William Yeatman

Post image for MoJo Not Always Wrong on Energy

Mother Jones (“MoJo”) is a lefty rag with an unrealistic outlook on life. Once in a while, though, they get it right.

For example, MoJo hates taxpayer subsidized high speed rail in California. Well, I also hate high speed subsidized high-speed rail in California. And for the same reason! We both see it as being an unrealistic boondoogle.

This week, MoJo again made a modicum of sense with a well-written and good-looking interactive piece that both explains and decries tax breaks for oil and gas producers. It’s a worthwhile read. Regardless MoJo’s evident disdain for an industry that has been the only bright spot in the U.S. economy since the great global recession, the article is fact-filled and it has some neat infocharts.

And again, MoJo’s is a message with which I agree. Industry specific tax breaks—indeed, all preferential tax treatments—are inefficient and wasteful. I’m with MoJo: Let’s do away with oil and gas’s perks…

….And, at the same time, let’s do away with wind and solar and ethanol and all other “green” energy subsidies and mandates. Then, let’s wait 5 years, and here’s what I bet we’ll see: the utter absence of green energy, having been wholly vanquished on the market by conventional energy sources*. Don’t take my word for it! Even the top lobbyist for the wind energy industry admits that his clients would go “bust” if the Congress fails to extend a single subsidy, despite the fact that the industry enjoys mandates forcing ratepayers to buy their energy in 30 States.

*Absent, of course, all of the expensive, long-term contracts that utilities have signed with green energy developers, in order to achieve the aforementioned green energy mandates in 30 States.

Updated: For an analysis of Judge Kavanaugh’s excellent dissenting opinion, see below the break.

Today, the D.C. Circuit Court of Appeals rendered a split 2-1 decision that upholds the Environmental Protection Agency’s Mercury and Air Toxics Standards regulation, also known as the Utility MACT. The decision in White Stallion Energy Center LLC et al. v. EPA et al. is available here.

As I explain here, the absurd justification for the mercury rule, one of the most expensive and consequential regulations of all time, is to protect a supposed population of pregnant subsistence fisherwomen, who consume hundreds of pounds of self-caught fish from exclusively the most polluted inland bodies of fresh water.

There is a “narrow” dissent by Judge Brett Kavanaugh, as described by InsideEPA. I’ll update this post when I’ve digested the decision. [See update after the break]. Below, I’ve posted an image depicting the costs and (supposed*) beneficiaries of EPA’s mercury rule.

coal retirments foto2

*EPA has never actually identified a pregnant, subsistence fisherwoman of the sort it purports to protect. Rather they are modeled to exist.

1:36 PM Updated: I’ve digested Judge Brett Kavanaugh’s dissenting opinion. As I note above, his dissent has been described in the press as being “narrow.” I disagree. In fact, it is a strong opinion, and, more importantly, it describes the exact path to obtaining Supreme Court review of the split decision.

[click to continue…]

Post image for Bipartisanship Alive and Well in Opposition to O’s Anti-Energy Policies

We are bombarded daily with stories bemoaning the societal ills engendered by the hyper-partisanship of our present political discourse. It is, therefore, notable that both Republicans and Democrats can find common ground in opposing the worst excesses of this administration’s anti-energy policies.

Last week, for example, eleven Democratic Senators sent a letter to President Barack Obama urging him to stop dragging his feet over the Keystone Pipeline. Specifically, the letter demanded that the President make a final decision on whether to permit the pipeline by the end of May.  The signatories were Senators Heidi Heitkamp (ND), Mary Landrieu (LA), Mark Begich (AK), Mark Pryor (AR), Joe Manchin (WV), Joe Donnelly (IN), Claire McCaskill (MO), Mark Warner (VA), Jon Tester (MT), John Walsh (MT), and Kay Hagan (NC). To repeat:  twenty percent of the Senate Democratic caucus is goading the Democratic President on a Republican Party talking point. Bipartisanship lives!

Of course, the Senate is historically the more friendly of the two Chambers of Congress. The House is now widely perceived as being far more partisan, and therefore far more dysfunctional, relative to the Upper Chamber.

And yet, contrary to this perception, 15% of Democrats on the powerful House Transportation & Infrastructure Committee last week sided with ($) a unanimous Republican committee vote, and passed H.R. 524, legislation that would prohibit the Environmental Protection Agency from vetoing Clean Water Act permits that have already been issued by the U.S. Army Corps of Engineers.

