Institute for Energy Research


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:

Pennsylvania’s Phenomenal Increase in Natural Gas Production

May 22, 2018 — Institute for Energy Research

Pennsylvania’s Phenomenal Increase in Natural Gas Production
Pennsylvania increased its permits for natural gas drilling by 51 percent in 2017 and its rig count by 65 percent, resulting in annual natural gas production increasing by 3 percent reaching a record 15 billion cubic feet per day, second only to Texas in natural gas production. The state’s permitting and drilling activity increase is a result of expanding regional pipeline capacity, moving natural gas to market centers outside of production areas. These new sources of natural gas are adding greatly to Pennsylvania’s economy and are increasing investment in the state.


Michigan Changes Net Metering Rules for Solar Power

May 17, 2018 — Institute for Energy Research

Michigan Changes Net Metering Rules for Solar Power
Michigan has joined other states in realizing that net metering rules as originally designed are biased against consumers without rooftop solar, raising their electricity rates. Michigan will now charge rooftop solar customers at the retail price of electricity for electricity that they consume and pay them a lower price for the electricity that the utility purchases from them thereby charging them for the use of the electrical wires (i.e., transmission and distribution) that non-solar consumers hitherto have had to subsidize. Customers already in the net metering program will be grandfathered for 10 years. By changing the rules on net metering, Michigan will join several other states that have recognized the bias.


Climate Litigation: Grasping at Tort Straws

May 10, 2018 — Institute for Energy Research

Climate Litigation: Grasping at Tort Straws
Billions of consumers purchase and use fossil fuels for safe, comfortable, prosperous living each day. Presumably, it is all voluntary and legal.

Countless entities and workers provide oil, natural gas, coal, and electricity to themselves and everyone else. Energy, the ubiquitous master resource, is a from-us-to-us activity.

Strange, then, that climate-change alarmists/activists are singling out certain energy companies on a nuisance claim for the latter’s alleged contribution to global climate change.


EPA Lacks Power to Administratively Expand Ethanol Waiver

May 9, 2018 — Institute for Energy Research

EPA Lacks Power to Administratively Expand Ethanol Waiver
The Trump administration is considering expanding the ethanol fuel waiver in the Clean Air Act (CAA) to allow E15 fuel (gasoline containing up to 15% ethanol) to be sold year round. The Environmental Protection Agency has indicated that it has been exploring this action as well, and the ethanol industry has been lobbying for years in pursuit of this change. There’s just one problem: EPA does not have the authority to expand the waiver, only Congress can do so by changing the law.


Coal Kept the Lights On During the Winter Months

May 7, 2018 — Institute for Energy Research

Coal Kept the Lights On During the Winter Months
The winter of 2017/2018 saw freezing weather, causing energy demand to increase above normal levels. One of the longest and intense deep freezes ever recorded for the East Coast of the United States with snow, ice and frigid temperatures occurred between December 27, 2017 and January 8, 2018, placing the East Coast electric grid under extreme stress. The period from January 4th to 6th accounted for three of the top ten winter demand days in the history of the PJM Interconnection. Electricity consumption rose 21 percent over average daily loads during that period.

According to the National Energy Technology Laboratory, coal and oil power plants, many of which are being retired, kept the regional grid from overloading and widespread blackouts from occurring. The Laboratory’s analysis of the PJM system found that coal generation rose from 20 gigawatts to 51 gigawatts of supplied capacity. Natural gas generation averaged about 25 gigawatts, and was limited by pipeline constraints and competition from home-heating. Solar power declined due to the clouds and snow. Wind power also declined.


Science for Government Policy Should Be Transparent

May 2, 2018 — Institute for Energy Research

Science for Government Policy Should Be Transparent
Suppose a progressive just woke up from a coma and you explained, “There is currently a battle between the Trump Administration and public health and environmental activists. One is favoring government proclamations and edicts issued on the basis of secret information, while the other favors transparency so outside parties can review the methods and data.” The progressive could be forgiven for thinking that the activists would surely be the ones favoring open access. And yet, the opposite situation is currently playing out, as critics blast the EPA’s new proposed rule that requires regulations to be based only on scientific findings that are derived from publicly available information.

