$600 Million for Nothing

EPA’s Region 8 office is asking electric consumers in the Upper Great Plains to absorb that much and more in a political punch to electric bills with no credible science to back up its claims of improving Regional Haze conditions.

EPA Region 8 held a hearing on this outrageous proposal in Cheyenne, WY June 24th. As a result of pressure from elected officials in Wyoming, South Dakota, and other impacted states, there will be two other hearings in July.

Heartland is one of the six partners in the Missouri Basin Power Project (MBPP), a group of non-profit consumer-owned energy organizations that built Laramie River Station (LRS). EPA’s decision to disapprove Wyoming’s state clean air plan will have a significant negative impact energy costs for our consumers in South Dakota, Minnesota, and Iowa.

Heartland, along with all MBPP members is committed to clean air, clear visibility, and continued protection of the state’s natural areas. In this regard, Wyoming developed a highly effective State Implementation Plan for Regional Haze, and we have spent more than $70 million implementing this plan.

Now the EPA is proposing that LRS install Selective Catalytic Reduction at a cost of more than $600 million to install on three units. This proposal is based on the curious notion that an EPA contractor in Massachusetts looking at Google Earth pictures of Wyoming power plants can substantiate this claim.

The EPA proposed plan makes no sense in light of effective and less expensive alternatives. Unless, of course, the political bulls eye is coal-fired power plants. According to EPA’s own modeling, the difference in perception to the human eye between Wyoming’s plan and EPA’s is less than one deciview – virtually indistinguishable. 

Wyoming state environmental protection officials have been proactive for over a decade in implementation of plans to improve regional visibility in the national parks and forests every one of us values. EPA Region 8 has proposed to ignore those efforts – not with science but with politics.

CFC’s to Blame for Global Warming?

Several major media outlets carried articles on this study a few days ago. It is an interesting addition to the science on the causes of global warming. The article below appeared in the Waterloo News of the University of Waterloo on Thursday, May 30.

Global warming caused by CFCs, not carbon dioxide, study says

WATERLOO, ONT. Chlorofluorocarbons (CFCs) are to blame for global warming since the 1970s and not carbon dioxide (CO(2), according to a research paper from the University of Waterloo (Ontario, Canada) published May 30th in the International Journal of Modern Physics B.

CFCs are already known to deplete ozone, but this study’s statistical analysis points to CFCs as a key cause of global warming, rather than CO(2) emissions.

“Conventional thinking says that the emission of human-made non-CFC gases such as carbon dioxide has mainly contributed to global warming. But we have observed data going back to the Industrial Revolution that convincingly shows that conventional understanding is wrong,” says Qing-Bin Lu, a professor of physics and astronomy, biology and chemistry in Waterloo’s Faculty of Science. “In fact, the data shows that CFCs conspiring with cosmic rays caused both the polar ozone hole and global warming.”

“Most conventional theories expect that global temperatures will continue to increase as CO(2) levels continue to rise, as they have done since 1850. What’s striking is that since 2002, global temperatures have actually declined – matching a decline in CFCs in the atmosphere,” Professor Lu said. “My calculations of CFC greenhouse effect show that there was global warming by about 0.6 deg C from 1950 to 2002, but the earth has actually cooled since 2002. The cooling trend is set to continue for the next 50-70 years as the amount of CFCs in the atmosphere continues to decline.”

The findings are based on in-depth statistical analyses of observed data from 1850 up to the present time, Professor Lu’s cosmic-ray-driven electron-reaction (CRE) theory of ozone depletion and his previous research into Antarctic ozone depletion and global surface temperatures.

“It was generally accepted for more than two decades that the Earth’s ozone layer was depleted by the sun’s ultraviolet light-induced destruction of CFCs in the atmosphere,” he said. “But in contrast, CRE theory says cosmic rays – energy particles originating in space – play the dominant role in breaking down ozone-depleting molecules and then ozone.”

Lu’s theory says his theory is confirmed by ongoing observations of cosmic ray, CFC, ozone and stratospheric temperature data over several 11-year solar cycles. “CRE is the only theory that provides us with an excellent reproduction of 11-year cyclic variations of both polar ozone loss and stratospheric cooling,” said Professor Lu. “After removing the natural cosmic-ray effect, my new paper shows a pronounced recovery by 20% of the Antarctic ozone hole, consistent with the decline of CFCs in the polar stratosphere.”

