On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the debt ceiling battle, new carbon tax proposals, and the continued deterioration of America’s electric grid and political fabric.
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Biden Lies And The American Dream Dies
May 4, 2023 by Leave a Comment
The Environmental Protection Agency’s (EPA) new emissions standards for vehicles require manufacturers to increase overall fuel efficiency by over 25 percent by 2026, effectively mandating that electric vehicles make up two-thirds of new car sales. In order for customers to buy electric vehicles, manufacturers will have to make them less expensive than internal combustion vehicles, which will likely mean raising the price of internal combustion (ICE) vehicles until they are more costly than electric vehicles. Today, the average electric vehicle costs around $65,000, while the average ICE vehicle costs around $48,000.
Electric vehicle prices are likely to also increase because increasing their demand will increase the demand for the materials to manufacture batteries, which are the largest cost component of an electric vehicle. Prices for rare earths, for example, have increased between 60 percent and 400 percent since 2020. Prices for lithium, the basic ingredient in most EV batteries, have increased by over 300 percent since 2020, having come down dramatically from their high last year. Moreover, the Biden administration continues to prevent the development of new mineral mines in the United States to supply those materials by revoking leases, delaying permits and labeling plants as endangered. This leaves China with a stranglehold on these metals, particularly their processing and on the supply chain for EV batteries, of which the U.S. Secretary of the Interior admits she is unaware despite her U.S. Geologic Survey tracking that data. China can process these minerals cheaply because of their lax environmental rules and their massive amounts of low-cost coal-fired generating plants.
Further, there is the increased electricity demand needed to charge these electric vehicles with more charging stations added to homes, apartment buildings, and on highways as more electric vehicles are purchased and operated. For electric vehicles to reduce emissions, the United States would need huge increases in wind and solar energy development. Yet, the U.S. Energy Information Administration projects that, by 2050, renewable energy will provide 63 percent of U.S. electricity generation, with wind and solar providing the largest amount of that renewable share. Natural gas and coal are still expected to provide a 27 percent share in 2050. Consequently, while the EPA may limit tailpipe emissions, it will transfer many of those emissions to power plants.
Electricity costs will also increase, negating the anticipated savings from “refueling” those electric vehicles. The federal government provides lucrative subsidies for wind and solar energy development and it has done so for 45 years at taxpayers’ expense. Many states have also implemented green energy mandates as developers of wind and solar power could not, and still cannot, compete on price alone, despite proponents’ claims. Wind and solar power are weather-driven and their inherently intermittent nature requires backup power from natural gas or coal generating units or from very expensive batteries—costs that are not imbedded in the calculations used in competing wind and solar power against traditional technologies.
In Europe, huge subsidies were used to increase wind and solar generation which resulted in large increases in electricity costs. Germany, for example, has the highest household electricity rates in Europe—around 3 times as high as those in the United States, and the continent is experiencing deindustrialization become industries cannot afford the cost of energy. A wind- and solar-based electric grid, without natural gas or coal generation, will require huge amounts of battery storage, which is simply an enormous added expense to accommodate their intermittent energy production. And, with the increasing electricity demand comes increasing electricity prices as new wind and solar plants replace existing coal and gas plants whose capital costs are mostly or entirely paid off.
EV Efficiency and Range Falls Short of EPA Ratings
Car and Driver magazine’s testing director Dave VanderWerp compared the EPA’s fuel economy and range estimates to the results of his own real-world highway tests. He found that electric vehicles underperform in efficiency and range relative to the EPA figures by a much greater margin than gasoline vehicles. On Car and Driver‘s 75-mph highway test, gas vehicles averaged 4 percent better than their stickers indicated while the average range for an electric vehicle was 12.5 percent worse than the window sticker numbers. According to VanderWerp, while EPA tests separate city and highway range figures, only a combined number for electric vehicles is presented to consumers. The combined rating is weighted 55 percent in favor of the city figure, where electric vehicles typically perform better, which inflates the EV estimates.
The way the tests are conducted also skews the reported range figure. Unlike Car and Driver‘s real-world test, which is carried out at a constant 75 miles per hour, the EPA’s cycle is variable, with the speed increasing and decreasing over the course of the test. The variability of speed in testing is detrimental to the results for gas vehicles, which tend to be most efficient at a steady rpm. However, for electric vehicles, the ability to regenerate energy under braking leads to higher range results, which are then shifted even higher by the slight bias towards city driving in the combined rating. It is almost as though the EPA has rigged the tests to achieve the numbers it wants to achieve. Consumers, however, live in the real world and would get different results, as Car and Driver did.
