Tuesday, April 30, 2013

EPA Slashes By 20% Fugitive Methane Emissions of Gas Production: What It Does And Does Not Mean

The EPA continues to gather data on the life-cycle emissions of natural gas and its latest update slashes by 20% its methane emission number for natural gas production.  EPA's April 2013 decrease followed an upward adjustment in 2011.  Even prior to this new number for fugitive methane emissions, 6 papers had found that gas emits about 50% less carbon than coal when both are used to generate electricity. The 2013 EPA fugitive methane emissions number will increase further the carbon benefits of gas over coal.

Moreover, there is no argument that gas emits less soot, mercury, lead, arsenic, sulfur dioxide, and nitrogen oxide--all pollutants that sicken and cause premature deaths--than coal.  The EPA new data focuses on the discussion about global warming impacts of gas versus coal and that alone.

As Kevin Begos of the AP reports in the linked to story, Professor Howarth, who authored the single paper contending shale gas emits as much or more carbon than coal, did not welcome EPA's 2013 fugitive gas number.  While there will be continuing data wars about the methane emission rate, perhaps we could all agree that reducing methane emissions from gas production can and must be done.  Indeed, the focus on methane fugitive emissions has almost certainly played a useful role in tightening regulation and in motivating more drilling companies to put resources and attention into cutting emissions through better maintenance, practices, and technology.

Such greater attention does lead to actual cuts in fugitive methane emissions.  Fugitive methane emissions, therefore, are likely declining now in the USA, and future EPA measures of fugitive methane emissions probably will go down again.  That is almost certain once the EPA green completion rule takes full affect in the next two years, as that rule can slash methane emissions during the well completion process by 90%.

Regulators and the gas industry itself should recognize by now that fugitive methane emissions from gas production could be the most important environmental impact associated with natural gas production.  Across the board, gas must cut its environmental footprint, but its carbon impact will be decisive to the climate and to its marketplace and political acceptance.

Staples Is A Power Company: Installs 37th Solar System & 2 Fuel Cells

Flat roofs are out of sight and mind, but a lot of solar is being installed on such roofs at big retailers across America.  Staples just installed its 37th solar system that now provides 14 megawatts of solar power.

Despite those impressive numbers, Staples ranks 7th among Fortune 500 companies and 4th among retailers in solar capacity on-site. It's just amazing what is happening on flat business roofs out of our sight.

Staples solar revolution is the product of a partnership with Sun Edison that features the solar leasing model.

In addition to the proliferating solar systems at ifs stores, Staples has installed 2 fuel cells.  Both were manufactured by Bloom.

The combination of on-site solar and fuel cells are true competitors to the grid and central station power plants.  Look no further than Staples for that emerging energy fact.

Monday, April 29, 2013

Gas Generation Takes Beating, Falling 7.7% Because Coal Generation Jumps 8%

Gas is getting beat by coal in the electric generation market in 2013 and beat soundly.

Natural gas generation fell a sharp 7.7% in February 2013 compared to February 2012.

And the cause of gas's decline is rising coal generation.  Coal jumped 8% in the same period.

Coal and gas duke it out daily in power generation markets. and the price of gas has reached levels that insure gas will lose in 2013 a significant portion of the market share that it gained from coal during 2012, when gas was about $1.50 per thousand cubic feet than it is now.

Last year, coal provided 37% and gas 30% of US electricity.  This year coal may well supply 40% and gas just 25% of our power. One consequence of the shift back to coal from gas will be higher carbon dioxide emissions this year.

The US said "no" to gas and "yes" to coal in almost equal amounts through February 2013. It is an energy fact of life that some still resist.

Game Changer: 15 Electric Vehicles Earning $1,800 By "Charging" The Grid & Sharply Improve EVs' Economics

Fifteen electric vehicles are selling balancing services to the PJM grid for $5 per day or about $1,800 per year.  Why should you care? It is one of the most important energy stories of 2013 to date.

Electric vehicles monetizing their ability to provide grid ancillary services that maintain the grid's stability is a game changer for electric vehicles.  It radically changes their economics and could slash by itself the payback period of electric vehicles to just 3 to 5 years.

The 15 electric vehicles are equipped so that they can both take and feed power from and to the grid. These two-way charging vehicles earn money when they are supplying the grid with service that helps to keep it in balance and stable.

Those grid earnings reshape the economics of electric vehicles.  If one assumes that an electric vehicle costs about $10,000 more than a gasoline vehicle, and fuel savings are about $1,250 per year, the payback period is 8 years.

But if the electric vehicle can earn $1,800 per year for supplying "ancillary services" to the wholesale grid, as the 15 EVs are doing with PJM, then the payback period is a little more than 3 years.  That is a game changer.

Throw in the EVs ability to power a home when the grid is down, a function that Nissan is already including in advertising for the Leaf, and the value proposition for electric vehicles would become compelling for tens of millions of us.

Friday, April 26, 2013

Solar Foundation Jobs Map Is Treasure Trove Of Facts: Texas Has More Solar Jobs Than Ranchers

California is back creating jobs.  It created 268,000 jobs last year, and its booming solar industry alone provides 43,000 direct jobs and many more indirect jobs.  Indeed, according to the Solar Foundation, California has more solar jobs than actors and Texas more sun positions than ranchers.

The Solar Foundation's solar jobs map has fascinating solar jobs information for each state. Take a look:

As for Pennsylvania, solar jobs total 4,000 and most are in manufacturing.

Through August 2012, total national solar employment was 119,000 jobs and had grown 13% over the prior year.  The Solar Foundation expects solar jobs to grow 20% from 2012 to 2013, a ten times faster jobs growth rate than found in the national economy.

Hybrid Cars Hit 14% Of Toyota Sales & Make Toyota World's Number 1 Auto Manufacturer

What both is a key to making Toyota the world's number 1 manufacturer and driving down US oil demand? Hybrid autos and their growing sales.  Just consider these facts.

An impressive 14% of Toyota's sales are already hybrids, and the total is growing.

Toyota reports that ii sold more than 5 million hybrids globally, that sales of the Prius in the USA will be 250,000 this year, and that it is bringing to the market another 18 hybrid models.

Hybrid buyers look to lighten their gas costs and to lighten their environmental footprint and are achieving both as more and more hybrid models reach the marketplace.  Indeed, collectively hybrids are driving down US oil demand by using oil more efficiently and substituting electricity for oil in ever greater quantities.

Toyota and happy hybrid car drivers are driving forward revolutionary change in transportation!

Thursday, April 25, 2013

Today I Annouce My Plan For World Class Drilling Regulation & Enforcement In Pennsylvania

Pennsylvania's public has lost confidence in Governor Corbett's oversight of the gas industry.  This crisis in public confidence is caused by the Governor's opposition to a gas drilling tax, his Administration's failure to hear and investigate fully and respectfully concerns and complaints, to having too few DEP staff regulating the gas industry, and a softer enforcement approach that has included a 50% drop in violations issued to the gas industry since 2010.

To remedy this crisis in public confidence, Pennsylvania must turn the page on Corbett's failed oversight of the gas industry.  My plan for world class drilling regulation and enforcement turns that page. 

My plan would cut by 90% air pollution from drilling operations; protect fully rivers and streams from being polluted by drilling wastewater; prevent more drilling in state forests and state parks; and enact a gas drilling tax like West Virginia.  Most of my plan could be implemented through the regulatory authority of the Governor.  Some of it like the drilling tax requires new legislation.

