Institute for Energy Research

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The Institute for Energy Research (IER) is a not-for-profit organization that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets. IER maintains that freely-functioning energy markets provide the most efficient and effective solutions to today’s global energy and environmental challenges and, as such, are critical to the well-being of individuals and society.

Most Recent Articles by Institute for Energy Research:

Responding to R Street on the Carbon Tax: When Does It Make Sense to Advocate the Impossible?

Sep 19, 2017 — Institute for Energy Research

In a recent series of posts (here and here), I amplified some of Oren Cass’s strongest criticisms of the typical case for a US carbon tax. Seeing an opportunity for a zinger, Josiah Neeley at R Street put up a post entitled, “Prominent carbon tax skeptic admits it could increase economic growth.” Although I appreciate being dubbed “prominent,” as we’ll see the R Street post is wrong in both title and in substance. Neeley is referring to my discussion of a capital tax cut offsetting the damage of a carbon tax, but that of course is far from saying a carbon tax could increase economic growth. Beyond that, Neeley’s advice to me to advocate politically impossible outcomes is also dubious.

Wind Turbines Reduce the Productivity of Surrounding Vegetation

Sep 15, 2017 — Institute for Energy Research

Many of wind energy’s problems, such as its intermittent nature; its slaying birds, bats and other animals; its noise pollution; its degradation of vistas; and its higher costs compared to traditional technologies are well known. The latest study, however, shows that it also reduces the productivity of surrounding vegetation. The study finds that wind turbines elevated both day and night temperatures, which suppressed soil moisture and enhanced water stress, decreasing local vegetative growth and productivity. Further, wind requires 5 to 6 times more land than traditional technologies (coal, natural gas and nuclear) for the same amount of capacity and 12 times more when generating capability is also considered.

A number of recent studies discuss these issues and are highlighted below.

Amplifying Oren Cass’s Critique of a Carbon Tax, Part 2

Sep 15, 2017 — Institute for Energy Research

In my last article, I explained that two years ago the Manhattan Institute’s Senior Fellow Oren Cass wrote a masterful critique of the typical arguments for a U.S. carbon tax. His essay, “The Carbon Tax Shell Game,” is so good that I decided to spend two posts here at IER amplifying some of his strongest points. As I’ve been illustrating over the years with my own work (e.g.,¬†here and here), the case for a carbon tax falls apart once you start picking at it.

In the previous post, I focused on Cass’s claim that the carbon tax in U.S. politics is a “shell game,” because its proponents promise contradictory things to different groups. In this post, I’ll focus on Cass’s sophisticated critique of superficial justifications for a U.S. carbon tax based on the concept of a “negative externality.”

Trump Administration Working Hard to Undo Obama’s Onerous Regulations

Sep 12, 2017 — Institute for Energy Research

EPA Administrator Scott Pruitt and Interior Secretary Ryan Zinke are hard at work undoing the Obama administration’s onerous regulations against the fossil fuel industry. From the Clean Power Plan to the methane rule on natural gas wells, the Obama administration waged a war on coal-fired power plants and oil and gas facilities.

Scott Pruitt has indicated that he will carry out the functions of the EPA based on the laws enacted by Congress. EPA released the proposed volumes for the Renewable Fuel Standard for 2018 on time1 and Pruitt has announced a plan to restore EPA’s Superfund cleanup program to its rightful place as a top agency priority. Over 1,300 cleanup sites have been designated and Pruitt will reprioritize and accelerate action to remediate them.2 He is also planning on having an open, transparent discussion on climate change—a red team/blue team exercise.3

Scary Sea Level Rise? Check Your Science

Sep 9, 2017 — Institute for Energy Research

“Sea level has been overall rising since the last ice age, with some ups and downs. Sea level has been rising for the past 200 years….Humans are not going to stop sea level rise on the time scale of a few centuries by ceasing emissions of CO2.”—Judith Curry, “The Blame Game.” Climate Etc. August 14, 2017.

