Friday, September 28, 2012

Cumulative Consumer PA Gas Savings Rise To $3200 Since 2008 & Average 42.5%

The stunning drop in natural gas prices from $13 in 2008 to less than $3 today for a thousand cubic feet has saved consumers big money in just gas bills.  Kathryn Klaber calculates the cumulative consumer savings at $3,200 and that gas utility rates at Pennsylvania's 9 major gas utilities are down on average 42.5% since 2008.  That's about right.  But the number does not include any consumer savings in lower electricity bills that have resulted as well from the big drop in gas prices.

These natural gas savings have been enormously important to families with incomes at or below the Pennsylvania median level of about $49,000 before taxes and have been literally the difference between having heat or not, during the winter for thousands of poor Pennsylvanians.  For poor families, government heating assistance programs have delivered in most cases much less than half of the financial assistance provided by the $3,200 in lower gas prices.

The impact of high energy costs on public safety and health is too often ignored.  Yet, the tragic truth is that utility shut-offs cause desperate families to turn to dangerous heating and lighting substitutes that have caused numerous fires that have killed more than 50 Pennsylvanians over the last 25 years.

That fact should not be lost in discussions about gas production and energy policy.

Stunning Facts: Net Metering Or Spinning Backwards Electricity Meters Jumps 61% Nationally & 350% In PA!

A sharply growing number of electricity meters are spinning backwards.  That's what happens when a homeowner or business installs typically a solar system at his or her property and "net meters' the output.

Net metered energy facilities are booming nationally and especially in Pennsylvania.  Nationally the number of net metered projects grew 61% in 2010, jumping to 155,841.  Net metered projects operated in 49 states and 694 utility service territories. Only Tennessee apparently forbids net metering. Most net metering takes place on residential and commercial accounts.

Net metering growth was explosive in Pennsylvania during 2010, skyrocketing 350%, with the number of net metered facilities up from 650 in 2009 to 2,971 in 2010.  Pennsylvania ranked second in the growth rate of net metered projects, trailing only Maine.

Nationally, California accounted for more than half of all projects with 86,495.  Colorado ranked second at 9,776.

In 2011 through to today, the net metering boom nationally continues and even may have accelerated. America now may have between 250,000 and 300,000 net metered energy facilities.  The overwhelming majority of which are solar.

Important Fact: 69% of Sportsmen Say US Should Reduce Carbon Emissions

A major poll of sportsmen, those who hunt and fish, found that 50% are conservatives, 42% are Republicans, 32% Independents, and 18% Democrats.  And 69% of sportsmen want the US to reduce carbon emissions.  Thanks to gas, renewables, and efficiency, the US is doing so.
US emissions are back to 1992 levels or below, after declines in 4 of the last 5 years.

The poll also found that if confronted with a choice of fossil fuel production or protecting public lands, 49% of sportsmen would protect public lands and 35% would put fossil fuel production first.

Sportsmen are a key constituency that is disproportionately Republican.  Yet, the views of Sportsmen on climate and public land protection are at odds with the position taken by the Republican party. Their is growing tension between more and more rank and file Republicans and what their candidates and elected officials are doing or not doing about at least climate.  This bares watching.

Thursday, September 27, 2012

Reviewing Earthworks Report Ripping State Enforcement Of Oil & Gas Rules: More Hatchet Than Lantern

Enforcing oil and gas regulations is vital to producing gas, protecting the environment, and building a culture of safety throughout the gas industry.  With the stakes high on the quality of regulation, enforcement must be a key topic about which professional, objective discussion is needed.

And so, despite the jarring cover page, I hopefully began reading the Earthworks report entitled, "Breaking All The Rules." I hoped it would provide a real analysis of the current strengths and weaknesses of enforcement activity.

Most unfortunately, for it is a lost opportunity to have a real dialogue that could lead to necessary further improvements in regulation, the Earthworks Report is a partisan document.   The Report is more hatchet than lantern and betrays the seriousness its topic should command.

For example, if you favored stronger enforcement and learned that a state had increased its budget for oil and gas oversight from $700,000 to $12.5 million from 2008 to 2010; raised inspections from 7,236 in 2002 to 22,600 in 2011; increased staffing; increased the number of regulatory citations issued to the gas industry from 1,153 in 2002 to 4,069 in 2011; had tripled the maximum daily fine; and had inspected every shale well and most multiple times, would you have something, anything, positive to say about that state's effort to regulate the gas industry?

The foregoing is a quick summary of Pennsylvania's regulatory record and most of that data is buried in Earthworks' Report.  Yet, the report is unrelentingly negative from its cover page to its end. It assiduously avoids crediting  any strengths or positive trends no matter that Pennsylvania increased its enforcement budget 18 fold, increased inspections three-fold, increased the number of citations to industry more than three-fold.  The Report stays on its message that state enforcement of gas rules is in crisis and bad.

For example, thanks to the comprehensive information about violations that is available to the public in Pennsylvania, the Report at pages 39 and 42 lists companies that do poorly on a couple metrics used by the Report.  The Report, however, does not list the companies that do well on those same metrics.

Too many environmentalists make a mistake, and commonly do so, by looking only at companies performing badly and not at those companies performing well.  Indeed, in terms of increasing safety, holding up for public praise those companies doing well, and understanding why they are, is as important as highlighting those performing badly.

The Report also manipulates the reader in a variety of ways, including by choosing to do most of its analysis on 2010 data, though 2011 data is available in many cases.  For example, the reader will be told repeatedly in the report that Pennsylvania conducted 15,000 inspections, the 2010 number, and most of the Report's analysis uses the 15,000 inspection number for Pennsylvania.

Yet, buried in an Appendix, one learns that the 2011 inspection number jumped again--up to 22,670.  And after being told that Pennsylvania has 65 inspectors on page 23, the persistent reader will find--again in an Appendix--that Pennsylvania had 88 inspectors in 2011.  The Report, however, never says that Pennsylvania actually increased the gas oversight staff from 88 in 2008 to 210 in 2010, opened 2 new gas drilling oversight offices, equipped staff with infrared cameras, and deployed mobile testing labs.

Again, the analysis in the Report uses the much lower inspection and inspector numbers of 2010, because they produce a "better" result for the authors.  These are but two examples of many manipulations.

Still another slanting involves the difference in the well totals in 2010 and 2011.  The 2011 data shows that the number of active wells with production in Pennsylvania fell to 55,812 from 69,626 in 2010.  But when crunching its main number to slam state regulation--the percentage of all wells inspected--the report uses 2010 data, the bigger and out of date number.

For the authors of the report determined to mine the most negative case, 2010 is a better year than 2011. After all, 2010 in Pennsylvania had both a much lower number of inspections than in 2011 and much higher number of wells.

Indeed, to slant its basic frame even more, the report calculates its percentage of wells inspected by using not just the 2010 data that creates a much higher percentage but by using a bigger category of gas wells.  That category is "active" gas wells that includes about 22,000 wells that are not producing.

In 2010, the "active" gas wells in Pennsylvania were 91,167 of which 69,626 had production.  By comparison, the active wells in 2011 were down to 77,898, and those with production fell to 55,812.

If 2011 data and "producing wells" were used for Pennsylvania, the Report would have found that Pennsylvania inspected all shale gas wells and about 30% or more of all producing wells, instead of reporting that Pennsylvania did not inspect 91% of gas wells.

And let's discuss for a moment what most producing gas wells really are in Pennsylvania.  They are shallow, small production wells that have been operating in many cases for 20, 30, 40, 50 or more years.  They are often so small that they barely register.   And most certainly they are not the shale gas wells that are the focus of attention and concern.

The Report's discussion of Pennsylvania contains many other errors. The list is too long to discuss here and includes a major mistake about DEP funding levels. But I must note that the Report does not put in its analysis the $4.1 million placed in escrow accounts for 18 families in Dimock, as a result of enforcement action to compensate them for gas migrating to their properties due to mistakes in gas drilling.

In addition to Pennsylvania, the Report also looks at Colorado, New Mexico, New York, Ohio, and Texas.  Enforcement can and should be improved in all of these states.  The topic of enforcement is critical.  It deserves a real lantern that sheds light.

Prius Plug-Ins Reach 6,000 In US & 15,000 Globally

August was not just a good month for the Volt or the Leaf but also for sales of the Prius plug-in models.  Sales were 1,047 cars, up 52% from July.

More than 15,000 plug-in Prius models have been sold globally as of August.  US sales were 6,068 of that total or about 40% of the world market.

Gasoline pricing is impacting US consumer interest in plug-ins, with August seeing escalating fuel prices, and more plug-in sales.

