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“Scranton Joe” Would Cripple Pennsylvania Via Fracking Ban

August 31, 2020 by Leave a Comment

Both Biden and Harris have stated that they would ban fracking. Biden indicated that he would ban new hydraulic fracturing in his debate with Bernie Sanders in March 2020, although he would not admit to that declaration when campaigning in Pennsylvania this year. Also, in September 2019 during a CNN town hall event, Kamala Harris said “There is no question I am in favor of banning fracking.” Fracking accounts for about 80 percent of our abundant and low cost natural gas, used for heating, cooking, generating electricity and in numerous industrial processes.

Continuing to allow hydraulic fracturing in U.S. shale basins also requires maintaining the ability to drill, produce, and transport oil and natural gas, which would include streamlining the siting and permitting of pipelines and accelerating research and development that offers the potential to double wellfield productivity. But, Biden’s climate change plan proclaims “that every federal infrastructure investment should reduce climate pollution” and would require “any federal permitting decision to consider the effects of greenhouse gas emissions and climate change.”

*This article was adapted from content originally published by the Institute for Energy Research.

For more information on these issues check out AEA’s Vote Energy 2020 election hub.

SPEAK YOUR MIND

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You Don’t Pay Enough For Electricity, According To Joe Biden

August 28, 2020 by 3 Comments

California set its first renewable portfolio standard in 2002 and currently requires 60 percent of its generation to come from renewable energy by 2030 with the next 40 percent of generation to come from zero-carbon sources by 2045. These non-carbon sources will likely be wind, solar, geothermal, and hydropower. California is shuttering its last nuclear plant in the next few years and new nuclear cannot compete economically with these other non-carbon sources.

During a recent heat wave, California was forced to implement rolling blackouts because it had insufficient power to meet demand when its solar generation declined in the evening, Normally, it purchases power from neighboring states when this occurs, but those states did not have extra power to sell due to the heat wave. California got caught because it had retired many natural gas and nuclear plants, and did not have sufficient back-up power to fill in when its intermittent renewables could not find enough sun or wind to continue operating.

Democratic Party presidential nominee Joe Biden, if elected, will be forcing the rest of the country into a similar plight with his “clean energy standard,” which requires 100 percent electricity to be generated from non-carbon sources by 2035. Whether it is even feasible on a national scale is doubtful, but it will undoubtedly be expensive to electricity consumers and to taxpayers.

Electricity Prices

While electricity production from fossil vs. renewable sources varies by state, the energy decisions that each state makes ultimately affect the price of generation and costs to consumers. For instance, Massachusetts had the third highest residential electricity price in the nation in 2019 mainly due to the lack of natural gas pipeline infrastructure, but also due to the premature retirement of fossil fuel generating capacity. California had the seventh highest residential electricity price in the nation in 2019 because of their zeal for carbon free and non-nuclear generating capacity. In 2019, 30 percent of California’s utility-scale electricity came from non-hydroelectric renewable energy, including 5.6 percent that came from industrial geothermal production, in which California leads the nation with 70 percent of U.S. geothermal production. Including hydroelectricity, 49 percent of the state’s utility-scale power was generated by renewable energy in 2019. (See graph below.)

Source: Energy Information Administration

Besides utility-scale generation, one million Californians have put solar panels on their homes—a requirement for newly built residences, despite the added cost. Some homes are installing battery systems, like Tesla’s, which cost about $10,000.

Other States Compared to California

California is not the only state pursuing an all carbon-free and mainly renewable electricity future. In New York, Governor Cuomo has called for the expansion of the state’s “clean energy standard” so that 70 percent of New York’s electricity comes from renewable energy sources such as solar and wind by 2030, followed by 100 percent carbon-free electricity by 2040 and an 85 percent reduction in greenhouse gas emissions by 2050 under the Climate Leadership and Community Protection Act. New York is shuttering the Indian Point nuclear plant that supplies power to New York City—one unit was closed in April and the second unit will be shuttered next April. By shutting down just one of Indian Point’s two reactors this year, New York lost more carbon-free electricity than produced annually by every wind turbine and solar panel in the state. New York still needs to figure out how to replace their output.

One project currently under negotiation in New York is the Champlain Hudson Power Express transmission line, which is expected to deliver 24,000 megawatt hours of hydropower daily through a transmission line that runs from Québec, Canada to New York City. However, environmentalists are calling for the city to scrap the project because of concerns about the environmental impacts of the transmission line that include the potential creation of new dams in Québec and the impact of the transmission line cable that will be buried into the Hudson River’s riverbed.