By examining the link between CFCs, ozone depletion and temperature changes in the Antarctic, Professor Lu  draws a near perfect correlation between rising global surface temperatures and CFCs in the atmosphere. “The climate in the Antarctic stratosphere has been completely controlled by CFCs and cosmic rays, with no CO(2) impact. The change in global surface temperature after the removal of the solar effect has shown zero correlation with CO(2) but a nearly perfect linear correlation with CFCs – a correlation coefficient as high as 0.97.”

He says data recorded from 1850 to 1970, before any significant CFC emissions, show that CO(2) levels increased significantly as a result of the Industrial Revolution, but the global temperature, excluding the solar effect, kept nearly constant. The conventional warming model of CO(2) , suggests the temperatures should have risen by 0.6deg C over the same period, similar to the period of 1970-2002.

The analyses indicate the success of the Montreal Protocol on Substances that Deplete the Ozone Layer.  “We’ve known for some time that CFCs have a really damaging effect on our atmosphere and we’ve taken measures to reduce their emissions,” Professor Lu said. “We now know that international efforts such as the Montreal Protocol have also had a profound effect on global warming but they must be placed on firmer scientific ground.”

“This study underlines the importance of understanding the basic science underlying ozone depletion and global climate change,” said Terry McMahon, dean of the faculty of science. “This research is of particular importance not only to the research community, but to policy makers and the public alike as we look to the future of our climate.”

Professor Lu’s paper, Cosmic-Ray-Driven Reaction and Greenhouse Effect of Halogenated Molecules: Culprits for Atmospheric Ozone Depletion and Global Climate Change, also predicts that the global sea level will continue to rise for some years as the hole in the ozone recovers increasing ice melting in the Polar Regions.

“Only when the effect of the global temperature recovery dominates over that of the polar ozone hole recovery, will both temperature and polar ice melting drop concurrently,” says Lu.

The peer-reviewed paper not only offers new fundamental understanding of the ozone hole and global climate change but provides alternative predictive capabilities, compared with the conventional sunlight-driven ozone-depleting and CO(2) -warming models.

Does this science have a chance to be considered in the public policy discussion of global climate change? There are a lot of closed minds in this public policy debate on both sides. Time will tell. It also highlights the necessity and success of a global agreement addressing global climate change rather than a piece meal approach by individual nations.

 

Media contact:

Nick Manning
University of Waterloo
nmanning@uwaterloo.ca

APPA Tells House Panel Greater Use of Natural Gas and Renewables Could Impact Grid Reliability and Affordable Rates

The American Public Power Association (APPA), our national trade association, has told the House Energy and Power Subcommittee that the switch from coal to natural gas and greater use of intermittent renewables will impact utility operations and could affect electric reliability. APPA said, “Given these trends, it is important that Congress continues to examine the short- and long-term implications of federal policies that promote more use of natural gas and intermittent renewables as fuels for electric generation on electricity prices and grid reliability.”

“The shift from coal to natural gas for electric generation creates several challenges that must be addressed, including potential price volatility for utilities and their customers, inadequate pipeline capacity and storage, lack of flexibility in pipeline rate schedules to accommodate the needs of electric generation, and misalignment of, and lack of intra-day flexibility within, the gas and electric days,” APPA said in a statement for the record of the subcommittee’s May 9 hearing on grid reliability challenges. There will be long-term implications from the greater use of natural gas for electric generation, APPA said. “Prices may be low today, but can easily rise in the years to come due to a variety of factors including potential new or existing regulations on hydraulic fracturing, increased utility and industrial demand, exports, and increasing use in the transportation sector.”

In addition, “it is not clear yet whether there will be sufficient infrastructure or storage to accommodate the greater use of natural gas by electric utilities,” APPA said. “While the Federal Energy Regulatory Commission (FERC) is examining how to promote greater coordination between the electricity and natural gas industries, no one knows whether all the changes needed for fuel switching on this scale can be accomplished in the time needed to comply with EPA regulations.” Greater use of natural gas also poses market-related challenges, such as misalignment of gas and electric days and a lack of flexibility in scheduling, APPA said.

