Global warming cures that aren’t needed, cost a bundle

Big government fans (Side A) have been known to dismiss the arguments of smaller government fans (Side B) as equivalent to opposing “any and all government regulations.” Why are humans endangering their future with climate change denial? Ted Kaufman, News Journal, 6/29/14.

This isn’t how SAFE thinks, or most conservatives for that matter. The point is not whether some regulations are needed, but whether regulators will stop when the incremental costs of further regulation start outweighing the benefits. Green monster, John Stossel, Townhall.com, 8/27/14.

•Thanks, Environmental Protection Agency! You've required sewage treatment plants, catalytic converters on cars and other things that made the world cleaner than the world in which I grew up. Good work.

•But we don't need what we've got: 16,000 environmental regulators constantly trying to control more of our lives. *** Like all bureaucracies -- regulatory, poverty-fighting and military -- the EPA [Enough Protection Already] spends every day hunting for new things to do, even if its new efforts cost much more and accomplish far less.
We recently reviewed the EPA’s proposal to force carbon emission reductions from power plants on a state-by-state basis and concluded that the plan was misguided from a policy standpoint and of dubious legality besides. SAFE to Congress: Bin the Clean Power Plan, 6/16/14.

This is not the EPA’s first misadventure. Indeed, they have become an ideologically driven organization that seems to be trying to tank the economy. See, e.g., “Dear EPA: Shape up or ship out,” 11/29/10 and “Regulate or subjugate,”12/9/13.

Now we read there may be electric power outages this winter as a result of the proposed Clean Power Plan (CPP) and other actions that have accelerated the shutdown of coal power plants. Winter blackouts could hit Midwest, Mid-Atlantic, regional grid operator warns, Zack Colman, Washington Examiner, 8/27/14.

Americans have not been advised of this risk by the EPA or our elected political leaders, let alone accepted it. The lengthy text of the CPP does not even mention the prospect of electric power outages. Clean Power Plan, EPA, 6/2/14. (on-line version in Federal Register, 6/18/14)

Could it be that we understated our case? Some further analysis seems in order, which will also cover several recent developments.

1. Fewer coal power plants – How could the CPP have anything to do with electric power outages this winter? It is merely a proposed plan, after all, which even if approved would not be finalized until 2015 and implemented between then and 2030.

Bear in mind, however, that the CPP is only one of the EPA initiatives that will impact coal power plants. Here are several others, all but the last of which are further along.

  • Cross-border pollution – Based on perceived injury to downwind states, the EPA issued a rule in 2011 requiring upwind states (some 28 in the East, Midwest and South) to cut back on sulfur and nitrogen emissions from coal-fired power plants within their boundaries. A legal challenge was ultimately rejected (6-2) by the US Supreme Court. Court upholds cross-state air pollution rule, Laura Barron-Lopez, The Hill, 4/29/14.
  • Mercury, etc. pollution – The MATS (Mercury and Air Toxins Standards), adopted in 2012, require all electric generation units to meet sharply reduced mercury emission levels by 2016. The EPA estimated that 4% of coal-fired units would be shut down because of MATS, but the actual effect has been considerably greater. “The US Energy Information Agency reported retirements of 8% of the fleet in 2012, and . . . now estimates the total will more likely reach 17%. It is simply not cost effective to retrofit older, smaller generating facilities. War on coal threatens electrical grid reliability, Caesar Rodney Institute.
  • New power plants – The CPP issued in June 2014 is applicable to existing power plants. Parallel rules for new power plants have been in the works for some time, and a revised proposal was issued in September 2013. The gist of it is to require new coal-fired plants to emit less than 1,100 pounds of C02 per Megawatt hour, representing a 38% reduction from CO2 emissions of existing US coal plants. Under this rule, one would not expect any more coal power plants to be built. Natural gas power plants could meet the proposed standards without much problem since they emit about half as much CO2 as coal power plants. US EPA issues revised rules for new power plants, Jeff Postelwait, renewableenergyworld.com, 9/30/13.
  • Ozone standards - Restrictions on ground level ozone (3-atom molecules of Oxygen) from power plants, fuel exhausts, and other sources are not new, but an ecpected proposal to raise the bar (by cutting permissible ozone levels to 60 parts per million versus the 75 ppm standard adopted in 2008) has been attacked as unjustified on any rational cost/benefit perspective. New EPA ozone regulations could be costliest in US history, Jamie Hennigan, NAM, 7/31/14. A new study by NERA Economic Consulting and commissioned by the National Association of Manufacturers (NAM) reveals that a more stringent ozone standard from the Obama Administration could reduce GDP by $270 billion per year and carry a compliance price tag of $2.2 trillion from 2017 to 2040, increasing energy costs and placing millions of jobs at risk. ***“We are rapidly approaching a point where we are requiring manufacturers to do the impossible,” added NAM Vice President of Energy and Resources Policy Ross Eisenberg. “The EPA is considering setting ozone levels below what exists at national parks, such as Yellowstone and Denali.”

