As Warren Meyer writes in Forbes: “Obama made the decision to block the pipeline because of concern over contamination of the Ogallala Reservoir….But local environmental concerns were merely the public pretext for a decision that is much more troubling. Opposition to the pipeline began to rally among radical environmental groups long before any of them had the first clue about the pipeline route. The real goal of these groups was not to protect water along the pipeline route, but to make it impossible to develop new sources of oil in Canada.”

The pattern of obstructing American energy production is seen with the EPA’s regulatory war on electricity production from coal-fired plants, with Interior Secretary Salazar’s withdrawal of uranium resources in northern Arizona, and with its de facto moratorium on off-shore drilling.

I have previously written about how Obama seems clueless on energy (see links below). I wonder, however, whether it is truly a lack of understanding or whether it is a concerted ideological quest to cripple America. The White House website has said, “”We need to deploy American assets, innovation, and technology so that we can safely and responsibly develop more energy here at home and be a leader in the global energy economy.” But action gives the lie to the rhetoric.

See also:

Keystone XL pipeline and the Ogallala aquifer

Obama Clueless on Energy – Part 1

Obama Clueless on Energy – Part 2

Obama administration still clueless on energy

Obama’s April Fools Joke

Politics versus American Energy Security

Investor’s Business Daily says:

A  member of Obama’s presidential transition team, T. J. Glauthier, is a ‘strategic advisor’ at Solazyme, the California company that is selling a portion of the biofuel to the Navy.  Glauthier worked on the energy-sector portion of the 2009 stimulus bill.  Solazyme had already gotten a nearly $22 million chunk of change out of the taxpayers thanks to the 2009 stimulus.

And this is only the beginning of this two-for-one bad deal — swindling taxpayers while ravaging national security. Obama’s Agriculture and Energy departments and Navy plan to spend $510 million over three years buying biofuel for military and commercial purposes, bypassing Congress by “leveraging Defense Department procurement.”

See also:

EIA says Clean Energy program will increase electricity costs 29%

Electricity generated by wind power may raise temperatures and costs

The cost of energy conservation

Another Federal Boondoggle?

A case in point: As a result of Arizona’s effort to boost renewable energy use and energy efficiency, we are using less natural gas.  That puts Southwest Gas in an bind.  They contend that with lower usage, they are unable to recover fixed costs to provide service.  Southwest Gas and other utilities are therefore urging the Arizona Corporation Commission to allow the utilities to impose a surcharge to gas customers, that is, allow the utilities to “decouple” charges from actual usage.  That policy will, of course, cost ratepayers more.  Not a good incentive for conservation.

We are already paying the cost of renewable energy mandates for electricity.  The Arizona Corporation Commission, in its benighted wisdom, requires electric utilities to produce an increasing percentage of electricity from much more expensive renewable sources due to fear of the phantom menace of global warming.

Tucson Electric Power Company notes that in 2011 it collected an extra $36 million from ratepayers to pay for renewable energy installations (mainly solar), and that in 2012 it expects to collect an extra $44 million in ratepayer money for these projects.

The Arizona Corporation Commission is not serving the public with these policies.  It is mandating that we produce electricity from more expensive and less reliable sources.  To put that in perspective the Energy Information Administration calculated the costs of electricity generation in dollars per megawatthour as follows:

Conventional coal power: $100.40; Natural gas: $83.10; Nuclear: $119.00; Onshore wind power: $149.30; Offshore wind power: $191.10; Thermal solar power: $256.60, Photo-voltaic solar power: $396.10. Note also, that the availability, i.e., the ability to produce electricity on demand, according to EIA, is 85% for coal, 87% for natural gas, 90% for nuclear, but only 34%-39% for wind, and 21%-31% for solar.

I urge the state legislature to take the power of issuing mandates away from the Commission and repeal the renewable energy standards.  That way utilities will be free to seek more efficient and cost effect ways of providing electricity.

See also:

Solar energy cannot economically compete in electricity generation

The graph below shows the relative costs of producing electricity by various means.  The data are from the U.S. Energy Information Administration’s Annual Energy Outlook for 2011. (Link).  The data were graphed by Willis Eschenbach.  The costs are in cents per kilowatt hour. The blue part represents capital and transmission costs; the red part represents fuel, operation, and maintenance costs.

