Category — Energy Sources
“It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.”
- Frédéric Bastiat (1850)
Making the news last week was a new “economic impact” study funded by a trade association representing the nuclear industry. The study purports to show that the nuclear industry in North and South Carolina generates $25 billion dollars annually and supports 29,000 jobs. The study funded by the industry group Carolinas Nuclear Cluster would like to believe that such activity is a per se good, the marketplace notwithstanding.
So much for economics, which stresses that ends are greater than means and that good activities should be done at least cost. [Read more →]
December 4, 2013 2 Comments
“One acre or 1,500 acres? 88 percent capacity factor or 22 percent? Less than $1,500,000 per megawatt of capacity or $6,400,000 per megawatt? Location near the customer load or remote? Highly dispatchable electricity or non-dispatchable? Do we need to really ask these questions.”
The huge California Valley Solar Ranch (CVSR) central-station solar plant is apparently now at “full power” thanks to a loan guarantee from the U.S. taxpayers of $1,237,000,000. Information regarding this project has been published here by Earthtechling, and also here, by the U.S. Department of Energy.
In an earlier article by Eric Lipton and Clifford Krauss in the New York Times entitled A Gold Rush of Subsidies in Clean Energy Search, the full cost of the project was established as $1.6 billion. Lipton and Krauss indicate:
The project is also a marvel in another, less obvious way: Taxpayers and ratepayers are providing subsidies worth almost as much as the entire $1.6 billion cost of the project. Similar subsidy packages have been given to 15 other solar- and wind-power electric plants since 2009.
The government support — which includes loan guarantees, cash grants and contracts that require electric customers to pay higher rates — largely eliminated the risk to the private investors and almost guaranteed them large profits for years to come. The beneficiaries include financial firms like Goldman Sachs and Morgan Stanley, conglomerates like General Electric, utilities like Exelon and NRG — even Google.
A Critical Appraisal
In a realistic appraisal of the CVSR we should note the following: [Read more →]
November 7, 2013 15 Comments
“It’s these subsidies and unfair billing credits–coupled with the intermittent nature of solar energy–that has utilities, utility customers, and taxpayers questioning the expansion of solar power. Until the solar industry can effectively operate in a free market and not burden consumers who cannot or choose not to install rooftop solar, this debate will continue.”
Solar power generation in the U.S. rose nearly 600% from 2000 to 2010 (NREL), and this trend is continuing. Fueled by an array of federal, state and local subsidies along with utility-bill credits, the economics of photovoltaic (PV) energy might seem too good to pass up. This is especially the case with residential or rooftop solar systems.
However, a closer look at industry subsidization, the unique properties of PV, and controversial billing practices for solar users, such as Net Metering, show that solar power is not as great a deal as its supporters would have you believe.
Economics of Rooftop Solar
For homeowners looking to add solar panels to their rooftops, there is no shortage of handouts to help make this possible. First, there is a 30 percent Investment Tax Credit from the federal government, in place until 2016. If not used completely at the time of installation, this credit can be carried over for up to five years. On top of that, state, local and utility specific programs sweeten the deal. These programs vary greatly by location. [Read more →]
September 30, 2013 5 Comments
“Deep Ecology adherents view fossil fuels as evil incarnate, and believe fervently in ‘peak oil’ and Climate Armageddon. They are frustrated that fracking guarantees a hydrocarbon renaissance and predominance for decades to come, and helps reduce carbon dioxide emissions without massive economic sacrifice.”
Anti-energy activists actively promote falsehoods about the vital, safe, job-creating hydraulic fractionation. They inhabit a callous parallel universe to wage war on affordable, plentiful energy–and quality, sustainable jobs. Such a war targets those who need jobs and lower costs the most.
It is time for all thinking, good people–Democrat and Republican–to welcome the oil and gas treasure unleashed by new technology in every locality and state where private property rights are respected. And, as Bret Stephens wrote in the Wall Street Journal, it is high time for environmentalists to think.
“Ninety-eight Percent Positive”
Signs of pride and prosperity were evident all over Williamsport and the gorgeous northern Pennsylvania countryside around it. Friendly, happy people greeted us. New cars, trucks, hotels and restaurants sparkled in a clean, bustling downtown. New roofs topped barns and houses, while late model tractors worked the fields. Formerly dirt roads are now paved.
