Red Flag: Ontario’s Green Energy Debacle

Babatunde Williams writes at Spiked Ontario’s green-energy catastrophe.  Excerpts in italics with my bolds

A transition to renewables sent energy prices soaring, pushed thousands into poverty and fueled a populist backlash.

In February 2009, Ontario passed its Green Energy Act (GEA). It was signed a week after Obama’s Economic Recovery and Reinvestment Act in the US, following several months of slow and arduous negotiations. It also had grand plans to start a ‘green’ recovery following the financial crash – although on a more modest scale.

This was the plan: increased integration of wind and solar energy into Ontario’s electricity grid would shut down coal plants and create 50,000 green jobs in the first three years alone.

Additionally, First Nations communities would manage their own electricity supply and distribution – what observers would later call the ‘decolonisation’ of energy – empowering Canada’s indigenous communities who had been disenfranchised by historical trauma. Lawmakers promised that clean and sustainable energy provided by renewables would also reduce costs for poorer citizens. This won an endorsement from Ontario’s Low Income Energy Network – a group which campaigns for universal access to affordable energy.

But on 1 January, 2019, Ontario repealed the GEA, one month before its 10th anniversary. The 50,000 guaranteed jobs never materialised. The ‘decolonisation’ of energy didn’t work out, either. A third of indigenous Ontarians now live in energy poverty. Ontarians watched in dismay as their electricity bills more than doubled during the life of the GEA. Their electricity costs are now among the highest in North America.

To understand how the GEA went irreparably wrong, we must look at Ontario’s contracts with its green-energy suppliers. Today, Ontario’s contracts guarantee to electricity suppliers that they ‘will be paid for each kWh of electricity generated from the renewable energy project’, regardless of whether this electricity is consumed. As preposterous as this may seem, it’s actually an improvement on many of the original contracts the Ontario government locked itself into.

Earlier contracts guaranteed payments that benchmarked close to 100 per cent of the supplier’s capacity, rather than the electricity generated. So if a participating producer supplied only 33 per cent of its capacity in a given year, the state would still pay it as if it had produced 100 per cent.

This was especially alarming in context, as 97 per cent of the applicants to the GEA programme were using wind or solar energy. These are both intermittent forms of energy. In an hour, day or month with little wind or sun, wind and solar farms can’t supply the grid with electricity, and other sources are needed for back-up. As a result, wind and solar electricity providers can only supplement the grid but cannot replace consistently reliable power plants like gas or nuclear.

Many governments, including other Canadian provinces, have used subsidies of all hues to incentivise renewables. But Ontario put this strategy on steroids. For example, the Council for Clean and Reliable Energy found that ‘in 2015, Ontario’s wind farms operated at less than one-third capacity more than half (58 per cent) the time’. Regardless, Ontarians paid multiple contracts as if wind farms had operated at full capacity all year round. To add insult to injury, Ontario’s GEA contracts guaranteed exorbitant prices for renewable energy – often at up to 40 times the cost of conventional power for 20 years.

By 2015, Ontario’s auditor general, Bonnie Lysyk, concluded that citizens had paid ‘a total of $37 billion’ above the market rate for energy. They were even ‘expected to pay another $133 billion from 2015 to 2032’, again, ‘on top of market valuations’. (One steelmaker has taken the Ontarian government to court for these exorbitant energy costs.)

Today, this problem persists.  Furthermore, electricity demand from ratepayers declined between 2011 and 2015, and has continued to fall. Ontarians were forced to pay higher prices for new electricity capacity, even as their consumption was going down.

Ontario’s auditor general in 2015 stated that: ‘The implied cost of using non-hydro renewables to reduce carbon emissions in the electricity sector was quite high: approximately $257 million [£150million] for each megatonne of emissions reduced.’ Per tonne of carbon reduced, the Ontario scheme has cost 48 per cent more than Sweden’s carbon tax – the most expensive carbon tax in the world.

Clearly, bad policy has led to exorbitant waste. This wasn’t the result of corruption or conspiracy – it was sheer incompetence. It’s a meandering story of confusion and gross policy blunders that will fuel energy poverty in Ontario for at least another decade.

As democracies across the West respond to the coronavirus crisis with hastily prepared financial packages for a ‘green recovery’, they should consider the cautionary tale of Ontario.

The GEA’s stubborn defenders refuse to recognise that poor policy, even with the best intentions, discredits future efforts at cutting emissions. ‘Green New Deals’ for the post-pandemic recovery in the US and Europe should learn from the GEA. Clean energy at any cost will be rightfully short-lived and repealed, and its supporters will be unceremoniously booted out of power.

See Also:  Electrical Madness in Green Ontario

 

Oil Demand No End in Sight

Your next car? NURPHOTO VIA GETTY IMAGES

Michael Lynch writes at Forbes  Peak Oil Demand! Again?  Excerpts in italics with my bolds.

Amid stubbornly low prices and lackluster demand we’re now seeing, on cue, a new round of predictions that oil demand has already or is about to peak (including even scenarios published by BP). These cannot be dismissed out of hand — as the peak oil supply arguments could, inasmuch as they were either based on bad math or represented assumptions that the industry couldn’t continue overcoming its age-old problems like depletion. (See my book The Peak Oil Scare if you want the full treatment.)

Now, the news is highlighting various predictions that the pandemic will accelerate the point at which global oil demand peaks, which is certainly much more sexy than business as usual. When groups like Greenpeace or the Sierra Club predict or advocate for peak oil demand, it doesn’t make much news: dog bites man. But, as the newspeople say, when man bites dog it is news. Thus, when oil company execs seem to believe peak oil demand is near, you get headlines like, “BP Says the Era of Oil Demand-Growth is Over,” The Guardian newspaper proclaiming that “Even the Oil Giants Can Now Foresee the End of the Oil Age,” and Reuters in July: “End game for oil? OPEC prepares for an age of dwindling demand.”

Anyone who is familiar with the oil industry knows that a peak in oil production has been predicted many times throughout the decades, never to come true (or deter future predictions of same). But few realize that the end of the industry has been repeatedly predicted as well, including both the demise of an old-fashioned business model, but also replacement of petroleum by newer, better technologies or fuels.

Until the 1970s, few saw an end to the oil business. The automobile boom created a seemingly insatiable demand for oil, one which has only slowed when prices rose and/or economic growth stalled, neither of which has ever proved permanent.