You can read the details about the gas drilling plan that includes flaring, pits, and well completions here:

Gas Continues Its War On Coal: Capital Costs Of A Coal Plant Now Three Times Greater Than Gas Plant

Why are gas-fired power plants dominating, with renewable energy, new generation markets?  Certainly, the booming gas supplies and the resulting lowered gas prices and increased confidence are a big explanation.  A second reason is that gas-fired power plants and most renewable energy generators meet tightening air quality regulations, without the need for additional large investments in environmental controls like scrubbers.

But there is a third reason why gas and renewables were 100% of the generation built in the USA during the first quarter of 2013.

The capital costs of building gas and renewable plants are falling fast and far.  Indeed, the spread in the capital costs of building a natural gas plant versus a coal plant widen significantly in the last 2 years as capital costs for gas plants fell 10% to $917 per watt, while coal plants inched down 1% to $2,934 per watt.

At this point, the capital costs of a coal plant are more than 3 times the cost of a natural gas plant and about 30% more than land wind farms. The capital cost advantages of wind and gas plants are becoming decisive in the marketplace, especially when the fuel costs of wind are zero for 30 years and confidence has risen that gas costs will remain in a $4 to $6 range for 10 to 20 years.

"Corbett's Miracle": 33,000 People Left PA Labor Market In March--Highest Monthly Drop Since 1983

An incredible 33,000 people left the Pennsylvania labor market during March.  That is the biggest one month drop since 1983.  This huge collapse caused columns cracking about the "Corbett Miracle." See:

March's mass exit from the Pennsylvania labor market demonstrates again that Corbett's belief that gas drilling can and will bring broad prosperity to Pennsylvanians is fundamentally mistaken.  Again, no single industry can do that.

March's mass exit also coincides with Governor Corbett's second foreign trade trip.  The most recent was 10 days in Brazil and Chile and produced supposedly 74 jobs and followed a lengthy trip in 2011 to France and Germany that to date has produced apparently a handful or no jobs.

Broad prosperity requires world class education, not 19,000 education layoffs and rising school taxes in 70% of school districts.  Broad prosperity requires substantial investment in roads, bridges, water, sewer, telecommunications, grid, fueling infrastructure.  It requires embracing higher education, innovation, and public-private partnerships.

As a result of "Corbett's Miracle," Pennsylvanians are giving up looking for work in record numbers, and Pennsylvania ranks 49th or 50th in job creation. Those facts make most Pennsylvanians ready for a new Governor.

Wednesday, April 24, 2013

FracFocus Falls Short & PA DEP Must Provide An Alternative

Nothing has done more to alarm the public than the failure to provide years ago comprehensive disclosure of all materials used in fracking fluids.  The gas industry and many regulators have turned to FracFocus to solve this crisis of public confidence. http://fracfocus.org/.

A Harvard Law School study now raises critical problems with FracFocus and notes Pennsylvania law requires the Department of Environmental Protection to fill the void created by FracFocus's inadequacies.

The Harvard Law Study at page 10 notes that Pennsylvania law requires the Department of Environmental Protection to investigate establishing an alternative to FracFocus, if its data base was not searchable by January 2013.  It was not.

Given the failures of FracFocus, the Pennsylvania Department of Education must go beyond investigating using the DEP website as an alternative.  It should establish an alternative at its website that would allow the public full access to information that is disclosed in the Commonwealth.  Full access means that the data base must be convenient to use and searchable.

Public confidence in regulatory oversight is impossible without excellence in disclosure.  FracFocus, unfortunately, is not anything close to excellent. And so, the Pennsylvania Department of Environmental Protection cannot any longer rely on it.

Pennsylvania Learns Governors Matter As PA Ranked 7th In Job Creation In 2010 But 49th Now

Never mind that Pennsylvania ranks 49th in job creation, Governor Corbett was "ridiculing" Rendell and celebrating Pennsylvania's economy on Friday, April 19th at a conference of his right wing supporters.

Read the story.  The Governor really was declaring mission accomplished, even though Pennsylvania is at the bottom of the ASU job creation rankings, and an incredible 33,000 Pennsylvanians left the labor force in March, the biggest one-month drop since 1983.

Not satisfied with his naked attempt to put lipstick on the pig of his jobs record, Corbett also stooped to a series of false and audacious attacks on Governor Rendell that suggest Corbett has a tenuous grip on reality.  It does, indeed, take nerve for Corbett to attack Rendell on jobs, when Pennsylvania ranked 7th in job creation, during Rendell's last year of 2010, according to the ASU index.

That's right Pennsylvania ranked 7th in job creation from January 2010 to January 2011 and 11th from January 2009 to January 2010.  Those numbers alone should make Corbett have the good sense to stop throwing stones at Rendell's economic record.

Also, somebody, anybody, should tell Governor Corbett that over the last year--from March 2012 to March 2013--Pennsylvania ranked 49th or 50th, depending on whether seasonally adjusted or unadjusted Bureau of Labor Statistics data are used.  On the issue of jobs, Corbett resides in a huge glasshouse.

And finally, on the issue of budget balancing, every single Rendell budget balanced and his last left Corbett an $800 million surplus!  Again, that's right.  The budget that began July 1, 2010 and ended June 30, 2011 (Rendell's last) ended with an $800 million surplus!

Corbett put $600 million of that surplus into the state's Rainy Day Fund in his budget that began on July 1, 2011! Don't expect Corbett to tell Pennsylvanians those inconvenient budget facts.

Pennsylvania is learning the hard way that Governors make a real difference.

Tuesday, April 23, 2013

The Price Of Oil & Gas Regulation: Health, Environmental & Safety Costs Put At Just 70 Cents/Barrel

How much does health, environmental and safety regulation add to the cost of producing a barrel of oil?
According to a new study by Lux Research, it adds about 70 cents per barrel or less than 1%.

A health, safety, and environmental regulatory regime that adds less than 1% to the cost of a barrel of oil is certainly not over regulating.  Indeed, at these numbers, the danger is under-investment in health, safety, and environmental protection.

Lux Research calculates global spending on health, safety, and environmental regulation by the oil and gas industry stands at $35 billion and projects a 60% increase over 17 years or a slow annual rate of growth.
http://www.luxresearchinc.com/news-and-events/press-releases/167.html.  Lux also states the accident rate has declined by 50% in the last decade.

The USA accounts for 39% of global spending to comply with health, safety, and environmental regulations. The USA, however, accounts for about just 8% of global oil production. Given how much of the global spending on regulatory compliance is in the USA, substantial parts of the world are imposing virtually no health, safety, and environmental costs.

Lux also states that, when oil is spilt in the USA (a not unusual event) penalties amount to $8,000 per barrel.  Even in the USA, where the regulatory regime is among the world's strongest, the real danger is under-investment in health, safety, and environmental protection and not too much regulatory oversight or compliance cost.

Stunning Fact: PA Jobs Growth Rank Falls From 13th To 49th Since March 2011

The business school at Arizona State University runs a monthly jobs growth index tracking job creation in all 50 states.  With its oil and gas boom, North Dakota ranks number 1 in the ASU index. California is creating thousands of jobs once more and ranks 6th.  New York is 32nd.  As for Pennsylvania, read and weep!

ASU ranks Pennsylvania 49th during the last 12 months, because ASU uses the seasonally non-adjusted data from the Bureau of Labor Statistics in BLS Table 6.  Pennsylvania would rank 50th, if the seasonally adjusted data in BLS Table 5 were used.

