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Energy Efficiency Mirage

July 4, 2014

It’s fair to say that it’s possible to improve energy efficiency, but it’s also fair to say that improved energy efficiency usually comes at a cost.

It’s the costs that organizations promoting energy efficiency like to ignore.

Automobiles have improved their energy efficiency, but at the cost of higher prices and smaller cars … and some will say, safety.

This article will deal with savings on the use of electricity, as this is a major component of the EPA’s proposed regulations for cutting CO2 emissions(1).

At the outset, it’s important to distinguish between improving efficiency, and not using electricity.

Organizations, such as the American Council for an Energy-Efficient Economy (ACEEE), promote setting thermostats higher, e.g., 78 degrees, in the summer, and lower, e.g., 68 degrees in the winter.

This does not improve efficiency, it reduces the use of electricity … and imposes a lower standard of living on people.

The ACEEE is one of the most egregious proponents of energy efficiency.

My article, Calling For Government Mandates, describes in detail why the ACEEE’s reports are so misguided, and misleading. The ACEEE, for example, ranked China’s residential segment as being among the most efficient in the world, with the United States ranked near the bottom. See Calling for Government Mandates

Having been to China, I know from first hand experience that China’s residential sector is not only less efficient, but also provides a much lower standard of living.

Clearly the ACEEE has a distorted view of America, yet the EPA adopted the ACEEE’s views to justify one aspect of its proposed regulations for cutting CO2 emissions.

Improving energy efficiency is a worthwhile goal, providing it’s done while keeping costs and living standards in mind.

LEDs for lighting use less electricity, while providing the same amount of light as the incandescent bulbs it replaces.

LEDs improve efficiency.

But even LEDs come at a cost. It costs around $12 for a 60-watt LED lamp as opposed to 60 cents for a comparable 60-watt incandescent bulb. The 100-watt LED lamp costs even more.

If a 100-watt LED cost $18 and a 100-watt incandescent cost 70 cents, and the LED replaces an incandescent bulb that burns 4 hours per day, it would only require about 14 months to recover the higher cost.

A 14-month payback is reasonable, but if the incandescent bulb only burns 15 minutes each day, such as in a closet, the payback would be 19 years, which is an unreasonable payback, and a bad use of financial resources.

 

Replica of 1879 Edison bulb used by GE at its 100th anniversary, alongside a modern LED lamp.

Replica of 1879 Edison bulb used by GE at its 100th anniversary, alongside a modern LED lamp.
Pat Hingle played Edison at commemorative dinners around the country.

Many other so-called proposals for improving energy efficiency also cost a great deal and are bad investments.

As mentioned in an earlier article, replacing all the windows in a moderately sized home will cost around $25,000 while only saving small amounts of electricity and heat.

Here’s what DOE’s Pacific Northwest National Laboratory (PNNL) says about triple pane windows it has used in its studies:

“It would take 23 to 55 years to save enough on a utility bill to cover the higher cost of the windows, based on national electricity costs.”

Obviously, replacing windows in an existing home with energy efficient windows is a bad idea, but is one of the alternatives for lowering CO2 emissions.

Improving energy efficiency can be worthwhile, but not if the costs are exorbitant.

Not only can the costs for improved efficiency be exorbitant, but the aim of demand response, as proposed by the EPA, is to force people to change their behavior.

Changing people’s behavior is when Big Government becomes intrusive.

Here is how one utility is approaching the issue of cutting CO2 emissions.

Their spokesman said, “Seattle City Light is committed to remaining a carbon neutral utility(2).”
“[ The plan is to] Capture savings through residential customer behavior change, and drive participation in our new whole home weatherization rebate program(3).”

It’s worth noting that the weatherization rebate program will result in higher electric rates, since the utility must recover the costs of subsidizing the program. The program cannot be justified on purely economic grounds since the return on investment is pitiful.

An advocate on Fox News said people can take cold showers to lower their electric bills.