Yet there have been three particular apocalyptic threads put forward for the oil industry: the industry would spiral into decline, demand would peak, and/or a new fuel or technology would displace petroleum.

The oil industry’s business model was challenged as far back as 1977, when Mobil XOM +1.3% CEO Rawleigh Warner tried to diversify out of the oil business for fear that those who didn’t would “go the way of the buggy-whip makers.” Similarly, Mike Bowlin, ARCO’s CEO, declared in 1999 “We’ve embarked on the beginning of the last days of oil.” Enron’s Jeff Skilling (whatever happened to him?) said he “had little use for anything that smacked of a traditional energy company — calling companies like Exxon Mobil ‘dinosaurs’”

Vanishing demand has been another common motif for prognosticators, especially when high prices caused demand to slump. Exxon CEO Rex Tillerson (whatever happened to him?) thought in 2009, when gasoline prices were $4/gallon, that gasoline demand had peaked in 2007. (The figure below shows how that worked out.)

Gasoline demand peaks then recovers U.S. Gasoline Demand (tb/d) THE AUTHOR FROM EIA DATA.

Sheikh Yamani, the former Saudi Oil Minister, warned in 2000 that in thirty years there would be “no buyers” for oil, because fuel cell technology would be commercial by the end of that decade. (From 2000, oil demand increased by 20 mb/d before the pandemic.) The fabled Economist magazine agreed with Yamani in 2003, “Finally, advances in technology are beginning to offer a way for economies, especially those of the developed world, to diversify their supplies of energy and reduce their demand for petroleum…Hydrogen fuel cells and other ways of storing and distributing energy are no longer a distant dream but a foreseeable reality.”

They might have been echoing William Ford, CEO of Ford Motor Company F +0.6%, who said in 2000, “Fuel cells could be the predominant automotive power source in 25 years.” Twenty years later, they are insignificant.

Amory Lovins, whose has probably received more awards than Tom Hanks, has long argued that extremely efficient (and expensive) cars would reduce gasoline demand substantially, including in his (and co-authors) Winning the Oil Endgame, which argued that a combination of efficiency and celluslosic ethanol could replace our imports from the Persian Gulf (then about 2.5 mb/d). (They’ve been replaced, but by shale oil, and demand was unchanged since their prediction.)

He was hardly alone, with Richard Lugar and James Woolsey in a 1999 Foreign Affairs article calling cellulosic ethanol “The New Petroleum.” Perhaps they relied on a 1996 Atlantic article by Charles Curtis and Joseph Room (“Mideast Oil Forever”) which argued that cellulosic ethanol should see its cost fall to about $1/gallon (adjusted for inflation). (In 2017, the National Renewable Energy Laboratory put the cost at $5/gallon.)

One of my persistent themes has been that too much writing is not based on rigorous analysis but superficial ideas, a few anecdotes and footnotes, supposedly supporting Herculean changes.

(See Tom Nichols The Death of Expertise.) Peak oil demand is the flavor of the month and people are rushing to publish predictions, prescriptions, guidelines, and fantastical views of a fantastical future. But petroleum remains by far the fuel of choice in transportation and the pandemic seems unlikely to change that. Sexy should be left for HBO and not energy analysis.

There are many reasons the demand for fossil fuels is strong and growing.  

Footnote:  Shareholder activism against Big Oil is based on a cascade of unlikely suppositions including declining demand and stranded assets.  See: Behind the Alarmist Scene

 

 

Stop Pension Funds Gambling on Energy Fads

Haley Zaremba writes at oilprice Will Trump’s Proposed ESG Regulation Help Big Oil? Excerpts in italics with my bolds.

The ESG Push to Gamble Pension Funds on Climate Concerns

Instead of joining the financial revolution geared toward environmental, social, and governance (ESG) that many experts believe is coming down the pike (with or without the cooperation of the United States) the Trump administration has actively fought against this likely inevitability. A new proposed regulation from the United States Department of Labor would explicitly bar the department from taking ESG into consideration in decision making concerning U.S. employer-provided pension funds. Ostensibly, this move is because the government doesn’t believe that the nation’s pension fund managers are doing a good job, but many critics see this as a blatant attempt to redirect investment dollars towards fossil fuels, which are increasingly falling out of favor with investors.

[Note: The author’s bias shows, favoring subsidized wind and solar enterprises over oil and gas companies that provide reliable energy powering modern civilization, reliable returns and tax revenues.]

This week Bloomberg Green reported that in this new proposed ruling, “the language reaffirms the standard interpretation of fiduciary guidelines that only financial risks and returns can be considered in the management of U.S. employer-provided pension funds; ‘non-pecuniary goals,’ for example relating to political or public policy, should not guide pension investments.” As Bloomberg Green points out in the report, “The timing is ironic, coming as the fossil fuel industry begins to confront existential questions about its near-term future. It would almost be amusing if it wasn’t for the fear, uncertainty, and doubt the proposal leaves in its wake.”

For Balance, Consider How Risky are Wind and Solar Investments

Paul Driessen writes at CFACT Reporting renewable energy risks.  Excerpts in italics with my bolds.

The whole thrust of the ESG campaign is to burden oil, gas and coal companies with additional reporting and scrutiny regarding hypothetical global warming impacts and to downgrade their worth in investors’ eyes.  Driessen correctly points to the risk of renewable energy projects collapsing when public support and tax dollars are withdrawn, as is already happening in some European countries.

If efficient energy companies must disclose climate-related financial risks, so should renewables.

Replacing coal, gas and nuclear electricity, internal combustion vehicles, gas for home heating, and coal and gas for factories – and using batteries as backup power for seven windless, sunless days – would require some 8.5 billion megawatts. Generating that much electricity would require some 75 billion solar panels … or 4.2 million 1.8-MW onshore wind turbines … or 320,000 10-MW offshore wind turbines … or a combination of those technologies … some 3.5 billion 100-kWh batteries … hundreds of new transmission lines – and mining and manufacturing on scales far beyond anything the world has ever seen.

That is not clean, green, renewable energy. It is ecologically destructive and completely unsustainable – financially, ecologically and politically. That means any company, community, bank, investor or pension fund venturing into “renewable energy” technologies would be taking enormous risks.

