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On FERC Commissioners: Clean Power Plan Doesn't Spell Doom for Grid Reliability

FERC’s Commission is made up of 100% political appointees, with very mixed-limited technical experience related to power grid’s designs, reliabilities and the possible impacts of the EPA’s proposed carbon regulation.  The Commissioners have primarily legal, public affairs and political backgrounds, with somewhat limited PUC and Power Industry related experience.

Yes, FERC will play an important role in ensuring the new EPA regulation does not knowingly harm major U.S. power grid reliabilities, but it’s not the FERC Commissioners’ technical expertise that one should rely on for (political) opinions at this time.  It will be their technical staffs and their individual leadership abilities to overcome less than value added political influence.  The FERC Commissioners need to make judgments/decisions based on analyses developed by the most qualified technical individuals and organizations (and not the EPA in the case of power grid reliability impacts).  One very qualified organization is North America Electric Reliability Corporation (NERC).  This organization is most capable of analyzing and determining the risks of each individual States’ compliance plans for the developing EPA carbon reduction regulation.  The NERC, of course, cannot begin any detailed analyses until after many of the States have submitted and the EPA has approved their individual compliance plans; over a year from now.

July 31, 2014    View Comment    

On Should the U.S. Implement a New 'Value-Added Carbon Tax' to Replenish the Federal Highway Trust Fund?

Thomas, when you travel around the States you might notice a significant deterioration in many roads average conditions compared to about 10 years ago.  Yes, this deterioration has developed despite the Stimulus spending (and arguably could be worse without it).  Safety issues such as deterioration of bridges should definitely be a priority.  How accurate the claimed 10,000’s of bridges that need immediate repair  is uncertain, but likely not insignificant.

At a recent meeting of most States’ Governors, they obviously prefer the Feds pay for needed improvements.  Reducing Federal HTF funding to individual States as you recommend will definitely force Governor’s to make those difficult political decisions and stop transferring their instate motor fuels excise taxes to non-roads maintenance priorities.  This situation could also force ('donee') States with inadequate instate motor fuels excise taxes to immediately begin implementing sufficient tax levels to meet instate highway/road priority maintenance needs.  Such an action will also force State Governments to do what most of them appear to rarely do or may have to develop the necessary skills: prioritizing the allocation of revenues to instate projects based on costs:benefits.  Political Cronies’, of course, may strongly disagree.  

July 23, 2014    View Comment    

On Why Does Politics Keep Getting in the Way of Pricing Carbon? - Part 1

If the health and environmental impacts are so bad and not continuous improving, where have the EPA, HHS, USDA, and other responsible Federal and State Agencies been all these years?  Also, how do you explain why the average life spans and general heath of Residents have continuously increased very significantly over the years?  Today, one of the largest causes of annual deaths (480,000) is due to smoking (primary & secondary exposure).  Why are people allowed to still smoke?  The top 3 causes for fatalities are heart disease, cancer and respiratory.  Smoking obviously contributes to all three of these poor health conditions.

In the somewhat distant past fossil fuels were also major contributors to health issues, but with the Clean Air and Water Acts and other Regulations (OSHA for example), these risks have been reduced substantially and most often eliminated since the 1970’s.  Today, how much do you believe negative health problems are caused by lifestyle choices such as obesity, high blood pressure, diabetes, and general poor eating/drinking habits or lack of exercise?

Yes, some fossil fuels such as coal power plant stack emissions should continue to be improved, but to imply we have made no progress in improving and preventing deterioration of our residential environments or ecosystems appears to be a convenient omission of the actual facts and progress made over the years.

July 22, 2014    View Comment    

On Why Does Politics Keep Getting in the Way of Pricing Carbon? - Part 1

Today fossil fuels supply about 84% of total primary energy for the World.  IEO 2013 basis.  Also, as I am sure you are aware, nuclear provides about 5% of total World primary energy; for a overall total up to 89% for non-renewables.    The balance or 11% of World energy supply comes from renewables; primarily hydropower and cellulosic material such as wood.  Other renewables (wind, solar, biofuels, etc.) are soon expected to possibly exceed nuclear.  Fossil fuels supplies were relatively insignificant 150 years ago and have dominated required World energy supplies (and associated GDP outputs) ever since.

The combination of available supply levels, technology innovations, and relatively high energy densities have historically made fossil fuels more cost effective than all other alternatives throughout most the World.  Today, the environmental impacts (or SCC) of fossil fuels, past & current, should already be built into most economies and associated GDP outputs.  The challenge moving forward will be developing lower carbon alternatives in the future that are truly cost-effective alternatives and those that are eventually sustainable without perpetual Governments’ support outside the free markets. 

Agreed, nuclear will definitely play a very important and significant role in a lower carbon future; including a wide variety/application transportation EV’s.

July 22, 2014    View Comment    

On Why Does Politics Keep Getting in the Way of Pricing Carbon? - Part 1

Jesse, as you are very aware most people generally ‘poll’ green but often are not willing to pay or vote green when the actual cost could become a significant Household burden.  Over the years I have studied and evaluated many options to replacing fossil fuels with lower/zero carbon alternatives.  On average the fully amortized cost appears to be an average of close to $100/MT.  Based on average U.S. Household carbon emissions of 34 MT/yr. and incomes of $52K/yr., this added 6.5% annual expense can be fairly difficult sell or persuade the average Household Head that it is justified (in the short term).

Another factor to consider is the probability of different climate change projections actually developing and the accuracy of the published estimated social carbon costs (SCC).  The one gap I consistently observe when trying to analyze SCC studies and validate some of their assumptions/conclusions is the omission of the ‘social and economic value’ of current carbon consumption.  Can you provide any reasonably balanced analysis references that also address current social/economic values provided by carbon consumption?