Gina McCarthy, EPA Administrator, said that the proposed new regulations will save people money. If the program forces people to use less electricity with resulting lower living standards, she may be right.

But the chances are that higher electricity rates from the proposed regulations will result in higher electric bills, as well as lower living standards(4).

Forcing people to use less electricity does not result in improved energy efficiency, while forcing people to spend money to achieve improvements in efficiency without a fair return on their investment, deprives people of having an opportunity to invest where they want, e.g., on education, or medical bills, or food.

That’s something to think about on this Independence Day.

And, that’s not good for America.

 

Notes:

  1. Building Block # 4: “Reducing emissions from affected EGUs in the amount that results from the use of demand-side energy efficiency that reduces the amount of generation required”.
  2. From IntelligentUtility, Utility2Utility series.
  3. Ibid
  4. Replacing low cost electricity with high cost electricity from wind and solar will increase electric bills for consumers and industry.

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Fracking Benefits America

July 1, 2014

The media continues to publish stories denigrating fracking. My local paper has published three anti-fracking AP articles in the past few days.

While a few people have been disturbed by drilling near their homes, fracking has not caused any important environmental damage.

On the contrary, fracking has resulted in many benefits for Americans.

The two primary benefits have been:

  1. A resurgence in domestic oil production that has reduced oil imports, with concomitant benefits, such as improved balance of payments, less exposure to interruptions of oil supplies and new royalty and tax income for the states and federal government.
Chart from Wall Street Journal. Data from EIA

Chart from Wall Street Journal. Data from EIA

2. An abundance of natural gas has lowered costs to consumers and industry, which, has in turn, resulted in a revival of manufacturing, especially in the chemical industry.

Wellhead Natural Gas Prices $/Million Cubic Ft, From EIA

Wellhead Natural Gas Prices $/Million Cubic Ft, From EIA

It was only a few years ago that there was great consternation over ever increasing oil imports, and the fear that the United States would have to import natural gas due to dwindling supplies. Communities and environmentalists were up in arms over building natural gas import terminals.

Fracking has changed all that, in what can only be described as a technological revolution.

Natural gas prices were skyrocketing between 2002 and 2008, but plummeted to around $2 before easing back to around $3.50 per mcf, or million BTUs, where it’s likely to stay for the foreseeable future.

Fracking also promises to alter the natural gas supply worldwide, as countries, such as Argentina and China, begin to use fracking to increase domestic supplies of natural gas.

Europe, because of environmental pressure from Greens, has refused to use fracking to develop its natural gas supplies. It now appears as though Russia has been plotting with environmental groups to prevent fracking.

Anders Fogh Rasmussen, NATO General Secretary, said Russia is secretly working with environmental groups to prevent fracking so as to maintain its natural gas exports to Europe.

There are no proven instances where fracking has caused environmental damage … it hasn’t caused water to be contaminated with chemicals, and it hasn’t caused wells to be contaminated with natural gas.

Pavilion, Wyoming was the only location where the EPA had, what it considered, proof of well contamination, but its tests were flawed, and after retesting the EPA gave up. See EPA Strikes Out on Anti-Fracking Campaign, and Fracking Indictment.

Earthquakes have also been attributed to fracking, but, nearly all are temblors barely large enough to be felt.

The few quakes that have actually caused damage were the result of waste water injection … not fracking. All of the 109 earthquakes greater than 3.0 on the Richter scale in Oklahoma, during 2013, were from the disposal of waste water … not fracking.

Fracking uses large quantities of water, but the industry is developing ways to recycle water and possibly use alternatives to mitigate this problem, especially in areas where water isn’t plentiful.

Drilling multiple wells from the same pad has reduced the number of roads being built and the area being disturbed by drilling.

Some people have been disturbed by the drilling process, including truck traffic, and some communities have been inundated with large numbers of workers, but these are usually short term issues, frequently associated with rapid growth, rather than fracking.