Once citizens, voters and investors begin to grasp:

  • (a) the quicksand foundations under alarmist climate models and forecasts;
  • (b) the fact that African, Asian and even some European countries will only increase their fossil fuel use for decades to come;
  • (c) the hundreds of millions of acres of US scenic and wildlife habitat lands that would be covered by turbines, panels, batteries, biofuel crops and forests clear cut to fuel “climate-friendly” biofuel power plants; and
  • (d) the bird, bat and other animal species that would disappear under this onslaught – they will rebel. Renewable energy markets will implode.

Growing outrage over child labor, near-slave labor, and minimal to nonexistent worker health and safety, pollution control and environmental reclamation regulations in foreign countries where materials are mined and “renewable” energy technologies manufactured will intensify the backlash and collapse. As the shift to GND energy systems brings increasing reliance on Chinese mining and manufacturing, sends electricity rates skyrocketing, kills millions of American jobs and causes US living standards to plummet, any remaining support for wind, solar and other “renewable” technologies will evaporate.

Pension funds and publicly owned companies should therefore be compelled to disclose the risks to their operations, supply chains, “renewable energy portfolio” mandates, subsidies, feed-in tariffs, profits, employees, valuation and very existence from embarking on or investing in renewable energy technologies or facilities. They should be compelled to fully analyze and report on every aspect of these risks.

The White House, Treasury Department, Securities and Exchange Commission, Federal Reserve, Committee on Financial Stability, Pension Benefit Guaranty Corporation and other relevant agencies should immediately require that publicly owned companies, corporate retirement plans and public pension funds evaluate and disclose at least the following fundamental aspects of “renewable” operations:

* How many wind turbines, solar panels, batteries, biofuel plants and miles of transmission lines will be required under various GND plans? Where? Whose scenic and wildlife areas will be impacted?

* How will rural and coastal communities react to being made energy colonies for major cities?

* How much concrete, steel, aluminum, copper, cobalt, lithium, rare earth elements and other material will be needed for every project and cumulatively – and where exactly will they come from?

* How many tons of overburden and ore will be removed and processed for every ton of metals and minerals required? How many injuries and deaths will occur in the mines, processing plants and factories?

* What per-project and cumulative fossil fuel use, CO2 and pollution emissions, land use impacts, water demands, family and community dislocations, and other impacts will result?

* What wages will be paid? How much child labor will be involved? What labor, workplace safety, pollution control and other laws, regulations, standards and practices will apply in each country?

* What human cancer and other disease incidents and deaths are likely? How many wildlife habitats will be destroyed? How many birds, bats and other wildlife displaced, killed or driven to extinction?

* For ethanol and biodiesel, how much acreage, water, fertilizer, pesticide and fossil fuel will be required? For power plant biofuel, how many acres of forest will be cut, and how long they will take to regrow?

* What “responsible sourcing” laws apply for all these materials, and how much will they raise costs?

* How will home, business, hospital, defense, factory, grid and other systems be protected against hacking and power disruptions caused by agents of overseas wind, solar and other manufacturers?

* What costs and materials are required to convert existing home and commercial heating systems to all-electricity, upgrade electrical grids and systems for rapid electric vehicle charging, and address the intermittent, unpredictable, weather-dependent realities of Green New Deal energy sources?

* What price increases per kWh per annum will families, businesses, offices, farms, factories, hospitals, schools and other consumers face, as state and national electrical systems are converted to GND sources?

* How many power interruptions will occur every year, how will they hurt families, factories and other users – and what will be the cumulative economic and productivity damage from those power outages?

* To what extent will policies, laws, regulations, court decisions, and citizen opposition, protests, legal actions and sabotage delay or block wind, solar, biofuel, battery, mining and transmission projects?

* How many solar panels, wind turbine blades, batteries and other components (numbers, tons and cubic feet) will have to be disposed of every year? How much landfill space and incineration will be required?

* How accurately are climate model predictions of temperatures, sea levels, tornadoes, hurricanes, floods, droughts and extreme weather events that are being used to justify renewable energy programs?

These issues (and many others) underscore the extremely high risks associated with Green New Deal energy programs – and why it is essential for lenders, investment companies, pension funds, manufacturers, utility companies and other industries to analyze, disclose and report renewable energy risks, with significant penalties for failing to do so or falsifying any pertinent information.

See Also Cutting Through the Fog of Renewable Power Costs

2020 Update: Fossil Fuels ≠ Global Warming

gas in hands

Previous posts addressed the claim that fossil fuels are driving global warming. This post updates that analysis with the latest (2019) numbers from BP Statistics and compares World Fossil Fuel Consumption (WFFC) with three estimates of Global Mean Temperature (GMT). More on both these variables below.

WFFC

2019 statistics are now available from BP for international consumption of Primary Energy sources. 2019 Statistical Review of World Energy. 

The reporting categories are:
Oil
Natural Gas
Coal
Nuclear
Hydro
Renewables (other than hydro)

Note:  British Petroleum (BP) for the first time uses Exajoules to replace MToe (Million Tonnes of oil equivalents.) It is logical to use an energy metric which is independent of the fuel source. OTOH renewable advocates have no doubt pressured BP to stop using oil as the baseline since their dream is a world without fossil fuel energy.

From BP conversion table 1 exajoule (EJ) = 1 quintillion joules (1 x 10^18). Oil products vary from 41.6 to 49.4 tonnes per gigajoule (10^9 joules).  Comparing this annual report with previous years shows that global Primary Energy (PE) in MToe is roughly 24 times the same amount in Exajoules.  The conversion factor at the macro level varies from year to year depending on the fuel mix. The graphs below use the new metric.

This analysis combines the first three, Oil, Gas, and Coal for total fossil fuel consumption world wide. The chart below shows the patterns for WFFC compared to world consumption of Primary Energy from 1965 through 2019.

To enlarge, open image in new tabl

The graph shows that global Primary Energy consumption from all sources has grown continuously over 5 decades. Since 1965  oil, gas and coal (FF, sometimes termed “Thermal”) averaged 89% of PE consumed, ranging from 94% in 1965 to 84% in 2019.

Global Mean Temperatures

Everyone acknowledges that GMT is a fiction since temperature is an intrinsic property of objects, and varies dramatically over time and over the surface of the earth. No place on earth determines “average” temperature for the globe. Yet for the purpose of detecting change in temperature, major climate data sets estimate GMT and report anomalies from it.