As you can plainly see, solar energy is much more expensive and would not be considered for utility-scale electricity generation were it not for government mandates and subsidies.  Another problem with solar generation is that it requires backup power because even in Arizona, the sun doesn’t shine all the time.  Solar plants typically produce just a fraction of their rated capacity.  For instance, TEP operates one of the largest solar PV arrays in the United States, a 5-MW system. But over two years of operation, the capacity factor for that generator has averaged 19%, meaning it produced only 19% of its rated capacity most of the time.

One of the rationales for using solar (and wind) energy is that it is supposed to reduce our carbon dioxide emissions, but that isn’t necessarily so if the backup generation comes from fossil-fuel powered plants.  A study in the Netherlands shows that the intermittent generation by wind actually increases carbon dioxide emissions because the fossil fuel-run backup generators have to cycle up and down constantly rather than being run efficiently at a constant output.  That cycling uses more fuel. (Note, the study was specific to wind power, but it could be applied to intermittent solar power also due to variable generation on cloudy days.)

Some may argue that the cost of solar cells is rapidly falling.  But, the cost of the cells themselves is a small part of what goes into a utility scale power plant.

Our modern society depends upon having a reliable source of electricity.  Wind and solar generation are not reliable.  As we increase our dependence of these unreliable sources we increase the risk of electrical brownouts or blackouts which disrupt vital services and commerce.

Perhaps our corporation commissioners think they are doing the right thing for the planet, but their benighted mandate may actually be doing the opposite because it ties up money and resources that could perhaps be put to better use to help solve real problems.  Again, who benefits?

Our state legislators should repeal the renewable energy standards mandate and let the utility companies produce electricity by less expensive and more reliable means.

Then we will see whether or not the utilities employ solar energy voluntarily.

See also:

APS wants electric energy efficiency to cost more

Arizona Corporation Commission May Ration Electricity

Smart Grid may ration electricity

Will you let the power company control your air conditioner?

Currently First Solar (Paloma project) and Cotton Center have solar plants under construction that will provide Arizona Public Service with enough electricity to power 9,000 homes so they claim.  Several other companies have permit applications pending.

According to the article, “the town government [is expediting] the speed at which solar companies’ construction plans could get approved. Processes that usually take at least a year, and often several years, can now go through public hearings, citizen review sessions, planning and zoning commissions hearings, publication in a newspaper, and council approval in as little as four weeks.” See complete press release here.

First Solar, a Tempe manufacturer of solar panels,  is one of the companies that received loan guarantees just one day before the federal program expired.  Cotton Center is getting its solar panels from Solon Corp. in Tucson.

These two photovoltaic plants join the Solana plant which is a concentrating thermal solar facility that broke ground near Gila Bend in December, 2010, aided by a $1.45 billion federal loan guarantee.

This boomlet of solar installation is funded by taxpayer subsidies and is a result of the state’s renewable energy standards mandate that require electric utilities to produce at least 15% of their electricity from renewable resources by 2025.

In general, electricity production from solar power is much more expensive than from coal or natural-gas fired plants . (see National Renewable Energy Standard Will Mean Higher Electricity Bills).  Already I can see extra fee charges on my electric bill from Tucson Electric Power.

White House rhetoric:

“We need to deploy American assets, innovation, and technology so that we can safely and responsibly develop more energy here at home and be a leader in the global energy economy.” – White House website.

“[T]he Obama Administration has launched the most aggressive and comprehensive reforms to offshore oil and gas regulation and oversight in U.S. history to ensure that our nation can safely and responsibly expand development of its offshore energy resources.” – White House website

The reality:

Exploring for oil and gas offshore has been an on-again, off-again circus.  The latest round is a de facto moratorium.  On November 8, 2011, the Obama administration announce a draft plan that would close exploration drilling on the outer continental shelf until 2017.

This moratorium places some of the most promising areas off limits and blocks some leases that were in progress.  This policy certainly is “aggressive” but misguided.

The Keystone XL pipeline would bring additional oil from Canada.  Canada currently supplies us with more oil than all the Persian Gulf sources combined, and this pipeline would put an additional large dent in that unstable source.

The pipeline is awaiting administration approval.  President Obama is caught between his environmentalist lobby supporters who want him to ban the pipeline, and the unions because the pipeline would create many new jobs.  President Obama has decided not to decide until after the 2012 election when he will have less need of these opposing forces.