Judith Curry is the personification of “one plus the truth equals a majority.” This esteemed climate scientist and erstwhile professor changed her views from climate alarmism and (government) forced energy transformation, a story told elsewhere.

Amplifying Oren Cass’s Critique of a Carbon Tax, Part 1

Sep 7, 2017 — Institute for Energy Research

Somehow I missed it when it first ran, but two years ago the Manhattan Institute’s Senior Fellow Oren Cass wrote a masterful critique of the typical arguments for a U.S. carbon tax. His essay, “The Carbon Tax Shell Game,” is so good that I’m going to spend two posts here at IER amplifying some of his strongest points. As I’ve been illustrating over the years with my own work (e.g., here and here), the case for a carbon tax falls apart once you start picking at it.

A Look Inside the DOE Grid Study

Sep 6, 2017 — Institute for Energy Research

If you are looking for a report that provides a comprehensive overview of today’s electricity markets, the principal causes of coal and nuclear retirements and the issues surrounding electric grid reliability and resilience, check out the Department of Energy’s Staff Report to the Secretary on Electricity Markets and Reliability. The grid study identifies low-cost and abundant natural gas as the main contributor to coal and nuclear plant retirements, but also notes other factors that include relatively flat electric demand, environmental regulations and the growth of intermittent renewable energy that is heavily subsidized. According to the report, renewable energy negatively affects the economics of baseload power plants, primarily due to “wholesale market impacts and distortions” from state renewable portfolio standards and federal tax credits for wind and solar.

The report makes eight recommendations, including directing the Federal Energy Regulatory Commission (FERC) to expedite the study of wholesale market structures; promoting research and development for grid resilience, reliability, modernization and renewables integration technologies; and examining infrastructure permitting and regulatory processes. It recommends that FERC accelerate efforts to improve energy price formation in wholesale power markets and create fuel-neutral markets that adequately compensate resources for essential reliability services to the grid.

The Wrong Way to Save Nuclear Power

Aug 31, 2017 — Institute for Energy Research

Earlier this month, Jeremy Carl and David Fedor of Stanford University’s Hoover Institution, released a book showcasing the dire state of America’s nuclear energy industry. Keeping the Lights on at America’s Nuclear Power Plants highlights the problems facing the beleaguered power source and offers a range of proposals to save America’s nuclear reactors. And while some of their proposals would make meaningful headway toward transforming nuclear power into a viable power source, others would merely make the nuclear energy industry dependent on government largesse and raise costs on consumers in the process.

As I discussed in my previous article, the authors support reforming the federal government’s expensive licensing restrictions which make it harder for newer and cheaper reactors to reach the market. In particular, they call for ending the Nuclear Regulatory Commission’s requirement that nuclear developers complete a decade-long application before any approvals are made. In its place, they support shifting the NRC’s licensing process towards a “test-then-license” system in which the commission would grant companies faster step-by-step approval as they wade through the process.

Al Gore’s Energy Problems

Aug 26, 2017 — Institute for Energy Research

Climate alarmism was launched almost 30 years ago when the featured scientist before Al Gore’s Senate Committee on Energy and Natural Resources testified that he was “99 percent certain” human activity was behind that year’s unusually hot summer.

IER Statement on Department of Energy Grid Report

Aug 25, 2017 — Institute for Energy Research

WASHINGTON – Today the Department of Energy (DOE) released a new report on electricity markets and reliability, as directed by Secretary Rick Perry. IER President Thomas Pyle issued the following statement:

“The DOE grid study is a solid examination of the challenges that lie ahead in order to ensure the reliability, affordability, resiliency, and diversity of our electricity system.”