Radical environmentalists have been trying to create fear among the public in an effort to stop fracking. Fear mongering has been behind many of the stories about fracking, where the story invariably asks: but what if wells aren’t inspected by the government? Or what if well casings break down? Or what if there are gas leaks in pipelines?

A typical example was a headline that ominously said: “Feds aren’t inspecting 4 in 10 higher risk wells.”

A more accurate headline would read: “Feds Inspect 60% of higher risk wells.”

And, of course, the article made no mention of whether any defects were found. I’m certain, if there had been defects, they would have been highlighted. Besides, a professionally done sampling program would achieve better results at lower cost.

Fracking’s record may not be spotless, but very few serious problems have been associated with the drilling process required for fracking, from building roads to waste water disposal … And none have actually been caused by fracking.

Fracking has been a blessing for America.

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Higher Costs Built Into EPA Proposal

June 27, 2014

The EPA fully recognizes that its proposal to cut CO2 emissions 30% will increase the cost of electricity to consumers and industry.

There are several places within the EPA regulations that recognize that costs will increase (1).

There can be no question that the EPA regulations will increase the cost of electricity for consumers and industry.

Several places in the proposed regulations, the EPA says: “We view these estimated costs as reasonable.” In fact, the EPA proposal includes the word “reasonable” over 90 times.

These “reasonable cost increases” are a hidden tax.

The EPA claims that electricity costs will decline and save consumers and industry money, because energy savings will lower electricity usage. What the EPA didn’t say was that many of the methods for reducing the use of electricity require a large upfront investment.

For example, replacing all the windows in a moderately sized home will cost around $25,000 and only save small amounts of electricity annually.

Here’s what DOE’s Pacific Northwest National Laboratory (PNNL) says about triple pane windows it has used in its studies.

“It would take 23 to 55 years to save enough on a utility bill to cover the higher cost of the windows, based on national electricity costs.”

Adding insulation may or may not be economically worthwhile. Forcing people to adjust their thermostats may save electricity, but at the detriment to comfort and enjoyable living … and possibly the health of the elderly and sick.

These are a few of the possible effects of demand reductions

The EPA overlooks the investment and cost to living standards when it claims that consumers and industry will save money because of these proposed new regulations.

The EPA and this administration try to overlook the negative aspects of these regulations because they are intent on cutting CO2 emissions. But as shown in other articles, these regulations won’t cut CO2 emissions worldwide, and will therefore, have no effect on global warming. See The Camels Nose.

This raises the question, why should the United States suffer the consequences of trying to cut CO2 emissions when it will cost Americans money to do so? … While achieving nothing.

The EPA, in its proposal, says, that electricity costs, on average, will only increase by 6% … and that the costs are reasonable.

But why should the government impose this hidden tax on Americans? Why is any increase in costs reasonable?

Any tax is bound to hurt the economy, and cost jobs, while hurting American’s standard of living.

The EPA quotes the American Council for an Energy-Efficient Economy (ACEEE) in its proposed regulations, to justify its demand side and energy efficiency proposals.

But the ACEEE has extreme views on this subject.

For example, an ACEEE report determined the United States lagged behind China for energy efficiencies in buildings.

In its report, the residential sector of the United States scored a 1 (nearly the worst possible rating), while China scored a 5 (best possible rating). See Energy Efficiency Common Sense for more information about the ACEEE.

Air-conditioning units and clothes hanging to dry. Photo by Dears

Air-conditioning units and clothes hanging to dry. Photo by Dears

How can any legitimate organization declare that the residential sector in China is more energy efficient than in the United States?

It’s ludicrous, yet the EPA uses the ACEEE as an example when it talks about demand side savings and energy efficiency.

The EPA’s proposed regulations are all pain and no gain … and harms Americans.

Note:

  1. The EPA’s proposed regulations for cutting CO2 emissions 30% by 2030 can be seen at http://www2.epa.gov/sites/production/files/2014-05/documents/20140602proposal-cleanpowerplan.pdf

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EPA’s Grasping Reach

June 24, 2014

In establishing the Best System of Emission Reduction (BSER) for cutting CO2 emissions 30%, the EPA has reached beyond its usual, and possibly legal, grasp.

