Monday, July 27, 2009

Wind Energy, Green Jobs “Sustainable” ?

Here at CARE, our primary role is public education on energy issues. We believe that all sources of energy—both green and traditional—will be needed to support America’s ever-growing energy needs. Because we also believe that energy is what makes America great, we do not want to sacrifice when it comes to energy; we do not want to take America back to the dark ages.

We as a country are in the process of potentially making major changes in energy production and delivery. So that we as citizens can make responsible choices we need to know the facts—not just feel good. We need to know the energy reality. (This was also addressed in CARE’s most recent op-ed which has been widely published throughout New Mexico.) It may seem that the choice is out of our hands as many of the elected officials in Washington DC appear to be bent on doing things the way want, not what their constituents want. But they’ll be home for “August recess;” they’ll be holding town-hall meetings. If you care about energy (no pun intended), go to the meetings and ask the hard questions.

Here from one of our Energy Counsel Members, Paul Driessen, are some “facts” to add into the “feel good.” We believe that if American citizens had straight talk instead of happy talk, they will make the right decisions for America.

Forests of concrete and steel
Boone Pickens, Nacel Energy, Vestas Iberia and others have been issuing statements and running ads, extolling the virtues of wind as an affordable, sustainable energy resource. Renewable energy reality is slowly taking hold, however.

Spain did increase its installed wind power capacity to 10% of its total electricity, although actual energy output is 10-30% of this, or 1-3% of total electricity, because the wind is intermittent and unreliable. However, Spain spent $3.7 billion on the program in 2007 alone, King Juan Carlos University economics professor Gabriel Calzada determined.

It created 50,000 jobs, mostly installing wind turbines, at $73,000 in annual subsidies per job – and 10,000 of these jobs have already been terminated. The subsidies have been slashed, due to Spain’s growing economic problems, putting the remaining 40,000 jobs at risk.

Meanwhile, the cost of subsidized wind energy and carbon dioxide emission permits sent electricity prices soaring for other businesses – causing 2.2 jobs to be lost for every “green” job created, says Calzada. Spain’s unemployment rate is now 17% and rising. That’s hardly the “success” story so often cited by Congress and the Obama Administration.

Across the Channel, Britain’s biggest wind-energy projects are in trouble. Just as the UK government announced its goal of creating 400,000 eco-jobs by 2015, major green energy employer Vestas UK is ending production. All 7,000 turbines that Downing Street just committed to installing over the next decade will be manufactured – not in Britain, but in Germany, Denmark and China.

For businesses, existing global warming policies have added 21% to industrial electricity bills since 2001, and this will rise to 55% by 2020, the UK government admits. Its latest renewable energy strategy will add another 15% – meaning the total impact on British industry will likely be a prohibitive 70% cost increase over two decades. This is the result of the government’s plans to cut carbon dioxide emissions 34% below 1990 levels by 2020, and increase the share of renewables, especially wind, from 6% to 31% of Britain’s electricity.

These cost hikes could make British manufacturers uncompetitive, and send thousands more jobs overseas, the Energy Intensive Users Group reports. English steel mills could become “unable to compete globally, even at current domestic energy prices,” says British journalist Dominic Lawson; “but deliberately to make them uncompetitive is industrial vandalism – and even madness … a futile gesture ... and immoral.”

On this side of the pond, President Obama and anti-hydrocarbon members of Congress are promoting “green” energy and jobs, via new mandates, standards, tax breaks and subsidies. However, the United States would need 180,000 1.5-megawatt wind turbines by 2020, just to generate the 600 billion kilowatt-hours of electricity that compliance with the narrowly passed Waxman-Markey global warming bill would necessitate, retired energy and nuclear engineering professor James Rust calculates.

This would require millions of acres of scenic, habitat and agricultural lands, and 126 million tons of concrete, steel, fiberglass and “rare earth” minerals for the turbines, at 700 tons per turbine; prodigious quantities of concrete, steel, copper and land for new transmission lines; and still more land, fuel and raw materials for backup gas-fired generators. America’s new national forests will apparently be made of concrete and steel.

Those miners and drillers would likely be reclassified as “green” workers, based on the intended purpose of their output. However, the raw materials will probably not be produced in the States, because so many lands, prospects and deposits are off limits – and NIMBY litigation will further hamper resource extraction.