Wednesday, September 26, 2012

Another Analysis Of The Role Of Gas In Plummeting US Carbon Emissions

Michael Levi of the Council on Foreign Relations weighs in on the role of gas in reducing US carbon emissions.

Michael's analysis discusses at length my September 17, 2012 posting on the same topic. See  I have also commented twice on Michael's analysis at his blog.

The role of gas in reducing carbon emissions differs in different time periods.  It was significant in 2011 but even bigger in 2012, for a number of reasons, including gas is displacing even more coal generation in 2012 than in 2011, and renewable electric production is down in 2012 compared to 2011.

The plummeting of carbon emissions in the US is real and not a result of magic.  Gas is at the heart of the good news, and it is sad to see some deny that fact, as others deny the reality of climate change.

Stunning Fact: $160 Million Or Equivalent Of $2,555 Per Person Paid In Gas Royalties In Bradford County

Gas royalties are rolling into Bradford County, a leading shale gas county in Pennsylvania.  According to one calculation, $160 million has been paid in royalties to landowners there, where 512 gas wells are producing.

Given that Bradford county had a population in 2010 of 62,622, or about 1 of every 200 Pennsylvanians, the $160 million total works out to the equivalent of $2,555 per person within the county.  Of course, royalty payments went not to every resident but to less than 1% of those in the county.

Both the amount of royalties paid and the number of residents in Bradford county that will receive a royalty check will soon increase significantly, since a total of 1,856 wells have already been drilled.  But 1,344 of those wells were not counted as producing, when the $160 million royalty total was calculated.

Landowners who lease their property for gas drilling also get a lease payment that is separate and apart from any royalties received.

Tuesday, September 25, 2012

Volt Outsells Half Of US Cars: Ranks 133 of 262 Models

Time to ruin Rush Limbaugh's day again.  The Chevy Volt is outselling half of all US cars.

The Volt ranks 133 out of 262 cars sold.  In their respective first years, the Volt also outsold the Prius, the phenomenally successful onfidently predicted would be a commercial flop.

History may be repeating itself.

Ranking America's Generation Technologies By Capacity & Production: Coal & Nuclear Plants Standout

America has much more gas-fired generation capacity than anything else, but coal plants rank first in production The difference between capacity and production is a key fact mentioned by some commenters to this blog, so here is a quick review of America's electricity capacity and production.

According to Federal Energy Regulatory Commission, America has 1,153,910 megawatts.  And that huge total comprises 10 different types of generation.

Measured by capacity, America has more gas-fired generation--482,800 megawatts--than any other type.  Coal ranks second at 340,780 megawatts; nuclear third at 106,770 megawatts; hydro fourth at 98,060 megawatts; oil fifth at 51,700 megawatts; wind fifth at 50,770 megawatts; biomass sixth at 14,390 megawatts; geothermal seventh at 3,610 megawatts; and solar ninth at 3,200 megawatts.  The FERC solar number does not include a substantial amount of solar distributed generation.

Capacity numbers are important, but they are not the same as production.  Indeed, there can be real differences between a technology's percentage of the nation's capacity and the percentage of electricity that it produces.

For example, though America has more gas-fired generation capacity than any other type and 41.84% of our total capacity, gas currently generates about 30% of our electricity and ranks second in actual power production.

Despite having 29.53% of America's capacity and ranking second, coal generates still the most electricity of any source, about 36%, though it has lost substantial market share to gas.

Nuclear power has just 9.25% of our capacity but generates a bit less than 20% of our electricity. Every 1% of nuclear capacity produces 2% of America's power.  The nuclear plants of the nation are real work horses.

Hydro is 8.5% of our capacity and produces about 7% to 8% of our electricity.  Wind is now 4.4% of our capacity and is producing a bit less than 4% of the nation's power.  Biomass is about 1.25% of our capacity and generates a similar amount of our electricity.

Oil is still 4.48% of our capacity but now generates 1% or less of our electricity.

As this review shows, nuclear and coal plants produce a greater share of the nation's electricity than their portion of the nation's capacity total.  Despite low gas prices, gas still produces considerably less than its share of the nation's capacity, as do oil plants.  Renewables tend to produce a percentage of power close to their percentage of the capacity total.

Reviewing America's electricity capacity and supply confirms the size and diversity of the nation's electricity generation.  Those are real strengths for America!

Monday, September 24, 2012

Federal Judge Dismisses Challenge To DRBC Drilling Regulations But...

A federal judge sitting in New York has dismissed on procedural grounds the challenge by drilling opponents to the DRBC's gas drilling rulemaking.  The judge apparently dismissed the suit on standing and ripeness grounds and did not reach the merits of the plaintiffs' claims.  Those claims asserted DRBC is a federal agency and must do a federal Environmental Impact Study (EIS) before adopting any drilling rules.

What does this mean?  This kicks the heart of the matter down the road but does not dispose of it one way or another.  Plaintiffs will be able to refile when and if regulations are finalized and applied.

As such, the court's decision today not to reach the merits of the claims may well add to delay and not shorten time needed for judicial process.

Sunday NYT Data Center & Power Story Goes Hyperbolic: Here Is The Side Of The Story Not Fit To Print

The NYT's Sunday front page story with color picture on the power needs and impacts of data centers has all the ingredients of what today's NYT offers--business or government doing nasty things, assaults on the environment, bad news. The piece follows tightly this formula for success but is hyperbolic and distorted.

Let's start with the basic theme that data centers are using enormous amounts of electricity and how the reporter builds it.  The reporter first tells us that data centers around the world use 30 billion watts of electricity or the equivalent of 30 nuclear power plants. I am sure that sounds like huge amounts to those not familiar with the electricity industry.

Of course, what is not said is often as important as what is said.  Not said in the article is that the world has over 470 nuclear plants, and that nuclear power provides less of the world's electricity than hydro by itself.   

But hydro is far from the major source of power for the world. Coal is the world's single, biggest source of electricity.

When all the hyperbole and obfuscation is stripped away, the world's use of electricity for data centers is probably less than 1% of global electricity consumption.  And let's remember that 1% of power makes modern commerce and life possible. The 1% of electricity used at data centers may be the most productive use of electricity on earth!

After his reference to the 30 billion watts of power used globally by data centers, then the reporter darkly quotes a former utility official who says the power use is "unsustainable" and the industry will "hit the wall." That statement is not just hyperbolic. It is totally ridiculous statement and as false as calling the shale gas boom a "Ponzi Scheme!"  

Total US electricity consumption is actually lower today than it was in 2006.  The country has substantial excess generation capacity, without building anything more.  

But the country is building more generation capacity.  In fact, new power capacity is outpacing power plant retirements by two to one or more.  

The electricity demand of data centers is not a problem at all for the US electric industry to meet.  That's why the electric industry does recruit them!

About half way through the sea of ink in this story, the reader is finally told that data centers use about 2% of US power.  Why not say that right up front? Well, it is a less scary frame for the whole piece, is it not?

The article nearly dismisses the fact that the internet sharply cuts energy use in other ways. The reporter tells us that the industry claimed it would cut down on paper but then writes that the paper industry uses billions of kilowatt-hours each year.  That's it.

Ask the US Postal Service what the impact of the internet has been on postal volumes.  Look at your own use of electronic bill paying, banking, and shopping.  

How about electronic computing?  The rise of the home office? How about the gasoline and diesel avoided in transportation. None of that is mentioned.

And since the data center industry is the bad guy in this piece, there is no mention of the industry's use of solar and fuel cells that run on gas.  Instead, the article focuses on the use of diesel generators.   Those are a step back. And it would be much better if gas-fired, micro-turbines or fuel cells were deployed to take the place of diesel generators.

This article, however, is another example of a NYT reporter being given months to investigate an issue and to read thousands of documents, as the reporter tell us. The sheer investment of time requires that the reporter bring forth something other than a mouse. The structure of these big projects contain pressure for bias and false drama.

And so we have another example--this time data centers--of the NYT producing hyperbole and painting a distorted picture for its readers.  

PA Loses Jobs For 5 Straight Months: Gas Alone Is Not Enough!

Pennsylvania has lost jobs every month since March, 2012--five straight months of job losses.  In fact, the Commonwealth has lost cumulatively 19,400 since March.

And the Pennsylvania job losses come, despite a rising national tide in the same period.  Since March 2012, more than 600,000 jobs have been created across America.

Job losses in Pennsylvania and job creation nationally means that the "Pennsylvania Advantage" is gone.  No longer does Pennsylvania have an unemployment rate well below the nation's, as had been the case for a decade.