Men and women again have high-paying jobs, young people are coming back instead of moving away, their salaries are supporting other businesses and jobs, and many are taking college programs in oilfield technical and business specialties, Vince Matteo told me. As president and CEO of the Williamsport/Lycoming County Chamber of Commerce, he’s witnessed the transformation. [Read more →]
July 25, 2013 1 Comment
Vogtle Nuclear Project: More Overruns, More Delay (Georgia Power reconfirms the perils of government-subsidized energy)
Late last month, Georgia Power (Southern Company) filed its eighth semi-annual report on the construction progress of its 2,240-MW two-unit Vogtle nuclear plant to the Georgia Public Service Commission (GPSC).
The already bad news got still worse–not surprising for a project that is all but financially insulated from its own failure. As I previously wrote at MasterResource:
With a pending $8.6 billion federal loan guarantee, a cap on liability, production tax credits and pre-collection of profits this makes Georgia Power the nation’s biggest welfare queen.
Georgia Power’s latest report to state regulators indulges in self-praise, shifts blame for growing problems, and employs misleading analysis. The Company asks the GPSC to approve an additional $737 million in cost and add 15 months to the project’s schedule. Since Georgia Power has 45.7% ownership, the entire $14 billion project has additional cost of over $1.6 billion. [Read more →]
March 28, 2013 2 Comments
“[T]here is no companion prerequisite that such renewable programs be cost-effective or deliver reliable power…. This program appears designed for the privileged few to enjoy a subsidized electric energy existence, provides those ‘green bragging rights’ mentioned by a solar installer in this courtroom last September, but little else.”
Last May, Dominion Virginia Power petitioned the Virginia State Corporation Commission to introduce a voluntary ratepayer program to support up to 3 MW from distributed solar installations. Dominion seeks to offer the public an alternative to an existing, net-metering, residential solar panel program. This voluntary test Solar Panel Program would be guaranteed for five years at a “buy all/sell all” $0.15/kWh. It would be limited to an initial maximum scale of 0.2 percent of 2010 peak load.
Solar is an intermittent power source that would require storage to be on a stand-alone basis. The Dominion program offers a solar energy buyback on a firm (non-interrupted) basis, which requires cross subsidization from conventional energies.
The $0.15/kWh price is below what the U.S. Energy Information Administration estimates to be the cost of distributed solar, which is north of $0.25/kWh. Multiple tax breaks explain the difference ($0.022/kWh production tax credit; accelerated depreciation, etc.). Solar executive David Bergeron has estimated that the as much as 90 percent of lifecycle solar costs are hidden, due to special government subsidies. [Read more →]
February 27, 2013 4 Comments
“The technically recoverable coal resources in the United States are unsurpassed and total 50 percent of the world’s coal reserves. At 486 billion short tons, it can supply our country’s electricity demand for coal for almost 500 years at current usage rates.”
Coal produced on federal lands has decreased less than that of oil and natural gas. Coal production on federal and Indian lands peaked at 509 million short tons in fiscal year 2008 and has been decreasing slightly each year since then. In fiscal year 2011, coal sales from production on federal and Indian lands reached 470 million short tons, a 2-percent decrease from fiscal year 2010 and an 8-percent decrease since the peak in fiscal year 2008. 
At today’s prices, the value of the government’s estimated coal resources in the lower 48 states is $22.5 trillion for a total fossil fuel value on federal lands of $150.5 trillion. Most of the coal resources in Alaska are deemed to be federally owned and are estimated to be 60 percent higher than those in the entire lower-48 states but are not included in these estimates.
Over 90 percent of coal in the United States is used for electricity generation. Until recently, coal had been used to produce 50 percent of the nation’s electricity, but is losing market share to natural gas and renewable energy as natural gas prices drop, renewable energy is mandated and subsidized, and new environmental regulations take effect.