Because of the way EPA conducts its testing, range figures are not comparable across different vehicles. The EPA’s highway cycle is conducted at significantly lower speeds than Car and Driver‘s 75-mph test, with the initial EPA results then multiplied by a reduction factor to simulate the effect of higher speeds. Automakers can choose between running a two-cycle test—where the data is multiplied by a standard 0.7 adjustment factor—or carrying out a five-cycle test in an attempt to earn a smaller reduction factor, making the label figure higher. To be upfront about the data, EPA should publish both city and highway range figures—as they do with fuel-economy estimates for gasoline vehicles. Putting their thumbs on the scales as they have been doing misleads the public and reduces trust in the EPA and the electric vehicles the Biden administration is pushing.
Conclusion
The EPA is forcing Americans to buy electric vehicles in the future by its regulations, whether Americans want those vehicles or not. Besides taking options away from Americans to choose what is best for them, EPA’s decisions also have security issues and cost issues associated with them. Electric vehicles currently cost more than gasoline vehicles, but the cost of both are likely to increase as automakers price vehicles so that they can meet EPA standards by selling the required number of electric vehicles. This means fewer Americans will be able to afford personal transportation and the freedoms that come with that tradition. Further, because China dominates the processing of metals needed for car manufacture and the supply chain for EV batteries, it makes the United States dependent on China—an autocratic country—far more (actually, 4 times more) than the United States was ever dependent on the Middle East for oil. That dependency is unnecessary since the United States has the mineral resources, but the Biden administration will not let those resources be mined.
Further, the EPA is skewing the data on EV efficiency and range, making them look more advantageous than they are, by the way it is performing its tests and how it is combining data for city vs. highway driving. Clearly, that points to a need for revised testing and labeling standards for electric vehicles, but that may not be in the Biden administration’s best interests, given its climate agenda which adheres to the belief that electrification of everything is fundamental. Car companies that exaggerate their mileage performance for gasoline vehicles face steep fines. Those fines should be extended to electric vehicles if the manufacturer exaggerates their range and efficiency data. And if the EPA is deliberately misleading in its tests to achieve a political rather than an objective number, perhaps they should share in the fines through a reduction in its budget.
*This article was adapted from content originally published by the Institute for Energy Research.
Team Biden Rolls Out Deranged Plan To “Electrify” America’s Armed Forces
May 3, 2023 by Leave a Comment
Secretary of Energy Granholm believes the U.S. military can rely on electricity to fuel its tanks and other military fighting equipment in about a decade. And, of course, that electricity must be supplied by politically correct resources—wind and solar power—that are weather-dependent. Granholm testified before the Senate in support of a plan to fully establish an all-electric vehicle fleet in the U.S. military by the 2030s. Granholm, a former Michigan Democratic governor, believes that reducing reliance on the “volatility of globally-traded fossil fuels” is key. She claimed an EV military fleet would feel fewer effects from the economic repercussions of events like the Russian invasion of Ukraine. However, she ignores the facts that a fully-electric military would be “expensive,” costing billions or more, and would be inherently “unreliable.” Reliability of equipment is a cornerstone of military readiness.
Just imagine a son or daughter in an EV military tank operated by enormous and heavy batteries that go dead in the middle of battle with no ability to be recharged quickly or at all, because the opposing side is advancing with modern weapons fueled by petroleum as that country is using the world’s resources to their most suited uses. Can you envision Americans building charging stations behind enemy lines to make these EV tanks usable? As this example shows, the Biden administration all in one basket (electrification) mentality should make Americans cringe at the sheer absurdity of it. As the Biden administration does all it can to eliminate American energy independence under the guise of “clean” renewable energy, it is creating a national security risk. Further, the Biden administration’s green energy goals rely in many ways upon Communist China—a potential enemy—as that country dominates the battery supply chain and the supply chains of most critical minerals that renewable energy and electric vehicles need. The “volatility of globally-traded minerals” that are dominated by Chinese investments and processing apparently has not occurred to Secretary Granholm.
Army Unveils Its Electrification Plan
In the actual report from the Army, however, there is a distinction between electrifying non-tactical vs. tactical vehicles. Tactical vehicles are basically any vehicle that is used in combat, combat support, training, or related operations. Non-tactical vehicles are usually found on military bases and are used for transportation to military appointments, group activities, etc.
