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Category — Tanton, Tom (posts)

Tom Tanton Interview (Part II)

“Generally, I’d like to be remembered for helping to form a better connection and awareness between innovation and free markets and the tremendous improvements modern energy brings to people. That’s the essence of my progressive nature, so maybe I haven’t strayed to far from my early liberal bent, just on the best ways to achieve good results. Be clear on results versus intentions.”

MasterResource from time to time conducts interviews with leading free-market scholars (see Ken Green here). This completes the Tanton interview, Part I of which was yesterday.

Q. Let’s turn from traditional pollutants to climate change. What work have you done here?

TT: My focus has been more on policies that strive to address emissions, rather than climate modeling. I’ll leave that to those more qualified, as long as they adhere to scientific process. In any event, some policies act counterproductively.

As an example, many of the policies and regulations adopted by the California Air Resources Board (CARB) under the “Global Warming Solutions Act” (AB32) actually cause increases, not decreases, in global emissions of carbon dioxide, primarily through leakage. And, the “good” news is CARB is a target rich adopter of policies to analyze. The bad news is there continues to be talk in other states and nationally to ‘replicate’ AB32 or components elsewhere, even before the real performance results come in.

Q. Going into college, what were your philosophical or political views?

TT: Many current colleagues and friends, who may not have known me at the time, are surprised to find out I was pretty very liberal in my youth and thought “there ought to be a law” covering just about everything. And, that was at a time when I’d already been supporting myself for a few years.

I’m just one real world example of Winston Churchill’s famous quote: “If you are not a liberal at twenty, you have no heart and if you are not conservative at thirty, you have no brain.” The nice thing about what I do today is it includes heart and brain, as I’ve realized advanced and plentiful energy are key to improving human kind’s lot, and that so called ‘progressives’ are generally the most regressive.

Q. Tell us about your early public policy career?

TT: I had some fun as a chemist for the California Department of Transportation, doing quality control of highway materials—paint, concrete, steel and epoxies used to glue down the dots on freeways. I also got to develop some new paint formulations, using specially produced pigments based on interference patterns rather than just color. Interference patterns, also called Newtonian rings, are what make butterfly wings look iridescent and changeable and that strange pattern you see looking through glass and window screen. [Read more →]

June 10, 2014   1 Comment

Tom Tanton Interview (Part I)

“I view my 40+ year career as progressions on a common theme; understanding (and promoting) the role of free markets and technology innovation one to the other, both to improve humankind’s’ lot.”

MasterResource from time to time conducts interviews with leading free-market scholars (see Ken Green here). This two-part interview with Tom Tanton continues tomorrow.

Q. Let’s start with your current position and responsibilities.

TT: I’m currently Director of Science and Technology Assessment at the Energy and Environment Legal Institute (EELI). I’m also President of my consulting firm T2 and Associates, which stands for “Trust in Technology” not my initials.

EELI is focused on strategic litigation, such as testing the constitutionality of the renewable portfolio standard in Colorado, and on increasing government transparency through Freedom of Information Act requests and litigation. T² & Associates are active primarily in the area of renewable energy and interconnected infrastructures, analyzing and providing advice on their impacts on energy prices, environmental quality and regional economic development.

With respect to EELI, I bring my knowledge and expertise of energy technologies, markets, and networks to complement the legal expertise of our Chief Counsel David Schnare and Senior Legal Fellow Chris Horner.

Q. Energy and environmental issues go closely together ….

TT: Yes, of course. And a large part of my daily grind is in educating people that modern energy improves the environment; the are not mutually exclusive or in contretemps. It’s also important to recognize there’s a third “E” that goes closely together, and that’s the economy.

All three work hand in hand to improve people lives (the doubling of life expectancy over the past 100 years is one example) and increase leisure time, education opportunities, food, shelter, and comfort. [Read more →]

June 9, 2014   No Comments

California’s Wrong Debate (Models cannot mask LCFS’s failure in-the-making)

“We should not be using models to ‘validate’ policy and regulations. We should be using the models to better inform policy debates and avoid picking technological winners and (more frequently) losers.”

California’s Global Warming Solutions Act of 2006 (AB 32) put the state on a track rejected by the nation as a whole: a regulatory limit on carbon dioxide (CO2) emissions. This policy, which I have criticized as elitist climate policy postmodernism [1], is an all pain, no gain policy with high implementation costs.

