On this episode of The Unregulated Podcast, Tom Pyle and Mike McKenna discuss the Biden administration’s continued descent into madness and the latest happenings, and not happenings, in Washington.
Links:
Forced Electricfication Threatens Winter Heating For American Families
January 12, 2022 by Leave a Comment
Early January saw a massive snowstorm in the Washington D.C. area that resulted in downed wires and electricity outages for many households and businesses. Over 50 miles of Interstate 95 was closed to traffic with thousands of people stranded for hours as traffic was stopped. Vehicles ran out of fuel and electricity. Many affected households and businesses rely entirely on electricity for their energy requirements, which is the way many blue states and the Biden administration are moving with their policies. With the outages lasting days, owners are suffering and determined to buy petroleum or propane generators to avoid a future occurrence. All this shows is that diversity of supply is needed for a secure, affordable and reliable energy system and “electrifying everything” under the guise of climate may increase problems. It was only decades ago when diversity of supply was encouraged and supported with coal, nuclear, oil, natural gas, hydroelectric and renewable energy all contributing to the U.S. energy system. Without a diverse supply system, Americans will be faced with more outages than those that occur because of a random snow storm.
States and countries opting for less diverse energy systems have been hit by high electricity prices and rolling blackouts or outages. They include countries in Europe (Germany, Spain and the U.K. for example), California, and Texas.
California
Established in 2002, California’s Renewable Portfolio Standard requires electricity providers to ensure that renewable energy constitutes a specified minimum portion of their electric load. Since then, the state Legislature has modified, increased, and accelerated the standard several times: investor-owned electric utilities must serve 33 percent of their electric load by 2020 and 60 percent of their electric load by 2030 with renewable energy. In 2020, California indicated that the state met the 33 percent requirement, with solar contributing 15.4 percent of it and wind contributing 7.2 percent. Geothermal represented 5.9 percent. But, according to the Energy Information Administration, California’s average electricity price in 2020 was 18 cents per kilowatt hour—70 percent higher than the national average.
California gets 48 percent of its electric generation from natural gas and 8.5 percent from 2 nuclear reactors, which it plans to retire in 2024 and 2025. It will then be dependent on renewable energy, natural gas and imports for its electricity requirements.
California plans to go all electric, which is the path President Biden is also trying to follow for the United States. Various California cities have banned using natural gas in new buildings and Governor Gavin Newsom ordered that sales of new gasoline-powered cars be banned by 2035. During the summer, the California Air Resources Board proposed requiring all new light-duty cars sold in the state by 2025 be electric, and that refineries be shut down by 2035, which would effectively ban gasoline-powered cars. Forcing people to use electric vehicles will only drive demand for electricity higher at a time when the entire system is already stressed.
The agency has also passed new rules that will phase out the sale of gasoline-powered lawn equipment and generators—the latter becoming more prevalent with rolling blackouts that occurred in August 2020. The new rules will require most newly manufactured small off-road engines such as those found in leaf blowers, lawn mowers and other equipment be zero emission starting in 2024. Portable generators, including those in recreational vehicles, would be required to meet more stringent standards in 2024 and meet zero-emission standards starting in 2028.
California state law gives the California Air Resources Board wide power to reduce statewide emissions 40 percent below 1990 levels by 2030, and the agency has used this mandate to implement a cap-and-trade program, a low-carbon fuel standard, electric-vehicle and renewable electricity mandates, and other regulations that raise costs for residents and businesses. Despite all the state’s draconian policies, the state is unlikely to meet its 40 percent mandate.
California has been shuttering its coal, nuclear, and natural gas plants and building solar and wind farms to meet its mandates. When the state finds it has insufficient generating capacity to meet demand, it imports electricity from neighboring states, which currently supply 30 percent of California’s electricity. But, in the summer of 2020, a heat wave resulted in California needing to use rolling blackouts because neighboring states had insufficient power to bail them out.