Pennsylvania's unemployment rate has jumped from 7.4% in April 2012 to 8.1% in August and now equals the national rate.  The current trends could well mean that Pennsylvania will soon have an unemployment rate higher than the nation, something that has not been a fact for a very long time.

Pennsylvania's string of bad economic numbers drives home the point that the gas boon alone is not enough to bring prosperity to Pennsylvania, especially when state government slashes budgets for education and does not make needed investments in transportation.  The gas industry provides a welcome, needed boost.
But it cannot erase strategic budgeting and economic development mistakes.

Moreover, Pennsylvania's population and economy must have more than 6 million jobs, and gas alone is never going to come close to providing full employment.  Another way to make this point would be: Pennsylvania is not North Dakota or Kuwait.

Friday, September 21, 2012

Stunning & Bad Fact: PA Unemployment Rate No Longer Less Than US After Rising To 8.1%

For nearly a decade, Pennsylvania's unemployment rate had been below, and often considerably below, the national unemployment rate.  That was the case for nearly every month of Governor Rendell's two terms, and Pennsylvania was a national leader in creating jobs in 2010.  Those days are sadly gone.

Pennsylvania's unemployment rate rose again in August from 7.9% to 8.1% and now matches the US rate of 8.1%. The consequences of devastating education cuts, mistaken budget priorities, and backwards economic development policie  enacted over the last two years are now crippling Pennsylvania's economy.

Relying on the natural gas industry alone to bring prosperity to Pennsylvania is unfair to the industry and a colossal misunderstanding of the size and diversity of Pennsylvania's economy.  Pennsylvania's unemployment situation is worsening, despite the real boost from gas production, because state policies are undermining education, health care, transportation, and clean energy industries among many.  Pennsylvania is no longer making adequate investments in infrastructure and other strategic assets that create short-term employment and long-term competitiveness.

Next door in New Jersey, austerity economics is working just as it is Pennsylvania, with New Jersey's unemployment rate rising to 9.9%.  Though it has fervent supporters, austerity economics undermines job creation and weakens the middle class.  It has failed in New Jersey and in Pennsylvania.

As President Clinton says: "But the problems with any ideology is that it gives the answer before you look at the evidence.  So you've got to mold the evidence to get the answer that you've already decided you've got to have.  It doesn't work that way.  Building an economy; rebuilding the economy is hard, practical nuts and bolts work."

The enormous cuts to public education in Pennsylvania were an ideological choice and fully avoidable. Those cuts put tens of thousands of teachers directly out of work. And when a teacher loses a job, a waitress or a store clerk will too as the loss of purchasing power in communities kills thousands of non-education jobs.

The education cuts are one reason, among many mistakes in the last two years, that the days, when Pennsylvania's unemployment rate was always below the national average, ended in August.  But education cuts and the failure to make strategic investments in transportation and infrastructure are a double whammy.  They hurt now and damage the future by undermining our children's and state's readiness and productivity.

World Temperatures Soar While Fracking Debates Roar

The world's land temperature in June to August, 2012 reached the highest level ever recorded for those 3 months.  That's a fact.

While temperatures soar, the world continues to debate shale gas--the energy resource that has cut  carbon emissions more in the USA more than anything else and that has made the USA the world leader in reducing its carbon emissions since 2006.

South Africa, a country that gets 70% of its total energy from coal, announced this month that it would end its fracking moratorium.  China another country that gets 70% of its total energy from coal fracked its first shale well this year.

Yet, President Hollande of France said that the French moratorium would continue for the 5 years of his term. And in New York the moratorium continues.

Temperatures soar as fracking debates roar.

Stunning Fact: Italy Sells in August Nearly As Many CNG Vehicles As Are On USA Roads

There is no chicken or egg problem in Italy.  The Italians are flocking to CNG vehicles, with 114,226 sold in just August, a monthly amount that is about equal to all the CNG vehicles on US roads.

Why were nearly 1 out of 8 vehicles bought in Italy last month a CNG vehicle?  High gasoline prices are one reason.

But just as important are the 900 public CNG fueling stations dotting Italy, an area about 70% the size of California.  Italian motorists know that they can refuel with CNG and pay much less when doing so.  The result is a booming CNG vehicle market that Fiat serves with a growing variety of models.

By contrast, the US has a total of 519 public CNG stations in our vast nation.   The result of effectively no reasonable CNG fueling infrastructure being available to motorists is scant consumer interest in natural gas vehicles, even though natural gas saves around $2 per gallon and pollutes less. 

In America, the failure to crack the chicken and egg problem continues.  A pathetic and dangerous condition that continues.

Thursday, September 20, 2012

Gas & Wind Dominate New Generation in 2012 But New Coal Accounts For 20% Of Total

From January to August 2012, new natural gas and wind capacity accounted for 70% of the total that began operating.  A total of 11,866 megawatts began operating, and new gas and wind plants equaled 4,636 and 3,604 megawatts respectively, according to the Federal Energy Regulatory Commission.

New wind capacity, however, will surpass new gas by the end of the year, as developers raise to finish project prior to the scheduled expiration of the production tax credit in December. America is on course to build about 10,000 megawatts of wind alone this year.

Apart from wind and gas, new coal plants were most of the remainder, 20% of the total, at 2,276 megawatts.  New solar capacity  was listed at 766 megawatts, but this number does not include the large amount of solar capacity that is distributed and not required to receive FERC approval. 

New solar capacity from all projects may exceed new coal capacity in 2012, for the first time in the nation's history. But importantly, as a result of substantially higher capacity factors, the new coal capacity will likely produce 5 to 6 times more electricity than the 2012 new solar capacity.

Rounding out the 2012 new plant capacity to date is 329 megawatts of biomass, 125 megawatts of nuclear, 105 megawatts of geothermal, 13 megawatts of oil (Hawaii??), 9 megawatts of hydro, and 3 of waste heat.

The 2012 new capacity build is lower than in 2011 at the same time.  In 2011, 14,212 megawatts of new capacity had opened by August.

America has a total of 1,153,910 megawatts of capacity, according to the FERC data.  New plant continues to exceed retirements.

Pathetic Facts: 519 Public CNG Stations In USA & Just 11 In PA After 5 Years Of Shale Boom

What does one say about these pathetic and dangerous facts? 

After 5 years of the shale gas boom and low-gas prices, and after 5 years of gasoline prices being consistently above $3, the USA has only 519 and PA just 11 public CNG fueling stations Also see

The odds of a military strike on Iran in the next 12 months are probably about 50%, and that means the probability of gasoline prices being above $5 in the next year is also about 50%.  Even if a war is avoided in the Persian Gulf, inexorably rising world oil demand is pushing global oil prices higher and higher.  One result of higher oil prices is lower US GDP growth, as the US economy stalls and even reverses, when Brent pricing hits $125.

The US remains over a barrel of expensive oil in large part, because there is no plan to accelerate greatly the deployment of the CNG fueling infrastructure necessary to enable families and companies to transition from oil. 

Here's an idea to end the paralysis.  How about the Congress of the United States putting country first by passing the Natural Gas Act (Pickens Plan)?  The bill has not even been given a vote in the US House of Representatives and was fillibustered by the Republican minority in the Senate so that the 51 votes it got in that chamber was 9 votes short of the needed 60 super majority.

Once again, party first politics. Pathetic and dangerous!

Wednesday, September 19, 2012

USGS Finds 2% of NY Water Wells Have Explosive Levels Of Methane & 53% Have Detectable Levels

A benefit of the incredible focus on gas drilling and fracking is greater and long overdue attention to the quality of water in private water wells. And as the facts are gathered about what has been and is in water wells before any drilling is done, the compelling need to clean up private water wells is documented.

In this vein, USGS did a major study of methane levels in New York water wells.  The results are striking, including the literally explosive finding that 2% of the wells tested (200) had ignitable levels of methane in them. 

Also 9% of the wells had methane readings above the Office of Surface Minining's action  level of 10 mg/L.  A full 53% of the water wells had detectable levels of methane, and 47% did not. The report's links are:; and

To be clear, the USGS findings of methane in New York water wells are pre-gas drilling and have nothing to do with gas drilling.  The conclusion that 2% of NY water wells have combustible levels of methane and that 9% have levels above the federal action level is serious and should trigger a major effort to clean up private water wells, whether or not drilling takes place.

China Finances $2.5 Billion Texas Coal Carbon Capture Power Plant: What Are The Lessons?