White House rhetoric:

“As we recover from this recession, the transition to clean energy has the potential to grow our economy and create millions of jobs – but only if we accelerate that transition. Only if we seize the moment.” – President Barack Obama

The reality:

This is a green fantasy that ignores reality.  So-called clean energy or green energy, such as solar and wind generation, is actually a parasite on the economy because neither would exist without government mandates and subsidies.  Expenditures on these programs divert resources that could otherwise be spent on more economical and productive development.

One administration claim is that increased use of solar and wind generation will reduce our dependence on foreign oil imports, but this doesn’t fly because less that 1% of our electricity is produced from petroleum.

The experience in Europe should serve as a warning:

Spain spent €571,138 (Euros) to create each ‘green job’, including subsidies of more than €1 million per wind industry job.” “… the programs creating those jobs also resulted in the destruction of nearly 110,500 jobs elsewhere in the economy,” and that “each ‘green’ megawatt installed [including solar jobs] destroys 5.28 jobs on average elsewhere in the economy.” The study also estimates that between subsidies, and higher production costs, Spaniards would have to pay 31% higher electricity prices to repay the incurred debt.

The administration’s EPA is also promulgating unrealistic regulations which will harm our ability to produce energy.  For a story close to home, The San Pedro Valley News-Sun has a story which starts:

The U.S. Environmental Protection Agency is proposing new regulations that, if enacted, could cause the cost of generating electricity to go up substantially in rural areas. In some cases, the cost of implementing the infrastructure to support the regulatory changes is so prohibitive, power generation facilities may be forced to shut down entirely.

Potential regulatory changes involving the sequestering of carbon and how coal ash is used – if enacted – could impact generating stations throughout rural America, including Cochise County, said Geoff Oldfather, the communications, marketing and public relations manager for Arizona Electric Power Cooperative.  (Read the rest of the story here.)

Politics and environmental zealotry are getting in the way of sound energy policy.

UPDATE:

Canadian Prime Minister Stephen Harper said Sunday that he was looking at exporting more oil to China after the United States delayed a decision on a controversial pipeline.  Read more here.

See also:

Obama Clueless on Energy – Part 1

Obama Clueless on Energy – Part 2

Obama administration still clueless on energy

Blowing in the Wind, a look at green jobs

The myth of green jobs

Clean Coal: Boon or Boondoggle?

EIA says Clean Energy program will increase electricity costs 29%

In a new report (see here) EIA examines the proposed federal Clean Energy Standard (CES) program. CES requires electrical generation utilities to produce an increasing percentage of electricity from so-called clean sources such as hydroelectric, solar, and wind.  The stated rationale for this program is to reduce dread carbon dioxide emissions to forestall global warming.

Under CES, carbon dioxide emissions are projected to be 60% less than the reference case by 2035.  EIA projects the cost of electricity to rise 16% by 2025 and 29% by 2035 as a result of the program.  EIA projects the average household will spend $211 more per year for electricity.

EIA also projects that the cost of natural gas will rise 9.3% by 2025 and level off to an increase of 5.4% by 2035.  Non-electrical natural gas expenditures will increase 10% by 2035.

The impact of CES will vary regionally.  Those areas more dependent on fossil fuel generated electricity will experience higher electricity costs than those areas which have more nuclear and hydroelectric generation.

Real GDP will be reduced, reaching a peak reduction of 0.8% in 2024, but converging to a 0.3% reduction by 2035.  EIA also says that CES will negatively affect non-farm employment from 2015 through the mid 2020s.

The EIA does not speculate upon the effect of CES in reducing global warming.  But I can.  In my post Your Carbon Footprint doesn’t Matter , I estimate that if all U.S. carbon dioxide emissions were suddenly stopped, it could reduce global warming by 0.003°C.  If CES reduces carbon dioxide emissions by 60% (and ignoring burning of fossil fuels for transportation), the program has the theoretical possibility of reducing global warming by something like 0.001 C or less.   Will we notice the difference for all the dollars spent?

While the concern over spills is something to consider, history shows that the pipeline is very safe.  According to TransCanada, the pipeline owner, there have been 14 spills since 2010, most of these occurred at pumping stations rather from a ruptured pipeline.  The typical spill was 5 gallons and the largest was 21,000 gallons but only 210 gallons escaped the plant.

But what if there is a major rupture where the pipeline passes over the aquifer?