New York has the eighth highest average residential electricity price in the nation and shuttering Indian Point will only raise it. But, thankfully for consumers, not all states are following California’s and New York’s lead. The following map depicts the 43 states that have lower residential electricity prices than California and provides how much lower their residential electricity price is relative to that of California’s price. For example, New York’s average residential electricity price in 2019 was 6.7 percent lower than California’s in 2019.  California’s average residential electricity price was 32 percent higher than the nation’s average residential electricity price in 2019.

Residential Electricity Prices Relative To California

Source: Energy Information Administration

Note: The states depicted in black are California and the 6 states that had higher electricity prices in 2019 than California. 

Not all states are endowed with renewable resources, such as the southeast where wind resources are poor. As a result, one size does not fit all and using California’s electricity system as a pattern for the nation, as Joe Biden is doing, is not beneficial to Americans for it will only increase electricity prices in the 43 states that have lower prices than California.

Conclusion

Americans need to see where Joe Biden and his party platform are taking the nation with their Green New Deal Clean Energy Standard. Americans complain if legislators torque their gasoline prices, but they should also keep an eye on policies that will increase their electricity prices and threaten the competitiveness of their businesses because these will not only affect their pocketbooks as consumers, but also as taxpayers since Biden indicates he needs $2 trillion—to start! If energy is made too expensive in the United States for businesses to produce things domestically, they will move to places that do not have such policies, taking jobs and opportunities with them.  With American companies finally moving jobs back to our own shores, now is not the time to artificially increase the cost of energy in the United States.

*This article was adapted from content originally published by the Institute for Energy Research.

For more information on these issues check out AEA’s Vote Energy 2020 election hub.

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Biden’s Bumbling Energy Scheme

August 27, 2020 by Leave a Comment

According to RBC’s Head of Global Commodity Strategy, Helima Croft (subscription required), “Joe Biden’s energy agenda would likely be pragmatic, by Democratic Party standards, with no wholesale assault on the traditional fossil fuel sector.” She notes that a Biden presidency would be a sharp departure from the Trump presidency on energy policy, but the shift away from fossil fuels may not be as seismic as some in the Democratic Party wish or the public anticipates. She also noted that there is no call for banning U.S. energy exports or fracking.

Biden’s “Clean Energy Standard”

Unfortunately, Ms. Croft is in la-la land. Biden’s so-called “clean energy standard” would eliminate the 62 percent of U.S. electricity generated by fossil fuels, primarily natural gas and coal over the next 15 years, increasing electricity prices for consumers, and costing taxpayers $2 trillion—to start! Wood Mackenzie estimates the cost of full decarbonization of the U.S. power grid to be $4.5 trillion, given the current state of technology. That cost would amount to $35,000 per household or about $2,500 per year over the 14 year period that Biden would have to implement the action should he get elected and take office in 2021. 

Clearly, Biden’s $2 trillion will not go very far, particularly since it is also supposed to fund energy efficiency improvements in buildings, more hybrid and electric vehicles and charging stations, an increase in public transportation including high-speed rail, and research and development in advanced nuclear power and carbon capture and sequestration systems. That figure does not include the implied costs of economic dislocation, lost jobs and industries, which might be forced to move offshore to countries with less expensive and more reliable energy—those costs would have to be discovered along the way.  

Natural gas, wind, and solar are now the most common new generation fuels, but it took decades of renewable energy mandates and government spending on renewables research, tax breaks, and other subsidies to help make wind and solar technology reach this point. Even so, capacity factors for wind and solar power are half or less than what they are for coal, natural gas, and nuclear power, making the amount of generation from wind and solar capacity less than 10 percent of our generation today. For Biden to change the 62 percent of the generation currently from fossil fuels into renewable energy sources will cost far more than he states he will spend on his “clean energy” standard and other goals in the building and transportation sectors and cost American families thousands of dollars needlessly, if it even can be accomplished.

Biden’s $2 trillion climate plan should remind Americans of the failed program by the Obama-Biden Administration that produced bankruptcies of renewable companies such as Solyndra, which left taxpayers liable for $535 million in federal guarantees.

Conclusion

Biden’s positions on oil and natural gas have been all over the map, seemingly changing depending upon his audience. For example, in Pennsylvania—which fracking has turned into a major energy producer and which has become re-industrialized after decades of manufacturing decline—he said he would not ban fracking, despite his agreeing to do just that when he debated Bernie Sanders. And, to make matters worse, his running mate has also agreed to ban fracking. Biden-Harris could easily change back to their original proposals once elected. Clearly, if Biden gets elected, the energy industry will feel the impact and so will consumers and taxpayers. With the addition of California Senator Kamala Harris to the ticket with Joe Biden, the Democratic Party has carved its anti-oil and gas credentials into stone for 2020.

