2012 February

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The True Cost of Gasoline is Closer to $15 a Gallon (Video)

Colorado Governor John Hickenlooper Appears In Fracking Ad

By Jessica Goad, Manager of Research and Outreach, Center for American Progress Action Fund.

Colorado Governor John Hickenlooper (D) is appearing in new paid radio ads airing across the state for the Colorado Oil and Gas Association, an industry lobby and trade group which has a history of fighting health and safety standards for fossil fuels.  In the ad the governor states:

Hi, this is Governor John Hickenlooper.  In 2008, Colorado passed tough oil and gas rules.  Since then we have not had one instance of groundwater contamination associated with drilling and hydraulic fracturing. And we plan to keep it that way.  That’s why Colorado recently passed the toughest—and fairest—hydraulic fracturing disclosure rule in the nation.  In Colorado, we’ve proven that industry and the conservation community can come together to solve problems.  We can create jobs, promote energy security, and protect our environment. [Brought to you by the Colorado Oil and Gas Association.]

Listen:

As Zaid Jilani of the Republic Report, United Republic’s new blog dedicated to exposing how money pollutes democracy, observes, “the spot is particularly remarkable because it is almost unheard of for a sitting governor to appear in a radio commercial sponsored by a certain industry.”

Hickenlooper’s background and track record may indicate why he has failed this test of good government.   Before founding Wynkoop Brewing Company in Denver, Hickenlooper was a petroleum geologist.  He took $73,666 from oil and gas interests in his 2010 election, and as Salon points out, appointed an industry campaign donor to an important regulatory position.

The governor’s smiling photo also appears on two print ads, which are greenwashed with statements like “because the environment matters.”  In response to criticism for the radio ads, Colorado Oil and Gas Association president Tisha Schuller said:

We stand by the ads, and we call them public service announcements.

However, in a strikingly public rebuke, 13 environmental groups are pushing back on the implication that drilling and hydraulic fracturing are safe and that there has been no damage from them in Colorado.  In a letter sent to Hickenlooper earlier this week, Colorado conservation groups discussed their “surprise” and “disappointment” and have asked the governor and the Colorado Oil and Gas Association to pull the ads off the air:

The ad…creates a misleading picture about the overall safety of oil and gas development…That assertion misleads the public by ignoring the high incidence of groundwater contamination from spills and releases of toxic chemicals at or near drilling sites. Since 2008, numerous instances of groundwater contamination have resulted from releases of chemicals such as petroleum liquids and produced water used and generated during drilling and hydraulic fracturing.

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Renewable Energy Industry Leaps into Mainstream Power Generation

AEI Economist Zycher Makes Head-Exploding Claims About Cost of Renewables

Did you know that the landing on the moon was staged? Or that swallowing seeds will cause fruit to grow in your stomach? Or that the cost of solar power has gone up 63% since 2001?

If you are tied to reality, you’d know that all three of these statements are utterly false. And while most people know that the moon landing was real and that seeds don’t grow in your stomach, the last falsity is an easy one to slip by people who don’t follow energy — which is almost everyone.

In fact, the installed cost of solar has come down nearly 40% since 2001.

That ridiculous statement about solar comes from Dr. Ben Zycher, an economist with the Pacific Research Institute and visiting fellow at the American Enterprise Institute, who has a new book out about renewable electricity technologies. Last week, AEI held an event for Dr. Zycher to talk about his book, in which he claims to be conducting a “fresh analysis” and a “reality check” on clean energy.

It seems Dr. Zycher needs a reality check — some of his math mistakes have introduced errors that are off by a factor of 100!  Below is a response to some of his claims.

According to the authoritative “Tracking the Sun IV” report from the Lawrence Berkeley National Laboratory, the installed cost of solar has come down about 40% since 2001, from $10 a watt to $6.2 per watt. And with a scale-up in manufacturing, the market price of modules has come down an astonishing pace, with prices declining from $7 a watt in the mid-80′s to under $1 a watt today. Some analysts predict that we’ll see solar module prices at 70 cents a watt this year.

