A free-market energy blog

“[T]he impact that emissions reduction efforts in the U.S. will have on global emissions totals–and by extension, global climate–is quickly diminishing.”

The just-released numbers for last year’s carbon dioxide emissions (not including land-use changes) show why forcing large cuts in carbon dioxide (CO2) emissions is not very high on the priority list of the U.S. powers-that-be (including voters).

In 2010, the total global CO2 emissions were the highest on record, ~9.1 PgC (33,400 million metric tons). The U.S. contribution was ~1.50PgC, about 16% of the global total—percentage-wise the lowest on record (since 1959) and falling rapidly.

Unilateral U.S. CO2 mitigation strategies, in other words, are doomed to increasing irrelevance–and even unintended consequences should carbon rationing at home result in industrial transfers to less regulated areas. [Read more →]

“Human beings create more than they destroy.”

- Julian Simon, The Ultimate Resource 2 (Princeton, N.Y.: Princeton University Press, 1996), p. 580.

“People have since antiquity worried about running out of natural resources–flint, game animals, what-have-you. Yet, amazingly, all the historical evidence shows that raw materials–all of them–have become less scarce rather than more….  And there is no reason why this trend should not continue forever.”

- Julian Simon, “The State of Humanity: Steadily Improving,” Cato Policy Report, September/October 1995.

There is only one thing that is going up more than government subsidies for uneconomic wind and solar power: oil, gas, and coal reserves and resources in the United States, according to a new study released yesterday by the Institute for Energy Research (IER) assessing total North American inventory.

The U.S. is the world’s most endowed energy country, followed by Russia, Saudi Arabia, and China. At current consumption rates, we have hundreds of years of domestic oil and gas, and thousands of years of coal.

Stephen Hayward explains this and more in this video: [Read more →]

“You may be interesting [sic] in this snippet of information about Pat Michaels. Perhaps the University of Wisconsin ought to open up a public comment period to decide whether Pat Michaels, [sic] PhD needs re-assessing?”

- Tom Wigley to ‘Folks’, October 14, 2009.

“I consider this to be an extremely serious matter. [The actions and climate views of] Mr. Bradley … may further damage both my personal and your company’s reputation.”

- Tom Wigley to Kenneth L. Lay (Enron), August 26, 1999.

“We sent [our paper] to Journal of Climate. I sent out about 10 copies–one to Wigley. But I requested that he not be used as a referee ‘because of an inexplicable hostility towards us (and possibly everyone else)’.”

- Gerald North to Robert Bradley (Enron), September 1999.

Climate scientist Patrick Michaels is mad–plenty mad (see his letter to Roger Wakimoto, Director, National Center for Atmospheric Research below). Among the Climategate 2.0 email sewage is a blatant attempt by Thomas Wigley, senior scientist at the National Center for Atmospheric Research (NCAR),  to undercut Michaels’s academic base by challenging the latter’s doctoral dissertation as inaccurate and deceitful.

If Michaels’s dissertation was purposely deceitful, not only flawed, then Wigley would have his ground. But if not, what does this say about the accuser in the highly politicized climate-change debate?

Climate scientist Judith Curry weighted in as follows: [Read more →]

There’s desperation on the Hill by the taxpayer  parasites. The wind industry is once again pressing Congress for a last minute extension of the Section 1603 subsidy.

And why not? ‘Tis the season for giving, and the approach of “Ask and ye shall receive” has worked pretty well for the industry so far, especially with a contingent of members happy to be led around by any entity cloaking itself in ‘green’. Who better to do the leading than the American Wind Energy Association (‘AWEA’), the trade group increasingly dominated by wind turbine manufacturers — most of whom are headquartered in Europe and Asia.

Any reasonable assessment of the 1603 grant program would be lost entirely on this crowd but there are facts that make any discussion of an extension foolhardy.

High Cost: The treasury reports it’s already distributed $9.6 billion in cash grants during the period from 2009 to October 31, 2011. Of this, 80% ($7.6 billion) was handed to wind developers representing 12,272 megawatts of installed capacity. Since the money does not transfer to project owners until a wind facility is in service, the public has NO idea of the total cost of 1603. And we won’t know until 2013 or after.