To solve the problem, California bought batteries to store excess wind and solar power to be used when wind and solar are not producing. Shortly after the battery addition was made, the battery modules overheated, scorching battery racks and melting wires, and placing the storage facility offline at a time when California could be threatened by rolling blackouts again. To ensure reliability, the state took the precaution of installing five “temporary” natural gas plants so it hopefully would not have to “steal” power. Earlier during the past summer, California’s electric grid operator “stole” electricity that Arizona utilities had purchased and that was in transit from Oregon through California.
Despite, California not producing much coal-fired power, the state does import power from states with coal-fired generators. The state is not serving as a good example, but the Biden Administration still hopes to follow in its footsteps.
Germany
Germany plans on renewable energy meeting 80 percent of its power demand by 2030 by expanding wind and solar generation. The share of renewable energy in its electric sector was almost 41 percent in 2021, with coal generating just under 28 percent and natural gas generating around 15 percent. The German government decided to phase out nuclear power following Japan’s Fukushima reactor accident in 2011 when an earthquake and tsunami destroyed the coastal plant. Three of Germany’s 6 nuclear reactors, which combined generated 12 percent of the country’s power in 2021, were closed at the end of the year with the remaining 3 to be closed at the end of 2022. As it moves to reach its 80 percent renewable target, Germany will be shuttering more coal plants, which is currently slated for phase out by 2038.
German residential customers pay for the renewable subsidies that the country uses to encourage renewable power development. Before this winter when a natural gas shortage, severe winter weather and low winds caused electricity prices to skyrocket, German households were paying 3 times what U.S. residential customers pay for electricity. Now, their bills are even higher because of the lack of diverse supplies. Germany and much of the continent of Europe rely on natural gas from Russia to back-up their renewable energy. Russia is withholding some of those deliveries as it is pushing Nord Stream 2 to open, a pipeline that bypasses the Ukraine by going under the Baltic, and using more natural gas domestically during the current cold spell.
Germany now plans to become carbon-neutral by 2045 rather than 2050. The amended Climate Change Act also calls for cutting carbon dioxide emissions by at least 65 percent from 1990 levels by 2030. With nuclear power on its way out, coal’s exit set for 2038, and electricity demand expected to see a steep increase as vehicles go electric and hydrogen production increases, wind and solar power are expected to compensate. A hastier phase out of coal coupled with a slow uptake of renewables, which has recently been the case In Germany with wind power, and a higher increase in electricity demand would increase electric bills even more for German households and raise the probability of power outages.
Conclusion
A snow storm and power outages in the D.C. area raise the issue of diversity of energy supply both for the electric system and for households as well. States with Democratic Party-controlled legislatures and executives and the Biden administration are pushing for all electric homes and businesses and for electricity to be produced mainly from intermittent renewable energy, which Europe has found this winter to be unreliable as wind generation has been severely reduced due to low winds. A path of all electric homes and vehicles and electricity produced mainly from intermittent wind and solar is a path likely to be steeped with blackouts, expensive electricity and general disaster for businesses that need affordable and reliable energy.
*This article was adapted from content originally published by the Institute for Energy Research.
Freedom Molecules To Save Europe From Itself
January 11, 2022 by Leave a Comment
The United States became the largest exporter of liquefied natural gas (LNG) in December 2021, edging out Qatar and Australia, as projects ramped up production and deliveries surged to Europe to help alleviate the energy crisis there. Output from U.S. LNG facilities edged above Qatar in December due mainly to an increase in exports from the Sabine Pass and Freeport facilities. A shale gas revolution, coupled with tens of billions of dollars of investments in liquefaction facilities, transformed the United States from a net LNG importer to a top exporter in less than a decade. U.S. natural gas production surged by about 70 percent from 2010 after a combination of horizontal drilling and hydraulic fracturing unlocked supplies from shale formations across the country.
