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.
By 2040, more than half of new-car sales and a third of the global fleet--equal to 559 million vehicles--is projected to be electric. This poses serious challenges.
A recent article by Phil McDuff in The Guardian carries the headline, “Ending climate change requires the end of capitalism. Have we got the stomach for it?” Although I obviously disagree strongly with the author’s claims, McDuff’s piece is refreshingly honest in its demands. Those of us warning that the radical environmentalist movement—particularly in the context of battling climate change—was tied to a broader rejection of capitalism, period, have yet another advocate admitting it openly in the popular press.
The International Energy Agency's (IEA) five-year outlook expects that the United States will overtake Russia and potentially Saudi Arabia as an oil exporter by 2024. The U.S. shale revolution‚--thanks to hydraulic fracturing and directional drilling‚--has made the United States one of the world's largest energy producers and potentially the largest oil exporter globally within five years. Forecasters expect the United States to become a net energy exporter by 2021, with its liquids production increasing by a record 2.2 million barrels per day in 2018. This one-year increase is slightly less than the total annual production of Kuwait and slightly more than the production of Nigeria, the 6th and 7th producers in the world, respectively. IEA expects the United States to provide 70 percent of the increase in global liquids production capacity by 2024‚--4 million barrels per day. Shale oil and liquefied natural gas (LNG) are increasingly in demand with Asian countries, particularly China.
There are few editorialists that many of us enjoy more than Holman W. Jenkins Jr. His twice-weekly "Business World" columns in the Wall Street Journal speak truth to power, including on the top-tier issue of energy and climate.
His March 16, 2019, piece, Is There a Green Rational Deal?, presents a government-activist alternative to the Green New Deal's "fantastically expensive plan to fix precisely nothing." But Jenkins errs in reaching for a silver bullet where, indeed, the fix is unnecessary, speculative, expensive, and not doable. And he defaults on the clear policy winner: free-market, wealth-is-health adaptation.
Weather has a major effect on the productivity of wind turbines. Both the Polar Vortex and El Niño have reduced the output of wind turbines in the Midwest. During the polar vortex, wind turbines automatically shut off in the extreme cold because the low temperatures take a toll on various parts of a turbine, from electrical cabinets to the gearbox, the generator, lubricants and steel components, which can become brittle if the temperature drops low enough.
Both fans and foes of the so-called Green New Deal (GND) agree that it is a wildly ambitious set of proposals, which—by design—will involve the federal government spending boatloads of money. In fact, the GND is so expensive that Rep. Ocasio-Cortez has cited the inflationary doctrine of Modern Monetary Theory (MMT) to deflect the issue; we don’t need to worry about the cost, so the argument goes, because the Federal Reserve can create an unlimited number of dollars.
The Indian Government is on its way to achieving the goal of universal household electrification through the opening of 52 new coal mines since Narendra Modi’s government came to power in May 2014. Structural reform and the elimination of red tape and cumbersome procedures have been key to the progress.
One of the most interesting aspects of the "Green New Deal" is that its progressive proponents hardly mention taxes at all--even as some Republican economists continue to champion a carbon tax. Faced with the political defeat of the Waxman-Markey "cap and trade" bill, as well as the failed carbon tax initiatives in Washington State, it seems that Rep. Alexandria Ocasio-Cortez and the other Green New Deal supporters are just going to accentuate the positive. In other words, they are going to focus on all the goodies contained in their proposals--such as a trillion dollars in spending projects--while downplaying taxes and regulations.
The Bureau of Land Management (BLM) generated $1.1 billion from oil and gas lease sales in calendar year 2018, nearly tripling what had been the agency’s previous record high of $408 billion in 2008. Bonus bids from the 28 oil and gas lease sales totaled $1,151,109,064 based on preliminary figures. A bonus bid is a one-time payment in exchange for exclusive access to explore for hydrocarbons on a parcel and grants an exclusive lease for a set period of time. A total of 1,412 parcels, covering almost 1.5 million acres, were leased. The lease sales generated nearly as much revenue as the BLM’s $1.1 billion budget for 2018.
Centralized planning of the energy sector, now at the forefront of political debate with the "Green New Deal," has a century-old tradition in the United States.
It began with the United States Fuel Administration (USFA) in World War I, which formed a model for more extensive price and allocation regulation during World War II by the Petroleum Administration for War (PAW). After an abbreviated return to federalization during the Korean Conflict by the Petroleum Administration of Defense (PAD), special wartime planning with energy would not reemerge (such as during the Vietnam War).
Last month, the polar vortex brought below-zero temperatures to the Midwest and Great Plains. Over 220 million Americans experienced below-freezing temperatures across the lower-48 states, and about 26 million people were living with temperatures at or below -20 degrees. Despite the large amount of wind power in the Midwest, coal and natural gas provided about 80 percent of the electricity needed to keep the power and heat on, according to the Midcontinent Independent System Operator, which manages that grid. However, utility companies in parts of the Upper Midwest had to ask customers to turn down their thermostats to ensure that there was enough natural gas to meet demand.
Due to Canadian oil sands being transportation-constrained, Canadian crude prices had traded at a steep discount to U.S. oil, reaching a record difference of more than $51 a barrel in October 2018. But that gap recently narrowed to less than $7—the lowest since March 2009—due to a production cut of 8.7 percent that the Alberta government imposed on oil producers to lift depressed prices. The cut began on January 1 and is to last for one year.
In response to the recent pro-carbon tax letter to the Wall Street Journal signed by dozens of prominent economists, Tyler Cowen objected strongly to the "citizen dividend" aspect. Although Cowen is sympathetic to a carbon tax per se, he was alarmed that the economists in the WSJ were misleading readers:
China recently put the brakes on solar and wind energy, indicating that it will no longer approve wind and solar power projects unless they can compete with coal power prices. In late May 2018, China issued "2018 Solar PV Power Generation Notice," imposing caps on solar energy and reducing feed-in tariffs on those projects. More recently, China's National Development and Reform Commission and the National Energy Administration provided a series of conditions under which new solar and wind projects would be approved through the end of 2020. Conditions include that the price must match or undercut the national coal benchmark and that the projects must show that the grid can handle their output. In 2017, 12 percent of wind generation and 6 percent of solar generation was curtailed due to lack of transmission capacity.
We live in strange times indeed when an environmental reporter for the New York Times writes that we should stop pushing for a carbon tax, just a few weeks before dozens of distinguished economists sign a letter to the Wall Street Journal calling for a carbon tax. Yet despite the prestige behind the impressive list of signers, the economists mislead the American public on several key points.
One of the hottest topics in policy wonk circles is the "Green New Deal," spearheaded by the rising star of the progressive Left, Alexandria Ocasio-Cortez. In my previous post, I explained that the entire premise of a current New Deal--whether green, red, or blue--was flawed.
The International Energy Agency (IEA) released their 2018 Coal Market Report last month with forecasts through 2023. Coal accounts for 27 percent of total global energy and 38 percent of global electricity generation—the same market share it held in 1998. In 2017, global coal demand increased by 1 percent and electricity generation from coal increased by around 3 percent.
At the request of the Secretary of Energy, the Energy Information Administration (EIA), an independent agency of the U.S. Department of Energy, evaluated the energy-related subsidies that the federal government provided in fiscal year 2016, updating a study that it did for fiscal years 2013 and 2010.