The bill is a direct response to EPA’s January 2011 revocation of a Clean Water Act permit that had already been granted to a surface coal mining project in Logan County, West Virginia. (For much more, see here, here, and here). This was the first time EPA had claimed the authority to issue a retroactive veto; before, permits had been thought to have been akin to a property right (for their duration). EPA justified the veto as being necessary to protect an insect that isn’t an endangered species.

Evidently, EPA’s power grab was too much, even for members of the President’s own party. The bipartisan fear galvanizing H.R. 524 is that EPA now claims the authority to effectively end any business reliant on Clean Water Act permits, at any time, based on the flimsiest of justifications.

Thus, it was a banner week for bipartisanship. Not that you read or heard about it. To be sure, the media normally loves to trumpet whatever both parties can agree on, in this hyper-partisan age. In last week’s cases, however, the common ends (a decision on Keystone; checking the EPA) are uncomfortable for the opinion makers. I’ve noted previously media’s reluctance to acknowledge that opposition to climate change mitigation policies is also healthily bipartisan. (See here and here).

Yesterday morning, This Week with George Stephanopoulos’s humbly titled “Powerhouse Roundtable” was debating the resignation of HHS Secretary Kathleen Sebelius, when Matthew Dowd, a prominent political consultant, said this:

This is what’s wrong with our system of government…We have a cabinet that no longer operates like you would normally want in a state or in a company, so that people are given delegation and accountability is held. Today, all the power is held by the White House…and the cabinet is given very little. It’s all photo [opportunities].

I respectfully disagree. The Environmental Protection Agency, a cabinet-level federal agency with which American business is all too familiar, is doing much, much more harm than could be accomplished with mere “photo ops.” Indeed, the EPA is waging an ideological war on an entire industrial sector of the economy. Worst of all, the agency is doing so on behalf its captors—environmental special interests–rather than U.S. voters. To be precise, green groups like the Sierra Club and NRDC have “captured” EPA, in the same way that industry was thought to have done to regulators in the 1960s. These environmental organizations spend significant resources on getting their preferred candidates elected. In return, they enjoy political spoils. The most conspicuous manifestation of this capture is the continuously revolving door between the non-profit, public (i.e., EPA), and private “green” sectors of the economy. Another is “sue and settle,” by which environmental lawyers at these green special interests have seized the regulatory initiative at the agency. Thus empowered at the EPA, these organizations use the Federal State to advance their political agendas against heavy industry in general, and fossil fuels in particular.

Matthew Dowd says the cabinet is impotent, because the White House is hoarding all the control. Contrary to this assertion, EPA, in fact, is running amok, performing the policy whims of green special interests outside the Presidency.

Video of the segment is re-posted below.


ABC US News | ABC Business News

Platts Energy Week with Bill Loveless: American Wind Energy Association CEO Tom Kiernan gave an illuminating interview with Bill Loveless on Platts Energy Week. In it, Mr. Kiernan explained that the wind energy industry would go “bust,” if the U.S. Congress fails to extend a subsidy that gives wind energy generators a tax credit worth $23 per megawatt electricity produced. This exchange occurs at the 2:40 mark of the video immediately below.

Mr. Kiernan’s dire warning was backed up by a report earlier this week from Energy & Environment News’s Nick Juliano, whose independent estimate that the wind energy industry would lose 30,000 jobs, virtually overnight, absent this one subsidy.

Keep in mind that thirty States have enacted Soviet style production quotas for green energy, and that wind energy meets the overwhelming preponderance of these mandates. Thus, the wind energy industry enjoys a government-guarantee for consumer demand. Few and lucky are the politically connected industries that receive such a state-sponsored perk.

And yet, despite these green energy production quotas, the industry faces imminent collapse, according to its own top lobbyists, if a single, albeit egregious, tax handout is allowed to expire.

Which brings me to my final point. In the interview, Mr. Kiernan innocently claims that the wind industry merits the $23 per megawatt tax credit, because it wants a “level playing field” with conventional energy. While I readily advocate for the elimination of all subsidies, I question whether Mr. Kiernan is sincere. Absent mandates and subsidies for all energy sources, and unless fossil fuels are regulated out of existence, wind energy would die a swift death at the hands of conventional energy on even a relatively free market. When competition matters, intermittent and expensive (i.e., renewable energy sources) simply are no substitutes for cheap and reliable (fossil fuels, that is).

The McLaughlin Group: Four months ago, I noted how John McLaughlin skewered global warming alarmists on his wonderful show, The McLaughlin Group. My attention was prompted by the show’s annual awards broadcast, in which McLaughlin had given the “2013 Enough Already Award,” to “the theory that now masquerades under the pseudonym of climate change. Even its most honest supporters now admit that there has been no increase in the earth’s surface temperatures for 15 years. It’s time to admit the theory is flawed.”