The United States shipped its first LNG cargo produced from shale gas in 2016. By the end of 2022, the United States is expected to have the world’s largest export capacity. At that point, peak U.S. LNG production capacity would hit 13.9 billion cubic feet per day, far surpassing both Australia (11.4 billion cubic feet per day) and Qatar (10.3 billion cubic feet per day). But, because it will take time for new projects to ramp-up to full production, U.S. LNG exports could be lower than available capacity.
When Golden Pass LNG comes online in 2024, which is currently under construction in Sabine Pass, TX, peak U.S. LNG export capacity would hit 16.3 billion cubic feet per day, or nearly 20 percent of current U.S. natural gas supply. Federal regulators have approved another 10 LNG export projects and capacity expansions at existing terminals, including Cameron, Freeport and Corpus Christi, totaling 25 billion cubic feet of new capacity. Qatar, however, is planning a huge LNG export project that will come online in the late 2020s, which could cement the Middle Eastern nation again as the top supplier of the fuel.
U.S. Aids Europe’s Energy Crisis
U.S. LNG exports to Europe will help ease a global supply crunch there this winter due to seasonally low natural gas inventories and a lack of wind resources. Overseas buyers purchased 13 percent of U.S. gas production in December, a seven-fold increase from five years earlier when most of the infrastructure required to ship the fuel did not exist.
In late December, natural gas in Northwest Europe was trading for about $57.54 per million British thermal units—up almost a third from a week earlier, which is about $24 higher than Asian prices and more than 14 times higher than natural gas being sold on U.S. benchmark Henry Hub.
Out of 76 U.S. LNG cargoes in transit, 10 tankers carrying a combined 1.6 million cubic meters of LNG have declared destinations in Europe. Another 20 tankers carrying an estimated 3.3 million cubic meters are crossing the Atlantic Ocean and are on a path to the continent. Nearly one-third of the cargoes come from Cheniere Energy Inc.’s Sabine Pass LNG export terminal in Louisiana. The news of the flotilla sent the benchmark Dutch front-month gas declining by 18 percent to 141 euros ($159) in Amsterdam. French power contracts declined by 24 percent to 775 euros ($875) per megawatt-hour and German electricity fell 15 percent to 277 euros ($313) per megawatt-hour. While the spread has declined, European natural gas is equivalent to a $273 price for a barrel of oil.
Conclusion
U.S. LNG export terminals are operating at or above capacity after reaching record flows and have taken over first ranking in LNG exports last month, edging out Qatar and Australia. While Asia is typically the top destination for U.S. LNG cargoes, Europe’s energy crisis this winter caused by insufficient supplies of natural gas and low wind resources and its significant premium for natural gas has resulted in a flotilla of tankers with U.S. LNG headed for European facilities. While the U.S. has additional LNG capacity coming on line, Qatar is expected to also add new capacity by the end of the decade and may take back its number one standing. The success of shale gas in world markets is a testament to the enormous energy wealth and expertise of the people of the U.S. oil and gas industry operating in a free market. Its contributions to our economy here and our influence abroad is a national strength.
*This article was adapted from content originally published by the Institute for Energy Research.
Learn More About Europe’s Self-Inflicted Energy Crisis
The Unregulated Podcast #65: The Chron
January 7, 2022 by Leave a Comment
On this episode of The Unregulated Podcast, Tom Pyle and Mike McKenna discuss January 6th, Theranos, and the Supreme Court. Plus an extended Covid discussion with guest Phil Kerpen.
Coal Is Still King
January 4, 2022 by Leave a Comment
For all the talk about the demise of coal, it’s important to note that coal generated 35% of the world’s electricity in 2020, more than any other fuel. Even in the U.S., coal was expected to generate 23% of the nation’s electricity in 2021—up from 19% in 2020.
In addition to electricity generation, coal is critical for industry, making the cement, iron, and steel needed for modern civilization, including even wind turbines and solar panels. Without coal, the industrial revolution would not have occurred. Without coal, a carbon-free energy transition— forced or otherwise—is simply unrealistic.
