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.
Milton Friedman once remarked: "Nothing is so permanent as a temporary government program." He also observed that so-called infant industries protected by the government "never grow up."
Walmart is suing Tesla alleging that some of the company's solar panels sparked roof fires at several of its locations. According to Walmart, Tesla's solar panels were responsible for at least seven fires that destroyed significant amounts of store merchandise and necessitated substantial repairs to buildings, costing hundreds of thousands of dollars. Walmart wants Tesla to remove the panels from over 240 Walmart store roofs and cover the costs. Walmart's push for solar power generation on its store roofs dates back more than a decade, and was announced with much fanfare. Similarly, Amazon alleges a June 2018 blaze on one of its warehouse roofs involved a solar panel that Tesla had installed. Unlike Walmart, Amazon only has a very small number of solar systems installed by Tesla. Both companies want their solar systems to operate reliably, efficiently, and safely.
U.S. coal plants are closing due to low natural gas prices, state mandates, and federal subsidies for renewable energy, mainly solar power and wind energy. Two coal-fired plants to close by the end of this year are The Navajo Generating Station in Arizona and the Bruce Mansfield coal plant in Pennsylvania--both large coal plants that have been producing power for decades. The third unit to the Paradise coal plant in western Kentucky is expected to close next year. The Tennessee Valley Authority closed two of Paradise's three units in 2017. Previously, smaller coal fired plants were retired. In 2015, the United States closed 15 gigawatts of coal-fired capacity--about 5 percent of the coal fleet--which remains a record on coal capacity retirements in one year. In 2018, 14 gigawatts of U.S. coal capacity were retired.
While natural gas is setting consumption records nationwide, Berkeley, California, is banning its use in new residential buildings. Beginning January 1, 2020, the city will not allow developers to build homes, townhouses, or small apartment buildings with natural gas hook-ups for cooking, heating, or hot water. Berkeley intends to expand the ban to bigger apartment buildings and commercial structures as it implements its goal of "fossil-free new buildings." For those wishing to have a gourmet gas stove in their kitchen, Berkeley will not allow it in a new house.
Mark Mills has a new report and an op-ed in the Wall Street Journal entitled "If You Want 'Renewable Energy,' Get Ready to Dig" that point out the physical impossibility of renewable energy (mainly wind and solar power) and battery storage transitioning the world to a "new energy economy."
After decades of climate-related debate and policy, it's still a fossil-fuel world. And judging from domestic and global politics, this will continue.
A base year to judge energy trends is 1988, the year climate scientist James Hansen sounded the alarm about the enhanced greenhouse effect, the result of manmade emissions of carbon dioxide and other warming gases.
New onshore wind energy is in a steep decline in Germany. The expansion of onshore wind power in the first half of this year is at its lowest level since the introduction of Germany's Renewable Energy Act in 2000. There were only 231 megawatts of new onshore wind capacity installed in Germany during the first half of 2019--an 82 percent decline compared to the first half of 2018. Wind Europe, the region's wind energy trade association, is expecting Germany to install between 1 gigawatt and 2 gigawatts of wind energy in 2019, which is significantly below the 4.3 gigawatts per year installed on average over the past 5 years.
In my previous post, I summarized William Nordhaus' new article, "Economics of the disintegration of the Greenland ice sheet," which showed that standard estimates of the "social cost of carbon" were not much changed even if we explicitly include the "tipping point" of a melting Greenland ice sheet. I showed that the pushback from some in the scientific community--who warned of sea level rise that wouldn't occur for centuries--demonstrated how baseless these warnings really were.
As I have been detailing for years here on the pages of IER, the actual peer-reviewed research on climate change doesn't come anywhere close to supporting the apocalyptic proclamations so often coming out of the corporate media and activist camps. Because I'm an economist, I tend to focus on the economics literature, but the pattern also holds for the physical sciences.
Lawmakers in Ohio have chosen to rescue two existing nuclear plants and two existing coal plants in lieu of mandates on renewable energy and energy efficiency, and as a result, lower electricity prices are expected for electricity consumers. Renewable energy will have to enter the market on its own merits once renewable energy reaches 8.5 percent of electricity generated in the state—up from about 3 percent today—and once federal subsidies expire. Residential charges will be lowered by over $2.00 per month by the legislative change and grid reliability is expected to be enhanced. The Ohio bill is contrary to what most states are doing and it will be an interesting exercise to contrast future electricity prices here and in surrounding states that are continuing their renewable mandates and forcing new capital expenditures because of mandates and subsidies.
