Marlo Lewis

Is the impact of global warming on hurricanes “worse than we thought”? Look at the data and judge for yourself.

The National Oceanic and Atmospheric Administration (NOAA) uses a metric called accumulated cyclone energy (ACE) to measure the strength of individual tropical cyclones and entire tropical cyclone seasons. As explained by NOAA:

The ACE index is a wind energy index, defined as the sum of the squares of the maximum sustained surface wind speed (knots) measured every six hours for all named storms while they are at least tropical storm strength.

Dr. Ryan Maue of WeatherBell Models reports that, “In the pentad since 2006, Northern Hemisphere and global tropical cyclone ACE has decreased dramatically to the lowest levels since the late 1970s.” He also reports that “the frequency of tropical cyclones has reached a historical low.”

This chart shows global and northern hemisphere ACE during 1970-2014. What we see is “strikingly large” inter-annual and decadal variability but no long-term trend.

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It was inevitable. As soon as consumers and the economy start to enjoy significant relief from a decade of pain at the pump, the political class clamors for higher gas taxes and new carbon taxes.

The recent reduction in energy costs is remarkable. The U.S. Energy Information Administration (EIA) reports a 43% decline in the energy component of the Goldman Sachs Commodity Index during 2014. According to EIA, the drop in fuel prices was not due to “strong underlying trends in global economic growth” but rather to “supply-side factors unique” to energy-related commodities.

Fuel prices are down because the revolution in unconventional hydrocarbon production increased crude oil and natural gas supplies, and Saudi Arabia has failed to persuade other OPEC members and Russia to behave like a cartel and cut output. Crude oil spot prices recently dipped below $54 per barrel.

As a result, regular gasoline is now selling for about $2.20 a gallon — roughly one-third less than in Jan. 2014.

Credible estimates of the direct and indirect consumer benefits vary, but they’re all substantial.

 AAA: Americans saved $14 billion on gasoline in 2014 compared to 2013, with many drivers saving $15-$30 every time they fill up, compared to a year ago. As of Dec. 31, 2014 gas prices declined a record-breaking 97 days in a row, with further decreases predicted “as retail prices catch up with the steep declines in the cost of crude oil.”

Bloomberg: “Plunging fuel prices will free up as much as $60 billion over the next year that the consumer can spend on a fall jacket, a movie ticket or just more groceries.” That was in October, when gas prices were still north of $3.00/gal.

WSJ: Falling gas prices will give consumers the equivalent of a $75 billion tax cut. The tax cut is progressive because low-income households pay a larger share of earnings on energy. “Households earning less than $50,000 annually spent around 21% of their after-tax income on energy in 2012, up from 12% in 2001, according to analysts at Bank of America Merrill Lynch.”

NPR: If current gas prices continue, the typical household will have an extra $1,500 to save or spend in 2015. Already, “The average American is seeing a much bigger boost from falling gas prices than from pay raises. Cheap energy could finally put the U.S. economic recovery over the top.”

So naturally, ‘progressives’ now claim that, more than ever, a carbon tax is an idea whose time has come. Harvard economist Lawrence Summers, for example, argues in the Washington Post that “Oil’s swoon creates the opening for a carbon tax.” Does it? More importantly, should it?  [click to continue…]

The integrated carbon capture and storage (ICCS) project at the Boundary Dam Power Station has scooped up its first major award, even though it has been fully operational for less than three months. — Estavan Lifestyles, Dec. 17, 2014

The economics only work at Boundary Dam in Saskatchewan for two reasons: a C$240 million government subsidy and a ready nearby customer for the carbon in Calgary-based Cenovus. . . .The CO2 is transported 66 kilometers (41 miles) to Cenovus Energy Inc. (CVE)’s oil fields where it is buried underground to coax additional crude from the reservoirs. — Bloomberg News, Dec. 4, 2014

The news items above point to one of the Clean Power Plan’s (CPP) fatal legal flaws.

The CPP requires states to adopt CO2 performance standards for existing fossil fuel power plants. As such, the CPP is unlawful if its legal prerequisite — EPA’s proposed CO2 performance standards for new power plants, the so-called Carbon Pollution Standards (CPS) rule — is unlawful.

The CPS rule proposes a performance standard of 1,100 lbs. CO2/MWh for new coal power plants. Coal power plants can meet the standard only by installing carbon capture and storage (CCS) technology. Under §111(a) of the Clean Air Act (CAA), performance standards are to reflect the “best system of emission reduction” (BSER) that has been “adequately demonstrated,” taking “cost” into account. EPA claims CCS is the adequately demonstrated BSER for new coal power plants. Applesauce!

CAA §111(a) requires that performance standards be “achievable.” The D.C. Circuit Court of Appeals interprets the term to mean achievable for the industry as a whole (National Lime Association v. EPA, 627 F. 2d 416 at 443). However, as Bloomberg points out, the Boundary Dam Power Station is the world’s only utility-scale CCS power plant in commercial operation, and the “economics only work” because of two favorable circumstances atypical for the industry as a whole: a generous subsidy and proximity to an enhanced oil recovery (EOR) operation.

With the federal deficit still near half-a-trillion dollars, Congress is not about to pony up lavish subsidies for CCS power plants, especially when natural gas combined cycle (NGCC) power plants easily meet a more stringent CO2 emission performance standard (79 FR 1486) at much less cost (EIA, Table 1, p. 6). EPA identifies only 12 states with significant EOR operations (79 FR 1474). Coal power plants not located near oil fields would not have a market for their captured CO2. Thus, on two separate counts, the proposed standard is not achievable.