*This article was adapted from content originally published by the Institute for Energy Research.

For more information on these issues check out AEA’s Vote Energy 2020 election hub.

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More Climate Catastrophizing from Democrats on the Hill

August 25, 2020 by Leave a Comment

Senate Democrats are rolling out their own “climate action” document, much in the same vein as the “Climate Crisis Action Plan” released earlier this summer by House Democrats.

Senate Dems’ “Case for Climate Action” says global warming is “scary stuff” and that by following their plans Americans will have better technology, cheaper energy, and “things that simply work better.” California’s Democrat-controlled government has been in pursuit of its own climate action plan for two decades. Ask any Californian if that plan has yielded “things that simply work better” and you’ll get a laugh in return. The Senate Dems’ plan, like California’s Dem-orchestrated plan, would slow technological improvement by burdening companies with expensive red tape; it would result in much, much higher energy prices; and it would lead to significant standard-of-living disruptions like the rolling blackouts California’s shortsighted policies caused in August.

The Senate Democrats’ “Case for Climate Action” is detached from energy realities and from the daily concerns of Americans.

Among the many dangerous propositions in this documents, the following four stand out as asking for problems:

1) The biggest pledge is for a national “Clean Energy Standard” that would eschew affordable, reliable electricity from natural gas and coal. 

Senate Dems claim that a “completely decarbonized” electricity sector is “not only possible—it is the economically favorable choice.” This statement is deeply concerning. Fossil fuels provide close to two-thirds of our power today. Natural gas, a plentiful domestic resource, currently provides 38 percent of our electricity nationwide. Coal-fired power plants provide 24 percent. Nuclear makes up 20 percent. Hydropower contributes 7 percent and wind and solar combine only to make up about 9 percent of our electricity. 

The Democrats’ document says “clean energy” provides 38 percent, in reference to the full portion of electricity that comes from non-fossil sources. The document plays up the contributions of wind and solar when the lion’s share of that generation comes from utility-scale nuclear and hydro. They include nuclear and hydro when useful, but allude almost exclusively to further investment in the intermittent sources that are causing California its problems. This is a willful deception.

The document cites states that have significant geographic advantages in wind and/or generation (Iowa, Kansas, and New Mexico) as evidence that these technologies can play the primary role on the grid, ignoring that the most populous areas of the U.S. aren’t in the windy Great Plains or the sunny Southwest, but rather they’re in the Northeast.

2) Senate Dems claim they will “decarbonize” cars and public transportation, through electrification. Aside from the failure that has been electric vehicle (EV) policy, which has resulted in the subsidization of joy rides for the wealthy, the electrification of transportation would put unmanageable stress on the electricity sector, because the Senate Dems’ plan calls for the elimination of reliable natural gas and coal electricity.

Democrats (and some wayward Republicans) have been using every tool at their disposal to politically engineer our auto fleet. They have failed. Americans like vehicles with many different profiles. Some like low-range electric vehicles for buzzing around town. Most others prefer larger, more powerful internal combustion engine vehicles that can go greater distances on road trips and fuel up in a matter of minutes. 

EV policy to this point has been to hand more money to the rich in the form of credits and rebates. Those credits and rebates subsidize what is usually the second, third, or fourth car for wealthy people on the coasts. Senate Dems even admit “low-income households generally do not have access to government and utility programs that promote…electric vehicles.” 

Yet Senate Dems call for more of the same, extending and expanding EV tax credits.

3) “The Case for Climate Action” also talks a big game on job creation, overlooking the uninspiring results of the green stimulus enacted during Barack Obama’s first term just a decade ago. As David Kreutzer documents in The Washington Times, “The down-trodden are always invoked, but rarely helped by plans to reorganize industries and the economy.  The Obama-Biden Stimulus Package failed on its green-jobs promise but did not fail to deliver hundreds of billions to the well-connected.” Democrats, once again, are making promises they can’t fulfill. Genuine, viable, economically-valuable jobs come through market-driven, in-demand production, not political deals.

4) The Senate Democrats are perpetuating the Joe Biden campaign myth that an economy-disrupting anti-fossil energy crusade will somehow be a pro-American endeavor. The United States is the world leader in oil and gas. China controls much of the global trade in the components necessary for solar panels and wind turbines. The idea that abandoning some of our greatest economic strengths and geopolitical assets in favor of a politically-preferred alternative on the grounds that it will make our country stronger defies logic. China’s economy isn’t a model.