But based on projects now under construction, we estimate the outlay for wind alone to be closer to $20 billion. This is without an extension. If Congress agrees to extend 1603 by 1 year, this figure would be much larger. Remember, we are borrowing 40 cents on every dollar to pay for this program. [Read more →]

[Ed. note: This week marks the 10th anniversary of Enron's bankruptcy filing (December 2, 2001). Enron's view of energy sustainability drives the Obama Administration today. Yesterday, this series looked at Enron's Kyoto moment.]

 In the fall of 2001, Ken Lay set the tone for what would be Enron’s last Environmental, Health, and Safety Management Conference:

We believe that incorporating environmental and social considerations into the way we manage risk, govern our projects, and develop products and services will help us maintain our competitive advantage. As we move forward, we will leverage our intellectual capital and innovative capabilities to promote sustainable business practices around the world.

At this meeting, Enron’s Corporate Social Responsibility (CSR) task force listed its “Accomplishments to Date,” which were:

• Secured board oversight of social/environmental performance
• Expressed support for Universal Declaration of Human Rights
• Completed corporate responsibility task force
• Developed and pilot-tested human rights audit
• Developed security and human rights guidelines
• Established formal partnerships with WBCSD [World Business Council on Sustainable Development], IBLF [International Business Leaders Forum], and CI [Conservation International]
• Identified language to strengthen code of ethics
• Providing project support—Calypso, Transredes, Dabhol and Cuiabá
• Responding to stakeholder concerns on an ongoing basis

The goals for 2002 included:

• Formally adopt CERES Principles
• Complete indigenous peoples’ policy
• Specify social/environmental expectations in formal relationships with vendors and contractors
• Review results of stakeholder survey and develop strategy to address outcome
• Create awareness of social/environmental trends among [Enron’s] origination and investment groups
• Add corporate responsibility performance attribute to PRC [Performance Review Committee] process
• Present task force recommendations to Dr. Lay and senior management

Make no mistake—Enron was trying to practice CSR, so that it could monetize its “green” energy model. This had been Lay’s strategy for a decade with natural gas, as well as internationally, as with Enron Global Affairs’s 1999 launch of the Social and Environmental Responsibility Program. [Read more →]

[Ed. note: This week marks the 10th anniversary of Enron's bankruptcy filing (December 2, 2001). Enron's view of energy sustainability drives the Obama Administration's "green 'dream' team" today, so such a look back at Enron's crony capitalism is merited.]

Beginning in the late 1980s, global warming became a bread-and-butter issue for Ken Lay, Enron’s leader and up-and-coming industry visionary. Enron in the 1990s became a full-fledged “green” company, practicing “energy sustainability” with its investments in solar power, wind power, energy-efficiency services, and environmental services.

No U.S.-based company sounded the tocsin over climate change more than Enron. What John Browne did as head of the international energy major BP, Ken Lay did in the United States, working with interest groups and political leaders to push the energy industry and public toward carbon dioxide (CO₂) regulation.

Lay had his reasons—seven in terms of company profit centers, all of which stood to gain from government restrictions on carbon emissions. They involved:

· Natural gas production (relative to oil and coal),

· Natural gas transmission (relative to oil and coal),

· Natural gas-fired electric generation (relative to oil and coal),

· Energy outsourcing (a/k/a energy efficiency) services,

· Renewable energy generation (wind and solar),

· CO₂ emissions trading (joining company trading in sulfur dioxide and nitrogen oxide), and

· Environmental outsourcing (a/k/a environmental services).

Of these, Enron’s natural gas activities were core, profitable activities (and “win, win” economically and environmentally, in their important applications). But the last four areas were problematic from the start and never profitable, even with special government favor. In retrospect, almost no amount of government subsidy would have been enough for these nascent businesses. [Read more →]

 “If the models are as flawed as critics say … you have to ask yourself, ‘How come they work?’”

- Gavin Schmidt [NASA], quoted in David Fahrenhold, “Scientists’ Use of Computer Models to Predict Climate Change is Under Attack,” Washington Post, April 6, 2010.