CCS combined with EOR is not BSER for an even more fundamental reason, first noted by my colleague William Yeatman. On a lifecycle basis, CCS + EOR produces more CO2 emissions than a conventional coal power plant. Without EOR, CCS is too costly to qualify as “adequately demonstrated.” But with EOR, CCS cannot be a “best” system of emission reduction because it increases rather than reduces emissions.

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EPA’s Clean Power Plan establishes carbon dioxide (CO2) performance standards for each state’s electric power sector. The standards are calibrated in lbs. CO2/MWh, which translate into statewide CO2 emission caps. On average, states will have to reduce their power-sector CO2 emissions 30% below 2005 levels by 2030.

The CPP is unlawful for a multitude of reasons, but surely one of the most bizarre is that EPA’s alleged statutory authority, §111(d) of the Clean Air Act (CAA), prohibits the agency from promulgating any such regulation.

Specifically, §111(d) bars the adoption of performance standards for existing facilities in source categories already regulated under §112. EPA has been regulating power plants under §112 since December 2011, when it finalized the Mercury Air Toxics Standards (MATS) Rule.

On the day EPA published the CPP in the Federal Register (June 18, 2014), Murray Energy, the nation’s largest privately-owned coal company, petitioned the D.C. Circuit Court of Appeals to stop EPA from further work on the rulemaking. The petition argued that EPA’s §111(d) regulatory authority is limited to existing sources not already regulated under §112. Eight days later, nine states led by West Virginia filed an amicus brief in support of the petition. And last week, Murray Energy submitted a brief urging the Court to halt EPA’s “illegal” rulemaking and vacate the agency’s “erroneous legal opinion” that it may doubly regulate sources under §111(d) and §112.

EPA, of course, argues that the §112 exclusion in §111(d) does not apply to CO2 and does not preclude the agency from requiring states to adopt CO2 performance standards for existing power plants.

Today’s post will review the legal arguments, pro and con, on whether EPA may regulate existing power plants under both §111(d) and §112.

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Earlier this week, economist Roger Bezdek gave a presentation at the Ronald Reagan Building titled “Carbon Dioxide: Social Cost or Social Benefit?” Washington Post columnist Dana Milbank covered the event and published a short review titled “The new climate denialism: More carbon dioxide is a good thing.”

Granted, it’s hard to develop an argument about a complex, technical subject in a 760-word column, but Milbank doesn’t even try. He takes cheap shots and spouts off without knowing whereof he speaks.

Milbank starts with a snarky putdown, asserting that “though Bezdek is an economist, not a scientist, he played one on Monday.” How so? Some of Bezdek’s slides show the fertilization effects of carbon dioxide (CO2) emissions on crop yields and plant growth. For example:

That is not playing scientist, it is citing scientific research.

Another slide shows that, over the past 250 years, CO2 emissions closely correlate with population growth, life expectancy, and per capita GDP. [click to continue…]

From a citizen perspective, there are three main questions in climate change science: What happened? Who done it? How bad is it going to get? Those questions roughly correspond to the scientific issues of detection, attribution, and climate sensitivity.

All scientists, including skeptics, agree with the IPCC’s assessment that warming of the climate system since the 1950s is “unequivocal.” In contrast, IPCC climate sensitivity estimates are increasingly controversial due to the growing divergence between climate model projections and observed temperatures. The chart below by University of Alabama in Hunstville (UAH) atmospheric scientist Roy Spencer illustrates — and satirizes — the divergence:

Earlier this week, I reviewed a comment letter by Spencer’s colleague John Christy  on the scientific basis of EPA’s Clean Power Plan. To recap, EPA’s climate change endangerment analysis is largely based on IPCC climate models. Christy challenges not only the IPCC’s climate sensitivity estimates, but also the IPCC’s claim that most warming since 1951 is anthropogenic. That “attribution” assessment is the core of what IPCC-affiliated scientists and their allies call “the consensus.”

Today’s post offers an historical perspective on Christy’s critique of the consensus position. [click to continue…]

Guest Post by Dave Juday*

Yesterday the Energy Policy, Health Care and Entitlements subcommittee of the House Oversight Committee held a hearing on the EPA’s implementation of the Renewable Fuel Standard (RFS) volumes for 2014.  The RFS is a schedule, which prescribes the volume of biofuels – corn ethanol, biodiesel, and so-called advanced biofuels, like cellulosic ethanol – that must be blended into the nation’s fuel supply each year.  The RFS was established by the Energy Policy Act of 2005, and greatly expanded by the Energy Independence and Security Act (EISA) of 2007.  EPA’s track record is abysmal, hence the hearing.

According to the statute, EPA’s confirmation of biofuels volumes is to be announced by November 30 of the preceding year – i.e. after the corn harvest and before the compliance year – in order to give some clarity to both the food and fuel markets.  Now in December, more than a year late, EPA has still not set the volumes for 2014.  And, according to Acting Assistant Administrator, Janet McCabe, probably won’t be until sometime 2015.

McCabe told lawmakers that “issuing rules every year has proven to be a significant implementation challenge.”  That’s an understatement.  Consider the agency’s record.

Each year since 2009, EPA has missed its deadline. In the 60 months since November 30, 2009 – the last time the deadline was met – EPA has been tardy in announcing the final volumes by a cumulative total of 27 months, so far.  By next year, the EPA will likely be 40 months late – or more – in meeting its annual deadline.  That means that for 72 months since 2009 when fuel blenders and refiners were to be in compliance they did not know the actual compliance target for more than half that time.  As the Government Accountability Office has reported, these late rulings “contribute to industry uncertainty, which can increase costs because industry cannot plan and budget effectively.”   Indeed, when the new 114th Congress convenes in January, RFS reform should be a pressing issue.

* Dave Juday is the principal of The Juday Group a commodity market and policy analytical firm in Washington, D.C. [click to continue…]