Conclusion

The Senate Democrats’ “Case for Climate Action” peddles the same tired wish list Big Green, Inc. has been after for years: more money for non-viable technologies that at best fill a niche role in our energy economy. The plan is dressed up as an investment in America’s potential, but it calls for the abandonment of our greatest energy strengths. 

The “Case for Climate Action” is a political document in an election year, not a set of serious recommendations for creating prosperity.

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Senate Democrats’ Climate “Report” Recycles Biden’s Failed Green Jobs Policies of 2009

August 25, 2020 by Leave a Comment

WASHINGTON DC (August 25, 2020) – The American Energy Alliance, the country’s premier pro-consumer, pro-taxpayer, and free-market energy organization, responded to the long-awaited Senate Democrats latest plan on how they would steer the federal government on the issue of climate change.

Thomas Pyle, president of the American Energy Alliance, issued the following statement in reaction to today’s report:

“Once again, the Senate Democrats are ‘all talk and no action’ with respect to climate change. ‘Just put us in charge,’ they say, and they will solve everything. Of course, they ignore history and conveniently overlook when they held a supermajority in the Senate, and Joe Biden was Vice-President, and they didn’t even bother to bring a House passed climate bill to the Senate floor for a vote.

“The Democrats latest plan calls for for an ‘unprecedented scale’ effort ‘using American wealth,’ which translates into taxpayers opening up their wallets and saying goodbye to any economic relief experienced in the form of affordable energy under President Trump.

“Trying to re-spin global warming from what it will do to us, to what we can do for it, won’t work either. Time and time again, despite 30 years of listening to a steady drumbeat of alarmism, a little less than one in five American voters (19%) have identified global warming as a crisis. Furthermore, research confirms that even fewer are looking for the government to solve it.

“Perhaps what is most misleading about this report is the notion of creating at least 10 million new, green jobs. We need look back no further than 2009 to see how the Democrats plan, led by presidential nominee Joe Biden, turned out. Back then it was all about a clean energy-economy and the 5 million green jobs to be created. Fast forward to today, and they talk about the climate in terms of environmental catastrophe and climate justice. Same actors. Same plot. New title. Same ending.

“Under Biden’s leadership, the lackluster growth in green employment was such a failure that it led to a desperate redefinition of what constituted a green job, including oil lobbyists and garbagemen. Even then, they never came close to the five million jobs promised.

“Senate Democrats’ latest treatise on climate change is a fantasy wish list with solution number one resting on decarbonizing everything. I suppose Senator Brian Schatz, the author of the report, will have plenty of time to draft implementing legislation on his high-speed rail trips back and forth to his home state of Hawaii.”

“When it comes to our environment, America is a leader. To imply we’re getting left behind flies in the face of reality and is an insult to the American people.”

Additional Resources

For media inquiries please contact:
[email protected]

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Biden Promises To Take California’s “Green” Blackouts Nationwide

August 24, 2020 by Leave a Comment

California prides itself on being at the forefront of the so-called energy transition, having set its first renewable portfolio standard in 2002, requiring 20 percent of its electricity to come from renewables by 2010. In 2008, California increased the state’s renewable portfolio standard to 33 percent by 2020, followed by SB 350, which in 2015 increased the standard to 50 percent by 2030. Then, in 2018, SB 100 accelerated the state’s renewable portfolio standard to 60 percent by 2030, and required that the next 40 percent of generation come from zero-carbon sources (e.g., wind, solar, geothermal, and hydropower) of electricity by 2045. California has retired most of its nuclear plants with only the Diablo Canyon nuclear plant left, which is scheduled to retire by 2025. The Diablo Canyon nuclear plant currently provides 8 percent of California’s electricity—all of it carbon dioxide emission-free. California has clearly shown it does not welcome nuclear, which currently cannot compete economically with natural gas, wind, or solar.

California’s reckless march into renewable energy has proven feckless. Its policies caused rolling black-outs in the August 2020 heat wave because when solar energy production dies down in the evening and when residents turn up their air conditioning and other appliances as they arrive home, there has recently been insufficient capacity to meet demand. California has been prematurely retiring reliable natural gas and nuclear plants in favor of renewable energy, particularly solar power, causing load capability to be diminished when the sun sets. In fact, the state has built so much solar that at times during midday, some of the solar power cannot be used and grid operators have to pay people to take it. Normally, when the state has insufficient power toward evening, it buys extra power from neighboring states, where it gets 15 percent of its power, but because of the regional nature of the heat wave, those states did not have excess power to bail out California from its self-imposed electricity problems.