The U.S. Army plan to establish an electric vehicle fleet, outlined in a document titled “Climate Strategy,” calls for the service to cut its emissions by 50 percent by 2030 from 2005 levels and reach net-zero emissions by 2050. It separates tactical vehicles from non-tactical vehicles. The strategy is to establish an “all-electric light-duty non-tactical vehicle fleet by 2027” and an “all-electric non-tactical vehicle fleet by 2035.” For tactical vehicles, the plan calls for “field purpose-built hybrid-drive tactical vehicles by 2035 and fully electric tactical vehicles by 2050.” Pretty amazing when none exist today, and when the supply chains for all the minerals necessary are dominated by China.
The Army strategy states, “There are 950 renewable energy projects supplying 480 megawatts of power to the Army … scoped and planned through 2024. The Army will continue these and other efforts under the Army Installation Energy and Water Strategic Plan to maximize resilience, efficiency and affordability on every installation.” The goals are “100 percent carbon-pollution-free electricity for Army installations’ needs by 2030” and the installation of a “microgrid on every installation by 2035.”
Despite having later dates for tactical versus non-tactical vehicles, the plan is still expensive and ludicrous. The critical minerals needed to manufacture batteries are located in countries like China and the mineral processing is dominated by China. Batteries and battery components are generally not manufactured in the United States, which creates national security problems. And while the United States has critical mineral resources, the Biden administration is revoking leases, delaying permits and listing plants as endangered to stall critical mineral mining projects in the United States that are increasingly under legal challenge from environmentalists and others.
Environmental Justice is the Buzzword
What Granholm was preaching to the Senate is Biden’s environmental justice plan. A few weeks ago, President Biden signed an Executive Order, “Revitalizing Our Nation’s Commitment to Environmental Justice for All,” that requires all military branches to incorporate environmental justice into their missions. Environmental justice requires federal agencies, including the military, to be up to the required standards of Biden’s climate agenda, as the administration scores their rate of performance. The Executive Order reads in part, “For far too long, communities across our country have faced persistent environmental injustice through toxic pollution, underinvestment in infrastructure and critical services, and other disproportionate environmental harms often due to a legacy of racial discrimination including redlining. These communities with environmental justice concerns face even greater burdens due to climate change.” Biden aims to rectify all of this carnage by spending well over a trillion dollars through various bills including the Infrastructure and “Inflation Reduction Act.”
Unfortunately, the United States is deliberately undermining our economy and our military over climate change while our enemies are building their offensive and defensive weapons quicker, stronger, and in some instances even better. The fact that ‘our leaders’ want to change how we develop, manufacture, produce and distribute our military capabilities –in the name of ‘the climate,’ is terrifying for it will cause Washington’s politicians to further their activist agendas while putting our national security at risk. Huge amounts of money are being distributed to “green groups” to promote these policies while also (unspokenly) building political cadres of people dependent upon federal tax money. President Biden and Secretary Granholm are saying that this will help make America energy independent. But, the United States is already energy independent with its coal, oil, natural gas, nuclear and renewable resources. Nonetheless, the Biden administration is doing all it can to restrict American manufacturing and our energy-producing capabilities to push its climate agenda.
Conclusion
Secretary of Energy Granholm believes that our military can electrify its operations—at least its non-tactical fleet by 2030. The Army recently released a report on its electrification plans that includes both non-tactical and tactical vehicles with specific dates to be accomplished. This ridiculousness is going on in the U.S. military while other countries are developing their weapons with fuels that make sense in a combat situation where charging stations are not at a tank’s beck and call. The whole situation is in the name of environmental justice—a term that is bandied about that may fool politicians into doing the Biden administration’s bidding—and supposedly in making the United States energy independent. However, according to data from the Energy Information Administration, the United States is already energy independent. The Army’s plan, however, will do the opposite by making the United States dependent on China for batteries and critical minerals and greatly risking our national security. Instead of fostering energy security, these programs and their enormous costs actually reduce our energy, economic and national security.
*This article was adapted from content originally published by the Institute for Energy Research.
American Energy Alliance to Senator Manchin: You’re Not Helping
May 2, 2023 by Leave a Comment
WASHINGTON DC (05/02/2023) – Today, Sen. Joe Manchin (D. W.Va.), once again, introduced legislation that will do little to actually solve our nation’s permitting issues, and, in many cases, it might actually make them worse. The measure seemingly seeks to reform the federal permitting process, but mainly is a vehicle to congressionally authorize the West Virginia Senator’s pet project, the Mountain Valley Pipeline.