Generation from variable energy resources such as wind and solar poses unique operational challenges, APPA told the panel. “There are strong disagreements about who should pay for the construction of transmission lines that bring renewable power into the grid and issues surrounding the siting of such lines,” the association added.

The subcommittee should evaluate all federal policies designed to promote renewables, given the competitiveness of some renewables, APPA said. “APPA members, in incorporating renewable generation into their resource portfolios, need the ability to evaluate specific renewable projects against one another and against distributed generation and energy efficiency/demand response measures,” the association said. “Subsidies given to certain types of renewable generation can skew individual utility integrated resource planning processes and, on a macro level, our nation’s overall resource choices, leading to sub-optimally efficient resource outcomes.”

Given the changes in the generation fuel mix, “it is important that we think through what must be done to ensure that the lights stay on and that electric bills are affordable in the years ahead,” Subcommittee Chair Ed Whitfield (R-KY) said. New natural gas pipelines as well as storage facilities need to be constructed, but “we don’t have a lot of time to build them given the reliability challenges we face today and we have already witnessed this scenario in areas like New England.” Federal and state policies promoting wind and solar power “could easily backfire if we don’t address the difficulties of integrating these intermittent sources into the electric grid,” Whitfield said.

Heartland shares APPA’s concerns. We have made carefully planned investments in renewable energy and energy efficiency. Heartland and its transmission partners Basin Electric Power Cooperative and Western Area Power Administration have carefully planned and developed a robust grid in the Upper Great Plains. A rush to judgement on fuel choices and transmission policies by Federal policy makers and regulators could cost consumers dearly.

Heartland Supports Bipartisan Energy Efficiency Bill

Senators Jeanne Shaheen (D-NH) and Rob Portman, (R-OH), have reintroduced their bill to promote energy efficiency, the Energy Savings and Industrial Competitiveness (ESIC) Act (S. 1000) The bill is focused on industrial and federal agency efficiency. It is supported by a broad range of industry groups (including APPA and Heartland), energy efficiency advocates and environmental organizations.

A similar bill passed the Senate Energy and Natural Resources Committee last year with broad bipartisan support, but drew opposition for a provision expanding a Department of Energy (DOE) loan program. The revised version eliminates that provision. Shaheen said the bill “uses a variety of low-cost tools to reduce barriers for private sector energy users and will drive adoption of off-the-shelf efficiency technologies among the largest energy consumers.”

The bill would strengthen national model building codes; create a “Commercial Building Energy Efficiency Financing Initiative” to promote building efficiency upgrades and renovations; establish university-based “Building Training and Research Assessment Centers”; and direct DOE to work with the private sector to encourage research and development of energy-efficient technologies and processes for industrial applications.

The beneficial impacts of this bill would be built into the economy over decades and significantly reduce carbon emissions while keeping energy costs to consumers affordable and reliable. As reported here many times, our LEED Platinum HQ has cut our energy use by 48%. Think of spreading that impact throughout the national economy in the coming decades.

A National Energy Boom Dividend That Keeps on Growing and Paying Big Dividends

The impact of the boom in new domestic oil and natural gas production is spreading throughout the American economy.

Industry observers say thousands of jobs are being created by the energy production boom. The explosion of drilling in our neighbor North Dakota as well as other areas in our country is spreading through the general economy – despite opposition from the environmental lobby over the technique known as hydraulic fracturing that has made the boom possible.

Companies are expanding payroll and investing in high-tech equipment to just to meet a steady increase in orders between U.S. manufacturers. This activity is the direct result of the low price and availability of natural gas as well as the impacts on electric rates.

U.S. companies that used to be at a price disadvantage are now positioned to win contracts they could not compete for in a very long time. Some analysts believe the energy cost savings for businesses, factories and consumers will last for decades.

“This is not going to be a one- or two-year thing,” says Ross Eisenberg, head of energy and resources policy at the National Association of Manufacturers. “We’re going to see lower natural gas prices for a long, long way into the future.”

The domestic energy industry has been through several cycles of booms and busts. After peaking in the early 1970s, U.S. oil and gas production began a rapid decline as thousands of depleted wells ceased production. The U.S. quickly became dependent on foreign supplies of oil.