Zycher also claims that “wind energy costs have been steadily rising even though the capacity to generate electricity has expanded.” He points to Department of Energy data showing an increase in turbine prices from 2001 to 2009.

It is true that the price of wind power increased slightly since 2001 due to a rapid scaling of global capacity, a shortage of product, and a huge jump in the cost of raw materials. (Steel doubled in price and copper quadrupled in price in the past decade.)  But this is after a stunning drop in costs over the previous two decades:

Moreover, the DOE data shown below clearly shows that turbine prices and project costs are back on a downward trend:

And with the size and performance of wind farms improving substantially, the levelized cost of wind electricity continues to fall and nip at the heels of historically-low natural gas prices.

“The PPAs [power contracts] that people are pricing today in the best wind markets around the country…in the three cents per kilowatt-hour range. Wind is now back in a very competitively advantageous position,” Lawrence Berkeley National Lab Analyst Ryan Wiser said recently.

History has shown that every doubling of wind capacity has resulted in a 14% reduction in the cost of wind electricity, according to energy analysts at Bloomberg New Energy Finance. Based upon the consistent drops in the cost of wind, BNEF analysts say they “expect wind to become fully competitive with energy produced from combined-cycle gas turbines by 2016 in most regions offering fair wind conditions.”

Zycher also tries to claim that conventional fossil energy technologies don’t have an artificial advantage over new, emerging technologies.

By comparing current government subsidies per megawatt-hour of electricity from less-mature renewables to electricity produced from mature fossil energies with high penetrations, he finds that renewables receive hundreds of times more subsidies per unit of energy.

Of course, taking a one-year snapshot of every single expenditure during the height of stimulus spending doesn’t tell us much about the imbedded impact of historical energy subsidies that allowed carbon-based fuels to scale up. Zycher refers to figures from the U.S. Energy Information Administration prepared for members of Congress, who requested the 2010 snapshot data in order to make a case against clean energy.

But when the EIA issued the report, the agency admitted up front that the methodology (again,requested by wind opponent Senator Lamar Alexander) was skewed against renewable energy:

“Focusing on a single year’s data does not capture the imbedded effects of subsidies that may have occurred over many years across all energy fuels and technologies.”

So what if we actually compared subsidies to various energy technologies based upon historical data? A report from the venture capital firm DBL Investors did just that, and found that federal investments in oil and gas were “five times greater than the federal commitment to renewables during the first 15 years of each subsidies’ life, and it was more than 10 times greater for nuclear.”

Those aren’t the only tricks Zycher plays with the cost structure of renewables. He also claims that the cost of back-up power adds $368 per megawatt-hour of electricity produced. That’s more than 36 cents per kilowatt-hour.

Say what? That would make renewables like wind and solar so ridiculously cost-prohibitive, no one would invest in them. Well, Zychner seems to have made a math error that inflated his estimates by a factor of 100, according to an analysis of his data from the American Wind Energy Association:

In his calculations, Mr. Zycher claims that backup capacity is needed for 3-4.5% of the nameplate capacity of wind energy added to the grid, based on analysis done by the California grid operator. In addition, the DOE tables cited by Mr. Zycher indicate the cost of that backup natural gas capacity would be $648-984 per kilowatt of gas capacity.

Taking those numbers at face value, multiplying 4.5% by the $984/kw backup cost indicates that the cost of backup capacity would add a mere $44.28 to the cost of each installed kilowatt of wind energy, adding just over 2% to the cost of wind energy, not the 250% that he claims. Thus, Mr. Zycher’s assumed cost for backup is wrong by a factor of at least 100. Even if drastically higher assumptions are used for the quantity of backup capacity needed and for the capital and operating cost of those reserves, the added cost for wind energy is still far less than a tenth of what Mr. Zycher claims it is.