It is this potential overreach that will be the basis for some of the lawsuits that are bound to come from this rule making.

It should also be of great concern to Americans, as it could, if upheld by the courts, provide the basis for powerful intrusions into the liberty of all Americans, including controlling their behavior.

Until now, the EPA has limited itself to specific technologies or practices to reduce pollution from plants.

Now, the EPA has required the inclusion of other, beyond the fence, installations as part of the BSER.

For example, when the EPA previously issued regulations to control NOx from power plants, it restricted the ruling to action at the power plants. The new EPA ruling to cut CO2 emissions 30%, requires including actions at other, beyond the fence, installations, (see building blocks 2 & 3 below) as well as actions not related to any installation. (see building block 4 below)

Requiring “beyond the fence” installations and non-installations will be the basis for some lawsuits, but the concept is also all pervasive … and should scare Americans.

For example:

Why not issue a regulation controlling CO2 from automobiles, using the same BSER concept?

The building blocks for such a regulation might be:

  • Require increasing the efficiency of cars to reduce gasoline usage, including using electric vehicles.
  • Require people to use public transportation to shift CO2 emissions from cars to more efficient rapid transit.
  • Require people to substitute the use of bicycles and mopeds, i.e., low carbon transportation, for automobiles.
  • Require people to work at home to avoid transportation and the emitting of CO2 altogether.

In parallel with the EPA’s BSER, each of these four building blocks have been proven viable, and allowing the states the flexibility to craft state plans using these building blocks provides the flexibility that is “fully consistent with Federalism”.

Each of these four building blocks meets the requirements the EPA has established for the BSER for cutting CO2 emissions 30%. The quote about Federalism is from the EPA’s proposed regulation.

Such a regulation affecting automobiles would restrict people’s freedom to work where they want, and to travel how they want.

The concept of the BSER, as proposed by the EPA for its regulations cutting CO2 emissions 30%, could be broadly applied, with applications that drastically intrude on people’s freedom.

The concept could be applied to such activities as education, travel for vacations, home and yard maintenance, operating a store, etc. (The original Waxman-Markey cap & trade bill envisioned imposing regulations on lawnmowers.)

Page 10 (partial) of the Waxman - Markey, cap & trade Bill.

Page 10 (partial) of the Waxman – Markey, cap & trade Bill.

It’s not difficult to apply the same BSER construct to these, and other additional applications

There was a proposal in the UK a few years ago to issue cards, such as debit cards, to everyone, where the card would include people’s CO2 allowance. Deductions would be made from the card when buying gasoline, or flying, etc., so that people’s use of CO2 would be restricted. When individuals used up their allowance, they wouldn’t be able to buy gasoline, etc.

It’s clear we are heading toward a similar regimen, with the EPA’s attempt to broadly construct its BSER.

Lawyers may laugh at this clumsy analogy, but Americans will understand why the EPA is reaching too far with its proposal to cut CO2 emissions 30% by 2030.

 

NOTES:
The four building blocks of the EPA’s BSER for cutting CO2 emissions 30% are:

  1. Reducing the carbon intensity of generation at individual affected EGUs [Electric Generating Unit] through heat rate improvements.
  2. Reducing emissions from the most carbon-intensive affected EGUs in the amount that results from substituting generation at those EGUs with generation from less carbon-intensive affected EGUs (including NGCC units under construction).
  3. Reducing emissions from affected EGUs in the amount that results from substituting generation at those EGUs with expanded low-or zero-carbon generation.
  4. Reducing emissions from affected EGUs in the amount that results from the use of demand-side energy efficiency that reduces the amount of generation required.

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The Camel’s Nose

June 20, 2014

The EPA’s proposal for cutting CO2 30% by 2030 seems innocuous. Some industry commentators have even been quoted as saying the rules could have been more severe, and that they will be able to comply with the rules without too much difficulty.