Conventional wisdom holds that the 2010 demise of cap and trade in Congress  killed carbon capture and storage technology in the USA.  After all, why spend hundreds of millions of dollars installing CCS technology, when the captured carbon has no monetary value? Yet, the reported death of CCS technology in the USA is premature, ironically as a result of China. 

Last week, the Texas Clean Energy Project made a startling announcement that the Chinese Export-Import Bank would finance a  $2.5 billion, 400 megawatt coal plant that will capture 90% of its carbon emissions that will then be sold for enhanced oil recovery.  The plant has sold 200 megawatts of its output to CPS Energy, the municipal utility serving San Antonio, and states that its carbon emissions will be one-quarter of a gas plant and one-tenth of a conventional coal unit.  The plant also will produce large quantities of urea, enough to raise US production by 20%,  and has sold that product to an outfit in Minnesota.

Apart from the Chinese financing, the US Department of Energy is providing $450 million to finance the plant from the nation's Clean Coal Power Initiative.

So what do the latest developments of this project teach?  First, carbon capture and storage technology lives in the USA, thanks substantially primarily to Chinese and secondarily DOE financing.  The Texas plant will be the first commercial scale operation to deploy CCS here.

Second, the Chinese see both an environmental and economic opportunity in coming years, if they can be world leaders in  developing CCS.  The Chinese are flush with cash, but they are not wasting it.  They plainly judge CCS to be a good bet on the future.

Tuesday, September 18, 2012

9 Billion Gallons Of Sewer Overflows in Pittsburgh Region & $2.8 Billion Clean Up Bill Dwarfs Statewide Gas Drilling Impacts

A main goal of this blog is to help its readers prioritize the biggest threats to water quality and to understand that, though gas drilling impacts are real, they are well down the list of the most serious causes of pollution of Pennsylvania's waters.  A must read is yesterday's Pittsburgh Post Gazette front page story about the massive amounts of sewer overflows that reach rivers in the Pittsburgh region multiple times each year.

The annual volume of untreated sewage reaching rivers and streams is reported as 9 billion gallons per year and occurs in 30 to 70 storms annually, according to the Post Gazette.  And the bill for stopping this pollution and cleaning up is a staggering $2.8 billion.

To make matters worse, the same problem of untreated sewage flowing into rivers and streams that the Pittsburgh region is confronting is found in many communities across Pennsylvania as well as in New York and other states.  While America's sewage overflow problem dwarfs the impacts of gas drilling on water quality, it normally attracts little media attention or sustained public concern.  There are no Hollywood stars campaigning to stop these huge amounts of sewage from going into rivers.  There are no HBO movies on the problem.

Normally, this huge source of pollution that threatens public health and safety is ignored or draws a yawn.

Congratulations to the Post Gazette for not yawning and for prominently and regularly reporting on its region's struggle with sewer overflows.  Such reporting is vital for readers to understand what are the top impacts on water and what are not.

USA Electricity Use In Historic Decline: 2012 Usage On Course To Be At 2005 Level

The latest EIA data confirm that the US is in the midst of an historic decline in electricity usage.  Going back to at least 1973 (the start of the EIA data), the US has used more electricity nearly every year and always used more electricity every 5 years.

But those iron trends are breaking. Electricity end use peaked in 2007 and has dropped slightly since then.

Electricity use in 2011 was about 1% less than in 2007 and was a bit lower than in 2010. The once near guaranteed yearly increases in electricity usage are no more.  The 2011 drop took place, even though the 2011 GDP was greater than 2010.

Moreover, electricity use in the first 5 months of 2012 was about 2% lower than in the first 5 months of 2011.  If that trend holds for the remainder of this year, electricity usage in 2012 will be lower than it was in 2007. And that would be the first time, since the EIA data began in 1973, that electricity usage was lower than 5 years ago.  Even the 2009 usage, despite a drop of 4% as a result of the economic collapse, was greater than in 2004.

Indeed, if electricity usage falls 2% during 2012, US electricity usage will be back to about 2005 levels, a remarkable change in the pattern of electricity usage.  This remarkable change seems to be a function of much greater efficiency surging through motors, appliances, air conditioning, lighting, and more and slow GDP growth.

Monday, September 17, 2012

10 Key Facts To Understanding The Decline In US Carbon Emissions

US carbon emissions have dropped sharply and surprisingly since their peak in 2007.  Here are 8 key facts to help understand how and why, and data is in the Environment section at:

1. Total US energy related carbon emissions peaked at 6,020 million tons in 2007.

2. Of that 2007 peak total, coal emissions were 2,172 million tons and oil emissions were 2,603 million tons. The remainder came from natural gas.

3. By the end of 2011, total emissions fell 9% or 549 million tons to 5,471 million tons.

4. Of the 2011 total, coal accounted for 1,867 million tons and oil 2,299 million tons.

5. Between 2007 and 2011, emissions from coal and oil fell respectively 305 million tons and 304 million tons, while natural gas emissions increased 61 million tons, as gas displaced coal to make electricity.

6. Coal's market share of electricity generation dropped from about 48% to 42% of America's power from 2007 to 2011.

7. During the first 5 months of 2012, total carbon emissions fell 144 million tons, when compared to the first 5 months of 2011.

8. During the first 5 months of 2012, coal emissions were down 18% or 132 million tons, when compared to the same period of 2011.  During April 2012, gas-fired generation actually equaled coal-fired generation, with both providing 32% of the nation's electricity.

9. Oil emissions fell 2% or 18 million tons for January to May 2012, when compared to January to May 2011.

10. About 80% of the decline in carbon emissions from coal in 2012 during the first 5 months is the result of natural gas displacing coal generation, as renewable generation has fallen so far in 2012 and nuclear power is stable. The  small portion of the 2012 decline not attributable to gas is a product of 2% decline in electricity sales compared to the same period in 2011.

Natural Gas Is Responsible For About 77% Of Carbon Emission Reductions In 2012

There is no disputing that US carbon emissions are plummeting.  First, carbon dropped 9% or 549 million tons from 2007 to 2011. Then, from January to May 2012, emissions declined another 6% or 144 million, when compared to the same period in 2011.

While no dispute exists that US energy related carbon emissions are way down, controversy has erupted in some quarters over the role of gas in producing the sharply lower carbon emissions.  It's become an energy "who done it?"

For the period from 2007 to 2011, more gas, more renewable energy, and more efficiency cumulatively caused respectively carbon emissions to drop from burning coal and oil by 305 and 304 million tons.  My estimate is that gas displacing coal and oil accounted for about half of the decline between 2007 and 2011.

Yet, while gas played a big role prior to this year in reducing carbon emissions, gas's role in cutting the 2012 emissions to date is even bigger. In fact, gas is likely responsible for about 80% of the 2012 emission decline to date. Consider the following data.

The entire carbon emission decline in 2012 comes from falling carbon emissions from coal and oil and disproportionately from coal.  From January to May 2012, coal emissions fell 132 million tons or from 756 million tons in the same 2011 period to 624 million tons.  That is an 18% decline and almost entirely as a result of more gas displacing coal generation this year.  Indeed, coal's electricity generation market share fell from 42% for all of 2011 to 32% in April and 34% in May.

By comparison to coal, oil carbon emissions dropped a modest 18 million tons or 2% in the first five months of  2012, compared to the same period in 2011.  Total oil emissions were 937 million tons so far this year, down from 955 million tons in 2011.

As a result, about 85% (132 of 144 million tons) of the 2012 US Carbon emission decline is a product of falling emissions from coal.  So one answer to the question, "what done it?" is that emissions from burning coal are way down.

But what caused coal emissions to decline in 2012?  Is consumption of electricity way down? Did the economy shrink in 2012? Are renewable energy or nuclear power shoving coal off the grid this year?  Or could it be that natural gas is displacing coal to generate electricity?  What done it?

It's not a shrinking economy.  The nation's GDP has increased every quarter since July 1, 2009.  And our GDP is bigger than in 2007, when carbon emissions peaked, and prior to the economic meltdown from November 2007 to June 2009.

It's not renewable energy or nuclear.  Nuclear power production is about flat between 2011 and 2012.

As a result of a big drop in hydro, total renewable production is down in 2012 compared to 2011 so renewable energy this year is not displacing more fossil fuels in 2012 than in 2011.  It will actually displace marginally less this year than it did in 2011.

Electricity demand is down 2% in the first 5 months of 2012 compared to 2011 so that is a small reason for declining emissions and probably explains about 10% of the 132 million ton decline of coal emissions.