Investors and managers can read the handwriting on the wall. The administration is on the warpath against coal power plants, so it would be smart to phase such facilities out sooner rather than later. Who wants to carry on, earning the displeasure of regulators and adverse publicity, when the government will surely insist on getting its way in the end.

2. Grid operation – In conjunction with rules that will make coal power plants an endangered species over the next few years, electric grid operators will be required or at least “encouraged” to change their procedures for determining which power plants should be chosen to meet power needs.

The traditional rule was that the cheapest (variable cost basis) reliable (or dispatchable) power sources available would be called on; until the fracking boom lowered natural gas prices, that generally meant coal or nuclear power plants. The new thinking is that grid operators should seek to use the lowest carbon emission power sources available versus minimizing electric power costs for consumers.

That’s not to say “renewable energy” sources would have priority, as wind and solar power are intermittent and can’t reliably serve consumer and business needs on a “when wanted” basis. But it would mean giving priority to natural gas plants over coal plants, even under circumstances in which coal power would be favored on a strict cost basis.

The EPA explains the policy shift at some length in the CPP. The basic idea is to factor an imputed cost for carbon emissions into the calculations, as is already being done in the case of states that (like Delaware) participate in the Regional Greenhouse Gas Initiative (RGGI). See discussion of “building block 2,” dispatch changes between electric generating units (EGUs). CPP, 6/2/14.

  • This system of security-constrained economic dispatch assures reliable and affordable electricity. Electricity demand varies across geography and time in response to numerous conditions, such that EGU owners and grid operators are constantly responding to changes in demand and “re-dispatching” to meet demand in the most reliable and cost-effective manner possible.

  • Operators of EGUs subject to CO2 emissions limits in RGGI now include the cost of RGGI CO2 allowances in those EGUs' variable costs, creating economic incentives to replace generation at higher-emitting EGUs with generation from lower-emitting sources . . . through the process of least-cost economic dispatch.

  • The amount of re-dispatch from coal-fired EGUs to NGCC [combined cycle natural gas] units that takes place as a result of this competition [between dispatchable EGUs] is highly relevant to overall power sector GHG [greenhouse gas] emissions, because a typical NGCC unit produces less than half as much CO2 per MWh [Megawatt hour] of electricity generated as a typical coal-fired EGU.

Viewing this thrust from a consumer standpoint, say hello to higher electric power prices. And for power companies, here is one more reason to shut down coal power plants.

3. Grid reliability – Concerns about chronic power shortages are understandable and deserve to be taken seriously, but we think the real concern should be cost versus the availability of electric power.

As was demonstrated during the winter of 2013-14, electric power demand and rates soar during periods of frigid weather. Northeast and Mid-Atlantic power prices react to winter freeze and natural gas, Energy Information Agency, 1/21/14.

There were lots of power outages, although this was probably due to lines being downed by ice, etc. versus power demand exceeding available capacity. Some could go days without power in cold Northeast, Michael Pearson & Margaret Conley, CNN, 2/6/14.

And many coal power plants that helped avoid much bigger problems will be shut down soon due to the EPA’s current and proposed policies. EPA coal rules leaving US vulnerable to power blackouts? Mike Emanuel, Fox News, 4/12/14. http://tinyurl.com/q8jb92h

"Regulation from five years ago is closing about 20 percent of the coal plants. Regulations being proposed now could close an additional 20 percent of coal plants. And that creates huge stresses -- we're just not ready for anything like that in this country," Mike Duncan, from the American Coalition for Clean Coal Electricity, told Fox News.