And last year, the National Renewable Energy Laboratory modeled a 30% wind and 5% solar penetration on the Western grid, finding that a combination of high renewables, low gas prices and a carbon tax could displace coal generation and maintain grid stability. Assuming a price on carbon, wind and solar could add $46 per MWh in value to the Western grid. The chart below illustrates declining grid operating costs with higher penetrations of renewables:

Lastly, Zycher uses his dubious tools of analysis to make that case that renewable electricity will harm the economy because “decades of data show that higher electricity consumption correlates strongly with GDP growth and higher employment.”

Yes, electricity consumption in the U.S. has closely followed GDP on the national level. And assuming you believe Zycher’s astronomically gross inflation of the cost of renewable electricity, that might be a notable argument.

But here’s an important thing to keep in mind. Electricity consumption and GDP don’t have to correlate. Take California — a leader in renewable energy and efficiency — which has seen twice the growth in GDP per kilowatt-hour of electricity than the rest of the county. Because of real-time pricing, conservation and efficiency — all necessary compliments to renewables — the state has seen economic productivity increase 50% per unit of electricity, while the rest of the country only increased 15%:

Zycher’s “fresh look” at the “myths” of renewable electricity is nothing more than a re-hash of the same tired arguments against clean energy. When you look at the data and historic experience in the U.S., renewable electricity technologies are clearly coming down in cost, creating new economic opportunities, and not dramatically increasing grid operation costs.

Then again, this is coming from an economist who, in response to a question about whether we are properly internalizing the environmental and health cost to poor communities located near dirty coal plants, explained that “we don’t have time to get into the issue of whether or not we need to lament the fact that there are poor people in the world.”

Watch the clip from last week’s forum:

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Republicans Sought Algae Research Grants From Obama, Now They’re Attacking Him For It

Following President Obama’s “all-the-above” energy speech last Thursday, conservatives have ignored the speech and instead latched onto a single point about investing $14 million in algae-based biofuel research. “Believe it or not, we could replace up to 17 percent of the oil we import for transportation with this [algae] fuel that we can grow right here in the United States,” Obama said.

Newt Gingrich said the president’s comments are “worthy of Leno or Letterman.” The same candidate who wants moon colonies during his presidency attacked the president for a “weird” technology both Republicans and their industry allies have endorsed.

Gingrich isn’t alone in the right-wing attempt to simplify the administration’s multifaceted energy proposals:

Newt Gingrich: “And maybe what we ought to do at Newt.org is we ought to get t-shirts that say ‘You choose.’ Gingrich went on to suggest the slogans, ‘You have Newt: Drill here, Drill Now, Pay Less. You have Obama: Have Algae, Pay More, Be Weird.”

Sen. Minority Leader Mitch McConnell (R-KY): I think the American people realize that a president who’s out there talking about algae when they’re having to choose between whether to buy groceries or to fill up the tank is the one who’s out of touch.

Syndicated columnist Charles Krauthammer: Why build a keystone pipeline with real oil from Canada to put in real refineries and put in real existing cars when you can do algae? I think he is on to something. And I think this shows the vision, the hope and change he promised in 2008.

Rush Limbaugh: This guy is so out of his league, to throw out there, “I’m looking at algae.” It’s patently absurd. In a sane world this guy would be laughed out of office, not voted out.

By mocking the president, conservatives ignore a history of party leaders and their industry allies endorsing algae research.

Republicans from Rep. Mike Pence (R-IN), Rep. Darrell Issa (R-CA) to Sen. Mike Johanns (R-NE) have requested Department of Energy grants for algae research. All three lawmakers wrote that algae investments would reduce America’s oil use. For instance, Johanns wrote that an algae biotechnology center “would develop technology to decrease our dependence on imported oil.”

Republican allies in the oil industry have also invested in algae, including No. 1 oil lobbyist ConocoPhillips and ExonMobil, which sunk $600 million in algae biofuel research.

On energy, the administration is doing far more than budgeting for biofuel research. The White House’s FY 2013 budget provides billions for R&D and manufacturing in clean energy technologies, while higher fuel economy standards will reduce U.S. oil consumption by more than 2 million barrels per day. Meanwhile, under Obama, domestic production of oil has reached record levels of quadruple the drilling rigs over the past three years.