California Alternatives

Over the August 15 to 16 weekend, the California Independent System Operator imported hydropower from the Pacific Northwest, and the U.S. Bureau of Reclamation released emergency water flows from the Glen Canyon Dam on the Colorado River to generate hydroelectricity. Reservoirs were relatively full after a somewhat wet winter. Los Angeles’s Department of Water and Power also supplied power, obtaining almost 20 percent of its electricity from out-of-state coal.

Governor Newsom waived the state’s emissions standards to allow businesses and utilities to run on-site fossil-fuel generators, many procured for emergency power outages during wildfire seasons, which also helped to deflect rolling blackouts. This meant Californians had to live with more localized pollution because of a breakdown in the system sold to residents as the answer to global climate change. To ward off similar events in the future, the Public Utilities Commission directed utilities to triple their battery storage for electricity by 2026, which is expensive, but also insufficient to replace the natural gas and nuclear retirements expected in the interim.

The capital costs of including a battery system with a solar plant is over twice as expensive as a new natural-gas plant.  Further, batteries need to be replaced every 10 years or so and disposing of their toxic metals is expensive. Their capacity to provide electricity is also short-lived, unless multiple utility scale storage projects are built. The longer the period of backup, the higher the capacity of the batteries needs to be – and thus the cost.  These additional costs are the price of doing business with intermittent energy sources, and they are paid for by homeowners and businesses.

Conclusion

Analysis indicates that California has shut down about 5,000 megawatts of natural gas-fired power plants without adequate replacements. Even though state officials extended operations in the past year of some natural gas units to keep them on hand for emergencies, grid operators admitted that it was insufficient for the recent heat wave. Despite some studies showing high levels of renewables are feasible, particularly with more storage, experts indicate that the changes needed in grid operations will be enormous—essentially a complete redesign of the power sector—if one is pursuing a 100 percent “clean energy” standard as Mr. Biden is doing. Even the National Renewable Energy Laboratory concluded in a recent study that “integrating high shares of wind power is technically achievable but will require changes to operating practices.”

A prudent policy would be to “push the pause button” before more reliability and cost issues result for California’s suffering consumers.  Yet, at a national level, Democratic Party presidential candidate Joe Biden has touted a similar system for the entire United States. Given California’s recent experience, such a policy looks less and less like a “Green New Deal,” and more and more like a “Great Leap Backward.”

*This article was originally published by the Institute for Energy Research.

For more information on these issues check out AEA’s Vote Energy 2020 election hub.

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AEA President Cheers Trump Administration’s Approval of $40 Billion Alaska LNG Project

August 21, 2020 by Leave a Comment

“This is what American Energy Dominance Looks Like.”

WASHINGTON DC (August 21, 2020) –  American Energy Alliance President Thomas Pyle today commended the Department of Energy and President Trump for the approval of the long-sought Alaska LNG project, which would make Alaska a player in world energy markets, create tens of thousands of good paying jobs and extend America’s ‘soft power’ into growing global markets for liquefied natural gas (LNG).

“The approval of this project now, at a time when the world and the U.S. is unsure about its future as a result of the coronavirus, is an optimistic nod to the future as we inevitably get back to work Making America Great Again by building big things.”  “This is what American Energy Dominance looks like,” Pyle added.

The proposed 800-mile pipeline, liquefaction plant and marine terminal is a world class project that complements the existing 800-mile Trans Alaska Pipeline which to date has transported almost 20 billion barrels of American oil to replace foreign oil.

For media inquiries please contact:
[email protected]

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Beijing Is Hoodwinking Biden

August 20, 2020 by Leave a Comment

While Democratic Party presidential candidate Joe Biden is touting his $2 trillion climate plan as a way to stimulate the U.S. economy from the lockdown caused by the coronavirus, China is building coal-fired plants and is using record amounts of diesel in its construction program. China is currently planning to build over 200 gigawatts of coal-fired generating capacity—almost the same amount of coal-fired capacity that the United States currently has in its generating fleet. Once built, China will have more coal-fired capacity than the entire generating fleet in the United States considering all power sources. 

Since 2000, China’s coal fleet has grown five-fold and now totals 1,040 gigawatts—nearly half the global total or about 5 times as large as the coal fleet in the United States. China is one of 80 countries in the world using coal power—up from 66 in 2000. Coal generated 36 percent of the world’s electricity in 2019, close to its highest share in decades and a greater share than any other generating fuel. China, however, almost doubled that share, generating 65 percent of its electricity from coal in 2019, using a very young coal fleet with generators averaging 14 years of age and capable of operating for 40 years or more.