Air quality laws and skyrocketing energy costs (due to carbon taxes and expensive renewable energy mandates) will make wind turbine (and solar panel) manufacturing in the USA equally improbable. Thus, manufacturing could well be in China or India, and most “green” jobs could be for installers, as Spain and Britain discovered.

Posturing has already collided with reality in Texas, the nation’s wind energy capital. Austin’s GreenChoice program cannot find buyers for electricity generated entirely from wind and solar power. Its latest sales scheme has been a massive flop: after seven months, 99% of its recent electricity offering remains unsold.

Austin officials admit that “times have changed,” and the recession and falling energy prices may make it impossible for the city to meet its lofty goals. The company’s renewable electricity now costs almost three times more than standard electricity, and even eco-conscious consumers care more about the color of their money than the hue of their purported ideology.

Even worse for global warming alarmists and renewable energy advocates and rent seekers, global warming patterns have reversed during the past decade. Satellite data reveal that the planet is cooling, despite steadily rising carbon dioxide levels, and summertime low temperature records are being broken all over the United States.

“You'd better hope global warming is caused by manmade CO2 if you're investing in [renewable] sectors,” says Daniel Rice, the past decade’s best-performing US equity fund manager (BlackRock Energy and Resources Fund). But evidence for manmade catastrophic global warming is dissipating faster than carbon dioxide from an open soda bottle on a hot summer day.

The crucial fact remains: wind and solar are simply not economical without major government subsidies or monstrous carbon taxes. Moreover, cap-and-tax legislation currently being promoted in the House and Senate is “not enough to do anything” about supposed global warming disasters notes Rice.

“All it does is provide Obama a pass to Copenhagen,” where the UN will host a climate change conference in December, Rice says. And those subsidies and taxes would drive energy prices still higher, killing jobs and skyrocketing the cost of everything we eat, drive, heat, cool, grow, make and do.

Congress and the Administration are dragging their feet on nuclear power, closing off access to more resource-rich lands, and imposing layers of new regulations on oil, gas and coal energy – denying Americans these vast stores of energy and hundreds of billions in revenue that developing them would generate. Meanwhile, slick wind turbine ad campaigns promote expensive, heavily subsidized, unreliable technologies that only climate activists and company lobbyists would describe as sustainable, affordable, eco-friendly or socially responsible.

The ads and lobbyists seek more mandates, tax breaks and subsidies. Wind promoters want to quiet opponents long enough to get energy and climate legislation enacted – before Americans realize how it would drive the price of energy still higher, kill jobs, curtail living standards and liberties, and raise the cost of everything we eat, drive, heat, cool, grow, make and do.

Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow and author of Eco-Imperialism: Green power – black death.

Thursday, July 23, 2009

The Best Course of Action on Climate Change Legislation

With so much going on in Washington politics in relation to energy—and especially cap and trade, it is difficult to stay on top of it all. Here from Master Resource—a Free-market Energy Blog, Robert Bradley, CEO and founder of the Institute for Energy Research, offers an up-to-date overview with lots of additional information for those who want to follow up with documentation.

Of note, is a response to this posting from atmospheric physicist Fred Singer, “Hansen’s proposal of a carbon tax paid into the Treasury is certainly a much better alternative to Waxman-Markey — if one really wanted to limit CO2 emissions – assuming, of course, that such a policy is needed
1. that anthropogenic CO2 increases will make a significant contribution to Global Warming. The evidence says No, contrary to the IPCC report; see
2. that a warmer climate (such as existed during many periods of earth history) is worse than a colder climate.

A carbon tax would certainly be more effective and less costly. But it is not as attractive to politicians as the Waxman-Markey bill, which dispenses multi-billions of goodies and deserves to be called “The Full Employment for Lobbyists Act of 2009.”
But even an energy tax has many loopholes that surely will be exploited. Should farmers pay the tax? What about municipalities, police, firemen, hospitals, clergy, etc, etc. The Defense Department? Surely they will exempt “pollution-free” solar and wind energy. But how will enviros react to nuclear energy – which also emits no CO2? One could go on…
The best course of action is to do nothing – and adapt to inevitable naturally-caused climate changes, as mankind has been doing since the dawn of history."