EPA vs. Improving Coal
The Environmental Protection Agency (EPA) has produced regulations that essentially ban new coal plants and make its continued use in existing plants extremely costly. As a result, coal produced only 42 percent of our electricity in 2011  and is expected to have produced only 38 percent in 2012. 
One of the biggest stated concerns about coal is air pollution. Coal produces more emissions than natural gas when burned. However, due to actions taken by industry and technological advances, our air quality is improving and new coal plants are cleaner than ever before. [Read more →]
February 7, 2013 4 Comments
One of the most hilarious – if not tragic – events that we as Americans witness is when Hollywood attempts to “inform” the public about energy issues, which often takes the form of fanatical opposition to oil and natural gas development.
During a staged protest against the Keystone XL pipeline this past summer, for example, Daryl Hannah and Margot Kidder were arrested while voicing their disapproval of U.S. infrastructure development. The protest also featured a large, inflatable black tube that was intended to represent the pipeline, although none of the protestors – including Hannah and Kidder – were able to explain the fact that petrochemicals are used to produce both the plastic and the paints used throughout the event.
The reason these events are so laughably absurd is that, in addition to the rank hypocrisy, Hollywood “stars” are attempting to drive the public debate on complex engineering processes, about which they have little to no actual expertise. Instead, the celebrity of their names is leveraged to secure headlines, and the public is left with the impression that there are significant technical concerns – all based on the words and deeds of multi-millionaire actors and actresses.
To be sure, there’s nothing wrong with acting or making films. We all love to go to the movies, and then argue at dinner afterwards about which of the previews were the best. And certainly no one is suggesting these individuals don’t have a right to protest. But we should all be concerned that the fact-based conclusions of engineers, geologists, and other technical experts can all be wiped away by what’s essentially a loudest-voice-wins mentality.
December 28, 2012 2 Comments
“Although we strongly support policy efforts to reduce greenhouse gas emissions and health-damaging air pollution from fossil fuels, we are concerned that the PTC includes support for biomass combustion technologies that both contribute to climate disruption and threaten public health.”
- Letter of December 11, 2012, to Senate and House Leaders from 40 environmental-related organizations (reprinted below)
Biomass energy has been called the air emission renewable. Technical studies have concluded that energy made from plants and woody matter can require so much (fossil) energy and stir up release of carbon dioxide as to negate CO2 reduction.
This problem has been long recognized in the environmental community. “Although biomass is a renewable resource, much of it is currently used in ways that are neither renewable nor sustainable,” stated Chris Flavin and Nicholas Lenssen in 1994. 
In 2001, the International Energy Agency (Organization for Economic Cooperation and Development, 2001), concluded:
Biomass energy is generally considered to be CO2-neutral, as long as it is consumed in a sustainable manner, i.e., the stock of biomass does not diminish. This is not the case in many developing countries, where over-consumption of biomass fuels leads to deforestation and hence to the reduction of forest-based CO2 sinks. 
And the debate/controversy continues. Last week, a letter to the House and Senate leadership from 40 left-of-center environmental-related nonprofits, groups, and businesses urged that biomass be excluded should the renewable-energy Production Tax Credit be extended past its year-end expiration date.
December 19, 2012 No Comments
The anti-industrial “green” movement, which once played nice with natural gas, is at war against hydraulic fracturing (fracing). Peak gas fears may be gone, and parasitic wind energy would crash without gas-fired generation to fill in, but an anti-energy agenda rules. What should be good news is parlayed into bad by the enemies of modernism.
Technology Jump–Societal Benefits
Horizontal drilling and hydraulic fracturing have boosted shale gas production from zero a few years ago to 10% of all U.S. energy supplies in 2012, observes energy analyst Daniel Yergin. Fracing has also increased U.S. oil production 25% since 2008 – almost all on state and private lands, and in the face of more federal land and resource withdrawals, permitting delays and declining public land production.
In the process, the fracing revolution created 1.7 million jobs in oil fields, equipment manufacturing, legal and information technology services, and other sectors. It will generate over $60 billion this year in state and federal tax and royalty revenues, reduce America’s oil import bill by $75 billion, and save us $100 billion in imported liquefied natural gas, concludes a new IMF Global Insight analysis. [Read more →]
October 30, 2012 7 Comments