I am not a lawyer and cannot comment on the specific language used in the proposed rule. However, as an economist who has worked in the climate change policy debate, I definitely agree that the only hope the public has for accountability and fidelity to the actual scientific literature is that government officials should issue rules on the basis of judgments or analyses that can be reproduced—and thus put to the test—by outside groups. It is amazing to me that we are even having this argument, at a time when there is a genuine “crisis of reproducibility” in the social sciences and even in economics, as I discuss in this recent article.


Renewables Generated 103 Percent of Portugal’s Electricity Consumption in March

Apr 30, 2018 — Institute for Energy Research

Renewables Generated 103 Percent of Portugal’s Electricity Consumption in March
Portugal’s renewable electricity production (mostly from hydropower and wind energy) exceeded monthly consumption in March. The average renewable generation for the month exceeded 103.6 percent of consumption. According to the nation’s transmission system operator, renewable energy production reached 4,812 gigawatt hours, surpassing Portugal’s total electricity needs for March, which totalled 4,647 gigawatt hours. But that does not mean that Portugal’s electric system can rely solely on renewable energy. At least, some say, not until 2040—over 20 years from now—will that be able to happen in a cost effective way.


Massachusetts Limits Gas Pipelines, Imports LNG from Russia Instead

Apr 17, 2018 — Institute for Energy Research

Massachusetts Limits Gas Pipelines, Imports LNG from Russia Instead
Environmentalists are winning in Massachusetts by getting natural gas infrastructure projects shelved. Natural gas consumers in the state, however, are losing out because those pipelines would supply natural gas to consumers at a lower cost than imported liquefied natural gas (LNG)—some of which is coming from Russia through the Everett LNG terminal—the only LNG import terminal still operating in the lower 48.

Environmentalists seem to be obsessed with stopping the construction of domestic pipelines in this country, regardless of what they carry, what fuels they displace, and how global greenhouse gas emissions may be affected. Liquefied natural gas results in greater emissions than pipeline gas because cooling the gas to minus 260 degrees Fahrenheit and then shipping and regasifying it requires more energy than pumping natural gas through domestic pipelines. Generally, LNG produces 5 to 10 percent more emissions over its entire life cycle than piped gas.


Offshore Wind States Beware

Apr 13, 2018 — Institute for Energy Research

Offshore Wind States Beware
Off of the shore of Block Island on the Rhode Island coast, five wind turbines are operating and supplying power to the island. It took years of state and federal policymaking, environmental impact assessments, and town hall meetings for the 30-megawatt wind farm to come to fruition due to its cost and degradation of vistas. It cost $300 million—$10,000 per kilowatt—about 10 times more than the cost of a new natural gas combined cycle unit. Further, it is 55 percent more costly than what the Energy Information Administration (EIA) expects a first-of-a-kind offshore wind unit to cost—$6,454 per kilowatt. In terms of generation costs, EIA expects a new offshore wind farm to be 3 times more expensive than an onshore wind farm.


South Australia Tries Wind First, Now Solar

Apr 13, 2018 — Institute for Energy Research

South Australia Tries Wind First, Now SolarSouth Australia, a state of 1.7 million people, is on a renewable energy kick and has encountered price and reliability issues. South Australia first invested in wind power and found wind’s reliability to be a problem when it shuttered its last coal plant that backed up the wind power and exposed its ratepayers to outrageous prices and massive black-outs. It then hired Tesla to install the largest storage battery in the world last November—a 100-megawatt lithium-ion battery—to provide back-up for wind’s intermittency, at a price of $50 million. Now, it will experiment with solar rooftop panels and Tesla Powerwall 2 batteries to form the world’s largest virtual power plant, costing $800 million. The project will cover 50,000 houses to be fitted with 5 kilowatt rooftop solar systems and 13.5 kilowatt hour Tesla batteries that together could provide up to 250 megawatts of solar power and 650 megawatt hours of storage.