Government officials deny there will be serious problems, however, and in this instance we are inclined to believe them – if nothing else because bureaucrats have an instinct for survival and a full-blown power crisis would energize Americans to demand a rollback of the EPA’s cherished policies.

Asked about future regulations, EPA Administrator Gina McCarthy suggested the agency is trying to be careful. "Nothing we do can threaten reliability. We have to recognize that in a changing climate like the one we have recently been experiencing, it is an increasing challenge to maintain a reliable energy supply," McCarthy said.

As coal power plants are shut down, in some cases prematurely, they will be replaced with natural gas power plants versus attempting to do the impossible and run the grid on intermittent wind and solar power. Germany’s energy poverty: How electricity became a luxury good, Der Spiegel, 9/14/13. http://tinyurl.com/ms5tvbq

This year, German consumers will be forced to pay €20 billion ($26 billion) for electricity from solar, wind and biogas plants -- electricity with a market price of just over €3 billion. Even the figure of €20 billion is disputable if you include all the unintended costs and collateral damage associated with the project.

On the other hand, we do not accept the EPA’s characterization of the CPP as essentially cost-free. There is little question that this proposal would result in higher electric power prices, in our view, and the resulting benefits seem to be greatly exaggerated. SAFE to Congress: Bin the Clean Power Plan, point 3 (“no free lunch”), 6/16/14.

4. Environmental justice – One of the more puzzling arguments for the EPA’s anti-carbon policies is that they will help people in the lower socio-economic levels. See, e.g., EPA chief: Co2 regulations are about “justice” for “communities of color,” Michael Bastasch, Daily Caller, 8/27/14.

Actually, lower income Americans will suffer the most from higher electric power prices and associated decline in industrial sectors. Is Obama just trying to tank the economy? Stephen Moore, Heritage Foundation, 6/5/14.

How ironic that a president who has talked endlessly about income inequality for the past two years will impose one of the most regressive taxes imaginable — and this is a tax — on the nation’s poor. *** And which Americans will lose jobs from these energy regulations? Hundreds of thousands of coal miners, construction workers, pipefitters, truckers, and manufacturing workers.

And when electric power prices are high, the effects on the economically vulnerable can be traumatic. How not to shut down coal plants, Lydia DePillis, Washington Post, 7/21/14. http://tinyurl.com/ow9m2ls

Ever since her power was shut off in 2010, [Sharon] Garcia has adopted a Depression-era obsessiveness: She doesn’t use the oven in the summer, because it heats up the house, and uses only one small air conditioner. Even the aquarium goes dark when someone’s not in the room. “If we’re not in here looking at the fish, it shouldn’t be on,” she says. Oh, and forget about machine-washed dishes; Garcia does them by hand (the battle is evident in the pile at the sink). The toaster and microwave bear sticky notes ordering the user to unplug them afterward, lest they continue drawing energy from the sockets. “You think turning it off is enough, and it’s not,” she admonishes.

5. Accountability – We have previously urged that the administration be required to seek congressional approval for the CPP. Such approval would not be forthcoming, of course, as Americans are growing increasingly skeptical of making economic sacrifices based on the manmade global warming theory. Too bad, that does not justify the president’s “go it alone” approach. Under the Constitution, Congress – not the president, let alone administrative agencies like the EPA – is supposed to make the nation’s laws.

Now a new plan to skirt constitutional norms is under consideration, namely an international agreement for the reduction of carbon emissions that would arguably not constitute a treaty and therefore would not be submitted to the Senate for ratification. Obama reportedly planning end-run around Congress on global climate change deal, Fox News, 8/27/14.

To borrow a line from the British, this scheme sounds “too clever by half.” And if there is an overwhelming scientific consensus in favor of the manmade global warming theory, as has often been claimed, then why is Side A so anxious to avoid an honest debate about energy policies?

Side B has been a bit slow to grasp the potential of this issue, but may finally be waking up. Thus, in the Aug. 30 response of Rep. Larry Buchson (R-IN) to the president’s weekly address (calling again for an increase in the minimum wage), pro-energy policies are identified as a means of “lowering costs at home” and thereby boosting the economy:





* * * This Blog’s Reply * * *

The EPA seems to be engaged in a power grab! [pun intended] – SAFE director

wwhipple3@verizon.net

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