The Left’s Civil War on Cap-and-Trade: Who Likes Political Capitalism?
Some environmental leaders have said that I am naïve to think that there is an alternative to cap-and-trade, and they suggest that I should stick to climate modeling. Their contention is that it is better to pass any bill now and improve it later. Their belief that they, as opposed to the fossil interests, have more effect on the bill’s eventual shape seems to be the pinnacle of naïveté.
- James Hansen, “
Strategies to Address Global Warming,” July 2009.

Welcome to the science of politics, Dr. Hansen–and welcome to a tradition in political economy that is more than a century old. “I see no force in modern society which can cope with the power of capital handled by talent,” stated William Graham Summer in 1905, “and I cannot doubt that the greatest force will control the other forces.” And said George Will in our time: “The world is divided between those who do and do not understand that activist, interventionist, regulating, subsidizing government is generally a servant of the strong and entrenched against the weak and aspiring.”

The political hijacking of climate legislation is why the Left is now embarrassingly split on the issue. And just maybe this is the opening wedge to get the Left to reconsider climate alarmism in its wider dimensions. After all, higher energy costs disproportionately affect the poor and slow the drive to mass-electrify the developing world. And the climate crusade is resurrecting (uneconomic) nuclear power–a Left no-no. And geoengineering–that too is an unwanted stepchild of climate exaggeration.

And there is even the spectre of Big Brotherism in this energy road to serfdom. Remember Jimmy Carter’s winter/summer thermostat regulations? Perhaps civil libertarian Nat Hentoff, now with the Cato Institute, will start to worry about the carbon police in a no-holds-barred carbon-constrained world.

There are good reasons for the Left to oppose the Waxman-Markey climate bill that is now in debate in the U.S. Senate.

1. HR 2454 does virtually nothing to reverse out the human influence on climate.
2. The political attempt to deal with the issue has been hijacked by, in Hansen’s words, “people in alligator shoes.”
3. Climate progressivism, led by cap-and-trade, is a throwback to Ken Lay’s Enron.
4. Carbon-code regulation for its own sake is dumb, vindictive, and elitist–an affront to the “little guy” rhetoric of the party in power.

Running Out of Time?
A realistic look at climate science, economics, and politics points towards a coming tipping point in favor of climate-change adaptation rather climate-change mitigation. This explains the current panic among climate regulationists about not passing cap-and-trade legislation in 2009–regulation that is supposed to magically lead to hard, short-term global targets in Copenhagen later this year.

Political failure this year portends failure next year–and beyond, which is to say that there are more losers than winners in cap-and-trade because carbon-based fuels are winners and politically correct energies are losers–as judged by consumer/voters.

Time is running out, given:
1) The long-lived nature of fossil-fuel infrastructure in light of the consumers’ strong preference of affordable, reliable energy;
2) The inability of renewable energies to compete on cost and reliability grounds despite decades of special government favor; and
3) The less-than-linear (logarithmic) forcing by greenhouse gas emissions on climate. (CO2 emissions have less and less of an effect on climate because of the atmosphere’s saturation effect.

In The Guardian earlier this year, James Hansen gave President Obama “four years to save the earth.” This was an update to Hansen’s 2006 pronouncement in the New York Review of Books: “We have at most ten years—not ten years to decide upon action, but ten years to alter fundamentally the trajectory of global greenhouse emissions.”

And as if to make it possible, Al Gore’s Repower America Project (Alliance for Climate Protection) has had a ten-year decarbonization plan. In their words:
It will be possible to achieve a 100% clean power mix over the next ten years if appropriate policies are put in place to unleash the [zero carbon source] technologies’ vast potential.
But then came Waxman-Markey, and Al Gore (like Joe Romm, under intense pressure at Obama’s think tank Center for American Progress) buckled to the politics of incrementalism–make that incremental incrementalism. And James Hansen, Al Gore’s mentor, has responded in no uncertain terms.

Here is what Hansen recently said to the party in power–and Al Gore, President Obama, and John Holdren in particular:
But we have to level with … President Obama [who] recently came out with a full-throated endorsement of Waxman-Markey. Was he properly advised about its contents? Perhaps so, but he chose to overrule the advice? His Science Adviser, John Holdren, has said that he cannot discuss what he has said to the President.