Global Fossil Fuel Consumption Subsidies Abound, But Not in the United States

Apr 3, 2018 — Institute for Energy Research

Global Fossil Fuel Consumption Subsidies Abound, But Not in the United States
The International Energy Agency (IEA) annually estimates global fossil-fuel consumption subsidies that measure what many developing countries spend to provide below-market cost fuel to their citizens. In 2016, IEA found that fossil fuel consumption subsidies totaled around $260 billion, 16 percent lower (about $50 billion less) than in 2015. According to IEA, this decrease is partly due to lower international energy prices of subsidized fuels. Oil subsidies made up 40 percent of the total fossil fuel consumption subsidies, while electricity made up 41 percent, natural gas 19 percent and coal 0.8 percent. According to the IEA, the United States does not have any consumption subsidies for oil, coal, electricity or natural gas.


Julian Morris Outlines Problems with the Social Cost of Carbon

Mar 29, 2018 — Institute for Energy Research

Julian Morris Outlines Problems with the Social Cost of Carbon
Earlier this month, Reason Foundation’s Julian Morris released an excellent policy study examining climate change, regulation, and the social cost of carbon (SCC). In the study, Morris highlights six problems with calculating the social cost of carbon. In this blog, I’ll provided an outline of those six problems, as well as some additional information on the work IER’s staff has done on the social cost of carbon. I strongly encourage you to read the entire policy study, as it provides a great overview of the problems many have identified with calculating the social cost of carbon.


Limiting California’s Waiver Authority Is Not a Federalism Issue

Mar 28, 2018 — Institute for Energy Research

Limiting California’s Waiver Authority Is Not a Federalism Issue
The federal government has passed two main laws regulating the efficiency and emissions of motor vehicles nationwide. The Corporate Average Fuel Economy (CAFE) standards, created by the Energy Policy and Conservation Act (EPCA) in 1975 in reaction to the Arab fuel embargo, mandate higher fuel efficiency for vehicles in an effort to reduce U.S. reliance on foreign oil. The Clean Air Act (CAA), passed in 1970, includes a mandate for the regulation of tailpipe emissions of vehicles. The statutory responsibilities for these regulations rest with the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) respectively.


Natural Gas Plants Under Attack in Several States

Mar 27, 2018 — Institute for Energy Research

Natural Gas Plants Under Attack in Several States
California, Arizona, Michigan, and Massachusetts are saying “no” to new natural gas generating plants, and California even wants to get rid of some of its older gas plants. Recently, the California Public Utilities Commission directed Pacific Gas and Electric, the state’s largest electric utility, to solicit bids for renewable energy and storage projects to replace three natural gas plants. In Arizona, regulators voted for a nine-month pause on any new large gas-fired power plants and told the state’s largest investor-owned utilities that their future plans relied too heavily on natural gas and should include more wind and solar, electricity storage, and energy efficiency. In Michigan, CMS Energy Corp. had to back off from plans to expand a gas-fired plant in Dearborn due to environmentalists claiming that it would worsen air quality.


Electric Vehicles Beware: Customers Prefer SUVs and Pick-Ups

Mar 20, 2018 — Institute for Energy Research

Electric Vehicles Beware: Customers Prefer SUVs and Pick-Ups
SUVs and crossovers made up more than one in three cars sold globally last year—almost tripling their share from just a decade ago. The world increasingly wants these larger vehicles that originated in America. Spurred by rising incomes and lower gas prices, drivers in China, Australia, and other countries are showing a preference for SUVs over smaller sedans. Compared to smaller cars, SUVs are about 30 percent less efficient and they are less likely to have electric versions because there are technological and cost hurdles to powering a larger car with batteries. Further, many automakers believe that drivers of SUVs value power and performance and do not want to be constrained by battery-powered cars with far less range.


No, China Will Not Outsmart America’s Energy Renaissance

Mar 17, 2018 — Institute for Energy Research

No, China Will Not Outsmart America’s Energy Renaissance
Imagine a centrally planned economy out-thinking and out-performing a consumer-driven, free-market one.