AEA President Thomas Pyle issued the following statement:
The American economy needs meaningful permitting reform. This legislation from Senator Manchin is certainly not that. The measure is insufficient at achieving actual permitting reform and contains provisions that do the bidding of environmental groups who seek to expand the powers of the federal government to override states and localities with respect to transmission projects.
The time limits and page counts in Manchin’s bill are meaningless unless the underlying issues with NEPA are addressed (which this legislation does not do). Setting time limits without meaningful reform of NEPA could perversely increase problems because anything that is left out of an environmental review to meet the deadline could then become grounds for NEPA litigation. The long timelines for NEPA reviews are a symptom of the dysfunction, not the cause. Any permitting reform legislation must clarify the scope of NEPA and the role of courts in those reviews.
The Mountain Valley part of the legislation sets a terrible precedent. If it requires an act of Congress to approve individual pipelines, we will never get any more pipelines built.
Giving FERC greater power to override state objections to transmission lines is a bad policy. When it comes to electricity transmission, states that get forced into participating in these projects end up having to bear the costs in rate charges. Thus, FERC can effectively force unwilling states into participating in whatever electricity projects the FERC chooses to approve. There was a state AG letter opposing this last year that explained it like this:
“The Act contains three interrelated provisions that, particularly when taken together, eviscerate states’ ability to chart their own land-use and energy policies. First, it would authorize private companies to use eminent domain against state land. Second, it would authorize FERC to command utilities to construct entirely new transmission facilities whenever and wherever FERC deems necessary. And third, it would authorize companies to spread the costs of constructing new transmission facilities onto residents of other states, requiring citizens of one state to subsidize the agenda of politicians and bureaucrats in other states. These provisions eviscerate state sovereign authority, commandeer companies to carry out the will of a three-vote majority of FERC Commissioners, undermine the power of each citizen’s vote to decide policies at the state level, and inevitably force the citizens of our states to subsidize the costs of expensive and unreliable energy policy preferences of California and New York.”
The parts of the Manchin legislation that are incremental improvements in permitting are not enough to justify passage. Congress is famous for passing inadequate legislation and then is content to move on without addressing meaningful and necessary changes to federal programs. This measure is a trojan horse for Senator Manchin’s pet project, the Mountain Valley pipeline.”
Additional Resources:
The Plugged In Podcast #95: Kenny Stein on H.R. 1
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The Unregulated Podcast #130: Mine, Baby, Mine!
April 28, 2023 by Leave a Comment
On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the debt ceiling battle, mineral dependency, EV mandates and more. This week they are joined by former professional hockey player and current Representative Pete Stauber (R-MN) to talk about the importance of domestic mineral production and a new paper from the Institute for Energy Research.
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EPA Regulatory Delays Exacerbate Biden’s War On Affordable Energy
April 28, 2023 by Leave a Comment
President Biden’s new rules for power plants that will be released soon would benefit carbon capture and sequestration technology by enabling coal and natural gas plants to meet the new proposed standards developed by the Environmental Protection Agency (EPA). However, the EPA is lagging far behind on permits allowing for the construction of the new technology. The new regulation is one of a series of regulations toward implementing Biden’s goal of cutting carbon emissions in half by 2030. The new rules on existing and new coal and natural gas plants are set to be imposed as dozens of carbon capture and sequestration projects await approval by the EPA, stalling construction and stifling investment. The backlog has delayed projects and frustrated states and industry officials seeking to build the new systems, and calls into question whether the Administration actually wants to deploy the technology.
In order to store captured emissions underground at scale, companies need to sequester the carbon at so-called carbon capture injection wells, or Class VI injection wells. The EPA has been slow-rolling the approval of these wells. In an effort to circumvent the slow approval, states have sought to secure their own permitting authority, known as “primacy,” to expedite the process. Yet here, too, applications have not been approved at the EPA’s offices. There are currently more than 70 outstanding Class VI permit applications across eight states. According to an EPA report, a massive scale-up of carbon capture technology at U.S. power plants could become a $600 billion industry by 2050, but permits are needed to do so.