Even if one incorrectly assumes that gas had nothing to do with the 2% (18 million tons) decline in oil emissions, and if one attributes 11% or 15 million tons of the coal emission decline to reduced electricity demand in 2012, natural gas displacing coal is conservatively still responsible for about 110 million tons of the 144 million ton decrease in 2012 carbon emissions during January to May 2012.  That is about 77% of the total decline this year to date.

Since gas is displacing more coal and oil than anything else, natural gas is cutting carbon emissions in the US more than anything else. That is a fact!

Friday, September 14, 2012

Zero Carbon Gas Electricity for 8 Cents/kwh: A Game Changer

Zero-carbon, gas-fired power plants would be a game changer for the world's energy business and climate.  Importantly, an August 2012 U.S. Department of Energy study on the life cycle costs of gas generation suggests that the game changer is nearer than most think.

While most assume that the cost of installing and operating carbon capture technology is prohibitively expensive, DOE suggests otherwise. See page 59 of this study for DOE's 8.1 cents per kwh estimate:

That 8.1 cents for zero-carbon, natural gas electricity is affordable, when measured against today's electric rates.  For example, the national average price of residential electricity service is about 12 cents per kilowatt-hour, and the national average for all customer classes is 10.18 cents per kilowatt-hour, as of June 2012. 

At 8.1 cents a gas-fired power plant with CCS, a zero-carbon plant, would be able to provide generation that would allow a full residential retail rate of 12 cents or even less in many parts of the country, because  many electric systems charge residential customers less than 4 cents per kilowatt-hour for transmission and distribution services.

Adding to the impressive and tantalizing quality of DOE's cost analysis for gas with CCS is the gas price assumption that DOE used to calculate the 8.1 cents number.  DOE cannot be accused of cooking the books, when it plugged a gas price number of more than $5.50 cents per thousand cubic feet into its calcualation that produced its 8.1 cents estimate.

Today gas costs about $3.00 for a thousand cubic feet and the use of that price in the calculation probably would have pushed the cost of gas with CCS to about 6 cents per kilowatt-hour.  That would be an attractive price indeed.

DOE put new gas powered generation without CCS at 5.3 cents in its study, so the price difference in gas-fired generation without CCS and with CCS is 2.8 cents per killowatt-hour.  That differential could be closed further with economies of scale and research and development.

It is also important to note that zero-air pollution wind energy today can be produced in many parts of the country for 5 cents per kilowatt-hour so that gas with CCS would be about 2 to 3 cents more per kilowatt-hour than wind.

To stabilize climate emissions the world is going to need much substantially increased wind, low-carbon gas, gas with CCS, as well as coal with CCS, energy efficiency, solar, nuclear generation, and more.  What is encouraging about the DOE study is that the price of the innovation needed in CCS for gas is already reasonable and likely to fall further.  Environmental and economic opportunity lies ahead.

But questions abound. Will the gas industry realize it has a major, long-term business opportunity, and even necessity, and push forward the development of gas with CCS and birthing zero-carbon gas? Will the environmental community realize it too must embrace CCS and zero-carbon gas?

US Biodiesel Production Jumps 43% & Joins US Energy Boom

Skyrocketing production makes biodiesel part of the on-going US energy boom and a small reason why US oil consumption is declining. America's biodiesel plants increased production by 43% in the first half of 2012, compared to January to June 2011.  Production reached 523 million gallons or 12.4 million barrels. 

US biodiesel production for the year will likely exceed 1 billion gallons or 25 million barrels.  That is the equivalent of a bit less than 4 days of US domestic oil production that too is increasing.

All of America's biodiesel plants have a capacity to produce 2.1 billion gallons or approximately 50 million barrels.  Pennsylvania's 6 plants can produce 91 million gallons.

Apart from the economic advantage of being a domestic transportation fuel that replaces a barrel of foreign oil for every barrel of biodiesel produced, biodiesel has environmental advantages over gasoline, including a much better energy balance.   It is already a small reason why America's oil imports, oil consumption, and carbon emissions are declining. 

More US biodiesel is good news for our environment, economy, and national security.

Thursday, September 13, 2012

New Solar Report Documents Walmart, Kohl's, Walgreens, IKEA, & More Are Power Companies Too

This blog has been regularly posting about how name brands like Apple, Hertz, and Walmart are becoming power companies too by building substantial solar systems at their business.  SEIA yesterday published a report that focuses on the solar boom at box stores and the numbers are dramatic.  See also the NYT story about the report:

Walmart has 144 solar systems in 7 states that total 65 megawatts.  And get this.  Walmart intends to have 1,000 solar systems operating by 2020. 

Walmart is far from alone. Costco has 62 solar systems for 38.9 megawatts.  Kohl's 124 systems for 36.5 megawatts.  Other prominent names include Walgreens, IKEA, Macy's, Fed Ex, GM, and more.

The top 20 commercial users have installed 700 solar systems for a total of 275 megawatts of generation.  These are remarkable numbers documenting that solar boom has arrived. 

But it is still in its earliest days, and these 2012 numbers will be dwarfed by installations over the next 5 years.

US Carbon Emissions Fall In 4 of 6 Years Thru 2011 & 2012 Will Be Better Still

Slowly it is dawning on the press that Uncle Sam is cutting carbon and that gas is playing a major role. The LA Times is but one example of prominent media reporting that America has cut its carbon emissions in 3 out of the last 4 years and 4 of  last 6.,0,3568947.story .

An EIA energy brief triggered the reporting.

The US carbon reduction story is getting better, much better, in 2012.  EIA data for January to May, 2012 show a 6% decline in emissions, when compared to the same period in 2011. 

Once 2012 is in the books, the US will certainly have cut carbon emissions for 4 of the last 5 years and 5 of the last 7.  No country in the world has cut more carbon than the US since 2006!

Wednesday, September 12, 2012

57% Of Washington State Voters Support Marijuana Legalization: Has Ron Paul Created A Tipping Point?

Survey USA released today a poll of the Washington referendum question that would regulate and legalize growing, distributing and possessing small amounts of marijuana.  The results are startling. 

In the poll, 57% favor passage of the referendum question and just 34% oppose it.  This result follows Gallup reporting this year that nationally for the first time a majority supports regulation and legalization of Marijuana.  And support for medical marijuana laws regularly approaches 80% in polling.

All this points to a public opinion tipping point being reached concerning the criminalization of Marijuana.  A number of factors are likely at work in moving public opinion, but Ron Paul's Presidential campaign that embraced legalizing marijuana may have accelerated changing opinion. 

By engaging the thinking of tens of millions of people, prominent but failed Presidential campaigns can still change the course of America.  I suspect that Ron Paul and his campaign is doing that on the issue of marijuana control.

But the real test comes this November 6th at the ballot box, when Colorado and Oregon will also have marijuana referendum questions on the ballot.  The fate of those questions will be part of a fascinating, consequential election day in our great democracy.

PJM Case Proves It Is Possible Both To Slash Carbon Emissions & Power Prices

Often those opposed to reducing carbon pollution insist that doing so is too expensive and raises prices. Those economic objections must be taken seriously and examined on a case-by-case basis.  Yet, powerful examples also now exist that it is possible to both slash carbon emissions and prices.

The PJM power pool and its gas and wind booms are a leading example of why low-carbon can be low-price.  As PJM's gas generation has more than doubled and wind generation has quadrupled since 2008, power prices have dropped 35%.  The savings are $400 per year for a residential customer.

While PJM power prices have plummeted 35%, its carbon emissions have dropped approximately 12%, during the same period, although exact comparisons are made difficult by more areas of the country and generation joining PJM in recent years.  Why are prices and carbon emissions down?

The reductions in price and carbon emissions are primarily because gas displaced substantial amounts of coal generation.  Coal's PJM market share declined from 55% to 40%, as gas rocketed up from 7% to 19% of the market.  Gas powered generation emits about 50% less carbon than coal.  And coal power plants accounted in 2008 for about 90% of the carbon emissions coming from PJM generation.

Gas, however, did not alone produce all the decline in prices and carbon. The wind boom that saw its PJM market share jump from 0.5% to 2% played a contributing role in lowering market prices and cutting carbon emissions.  More zero-bid, zero-carbon power supply will both lower market clearing prices and carbon pollution!

Stunning Fact: Gas Price Falls About 40% For Power Plants In First Half Of 2012

From 2000 to 2008, gas was only slowly eroding coal's market share.  Coal lost about 0.5 percentage points of market share per year. Moreover that slow erosion was likely going to be ended and reversed by 150 new coal plants that were in development, as of 2005.