UAH record consists of satellite era global temperature estimates for the lower troposphere, a layer of air from 0 to 4km above the surface. HadSST estimates sea surface temperatures from oceans covering 71% of the planet. HADCRUT combines HadSST estimates with records from land stations whose elevations range up to 6km above sea level.

Both GISS LOTI (land and ocean) and HADCRUT4 (land and ocean) use 14.0 Celsius as the climate normal, so I will add that number back into the anomalies. This is done not claiming any validity other than to achieve a reasonable measure of magnitude regarding the observed fluctuations.

No doubt global sea surface temperatures are typically higher than 14C, more like 17 or 18C, and of course warmer in the tropics and colder at higher latitudes. Likewise, the lapse rate in the atmosphere means that air temperatures both from satellites and elevated land stations will range colder than 14C. Still, that climate normal is a generally accepted indicator of GMT.

Correlations of GMT and WFFC

The next graph compares WFFC to GMT estimates over the five decades from 1965 to 2019 from HADCRUT4, which includes HadSST3.

Since 1965 the increase in fossil fuel consumption is dramatic and monotonic, steadily increasing by 237% from 146 to 492 exajoules.  Meanwhile the GMT record from Hadcrut shows multiple ups and downs with an accumulated rise of 0.9C over 54 years, 6% of the starting value.

The graph below compares WFFC to GMT estimates from UAH6, and HadSST3 for the satellite era from 1979 to 2019, a period of 40 years.

In the satellite era WFFC has increased at a compounded rate of nearly 2% per year, for a total increase of 87% since 1979. At the same time, SST warming amounted to 0.52C, or 3.7% of the starting value.  UAH warming was 0.58C, or 4.7% up from 1979.  The temperature compounded rate of change is 0.1% per year, an order of magnitude less than WFFC.  Even more obvious is the 1998 El Nino peak and flat GMT since.

Summary

The climate alarmist/activist claim is straight forward: Burning fossil fuels makes measured temperatures warmer. The Paris Accord further asserts that by reducing human use of fossil fuels, further warming can be prevented.  Those claims do not bear up under scrutiny.

It is enough for simple minds to see that two time series are both rising and to think that one must be causing the other. But both scientific and legal methods assert causation only when the two variables are both strongly and consistently aligned. The above shows a weak and inconsistent linkage between WFFC and GMT.

Going further back in history shows even weaker correlation between fossil fuels consumption and global temperature estimates:

wfc-vs-sat

Figure 5.1. Comparative dynamics of the World Fuel Consumption (WFC) and Global Surface Air Temperature Anomaly (ΔT), 1861-2000. The thin dashed line represents annual ΔT, the bold line—its 13-year smoothing, and the line constructed from rectangles—WFC (in millions of tons of nominal fuel) (Klyashtorin and Lyubushin, 2003). Source: Frolov et al. 2009

In legal terms, as long as there is another equally or more likely explanation for the set of facts, the claimed causation is unproven. The more likely explanation is that global temperatures vary due to oceanic and solar cycles. The proof is clearly and thoroughly set forward in the post Quantifying Natural Climate Change.

Background context for today’s post is at Claim: Fossil Fuels Cause Global Warming.

Disunity Over Going Green

Joel Kotkin writes at Real Clear Energy The Green Civil War. Excerpts in italics with my bolds and images.

Like many contemporary social movements—#metoo, Black Lives Matter, the Women’s March—the environmental lobby has tended to create an atmosphere of unanimity. In its struggle to win public and elite opinion, it has frequently evoked “science” as something settled and immutable, warning that those who dissent are either self-serving or seriously deranged.

Yet in recent months, there has been growing criticism about the current green orthodoxy, including from people long associated with environmental causes. This has been most widely seen in the strange case of the Michael Moore–produced Planet of Humans, which exposes the rapacious profit-seeking and gratuitous environmental damage caused by the renewable energy industry.

Critics have attempted to get Moore’s film de-platformed, and the green establishment has pressured distributors not to take the film. Such censorious behavior is increasingly common among the greens. Some veteran climate scientists—such as Roger Pielke and Judith Curry, Greenpeace founder Patrick Moore, and former members of the UN International Panel on Climate Change—have been demonized and marginalized for deviating from what Curry has described as an overly “monolithic” approach to the issue of climate change. Some political leaders even seem ready to take dissenters to court in an effort to ban their ideas by legal means. Not only energy companies but think tanks and dissident scientists have been targeted for criminal prosecution. These tactics are all too reminiscent of the medieval Inquisition.

The Green War on the Working Class

Moore’s apostasy may be better known but lacks the breadth of Michael Shellenberger’s new book, Apocalypse Never. A green zealot from his high school years, the Berkeley-based Shellenberger has worked on protecting habitats for endangered species and has battled climate change. His book, like Moore’s movie, exposes the hypocrisy of the green elite but, importantly, offers a more hopeful approach than Moore’s Malthusian worldview.

Like Moore, Shellenberger has become utterly disillusioned with the self-serving and often counterproductive policies pushed by the green lobby. He demonstrates how green policies backed by oligarch-funded nonprofits have often worked against the economic interests of people in Africa, Southeast Asia, and South America, often leaving them with little recourse but to pillage their own natural environments.

Shellenberger blasts green nonprofits for blocking new energy development—dams, gas plants, pipelines—in these countries. Such actions may seem noble enough to the rich of the West, but it slows the manufacturing growth that could allow these countries to become rich enough to accommodate such things as habitat preservation. People working in textile or garment plants need not rely on the jungle for their survival, reducing the need to consume its bounty.

“Rainforests in the Amazon and elsewhere in the world can only be saved if the need for economic development is accepted, respected, and embraced,” Shellenberger states. “By opposing many forms of economic development in the Amazon, particularly the most productive forms, many environmental NGOs, European governments, and philanthropies have made the situation worse.”

Green plans to raise energy prices, eliminate cars, and ban fossil fuel development also have stirred fierce opposition from the working class, whether in pro-Trump middle America, or among France’s gilets jaune. But it’s not just the proverbial angry white men. In California, some 200 local civil rights leaders have filed lawsuits against the state’s regulators, arguing that the state’s climate policies are essentially discriminatory toward poor people and minorities.