So far, North Dakota and Wyoming are the only states that have been granted primacy, and both approvals came under the Trump administration. North Dakota has attracted key projects and investments, including $250 million for the largest carbon capture project in the world, expected to operational by early 2024. Arizona, Louisiana, Texas, West Virginia, and Pennsylvania have applications pending, while many more states have expressed interest.
The new rules that EPA is about to impose on natural gas and coal plants are meant to eliminate them entirely—fossil-fuel driven technologies that generated 60 percent of the nation’s electricity in 2022. The cost and difficulty of implementing carbon capture technology will make renewables like wind and solar a more attractive energy source for power plants, resulting in utilities building them instead. However, wind and solar will make the grid unreliable and electricity more expensive. Wind and solar are weather-dependent, generating electricity only when the wind blows and the sun shines and requiring very expensive battery back-up when they do not produce electricity.
Biden’s Inflation Reduction Act provides taxpayer funding to encourage carbon capture, utilization, and storage projects. The law expanded the availability of tax credits for carbon capture and storage and increased the credit amounts. The tax credits are now worth up to $85 for every ton of carbon dioxide captured, up from a maximum of $50 previously. The president’s bipartisan infrastructure bill, now a year old, also provided money to the EPA to help administer the permitting process.
Background on Carbon Capture and Sequestration Technology
Electric utilities have in the past found it difficult to capture large amounts of the carbon dioxide from coal- and gas-fired power plants, particularly since the technology is expensive and requires large amounts of electricity to operate. In the 2010s, several early projects partly funded by the federal government were abandoned because of the high costs. Only one coal plant in the United States ended up using carbon capture on a large scale: The $1 billion Petra Nova facility in Texas, completed in 2017. It sold the captured carbon dioxide to oil drillers who injected it into oil fields to extract more oil. That facility shut down in 2020, but its owners plan to restart it this year.
Canada’s Saskatchewan’s state-owned electricity provider has a $1.3 billion, 110 megawatt coal plant with carbon capture technology. The Boundary Dam power plant traps 90 percent of the plant’s carbon dioxide, pumping it underground and then selling it to the Cenovus oil company for use in priming nearby oil fields or burying it in geological formations.
The higher tax credits in the Inflation Reduction Act, however, have increased interest in the technology. The owners of at least six coal plants and 14 large gas plants are conducting detailed engineering studies to gauge the economic feasibility of carbon capture and storage. Calpine Corporation, one of the country’s largest generators of electricity from natural gas, is exploring plans to install the technology at four large gas plants in Texas and California. Since the federal tax credit will not be enough to cover the cost of capturing carbon from the gas plants, the company is exploring other potential sources of financing.
A recent study by Rhodium Group, an energy research firm, estimated that only about 20 gigawatts of coal and natural gas plants would likely install carbon capture by 2035 — a small fraction of the almost 700 gigawatts of coal and gas that exist today, mainly because of cheaper alternatives from wind and solar projects. Those intermittent renewables, however, require expensive batteries as backup, which are heavily subsidized in the Inflation Reduction Act, along with wind and solar plants. Consumers and taxpayers are struggling to pay for the costs associated with reducing carbon dioxide emissions, which are escalating with exotic new methods of generation prescribed by government policies.
Despite that forecast, carbon capture might be a more attractive option in parts of the country where it is difficult to build new wind and solar power because of a lack of wind or solar resources, insufficient power lines or community opposition. Options for backing up renewable energy, such as advanced batteries, might not pan out. And some states like Wyoming have expressed interest in encouraging their utilities to use carbon capture technology in order to maintain a market for fossil fuels. It also might prove easier to modify existing natural gas plants so that they can run entirely on hydrogen fuel from renewables.
If this EPA rule is implemented and can withstand legal challenges, carbon capture technology is more likely to be used at industrial facilities, such as at hydrogen or ethanol plants, where it is often technically easier to capture carbon dioxide and there are fewer alternatives for cutting emissions.
Conclusion
Despite the rampant growth expected for wind and solar facilities, the electric grids of the future will need electricity sources that can run on demand at all hours to complement their intermittency. Carbon capture technology could allow coal and natural gas-fired plants to provide that service if EPA is successful in implementing its proposed regulation on power plants. But, while the EPA is proposing CCS technology, the agency is delaying the approval of permits that would allow the necessary R&D to move the technology forward. This is not unlike the administration’s opposition to critical metal mining projects in the United States at the same time it pushes policies designed to rely much more on minerals necessary for green energy initiatives. It seems that the Biden administration does not want Americans to have a reliable energy grid and is doing all it can to make electricity more expensive for Americans as electricity rates have already risen with solar and wind’s forced entry into the market.