China is investing heavily in the country’s infrastructure, building power plants, new roads, railway lines, and sewage systems and manufacturing the equipment necessary for those projects. These large investments helped make China the first major economy to see its economy rebound after the coronavirus outbreak, with output increasing 3.2 percent from April through June compared to the same period last year.

Truck sales in China—the world’s largest freight market—are expected to hit a record of 3.76 million vehicles in 2020, up by 18 percent from 2019. Heavy-duty truck sales are expected to top 1.4 million units this year, following growth of over 50 percent each month between April and June.

Booming online shopping during the lockdown resulted in an increase in express deliveries. In June, China’s deliveries hit a record 7.47 billion, or nearly 3,000 deliveries every second. As a result, sales of light trucks, which are widely used for deliveries and moving construction materials, are estimated to increase 18 percent this year.

Source: Reuters
Source: Reuters

Diesel Demand

China’s construction and delivery boom is expected to result in diesel demand reaching a record this year powered by trucking activity. Diesel accounts for about 30 percent of China’s oil demand and is expected to increase by about 2 percent in 2020, which translates into a 60,000 to 90,000 barrel-per-day increase in total diesel consumption, reaching a record of 3.8 to 4.1 million barrels per day. The rebound began in March/April, shortly after China began to reopen its economy from the coronavirus lockdown. Diesel’s boom is a result of government stimulus spending on infrastructure, robust mining activities, and an e-commerce boom.

China’s Refinery Production

China’s refinery output increased 12 percent in July from the same month a year earlier, hitting the highest on record for any single month, as several major state plants resumed operations after maintenance overhauls. Two of Sinopec Corp’s top plants—Zhenhai and Tianjin—and PetroChina’s Dalian plant resumed production after being off-line for several months. China processed 59.56 million metric tons of crude oil in July—about 14.03 million barrels per day. Refinery throughput for the first seven months of this year totaled 378.65 million metric tons, or about 12.98 million barrels per day—an increase of 2.3 percent from the same period a year ago. 

Oil and Natural Gas Production

China’s domestic crude oil production increased 0.6 percent in July compared with the same month a year ago to 16.46 million metric tons—about 3.88 million barrels per day. Production for the first 7 months of this year totaled 113.5 million metric tons—1.4 percent higher than the same period last year.

Natural gas production increased 4.8 percent in July from a year earlier reaching 14.2 billion cubic meters, and production for the first seven months of this year increased 9.5 percent to 108.3 billion cubic meters.

China Continues to Import Crude Oil

Not only is China producing more domestic oil, but it is also importing oil. China is the world’s biggest oil importer, and it continues to import despite its storage tanks being filled to capacity. According to brokers, at least 80 ships have been waiting for more than a month to unload their cargo in northern Chinese ports where congestion is the most severe. Over half of the vessels are very large crude carriers, which can move up to two million barrels each in a single sailing.

As demand for oil has declined during the coronavirus pandemic, freight rates have declined from an average $129,000 a day in March and $176,000 in April to about $15,400 on the benchmark Middle East-to-China route, which is at least $12,000 below average break-even levels for such ships. China is capitalizing on the lower rates by moving as much as possible at COVID-induced bargain-basement rates.

Conclusion

China’s economic approach in the wake of the coronavirus differs significantly from Joe Biden’s $2 trillion climate plan to reduce fossil energy use. China is increasing fossil energy use—building coal-fired power plants, increasing its oil and natural gas production and refinery output, and importing crude oil. Given that coal plants can easily last half a century or more, with a fleet of over 1,000 gigawatts in coal, it does not look like China is taking action toward its commitment to the Paris Agreement any time soon. Rather, it is helping its economy recover by using fossil energy—the fuel that has fired the furnaces of progress since the dawn of the Industrial Revolution.

*This article was originally published by the Institute for Energy Research.

For more information on these issues check out AEA’s Vote Energy 2020 election hub.

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Expensive Electric Vehicle Makers are Ridin’ With Biden

August 19, 2020 by 5 Comments

Democratic Party presidential candidate Joe Biden’s $2 trillion energy plan includes Senate Minority Leader Chuck Schumer’s Clean Cars for America proposal. To enable the proposal, Biden will provide consumers rebates to swap old, less-efficient vehicles for newer American vehicles along with targeted incentives for manufacturers to build or retool factories to assemble zero-emission vehicles, parts, and associated infrastructure. These supposedly zero-emission vehicles are still not capturing the American public’s hearts or pocketbooks.