Challenging Religious Orthodoxy

Even before Black Lives Matter, mainstream American journalism was being transformed into an extended-stay resort for the woke. Shellenberger calls out “stealth environmental activists working as journalists” who report the most drastic environmental projections while ignoring any contrary perspectives. “Much of what people are being told about the environment, including the climate, is wrong, and we desperately need to get it right,” he insists, suggesting that he is “fed up with the exaggeration, alarmism, and extremism that are the enemy of a positive, humanistic, and rational environmentalism.”

Shellenberger places his hopes on “competition from outside traditional news media institutions,” having seen the gullibility of most reporters. For decades, they have embraced notions, first seen in Paul Ehrlich’s 1968 book, The Population Bomb, that humanity would “breed ourselves to extinction” if birthrates were not severely curtailed. Reporters also widely hailed the Club of Rome report in 1972, which took a similar apocalyptic approach, predicting massive shortages of natural resources unless there was a shift to lower birthrates, slower economic growth, less material consumption, and, ultimately, less social mobility.

Many of these apocalyptic predictions, like those in the Middle Ages, proved exaggerated or even plain wrong. Contrary to environmentalist dogma from the 1970s, natural resources, including energy and food, did not run out but became more available than anyone expected. So why the constant hyping and hysteria? Because what Shellenberger calls “the apocalyptic environmental tradition” demands it.

In a way that perhaps only someone bitten by the green bug could understand, Shellenberger labels environmentalism as “the dominant secular religion of the educated, upper-middle-class elite in most developed and many developing nations.” This applies, he reports, not only to seemingly deranged cults like Britain’s Extinction Rebellion but also to august environmental groups like the Sierra Club or Friends of the Earth. Christianity offered guidance for how one should live and conduct one’s personal affairs in a manner pleasing to God, but the green movement seeks to steer people toward a life in better harmony with nature.

Like medieval Catholicism, the green faith foresees impending doom caused by human activity; human sin was the primary reason for the world’s problems in medieval times, and has been rediscovered by environmentalists. “Apocalyptic environmentalism gives people a purpose: to save the world from climate change, or some other environmental disaster,” Shellenberger writes. “It provides people with a story that casts them as heroes“.”

Needed: A New Human-Centered Approach to the Environment

Perhaps what is most revolutionary about Shellenberger’s book is his call for a new, more human-centered, environmentalism. In contrast to the green movement’s jihad against material progress, he suggests that only by making people more affluent will they be able to afford the environmental redress that the planet, in fact, needs.

Rather than battle industrialism, greens need to appreciate what technological progress has done for the environment. The development of plastics helped reduce demand for ivory, hawksbill turtles, whale oil, and the despoiling of old forests. Dealing pragmatically, as opposed to religiously, with environmental concerns, means accepting the reality that some forms of efficient energy production, such as natural gas or nuclear, need to be part of a cleaner future. “It is only by embracing the artificial that we can save what’s natural,” he states.

The key to environmental success lies in affluence. “Richer countries are more resilient,” he says, quoting MIT climate scientist Kerry Emanuel, “so let us focus on making people richer and more resilient.” Countries like the United States, the United Kingdom, and particularly Scandinavia become cleaner, in large part, because they can afford to do so and also must respond to popular pressures. Poor autocratic and officially socialist states, like those of the former Soviet bloc and China, did not face the same pressures for a cleaner environment.

In the future, to succeed, environmental policy has to consider human concerns, particularly those of the working and middle classes. It needs not only to “protect the natural environment but also to achieve the goal of universal prosperity.” Thus Shellenberger speaks of “a positive, humanistic, and rational environmentalism.” Like any movement in a still-democratic society, he suggests, environmentalists can win over the population not by terrorizing them but by showing that we can protect nature without stomping out all natural human aspirations.

Coal Needed to Power Recovery

By Conor Bernstein explains at Real Clear Energy  For Energy, Affordability, Reliability, and Balance Matter More Now Than Ever.  Excerpts in italics with my bolds.

While we are still in the throes of the crisis, it’s essential we already plan for the recovery. Affordable, secure and reliable power will be all the more important as the nation tries to get back on its feet.

But, if we aren’t careful, near-term market conditions could accelerate retirements of additional well-operating coal plants, further eroding the balanced electricity mix that has long ensured affordable, reliable power in markets across the country.

Even before the onset of the COVID-19 crisis, cracks were emerging in regional grids where fuel security and balance have been traded for increased reliance on just-in-time fuel delivery. Shrinking reserve margins, flirtations with rolling blackouts and spiking wholesale electricity prices are becoming far too common for comfort.

Michigan offers the latest evidence of the challenges emerging from the pivot away from coal. Just a week ago, the region’s grid operator, MISO, reported that capacity prices for the Lower Peninsula maxed out in their annual capacity auction. With a shrinking reserve margin, clearing prices for the capacity auction jumped 10 times what they had been a year ago.

This comes as Michigan utilities have closed more than a dozen coal plants since 2016 and have more retirements scheduled.

Wholesale electricity prices are going up just when consumers and industry need support for economic recovery. The timing couldn’t be worse. Michigan is turning to costly energy imports to ensure reliability. The takeaway should be clear: the shift away from coal – often driven by state policy – is coming with real costs.

As policymakers, regulators and utilities grapple with the ramifications of the pandemic, pumping the brakes on further plant retirements is a logical step to hedge against uncertainty and to ensure our balanced, affordable and reliable electricity mix doesn’t become another victim of this unprecedented moment.

Indiana, even before the crisis, had already moved to require additional review of proposed retirements to ensure utilities weren’t passing unnecessary costs onto consumers while weakening the reliability of the grid. A thoughtful, do-no-harm approach to the electricity sector is exactly what’s needed across the country as we confront the uncertainty of the months ahead.

The past several years have seen a shift away from what we know works – balance, certainty, fuel security – to increased reliance on thinner margins, weather-dependent resources and the inherent vulnerability of just-in-time fuel delivery. With global supply chains turned upside down, with chaos wreaking havoc across the oil and gas sector, and the economy shaken to the core, the era of flying by the seat of our pants into the unknown and of utilities filing a record number of rate cases needs to end.

Time and again, grid operators overestimate capacity additions while underestimating retirements. That kind of miscalculation, in a perilous moment like this, could prove disastrous. Now, more than ever, we need smart policymaking that puts reliability, resilience and affordability first. Ensuring we maintain essential coal generating capacity and properly value the security and balance it brings to the grid must be a priority.