Moreover, the trend in Pennsylvania is worsening.  ASU ranked Pennsylvania 13th for the period March 2010 to March 2011 or for essentially the last year of the Rendell Administration.  Pennsylvania fell to 39th for March 2011 to March 2012 or during the first year of the Corbett Administration. And as Governor Corbett worked his jobs magic for a second full year, Pennsylvania fell to its current disastrous 49th position in the ASU rankings.

Corbett's mistakes now have come home to roost.  His massive attacks on education caused 19,000 lost jobs and 70% of local school districts to raise school taxes, while often laying off teachers. Corbett's under- investing in roads, bridges, and infrastructure and neglecting health care, agriculture, and clean energy made job creation worse.

Few Pennsylvanians currently know that their state has gone first from 13th to 39th and now to 49th in job creation during Corbett's term.  But they will soon enough.  As national rankings like those of ASU make clear, the jobs disaster of the Corbett Administration can no longer hide.

Monday, April 22, 2013

Getting Cheaper & Dominating New Generation Markets: Capital Costs of Solar, Wind, and Gas Power Plants Drop Another 10% To 22%

Rapidly falling capital costs are a main reason why wind, solar, and gas now dominate the new construction market for power plants.  EIA calculates that capital costs for the three are down 10% to 22% since 2010.

The capital costs for a large solar farm and a big wind farm fell 22% and 13% respectively.  A conventional natural gas plant saw its costs fall 10%.  See Table 2 at page 7.

In the first quarter of 2013, all new electricity generation built in the USA was wind, solar, or gas. Falling capital costs of the Big Three are making each more competitive than ever!

Friday, April 19, 2013

PA Ranks 50th in Job Creation, Actually Loses Jobs During Last Year, While Nation Creates 1.91 Million

The performance of Pennsylvania's economy grows worse and worse.  During the last year (March 2012 to March 2013), Pennsylvania became the only state in the nation to lose jobs.  While the nation created 1.91 million jobs, Pennsylvania lost 5,800 jobs, according to the latest Bureau of Labor Statistics report.

Pennsylvania's disastrous job creation record during the last 12 months compares terribly to New York, where 85,000 new jobs were created, or New Jersey that generated 54,000 jobs, or California that grew 260,000 new jobs.

During the last year, Pennsylvania was also one of just 8 states where the unemployment rate actually rose, even as the national unemployment rate declined.  Pennsylvania's unemployment rate was 7.6% in March 2012 but rose to 7.9% in March 2013.  For another month, Pennsylvania's unemployment rate was above the national average.

Pennsylvania's rate fell from 8.1% in February to 7.9% in March because of a large decrease in the labor force as people just gave up looking for jobs.

The responsibility for this terrible jobs performance, literally the worst in the nation, rests squarely with the disastrous policies of Governor Corbett.  Corbett is a career prosecutor who fails to understand our econonmy and has managed to turn a gas boom and a national recovery that created 1.91 million jobs during the last 12 months into less jobs in Pennsylvania. 

For a new direction for Pennsylvania and our economy, please visit www.hangerforgovernor.com.

Businessweek Publishes Hanger Profile--Here It Is

Businessweek has published a profile of me and my run for Governor. Here is the link to the story:

Karen Weise is the reporter and I appreciate her writing and professionalism.  For more information on the campaign, please go to www.hangerforgovernor.com or www.facebook.com/hangerforgovernor.

Texas and Wyoming are the only states producing more total energy than Pennsylvania at this point. Both have no income taxes but do significantly tax energy.  Pennsylvania inexplicably is almost the reverse.

At this point in the race, Governor Corbett is among the most vulnerable Governors in the country.  I and the other Democratic candidates are leading him.  At this point, there is no need to settle for second or third best for the next Governor.

My executive experience, accomplishments when in office, and my plans for the future make me the best choice for the next Governor of Pennsylvania.

EIA Projects That Fossil Fuels Still Provide 78% Of US Energy In 2040

"The more things change the more that they stay the same" would sum up EIA's reference case in its 2013 Annual Energy Outlook.  If EIA's crystal ball comes true, Uncle Sam will get 78% of his energy from fossil fuels in 2040, down most modestly from 82% in 2011.

Renewable energy, in all its forms, increases from 9% of our total energy in 2011 to 13% by 2040.

If EIA is right, the shares of the energy pie going to fossil fuels, renewable energy, and nuclear barely change
over the next 27 years.  Since EIA also projects a small annual increase (0.3%) in energy use, renewables and to some extent natural gas get a bigger slice of a bigger energy pie.  Renewables and gas capture almost all the growth in energy use or the increase in the energy pie so the total amount of energy provided by renewables increases significantly, even though their market share rises modestly.

Interestingly, EIA also projects that coal will almost hold its market share, dropping from 20% of total energy in 2011 to 19% in 2040.  EIA has coal consumption rising 0.1% per year from 2011 to 2040 and growing back to 2011 levels by 2030.  If there is a war on coal, it does not show up in these numbers. 

What does the EIA crystal ball say about gas?  It sees a truly marginal increase in market share from 26% of total energy in 2011 to 28% by 2040.  That's pretty slim pickings, given the shale gas revolution frenzy.

And still in 2040, oil is the nation's leading source of energy, providing 32% of all our energy, compared to 36% in 2011, according to the EIA reference case.  Those numbers would mean that gas makes only small gains in the transportation sector.

As for nuclear, EIA projects that it will provide 9% of total energy in 2040, up a tad from 8% in 2011.

My own view is that the EIA reference case badly underestimates the rise of solar (see the prior post for why) as well as energy storage technologies.  I suspect it also understates the increase in market share for natural gas that will occur.  In short, while EIA projects growth for both renewable energy and gas, I expect their actual performance will be considerably stronger than EIA project. I would also be surprised if nuclear and coal reach the EIA numbers.

On the demand side of the market, the EIA projections seem more solid.

Key Fact: Utility Trade Group Says Solar Today Is Competitive In 16% Of US Service Territories

Few energy facts matter more than the competitive posture of solar.  Solar that is competitive with the grid is an energy game changer like shale gas.

Solar today is competitive in 16% of US electric service territories and will be competitive in 33% by 2017.  Who says that? Not a solar trade group. But the Edison Electric Institute, the association of public utilities.

At page 3 of the linked to report, EEI says solar right now is competitive with grid power in the 16% of electric service territories where the price is 15 cents per kilowatt-hour.  Moreover the number of service territories where solar is becoming competitive rises each year, jumping to 33% in just 5 years or by 2017.

The solar revolution is underway and accelerating.

Thursday, April 18, 2013

Shock Fact: EIA Projects US Per Capita Energy Use Will Fall To 1963 Levels

America's energy marketplace is undergoing incredible change in its demand side.  The just released EIA 2013 Annual Energy Outlook drives home this important reality.

The most shocking finding in the EIA 2013 Annual Energy Outlook is its projection that each American will use less and less energy from 2011 to 2040.  Indeed, EIA projects in its reference case that per capita American energy use will fall back to 1963 levels by 2040.  That really is back to the future when no computers, big screen televisions as well as no hybrid cars and LED lighting existed.  Stunning if accurate!

How reasonable is EIA's shocking finding that Americans are hurtling back to 1963 in per capita energy use? EIA's projection assumes annual real GDP growth of 2.5% and population growth of 0.9% or adding about 3 million Americans per year over the forecast period.  Both are conventional forecast numbers, though the GDP growth number is above current levels.

EIA is forecasting a much slower rate of annual energy growth--just 0.3%--than had been the case in the prior 25 years. The much slower rate of annual energy growth rests significantly on increasing energy efficiency in appliances and vehicles that will be required by already enacted federal laws.

