Paris Agreement Withdrawal

Two days ago in this space, I shared my thoughts after reading the Paris Agreement in its entirety.

In a sentence, it is an anti-capitalist document in which the United States admits fault for climate change and commits to making financial payments to the developing world as a result.

Today, President Trump announced  he will withdraw the United States from commitments made in the Agreement, a decision that is reasonable and justified.

In a speech in the Rose Garden, the President said, “The Paris climate accord is simply the latest example of Washington entering into an agreement that disadvantages the United States, to the exclusive benefit of other countries, leaving American workers…and taxpayers to absorb the cost in terms of lost jobs, lower wages, shuttered factories and vastly diminished economic production…The agreement is a massive redistribution of United States wealth to other countries.”

The President also made several important points in his speech regarding our country’s energy policy:

The United States needs all forms of energy because of high energy usage, a point I’ve previously made in this space.

Other countries are continuing to use coal as I’ve shared here.

The United States has abundant energy reserves. See my previous entry on this subject.

The Paris Agreement’s effect on the global climate is minimal. I made the same point here about the Clean Power Plan.

As far as our energy policy goes, President Trump’s speech was factually accurate, and his decision to withdraw from the Paris Agreement is exactly what is needed for the United States of America.

As you can imagine, however, criticism for this decision has been wide ranging an abundant.

Former President Obama, breaking a longstanding precedent of United States presidents to refrain from criticizing their successor, called the decision a rejection of the future and a lack of American leadership.

To that, two comments need to be made.

The first, as far as the future is concerned, one need only to look at the accuracy rate of the many climate change predictions that have been made since the 1970s to see the folly in that criticism.

The second is an astute observation made by Glenn Reynolds at InstaPundit.com. He said, “I’ll believe there’s a climate crisis when the people who keep telling me there’s a climate crisis start acting like there’s a climate crisis.”

Here are a few examples:

In 2011, Secretary of State Hillary Clinton requests to ride in a separate private airplane than First Lady Michelle Obama when traveling to the same event.

Leonardo DiCaprio used a private jet to travel 8,000 miles to accept an environmental award only to travel back by private jet the very next day.

Last month, Mr. Obama also traveled by private jet to speak at a climate change conference in Italy.

If the stakes are so high for the planet, how can we afford for the advocates of such drastic policies to have such a large carbon footprint?

Facts matter, and despite the criticism, President Trump made the correct decision to withdraw from the Paris Agreement.

-John Anchor
@JohnAnchorBLOG

More on the Value of Coal 

In previous entries on the subject of energy, the value of coal as an energy source has been evaluated based on economic conditions and coal’s effect on consumers’ electricity bills.

Recently, EPA Administrator Scott Pruitt spoke to the value of coal as an energy source from the perspective of national security.

As I’ve mentioned before, electricity cannot yet be economically stored in large, grid sized quantities. It must be produced as it is consumed.  This is the difficulty with certain renewables.  Demand often reaches a peak in hot summer months when the wind speed is not at a peak.  Solar energy loses efficiency during the hottest times of the year as well.

Mr. Pruitt points out, as noted by the Washington Examiner, that just like electricity cannot be stored in large quantities, natural gas cannot be stockpiled either.  It must be burned as it is produced.  The only energy source that can be stockpiled for contingency use in emergency situations is coal.

Per the Examiner:

“The North American Electric Reliability Corporation, the congressionally mandated grid watchdog that develops mandatory reliability standards for utilities, is focused on examining the challenge faced by an electric system dominated by natural gas and more renewables.

“The group said in its 2016 reliability report that there are advantages to having tons of coal on site at a power plant to maintain the power supply, whereas natural gas is a just-in-time resource that must be transported via pipeline. Pipelines cannot always keep up with demand if there is a spike in electricity consumption during a bout of extreme hot or cold weather.”

What does this mean in terms of our national security?  As Mr. Pruitt notes, an attack on our infrastructure could have a disastrous effect on our energy supply if we eliminate coal as an energy source as many are proposing to do.

Recently, Senator Bernie Sanders introduced legislation that would require the United States to move to 100% renewable energy by the year 2050.

This is unrealistic. 

Moreover, it is dangerous.