See Also New York Nukes Itself

Surprise! Carbon Fuels are Plentiful, not Scarce.

Brentan Alexander writes at Forbes $40 Oil Will Return: This Isn’t The End Of Fossil Fuels. Excerpts in italics with my bolds and images.

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Yesterday, May futures for WTI crude, a benchmark often used for U.S.-sourced oil, crashed into negative territory for the first time ever. It was the last day to trade a May contract, and with storage space filling up as oil demand craters, contract holders with nowhere to put the oil they were obligated to physically accept were forced to pay to have somebody take contracts off their hands. This moment represents a stunning new chapter in the ongoing oil crisis that has seen record drops for oil consumption and prices globally. Spot prices in May will remain depressed, and the June market is likely to be painful as well. It may seem like the days of $40 oil are behind us, and that we’re witnessing the beginning of the end for oil as the lifeblood of the global economy. We aren’t:

Oil will one day return to $40 a barrel, but the last few weeks have demonstrated in hyperdrive how the oil endgame will play out.

It seems that oil isn’t the precious commodity it has been made out to be. Much ink has been spilled on the concept of peak oil, wherein dwindling reserves of oil cause rising prices as the marketplace becomes more and more supply-constrained. In the endgame scenario, supply shocks send prices soaring to levels that force global economies to find alternative fuels, renewable energy, or otherwise. A key issue with the peak oil theory is that ‘reserves’ are only counted if they’re known to exist and can be extracted with current technology.

As prices soared to upwards of $100 a barrel around 2008, many wondered if the high prices were here to stay, and if peak oil was coming to pass. Instead, high prices were just the motivation needed to unlock a bit of American ingenuity. Within 10 years, new technology unlocked vast fields of oil and gas throughout Texas, Pennsylvania, and the Dakotas. The ‘reserves’ in the United States multiplied, oil prices dropped, and the United States regained its status as the world’s leading producer of oil.

Peak oil, it turns out, is a story of peak demand.

As some economies of the world begin to face the realities of climate change, new renewable and net-zero (or negative!) technologies have emerged and will emerge to supplant fossil oil. At first, these technologies require higher fossil prices, government programs, or both, to compete in the market. But as they mature and grow, prices come down. Demand for fossil will drop accordingly. And at some point, so little demand will exist for crude oil that producers will have to pay somebody to take if off their hands or stop producing it altogether.

This market conversion has already begun. Tesla has proven electric vehicles can out-perform and out-sexy the incumbents. Biorefineries are being built to turn household trash in to jet fuel. Governments are taking action to incentivize cleaner fuels. Nevertheless, action thus far has been spotty at best and despite the current market, peak oil demand has not yet come to pass.

The unprecedented demand destruction caused by COVID-19 will eventually subside as the threat of the pandemic wanes. The public will fly again, drive again, and buy plastic again; oil demand will ratchet up again. Shuttered wells won’t restart, stored oil will be drawn down, OPEC will maintain supply controls to balance government budgets, and prices will rise to $40 or more again. But someday, hopefully in the not too distant future, oil will again find itself in decline when a different (and more permanent) source of demand destruction weans the global economy off of fossil carbon for good.

Comment:

This article makes a distinction between short and long term energy supply and demand.  Thus the price drop yesterday signifies a present glut of carbon fuels.  Climate activists can not count on the supply of fossil fuels falling as long as they are plentiful and inexpensive.  For example, others note coal reserves exceed 100 years at current rates of consumption, and will remain attractive for electrical power production.  In the absence of economical substitute energy sources, modern societies for years to come will depend on companies providing carbon-based fuels.

As Bjorn Lomborg has long maintained, this is the time to invest in advanced energy technologies, including nuclear, to engineer price-competitive energy alternatives and achieve an orderly transition for future generations.  It is not a time for short-term bad bets on immature wind and solar tech that do not scale to societies’ need for reliable affordable energy.

BTW, Bill Gates also shares and funds this perspective:

New York Nukes Itself

This post is not about WuHanFlu, but about New York’s insane decision to close nuclear power plants in favor of wind farms.  Robert Bryce writes at Forbes New York Has 1,300 Reasons Not To Close Indian Point. Excerpts in italics with my bolds.

At the end of this month, the Unit 2 reactor at the Indian Point Energy Center in Buchanan, New York will be permanently shut down. Next April, the final reactor at the site, Unit 3, will also be shuttered.

TOMKINS COVE , NY – MAY 11: The Indian Point nuclear power plant is seen from Tomkins Cove, New York … [+] CORBIS VIA GETTY IMAGES

But the premature closure of the 2,069-megawatt nuclear plant is even worse land-use policy. Here’s why: replacing the 16 terawatt-hours of carbon-free electricity that is now being produced by the twin-reactor plant with wind turbines will require 1,300 times as much territory as what is now covered by Indian Point.

Here are the facts: Indian Point covers 239 acres, or about 1 square kilometer. To put Indian Point’s footprint into context, think of it this way: you could fit three Indian Points inside Central Park in Manhattan.

Based on projected output from offshore wind projects (which have higher capacity factors than onshore wind projects), producing that same amount of electricity as is now generated by Indian Point – about 16 terawatt-hours per year – would require installing about 4,000 megawatts of wind turbines. That estimate is based on the proposed South Fork offshore wind project, a 90-megawatt facility that is expected to produce 370 gigawatt-hours per year. (Note that these output figures are substantially higher than what can be expected from onshore wind capacity.) Using the numbers from South Fork, a bit of simple division shows that each megawatt of wind capacity will produce about 4.1 gigawatt-hours per year. Thus, matching the energy output of Indian Point will require about 4,000 megawatts of wind capacity.

That’s a lot of wind turbines. According to the American Wind Energy Association, existing wind-energy capacity in New York state now totals about 1,987 megawatts. That capacity will require enormous amounts of land. Numerous studies, including ones by the Department of Energy have found that the footprint, or capacity density, of wind energy projects is about 3 watts per square meter. Thus, 4,000 megawatts (four billion watts) divided by 3 watts per square meter = 1.33 billion square meters or 1,333 square kilometers. (Or roughly 515 square miles.)