The combination of a much slower rate of annual energy growth and continuing significant population growth of 0.9% per year produces a sharply lower projected per capita energy consumption. The biggest risk of error in this forecast may rest in the population growth number. Slower population growth would decrease further the rate of annual energy growth but also could drive up the per capita energy growth number.

The big picture points of the EIA projection--falling per capita American energy use and much slower growth in total energy use than had been the case over the previous 25 years--has a high probability of being correct. America's energy marketplace is indeed undergoing incredible change on its demand side.

Walmart Accelerates Becoming A Renewable Energy Company: 300 Solar Systems Today & Enough Renewable Power For 700,000 Homes By 2020

Walmart's embrace of renewable energy and energy efficiency is stunning.  It already has operating 300 solar or other renewable energy systems on the roofs and at the sites of its global facilities. By 2010, it was producing 1 billion kilowatt-hours of renewable power or enough for 100,000 US homes.

And now Walmart is accelerating its plunge into becoming a renewable energy power company.  It will have enough renewable generation systems or green purchases to total 7 billion kilowatt-hours per year of renewable power by 2020. That extraordinary number is the equivalent of the power needed for 700,000 US homes.

Combined with its extensive investment in energy efficiency, Walmart expects its renewable generation to cut costs by $1 billion per year and to slash its carbon emissions by an amount equal to removing 1.5 billion cars per year.  Cheaper and cleaner goes together once more!

Wednesday, April 17, 2013

Time To Stop Making Carbon Excuses For China: China's Per Capita Pollution Will Exceed USA's By 2020

As little as 10 years ago, China's portion of global carbon pollution was considerably less than Uncle Sam's.  Additionally, China's per capita carbon pollution was about just 10% of US per capita emissions.  And so many folks excused China and its carbon pollution.  Some still do.

Times, however, have changed and quickly. In 2012, China accounted for about 32% of the total global carbon emissions or twice the total of the USA.  Moreover, Chinese per capita emissions are now up to about 50% of a typical American.

Chinese carbon emissions remain a runaway locomotive fueled by coal, while US emissions have been declining significantly since 2005. Writing in the New York Times, Elizabeth Muller calculates that  even Chinese per capita carbon emissions will exceed those of Americans by 2020. Remarkable!

By 2020, China will emit approximately 4 times more carbon pollution than the USA, and its portion of global emissions could be close to 40%.  The time for excusing Chinese carbon emissions is over!

Nuke Fact: 27% Of Nuclear Plant Was Not Operating On Tax Day & That Was Good For Gas

Apparently, like many of us, nuclear plants don't like tax day.

On tax day, 27% of the nation's nuclear plants or more than 27,000 megawatts were not operating.  Most plants were out of service for planned maintenance or refueling.  A few were broken down.

During the course of a year, all generation machines won't run for days, weeks, or even months.  No plant maintains a 100% capacity factor continuously.

Plants of all types need maintenance. Things go wrong that must be fixed.  Fuel problems happen. Disasters hit. Demand changes.  For all these reasons, grid systems have spinning reserves ready to provide power almost immediately to take the place of a plant that suddenly goes down.

The amount of nuclear power plants out of service on Monday was higher than the 5-year average of about 24,000 megawatts for this time of year.  The comparatively large amount of down nuclear capacity was identified by traders as a bullish factor for the natural gas spot market.

A down nuke is opportunity for a gas plant to crank up to take its place.  And the gas market remains heavily influenced by sales of gas for electricity generation.

Tuesday, April 16, 2013

Utilities Trade Association Sounds Alarm That Distributed Generation Is Destroying Grid Monopoly--Right Now!

Monopolies can be destroyed by law or technology.  Changing its law in 1996, Pennsylvania is among the minority of states that ended the electricity generation, state sanctioned monopolies.  Unlike in Georgia, Florida, Kentucky and most states where Big Government rules the electricity generation business,  any company in Pennsylvania can generate electricity and sell its power to any willing retail consumer, thanks to Electricity Generation Competition and Customer Choice Act.  Today, more than 2 million Pennsylvania customers have switched to competitive electricity suppliers for generation.  www.papowerswitch.com.

But in Pennsylvania and every state the distribution of electricity to customers remains a state sanctioned monopoly.   The law will not end that monopoly to your home or business, but technology will.  It is not a question of if, but when.

The Edison Electric Institute, the trade association for America's investor owned electric utilities, issued a bland titled report that sounds the alarm!  EEI itself says distributed generation technologies undermine the business model of the electric distribution monopoly.  Solar is coming, and the grid trembles!

David Roberts describes what distribution utilities may do to slow the erosion of their monopoly.

Utilities that choose to fight distributed generation will find rising public resistance to their grid monopoly. Some may be able to slow but few will stop the erosion of their grid monopoly. Stopping the solar and distribution revolution that is already underway will be much like putting toothpaste back in the tube.

Instead of fighting the waves of distributed generation that are just beginning, the smart course for today's utilities is to use their assets to become tomorrow's leading suppliers of distributed generation, energy efficiency, and back up grid power.  Currently only a handful of utilities are on this smart path.

A Tale Of Coal In 2 Nations: China Adds 50,000 Megawatts of Coal But USA Retires 9,000 Megawatts

For coal around the world it is the best of times, with the notable exception of the USA, where coal consumption and production hit lowest levels for many years during 2012.  Declines in coal consumption and production has led some to declare that there is a war on coal in the USA, though coal mining employment in the US has risen over the last 10 years.

Yet, there is no war on coal in China. That's for sure.  Unlike in the US, shale gas is not now a competitive threat to coal in China, though that might change over the next 10 years.  And unlike in the USA, the Chinese government pours money into a massive coal-fired power plant building boom that continues year after year.

China is coal-powered, getting about 70% of its total energy from coal, and its surging coal use continues.  China built 50,000 megawatts of coal generation during 2012 or about one-sixth of the US coal fleet.

Meanwhile, in the USA, 9,000 megawatts of coal generation retired in 2012 out of 316,000.
http://www.reuters.com/article/2013/01/04/utilities-coal-usa-idUSL1E9C352P20130104.  While coal provides currently about 40% of America's electricity, coal provides about 20% of our total energy.  Coal provides 3.5 times of China's total energy as it does in the USA.

Moreover, in the USA  the pace of coal retirements is quickening.  Considerably more coal generation will retire in the next 3 years, with estimates ranging from about 40,000 to 100,000 megawatts.  In short, the USA could retire up to a third of its coal generation by 2016.

What explains China's continuing rush to coal but America's declining coal-fired capacity?  America has both natural gas at $4 that makes gas a powerful market competitor with coal and air regulations that protect public health.  China has neither!

Monday, April 15, 2013

What Happens When Gas-Fired Electricity Drops 18%? Coal, Oil, Nuke Power Takes Its Place In New England!

Debate rages about what would happen if gas-fired electricity were not available or cut substantially. Would coal take its place? Renewables? Something else?

In New England, during January 2013, weather and market conditions led to a decline of gas-fired generation by 18%, compared to January 2012.  The drop in gas-fired generation was much greater than the 3% overall decline in electricity consumption in January, 2013.

So what happened when gas-fired generation dropped 18%? What took its place in New England during January 2013? First, renewable power did not fill the gap.  It actually declined slightly too.

