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Energy and the Environment in 2014

Energy and the Environment in 2014. The Politics of Climate C hange. The P olitics of Climate C hange. The number of Americans who believe global warming isn't happening has risen to 23 percent, up 7 percentage points since April 2013.

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Energy and the Environment in 2014

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  1. Energy and the Environment in 2014

  2. The Politics of Climate Change

  3. The Politics of Climate Change • The number of Americans who believe global warming isn't happening has risen to 23 percent, up 7 percentage points since April 2013. • The latest survey, taken in November 2013, finds that the majority of Americans — 63 percent — do believe in climate change, and 53 percent are "somewhat" or "very" worried about the consequences. • The proportion of people who do believe in climate change has been steady since April 2013, but the proportion of those who say they "don't know" whether climate change is happening dropped 6 percentage points between April and November 2013, suggesting that many "don't knows" moved into the "not happening" category.

  4. The Politics of Climate Change • Sixteen percent are "alarmed,“ sure that global warming is happening and concerned about it. • On the opposite end of the spectrum are the "dismissive," who comprise about 15 percent of the public and who almost all see global warming as a conspiracy theory or hoax. • Changing either of these two groups' opinions about climate change is nearly impossible.

  5. The Politics of Climate Change • The "doubtful," 12 percent of the public, are inclined to disbelieve climate change and may be difficult to convince. • Another 23 percent of the country is "cautious" — they believe climate change is happening, but are uncertain and tend to see the threat as distant. • The cautious are among the Americans most open to hearing the scientific evidence about climate change, so are their neighbors, the disengaged, who make up about 5 percent of the public and who have given climate change little thought.

  6. The Politics of Climate Change“Going down an up escalator”

  7. Losing Control of the Issue • In 2002, President Bush proposed the Clear Skies Initiative, a national cap-and-trade legislative proposal to reduce emissions of SO2, NOX, and mercury by roughly 70 percent from the power sector. • Absent legislation, EPA finalized CAIR and CSAPR, lowering allowable emissions of SO2 and NOX using the authority granted under the Clean Air Act.

  8. Losing Control of the Issue • Among the companies, advocacy groups, and state governments challenging the EPA actions, a central argument involves CSAPR’s compliance timeline. • January 1 is far too soon, objectors say, to retrofit plants, build replacement capacity, or make other changes needed to comply with CSAPR’s limits on emissions of sulfur and nitrogen oxides. • The CSAPR emissions budgets vary from state to state and unit to unit, but the budget for Texas would require a 47-percent reduction in SO2 emissions, and Luminant estimated it would have to reduce its sulfur emissions by more than 60 percent.

  9. Losing Control of the Issue • “The reaction by the industry has been close to horrified,” says David Buente, a partner at Sidley Austin who, among other things, represented American Electric Power in its successful defense of a major greenhouse gas lawsuit before the Supreme Court this past term

  10. Losing Control of the Issue • “Immediate and irreparable harm.” • “It comes down to resource adequacy.” • An ERCOT report, Impacts of the Cross-State Air Pollution Rule on the ERCOT System, published September 1. • ERCOT estimated the CSAPR budgets outlined in EPA’s July final rule would result in between 1,200 MW and 6,000 MW of generating capacity being forced offline in ERCOT in various months, depending on the scenario. The study states that “had this incremental reduction been in place in 2011, ERCOT would have experienced rotating outages during August.”

  11. Losing Control of the Issue • Using the NOX Budget Trading Program as a model, CAIR grants states the option of participating in a market-based cap-and-trade program to reduce both SO2 and NOX emissions. • As part of the program, EPA set emission caps for SO2 and NOX for the affected region based upon what can be achieved in a cost-effective manner. The emission allowances then were apportioned to the states. • States must achieve their required emission reductions by either participating in the EPA-administered interstate cap-and-trade system for the power sector, or by choosing an alternate approach that is subject to EPA approval. Under the regional NOX Budget Trading Program, all states affected by the rule joined the optional cap-and-trade program to lower ozone season NOX emissions

  12. Losing Control of the Issue The Clean Air Act (CAA) is generally very prescriptive, sections 108, 109, and 112 focus on mercury (and other air toxics), Sulfur dioxide (so2) and particulates. Section 111 doesn’t follow that pattern – it was written to cover pollutants not identified specifically. That ambiguity created the EPAopportunity for rule 111(D). Under section 111 – the EPAfollows a two-step process in implementing emissions rules: • For existing sources, EPA issues emissions guidelines • States then issue performance standards for stationary sources within their jurisdiction.