The Plug-In Electric Drive Vehicle Credit (EV tax credit)--established by the Energy Improvement and Extension Act of 2008, and further amended by the American Recovery and Reinvestment Act of 2009--provides a tax rebate of up to $7,500 to U.S. purchasers of qualified plug-in electric vehicles. The tax credit is worth its full value until a manufacture sells more than 200,000 vehicles. After this threshold is met, a phase-out period begins. Starting the second quarter following the quarter in which the 200,000th vehicle is sold, the credit halves to $3,750, and after two quarters at that rate it halves again to $1,875, where it remains for another two quarters before going away entirely.
We have at most ten years--not ten years to decide upon action, but ten years to alter fundamentally the trajectory of global greenhouse emissions. -James Hansen, July 2006 Saving Earth is a century-time-scale problem. There will be significant overshoot of global temperature as well as overshoot of atmospheric greenhouse gas amounts. We are already into overshoot territory, but not very far as yet. This is no time to give up. -James Hansen, June 2019
Many of the Democrats running for President in 2020 support the Green New Deal that was introduced by Representative Alexandra Ocasio-Cortez of New York and Senator Markey of Massachusetts. The Green New Deal, however, would require a $10 tax increase on a single gallon of gas, according to a study by the CO2 Coalition. Key to the Green New Deal is the goal of eliminating gasoline-powered vehicles in favor of electric vehicles. But in order to make electric cars desirable to consumers gasoline prices would have to increase to $13 per gallon. Such a tax would undoubtedly harm consumers and the U.S. economy.
A recent article in The Guardian trumpeted the findings of a new study published in Science that found massive tree planting would be--by far--the cheapest and most effective approach to mitigating climate change. Ironically, the new thinking shows the pitfalls of political approaches to combating so-called "negative externalities." The good news about tree planting disrupts the familiar narrative about carbon taxes that even professional economists have been feeding the public for years. The whole episode is an example of what Ronald Coase warned about, in his classic 1960 article showing the danger in the traditional approach of using taxes to fix alleged market failures.
In Massachusetts and New York, fishers seem to be winning small victories against offshore wind farms. The Edgartown Conservation Commission in Massachusetts denied an underwater cable route off the town's coastline, citing the potential disturbance to marine habitats and other conflicts. Vineyard Wind LLC plans to get a "superseding order" from the Massachusetts Department of Environmental Protection to overturn the commission vote in order to build 84 wind turbines off Martha's Vineyard. Furthermore, the Bureau of Ocean Energy Management (BOEM) is delaying a federal environmental analysis for this wind farm to make sure it gets its assessment right, taking closer to the two years that are allowed for the assessment. In New York, East Wind LLC has withdrawn development of a 100-turbine wind farm off the Hamptons on Long Island primarily due to concerns about impacts on fishing and will consider an alternate route instead.
Today we celebrate the 107th anniversary of the birth of economist Milton Friedman (1912-2006). Primarily known for his work on monetary economics, Friedman was a keen observer of energy economics and public policy whose insight remains valid today.
Early on, Friedman understood how major energy regulation was sponsored by an industry segment. "Few U.S. industries sing the praises of free enterprise more loudly than the oil industry," he stated in 1967. "Yet few industries rely so heavily on special government favors."
Friedman was referring to oil-demand proration in the major oil states (excepting California), as well as federal oil-import limits, two complementary programs that governed from the 1930s through the 1960s. It was this political bias that contributed to the backlash against oil and natural gas in the 1970s that still haunts the industry today.
New York's Con Ed has had two major power outages within a two-week period--and the outages probably will continue given the state's new policies that will only destabilize its electric grid further. The state will not allow new natural gas pipelines, which has forced moratoria on new natural gas hook-ups in Westchester County, Brooklyn, Queens, and on Long Island.
The Environmental Protection Agency (EPA) released its 2019 report on Our Nation's Air that details the levels of criteria pollutants that exist in our air, which have decreased by 74 percent between 1970 and 2018. Criteria pollutants are precursors of acid rain and are a cause of detrimental diseases such as asthma. During this period, the U.S. economy increased 275 percent, energy consumption increased almost 50 percent, Americans drove more miles, and population increased.
Globally, $1.3 trillion is currently being invested in liquefied natural gas (LNG) expansion, which includes $507 billion in the United States. Global LNG demand is expected to grow significantly, increasing by 9.8 percent to a record high for a fifth consecutive year in 2018. The top global LNG producers are Qatar, Australia, and the United States.