*This article was adapted from content originally published by the Institute for Energy
Key Vote YES on H.R. 2811
April 26, 2023 by Leave a Comment
The American Energy Alliance urges all members to support H.R. 2811 the Limit, Save, Grow Act of 2023. This legislation begins the process of repealing many of the expensive and distortionary energy subsidies jammed into the misleadingly named Inflation Reduction Act. While more is needed, this is an important start.
The estimated cost of the vast subsidies in the IRA to taxpayers has already ballooned, tripling or even quadrupling depending on which estimate one uses, in less than a year since passage. For some of the subsidies, taxpayers will be paying for decades. These subsidies will make electricity more expensive and less reliable, as well as subsidizing industries whose supply chains are dominated by China.
The net effect of the energy provisions of the IRA will be higher energy costs, less reliable energy, and trading energy security for dependence on China. And all this destruction will be paid for with borrowed money run up on the backs of future taxpayers. A course correct is urgently needed, and this legislation marks an important step in the right direction.
The AEA urges all members to support free markets and affordable energy by voting YES on H.R. 2811. AEA will include this vote in its American Energy Scorecard.
The Latest Attack In Biden’s War On Coal
April 26, 2023 by Leave a Comment
President Biden’s Environmental Protection Agency (EPA) is expected to announce limits on greenhouse gas emissions from power plants. If implemented, the proposed regulation would be the first time the federal government has restricted carbon dioxide emissions from existing power plants, as well as future plants. According to the regulation, almost all coal and gas-fired power plants would have to cut or capture nearly all of their carbon dioxide emissions by 2040. The regulation is now being reviewed by the White House’s Office of Management and Budget and could be adjusted. The power plant rule is also subject to a public comment period and is not likely to be finalized and implemented until next year when it would also face legal challenges. Electric utilities indicate that any policy that forces them to install carbon capture technology would be far too expensive, driving up energy costs significantly for consumers.
However, the EPA proposed rule is not expected to mandate the use of carbon capture equipment–an expensive technology–but it could lead to its broader adoption as the Inflation Reduction Act offers incentives to speed up adoption of carbon capture and sequestration technology (CCS). The law raises existing federal tax credits for electric utilities that capture their carbon dioxide emissions from $85 to $135 per ton of carbon dioxide, up from $30 to $50, which could translate into hundreds of thousands of dollars per year for major power companies who choose CCS.
Instead, the proposed rule would set caps on emission rates that plant operators would have to meet. They could do that by using a different technology or, in the case of natural gas plants, switch to a fuel source like “green hydrogen”—hydrogen produced by renewable energy. Instead of creating one limit with which all power plants must comply, the EPA plans to set various targets based on the size of the plant, whether it runs regularly or intermittently, and whether it is already scheduled for retirement. Some coal plants scheduled to shut down in the next decade may not have to meet the new standards, but the new standards may force plants to close prematurely.
Since most of the electricity produced in the United States last year — about 60 percent — was generated from coal, natural gas and petroleum, to regulate these plants out of existence would mean a costly and massive effort to build weather-dependent wind and solar plants along with very expensive battery backup just to keep the lights on and meet existing electricity demand. Since the Biden Administration is pushing to electrify everything, electricity demands will no doubt be increasing.
For example, In Wyoming, which has more coal reserves than any other state, Rocky Mountain Power will keep only two of its 11 Wyoming coal units operating by 2030. In fact, the utility will ditch coal entirely at its Rock Springs plant — the largest of its kind in Wyoming — seven years ahead of schedule. Rocky Mountain Power’s parent company, PacifiCorp, currently has about 5,000 megawatts of wind and solar in operation across its six-state service territory, made possible by tax credits and mandates. Over the next decade, it wants to quadruple that number, while adding more than 7,000 megawatts of energy storage to help balance out renewables’ intermittent power output that is also heavily subsidized in the Inflation Reduction Act.
U.S. grid operators, however, are raising alarms that the U.S. power grid is becoming less reliable and potentially more prone to blackouts as traditional fossil-fuel and nuclear plants are shutting down at a rapid pace and are replaced by renewables that are a less consistent forms of generation. Jim Robb, president of the North American Electric Reliability Corp., indicated that the rapid expansion of wind and solar farms in recent years was already testing the limits of existing natural gas generation, which grid operators rely on to supply electricity when changes in weather causes renewable power loads to drop.