The result of AB 32, California’s Low Carbon Fuel Standard (LCFS), has been debated for six-plus years, including the release of rival studies estimating regulatory impacts. Studies do not debate the climate-change impacts because the answer is … nil.

LCFS requires fuel producers to lower the average carbon content of their products 10 percent by 2020. It is a huge economic variable for the state’s (troubled) economy, and the size of California makes it a national economic issue as well. 

Dueling Studies

A year ago, an oil-industry-backed analysis by Boston Consulting Group estimated that California could lose between 28,000 and 51,000 jobs. The losses included many high-paying skilled manufacturing jobs, as well as indirect job losses due to multiplier effects.

Just last month, a counter study of LCFS was released by ICF that paints a much rosier picture than that of Boston Consulting. The face-value result might not be troubling, but the peculiar assumptions should be.  [Read more →]

July 2, 2013   2 Comments

Market Investment Outpace/Outperform Federal ‘Clean Energy’ Investment (GHG reductions without social cost)

“Over the 2000–10 period, the U.S.-based oil and natural gas industry invested $71 billion in technologies that reduce greenhouse gas emissions, far more than the federal government ($43 billion) and almost as much as the rest of private industry combined ($74 billion).”

“The United States has failed to create a comprehensive energy policy that provides robust and consistent support for innovation,” the familiar complaint goes.

Although the Recovery and Reinvestment Act of 2009 stimulated public investments in energy innovation, many of these programs and incentives have since expired or concluded, leaving the energy innovation ecosystem underfunded and skewed towards supporting deployment incentives over technology R&D, demonstration, and manufacturing.

Such comes from Breaking Down Federal Investments in Clean Energy (March 2013), published in Energy Innovation Tracker, a website devoted to providing data on U.S. energy-innovation spending. Authors Megan Nicholson and Matthew Stepp bemoan the state of innovation funding in the U.S., defined as federal spending on greenhouse gas (GHG) emission reductions.

Funded by The Nathan Cummings Foundation, this project’s taxonomy of “innovation investments” aims wrong and misses even that target. [Read more →]

March 20, 2013   6 Comments

Wind Energy Cost: Think Again ($0.15/kWh wholesale prohibitively expensive)

“Once these hidden costs [of windpower] are included and subsidies are excluded, wind generation is not close to being competitive with conventional generation sources such as natural gas, coal or nuclear.”

- George Taylor, quoted below.

“However, to meet the 33% RPS, technical studies show ramp rates may triple, which is not possible for the [California] ISO’s conventional generation as configured today.”

- Clyde Loutan (Senior Advisor, CaISO), “How Intermittent Renewables Impact CallSO.”

George Taylor and I have published a new study for the American Tradition Institute (ATI) that finds that on a full cost basis, wind electricity is nearly twice as expensive as what is typically reported. “The Hidden Costs of Wind Electricityprovides an analysis of three major costs that past estimates have ignored.

“The costs that have been left out of previous reports are the costs of paying for the fossil-fired plants that must balance wind’s variations, the inefficiencies that wind imposes on those plants, and the cost of longer-distance transmission,” said Taylor in ATI’s press release.  “Once these hidden costs are included and subsidies are excluded, wind generation is not close to being competitive with conventional generation sources such as natural gas, coal or nuclear.”

Adding a conservative estimate of the hidden but real costs to the Energy Information Administration’s (EIA’s) and the Office of Energy Efficiency and Renewable Energy’s most recent generation-cost reports increases wind’s projected cost from 8 cents to 15 cents per kilowatt-hour (kWh).

AWEA’s Rebuttal: Misdirection I

Taylor and I summarized our findings in the Washington Times opinion-page editorial, “Blow off wind-production tax credit” (December 19, 2012). We described the Production Tax Credit (PTC) as a bad deal, imposing additional costs on consumers and taxpayers with no offsetting benefits.