Are they the lambs being led to slaughter?

It may be easy to comply with the proposed regulations, but they will adversely affect the economy and hurt people with higher electric bills.

Obviously, the requirement to cut CO2 emissions 30% below the levels of 2005, is not a huge hurdle, since emissions have already been cut by around 15% because of the slow economy and the advent of cheap natural gas.

For most states, cutting CO2 emissions another 15% won’t be too arduous a task. Some states will have more difficulty than others, but nationally, another 15% cut is not a huge challenge.

But why issue regulations that won’t accomplish very much, if anything?

Cutting CO2 emissions another 15% won’t affect global warming, if CO2 in the atmosphere is the cause of global warming … which is highly debatable.

The IPCC has said it is necessary for developed countries, which includes the United States, to cut their emissions 80% by 2050, or there will be a climate catastrophe.

The EPA has also said it is its objective to cut CO2 emissions 80% by 2050.

CO2 emissions with 80% cut

CO2 emissions with 80% cut

Cutting CO2 emissions 80% will have draconian effects on the United Sates, bringing CO2 emissions to levels last seen well before the First World War, or 114 years ago. There weren’t many automobiles, airplanes, air-conditioning units, etc., in place in 1900.

Even this administration recognizes that China and India, and other developing countries are increasing their CO2 emissions at a rapid rate, with China for example, now exceeding the emissions of the United States.

This administration has said establishing these regulations will set an example for China and the other developing countries, so that they will follow the example set by the United States.

Can anyone really believe that China and India, and the poor countries of Africa are going to limit their economic development because the United States cuts its emissions 30%? Don’t they need electricity for lighting, heating, cooking, etc., to improve their standard of living and increase their lifespans?

Even Europe, the paragon for rules to cut CO2 emissions, is building coal-fired power plants, with CO2 emissions probably increasing once again.

Worldwide, CO2 emissions are going to increase no matter what the United States does.

So why introduce regulations to cut CO2 emissions 30% by 2030?

Clearly, a 15% cut won’t do much toward achieving an 80% cut in CO2 emissions, unless the strategy is to slip this rule into place without much resistance, and thereby establish the basis for making much larger cuts later.

Once these regulations are in place, and have cleared the anticipated legal hurdles, the EPA need merely change the targets for each state, thereby forcing the states to cut emissions more dramatically.

The newly proposed regulations allows the camel to stick its nose under the edge of the tent, so it can gain full access later. After all, the EPA has said it wants to cut CO2 emissions 80% by 2050.

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War On People

June 17, 2014

EPA’s proposal to cut CO2 emissions 30% has dominated the news, but it’s important to step back and examine the whole picture.

The EPA’s proposal is only one of several attempts by radical environmentalists to conduct a war against people, because it’s the ordinary American who is being harmed.

What are the elements of this war on people?

  • The EPA’s proposal to cut C02 emissions is, of course, one element of the war.
  • Then there is the Sierra Club’s war against natural gas.
  • Thirdly, there is the war against nuclear power, spearheaded, one could say, by the Union of Concerned Scientists and the Natural Resources Defense Council, though others have also been in the forefront.

Taken together, coal, natural gas and nuclear, are the only methods of providing base load power for the grid1.

Taken together, these attacks on coal, natural gas and nuclear will undermine the nation’s ability to provide electricity, cheaply and reliably, to Americans.

Radical environmental organizations don’t have to collude, rather they act as an oligopoly, where each member watches the other and acts accordingly.

While the Union of Concerned Scientists conducts its attacks on nuclear power, those warring against CO2, such as Obama, can say they support nuclear.

The net effect is obvious: America is put at risk. What has this environmental oligopoly achieved?