But then the shale gas boom, starting in 2008, crashed the price of gas, and the invisible hand of market forces transformed how electricity is made in the US. ( While gas prices have headed down since 2008, the price tipping point that made gas cheaper than coal was reached at the end of 2011 through the first 6 months of 2012.

In the first 6 months of 2011, gas delivered to power plants across America averaged $5.06 for a thousand cubic feet, and the market gains of gas were increasing, but the stampede to gas had not begun. When gas cost more than $5, coal continued to provide more than 40% of the nation's electricity and as much as 48% for the full year of 2008.

But by the first 6 months of 2012, gas delivered to power plants averaged $3.08 or about 40% less than in the same period during 2011.  And in many parts of the country, power plants were burning gas at prices well below $3.

In Texas, the power plant gas price was $2.59; Pennsylvania $2.83 down 45% from 5.11 in 2011; and in Ohio it was $2.66.

Those low gas prices created a massive stampede to gas electricity generation, during the first 6 months of 2012, and pushed coal's market share down to 32% and 34% in April and May 2012 respectively.

The stampede to gas set off by these low prices shoved down electricity prices and slashed carbon emissions.  More on both points soon.

Tuesday, September 11, 2012

New Report Documents Low Solar Pricing Pushes Installations To Record Levels In Second Quarter

Is the real solar story Solyndra or the incredible solar installation numbers that were released yesterday?  In the world of conservative politics and for the gullible, Solyndra and its demise are the "truth" about today's US solar industry.

But in the real world of energy, here are the latest startling US solar facts.  The US now has 5,700 megawatts of solar installed and operating, after having about 500 megawatts less than four years ago in 2008.  A total of 742 megawatts of solar was installed in just the second quarter of 2012 or more than in all of 2009.

Most importantly, the US may install 3,200 megawatts of solar this year; a total of 3.4 megawatts of solar is now under construction; and a huge 10,000 megawatts of solar that is awaiting construction have signed power purchase contracts. 

All that adds up to the US will certainly have more, and possibly much more, than 15,000 megawatts of solar operating by 2015.  Why is the solar installation boom a reality?

As Rhone Resch said: "With cost continuing to come down, solar is affordable today for more business, utilities, and the military."

Stunning Fact: Gas Generation In PJM Power Pool Up 168% Since 2008

The epicenter of both the shale gas production revolution and the boom in natural gas generation is within the PJM power pool, the world's largest wholesale electricity market, that also sits atop most of the approximately 450 trillion cubic feet of gas in the Marcellus Shale.  The rapid transformation of the fuel mix within PJM generation fleet that serves 60 million people and contains 185,841 megawatts of generation is creating stunning facts.

In 2008, natural gas power plants supplied just 7.3% of PJM's electricity, even though they comprised 29.3% of PJM's 2008 installed capacity. at Table 2-2, page 21 of the 2008 Market Report.  Gas power plants largely sat idle, because high has prices meant that they could not compete with coal-fired power, except in the highest demand hours of the year.

With gas sidelined by its high prices, PJM was essentially a coal and nuclear power pool, with them together generating 90% of the total electricity produced in 2008.  Then coal was still king within PJM, as coal plants produced 55% of PJM's power, while nuclear plants produced 34.6%.

Gas, hydro, wind, solid waste, biomass, and oil together accounted for the 10% of PJM's supply not coming from coal and nuclear. Notably hydro and wind supplied 1.7% and 0.5% respectively, during 2008.

Less than 4 full years later, the shale gas revolution has swept through PJM, and wind has quadrupled its market share.  The latest PJM market report states that, during the first 6 months of 2012, the market share of gas had increased to 19.4% (up from 7.3% in 2008) or by an incredible 168%.  Coal provided 40.3% of PJM's power, down 14.7 percentage points or a 27% decline in market share. And nuclear supplied 35.2%. at page 116.

The rise of gas quickly converted PJM from a 90% to a 75.5% coal and nuclear power pool.  Importantly, nuclear power provides a considerably higher portion of PJM's power than its approximately 20% national average.  And its market share is holding steady within PJM and nationally.

Wind in PJM has also had an excellent 3.5 years since the end of 2008, with it providing 2.0% of all electricity within PJM, a four-fold increase in market share.  In fact, wind now provides more electricity than hydro that registered a 1.8% market share.

Within PJM, we again see the simultaneous boom in gas and wind.  It is not a question of one or the other.  Indeed, gas and wind are better together than separately, because gas can firm wind, while wind hedges gas price volatility and is zero-carbon generation. And those different strengths make both of their futures better together than apart.

Latest CA Solar RFP Winners Average 8.37 Cents/kwh For Next 20 Years

I am a solar bull for one principal reason--sharply falling solar prices.  Here is a prominent, recent example.

California's Pacific Gas & Electric (PGE) latest RFP for up to 50 megawatts of solar power produced an average fixed price of 8.37 cents per kwh for 20 years.  PGE awarded contracts to 6 bidders. at page 19 for the average price.  The winning projects include two 20-megawatt and four 2-megawatt facilities.  The 2 megawatt facilities are relatively small, a size that is increasingly found behind the meter and on roofs, but not able to capture the very lowest cost per watt pricing in the solar market.

A 20-year contract for a fixed 8.37 cents per kilowatt-hour is enticing. The power will be produced in peak hours, when market prices are highest, and the facilities will provide capacity to meet hourly, daily, and annual peak demands.  As such, the power they produce is especially valuable.

And to state the obvious, the contract is for 20 years at a known price.  Unlike fossil fuel plants that must manage substantial fuel price volatility, these solar plants have zero cost fuel and very low other operating costs that allow them to confidently offer decades-long contracts at a fixed price.

It is also important to underline that the 8.37 cents is an average price of the 6 winning bids and the cost of building just about anything in California is higher than in most parts of the country.  That means two things.  The lowest bids accepted bids came in even lower than the 8.37 cents price, and prices for similar projects in some other parts of the country would likely be lower.

Finally, though this 2012, California 8.37 cents average price is impressive, even lower solar prices are ahead, because solar pricing continues to fall significantly!

Monday, September 10, 2012

Stunning Fact: Shale Gas Shoves PJM's Wholesale Electricity Price Down 33% In First Half Of 2012

During the first half of 2012, an already low PJM wholesale energy price fell through the proverbial floor, as gas prices delivered to power plants crashed to below $3 per thousand cubic feet.  From January to June, PJM's wholesale energy price fell 35%, down from the equivalent of 4.8 cents per kilowatt-hour to 3.1. at Table 1.7 on page 15.

The wholesale energy price accounts for approximately 70% of the total PJM wholesale electricity price, and the total PJM wholesale electricity price (energy, capacity, operating reserves etc) fell 33% in 2012 from the equivalent of 6.8 cents per kwh to 4.5 cents.

These low prices have delivered electricity bargains to consumers especially in Pennsylvania where competitive power prices are delivered quickly to the retail electricity market.  For producers, the low energy prices are cutting profits to the bone and making older, less efficient plants uneconomic.

The 2012 drop is even bigger when measured against PJM's energy price in 2008--the last year before major shale gas production in the Marcellus and around America smashed gas prices.  In the pre-shale gas era of 2008, PJM's load weighted energy price was the equivalent of 7.1 cents per kilowatthour, according to the 2008 State of the Market Report.  The difference between 2008 and 2012 prices is now a full 4 cents per kilowatt-hour.

A typical residential customer in Pennsylvania uses about 10,000 kilowatt-hours per year and is saving approximately $400 per year, as a result of the much lower PJM energy price produced by shale gas.
That's real savings for consumers and increased disposable income for the economy.

Stunning Fact: PA's Biggest Solar Farm To Cost Just $1.80/Watt!

The Brits are coming to Pennsylvania! Well, sort of. A renewable energy company owned by BP is planning to build what will be Pennsylvania's largest solar farm but the cost of the new solar farm is even more important.

Incredibly, the $2 per watt barrier will be breached by a new solar farm in Franklin County that is scheduled to be completed in 2014. Orion Renewable Energy Group is building a 14 megawatt, $25 million solar farm in Franklin County that will cost just $1.80 per watt fully constructed.
The project will more than double the 6-MW facility in Lancaster that is nearing completion and is  Pennsylvania's largest solar facility.

The Orion farm will be the first in Pennsylvania to break the $2 per watt mark, to my knowledge.  Indeed, its $1.80 per watt cost is without the benefit of any tax credits or others incentives.  The cost falls still further--probably to below--$1.20 per watt with incentives.

