In the Pipeline: 10/4/11

This is a little complicated.  Let me make it easy.  When you have a commodity defined by stochasticity, and then you mandate its use, things tend to go bad pretty quickly for the remainder of system.  Or, mandating unreliable energy, like wind, is usually not a good idea Bloomberg (10/3/11) reports: The 15 mile-per-hour winds that buffeted northern Germany on July 24 caused the nation’s 21,600 windmills to generate so much power that utilities such as EON AG and RWE AG (RWE) had to pay consumers to take it off the grid…Rather than an anomaly, the event marked the 31st hour this year when power companies lost money on their electricity in the intraday market because of a torrent of supply from wind and solar parks. The phenomenon was unheard of five years ago…With Europe’s wind and solar farms set to triple by 2020, utilities investing in new coal and gas-fired power stations no longer face stable returns. As more renewables come on line, a gas plant owned by RWE or EON that may cost $1 billion to build will be stopped more often from running at full capacity. It may only pay for itself on days like Jan. 31, when clouds and still weather pushed an hour of power on the same-day market above 162 ($220) euros a megawatt-hour after dusk, in peak demand time.

Math is hard — AEA President Tom Pyle adds up the Obama jobs plan and it doesn’t look good for the middle class. I guess it’s easier to have a war with just two sides: ultra rich and hopelessly poor Fox News (10/3/11) reports: President Obama conjured up his favorite boogeyman recently: the oil and gas industry. He reached for it when he released his job creation and deficit reduction package…Despite the fact that the oil and gas industry pays over $86 million a day in income taxes, royalties, bonuses and rents to the federal government, the president claimed that U.S. energy producers have not paid “their fair share.” …The president is proposing an additional $41 billion in new taxes on energy producers. This will result in higher energy prices, more oil imports, and in the end, few jobs in America. No wonder why the economy continues to be mired in an economic funk.

Winning the Future — China cashes in on Western subsidies for solar panel demand and President Obama gets a lesson on the long con. Wall Street Journal (10/4/11) reports: Solar-panel company stocks have plunged to multiyear lows as slowing demand and a glut of panels from Asia have squeezed margins, creating a cloud that could hang over the industry for some time…Shares of U.S. solar-panel giant First Solar Inc. (FSLR) have been trading at four-year lows, while shares of Chinese rival Suntech Power Holdings Co. Ltd. (STP) have reached all-time lows since the company went public in 2005. The Standard & Poor’s Global Clean Energy Index, which includes First Solar, Iberdrola S.A. (IBE.MC) and other renewable energy companies, was down 41% year-to-date as of Monday. That compares to the broader S&P 500 index, which was down 11.3% during the same period.

You know you’re in trouble with the Huffington Post calls BS on green jobs Huffington Post (10/4/11) reports: A $500 million Labor Department program designed to train workers for green jobs has come up far short of its goals, with only 10 percent of participants finding work so far, the agency’s assistant inspector general has found…The report said the low rate makes it unlikely the program will meet the goal of placing nearly 80,000 workers in careers in energy efficiency or renewable energy by 2013…”Grantees have expressed concerns that jobs have not materialized and that job placements have been fewer than expected for this point in the grant program,” said the report from Assistant Inspector General Elliott Lewis.

Brave New World — Turns out Obama realizes he needs oil to run his utopia Wall Street Journal (10/4/11) reports: The Obama administration said Monday it was moving forward with oil-drilling leases off the coast of Alaska issued by the Bush administration in 2008, a victory for oil companies in the battle over Arctic Ocean drilling…The Interior Department said it would uphold nearly 500 leases issued in the Chukchi Sea after several environmental groups challenged the sale of the leases in court… The department’s decision came in response to the lawsuit filed by environmental groups, and those groups still had the option of challenging the department’s determination…Among the companies securing leases in what is known as Lease Sale 193 was Royal Dutch Shell PLC, the energy giant already at the center of another high-profile fight to secure permits to drill in the Arctic.

Last week GAO noted that 42% of the temperature stations run by NOAA don’t actually meet NOAA’s own standards.  This week, they are suggesting that NOAA do something about it.  How much would you like to bet that NOAA’s response is going to be less than prompt and thorough?E&E News (10/3/11) reports: The National Oceanic and Atmospheric Administration should develop a policy to track and address weather stations that are sited in ways that could distort the data they collect, the Government Accountability Office said last week…The GAO report examined NOAA’s Historical Climatology Network, which consists of 1,218 weather stations across the United States that record daily minimum and maximum temperatures and precipitation totals. The agency uses those data to monitor the climate, including long-term temperature trends…The GAO report found that last year, 42 percent of the network’s active stations were sited in ways that did not meet one or more of NOAA’s standards for station locations.

Obama doesn’t regret betting on Solyndra–after all, it wasn’t his money he was playing roulette with CNET (10/3/11) reports: President Obama said today he does not regret the loan-guarantee Solyndra received, while recently revealed e-mails show early doubts within the White House about the now-famous solar company…In an interview with ABC News and Yahoo News, Obama said the policy of providing loan guarantees to clean-energy technology companies is sound despite the failure of Solyndra, which filed for bankruptcy at the end of August. The company received a $535 million loan guarantee and about $1 billion in private capital…Obama said loan guarantee program is important to developing clean-energy technologies and demonstrating that that U.S. can be an exporter of manufactured goods, rather than only an importer.

“The high value for destroying these gases creates perverse incentives in developing countries to manufacture more of them bringing into question the environmental gains,” Smith said in a statement.”  Are you sure?  Because we only have about 10 years worth of data that says that this whole program is a sham Reuters (10/3/11) reports: New Zealand is looking to exclude the use of U.N. offsets from industrial gas projects in its emissions trading scheme from as soon as 2012, as these offsets threaten to distort the market, the government said on Friday…Climate change minister Nick Smith said he wanted to maintain the integrity of the emissions trading scheme, which is why the government is considering banning offsets from the potent greenhouse gas hydrofluorocarbon-23 (HFC-23) and nitrous oxide credits…”The high value for destroying these gases creates perverse incentives in developing countries to manufacture more of them bringing into question the environmental gains,” Smith said in a statement.

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