Texas Railroad Commissioner Ryan Sitton recently noted that an American Enterprise Study produced the following facts:

  • 400,000 solar workers produced less than 1% of the power generated in the U.S. last year
  • 398,235 natural gas workers produced more than one-third of U.S. electric power last year (37 times more than solar)
  • 160,000 coal workers produced nearly one-third of U.S. electric power last year (79 times more electric power generated per worker than solar)

Coal remains the cheapest, most abundant source of energy we have in the United States.

If we eliminate its production in this country, either directly or gradually through cost inhibiting regulations, what happens if our natural gas pipelines are interrupted?

It’s something to think about.

-John Anchor

@JohnAnchorBLOG

Components of a Sound Energy Policy

The following components are necessary for an economically sound energy policy.

We must have a free market solution. Free market capitalism ensures American consumers receive affordable electricity in sufficient quantities to satisfy grid demand. 

Renewables are great in theory, but they are not yet economically competitive. To compete with fossil fuels, renewables (solar and wind) require subsidies at a rate twice that given to the fossil fuel industry. 

We cannot economically store large amounts of power…yet. It must be produced as it is used. The game changer for the energy industry will be when mass storage becomes feasible. It’s then that renewables will take off and soar. 

Until then, renewables must be backed by a constant source of power such as coal, natural gas, or nuclear. The sun doesn’t always shine. Wind fluctuates, and in the hot summer months when electric demand is at its peak, often doesn’t blow. Coal fired plants take a long time to ramp up to full power generation, but once online, provide a steady source of electricity that does not fluctuate. 

Fossil fuels are cheaper to burn than renewables are to generate, but the truth is we need as much electricity as we can generate. We need all sources of energy because our electric demand is higher than it has ever been and projected to grow.

One of the largest users of electricity in the world is Google. “The Cloud” by itself uses more energy in a year than all the world’s lighting in 1985. Streaming one hour of video once per week on a phone or tablet uses more electricity in a year than two refrigerators. 

We need energy.

Fracking technology has driven natural gas prices to an all time low, and as a result, coal is struggling to survive. Because of subsidies paid to renewables, electricity prices will actually go negative at certain times of the day, typically overnight, when demand is low. Negative prices mean that coal generators have to pay to put their electricity on the market instead of the other way around. Shutting down for an hour or two is not an option for coal because of the time it takes to ramp back up to full production. 

Subsidies to renewables risk forcing coal out of the market. If this happens, renewables cannot fill that void economically for reasons described above, and energy bills of American consumers will rise. 

Natural gas aside, coal is still the cheapest, most abundant source of energy available in the United States. Renewables will eventually reach a point where they are economically competitive on the free market. Until then, however, subsidies to renewables should be eliminated. For the sake of the American consumer, we need a level playing field. 

-John Anchor

Follow us on Twitter @JohnAnchorBLOG

References:

Energy Subsidies 

https://en.m.wikipedia.org/wiki/Energy_subsidies

Energy Storage

http://www.mass.gov/eea/energy-utilities-clean-tech/renewable-energy/energy-storage-initiative/

Electric Demand

http://www.rmi.org/RFGraph-US_electricity_demand

Energy Usage

https://www.tech-pundit.com/wp-content/uploads/2013/07/Cloud_Begins_With_Coal.pdf?c761ac

More on Energy Usage

http://science.time.com/2013/08/14/power-drain-the-digital-cloud-is-using-more-energy-than-you-think/

Electric Prices

https://www.dallasnews.com/business/energy/2017/02/28/texas-biggest-electricity-market-us-wind-threatens-independent-power-producers

The Value of Coal

When then-Senator Obama ran for the Presidency in 2008, he said during an interview with the San Francisco Chronicle editorial board, “So if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them, because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.”

On March 20th of this year, @SierraClub tweeted: “Today marked 250th US coal plant that’s retired or committed to retire since our @BeyondCoal Campaign began in 2010…”

Eliminating coal as an energy source via policy is not a wise strategic move for the United States. Coal continues to be one of our cheapest, most abundant sources of energy, and becoming overly dependent on too few energy sources is economically dangerous.

Consider what is happening in other countries, where access to affordable electricity is perhaps the single biggest factor as to a country’s citizens’ quality of life. 