My rough calculation is that the farm will produce power for about 7 cents per kilowatt-hour (and possibly less) without incentives and below 5 cents per kilowatt-hour with incentives.  Given those costs, the farm could recover its investment by selling into the PJM spot market, since most of its power production would be during peak hours, when higher market prices prevail.  The farm will also qualify for PJM capacity payments, because the facility will indeed produce significant output during the hottest hours of the year when PJM total demand is highest.

The Orion Renewable Energy Pennsylvania facility is a major milestone on the march to $1 per watt solar.  That price is now in sight, and, when it is achieved, solar will become a dominant power source.

Friday, September 7, 2012

Barclays' Oil Warning: $180 Per Barrel & $8 Gasoline By 2020

The view of future oil prices from Barclays Bank should make us shudder. And it may even be optimistic.

Last week, Barclays Bank projected that oil would hit $125 per barrel next year and $180 by 2020. Those oil prices would translate to US gasoline prices above $4 in 2013 and at about $8 by 2020.

Barclays based its projection on inexorably rising global oil consumption and struggling world oil production. Yet, on both consumption and production, the US is moving in the opposite direction to the global trends that are the foundation of the Barclays' analysis.  Here oil consumption is back to 1990 or 1991 levels and oil production in 2012 will rise another 12%, reaching the highest mark in 14 years.

Despite the positive oil trends in the USA, the US economy still relies on oil more than any other fuel to power it and stalls whenever oil prices go to $125 or higher.  It remains maddening that neither at the national nor at the state levels has America embarked on a comprehensive plan that substantially accelerates the mass adoption of oil substitutes like natural gas, electricity vehicles, and biofuels.

For goodness sake, the  leadership of the US House of Representatives refuses to even allow a vote on the Pickens Plan (Natural Gas Act). The US Senate at least voted on it, and even 53 Senators voted for it.  But it did not pass, as it fell victim to more 60-vote obstruction from the Senate minority.  Despite this policy void, no state has aggressively acted to deploy fueling infrastructure for gas, electricity vehicles, or biofuels.

The failure to make moving beyond oil a top priority means that our economic and national security remains imperiled.  Hostilities over Iran's nuclear program could begin almost at anytime, and the world oil market prices in that possibility today by adding about $20 to each barrel of oil. If war begins, oil prices almost certainly quickly go to $150 and possibly beyond.  And that could happen this month or year.

But today's era is one of high oil prices, even if peace reigns, simply because of exploding demand for oil in China, India, and even the Middle East itself. The damage done by high oil prices to economic growth is here and now.  As Barclays warns, much worse, however, is likely ahead, because our economy remains over an ever more expensive barrel of oil.

Stunning Facts: US Oil & Coal Consumption Dropping To 1990 and 1985 Levels Respectively

Remarkable changes in the usage of different energy sources are reshaping how America powers itself.

America is consuming less coal and oil than it was 20 to 30 years ago, while natural gas and non-hydro renewable energy set new records for both consumption and production.  See Section 2 at page 21: As the usage of competing fuels changes, total energy consumption declines and will likely drop to 1998 or 1999 levels this year, making the energy business intensely competitive.

Unlike in most of the world, US coal consumption is falling, down about 18% in the first 5 months of 2012, compared to the same period in 2011.  This year coal consumption may fall to 1985 or before levels (see Table 6.2 in the EIA data).  The decline in coal consumption is a direct result of natural gas displacing coal to generate electricity.

Oil demand is down too in the US and is on track to decline another 2% compared to last year.  US oil consumption likely will be at 1990 or 1991 levels in 2012.

Though the US is consuming substantially less oil than it did in the peak year of 2007, US oil production is roaring.  The result of less oil consumption and more production is a significant drop in US oil imports.

As consumption of coal and oil falls in the USA, natural gas set records for consumption in 2010, 2011, and may do so again in 2012, though so far it has registered just a 1% increase in 2012, much less than one would expect given its success in capturing electricity generation market share.  In fact, The 2012 increase in natural gas consumption is not nearly enough to absorb the enormous new shale gas production.  Hence natural gas prices have been persistently low in 2012.

Thursday, September 6, 2012

NYT Hypes Gas Water Usage Issue In Front Page Story

The NYT today has a front page story that creates the dramatic impression that gas drilling is using so much water that it is harming farmers.  The piece is hype that burries in a flood of words two facts revealing the concocted story frame to be false and misleading. 

If you get beyond the headline and off the front page, you learn that gas drilling in Colorado uses somewhere between 0.1% and 0.2% of all water. That's about what it does in Pennsylvania too.

The range of disagreement about water usage in Colorado between the gas industry and its most vociferous critics is literally 0.1%, with the industry saying it uses 0.1% of all water and the critics insisting its 0.2%.

Another way to state the numbers would be that the gas industry does not use 99.8% to 99.9% of all the water consumed in Colorado.  And the industry and its critics agree on those facts.

Now every drop of water is important, especially in a drought, and every user of water should conserve water, no matter how big or small they are. And the gas industry must conserve too, but its water recycling effort is more than many are doing.

When the gas industry uses about 1 out of every thousand drops of water consumed, water conservation efforts will be much more successful focusing on leaks in infrastructure, running toilets, wasteful watering, and so on.

This NYT story is just another example of how fundamentally misleading and unbalanced so much of its news coverage of the gas issue is.

Gas Beats Down Carbon Emissions Again: US Emissions Drop Another 6% So Far In 2012

The latest EIA data for energy related carbon emissions show them falling 6.3% in January-May 2012, compared to the same period in 2011.  How big is that?

Huge! It is as big a drop as happened in 2009, when the economy collapsed, but this time GDP grew both in 2011 and 2012.  The 2012 drop so far is much bigger than in 2011 but is made more impressive, because it follows 2011, when carbon emissions also decreased. Back-to-back years of falling carbon emissions remain unusual.

Carbon emissions for 2102 are on course to reach 1992, 1991, or even possibly 1990 levels. Just amazing!
The 2012 drop is due to mainly gas displacing coal to make electricity and falling oil consumption due to efficiency and growing oil substitutes.

Unlike previous reductions, the 2012 drop is not due to renewable energy, since total renewable energy production is down in 2012, as a result of a significant decline in hydro generation.

Despite Big Wind Gains, Total Renewable Electricity Production Falls In First Half Of 2012

The wind industry is setting wind production records virtually every month, and wind power increased 16% from January to June 2012.  Yet, total renewable energy generation dropped about 5% during the first 6 months of 2012, compared to the same period in 2011. Why?

Lower river flows caused hydro generation to fall 14.3%, and hydro production still dominates the renewable energy totals, accounting for more than half of all renewable energy electricity. While total renewable energy generation dipped so far in 2012, renewable electricity now routinely accounts for more than 13% of America's power.

Hydro typically provides 7% or more, and wind is getting close to providing 4% of the nation's power.  Moreover, the EIA data is not catching about half of the solar generation that is distributed generation--an increasingly important data point.

Were renewable energy not on the grid, electricity bills would be much higher and the nation's electricity supply would be unreliable.

Wednesday, September 5, 2012

The Dozen Most Important Energy Facts Of President Obama's Term

Energy is assuming appropriately a prominent role in this year's campaign, but often facts are the first casualty of political debate.  In the hope of infusing facts into the political dialogue ahead, I have compiled my selection of the most important energy facts of the President's first term.

Each fact was selected because of its importance to our economy, national security or environment.  Different people will look at many of these facts and disagree about whether they represent progress or folly. Moreover, the President and his policies had a lot to do with creating some of the chosen facts but little or nothing to do with others selected. 

Again, the point of the list is to select the most important energy facts of the President's term to provide a foundation for discussion.

12. US Solar power increased about 14-times since 2008, skyrocketing from 500 megawatts installed in 2008 to about 8,000 megawatts at the end of 2012, and solar prices declined about 75% to $2.50 per watt for large solar farms.

11.  The global solar market reached $90 billion and was bigger than the global arms market in 2011.

10. Wind power increased from 25,000 megawatts installed in 2008 to about 55,000 megawatts by the end of 2012, as at least 7 states generated more than 10% of their electricity from wind, but Congressional inaction on the Production Tax Credit puts many 2013 projects on hold and triggers layoffs.

9. US carbon emissions decline to the lowest levels in 20 years, as a result of natural gas displacing coal and oil, more renewables, and energy efficiency. The US cut carbon emissions more than any nation in the world since 2006.

8. Toxic air emissions nationally declined 19% in 2010 and further declines took place in 2011 and 2012, because more coal plants installed scrubbers and more gas that emits no toxic air pollution was used to make electricity.

7. The electricity market share of coal-fired generation fell from 48% in 2008 to approximately 36% in 2012, and gas increased its generation market share to about 30% in 2012.  In April 2012, gas and coal each supplied 32% of America's electricity.