This power plant proposal comes on the heels of another Biden administration plan to cut tailpipe emissions dramatically by speeding up the country’s transition to electric vehicles that would increase electricity demand tremendously. In other words, Biden is making the American transportation system dependent on electricity, no longer allowing it to be fueled with oil, gas, and diesel, but with electric-battery cars dependent on the power grid system that will be dismantled with this rule. The Biden administration is racing to implement these and other proposed regulations before the 2024 election when a new Congress could overturn agency regulations that were finalized within 60 days of the previous Congress by using the Congressional Review Act.
President Biden pledged to cut the country’s emissions roughly in half by 2030, and reach net zero carbon by 2050. Biden has said that he would use his executive authority to act on global warming regardless of what Congress legislates. Recently, he signed an executive order to create the White House Office of Environmental Justice and to require every federal agency to develop plans to address the impact of carbon emissions and climate change on minority and tribal communities. At a recent virtual meeting with leaders of other major economies, Biden said he would seek $500 million from Congress to fight deforestation in the Amazon.
Background
Nearly a decade ago, President Obama’s EPA proposed limits on power plant emissions that were blocked by the Supreme Court and then rolled back by President Trump. However, last summer, the Supreme Court confirmed that the EPA had some authority, in a limited way, to regulate carbon emissions from power plants, allowing it to issue plant-specific rules. According to the New York Times, three factors have also changed since President Obama’s attempt to regulate those emissions: carbon capture technology has advanced, the Inflation Reduction Act added language that may have classified greenhouse gases as “pollutants” to be regulated by the EPA (which will certainly be litigated since it is very unclear), and the law provides tax credits to power plant operators that capture carbon, making the technology more financially feasible. The law offers more than $100 billion in electricity tax incentives, including a 70 percent increase in credits for each ton of carbon captured and sequestered.
U.S. Emissions
The United States has a strong track record of reducing emissions without heavy regulation or policy mandates. Between 1970 and 2021, the combined emissions of the six common pollutants (PM2.5 and PM10, SO2, NOx, VOCs, CO and Pb) dropped by 78 percent. This progress occurred while U.S. economic indicators remain strong, as the following graph shows. Even carbon dioxide emissions have fallen in recent years, and more than in almost all other industrialized nations – thanks to the shale oil and gas revolution. In 2021, U.S. carbon dioxide emissions were 19 percent less than their high in 2007, despite a much larger economy and population.
Conclusion
The proposed power plant rule is one of six rules EPA is expected to advance this spring and summer that would levy new costs on coal-fired units with the goal of getting them to retire. Biden explained this in November of 2022, when he said he would be “closing coal plants across America,” although he later walked his comments back in the uproar that followed. The six rules include two actions teeing up tougher rules for mercury and air toxics, a final rule for emissions that cross state lines, a final rule for coal plant waste and a proposal for legacy combustion residuals. The result of these rules will be a utility grid that is unreliable, prone to blackouts, and very expensive for consumers as new wind and solar units with expensive battery backup will be needed to replace retired power plants–coal units that most likely have had their capital costs already paid.
Electricity prices have already increased for consumers as the government has been pushing wind and solar power through mandates and subsidies paid by taxpayers—meaning that many consumers are paying twice for electricity that is becoming increasingly unreliable. Further, the Administration is pushing policies that may require a doubling or more of electricity demand, making it even more expensive. But those cost increases will be nothing compared to what is likely to come if these regulations get implemented.
*This article was adapted from content originally published by the Institute for Energy
California Utilities Lurch Leftward With Progressive Income Tax Proposal
April 21, 2023 by Leave a Comment
California is introducing the first-ever graduated tax on electricity bills. Traditionally, utility bills are based on the user’s consumption. If you use twice as much electricity as your neighbor, you pay twice as much. But last year, California’s legislature passed a law that adds a de facto income tax to the state’s electric bills. Based on that law, three major utility companies in California are restructuring their customer billing with customers being charged based on how much money they make. Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric filed a joint proposal for a flat-rate charge based on income.
The plan would break monthly bills in two parts: a fixed infrastructure charge, tiered by customer income level as required by the law, and an electricity use charge, which would vary based on consumption. The new fixed fee would be $15 a month for lower income ratepayers, while upper income ratepayers earning more than $180,000 a year would pay a charge of $85 a month, or about $1,000 a year. The rest of the bill would be determined by consumption. The California Public Utilities Commission has to approve the proposal and make a final decision by mid-2024. The fixed rate could start as soon as 2025.