More electricity from coal, nuclear, and, most surprisingly, oil filled the gap, when gas-fired power generation fell 18%.  Indeed, the biggest increases came from coal and petroleum power plants, the two sources that emit the highest levels of air pollution.  The result was likely more soot, sulfur dioxide, nitrogen oxide, and toxic air pollutants as well as more carbon dioxide.

Since coal and natural gas provide together provide about 65% of our electricity and compete intensely with each other for sales, a decline in one will lead to an increase in the other.  That market dynamic will continue for at least another 10 years and probably more.

Big Price Volatility Persists In Shale Gas Era: Gas Price Rises 125%

At the risk of considerable understatement, let's say that price stability is not one of the strengths of natural gas or the fruits of the shale gas revolution.  Indeed, the shale gas revolution so far has not banished substantial price volatility.

Just consider the huge gas price moves from 2011 to 2012 and now from 2012 to 2013.  In 2011 the spot price of gas was above $4 for a thousand cubic feet and then fell to $1.80 by April 2012 or a decline of about 55%.

The plunge of 2011 to 2012 has now been followed by the skyrocketing spot price over the last year. This past Friday, April 12th, 2013, the Henry Hub spot price was $4.21, compared to $1.87 on April 12, 2012.  In just one year, the spot price has increased 125%!

Hedging the price volatility of natural gas is one of the strengths of wind, solar, hydro, and geothermal, all of which have no price volatility and no fuel cost.  In turn, natural gas power plants can firm wind, solar, and hydro.  As such combining renewable energy and natural gas produces economic and operational advantages for both and for consumers.

Friday, April 12, 2013

Stunning Fact: Coal Mining Jobs 15% Higher During Obama Than Bush Administration

You certainly have heard of the "war on coal."  During the 2012 election, you may even have seen signs or ads attacking the President for supposedly waging war on coal.

But the average number of coal mining jobs during the Obama administration has been 15.3% higher than the average during the Bush administration, according to a new report on coal mining employment.

The average number of mining jobs during the Bush administration was 76,470 but 88,152 during the Obama administration.  The report further finds that the number of coal mining jobs in 2011 and 2012 were the highest for any two-year period in the last 15.  It also looks at employment numbers from 2001 to 2012 in the top 10 coal mining states and makes for fascinating reading.

The report states that declining productivity of coal mines and record coal exports have led to increased coal mining jobs.  Again, the report is fascinating reading.

Geothermal Generation Grows & Produces At Least Twice The Electricity As Solar And Is Growing

Geothermal generation is the renewable energy resource that gets the least attention, but it is the little train that can.  Indeed, in 2012, though it had about 50% of the installed capacity of solar in the USA, it produced about twice the electricity of solar.

Geothermal capacity continues to grow, up 5% or 147 mw in 2012, and now totals 3,386 mw. Of that total, 1,000 MW was added in last decade. California with 2,732 megawatts and Nevada with 517 megawatts dominate national geothermal power production.

Interestingly, the nation's geothermal capacity produced in 2012 16.7 million megawatt-hours versus 4.3 million megawatt-hours for solar, according to the EIA. http://www.eia.gov/electricity/monthly/.  Geothermal produces more electricity than solar, even though it has about half of the total capacity of solar, because it has high capacity factors.

Even after adjusting EIA data, by adding production from the substantial amount of distributed solar, geothermal produced in 2012 about twice as much electricity as the nation's solar systems.  Solar, however, will pass geothermal production in the next 4 years, given its rapid rate of deployment.

Thursday, April 11, 2013

Fabulous Fact: EIA Projects Oil Imports To Drop From 60% In 2005 To 32% By 2014

How about this for a great, national trend: 60% in 2005; 40% in 2012; and 32% in 2014 for the oil import percentage. EIA projects that oil imports will fall in 2014 to the lowest level since 1985.  See page 4 of:

The decline in oil imports improves US balance of trade, raises GDP, but does not free us from globally priced oil.  The only thing that will remove the threat to the US economy posed by oil shocks is lowering substantially the portion of US energy supplied by oil, whether it be domestically produced or imported.

US Wind In January 2013 Set Monthly Record & Produced More Than In All Of 2004

Records are made to be broken, and the wind industry rewrites the record book now every month.  The latest EIA numbers show that wind energy produced 14.5 billion kilowatt-hours in January, 2013.

January's production was a monthly record. More impressively, the wind industry produced more electricity in January than during all of 2004.  That certainly drives home just how rapidly wind production has increased during the last 9 years.

PA Used Record Monthly Amount Of Gas In January, 2013

Gas usage in Pennsylvania is up strongly and set a record monthly amount in January, 2013.
http://www.eia.gov/dnav/ng/hist/n3060pa2m.htm.  The increase in gas usage in Pennsylvania reflects increased electricity power production as well as more switching to gas from oil for space heating.

Now that gas is at about $4 per thousand cubic feet it will be interesting to see whether the January, 2013 record is quickly broken or not.

Wednesday, April 10, 2013

Shock Fact: Citi Research Reports "Renewable Technologies Are At Parity And Are Hot On Gas's Heels"

The news that renewable energy provided 82% of all capacity built in the USA in the 1st quarter and that solar supplied 100% of the capacity built during March puts a spotlight on renewable energy.  Why is renewable energy booming?

An answer follows from Citi Research and not a renewables booster.  It appears in "Shale & Renewables: a symbiotic relationship," an 88-page Citi Research report authored in September 2012 that I recommend.

"Solar is already cheaper than domestic electricity tariffs in many parts of the world, with many other regions to follow in the next few years.  While wind has a tougher task competing with lower wholesale prices, it is also competitive in growing number of regions.  Renewable technologies can already compete against CCGTs in higher-priced (non-shale-blessed) regions, and rapidly falling cost curves imply parity even vs. cheap 'shale electricity' in windy and sunny regions before 2020."  See pages 2 and 5 as well as Figures 6, 7, 8 and 9.

Citi calculates that wind power (without subsidies) is competitive with natural gas today, if gas costs $6 per thousand cubic feet.  In most parts of the world, gas costs right now considerably more than $6 per thousand cubic feet.  See Figure 8.

Citi even more stunningly finds that solar today competes with a wholesale power from a CCGT in the sunniest regions where gas costs $12 per thousand cubic feet. See Figure 9. Again this is comparing a solar farm feeding into the grid, with a gas-fired power plant doing the same.  It is not comparing solar at the premises of an electricity customer, where solar is competing against the fully bundled retail price of electricity that includes generation, transmission, and distribution costs.

Citi moreover finds that solar in the sunniest regions will be competitive by 2020 with gas at just $5 per thousand cubic feet.  Why? The price of solar continues to hurtle lower.

Will gas cost $5 per thousand cubic feet in 2020? With gas reaching $4.15 this week in the spot market, it might do that even this year.

Kroger Installs 225 More EV Charging Stations: Another Example of Electricity Beating CNG As Alternative Transportation Fuel

In another sign that electricity may be fairing better than gas as an alternative transportation fuel, Kroger will install 225 more electric charging stations to bring its total to nearly 300. Electric vehicle convenience rises.

ECOtality, Inc (http://www.ecotality.com/) will install the Kroger charging stations, and ECOtality alone has built 5,000 electric vehicle charging stations.

The biggest obstacle to the adoption of electric or natural gas vehicles is consumer concern about fueling. Electricity charging stations, however, are being built installed in significant numbers in a few Western states, while little progress is being made in constructing natural gas fueling stations for the public. Unfortunately, Pennsylvania is not a leader in either electric vehicle charging stations or natural gas fueling stations.