In 2018, fewer than 400,000 electric vehicles were sold in the United States despite the market supporting a 17-million-plus sales level for about five years—almost all of it gasoline-powered. And, electric vehicle sales dropped significantly in 2019.  Electric vehicles have been widely available for more than a decade, which is enough time for a market to develop for a new type of vehicle. That electric vehicle sales growth has been weak relative to expectations indicates that people fundamentally do not want to purchase them. Given a choice, few Americans purchase electric vehicles. In the United States, people want SUVs and pickups. According to IHS Markit, SUVs, vans, and pickups made up 72 percent of U.S. vehicle sales in 2019, while sedans made up 22.1 percent. Consumers are wary of the poor range of electric vehicles, the lack of refueling stations, the long time to refuel, their high cost and loss of trunk space for batteries. They also prefer larger vehicles.

Electric vehicles have been and continue to be supported by federal and state incentives, which is why the market exists. But that market is mainly for elites who can buy Teslas, BMWs, and other high-priced electric vehicles, and most are in urban areas where vehicles travel short distances. The federal tax credits consist of $7,500 per vehicle (for manufacturers who have produced less than 200,000 electric vehicles) and 30 percent for refueling stations. And state rebates include California’s rebate of up to $7,000 per car, Oregon’s rebate of $2,500 per car, and New Jersey’s rebate of up to $5,000 per car, though in the latter case, program funding has been cut by over 50 percent as state revenues fall due to the coronavirus pandemic. In California, which provides the strongest incentives for purchasing electric vehicles, electric vehicle sales declined in 2019, coinciding with the reduction in tax credits available to high-income individuals.

New Issues

Researchers see two new challenges to electric transportation: degraded batteries stemming from rushed charging and spikes in power demand as plug-in cars flood U.S. roadways. The current life of big, expensive car batteries can be degraded by what is called “lithium plating,” which occurs on car battery terminals when attempting superfast charging. Lithium is a soft, silvery-white and soluble metal that tends to be unstable. During fast charging, instead of being absorbed into the graphite battery terminal, lithium can solidify, forming plates on the terminals. Once lithium plating occurs, the cell becomes increasingly unstable, potentially leading to battery failure. Faster charging shortens battery life, which is expensive because lithium-ion batteries can account for as much as 65 percent of the price of an electric vehicle. The only option currently available unless one wants to contribute to the destruction of two-thirds of an electric vehicle’s value is slower charging, which is impractical for many people.

Steps can be taken to minimize plating damage such as using the EV’s motors to heat the battery before recharging. Another is to charge the vehicle slowly overnight, which may be difficult to achieve for owners that live in apartment buildings, have city street parking or do not have access to a nearby charging station. And, if owners charged their vehicles overnight at the same time as they turn on their appliances, televisions, and air conditioning, power grids could become overloaded creating spikes in demand. Also, some drivers may not have the patience to wait while an electric vehicle recharges. Currently, software prevents a battery from being fully recharged at high speeds.

To be competitive with gasoline vehicles, electric vehicles need to be capable of a full charge in 15 minutes or less. Automobile makers know that electric vehicles need to be reasonably priced, able to travel 300 miles on a single charge and allow fast charging. Currently, they are able to achieve only 2 of these 3 requirements, choosing to value range and moderate prices over fast charging.

Electric Vehicles are Not Emission Free

Electric vehicles are not zero-emission: it takes more energy to manufacture a battery-operated electric vehicle than an internal combustion engine because the manufacture of batteries is very energy intensive. As battery size increases to enable bigger cars and longer range, the carbon dioxide footprint of electric vehicles can surpass that of equivalent internal combustion vehicles, even if the electricity used is increasingly carbon-free. An International Energy Agency study suggests that, on average, for a mid-sized car, greenhouse gas emissions are around 25 percent lower for a battery-operated electric vehicle compared to an equivalent internal combustion engine. Allowing for uncertainties, if the entire light duty vehicle flee were converted to battery, an overall greenhouse gas savings would probably be around 15 to 20 percent. In addition, the end-of-life recycling cost is higher for electric vehicles than for internal combustion vehicles.

Conclusion

Biden’s environmental plan and Schumer’s Clean Cars for America are not panaceas for a carbon-free transportation system due to the state of the electric vehicle battery technology, the mix of fuels used in generating electricity, and the requirements of vehicle owners. Currently, vehicle owners can “fill up” in no time and there are gas and diesel stations galore in the United States. Encouraging American vehicle owners to switch to a higher priced vehicle with longer refueling times and less range will require a unique and persuasive marketing strategy that is not noticeable in these plans, and unlikely to be accepted by a public that is very careful about the vehicle they purchase to fit their individual needs.