6. Total US energy demand fell to 1998-1999 levels, with coal and oil consumption dropping respectively to 1985 and 1990 levels.

5. US Oil production rose another 12% in the first 7 months of 2012 and hit its highest level in 14 years.

4. Oil imports will drop to 42% of US oil consumption in 2012, the lowest level in 20 years, and down from 60% in 2005.

3. Sustained high oil prices caused in 2011 a new record high average annual gasoline cost of $2,850.

2. Thanks to shale gas that supplied about 37% of all US gas, natural gas production set new record highs in 2010, 2011, and possibly 2012, as the US became the world's top gas producer. Hundreds of thousands of jobs were directly and indirectly created by the gas boom.

1. Natural gas prices plummeted from $13 per thousand cubic feet in July 2008 to $2.75, saving many families $1,500 in gas and electricity costs, compared to 2008 pricing.

I pick the falling natural gas price as the biggest energy fact of the President's term, as it generated economic benefits estimated at $1 billion per day as of the Spring of 2012, and  helped to prevent a double dip recession in both 2011 and 2012, as sustained high oil prices and a growing. European financial crisis cut growth. Falling natural gas prices also led to plummeting toxic air and carbon dioxide levels, because low-priced, cleaner gas is increasingly used to make electricity and heat buildings.

These facts don't answer important policy debates but do provide direction.  For example, I believe the failure of Congress to pass the Natural Gas Act (the Pickens Plan), despite the domestic gas glut and high global oil prices, is a major mistake.

Energy facts are essential to good debate about  tax policy, regulation, environmental and public health stewardship, national security, and economic growth.  Most importantly, energy facts are essential to planning for the future and a vision for the nation, without which the nation moves blindly.

Volt Sales Set Record & My Sister Averages 354 MPG

This fact already may have triggered another rant from Rush, expressing as only he can his desire for the Volt to fail.

In August, the Volt set a new monthly sales record at 2,831, beating by 24% the previous record of 2,289 vehicles in March 2012.  Gas prices are fueling sales.  While the Volt had its best month ever, vehicle sales in the US were up strongly last month to an annual rate of 14.6 million, with GM up 10%; Chrysler 13%; and Ford 14%.

Word of mouth remains the most powerful form of consumer endorsement, and here's the latest from my sister who has driven a Volt since November 2011.  Her Volt has gone over 10,000 miles, used a bit more than 30 gallons of gasoline, and averaged an "are-you-kidding-me" 354 miles per gallon. 

Clare charges regularly at her home, her place of work, and her daughter's home.  She has used public charging stations a handful of time at Baltimore Airport and University of Maryland at College Park.
She drives on electricity more than 90% of her miles traveled. 

My sister reports only one mechanical problem with her Volt--it jams Rush's radio show.

Tuesday, September 4, 2012

Astonishing Chinese Coal Production & Safety Facts

Writing for today's Wall Street Journal at page A13, James Areddy unearths astonishing facts about Chinese coal production and mining fatalies.

Consider that Chinese coal production is "...half of the global total and 3.5 times that of the next biggest coal producer, the US, according to the BP Statistics Review of World Energy." Despite that massive domestic production, China's appetite for coal exceeds its ability to produce it, and China now imports coal from the USA, Indonesia, Australia and from around the world. Wow! 

Areddy then reports that China had "around 2,000 miners" die on the job in 2011 but that was a big improvement from 3,786 deaths in 2007, and 7,000 in 2000.  By contrast, 17 miners died in US mine accidents in 2011.

In Pennsylvania, there have been no deaths at our mines for more than 2 years, a tremendous credit to the coal industry here, its employees, the UMW, and state and federal regulators.

2012 US Oil Production Will Be Highest In 14 Years & US Oil Boom Gets Bigger

The latest EIA data confirms that the US oil boom is hitting new highs in 2012.  During the first 7 months of 2012, production jumped another 12%, compared to the same period in 2011.  See table 3.1 at:

Rather incredibly, the US will produce more oil this year than it has in the last 14 years and will surpass the 1998 production total.  Moreover the data indicates that the oil boom is getting bigger as the year goes along. The highest monthly production this year was in July, the last month for which data was reported, and the last 5 months probably will see higher average production than was the case in the first 7 months.

Rising US oil production comes at a time of falling US oil demand, with demand back to approximately 1990 levels.  This powerful combination is shrinking US oil imports but does little to moderate global oil prices, as global oil demand continues to increase by about 1 million barrels per year and the real possibility of war with Iran adds up to $20 per barrel.

Of course, US motorists pay global oil prices, and the average cost of gasoline in 2011 hit a record high of $2,850 per family.  Such prices hurt US economic growth and can trigger recession, when prices reach $125 per barrel or more. The only remedy for this persistent economic threat is to move beyond oil to substitutes like natural gas, electricity, and biofuels as much as possible and as soon as possible.

US Total Energy Consumption Falls To 1998-99 Levels & Energy Efficiency Revolution Quickens

The shale gas revolution properly attracts barrels of ink, but scant attention is paid to another big energy change rolling through homes, offices, factories, and vehicles--the US energy efficiency revolution.

Stunningly, total US energy consumption is back to 1998-99 levels, according to EIA data. Wow! at page 21.  That demand fact is shaping our economy, environment, the energy business, and the shale gas revolution itself.

Part of the decline is an historical trend to toward more energy efficiency or productivity, apparent since 1973, when the EIA began keeping such data.  In 1973, it took 15.41 thousand BTU to produce one dollar of GDP; by 1995 10.02; and today 7.31 thousand BTU per dollar of GDP.

While the economy became more energy efficient, it still used more total energy each year.  No longer. Total energy consumed peaked in 2007 at 101,926 quadrillion BTU.

Since that peak, total energy consumption declined in 3 out of 4 years from 2008 to 2011. The first 5 months of 2012 indicate that energy consumption this year is on course to drop another 1.5% to about 95.7 quadrillion BTU.  We are going back to the future in total energy consumed.

Some would dismiss this emerging trend toward lower energy usage as simply a function of economic trouble.  But since July 2009, the economy has grown for 13 straight quarters, and our 2012 GDP will be bigger than the 2007 GDP, when energy usage peaked, and considerably bigger than the 1998 or 1999 GDP.

This drop is especially remarkable when one remembers that, like our economy, the US population is 30 million bigger than it was just in 2000. A bigger population; bigger economy; and lower energy consumption. What explains it?

Structural changes in energy markets and consumption are the major explanation for the decline in total energy consumed and the energy intensity of the economy.  Stronger energy standards for buildings, appliances, vehicles have all been adopted in the last 20 years and are creating tipping points. Environmental initiatives like the green building movement have gained momentum and scale.  More people are embracing energy thrift as a personal value.

As individuals, families, companies increasingly go green, more states join California and require electric and gas utilities to invest extra billions to cut usage, as a low-cost way to meet the energy demands of consumers.  Wholesale electric markets have reformed and allow both energy efficiency and demand response to bid into their capacity auctions.  Programs paying electricity consumers to cycle their air conditioning on high heat days are proliferating. As a result, a friend enrolled with three air conditioners enrolled in such a program   tells me that his electric bill was zero in July.

And persistently high oil prices have made consumers of all sorts watch every drop and virtually every one of the 14 million plus vehicles bought annually get close to 20% better mileage than the ones they replace.

All that adds up to a real energy efficiency revolution that is quickening in 2012 and producing a stunning fact of the day!

Monday, September 3, 2012

Labor Day Facts That Challenge Our Society To Change

This Labor Day compelling facts show that our workplaces are broken for far too many Americans and for the good of our country.  Today Americans produce more than ever but get the lowest share of what they produce since 1929.  See Hedrick Smith:

Though productivity is up 80.1% since 1973, many families must have two paychecks to earn the median income, and a single worker working two jobs to pay the bills is far from unusual.  Why do so many who have jobs struggle to stay in the middle class, when productivity is roaring? Simply put, hourly compensation has barely budged--up just 10%--over the last 40 years, despite big productivity increases.

If the GDP is growing in real terms and national income is rising, but most of the increased wealth is not going to paychecks or benefits, where is it going?  Part of the answer is that corporate profits now account for their biggest share of national income since 1942.

As Hedrick Smith's article describes, too often in America this Labor Day workers are seen as costs to be squeezed and not resources to be nurtured by insuring rising productivity produces higher compensation.  This course ultimately undermines the national interest itself and must be changed for the good of all, including businesses and their long-term profits.