The combination of increasing availability of charging stations and more electric vehicle models for consumers makes an electric vehicle an attractive choice for a rising number of consumers.   Indeed, powering a vehicle with electricity can reduce by 75% the fuel bill for many car owners, with savings of $1,000 to $2,000 per year common.

Tuesday, April 9, 2013

EIA Projects Flatlining Of Natural Gas Consumption Through 2014

Natural gas usage is flatlining, according to the latest EIA data.  EIA projects demand of 70.1 Bcf/d in 2013 and 70.3 Bcf/d in 2014. Increases for heating and industry are being offset by sharp reductions in gas used to make electricity.  EIA projects an 8% decline in gas used for power in 2013.

Flatlining gas usage puts a lid on gas prices, to the cheers of consumers. It also underlines how little progress is being made on using gas for transportation.

Reversal Of Fortune: Coal Generation Surges 7% and Gas Slumps 3% In January 2013

The intense competition for generation market share continues and the latest available EIA data shows a reversal of fortune for coal and gas in the power markets took place in January 2013.

Coal provided 39.8% of the nation's electricity in January, while gas supplied 25.2%.  The gas market share is down sharply from the 30% of power that gas provided for all of 2012, when coal provided 37% of the nation's electricity.

Compared to January, 2012, power generation from coal was up 7%, but natural gas generation was down 3% during January 2013.  The gas price went up so gas generation went down and coal generation up. It's the simplicity and power of fuel pricing.

If the January 2013 market shares for coal and gas continue for the remainder of the year, coal will recapture about 50% of the market share that it lost in 2012.  America's total carbon emissions will also likely increase, unless significant declines is emissions from oil offset increasing emissions from coal.

Renewable Energy & Gas Supply 100% Of New Generation Capacity In First Quarter

Get used to this fact. It is going to be repeated time and again for the next 20 years in the USA.

Renewable energy and gas provided 100% of all new capacity in the USA during the first quarter of 2013
http://www.ferc.gov/legal/staff-reports/2013/mar-energy-infrastructure.pdf. No new coal, nuclear, or oil capacity came on line.

A total of 1,886 megawatts came on line in the first 3 months of 2013, and 82% were renewable energy or 1,546 megawatts.  The remainder of 340 megawatts came from natural gas plants.

Making up the renewable totals were 958 megawatts of wind and 537 megawatts of solar.  Wind again leads the nation in new capacity and does so even when it is in a bit of a lull.  As for the solar number, it includes only utility scale solar farms that are feeding power into the grid.

Then consider this stunning fact: 100% of all the new capacity opening in March were solar plants. Wow!

Monday, April 8, 2013

Total Carbon Emissions From Natural Gas May Exceed Coal By 2016

Within the next 4 years, total carbon emissions from natural gas probably will exceed emissions from coal, but America's total carbon emissions will likely fall further as a consequence.  Here is why.

As gas displaces coal in power generation, the shale gas revolution drives down carbon emissions from coal,  increases emissions from natural gas, and cuts total US carbon emissions, because the decrease in emissions from coal are much greater than the increase from gas production.

At the start of EIA records in 1973, US carbon emissions from coal and natural gas were almost the same, with coal emitting just 29 million tons than gas.  As the nation turned to coal to make electricity, carbon emissions from coal nearly doubled and were 1 billion tons more than natural gas by 2005.

Just as US carbon emissions from coal peaked in 2005, shale gas production began to zoom upward.  One result of cheap gas was that coal's carbon emissions dropped 73 million tons per year since 2007, as gas took generation market share from coal.

Another result of cheap gas and more gas usage is rising carbon emissions from natural gas, as the economy shifts from both coal and oil to natural gas. Carbon emissions from natural gas rose a total of 121 million tons since 2007 or 24 million tons per year over the five year period.

By 2012, the spread in carbon emissions between coal and natural gas that had been 1 billion tons in 2005 was down to 300 million tons. If one assumes both that emissions from coal will decline on average 73 million tons  per year and that carbon emissions from natural gas increase by 24 million tons per year, natural gas will emit more carbon than coal by  2016.

The more than 100% increase in natural gas prices since April 2012 and the return to $4 per thousand cubic feet gas does call into question the current trend of decreasing carbon emissions from coal and increasing carbon emissions from gas will continue. Market forces in early 2013 have reversed and are moving toward coal and away from gas for generation.

EPA's Air Toxic rule, however, takes effect in 2015 and natural gas plants meet that requirement, while old-coal fired power plants without pollution controls do not.  A mid-range estimate of coal plants that will retire, as a result of the EPA rule, is about 50,000 megawatts.

By 2015 and 2016 another big drop in carbon emissions from coal plants will occur as a result of the EPA Air Toxic rule. As those coal plants retire, natural gas generation will substantially take their place, and that combination could well mean that carbon emissions from natural gas will exceed those of coal by 2016.

Republican Voters Hold The Key To Climate Change Policy But 3 Recent Polls Conflict On Where They Stand

Though America's carbon emissions are back to 1994 levels, the carbon plunge has nothing to do with any explicit Congressional action on climate change.  Congress will not soon enact a carbon cap and trade program or carbon tax, though current policies do promote energy efficiency, nuclear power, renewable energy that all reduce carbon emissions.

Congressional paralysis on addressing climate change directly is rooted in the partisan polarization of the climate change issue between Democrats and Republicans.  And so the prospects of action on climate rise or fall with the opinion of Republicans.  What Republicans think about climate change holds the key.

But 3 recent polls seemingly conflict on what Republicans are thinking on climate change.  A George Mason University and Yale University poll of registered Republicans and Republican leaning independents paints a portrait of Republican voters ready to act and frustrated by their elected leaders inaction.  The poll finds that 52% of Republicans believe climate change is happening and just 26% do not.  The poll further finds that only 33% of Republicans support their party's position on climate change.  See the following link:

In sharp contrast to the George Mason Poll stands the recent Public Policy Polling survey.
PPP finds that 58% of Republicans believe global warming is a hoax.  Ouch!

The third poll measuring Republican opinion about climate comes from Pew, and it has more numbers.
http://www.people-press.org/2013/04/02/keystone-xl-pipeline-draws-broad-support/.  Pew finds that
50% of Republicans do not believe evidence supports the conclusion that the earth is warming, while 44% believe there is solid evidence of warming.

So what to make of the current state of Republican voters views on climate?  Which poll is the outlier?

Unfortunately, the PPP and Pew polls are more similar with each other and contradict the George Mason poll.  In essence, Pew and PPP find that between 50% and 58% of Republican voters do not even believe that the world is warming, while George Mason finds the reverse or that 52% believe that climate change is happening.  Perhaps, the almost diametrically opposed findings can be explained by the inclusion in the George Mason poll of Independents who lean Republican, while Pew and PPP survey only registered Republicans.

My conclusion from these 3 polls is that a slight majority of Republican voters do not accept the main findings of climate science and that the paralysis on climate policy will continue until that changes.  The current Republican orthodoxy opposed to climate science is also one reason that the GOP is losing badly among voters less than 35 years old.  Hopefully, political self-interest and climate science will forge sooner rather than later a new majority within the Republican party in favor of addressing climate change.

Friday, April 5, 2013

Love It Or Hate It, The Facts About How We All Use Natural Gas

Natural gas in the USA is as bountiful as it is controversial. Some love it, while others hate it.  Yet, all of us use it in one way or another to get through every single day and night. Despite the controversy, gas supplies about 26% of America's total energy, ranking behind only oil in meeting America's energy needs.