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Bad Acid Trip: USGS Study Finds Humans Are Acidifying ‘The Air, Oceans, Freshwaters And Soils’

Call it the reverse Midas touch. Everything homo sapiens touches turns to acid.

A study led by the U.S. Geological Survey finds, “Human use of Earth’s natural resources is making the air, oceans, freshwaters, and soils more acidic.”  The USGS news release explains:

This comprehensive review, the first on this topic to date, found the mining and burning of coal, the mining and smelting of metal ores, and the use of nitrogen fertilizer are the major causes of chemical oxidation processes that generate acid in the Earth-surface environment.

These widespread activities have increased carbon dioxide in the atmosphere, increasing the acidity of oceans; produced acid rain that has increased the acidity of freshwater bodies and soils; produced drainage from mines that has increased the acidity of freshwater streams and groundwater; and added nitrogen to crop lands that has increased the acidity of soils.

Previous studies have linked increased acidity in oceans to damage to ocean food webs, while increased acidity in soils has the potential to affect their ability to sustain crop growth.

In short, global acidification is one more threat to global food security, which is already under grave threat by climate change, our idiotic biofuels policies, population growth and demographic changes (see Oxfam Predicts Climate Change will Help Double Food Prices by 2030: “We Are Turning Abundance into Scarcity”).

Here’s more background on the study and its findings:

“We believe that this study is the first attempt to assess all of the major human activities that are making Earth more acidic,” said USGS scientist Karen Rice, who led the study. “We hope others will use this as a starting point for making scientific and management progress to preserve the atmosphere, waters, and soils that support human life.”

… “The low pH levels of streams in coal regions of the eastern United States were a major environmental concern 50 years ago,” said University of Virginia geochemist Janet Herman. “Changes in mining practices as well as shifting location of production brought about improvements in water quality in Appalachia. In contrast, exploitation of coal has grown in China where the same environmental protections are not in place.”

To examine the global impact of acidification, the researchers developed a series of world maps to show current coal use, nutrient consumption, and copper production and smelting by country. By combining this information with the anticipated population growth through 2050 and the impact of changing technology, regulations and other factors, the researchers address shifting trends in acidification.

“Looking at these maps can help identify where the current hotspots are for producing acidity,” said Rice. “The population increase map can help guide policymakers on possible future trends and areas to watch for the development of new hotspots.”

For example, the populations of some countries in Africa are projected to increase in the near future. To support the growing populations, these countries likely will be forced to apply more nitrogen fertilizer to their crops than they currently use, increasing the acidification of soils and freshwater resources in a region that had not previously been affected.

To look at the impact of the acid producing activities, the researchers characterized the scale of environmental damage from major activities and their components as local, regional, global, or some combination of the three. Generating power by burning coal, for instance, can have local, regional and global impacts. Locally, it can cause acid mine drainage where the coal is mined; regionally, burning it can cause acid rain; globally, the increased carbon dioxide in the atmosphere increases the acidity of the ocean.

The full study in the journal Applied Geochemistry, “Acidification of Earth: An Assessment across Mechanisms and Scales,” is available online. It concludes:

… currently low-consuming regions in Africaand the Middle East are predicted to experience a tremendous population growth with its attendant demand for energy, mineral, andfood resources. It may be that regions of Earth not currently burdened with environmental acidification soon will be contributing significantly to Earth’s acid load. Now might be the time of opportunity to anticipate the coming shifts in population and resource consumption and plan for amelioration of acidifying processes from the outset.

That would be the understatement of the year.

The fact is ocean acidification by itself ought to be reason enough to act now (see Geological Society: Acidifying oceans spell marine biological meltdown “by end of century”). But the disinformers, delayers, inactivists, and smoke-detector-battery-removers currently have the upper hand.

So we will get to see what happens when you acidify everything. What a long, strange trip it’s going to be.

Image via Tadbot

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