Unsurprisingly, AWEA spokesman David Ward repeated some industry falsehoods in rebuttal to our piece. His assertions (in blue) are followed by my rebuttal. [Read more →]

January 8, 2013   16 Comments

California: Climate Policy Postmodernism (all-pain, no-gain for feel-good elitism)

“There is a vast difference between doing the right thing and doing the thing right. In this case, CARB is implementing AB32 in ways that ignore current realities and that likely make matters worse…. It is time for a major reset of the underlying law and its regulatory implementation.” – T. Tanton

The California Air Resources Board (CARB) is all-in, damn-the-torpedoes relating to AB 32, the state’s 2006 anti-global warming law, even while acknowledging that it will drive up the cost of energy. CARB chair Mary Nichols confirmed the start of a statewide cap-and-trade auction system November 14 under which industrial firms will buy and sell emission rights for pollutants–despite receiving unrebutted testimony from manufacturers and business owners about the very onerous, and even devastating, impact of moving forward with the auction.

Background

When the California’s Global Warming Solutions Act was enacted in 2006, things were quite different. Electricity prices were being pushed down by the early expansion of natural gas plenty. Other states and nations were considering similar climate change programs, and, in fact, the Western Climate Initiative set up by Western Governors looked to increase trade in emission allowances. Unemployment in the State was at about 7 percent, and the foreclosure debacle hadn’t yet hit (which would drive many cities to the brink of bankruptcy).

The prospect of “leakage” was known, but not the extent. Too much faith was held in the Hobson’s choice of cap-and-trade as opposed to the more draconian option of command-and-control regulation. And finally, national cap-and-trade seemed to be coming.

My how things have changed—except for the commitment to economy destroying state policies. The most notable change is that, nationwide, greenhouse gas emissions have already dropped to 1992 levels, without interventionist policies. California’s carbon intensity has improved 21 percent since the turn of the century. Compare this to AB32′s goal of reaching 1990 statewide emissions by 2020. [Read more →]

October 4, 2012   7 Comments

“Not Cheap, Not ‘Green’” at the California Energy Commission

“In my period at Cato (1990–present), “Renewable Energy: Not Cheap, Not ‘Green’,” is probably our most important Policy Analysis in the energy/environment area. Bradley’s thorough review and analysis (60 pages, 325 footnotes) was a real pushback against the viability of ‘green’ energy in theory and practice.”

- Jerry Taylor, Senior Fellow and Director, Natural Resource Studies, Cato Institute.

On the fifteenth anniversary of “Renewable Energy: Not Cheap, Not ‘Green’” (yesterday), I recall, with no little pride, a lot of hard work that went into supplying the author with information about California’s wind and solar experience.

At the time I was working in the belly of the beast, the California Energy Commission (CEC) in Sacramento. The Commission was a major proponent of all things renewable, almost to the point of fanaticism. Well, actually far beyond that point (and that persists to this day), and therein lies a story about how I met a particular Texan and became the silent author of a major public policy study that still reads well today.

Three Amigos

Back in the 1980s and 1990s, I was fortunate to work alongside Richard Bilas, Vice Chair of the Commission, who was our ‘F. A. Hayek’ (think 1944 and Road to Serfdom). Dick Bilas was schooled in Austrian School and Public Choice economics and a real rarity–a free-market California energy regulator (and not wannabe energy planner).

And the third person in our group was Manual Alvarez, principal advisor to Commissioner Bilas, who actually cared about energy consumers. The three of us were rather wide-eyed at what can only be described as postmodern energy policy, a sort of ‘anything goes and is good if you really want it.’ [Read more →]

August 28, 2012   4 Comments

California Cap-and-Trade: Making Ourselves Poorer and ‘Dirtier’ (Part 2)

[Editor's Note: This post concludes a two-part series on counter-productive regulation passed in the name of addressing man-made climate change.]

In Part One yesterday, I summarized the recent research by U.C. Berkeley researcher Margaret Taylor, which found that cap-and-trade programs (CTP) impede technological innovation. Not only do they stifle future technological improvements, CTP often erase past improvements.

California’s Global Warming Solutions Act (AB32) and the Air Resources Board’s implementation of that law to date provide a sobering example of the Taylor Thesis.

California Improvements before Cap-and-Trade

California is the only state insisting on implementing economy wide cap-and-trade. The climate impact, if the programs (unrealistic) goals are achieved, are miniscule. Nonetheless, the program is to start later this year, according to the California Air Resources Board (CARB). Not acknowledged by these uber-bureaucrats, California has the third BEST carbon intensity in the U.S., according to the Congressional Research Service.