Great stuff. And it leaves no doubt as to where he stands on the issue. On this week’s show, we got more of the same. Near the end of the show, McLaughlin introduced a segment about global warming, titled “Apocalypse Now?” The question mark is operative. The topic of the segment was the recent release of an Intergovernmental Panel on Climate Change report. Before the start of the roundtable debate, there was a long video lead-in to the segment, featuring one scary IPCC prediction after another. See for yourself (it starts at the 21:55 mark): [click to continue…]

Post image for WaPo Wonkblog Makes Case that EPA’s Carbon Pollution Standard Is Illegal

On Friday, Washington Post Wonkblog published a notable article about “clean coal,” defined by reporter Max Ehrenfreund as “[t]he suite of technologies that the industry hopes could one day remove carbon dioxide from exhaust at coal-fired power.”

The most mature of these “clean coal” technologies is known as carbon capture and sequestration (“CCS”), although it has never been outfitted on a coal-fired power plant of even moderate size. The purpose of the Washington Post article was to throw cold water on recent media reports regarding the promise of clean coal. According to Mr. Ehrenfreund, the case for CCS in the U.S. is “weak,” because the technology is “exorbitantly expensive.”

Somewhat bizarrely, the Wonkblog reporter failed to mention that the Environmental Protection Agency in February proposed the Carbon Pollution Standard, a requirement for CCS on all new coal-fired power plants. Due to a unique provision of the Clean Air Act, the regulation goes into effect upon proposal. As a result, all new coal-fired power plants require “clean coal” technology—the very technology that is the subject of the Washington Post Wonkblog article. You’d think that this would qualify as “news.”

Whatever the reason for this rather conspicuous omission, I want to draw attention to the reporter’s use of language, which offers an important legal lesson. Mr. Ehrenfreund wrote that CCS is “exorbitantly” costly. This modifier is supremely apt; it is the exact word chosen by the D.C. Circuit Court of Appeals* to describe an impermissible requirement pursuant to the provision of the Clean Air Act that authorizes the aforementioned Carbon Pollution Standard. See Essex Chemical Corp. v. Ruckelshaus, 486 F. 2d 427 at 433 (D.C. Cir. 1973). As such, if the costs of carbon capture and sequestration are in fact “exorbitant,” then the regulation is illegal.

[click to continue…]

Post image for Ivanpah: Dead Technology Propped Up by California Ratepayers

In February, the New York Times ran a stunning article, “A Huge Solar Plant Opens, Facing Doubt about the Future,” concerning the start of the Ivanpah project, the world’s largest concentrated solar thermal power plant. Situated in California’s Mohave Desert, Ivanpah generates up to 393 megawatts of solar power with 350,000 mirrors arrayed over five square miles, which redirect and focus the sun’s rays in the service of boiling water to drive conventional steam turbines. According to the New York Times report, industry analysts believe that the technology behind Ivanpah is no longer viable on the energy market, even though the project is brand new. It was “stunning,” to me, insofar as negative takes on green energy infrequently appear within The Grey Lady.

Yet the news also must have come as a shock to California ratepayers, who will be responsible for propping up this dead technology for the next two decades. In a recent interview on the invaluable Platts Energy Week with Bill Loveless, BrightSource Energy (the Ivanpah developer) senior vice president Joseph Desmond described the long-term purchasing power agreements his company signed with Pacific Gas & Electric and Southern California Edison as being akin to “building a hotel and having 100% occupancy guaranteed for twenty years the day you open.” Sounds like a great deal—for BrightSource.

 

It’s not as if Ivanpah’s power will be cheap. The exact terms of these long term contracts, known as purchasing power agreements, are not publicly available. However, we do know that the raw project costs were $2.2 billion, and that the peak power output is 393 megawatts. Because the sun only shines half the day, we can safely give the plant an effective capacity of 200 or so megawatts, although even this energy isn’t dispatchable. So that works out roughly to $2.2 billion for 200 megawatts of unreliable capacity, or $11,000/kilowatt. By comparison, the most recently constructed coal-fired power plant I can think of off the top of my head, Xcel Energy’s 760 megawatt Comanche 3 power plant in Pueblo, Colorado, which was outfitted with the latest, most expensive environmental controls, cost $1,700/kilowatt.*

[click to continue…]

Post image for True Conspiracy Theory: The Green Assault on Civil Liberties

There exists an environmentalist strain of armchair psychology that dismisses the input of free-marketers on the issue of global warming, due their supposed affinity for conspiracy theories about runaway government. According to this line of reasoning, some “conservatives” are “individualists,” who innately reject global warming alarmism, because of an unfounded fear that mitigating climate change would endanger their civil liberties.