Nuclear power is dying. The fear of radiation, inculcated into the general public by radical environmentalists; the high cost of building new nuclear power plants; and the lack of storage for nuclear waste, the result of the public’s fear of radiation, have left the country with a dying nuclear industry. It’s highly probable that existing nuclear power plants won’t get a second extension to their operating licenses, and will begin shutting down in the 2030s, less than 20 years from now, if not sooner.

Coal-fired power plants will have to close as the result of the EPA’s proposal to cut CO2 emissions 30% by 2030. And, as a result of EPA regulations, It will be impossible to build modern, ultra-supercritical, clean-coal, coal-fired power plants.

While natural gas power plants still remain viable, can anyone doubt they will be the EPA’s next target? Natural gas power plants emit CO2, and CO2 emissions cannot be cut sufficiently to meet the EPA’s long standing target of cutting CO2 emissions 80% by 2050, as long as natural gas power plants are permitted to operate.

 

Gina McCarthy, Administrator, U.S. EPA

Gina McCarthy, Administrator, U.S. EPA

The head of the EPA blithely said that wind and solar can take up the slack, but wind and solar are unreliable, as Germany is learning the hard way, and cannot provide base load power.

The war on people, by the oligopoly of radical environmentalists, is progressing at an alarm rate.

Ordinary Americans will suffer the most.

 

Notes:

1. Hydro and geothermal can provide base load power, but hydro is limited to existing installations in specific areas of the country, primarily the Northwest, while geothermal provides extremely small amounts of electricity in a very limited number of locations.

 

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Good News For The Grid

June 13, 2014

The federal D.C. Circuit Court of Appeals reigned in the use of Negawatts by nullifying a 2011 order by the Federal Energy Regulatory Commission (FERC) allowing regional transmission operators to pay for Negawatts1.

Negawatts is a play on Megawatts.

Paying for Negawatts was part of a Demand Response regimen proposed by radical environmentalists to reduce peak load. It allowed RTO/ISO’s to pay aggregators for Negawatts, to reduce demand at the retail level during peak periods.

Negawatts are defined as: Watts that have been eliminated when customers reduce their use of electricity, specifically during periods of peak demand2.

Aggregators are organizations that corralled multiple users into committing to cut demand, and then combining all the committed reductions into a package for which the RTO/ISO would pay. The RTO/ISO paid for Negawatts the same as they would pay for the actual generation of electricity.

The ruling did not eliminate the use of Demand Response using pricing, which was historically utilized with load shedding agreements, typically with industrial companies.

An earlier article, Dangerous Negawatts, discussed why Negawatts are bad for the grid, including the potential for fraud. See Dangerous Negawatts.

Gas turbine power plant in background. Photo and picture by D. Dears

Gas turbine power plant in background. Photo and picture by D. Dears

The D.C. Court ruled, “given [FERCs] Order 745’s direct regulation of the retail market, we vacate the rule in its entirety as ultra vires agency action.”

In other words, the court ruled that FERC lacked statutory authority to make rules directly affecting the retail, rather than the Interstate, wholesale market.

Given this Administration’s bent on cutting CO2 emissions by any means, there is a strong possibility that the ruling will be appealed to the Supreme Court. This is especially true now that the EPA has issued its proposed regulations for cutting CO2 emissions.

For example, the Environmental Defense Fund (EDF) denounced the decision, saying, “we need to ensure that our nation’s policies … [are] fairly valuing clean energy resources, … “

These groups equate nothing, i.e., Negawatts, to clean energy.

Negawatts are not the same as Megawatts produced by power companies. Negawatts are essentially nothing, while Megawatts are real electricity.

The courts ruling is good for the grid, in that it allows RTO/ISOs to compensate for generating electricity, so that new power plants will be built as demand increases.

 

Notes:

  1. The ruling can be seen at http://www.cadc.uscourts.gov/internet/opinions.nsf/DE531DBFA7DE1ABE85257CE1004F4C53/%24file/11-1486-1494281.pdf
  2. An example would be a grocery store turning off some of its lighting or its refrigerators for a predetermined period of time.

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