The companies estimate that the electricity use charge, called a rate, would initially fall by a third as more of the costs of providing electricity service are rolled into the fixed charges. The measure would potentially save low-income families on their power bills while charging higher-earning families more.
PG&E has also proposed a four-year plan that would increase utility rates by about 16 percent in year one — about $35.40 more each month for the average customer compared with 2022 — that state regulators are considering.
California’s Electricity System
California’s wind and solar mandates have led to skyrocketing electricity prices that have harmed low-income families. Electricity prices in California have increased three times faster than the national average since 2008, contributing to an enormous and increasing income inequality. Since 2008, when Governor Arnold Schwarzenegger signed an executive order requiring the state’s utilities to obtain a third of the electricity they sell from renewables by 2020, average electricity prices in California increased by 80 percent. California residents are now paying one of the highest electricity prices in the United States. In 2022, California’s residential electricity prices continued to increase and jumped by 14.7 percent.
California’s surging electricity costs have coincided with increasing renewable energy mandates and the closure of the San Onofre Nuclear Generating Station in 2012. In 2015, Governor Jerry Brown signed a law that boosted the mandate to 50 percent by 2030. In 2018, California lawmakers imposed yet another mandate that requires the state’s electric utilities to procure at least 60 percent of their electricity from renewables by 2030 and 100 percent “zero-carbon” electricity by 2045. In 2022, Governor Gavin Newsom signed into law a measure that “creates clean electricity targets of 90 percent by 2035” and reaffirmed the state’s target of 100 percent “clean electricity” by 2045.
Despite skyrocketing prices, California’s electric grid has grown increasingly unreliable. The state has been shutting down natural gas power plants since 2013 and has become overly reliant upon weather-dependent wind and solar generation and electricity imports from neighboring states. As the federal government adds more regulations against fossil fuels, California’s neighboring states are shutting down their reliable coal and natural gas plants, which means that they will not have enough power to bail out California in the future, and any power that they will have will be more expensive.
Instead of making the cost of electricity low so that everyone can afford it, California appears committed to mandating unreliable wind and solar technologies that will increase electricity costs and trying to correct it on the back end, which is hurting its residents. More than a third of Californians are living in or near poverty, resulting in California having the highest poverty rate in America. A 2021 report by the Public Policy Institute of California found that “More than a third of Californians are living in or near poverty. Nearly one in six (16.4 percent) Californians live fairly close to the poverty line … All told, more than a third (34.0 percent) of state residents were poor or near-poor in 2019.”
Conclusion
California has imposed income-based fixed utility charges that are a departure from the classic tenets of utility rate-making, which stress that customer expenses should be just and reasonable and based on the cost of providing the service to the customer. Instead, the state has essentially instituted a progressive income tax via the utility bills consumers pay. California already has one of the highest electricity prices in the country as it is has mandated weather-dependent wind and solar energy while shuttering natural gas and nuclear plants. When it is short on power, it attempts to get what’s needed from neighboring states. That won’t last as those states are also shuttering their reliable coal and natural gas plants as the federal government continues to regulate them out of service. California’s new income-based fixed utility charge is another defacto income tax. California seems to like to tax its citizens as it already has the highest income taxes in the country.
Margaret Thatcher once said, “The problem with socialism is that you eventually run out of other people’s money.” The problem with California-style electricity policy is that you eventually run out of other people’s electricity. California appears to be racing to run out of both other people’s money and electricity, making its energy policy a shining example of what not to do.
*This article was adapted from content originally published by the Institute for Energy Research.
The Unregulated Podcast #129: Biden’s Fuzzy Math
April 21, 2023 by Leave a Comment
On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the ongoing legal drama surrounding the 2024 front runners, how the presidential field is showing up, California’s energy crisis, and more.
Links:
- WATCH: Kenny Stein Testifies Before the House Ways and Means Committee on “Green” Subsidies in Biden’s Inflation “Reduction” Act
- The Race for the White House RFK Jr is in
- Pompeo is out
- Christie is considering
- Trump calling out DeSantis
- Nuclear Finland
- Germany
- Energy Socialism – Isaac Orr / American Experiment
- California Imposes a Graduated Tax on Utility Bills – Institute for Energy Research
- Walk Around Money
- Natural Law Biden/Thomas