July 21, 2014    View Comment    

On Condensate Pries Open the Oil Export Lid

Geoffrey, allowing condensate exports may be a ‘smart move’ in a free, open and stable world market, but with today’s Middle East instabilities it is not without significant future risk.  From the perspective of 'energy security' it may not be such a smart move.  As you are aware, today the U.S. consumes 18.9 million barrels per day (MBD) of petroleum products and has total imports of 9.8 MBD.  We also export 3.6 MBD of primarily ‘refined products’, for total ‘net’ imports of 6.2 MBD; or 33% of total products supplied/consumed.  This level of imports is greater than prior to the 1973 Arab OPEC oil embargo.  The highest risk (to import supplies disruption) are the 2.0 MBD of Persian Gulf oil imports; or over 10% of total U.S. consumption.  Once again, still greater than the level of disrupted Arab OPEC imports embargoed in 1973.

The current level of approved condensate exports are relatively insignificant (few thousand barrels) compared to the 3.6 MBD refined products exports.  Substantially increasing condensate exports and expanding the policy to include crude oil could definitely become problematic not only for U.S. future energy security, but also for sustaining the Refining Industry and associated manufacturing jobs.  As you are well aware the Refining Industry capacity and utilization has been relatively constant the past decade despite the 2007-09 recession and a 9% drop in U.S. total consumption.  Processing domestic and imported oil into petroleum products exports has been a critical option to maintaining this part of the U.S. Manufacturing Sector.  Many major Refiners are in the process of evaluating and designing the equipment modifications needed to process increased levels of condensate.  The Commerce Department's recent approval to allow condensate exports creates an immediate and possibly very significant investment risk to building the new Refining equipment-modifications necessary to increase the current domestic capacity to process increased condensate.

July 21, 2014    View Comment    

On New EPA Carbon Regulation: What will the Impacts be on Consumer Power Costs?

Lewis, excellent point.  Sometimes we technical folks get buried in the details of the original research project scope and miss properly highlighting the key findings at the beginning of the article.  That’s why having independent Editor review definitely adds value.  Thanks much for the feedback. 

July 18, 2014    View Comment    

On Will the EPA's New Carbon Rule Survive Judicial Challenge?

Coal Power Generation with CCS is likely a EOR niche market at best and will increase power costs many times current average market levels.  The EPA’s proposed NSPS based rule is another example of ‘technology forcing’ regulation that assumes near future innovations will be made that are cost effective compared to alternatives.  In this case you are absolutely correct that the majority of Coal will most likely be replaced by Natural Gas Power in the near future.  Re. Impacts of Shutting Down Most U.S. Coal Power: Part 1, Part 2, and Part 3.  What the EPA also overlooks is the combined impacts of this Section 111(b) NSPS regulation in addition to their more recent Section (d) 30% carbon emission reduction for existing Power Generation.  Besides leading to U.S. power costs doubling-tripling current levels (unless Nuclear Power generation is substantially increased), replacing most Coal with Natural Gas Power will likely consume all future-growing domestic natural gas production; despite the substantial expansion from hydraulic fracturing.  Besides increasing the cost of natural gas (both power & heat), unless enormous improvements are made to Consumer efficiency-consumption behaviors (another EPA grossly questionable assumption; Re. New EPA Carbon Regulation) the U.S. could actually be forced to once again import natural gas within the next couple decades.

July 16, 2014    View Comment    

On Carbon Capture and Storage is Coal's Pipe-Dream

Roy, sequestering carbon dioxide is definitely not without its environmental/safety risks.  Unfortunately your referenced BLM link does not appear to work.  What is the title and date of the BLM report?  The report I am familiar with (EISA 2007 Section 714 Compliance) also does a good job of covering some of the sequestering issues of concern; on Public/Federal lands.  

July 15, 2014    View Comment    

On Carbon Capture and Storage is Coal's Pipe-Dream

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July 15, 2014    View Comment    

On New EPA Carbon Regulation: What will the Impacts be on Consumer Power Costs?

I seriously doubt the EPA intends to put power grid’s required generation capacities/reliabilities at risk as part of their 30% reduced carbon regulatory strategy.  However, putting some power grids at significant stability/reliability risk could be an unintended consequence if the EPA fails to properly analyze the impacts of the numerous and likely independent State’s submitted reduced carbon compliance plans.   To avoid significant risks the EPA needs to work closely and diligently with expert organizations such as the NERC.  Failure to do so could result in significantly increased local/regional brown- and black-outs in the future.  Such an (unintended) outcome will likely make negatively impacted power Customers very unhappy; particularly when they are forced to pay up to double current power costs for potentially less reliable ‘on-demand’ power.

July 14, 2014    View Comment    

On Seeking Consensus on the Internalized Costs of Energy Storage via Batteries

Nathan, my past research found that recent years’ Li-ion automobile batteries have costs closer to the $500/KWh range.  The higher cost is due to a combination of new technology and ‘light-weight’ designs.  The lighter weight Li-ion batteries are more likely to have reduced lives (up to about 5 yr. max.) and light-weight designs that definitely make the batteries more susceptible to damage that leads to shorting-out/fires; compared to heavier stationary battery applications.  Stationary batteries should also be cheaper, and possibly half the cost of light weight auto batteries; or in the $270/KWh range that Clayton references.  This is still a magnitude pricier than lead-acid batteries that have historically been used in off-grid applications (with backup petroleum motor fueled generators of course) in most Developing Countries (Mexico, India, etc.).  Lead-acid batteries are definitely cheaper, but their lives’ are typically only a couple-three years, however.  

July 12, 2014    View Comment