By comparison coal provides 19% of our total energy and ranks third in meeting our energy needs. Renewable energy in all its forms, including hydro and biofuels, ranks fourth and nuclear power fifth.

Simply put, natural gas heats buildings, feeds industrial processes, and fuels power plants to make electricity.
See page 31.

The biggest portion of natural gas supply--38%--is used to heat buildings.  In fact, 51% of America's homes rely on natural gas to stay warm during winter. And when gas is shut-off to the poor, that loss of gas service creates substantial health and safety risks, since people who lose gas service resort to dangerous substitutes that have caused fires and deaths, especially among young children.

The second biggest use of gas is to fuel power plants to generate electricity, and about 33% of all gas is combusted for this purpose. The share of electricity coming from natural gas-fired power plants has been steadily increasing since 1990 but sharply increased during 2012, when low-priced gas displaced large amounts of coal-fired power. Indeed, last year natural gas power plants provided 30% of the nation's electricity, while coal plants' market share fell to 37% from levels as high as 50% about a decade ago.

With major assists from more renewable energy and energy efficiency, the increase in gas-fired electric generation is the single biggest reason why America's energy related carbon emissions have substantially declined since 2007.  Rising gas generation that displaced coal is also slashing the amount of mercury and other toxic air pollution as well as sulfur dioxide emissions in our air. Yet, the recent run-up in natural gas prices could well produce a drop in the electricity market share of natural gas during 2013, as coal may reclaim some of its lost market share this year.

The last major use of natural gas is to in industrial processes that consume 29% of natural gas.  Natural gas is a primary feedstock for many products and so the boom in shale gas has increased expectations for major new investment in manufacturing.

Starkly absent from the major uses of gas is transportation.  Just 0.2% of all gas is used for transportation in the USA, while globally 3.2% of gas is already powering vehicles.

US Coal Carbon Emissions Plunge To 1986 Level And Head Toward Historic 1973 Mark

Some years stand out and 1973 is just one such year.  It was the year of the first oil price shock, triggered by an embargo of oil to the USA, and 1973 is the start of the EIA data on carbon emissions from coal.

Now 40 years ago, carbon emissions from coal were 1.2 billion tons and they had nearly doubled to 2.182 billion tons in 2005, when they peaked. In the last 7 years, coal's emissions have rolled back 26 years.

By last year, coal's emissions were back to 1986 levels at 1.66 billion tons, after an enormous plunge during 2012, when gas displaced huge amounts of coal-fired generation.  Just in 2012, emissions from coal dropped an astonishing 222 million tons, or close to 12% of the 2011 total. Wow! Wow!

Coal's emissions fell so much during 2012 that carbon emissions from natural gas exceeded those from coal during January and February of 2012.  Not since probably 1980 or earlier had gas emitted more carbon than coal for a full month.

Since the peak of coal's emissions in 2005, coal's carbon emissions dropped 516 million tons in 7 years or an average of 73 million tons per year.  At that rate of decrease, coal's carbon emissions will be back to 1973 levels by 2020.

Coal's carbon emissions may not reach the level of the historic 1973 by 2020, but they will sooner or later. It's not a question anymore of if but when.

Thursday, April 4, 2013

Western Pennsylvania Farmers Using Shale Gas Money To Install Solar Systems Make Gas A Real Bridge To Renewable Energy

This blog has long pointed out that renewable energy is prospering in the age of the shale revolution.  Wind power has more than doubled and solar has increased about sixteen times since the shale boom took off in 2008. Now, in one of the great stories of the year, the Allegheny Front reports that shale gas funds are enabling farmers to actually install solar panels and are an important source of customers for solar installers.

In one case, at the linked to story, a farmer has constructed a 38.4 kilowatt system. Pretty big!
http://www.alleghenyfront.org/story/shale-solar-farmers-use-gas-money-build-solar-arrays. Joe Morinville, who owns a solar company (http://www.eissolar.com/) in the Pittsburgh area, says that about 25% of his customers are farmers and that 70% to 80% of them say that shale gas money enabled them to install solar systems.

Some Pennsylvania farmers who love the land and want to keep farming are turning right now shale money into a real bridge to solar.  Congratulations to them and the solar entrepreneurs that have new customers!

Stunning Fact: Top Ten Wind States All Have Electric Rates Below The National Average

Wind power now provides from nearly 10% to 25% of the electricity in 10 states, and those top ten wind  states all enjoy electric rates below the national average of 9.66 cents per kilowatt-hour as of January 2013.
http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_06_b.  Indeed, they have rates that range from 5% to 33% below the national average.

The 10 states with the highest portion of their electricity coming from wind are Iowa, South Dakota, North Dakota, Minnesota, Kansas, Colorado, Idaho, Oklahoma, Oregon, and Wyoming.
http://www.earth-policy.org/data_highlights/2013/highlights37.  In those states, electric rates are from a low of 6.74 cents per kilowatt-hour in Oklahoma to a high of 9.22 cents per kilowatt-hour in Colorado.
Though Colorado has the highest electric rate in the top ten wind states, Colorado's electric rate is still about 5% below the national average.

Did wind alone create electricity rates below the national average in these top 10 wind states? It did not.  But this data shows that large amounts of wind power do not cause high electricity rates. Indeed, in these states, wind power will be a significant hedge against fossil fuel price volatility in the coming decades.

Wednesday, April 3, 2013

Pathetic Fact: Globally 3.2% Of Natural Gas Is Used For Transportation But Only 0.2% In America

America has cheap, domestic natural gas and expensive global oil.  America is home to the shale gas revolution and has had record gas production in  2011 and 2012. Though gas is cheap and oil is expensive in the USA, the portion of natural gas used for transportation is 16 times greater globally than in the USA.

Citi Research at page 31 in the linked to report states that globally 3.2% of natural gas is used for transportation, but only 0.2% of America's gas is consumed to power vehicles of all sorts.

Pennsylvania Leads Nation In Cutting Sulfur Dioxide Emissions by 600 Million Tons From 2007 to 2011

Unlike China, America's air is getting cleaner, and Pennsylvania is leading the way, where sulfur dioxide emissions were slashed by nearly 600 million tons from 2007 to 2011 or by about two-thirds. Georgia was second with a 400 million ton reduction. http://www.eia.gov/electricity/monthly/update/.

The Clean Air Act targets sulfur dioxide for reduction, because it is a precursor to particulate matter that causes sickness and early death and because it causes acid rain.  The huge declines are nothing but good news.

The sharp declines in sulfur dioxide emissions are caused by large investments in scrubbers for coal-fired power plants, the shift to natural gas power plants, as they emit very little sulfur dioxide, and more renewable energy and energy efficiency.

Stunning Fact: US Carbon Emissions From Coal Are Down 19% Since 2005

The most recent EIA date drive home coal's shrinking share of America's total energy related carbon emissions. Consider these facts.

Carbon emissions from coal steadily increased from 1973 to 2005, when they peaked in the USA.  Starting at 1.2 billion tons in 1973, coal's carbon emissions hit 2.18 billion at their top in 2005, where they flattened through 2008. Starting in 2008, coal's carbon emissions plunged, as primarily natural gas and secondarily renewable energy began to replace large amounts of coal in power generation.

In 2012, the big plunge in coal's carbon emissions pushed coal's annual emissions down to 1.66 billion tons, a decline of 420 million tons or 19% from the 2005 peak.  The 2012 coal number is substantially lower than even the 2009 near depression year.