 “[Model results] could also be sociological: getting the socially acceptable answer.”

 - Gerald North (Texas A&M) to Rob Bradley (Enron), June 20, 1998.

 The above quotation by NASA climate scientist Gavin Schmidt suggests that quite remarkable progress has been made with climate models in recent years. Such must be the case given the verdict by leading climate scientists that climate models were not nearly ready for prime time just a decade ago.

But what do climate scientists really believe behind closed doors? Will they no longer express their innermost thoughts in emails or in fear that ‘the cause’ of climate alarm/forced energy transformation will be compromised?

Climategate 2.0: Model Quotations

<0850> [Tim] Barnett:  “[IPCC AR5 models] clearly, some tuning or very good luck involved.  I doubt the modeling world will be able to get away with this much longer.”

<5066> [Gabriele] Hegerl: “[IPCC AR5 models] So using the 20th c for tuning is just doing what some people have long suspected us of doing [...] and what the nonpublished diagram from NCAR showing correlation between aerosol forcing and sensitivity also suggested.”

<4443> [Phil] Jones: “Basic problem is that all models are wrong – not got enough middle and low level clouds.”

<1982> [Ben] Santer:  “There is no individual model that does well in all of the SST and water vapor tests we’ve applied.”

[Jagadish] Shukla/IGES: ["Future of the IPCC", 2008] It is inconceivable that policymakers will be  willing to make billion-and trillion-dollar decisions for adaptation to the projected regional climate change based on models that do not even describe and simulate the processes that are the building blocks of climate variability.

Gerald North Quotations

Here are some quotations from Dr. Gerald North of Texas A&M, certainly a distinguished climate scientist, made during his consulting era with Enron Corp. [Read more →]

Michael Mann: “I gave up on Judith Curry a while ago. I don’t know what she thinks she’s doing, but it’s not helping the cause.”

Phil Jones: “I’ve been told that IPCC is above national FOI Acts. One way to cover yourself and all those working in AR5 would be to delete all emails at the end of the process.”

The above emails are representative of the sickly fare of a group of physical scientists who set out to change the world from one of open-ended economic growth to one of economic constraint via international carbon planning. The good news is that the Intergovernmental Panel on Climate Change (IPCC) gatekeepers have once again been exposed by the e-mail release of last week, now known the world over as Climategate 2.0.

Having conversations like this is way beyond the bounds of scholarship or decent inquiry. We have heard of market failure and government failure–we need the term academic failure to describe scientists behaving badly.

For students of neo-Malthusianism (alarmism in different dimensions that began with Robert Thomas Malthus’s An Essay on Population in 1798), Climategate 1.0 and 2.0 continue a trend line. To really appreciate the desperation of climate alarmists in the face of contimuing anomolies, theoretical and empirical, context is required. That context is the failed worldview of modern neo-Malthusianism, which has promoted fear after fear with an intolerant, smartest-guys-in-the-room, above-the-rules mentality.

Remember the “population bomb” where many millions would die in food riots? Well, obesity turned out to be the real problem.

Remember the Club of Rome’s resource scare? In 1972, 57 predictions of exhaustion were made regarding 19 different minerals. All either have been falsified or will be.

Remember the global-cooling scare promoted by, among others, the Obama administration’s science czar, John Holdren? (Yes, global cooling was a big deal, although it was not a “consensus.”)

And all of the above doom merchants were uber-confident and still are loath to admit they were ever wrong. Holdren, for example, has not disowned his prediction that as many as one billion people could die by 2020 from (man-made) climate change. That’s nine years, folks.

Climategate/Climate McCarthyism

Intolerance rules in the global warming scare. Read the new flaming emails from the principals of Climategate. Read about Joseph “Climate McCarthyism” Romm by his critics on the Left.  Read the words of (non-Climategater) Michael Schlesinger, who lost his cool against New York Times environmental reporter Andrew Revkin. [Read more →]

Major wind projects are being cancelled or put on hold with waning public and private support. In recent weeks,

• Wind developer Terra-Gen terminated plans to build its Horseshoe Wind Farm in Illinois;
• NextERA suspended the permitting process for a 150-megawatt project in South Dakota; and
• Iberdrola announced its Desert Wind Energy Project in North Carolina was delayed and might be scrapped altogether.