Al Gore probably has the strongest voice that the President would listen to, so assessment on that front is useful. Last year Al called for rewiring America within 10 years – a national electric grid with renewable energies and energy efficiency replacing 100 percent of coal use. Now he supports Waxman-Markey, which locks in negligible movement in that direction–indeed, the progress in that direction might be greater without Waxman-Markey, and surely would be greater with a rising carbon price. Perhaps “100% carbon-free in 10 years” was only meant as an idealistic goal to be abandoned.

So now that it has been revealed that the climate “problem” is far beyond what voters and politicians can or will stomach, what will Dr. Hansen do? One can only hope that he will bow to reality by:
1. Revisiting his alarmist science (he has shown signs of open-mindedness before) or
2. Instruct the political sector to cease-and-desist and not to squander wealth on the pretext of addressing climate change, wealth that is needed for societal adaptation under his gloomy scenarios.

Joe Romm vs. The Left
And then there is Joe Romm of Climate Progress, who is hopping mad at the Left, not only the Right, when it comes to climate alarmism and policy activism.\

James HansenRealClimateEnergy Action CoalitionBreakthrough InstituteWashington PostNew York Times … to Dr. Romm, all scientific news must be bad news about the climate, and no climate legislation is bad enough to veto given the alternative of no legislation. His is a scorched earth policy for a non-scorched earth. Romm even abandoned his earlier views about what was good climate legislation! I think it had to do with organizational pressure, and thus I challenged Romm to stand up to his boss John Podesta on Waxman-Markey just like I challenged my old boss Ken Lay on Enron’s knee-jerk climate alarmism. There are limits to being a ”company man.”

And Dr. Romm does have a fight on his hands. Regressive energy taxation and a special-interest takeover of the 1,428-page H.R 2454 is no small matter. It is not surprising that a growing number of prominent individuals and organizations on his side of the debate do not like corporate welfare (aka political capitalism) and special-interest regulation that is form over substance. Welcome to the real world.

Contra Romm, climate policy needs a fundamental mid-course correction. Cap-and-trade should politically die just like the House-passed BTU tax died in 1993. Free-market economic policies that create individual and organizational wealth is the best that politics can do when it comes to the real or imagined challenges of global and regional climate change.

Saturday, July 4, 2009

Do We Really Want Expensive Experimental And Bureaucratic Mechanisms To Fix Climate Change?

When Diana Furchtgott-Roth “speaks,” we have learned to listen. The articles we use of hers always offer fresh insight on an energy issue. (She does write on other topics too, due CARE’s focus, we only use her pieces that address energy.) A new approach or a unique angle on today’s energy issues are what we hope to offer here in the CARE Blog. Therefore, we use quite a bit of Diana’s work. If you have not read her previous postings here in Comments About Responsible Energy, we encourage you to go back and read them. You, too, will appreciate her commentary.

This one is of particular interest at this time due to its position on the calendar--in between the time when the House passed their version of climate change legislation AKA “cap and trade” and the time when the Senate brings it up for debate. This period in history brings global warming to the forefront. Here Diana postulates that if climate change is a real issue and man-made carbon dioxide is an issue, than the problem would be better solved by going nuclear than by taxing carbon emissions. Here’s a great perspective as represented in her entire article: “A nuclear strategy would avoid the experimental and bureaucratic mechanisms for awarding emissions permits to power plants and other polluters and for monitoring compliance and trading…”

Read on. We think you’ll find her approach to be a great angle to add to your mental database on energy.

It's Time to Go Nuclear
With the Senate committees poised to consider versions of the expensive climate-change bill narrowly approved by the House of Representatives, it's time for the country to take a fresh look at nuclear power, which already generates 20 percent of our electricity.

The Environment and Public Works Committee and the Finance Committee hope to finish drafting a bill before the August recess. Floor debate and a vote will come only after Labor Day, to be followed later in the autumn by House-Senate conference. Whatever the Senate finally does, the process will be contentious and protracted.

Senator Judd Gregg (NH) told me in a telephone conversation that the Senate Republican Conference recommends a national strategy to build 100 nuclear power plants by 2030, in addition to the 104 that are now in operation. "This will clean up the air," he said, "and reduce reliance on foreign oil. This is a much more constructive approach than the climate change bill," which would create limits on carbon-dioxide emissions and a system for trading permits to emit them.