Coal supplies the world with 27% of its total energy needs, second only to oil (which supplies 31%). China and India alone consumed 66% of the world’s coal in 2020, and coal supplies at least 55% of their total energy needs.
Coal Generation
In the U.S., coal is regaining market share from natural gas, whose generation is expected to drop to 36% in 2021 from 39% the year prior. Incidentally, coal’s increased generation from July 2020 to July 2021 is four times larger than that of wind and solar generation combined for the same period.
U.S. electricity generators are returning to coal because they have the existing plant capacity and it is an abundant, affordable, and reliable domestic source of electricity. The U.S. is blessed with the largest share of the world’s coal reserves (23%), eclipsing second-place Russia (15%) and third-place Australia (14%).
Around the world, coal is still the dominant source of electricity generation. Though it has just 13% of the world’s coal reserves, China generates more than 60% of its electricity from coal. India, with 10% of the world’s coal reserves, generates more than 70% of its electricity from coal. Similarly, Poland, the second-largest coal producer in Europe (behind Germany), generates 74% of its electricity from coal. Even Japan generates 30% of its electricity from coal and has no plans to phase it out any time soon.
COP26 Framework
At the recent United Nations climate conference in Scotland (COP26), U.S. Special Climate Envoy John Kerry boasted that the U.S. will end the use of coal-fired power by 2030. Fortunately, Kerry has been wrong more often than he has been right, and he has no actual authority with respect to power generation.
India was quick to point out that providing their citizens with affordable and reliable energy requires the continued use of coal, and successfully urged other nations to commit to slowing coal power generation, rather than deliberately transitioning away from it.
India is not alone in that sentiment. South Africa gets more than 80% of its electricity and nearly one-fifth of its liquid fuel from coal. The nation is one of the top 10 coal producers in the world and has spent the equivalent of 6% of its annual gross domestic product on two huge coal-fired power plants that will become fully operational in the coming years. It is the most coal-dependent country in the Group of 20, or G20, major economies. At COP26, the U.S., Germany, France, the UK, and the European Union all pledged to mobilize $8.5 billion over the next three to five years to help South Africa replace coal with renewable energy and find new livelihoods for mining communities. South Africa, however, said it needs more than $26 billion from wealthy nations to transition its power system from coal to renewables.
Also, at COP26, China, India, and other developing economies demanded that wealthy nations pay them $1.3 trillion annually for climate projects starting in 2030, half of which would be dedicated to subsidizing renewable energy in the developing world, with the other half earmarked for protecting other countries from the effects of global warming. For China to achieve its net-zero emissions targets in 2060, investments of as much as $2 trillion a year through 2060 would be necessary. That includes more than tripling its current pace of renewable energy installations. According to China’s Premier Li Keqiang, China cannot easily pivot away from coal until it has enough other alternatives to ensure reliable power. He hinted that even his country’s pledge to cap its carbon dioxide emissions by 2030 could be torn up sooner rather than later.
These are examples of the benefits of affordable and reliable coal power, and the likely costs to transition away from it. Much of what gets reported in the news, or hyped by climate alarmism about coal, is simply wrong. Until technologies that haven’t even been dreamed of yet come along, an affordable, predictable baseload future led by cleaner-burning coal is preferable to a wildly expensive, unrealistic carbon-free future. In other words, the rumors of coal’s death have been greatly exaggerated.
The Unregulated Podcast #64: The Prediction Episode
December 30, 2021 by Leave a Comment
On this episode of The Unregulated Podcast, Tom Pyle and Mike McKenna make stunning and bold predictions for what will unfold in 2022.
The Unregulated Podcast #63: Christmas Special
December 25, 2021 by Leave a Comment
Just in time for Christmas, the jolliest podcast hosts you know, Tom Pyle and Mike McKenna, unveil their inaugural holiday special.