Gas Tax Revenues Will Plummet With Large Increase in Electric Vehicles

Aug 24, 2017 — Institute for Energy Research

Europe and the United States need to prepare for lower gasoline and diesel tax revenues if electric vehicle sales skyrocket as some analysts predict. For example, if electric vehicles were to represent 60 percent of U.S. new car sales by 2030, annual tax revenue (federal and state) would be reduced by $10 billion, or about 14 percent compared to if electric vehicle sales remained flat at 1 percent of new car sales. If electric vehicle sales reached 20 percent of new car sales, gasoline revenue would still fall by $3 billion, or about 5 percent.sup>1 California, which has the highest number of electric vehicles, would be hit hard as it currently has the sixth largest gasoline tax.sup>2The state recently passed an increase to its gasoline tax of $0.12 per gallon (up to $0.52 a gallon from $0.40 per gallon) and an increase in its diesel tax by $0.20 per gallon, both of which will take effect on November 1.sup>3 The increase will make its gasoline tax the second highest in the country, behind only Pennsylvania.

Does the Developing World Want Solar Power?

Aug 23, 2017 — Institute for Energy Research

While some of the developing world leapfrogged to cellular phones without ever using landlines first, it does not have a matching appetite for skipping over central station power generated by reliable traditional technologies for solar power and mini-grids. An attempt to leapfrog to mini-grids using solar power in northeastern India resulted in no takers at the true cost of the system and only a few takers when it was heavily subsidized. In Dharnai, a village in the state of Bihar near the Nepalese border, youngsters demanded the “real source of energy,” rather than “the fake solar powered” energy after a solar micro-grid was installed providing electricity for the first time in 33 years.1 Among developing countries, including China and India, there is a long-standing recognition of the need for fossil fuels, especially coal, which is more abundant and has a competitive edge over natural gas. This is particularly true in Southeast Asia and Sub-Saharan Africa where coal reserves are plentiful.

IER Publishes “The Solar Value Cliff: The Diminishing Value of Solar Power”

Aug 21, 2017 — Institute for Energy Research

WASHINGTON – The popular media is replete with articles heralding the falling costs of solar power. But while solar’s costs may be going down, so too is its value to the electricity grid. Today, as the nation anticipates its first total solar eclipse in nearly 100 years, the Institute for Energy Research released a paper detailing this phenomenon, which it calls the solar value cliff.

The Solar Value Cliff: The Diminishing Value of Solar Power chronicles the following:

California Gas-Fired Power Plant Files for Bankruptcy

Aug 20, 2017 — Institute for Energy Research

The La Paloma natural gas plant in California filed for bankruptcy last December because it was not getting enough operating time to cover its costs due to solar and other renewable energy receiving preference. The plant, which serves as back-up to the state’s renewable generating technologies, was also denied a reliability charge by the state that would have allowed it to continue to operate. The owners project an annual loss of $39 million without a reliability contract or other support. In its bankruptcy filing, the plant owners listed assets of between $100 million and $500 million and liabilities of $500 million to $1 billion.1  La Paloma is a 1200-megawatt merchant plant located 110 miles northwest of Los Angeles and is able to serve both the San Francisco and Los Angeles markets.2

Will Solar Power Be at Fault for the Next Environmental Crisis?

Aug 16, 2017 — Institute for Energy Research

Solar panel waste will become a major issue in the coming decades as old solar panels reach the ends of their useful lifespans and require disposal. Last November, Japan’s Environment Ministry issued a warning that the amount of solar panel waste Japan produces each year is likely to increase from 10,000 to 800,000 tons by 2040, and the country has no plan for safely disposing of it. China has more solar power plants than any other country, operating roughly twice as many solar panels as the United States and also has no plan for the disposal of the old panels. In China, there could be 20 million metric tons of solar panel waste, or 2,000 times the weight of the Eiffel Tower, by 2050. California, another world leader in deploying solar panels, likewise has no plan for disposal, despite its boasts of environmental consciousness. Only Europe requires solar panel manufacturers to collect and dispose of solar waste at the end of their useful lives.