UNITED STATES – AUGUST 20: Aerial view of New York City’s Central Park (Photo by Carol M. … [+] GETTY IMAGES

Those numbers are almost too big to imagine. Therefore, let’s look again at Central Park. Recall that three Indian Points could fit inside the confines of the famed park. Thus, replacing the energy production from Indian Point would require paving a land area equal to 400 Central Parks with forests of wind turbines.

Put another way, the 1,300 square kilometers of wind turbines needed to replace the electricity output of Indian Point is nearly equal to the size of Albany County. Would New York legislators who convene in the capitol in Albany consent to having the entire county covered in wind turbines? I can’t be sure, but I am guessing that they might oppose such plan. (See yellow area in Google Earth image  at top).

These basic calculations prove some undeniable facts. Among them: Indian Point represents the apogee of densification. The massive amount of energy being produced by the two reactors on such a small footprint provides a perfect illustration of what may be nuclear energy’s single greatest virtue: its unsurpassed power density. (Power density is a measure of energy flow from a given area, volume, or mass.) High power density sources, like nuclear, allow us to spare land for nature. Density is green.

Alas, the environmental groups that are influencing policymakers in New York and in other states are strident in their belief that nuclear energy is bad and that renewables are good. But that theology ignores the greenness of density and the essential role that nuclear energy must play if we are to have any hope of making significant reductions in carbon-dioxide emissions.

In short, the premature closure of Indian Point – and the raging land-use battles over renewable energy siting in New York – should lead environmental groups to rethink their definition of what qualifies as “green.” Just because wind and solar are renewable doesn’t mean they are green. In fact, the land-use problems with renewables show the exact opposite.

Why Halting Failed Auto Fuel Standards 2020 Update

Update April 2, 2020: Much in the news today is the EPA relaxing of Obama-era auto fuel standards, along with the usual Trump bashing and complaining while ignoring why the efficiency rules were ill-advised. Text from a previous post is printed below explaining this positive development.

There are deeper reasons why US auto fuel efficiency standards are and should be rolled back.  They were instituted in denial of regulatory experience and science.  First, a parallel from physics.

In the sub-atomic domain of quantum mechanics, Werner Heisenberg, a German physicist, determined that our observations have an effect on the behavior of quanta (quantum particles).

The Heisenberg uncertainty principle states that it is impossible to know simultaneously the exact position and momentum of a particle. That is, the more exactly the position is determined, the less known the momentum, and vice versa. This principle is not a statement about the limits of technology, but a fundamental limit on what can be known about a particle at any given moment. This uncertainty arises because the act of measuring affects the object being measured. The only way to measure the position of something is using light, but, on the sub-atomic scale, the interaction of the light with the object inevitably changes the object’s position and its direction of travel.

Now skip to the world of governance and the effects of regulation. A similar finding shows that the act of regulating produces reactive behavior and unintended consequences contrary to the desired outcomes.

US Fuel Economy (CAFE) Standards Have Backfired

An article at Financial Times explains about Energy Regulations Unintended Consequences  Excerpts below with my bolds.

Goodhart’s Law holds that “any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes”. Originally coined by the economist Charles Goodhart as a critique of the use of money supply measures to guide monetary policy, it has been adopted as a useful concept in many other fields. The general principle is that when any measure is used as a target for policy, it becomes unreliable. It is an observable phenomenon in healthcare, in financial regulation and, it seems, in energy efficiency standards.

When governments set efficiency regulations such as the US Corporate Average Fuel Economy standards for vehicles, they are often what is called “attribute-based”, meaning that the rules take other characteristics into consideration when determining compliance. The Cafe standards, for example, vary according to the “footprint” of the vehicle: the area enclosed by its wheels. In Japan, fuel economy standards are weight-based. Like all regulations, fuel economy standards create incentives to game the system, and where attributes are important, that can mean finding ways to exploit the variations in requirements. There have long been suspicions that the footprint-based Cafe standards would encourage manufacturers to make larger cars for the US market, but a paper this week from Koichiro Ito of the University of Chicago and James Sallee of the University of California Berkeley provided the strongest evidence yet that those fears are likely to be justified.

Mr Ito and Mr Sallee looked at Japan’s experience with weight-based fuel economy standards, which changed in 2009, and concluded that “the Japanese car market has experienced a notable increase in weight in response to attribute-based regulation”. In the US, the Cafe standards create a similar pressure, but expressed in terms of size rather than weight. Mr Ito suggested that in Ford’s decision to end almost all car production in North America to focus on SUVs and trucks, “policy plays a substantial role”. It is not just that manufacturers are focusing on larger models; specific models are also getting bigger. Ford’s move, Mr Ito wrote, should be seen as an “alarm bell” warning of the flaws in the Cafe system. He suggests an alternative framework with a uniform standard and tradeable credits, as a more effective and lower-cost option. With the Trump administration now reviewing fuel economy and emissions standards, and facing challenges from California and many other states, the vehicle manufacturers appear to be in a state of confusion. An elegant idea for preserving plans for improving fuel economy while reducing the cost of compliance could be very welcome.

The paper is The Economics of Attribute-Based Regulation: Theory and Evidence from Fuel-Economy Standards Koichiro Ito, James M. Sallee NBER Working Paper No. 20500.  The authors explain:

An attribute-based regulation is a regulation that aims to change one characteristic of a product related to the externality (the “targeted characteristic”), but which takes some other characteristic (the “secondary attribute”) into consideration when determining compliance. For example, Corporate Average Fuel Economy (CAFE) standards in the United States recently adopted attribute-basing. Figure 1 shows that the new policy mandates a fuel-economy target that is a downward-sloping function of vehicle “footprint”—the square area trapped by a rectangle drawn to connect the vehicle’s tires.  Under this schedule, firms that make larger vehicles are allowed to have lower fuel economy. This has the potential benefit of harmonizing marginal costs of regulatory compliance across firms, but it also creates a distortionary incentive for automakers to manipulate vehicle footprint.

Attribute-basing is used in a variety of important economic policies. Fuel-economy regulations are attribute-based in China, Europe, Japan and the United States, which are the world’s four largest car markets. Energy efficiency standards for appliances, which allow larger products to consume more energy, are attribute-based all over the world. Regulations such as the Clean Air Act, the Family Medical Leave Act, and the Affordable Care Act are attribute-based because they exempt some firms based on size. In all of these examples, attribute-basing is designed to provide a weaker regulation for products or firms that will find compliance more difficult.