That is the prognostication, even hope, of Amy Myers Jaffe, director of the program on Energy and Climate Change at the Council on Foreign Relations, as stated in the current edition of Foreign Affairs (“Green Giant: Renewable Energy and Chinese Power”) and in the Houston Chronicle (“Will Clean Energy Push China Past the U.S”).


The Gas Tax Has Little to Do With Road Costs

Mar 16, 2018 — Institute for Energy Research

The Gas Tax Has Little to Do With Road Costs
In a previous article, I explained that the federal gasoline tax was a very crude way to fund highways, because there is only a tenuous link between gasoline consumption and highway usage. I followed up with an article explaining that once you add in state and local taxes on gasoline, you’re already talking over 20 percent of the price of a gallon at the pump, and furthermore the proposed hike of 25 cents per gallon would push the tax on gasoline above the limit appropriate for the “social cost of carbon” as estimated by the EPA.


White House Looks Into Permanent Jones Act Waiver for Puerto Rico

Mar 16, 2018 — Institute for Energy Research

White House Looks Into Permanent Jones Act Waiver for Puerto Rico
According to several reports, the Trump White House is pursuing a permanent waiver to the Jones Act for Puerto Rico. This decision comes after the law received heavy criticism during last year’s hurricane season when it was blamed for impeding emergency efforts in Puerto Rico during the aftermath of Hurricane Maria. In response to this criticism, on September 28, the Trump administration issued a 10-day Jones Act waiver for Puerto Rico to help support the emergency relief effort.

The Jones Act is a 1920 law mandating that only vessels that are built, crewed, owned, and flagged in the United States are allowed to participate in maritime shipping between domestic ports. By limiting the supply of domestic ships that are available to transport goods between American ports, the Jones Act raises shipping costs on those products; that cost is then passed on to American consumers.


United States to Be the World’s Largest Producer of Oil by 2023

Mar 13, 2018 — Institute for Energy Research

United States to Be the World’s Largest Producer of Oil by 2023
According to the International Energy Agency (IEA), when accounting for most of the global growth in petroleum supplies, the United States is expected to overtake Russia to become the world’s largest oil producer by 2023. Other forecasters are also expecting that outcome including the Energy Information Administration, Exxon Mobil, and BP. U.S. crude oil production is expected to reach a record of 12.1 million barrels a day in 2023, up 2.8 million barrels a day from current levels due to technological advances, improved efficiency, and an oil price recovery that has shale oil companies ramping up their drilling. American oil production would then surpass Russian oil production, currently the world’s largest crude producer at about 11 million barrels a day.


The D.C. Carbon Tax Comedy of Errors

Mar 8, 2018 — Institute for Energy Research

The D.C. Carbon Tax Comedy of Errors
Washington City Paper’s February 8 article discussing the ongoing carbon tax initiative in the District of Columbia—A Carbon Tax Is Popular, But District Lawmakers Can’t Decide How To Implement It—reads like a comedy of errors. A change to public policy as significant as a tax on energy requires precision and clarity, but the proposals being tossed around D.C. are instead half-baked and imprecise. What the discussion lacks is a clear delineation of how the sundry proposed government actions would achieve the desired ends. And more fundamentally, the discussion fails to identify precisely what those desired ends are.

The panoply of misrepresentations and inchoate arguments, though specific to D.C. in its details, is representative of the underwhelming case being made for a carbon tax in a number of states across the country as well as at the federal level. Carbon tax advocates, as aptly described by the Manhattan Institute’s Oren Cass in his essay “The Carbon-Tax Shell Game,” have no one ironclad argument in favor of their proposals and instead resort to new lines of reasoning each time a justification is challenged. The Washington City Paper article illustrates just this point. Among the justifications presented by local activists and politicians for enacting a carbon tax in D.C. are that it would reduce childhood asthma, that it would help the environment, and that it would spur investment in carbon-free energy technologies—all, of course, in the context of maintaining Mayor Muriel Bowser’s pledge of fidelity to the United Nations’ Paris climate agreement intended to slow global warming.