Links:
Biden Orders Federal Agencies On Wildly Expensive Fool’s Errand
December 16, 2021 by 2 Comments
On December 8, President Biden directed federal agencies to cut the government’s carbon dioxide emissions by 65 percent by 2030 with the goal of reaching net-zero emissions by 2050. Biden is directing federal car shoppers to buy only zero-emission passenger vehicles and light trucks by the end of fiscal year 2027, with 100 percent compliance by all vehicles by 2050. His executive orders call for federal buildings to transition to net-zero emissions by 2045, by primarily powering the facilities with wind, solar, and nuclear energy and using “sustainable” building materials. By 2030, Biden wants the federal government to purchase electricity produced only from sources that do not emit carbon dioxide. By 2032, the Biden administration wants to see carbon dioxide emissions from building operations, such as heating, cut in half.
In a series of executive orders, Biden directed the government to transform its 300,000 buildings, 600,000 cars and trucks, and use its annual purchases of $650 billion in goods and services to meet his goal of a federal government that is net zero in carbon dioxide emissions by 2050. The plan does not cover purchasing by the Department of Defense, which accounts for a large portion of the government’s energy spending.
Issues
Currently, only 40 percent of the electricity purchased by the federal government of its $4.5 billion in electricity expenditures annually comes from renewable sources like wind and solar. Biden’s goal is to ramp that up to 100 percent in less than a decade. The federal government consumes just 1.5 percent of the nation’s energy, although it is a major player in certain states where it has significant operations, such as Virginia, California, Georgia and North Carolina. In converting its power to wind, solar and other sources that do not produce carbon dioxide emissions, the government intends to follow the path set by companies like Google, Apple and Wal-Mart, which established tariffs or developed power-purchase agreements with local utilities to achieve their goals of 100 percent renewable energy.
Currently electric vehicles represent only about 1.5 percent of the government fleet. In fiscal year 2021 the administration purchased 650 electric vehicles, but that number would have to increase several-fold this year and beyond to achieve the goal. The government buys about 50,000 vehicles a year, many of which are replacements. Renewable energy and other “clean” energy purchases are likely to cost the government more money, and many of the components like electric charging stations for an all-electric federal vehicle fleet have not yet been built and will also run up the price tag of achieving Biden’s goals.
According to the White House Fact Sheet, the following acquisitions will begin the effort toward meeting the goals:
- In 2022, the Department of Defense’s Edwards Air Force Base in California will add 520 megawatts of solar photovoltaic energy.
- In 2022, the Department of Defense’s Pacific Missile Range Facility in Hawaii will complete construction of a 14-megawatt solar facility paired with a 70 megawatt-hour battery energy storage system sited on the base.
- In 2023, the Department of Transportation will complete its Volpe Transportation Center project that transforms six buildings into a low-emissions building with rooftop solar PV panels, zero electric vehicle charging stations for the federal fleet and employee vehicles, green and cool roof technologies, a rainwater reclamation and reuse system, and a climate-resilient above-grade data center.
- By 2022, the Department of the Treasury will have completed the majority of its energy infrastructure improvements at an Internal Revenue Service Center outside of New York City through a 17-year, $30.9 million energy savings performance contract.
- Some federal agencies have taken steps toward integrating electric vehicles into their fleet, including the Department of Homeland Security which plans to begin field testing an electric Ford mustang model next year for law enforcement use. The U.S. Department of Interior’s U.S. Park Police have begun using lightweight motorcycles and dirt bikes at some locations.
These are just a drop in the bucket to what will be needed to attain Biden’s goals.
Conclusion
These executive orders are to get the Biden administration closer to its announced goal of cutting U.S. greenhouse gas emissions 50 percent to 52 percent below 2005 levels by 2030. The White House plans to use money from the $1.2 trillion infrastructure bill, the annual budget and the Build Back Better Act, which Congress has yet to pass, to pay for these federal initiatives, which will harm workers in the fossil fuel industries. While Biden’s goals will be creating jobs in the renewable energy and electric vehicle markets, these jobs will not compensate for the losses in the fossil fuel industries and their higher salaries. Luckily, given that these goals are set by executive order, they can be reversed by a future administration more concerned about financial responsibility to taxpayers.