Since 1994, China has tripled its use of coal for electric generation. In this time, its poverty rate has plummeted, and its gross domestic product has increased by a factor of eighteen. 

India has ramped up its use of coal dramatically since 2012 and is expected to become the world’s largest coal importer within the next few years, in a country where 400 million still lack access to electricity. 

Since the 1980s, Indonesia has increased its coal usage 5,900%, and their electricity usage is expected to double by 2022. 

In Germany, on the other hand, renewable energy use has increased, but so has the country’s electricity prices. Renewable energy subsidies are costing its citizens $32 billion per year.  As a result, Germany has been unable to eliminate the use of coal. Their market won’t allow it. 

As you can see, countries around the world are relying on coal to meet their energy needs. Therefore, policies aimed at eliminating coal as an energy source in the United States, such as the Clean Power Plan, have the potential to hamstring our economy with very little global environmental benefit. 

Studies have shown the Clean Power Plan that Trump repealed last week would have resulted in only a 0.2% reduction in global CO2 concentration by 2050, a 0.01 degree Fahrenheit difference in global temperature, and a reduction of sea level rise of 0.2 millimeters. In other words, virtually zero benefit. It would, however, have raised electricity prices as much as 40% in some locations. 

The United States has currently about 240 years of coal reserves at our current rate of consumption, and we need every source of electricity we can find, including natural gas and renewables. 

From a policy perspective, the United States should let the free market work. Level the playing field. 

-John Anchor

Follow us on Twitter @JohnAnchorBLOG

References:

2008 Coal Comments

http://www.weeklystandard.com/obama-warned-that-his-policies-would-bankrupt-coal-power-plant-owners/article/644384

China, India, Indonesia, Germany, United States

https://www.manhattan-institute.org/pdf/eper_14.pdf

Germany

http://energypost.eu/german-conundrum-renewables-break-records-coal-refuses-go-away/

The Truth about the Clean Power Plan

Last Tuesday, March 28th, President Trump signed an order repealing the Clean Power Plan, President Obama’s energy regulation. 

Many politicians commented on Twitter:

Senator Tim Kaine:

“Our energy strategy should be getting cleaner tomorrow than today. Disappointed @POTUS is breaking his promise to promote clean air & water.”

Senator Bernie Sanders:

“Mr. Trump, you cannot run a government by rejecting science. Listen to the scientific community, not the CEOs of the fossil fuel industry.” And: “Our job is to save the planet not make more profits for the oil, gas and coal industries. We must act boldly to transform our energy system.”

Here are some facts about the Clean Power Plan:

As of 2015, the United States generates approximately 213 Million Megawatt-Hours of electricity from renewable energy sources annually. (Wind, Solar, Etc.)

The Clean Power Plan projects that this number will increase to 706 Million Megawatt-Hours by 2030. 

Renewable energy sources are expensive and, as of 2013, require more than twice the government subsidies that fossil fuels receive in order to remain competitive. 

An increase of renewable energy production of this magnitude coupled with a decrease in coal production, as per the Clean Power Plan, is projected to result in a rise in electricity prices between 10% and 40% over this same period. 

The benefit? A 0.2% reduction in global CO2 concentration by 2050, resulting in a 0.01 degree Fahrenheit difference in global temperature and a reduction of sea level rise of 0.2 millimeters. 

The Clean Power Plan was bad policy. It would not have saved the planet, in terms of having made much of a difference at all in global concentration of carbon dioxide, temperature or sea level rise, but it would have caused a tremendous increase in utility prices to American families. 

More Facts, Less Rhetoric…

More on this tomorrow. 

-John Anchor

Follow us on Twitter @JohnAnchorBLOG

References:

Clean Power Plan (CPP)

https://www.epa.gov/sites/production/files/2015-11/documents/tsd-cpp-ghg-mitigation-measures.pdf

Energy Subsidies

https://en.m.wikipedia.org/wiki/Energy_subsidies

Impacts of the CPP (Electricity Prices)

http://www.nera.com/content/dam/nera/publications/2015/NERA_ACCCE_CPP_Results_Nov72015.pdf

Climate Effects of the CPP

http://www.americaspower.org/wp-content/uploads/2015/09/Climate-Effects-Paper-August-6-2015.pdf