About ten years ago advanced oilfield production technologies known as hydraulic fracturing, or “fracking,” and horizontal drilling began to increase domestic oil and gas production. Many of the now active fields brought  into production had been left undeveloped because the remaining “tight” oil and gas deposits were too expensive or technically difficult to produce.

The economics of supply have also played a key role in the boom. A tripling in the market price of a barrel of crude over the past decade supports widespread use of expensive extraction methods that didn’t make sense when oil prices were lower.

Barring unforeseen limits on production, this “unconventional” oil and gas production is now the norm and is projected to grow rapidly over the next twenty years. The industry is expected to make more than $5 trillion in new capital investment that will support more than 3.5 million jobs by 2035, according to the financial analysis firm IHS Global Insight.

That economic impact of this spending already is spreading, especially to companies that rely heavily on natural gas as a raw material or energy source.  Steel makers, for example, benefit from both the lower cost of manufacturing and from strong demand for steel pipe used for oil and gas drilling. Others are building near major gas distribution centers like Louisiana, where steel giant Nucor is investing $750 million to open a new plant later this year.

Chemical, plastics and fertilizer makers, who rely on natural gas both as a raw material and an energy source, have also been expanding production. Last year, Dow Chemical announced a $4 billion investment in facilities, part of some $15 billion in expansion plans announced by Gulf Coast chemical companies.  In December, economists with UBS bank noted some $65 billion in announced construction of new plants related to cheaper natural gas.

As work on these projects gets under way, the dividends from the energy boom will flow even further – to construction companies, engineering firms, materials and equipment suppliers and lenders who help finance these projects.

That, in turn, will help increase state and federal revenues. The added revenue – from income taxes on new jobs created, corporate taxes on added oil and gas profits and state and federal royalty payments – could top $2.5 trillion through 2035, according to IHS Global Insight.

Though retail prices for gasoline have remained high – primarily because U.S. production still is a relatively small part of the global supply which drives oil prices – American consumers are getting a break on the lower cost of natural gas and electricity. IHS estimates that the energy “dividend” amounts to about $1,000 a year per household and will double by 2035.

Increased domestic oil and natural gas production will also re-balance long-running international trade deficits that have weakened the dollar. As the U.S. moves from a net importer to a net exporter of energy over the next decade, as projected by most experts, oil will no longer be a source of trade deficits and become an important contributor to a positive trade balance.

America’s growing energy independence also has also been fueled by gains in efficiency. Our vehicles are getting more miles from every gallon of fuel, and advanced heating and cooling units combined with green building techniques and materials have cut energy bills for commercial and residential buildings by 10 percent since 2005.  Heartland knows something about energy efficiency – our LEED Platinum HQ has cut our energy use by nearly 50 percent.

To be sure, there are forces that could delay – or even stop – the ongoing energy boom. A recent drop in natural gas prices has already slowed production of some projects and the environmental lobby is fighting to prohibit “fracking”.

Lower oil prices could have the same impact on our economy, but it is not certain that added U.S. supplies will be enough to lower global oil prices, especially if OPEC producers like Saudi Arabia reduce production to support current prices.

Some experts are more optimistic on the prospects for a second energy windfall as increased U.S. supplies of oil put pressure on global prices. Citibank analyst Edward Morse believes that by the end of this decade, added U.S. output will push global crude prices back down to a range of $70 to $90 a barrel – a savings of as much as 30 percent. That kind of price reduction would further spread the economic dividend from lower natural gas prices already flowing through the economy.

A 30 percent reduction in oil prices is equal to about 1.3 percent of gross domestic product. In an economy growing at 2 percent a year, the impact of that dividend would be substantial.

Finally, transportation bottlenecks have already slowed the distribution of new energy supplies and could further slow future expansion. Expanding the existing pipeline network, which was planned and constructed decades ago, long before new drilling techniques altered the U.S. energy map, is already facing environmental lobby opposition.

The most visible controversy – construction of the proposed $7 billion Keystone pipeline – could be the opening round of intense battles over the expansion of the pipeline network required to get affordable and reliable new supplies of oil and natural gas from producers to consumers.

Our energy future and national economic health is not tied to unending use of fossil fuels. It is, however, tied to a balanced transition from carbon based fuels that will ensure reliable and affordable energy to consumers. The current energy boom can be the foundation of that balanced transition.