*This article was originally published by the Institute for Energy Research.

For more information on these issues check out AEA’s Vote Energy 2020 election hub.

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California Previews Biden’s Energy Plan

August 18, 2020 by Leave a Comment

California does it again. In 2001, California experienced rolling blackouts due to energy market manipulation by energy wholesalers and a shortage of pipelines. Now, Californians are again facing rolling blackouts, and this time it is due to California’s forced reliance on solar and wind power. Due to a severe heatwave and without the wind blowing and the sun shining, California’s day-ahead electricity prices spiked at above $1000 per megawatt-hour on August 14. California’s renewable portfolio standard mandates that 60 percent of its electricity must come from renewable energy (mainly wind and solar power) by 2030.  Now, residents are asked to conserve electricity to keep the power on—something most other states do not have to endure. This should be a warning to America about the risks of Biden’s Clean Energy Standard that would require 62 percent of our electricity which is now produced from natural gas and coal to come from non-carbon sources, which would primarily be wind and solar power.

The California Independent System Operator, which manages the power grid, declared an emergency shortly after 6:30 p.m. on August 14 and directed utilities around the state to decrease their power loads. Pacific Gas & Electric, the state’s largest utility, needed to turn off power to about 200,000 to 250,000 customers in rotating outages for about an hour at a time. Other utilities were told to do the same, affecting up to 4 million people. The emergency declaration ended just before 10 p.m. The requirement to shed load resulted from temperatures hitting triple digits in many areas, resulting in higher air conditioning use. In addition, cloudy weather from the remnants of a tropical weather system reduced power generation from solar plants. California’s solar mandates are making the state much more reliant on the weather for electricity production.

California’s Anti-fossil Fuel Policies

California generally produces a surplus of solar energy during the day and when that happens, other power generators are ordered to cut back their production so that the electric grid is not overloaded. On Friday and Saturday, August 14 and 15, about 1,000 megawatt-hours were curtailed—enough to power 30,000 homes. This curtailment resulted in supply shortages as solar energy output plunged at the end of the day with the electricity demand remaining high.

Many of California’s natural gas and nuclear plants have had to shut down because they cannot compete with heavily subsidized renewable energy. For example, a 10-year-old natural gas power plant in California’s Inland Empire is being prematurely shuttered this year despite being built to operate for forty or more years. Also, California’s state water regulations are forcing the shutdown of natural gas plants along the coast that can quickly ramp up generation during peak demand periods or when solar power plunges. Because of policies promulgated by California’s anti-fossil energy politicians, Californians are paying for new renewable power when they already have natural gas capacity readily available to meet demand 24/7.

Because the spot price for power in the summer can increase more than 30-fold from noon to dusk, California’s utilities are forced to build expensive batteries to store solar energy that can be released in the evening, which will cost Californians even higher electricity prices, despite its prices already being one of the highest in the country. Utilities do not mind this result because new capital investment necessitated by government actions ultimately means higher prices for consumers and higher profits for utilities.

Conclusion

California’s blackouts are a product of its politically-determined reliance on intermittent, unreliable renewable energy, not a product of heatwave.  So far, California’s environmental policies have resulted in 1.3 million megawatt-hours of reliable power being curtailed this year. Due to the state’s renewable portfolio standard and its subsidization of wind and solar energy, the state is suffering from the loss of reliable power that cannot compete with the state’s environmental policies. Natural gas and nuclear power plants are being shuttered. In fact, the state’s only remaining nuclear plant, Diablo Canyon, which provides 20 percent of the state’s carbon dioxide-free energy and 9 percent of its electricity, is scheduled to shut in a few short years. As a result, when temperatures rise, Californians need to curtail electricity usage and suffer from rolling blackouts as well as paying some of the highest electricity prices in the nation. Currently, most states do not need to endure the loss of power when temperatures escalate due to sufficient power from reliable sources—coal, natural gas, and nuclear power.

Americans need to be aware of Joe Biden’s Clean Energy Standard, which would put them in the same position as Californians, who are reliant upon intermittent wind and solar power. This episode should be a wake-up call for politicians thinking of jumping on the green energy bandwagon; it appears the wagon is headed for a cliff.

*This article was originally published by the Institute for Energy Research.

For more information on these issues check out AEA’s Vote Energy 2020 election hub.

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