The carbon intensity of the U.S. is only a quarter of China’s and is well below the average of the world. Every ton of cement California imports from Arizona, every basket of fruit the U.S. imports from Chile, and every techno-gadget we import from Asia, in other words, result in a net increase of emissions, compared to our producing those things here at home. [Read more →]

April 5, 2012   4 Comments

Misdirected Innovation: Environmentalist Taylor on Cap-and-Trade (Part I)

[Editor Note: This is Part One in a two-part series by Mr. Tanton on counter-productive regulation passed in the name of addressing manmade climate change. Part II tomorrow focuses on California. ]

Cap-and-trade programs (CTP) do not provide incentives to develop innovative technologies and likely increase emissions, according to a new essay, Innovation Under Cap-and-Trade Programs, published in Proceedings of the National Academy of Sciences. Author Margaret Taylor, a researcher at Lawrence Berkeley National Laboratory, completed her study as assistant professor at the University of California-Berkeley’s Goldman School of Public Policy.

Based on actual case studies, she found that CTP have reduced incentives for research and development. “Policymakers rarely see with perfect foresight what the appropriate emissions targets are to protect the public health and environment,” said Taylor.

Emission targets might actually be set more strict, she explains, even while the mechanism (i.e. CTP) may be inefficient, or ineffective, or counterproductive. Yet policymakers also seldom set targets they don’t have evidence that industry can meet. This is where R&D that can lead to the development of innovative technologies over the longer term is essential.

The Estimation Problem

Putting aside whether the targets (i.e. emission levels) are set correctly, the question remains whether cap-and-trade is a useful mechanism. In fact, it might actually get in the way of the technology that reduces emissions and achieves other worthwhile goals like productivity enhancement and wealth creation. [Read more →]

April 4, 2012   5 Comments

Renewable Mandate Challenged in the Centennial State (An economic, legal case for free, fair energy choice in Colorado)

The American Tradition Institute (ATI) and the American Tradition Partnership (ATP) have filed suit in Federal District Court in Colorado to have Colorado’s renewable energy standard (RES) declared unconstitutional. The plaintiffs find that the Colorado RES discriminates on its face against legal, safer, less costly, less polluting and more reliable in-state and out-of-state generators of electricity sold in interstate commerce, and thus violates the Commerce Clause of the U.S. Constitution.

Given 29 states with either a RES or a Renewable Portfolio Standard (RPS) of varying strength, the outcome of this case will likely have far reaching implications. The suit was filed yesterday, April 4, 2011.

Part of the suit is a “declaration” of technical aspects and the costs and benefits of how the RES is implemented; I am the author of that declaration. The other major part of the filing, as would be expected, is various legal arguments. This posting does not further describe the legal arguments but simply summarizes the content of my declaration.

RES/RPS Requirements

Renewable portfolio standards require utilities to use renewable energy or renewable energy credits (RECs) to account for a certain percentage of their retail electricity sales — or a certain amount of generating capacity — according to a specified schedule. The term “set-aside” or “carve-out” refers to a provision within an RPS that requires utilities to use a specific renewable resource (usually solar energy) to account for a certain percentage of their retail electricity sales (or a certain amount of generating capacity) according to a set schedule.

Colorado became the first U.S. state to create a renewable portfolio standard (RPS) by ballot initiative when voters approved Amendment 37 in November 2004. The original version of Colorado’s RPS required utilities serving 40,000 or more customers to generate or purchase enough renewable energy to supply 10% of their retail electric sales. In March 2007, HB 1281 increased the RPS to 15% from 2015–19 and 20% from 2020 forward, as well as  extending a separate renewable-energy requirement to electric cooperatives, among other changes. HB 1001 of 2010 expanded the RPS to 30% for 2020.

Eligible renewable-energy resources include solar-electric energy, wind energy, geothermal-electric energy, biomass facilities that burn nontoxic plants, landfill gas, animal waste, hydropower, recycled energy, and fuel cells using hydrogen derived from eligible renewables.

The PUC has issued rules to implement the RPS. The rules were amended as required by HB 1001 in August 2010. The PUC’s rules generally apply to investor-owned utilities (IOUs). Electric cooperatives and municipal utilities serving more than 40,000 customers are still bound to the separate requirement approved by the legislature. [Read more →]

April 5, 2011   19 Comments