Indeed, at this point, coal's contribution to total energy related carbon emissions is down to 32% or much lower than the 42% attributable to oil.  The question becomes, is the plunge in coal's carbon emissions since 2008 an anomaly or a long-term trend?

With the recent rise in natural gas prices to $4 for a thousand cubic feet, up more than 100% from the April 2012 low, coal-fired power plants are projected to recapture some market share in 2012, and so coal's 2013 carbon emissions may rise marginally.  It, however, should be noted that coal's emissions in December 2012 were about 2% lower than those in December 2011.  Any increase in 2013 over 2012 is likely to be small.

The outcome of market competition between gas and coal, the growth rates of renewable energy and energy efficiency, and public policy will determine whether the sharp decline over the last 4 years in coal's carbon emissions continues in the next 5 years.

Tuesday, April 2, 2013

The World's First Profitable Electric Vehicle: Tesla Reports Profit & Share Price Jumps 19%

For decades, either starting a new car company or making electric vehicles has been an almost sure way to lose lots of money.  

And so the news that Tesla is the world's first profitable electric vehicle company is a true milestone.
http://www.reuters.com/article/2013/04/01/us-teslamotors-outlook-idUSBRE93008D20130401. Investors certainly took note of Tesla's first quarter profit, as Tesla's stock price jumped 19%.  Tesla's profitable quarter was the result of sales exceeding 4,750 vehicles and is encouraging, though obviously no guarantee of future success. 

The Tesla Model S has been receiving rave reviews, winning many automotive awards from all corners.
http://www.teslamotors.com/models. A fully electric car, the Model S can go a remarkable 301 miles on a charge with the biggest battery--an 85 kWh option.  The price for that revolutionary vehicle is an enormous $96,000.  Tesla also has an 60 kWh option that reduces range to a still big 232 miles and the price to a still high plus $70,000.

Unlike Fisker that appears to be heading to bankruptcy court, Tesla may have found a small but profitable niche for electric vehicles.  If so, that's a remarkable feat at this stage of battery technology and speaks volumes about Elon Musk's vision and ability to execute.

Key Fact: By Far Oil, Not Coal, Is America's Biggest Source Of Carbon Pollution

Coal is the most carbon intensive fossil fuel and so is normally the focus of climate change concern.  Yet, oil is America's biggest source of carbon pollution.

By itself, oil accounts for 42% of America's energy related carbon emissions, while coal is responsible for 32%. America's economy and way of life is much more dependent on oil and coal, unlike China which gets an incredible 70% of its total energy from coal.

Indeed, burning oil is responsible for 2.25 billion tons of the America's 5.29 billion tons of carbon pollution.
http://www.eia.gov/totalenergy/data/monthly/pdf/sec12_3.pdf. By comparison, coal burning emitted 1.66 billion tons of carbon during 2012.

Though both carbon pollution from coal and oil in the USA have been declining in recent years, the declines in carbon pollution from coal have been much bigger and faster. As a result of the bigger declines in coal's carbon pollution, the spread in carbon pollution totals of coal and oil has been growing.  For many years, oil would account for 300 million to 400 million more tons of carbon pollution per year than coal.  By last year, oil, however, accounted for 600 million more tons of carbon emissions.

Natural gas explains why coal emissions dropped more rapidly than oil's during 2012. At this point, natural gas is a powerful competitor to coal for power generation but a weak competitor to oil for transportation market share. Gas is displacing oil in heating and industrial uses, but its gains in transportation barely move the needle on oil demand.

Until either gas, electricity or biofuels become powerful substitutes for oil in transportation, oil will remain America's largest source of carbon emissions.

Stunning Fact: Iowa And South Dakota Get Nearly 25% Of Their Electricity From Wind And Have Power Prices Up To 20% Below National Average

Iowa and South Dakota lead the nation in the portion of their electricity coming from wind power, with both reaching nearly a truly windy 25%.  Though Texas gets a smaller portion of its electricity from wind power--nearly 10%--Texas has installed the most wind power capacity in the country.  At over 12,000 megawatts, if Texas were a nation, Texas would rank 6th in the world in wind power capacity. 

In some quarters, the claim is regularly advanced that wind power or renewable energy means higher prices and so the question becomes, how do electricity prices compare in Iowa, South Dakota and the Texas to the national average?

As of January 2013, electricity prices in Iowa, South Dakota, and Texas were below the national average.
http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_06_b.  In fact, they were well below the national average of 9.66 cents per kilowatt-hour.  Electricity prices were 7.78, 8.12, and 8.61 cents per kilowatt-hour in Iowa, South Dakota, and Texas respectively.

What does that prove?  A state can rely on wind for 25% of its electricity and still have electric prices nearly a full 2 cents per kilowatt-hour or about 20% below the national average.

Monday, April 1, 2013

PSU Enrollment In Petroleum and Natural Gas Engineering Jumps To 500 From 30

Back in 1999, when both oil and natural gas prices were collapsed, a hardy 30 students were enrolled in Penn State University's petroleum and natural gas engineering program.  Now, the number is 500.

Today's high oil prices and the shale gas boom have led students to flock to petroleum engineering programs. Graduates from those programs are in high demand and can command high initial salaries. Yet, the Philadelphia Inquirer surprisingly reports that there are just 17 universities offering majors in petroleum engineering, and Penn State University is among that small group.

An Atlantic Tale Of Gas And Coal: US Carbon Emissions Drop 3.8% But UK Emissions Surge 4.5%

During 2012, carbon emissions headed in opposite directions on the different sides of the Atlantic.  In the United Kingdom, carbon emissions jumped 4.5% in 2012, and here is why:

"The UK's emissions of climate-warming gases surged in 2012, as cheap coal replaced gas in power stations." http://www.guardian.co.uk/environment/2013/mar/28/uk-co2-emissions-up-2012.  Natural gas costs 2 to 3 times more in the UK than the US.  A major reason for the higher gas price in the UK is that it, until recently, had a moratorium on shale gas production.  Now that the UK has lifted its shale gas moratorium, shale gas production could begin there within 5 years.

Meanwhile, in the USA that unlike the UK has had massive shale gas production, carbon emissions dropped 3.8%.  In America, the massive new gas supplies crashed the price of gas and allowed cheap, lower carbon gas to replace large amounts of more expensive coal and oil at power plants and in the economy.

Carbon emissions going down in the USA but up in the UK are a lesson in the power of markets. Rising carbon emissions in the UK vividly underline what happens currently around the world when gas is made expensive.

Even in countries committed to expanding rapidly renewable energy, as the UK is, when gas is made expensive, coal use rises and so do carbon emissions.

US Carbon Emissions Fall 3.8% In 2012 Because Coal And Oil Emissions Drop 12% and 2% Respectively

Why did US energy related carbon emissions fall another 3.8% in 2012 and fall to 1994 levels? Simply put, emissions from coal and oil are dropping substantially.

Plummeting carbon emissions from coal--down 12% in 2012--led the way to US carbon emissions declining another 3.8% in 2012.  Emissions from oil dropped also 2%, while natural gas emissions rose 4.5%.

The raw numbers show that emissions from coal and oil fell 212 million tons and 50 million tons respectively for a total of 262 million tons.  Emissions from natural gas rose 58 million tons. The net decrease was 204 million tons or 3.8% of the previous year (2011) total.

The rise in gas emissions came, because natural gas generation displaced large amounts of coal-fired generation and natural gas also reduced oil consumption to run power plants, to heat buildings, and marginally to run vehicles.  More renewable energy in transportation and power production and more energy efficiency also contributed to declining carbon emissions.