I’ve long dismissed this reasoning as self-serving propaganda. After all, what better way to de-legitimize your opponents than to call them kooks? It seemed to me like a cheap debate trick. Now, however, I’m not so sure. It’s not that I’ve joined the black helicopter crowd. Rather, evidence is mounting that environmentalists both prominent and plebeian are all-too willing to forsake my civil liberties in order to mitigate climate change, the supposed #1, end-all problem now facing mankind.

To wit, a group of Senators in January formed an ad hoc caucus of global warming alarmists and their first task was to pressure Sunday news programs on global warming coverage. To this end, nine Senators sent a letter to Fox News chief Roger Ailes, CBS News President David Rhodes, ABC News President Ben Sherwood and NBC News President Deborah Turness, deploring the paucity of coverage given to climate catastrophes. They concluded,

“We urge you to take action in the near term to correct this oversight and provide your viewers, the American public, with greater discussion of this important issue that impacts everyone on the planet.”

Not coincidentally, each network that received this letter ran a major climate change segment on its Sunday show within weeks.

Alas, these news nannies aren’t yet done. This week, one of the group, Sen. Sheldon Whitehouse, took to the floor of the floor of the world’s greatest deliberative body so as to bemoan the absence of coverage of the recent UN climate report by the cable news networks. No doubt, a strongly-worded letter “urging” the networks to “correct this oversight” is in the works.

[click to continue…]

Readers of this blog are no doubt up to speed with the revolution in drilling technology—collectively known as hydraulic fracturing, or “fracking”–that has unleashed an American energy boom. Thanks to fracking, U.S. oil production grew by a record 1.136 million barrels a day last year to 8.121 million barrels a day. Gas production has increased by even greater leaps and bounds, such that there is clamoring on Capitol Hill to facilitate gas exports as a strategic geopolitical asset.

North Dakota has been a locus of the U.S. energy renaissance. It is the home of the Bakken formation, one of North America’s largest oil-rich shale plays unlocked by fracking. The economic impact has been eye-popping. The State now proudly claims the nation’s lowest unemployment and a per-person gross domestic output significantly higher than the national average. Last week, the Department of Labor released statistics showing that the citizens of North Dakota enjoyed the fastest year over year increase in personal income at 7.6 percent. Current per capita income in North Dakota is $57,000, second only to Connecticut, and has increased by almost 50 percent since 2009.

To better understand how the domestic energy industry is at work in North Dakota, check out the great infographic below, “The Burgeoning Bakken,” from Hart Energy by way of the Unconventional Oil & Gas Center.

[click to continue…]

Post image for EPA’s Shocking Justification for Retiring up to 25% of U.S. Coal Fleet

Last week, the EIA published a little-noticed analysis estimating that up to 25 percent of the nation’s coal-fired power plant fleet could be forced to retire due to the EPA’s 2012 Mercury and Air Toxics Standards rule, also known as the “Utility MACT.” Above, I’ve re-posted a chart that summarizes EIA’s findings.

Needless to say, these are significant retirements. While it’s true that EPA performed a reliability analysis of its Utility MACT, the Agency’s work was shredded by analysts at the Federal Energy Regulatory Commission. Notably, many of the coal plants in the northeast that are slated for retirement were called into service during the unusually cold winter of 2013-2014. Had they not been available, electricity and heating costs would have “skyrocketed.” After 2015, these plants will be shut down permanently. For more, see this recent New York Times article, “Coal to the Rescue, But Maybe Not Next Winter.” And those electricity generating units that decide to comply with the utility MACT, rather than retire, will be on the hook for almost $10 billion in annual compliance costs through 2020. Taking into account these direct and indirect costs, this is one of the most expensive regulations, ever.

That’s a description of some of the costs of the Utility MACT. Now, let’s turn to the “benefits,” which I’ve summarized in the graphic below.

coal retirments foto2

That’s no joke: The actual justification for the Utility MACT, one of the most expensive and consequential regulations of all time, is to protect a supposed population of pregnant subsistence fisherwomen, who consume hundreds of pounds of self-caught fish from exclusively the most polluted inland bodies of fresh water. Don’t take my word for it! Below, I’ve posted this “evidence” of harm, as presented by the EPA.

[click to continue…]