*This article was originally published by the Institute for Energy Research.
The Unregulated Podcast #62: Greedy Meat Conglomerates
December 16, 2021 by Leave a Comment
On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss Democrats’ crazy attempts at inflation deflection and nail down what exactly is causing the consumer price index to skyrocket.
Links:
Biden Directs Department of Energy to Flout the Law
December 14, 2021 by Leave a Comment
One of the President’s most important jobs is to “take Care that the Laws are faithfully executed” as it says in Article II Section 3 of the Constitution. Put another way, an important purpose of the Executive Branch is to execute the laws. The Department of Energy, however, does not want to do that with research and development on oil, natural gas, and coal. In fact, they have gone so far as to say that it is “a central ethic of our [Fossil Energy] office is that if a non-fossil energy option exists today, it should always be preferred to the use of fossil energy.”
In July 2021, the Biden administration changed the name of the Fossil Energy Office at the Department of Energy from the Office of Fossil Energy to the Office of Fossil Energy and Carbon Management (FECM). There is nothing wrong with changing the name of the office and there is nothing wrong to note that part of the work the office does is “carbon management.” The problem is that they would like to ignore their statutory instructions—the law—in the name of climate change.
On December 6, 2021, the Office posted an explanation of their name change. They wrote, “This is not a rebranding; it is a historical shift in focus.” The problem is that this gets it exactly wrong. The Department of Energy is free to rebrand the office, but they are not free to shift focus or execute their own goals. Congress writes the laws explaining the focus and goals and then the Executive Branch executes those directives.
But the Biden administration doesn’t want to execute the law as it is written, but rather to make up their own statutes to execute. For example, DOE writes, “we have refocused FECM to center our work on climate.” The problem is that Congress has not authorized DOE to “center their work on climate.” There is no statutory authorization to only focus on climate. DOE’s work on fossil energy is authorized by 42 U.S.C. 16291. It instructs DOE to work on improving energy from fossil energy including reducing greenhouse gas emissions. For example, here is part of the office’s objectives:
(2) Objectives
The programs described in paragraph (1) shall take into consideration the following objectives:
(A) Increasing the energy conversion efficiency of all forms of fossil energy through improved technologies.
(B) Decreasing the cost of all fossil energy production, generation, and delivery.
(C) Promoting diversity of energy supply.
(D) Decreasing the dependence of the United States on foreign energy supplies.
(E) Improving United States energy security.
(F) Decreasing the environmental impact of energy-related activities, including technology development to reduce emissions of carbon dioxide and associated emissions of heavy metals within coal combustion residues and gas streams resulting from fossil fuel use and production.
… [emphasis added]
Congress instructed the Department of Energy to work on reducing GHGs from fossil energy, but that is only part of a list of things they are supposed to work on, not the only focus. The Department of Energy is also supposed to work on decreasing the cost of oil, natural gas, and coal production for Americans. But the Department of Energy would like to ignore that.
One of the most concerning things in DOE’s statement is its rejection of fossil energy overall. The original version of the statement posted on DOE’s website states, “a central ethic of our [Fossil Energy] office is that if a non-fossil energy option exists today, it should always be preferred to the use of fossil energy.” This statement was apparently a little too honest because DOE edited the statement and removed that sentence. But that sentence is certainly the spirit of the statement as a whole.
The statement also talks about climate goals, net-zero goals, and decarbonization goals. The problem with these goals is that Congress has not set them. Again, Congress has legislative power and the Executive Branch is supposed to execute the law, not extra-statutory goals of temporary office-holders with personal beliefs.
With this rebranding and refocusing, DOE is thumbing their noses at Congress and our very form of government with its divided roles. It is critical that Congress forces DOE to focus on its statutorily defined mission and not allow DOE to ignore the law.
*This article was originally published by the Institute for Energy Research.