In each case, company officials blamed current market conditions and the inability to secure a long-term power contract with area utilities.

PTC In Review

The American Wind Energy Association (AWEA) insists the industry is at risk of a slow-down if Congress does not act quickly to extend the Production Tax Credit (PTC), the federal incentive most often credited for market growth in the wind sector. The PTC expires at the end of 2012. [1]

But if the PTC were to expire, the damage would be less than what the AWEA claims.The industry has clearly grown addicted to the production tax credit, but our findings suggest that attributing market activity to the PTC is overly simplistic and fails to consider other crucial (government) factors driving wind development in the U.S.

The PTC was established by the Energy Policy Act of 1992 to stimulate use of renewable technologies for power generation by providing a production-based credit for the first 10 years of project operations. Initially set at 1.5¢/kWh, the credit is adjusted annually for inflation and today stands at 2.2¢/kWh. [Read more →]

“It’s time to move the debate past the dogmatic view that carbon dioxide is evil and toward a world view that accepts the need for energy that is cheap, abundant and reliable.”

- Robert Bryce, “Five Truths About Climate Change,” Wall Street Journal, October 6, 2011.

“Every [energy] policy objective should be viewed through the lens of affordability.”

- John S. Watson, Chairman and CEO, Chevron Corporation
Remarks at the Peterson Institute for International Economics, Washington, D.C., October 19, 2011.

Chevron CEO John Watson delivered a major address last month in Washington, D.C. that reorients energy sustainability from controversial neo-Malthusian notions toward consumer affordability and reliability. As such, it marks an end to the ‘apologetic’ era launched by BP’s John Browne in his 1997 Stanford University speech, which proclaimed that fossil fuels were problematic in relation to anthropogenic climate change. The moral high ground of consumerism also points to market capitalism in place of political capitalism.

Watson’s speech follows verbatim with subtitles added.

This is one of those places in our nation’s capital where serious minds turn to serious matters. The spirit of the Institute is to take the long view, to look past election cycles to the fundamentals of good policy, in this country and beyond. That’s an attitude that serves us well in any place and time, and certainly right now, in this fourth year of low economic growth, high unemployment and many other challenges.

This room is filled with people who spend a lot of time analyzing these problems, and advocating policy prescriptions to deal with them. And few policy issues are more contentious than energy.

There’s a reason for that. When it comes to energy policy today, we’re talking past one another. We all want a secure source that
minimizes adverse environmental impacts. But we’re failing to be clear about what our central priority ought to be among our energy objectives.

Affordable Energy

Today, I’d like to share what I believe that priority should be. I submit to you that affordable energy is the priority that should underpin all of our actions. Every policy objective should be viewed through the lens of affordability.

To make the case, think back over the last 150 years. We’ve seen the greatest advancements in living standards in recorded history because we have developed abundant, affordable energy. Light, heat and mobility have been made available to billions of people.

Agriculture has been mechanized, freeing populations to spend time developing other industries and toiling less for the very basics of life.

The evolution of energy supply over that time period has been just as stunning. As late as 1910, about a quarter of all U.S. farmland was still devoted to feeding horses used for transportation. Today, we use half as much land for all of our roads and highways, oil pipelines, refineries and wells combined.

Since Edison switched on his first generators in 1882, the average price of a kilowatt hour of electricity has fallen almost without interruption. Markets have driven a diverse portfolio of affordable energy sources that is anchored by oil, natural gas and coal, but also includes nuclear, hydropower and other renewables.

And we’re using our energy more efficiently. It takes 60 percent less energy today to produce a dollar of GDP than it did in 1949.

Affordable energy supports the very foundation of American life. Americans love their mobility, whether for business or pleasure. The population has roughly doubled since 1950, but gasoline consumption has quadrupled, even as gas mileage has improved. And we’re flying more. U.S. airlines use about 80 percent more fuel today than when I was in college, even as they have became more fuel efficient. [Read more →]