The House bill, if enacted, would raise $847 billion over 10 years while adding $821 billion to federal spending. It is effectively a tax increase with large, negative economic implications. That huge sum would not pay for the additional electric power a growing economy must have. It would be the added cost of curbing climate-warming emissions and of developing energy from renewable fuels.

Nuclear power has its problems, including delays in licensing and substantial up-front costs, but it can generate additional power for economic growth at a cost lower than that of the cap-and-trade bill.
A nuclear strategy would avoid the experimental and bureaucratic mechanisms for awarding emissions permits to power plants and other polluters and for monitoring compliance and trading, as well as compulsory efficiency standards for automobiles and household appliances and mandatory use of renewable fuels, such as wind, solar, biomass, and hydroelectric power.

If we're going to wave goodbye to the invisible hand by spending hundreds of billions of taxpayer dollars on wind and solar power, and on giving motorists tax-funded incentives to drive electric cars, then it's reasonable to ask whether subsidies for nuclear power might be less costly and achieve the same environmental results. The answer is probably yes.

The House's planned expenditure of $800 billion could fund 100 nuclear power plants with proven technology and no greenhouse gas emissions. This could be faster and less expensive than new emissions allowances, carbon sequestration, and wind, solar, and biofuel technology.

Despite generating 20% of America's electricity and its role in the U.S. commercial power grid since 1957, nuclear power is not without problems.

Energy is relatively inexpensive to generate once a plant is built, but plant construction requires a capital outlay of $6 billion to $8 billion. Since projects take five years to complete, a substantial portion of the funding is interest. Hence, some government subsidies or loan guarantees are necessary just to fund the project.

Four companies planning nuclear reactors-UniStar Nuclear Energy, NRG Energy, Scana Corporation, and Southern Company-are among those reportedly under consideration for a share in $18.5 billion in federal funding. Due to financial considerations another company, Exelon, announced this week that it is shelving its plans for a new power plant in Texas, and in April AmerenUE abandoned a planned plant in Missouri.

As well as difficulties in funding, delays can be caused by local site-permitting issues. Some communities may welcome the "green" jobs and additional tax revenue provided by a new nuclear power plant, but some will resist. Approval by the Nuclear Regulatory Commission can be made faster than in the past with standardized designs and congressional support.

The issue most familiar to Americans, disposal of spent uranium fuel rods, has generated headlines as Congress has argued about where to store the radioactive waste. How to transport it there safely also is an issue. The prior selection of Yucca Mountain in Nevada has stalled, since President Obama has not allocated any funding for the facility in the 2010 budget.

In this, the United States can learn from France, which generates over 80% of domestic electricity production from atomic energy and prides itself on being in the forefront of the global environmental movement. It reprocesses the spent rods at the power plants and does not have one giant, national storage facility. Local storage and reprocessing avoid transporting nuclear waste across the country.

It's not clear that government funding of energy and environmental projects is necessary. But if that's how Congress wants to spend tax dollars, Americans should press for further development of clean nuclear power.

Diana Furchtgott-Roth is a senior fellow and director of Hudson Institute's Center for Employment Policy. She is the former chief economist at the U.S. Department of Labor.

Friday, July 3, 2009

Advancing The Fears Of Climate Change = More Control

Do you wonder what people from other countries are thinking about America when they look at the shenanigans we are going through surrounding our current economic crisis and the approach to deal with the supposed climate change threat? Especially when other countries that have gone before us are realizing the folly of their ways and ditching their plans?

Here is an interesting view from Australia, from one of the writers for the Whiskey and Gunpowder newsletter. Usually we feature their energy writer Bryon King who was our featured guest on the June CARE Conference Call. Dan Denning may be new to most of the Comments About Responsible Energy Blog readers, But we believe you’ll find his comments of interest.

Cap and Trade: The Death of the Industrial West
Hey, here’s a question to start off with. If Bernie Madoff gets 150 years in prison for running a Ponzi scheme, what do you think the people who designed Social Security and the Superannuation scheme (Australia's version of a retirement or pension plan) ought to get?