Summary from Heritage Foundation study Fuel Economy Standards Are a Costly Mistake Excerpt with my bolds.

The CAFE standards are not only an extremely inefficient way to reduce carbon dioxide emission but will also have a variety of unintended consequences.

For example, the post-2010 standards apply lower mileage requirements to vehicles with larger footprints. Thus, Whitefoot and Skerlos argued that there is an incentive to increase the size of vehicles.

Data from the first few years under the new standard confirm that the average footprint, weight, and horsepower of cars and trucks have indeed all increased since 2008, even as carbon emissions fell, reflecting the distorted incentives.

Manufacturers have found work-arounds to thwart the intent of the regulations. For example, the standards raised the price of large cars, such as station wagons, relative to light trucks. As a result, automakers created a new type of light truck—the sport utility vehicle (SUV)—which was covered by the lower standard and had low gas mileage but met consumers’ needs. Other automakers have simply chosen to miss the thresholds and pay fines on a sliding scale.

Another well-known flaw in CAFE standards is the “rebound effect.” When consumers are forced to buy more fuel-efficient vehicles, the cost per mile falls (since their cars use less gas) and they drive more. This offsets part of the fuel economy gain and adds congestion and road repair costs. Similarly, the rising price of new vehicles causes consumers to delay upgrades, leaving older vehicles on the road longer.

In addition, the higher purchase price of cars under a stricter CAFE standard is likely to force millions of households out of the new-car market altogether. Many households face credit constraints when borrowing money to purchase a car. David Wagner, Paulina Nusinovich, and Esteban Plaza-Jennings used Bureau of Labor Statistics data and typical finance industry debt-service-to-income ratios and estimated that 3.1 million to 14.9 million households would not have enough credit to purchase a new car under the 2025 CAFE standards.[34] This impact would fall disproportionately on poorer households and force the use of older cars with higher maintenance costs and with fuel economy that is generally lower than that of new cars.

CAFE standards may also have redistributed corporate profits to foreign automakers and away from Ford, General Motors (GM), and Chrysler (the Big Three), because foreign-headquartered firms tend to specialize in vehicles that are favored under the new standards.[35] 

Conclusion

CAFE standards are costly, inefficient, and ineffective regulations. They severely limit consumers’ ability to make their own choices concerning safety, comfort, affordability, and efficiency. Originally based on the belief that consumers undervalued fuel economy, the standards have morphed into climate control mandates. Under any justification, regulation gives the desires of government regulators precedence over those of the Americans who actually pay for the cars. Since the regulators undervalue the well-being of American consumers, the policy outcomes are predictably harmful.

Climate Beauty Pageants

Exxon CEO Calls Rivals’ Climate Goals a ‘Beauty Competition’ reported in the Houston Chronicle. Excerpts in italics with my bolds.

“Individual companies setting targets and then selling assets to another company so that their portfolio has a different carbon intensity has not solved the problem for the world,” Exxon Mobil CEO Darren Woods says.

Exxon Mobil Corp. dismissed long-term pledges by some of its Big Oil rivals to reduce carbon dioxide emissions as nothing more than a “beauty competition” that would do little to halt climate change.

Energy companies need to focus on global, systemic efforts to reduce greenhouse gases, rather than just replacing their own emissions-heavy assets with cleaner ones to make themselves look good, Chief Executive Officer Darren Woods said in New York on Thursday.

“Individual companies setting targets and then selling assets to another company so that their portfolio has a different carbon intensity has not solved the problem for the world,” Woods said at Exxon’s analyst day. Exxon is focused on “taking steps to solve the problem for society as a whole and not try and get into a beauty competition.”  Woods’ remarks, which echo those made by Chevron Corp. CEO Mike Wirth earlier this week, underscore the divide between U.S. and European oil explorers in their approach to addressing climate change.

Both American companies see oil and gas demand growing for decades and refuse to compete in a crowded market for renewables where they have little expertise.

Much-derided plastic even came in for some praise, with Exxon Senior Vice President Jack Williams arguing that it’s “a net benefit to society and to the environment.”

By contrast Royal Dutch Shell Plc, Repsol SA and Eni SpA have pledged to make large reductions in carbon emissions over the long term, while last month BP Plc went a step further with a target to become carbon neutral by 2050.

Companies changing their production mix “doesn’t change the demand” for oil and gas, Woods said. “If you don’t have a viable alternative set, all you’re doing is moving out from one company or one country to someplace else. It doesn’t solve the problem.”

Exxon sees world demand for oil and gas growing substantially out to 2040, even under the goals of the Paris Agreement, which seeks to limit temperature rise to 2 degrees Celsius above pre-industrial levels. Renewables such as wind and solar won’t be enough to meet demand growth on their own, according to Exxon.

In any case, it remains to be seen whether oil giants can generate big profits by producing carbon-free energy. Solar, wind and battery storage projects haven’t shown they can fund the huge dividends that underpins the industry’s investment case.

To underscore his point, Woods said that global emissions have risen 4% since the Paris Agreement was signed four years ago and energy demand is up 6%.

For the energy industry to truly address climate change, Woods believes major technological breakthroughs are needed in the fields of carbon capture, alternative fuels in transport and re-thinking industrial processes. The company is investing in all of these fields but admits that progress will take time.

Exxon is also taking steps to reduce emissions from its own operations including reducing methane emissions and gas flaring.

Speaking at the company’s annual investor day meeting, CEO Darren Wood stated that Exxon is “mindful of the current market environment.” However, Woods said that Exxon plans to maintain its current strategy of “leaning into this market when others have pulled back.”

Exxon intends to use “the strength of our balance sheet to invest through the cycle,” according to Woods. As such, it will outspend its cash flow when necessary to maintain its investment pace while also continuing to increase its dividend as it has for the last 37 consecutive years. It also aims to sell $15 billion in assets to help finance its investment plan.

While Exxon isn’t making any changes to its planned investment level, it is adjusting its development plan. Most notably, it will operate at a reduced pace in the Permian Basin over the next two years compared to its previous outlook. However, it still expects to produce more than 1 million barrels of oil equivalent per day from the region by 2024.

Exxon fully believes that energy demand will grow in the coming years. That’s why it’s taking advantage of the current environment to invest while costs are lower so that it can cash in on more favorable future market conditions.

Activists attempt to storm the Exxon Mobil bastion, here seen without their shareholder disguises.