Here is where geology comes in.  The geological situation is explained in detail by hydrogeologist Jim Goeke in an article in the (Nebraska) JournalStar. Dr. Geoke has had 40-years of experience with the aquifer.

The first thing you should realize is that the aquifer slopes from west to east, so only the downslope part of the aquifer would potentially be affected by a spill.

Secondly, the geologic nature of the aquifer, which at its shallowest is 300 feet below the surface, would tend to confine any spill to a very small area.

See also:

Fossil fuel resources of the United States

Shale oil and environmental concerns

A good reason to eliminate the Energy Department and its budget

Clean Coal: Boon or Boondoggle?

This should be enough for the U.S. to be independent of middle-eastern and other unfriendly sources. However, a large part of these resources are unavailable due to government regulations. For instance, most of the off-shore component of these resources is unavailable due to the de facto moratorium on exploration (see Obama’s April Fools Joke.) Many prime on-shore areas are blocked due to various government regulations such as application of the Antiquities Act.

The resources reported above are just part of the potential ultimate resource. The graph below (from the Congressional report) shows the situation for Oil, but the pyramid structure holds true for all mineral resources.

 The “Reserves” category is that portion of the resource that has been proven and measured according to strict rules and reported to the Securities and Exchange Commission as bankable assets.

 The “Undiscovered technically recoverable” category also has a strict meaning. This category consists of those areas that have geological characteristics similar to those of producing areas. These estimates are made by the U.S. Geological Survey for on-shore resources and by the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement (formerly the Minerals Management Service) for off-shore resources.

The bottom and largest resource category is the “Discovered and Undiscovered sub-economic resources.” These deposits may be currently sub-economic because of the state of technology, the state of supply and demand, or the state of regulation. Shale gas was in this category until very recently. Methane hydrates are still in this category.

When I first began working as a geologist, oxide copper deposits were in the bottom category because there was no economic way to exploit this resource on a large scale. However, with development and widespread use of solvent-extraction/electro-winning technology, these deposits because economic and are now responsible for a significant part of our copper production.

Human ingenuity produces the technological innovations and human ignorance or ideology produce the regulatory impediments. With a more rational energy policy the U.S. could have more jobs and more secure sources of the natural resources we depend upon.

See also:

Obama Clueless on Energy – Part 1

Obama Clueless on Energy – Part 2

Obama administration still clueless on energy

Obama says Drill Baby Drill just not in the United States

Gasoline Prices and the Obama Energy Policy

Clean Coal: Boon or Boondoggle?

The author, Dr Gordon Hughes, is a Professor of Economics at the University of Edinburgh. He was a senior adviser on energy and environmental policy at the World Bank until 2001. He has advised governments on environmental policies and was responsible for some of the World Bank’s most important environmental guidelines.

Some excerpts (British spelling preserved):

Claims by politicians and lobbyists that green energy policies will create a few thousand jobs are not supported by the evidence. In terms of the labour market, the gains for a small number of actual or potential employees in businesses specialising in renewable energy has to be weighed against the dismal prospects for a much larger group of workers producing tradable goods in the rest of the manufacturing sector.

The government target for generating electricity from renewable energy sources will involve a capital cost that is 9-10 times the amount required to meet the same demand by relying upon conventional power plants.

The extra investment required for renewable energy – about £120 bln ($194 billion) – will be diverted from more productive uses in the rest of the economy.

Increases in the cost of energy together with the diversion of investment funds means that many manufacturing firms will either go bankrupt or relocate.

The cumulative impact of these policies could amount to a loss of 2-3% of potential GDP for a period of 20 years or more.

　

The full report can be downloaded here: The Myth of Green Jobs

See also:

Blowing in the Wind, a look at green jobs This article examines the experience from Spain and Denmark. In Spain for every green job created, 2.2 other jobs were lost. In Denmark, they found “that the effect of the government subsidy [to the wind industry] has been to shift employment from more productive employment in other sectors to less productive employment in the wind industry. As a consequence, Danish GDP is approximately 1.8 billion DKK ($270 million) lower than it would have been if the wind sector work force was employed elsewhere.”

And, of course, in the U.S. there was this: the $535 million in stimulus cash lent to solar panel maker Solyndra, is now lost because Solyndra is bankrupt and out of business, having taken 1,100 jobs with it.