And speaking of colossally stupid government programs, you may have seen the news that the U.S. House of Representatives passed a climate change bill on Saturday by a narrow vote of 219-212. The cap-and-trade bill, otherwise known as Waxman-Markey (for the nominal writers of the bill), mandates that U.S. manufacturers and utilities reduce carbon emissions 17% from 2005 levels by 2020 and 83% by 2050.

Under the sausage making process that is the American Congress, the bill was filled with compromises. Congressmen from coal-producing states or states with lots of manufacturing jobs had to be bribed into supporting it through various means. It must now go the Senate, which must pass its own version of the bill.

If the Senate bill is different from the House bill (and it almost always is, given the different agendas in both bodies and the need for more bribes), the two bills go to “reconciliation.” That’s where a committee made of members from both houses settles on a final compromise version of the two bills and sends them back to their respective bodies to be voted on. Then it gets sent to the President to become the law of the land.

By the way you may have missed an amendment to the bill that’s stirred a bit of controversy. It was inserted the night before among the bill’s 1,200 pages, which you can be sure none of America’s elected officials actually read. The amendment placates Congressmen from Rust Belt states who worry about losing even more manufacturing jobs to the developing world (China). It requires the U.S. President to make a “border adjustment” on goods from countries that do not cap or reduce carbon emissions by 2020. It’s a tariff.

Already President Obama has backed off that particular amendment. He says, “At a time when the economy worldwide is still deep in recession and we’ve seen a significant drop in global trade, I think we have to be very careful about sending any protectionist signals out there.” Very careful, sure. But you already did send the signal didn’t you?

For what it’s worth, we think this was all an exercise in political window dressing to get some version of a bill passed. If the Senate and the House actually agree on a climate change bill that puts a high tax on carbon, then the apotheosis of Obama will be complete.

We will take The One at his word, though. Besides, as everyone knows, the real purpose of the bill is not to start a trade war (although it may do so). The purpose is to make conventional energy more expensive AND--in an era of declining government tax receipts and rising liabilities--to create a huge new source of government revenues by taxing carbon. It’s a revenue and power grab by an institution (the Nation state) that finds itself increasingly off-balance.

It’s also a massive project in socioeconomic engineering that ignores the reality (and physics) of energy generation in an industrial society. It’s true the world could benefit from cleaner and cheaper energy. But cleaner and more expensive energy is a recipe for economic suicide. It’s something Western nations seem particularly keen on committing, although we can’t really figure out why. It could be that the global Left simply finds modern life aesthetically ugly and consumerism (with all that pesky individual choice) a vulgarity that should be destroyed via legislation.

But speaking strictly in economic terms, unless a region or a country has ample hydroelectric or geothermal resources, it’s impossible to meet base load electricity needs reliably with renewable energy. Advocates envision a world full of ultra-long life batteries, windmills, and solar farms. But it’s just a fantasy. If the climate bills become law in Australia and America, it will accelerate the deindustrialising of Western economies and mean the transfer of even more manufacturing jobs to the developing world.

Of course maybe that’s just what the architects of these laws want. Who knows? We know they want to tax productive enterprise and make the bulk of the population dependent on government handouts. That makes people compliant and easily controllable. That is big government Utopia. Advancing the fears of climate change is the easiest way to get more control.

We’d expect to see the construction of a lot more natural gas fired power plants in the coming years in the West (although they are more expensive than coal-fired plants). All those re-chargeable plug-in hybrids have to get their electrons from somewhere. If it’s not going to be coal (which will be taxed out of existence), it’s probably going to be cleaner-burning natural gas power plants, powered by both conventional and unconventional gas.

Right now, global LNG capacity is rising and stockpiles are fairly high. But if you keep your eye on the big picture and we see a transition of the world’s power plant fleet from coal to natural gas, it obviously favors gas producers and explorers. Australia is moving ahead by leaps and bounds in this area with conventional offshore production in the North West Shelf and Timor Sea and more unconventional production (hopefully) from coal-seam-gas in Queensland.

Dan Denning, Melbourne, Australia
Dan Denning is the author of 2005’s best-selling The Bull Hunter. A specialist in small-cap stocks, Dan draws on his network of global contacts from his base in Melbourne, Australia, and is a frequent contributor to The Daily Reckoning Australia.