  13. Losing Control of the Issue In addition to ceding the management of climate change adaptation to the EPA, America has also allowed the highly-subsidized renewable energy industry to control the public debate over best approaches to cleaner air: Countless public opinion surveys now show public support for renewables consistently in excess of 70%

  14. Renewables – Costs, Explicit & Unexpected • “China, America, and the European union spend $140 billion a year on subsidizing renewable energy – it is hard to say which policies are having the greatest effect.” –The economist, “Curbing climate change”, Sep. 2014 • Worldwide renewable energy policies and investments have reduced ghg emissions by approximately 600 million tons, cumulatively. • By way of comparison: • Nuclear energy has reduced ghg emissions by 2.2 billion tons, • Hydropower has reduced ghg emissions by 2.6 billion tons, • Rainforest preservation reduced ghg emissions by 3.2 billion tons, • Energy and vehicle efficiency have reduced ghgemiisions by 10.03 billion tons.* *Ibid, Table: “To Slash or to Trim”

  15. Renewables – Costs,Explicit & Unexpected

  16. Renewables – Costs, Explicit & Unexpected • The shift to renewables - especially the explosion of rooftop solar - has turned electric system planning virtually on its head. In California, which aims for a 33% share of renewable energy by 2030, the problem is the so-called "Duck Curve" which depicts how solar energy production peaks at mid-day. But that just floods the system with so much output that power prices can actually go negative. • According to Brad Bouillon, director of day-ahead and real-time market operations support for the California ISO, the "belly" of the Duck Curve this year has already fallen to levels not expected until 2016. That means that "net load" to supplement wind and solar is too small even to justify running the most economical base load units.

  17. Renewables – Costs, Explicit & Unintended • And while solar and wind energy may replace much retired fossil capacity, the renewables won't be able to supply the same collection of attributes, vital to reliability, such as inertial momentum, reactive power, frequency regulation, or voltage stability and support. • And so, at a key moment in the conference, FERC's acting chairman Cheryl LaFleurasked "Do we need a different set of standards," LaFleur asked, "for a different kind of system?

  18. China, again, ahead of the U.S. • China is the world’s largest producer of solar panels – in fact, over 60% of the panels sold in America come from china. • China dominates the production of the 21st century minerals essential to renewables, computers, and cell phones: china produces over 90% of the world’s supply of “rare earth” minerals.

  19. Market Solutions to Global Problems • Since the advent of the acid rain SO2 cap-and-trade program, the market-based regulatory approach for reducing air emissions has shown remarkable environmental results at costs far below original projections. The cap-and-trade approach establishes an emissions cap and then distributes "allowances" to emit equal to the cap, granting sources the opportunity to find the most efficient way to meet the environmental goal

  20. Market Solutions to Global Problems • GHG regulations will certainly affect how we generate electricity in this country. If they didn’t, what would be the point? The real question is how will they do that: with a prescriptive and painful top-down regime, or with flexibility for market-based innovation? • A constitution-based federalist approach would allow states to continue taking the lead in reducing emissions – even as EPA promulgates so-called “guidelines,” in Clean Air Act parlance.

  21. Market Solutions to Global Problems • EPA’s authority under the Clean Air Act to extend compliance deadlines for individual companies that are taking steps to comply but need more time; consent decrees and financial incentives from FERC and regional transmission organizations

  22. Market Solutions to Global Problems • So we face an ironic and unfortunate political dichotomy. States like Nebraska, which seem intent on fighting GHG regulation, eventually could find themselves forced to comply with an inflexible set of EPA mandates. • Meanwhile, states that take their cue from EPA might foster new investment through flexible, market-based regulation. Federalist ideals might motivate both responses, but innovation will first become necessary in the states that accept the challenge of global climate change

  23. China, again, ahead of the U.S. • China is currently the world leader in investment in and development of new nuclear power facilities. Not only are 28 conventional nuclear reactors under construction, but China is also actively developing Generation IV nuclear concepts. • By 2015, China will have 36 Gwe installed nuclear capacity, about 2% of its electricity power supply, with a projected 70 Gwe by 2020. The Chinese National Nuclear Corporation expects to invest $120 billion by 2020 in new reactors. • China's motivation is profound. Coal supplies over 70% of China's energy, which makes it the leading source of greenhouse gas emissions in the world, and the target for those concerned about climate change. Coal's dominance leads to very poor air quality, but China has limited options for replacing its coal-fired capacity, as its natural gas resources are insufficient.

  24. Market Solutions to Global Problems • The RGGI modeling not only helped show that low allowance prices could contribute to reducing CO emissions without imposing unreasonable costs on consumers, it also demonstrated that investment in end-use efficiency reduces consumer exposure to energy costs. In short, clean energy policies, with an emphasis on energy efficiency, could cost effectively help secure theemissionreductions thestates originallyset outto achieve. • Since its first auction in 2008, RGGI states have raised more than $1.5 billion. They have done this with allowance prices clearing between roughly $2.00 and $3.00. Today, sharing auction revenues in proportion to the energy produced by their fossil generation, the states invest over half that amount in energy efficiency, thereby helping to keep the costs of RGGI allowances low.

  25. Market Solutions to Global Problems “Better Growth, Better Climate,” published by Felipe Calderon and Nicholas Stern, with help from Nobel economists Michael Spence and Daniel Kahneman: • Better urbanization, smarter city planning with more open space, and easier commutes; • Doubling support for agriculture and forest research & development, from $16 billion to $32 billion a year – while phasing out inefficient farm subsidies • More hydropower, more nuclear power, more energy and vehicle efficiency. • Net result: lower electric costs, lower total fuel costs, more open-space, shorter commutes, lower food costs. And a 24 billion tons per year reduction in ghg – nearly reaching the safety mark set by the IPCC.

  26. Renewables – Costs, Explicit & Unexpected • Nuclear and hydropower generated 6,000 terawatt-hours of energy in 2011 • Wind power generated 450 terawatt-hours, • Solar power generated less than 60 terawatt-hours.* *Ibid

  27. Key consideration • Every word in this presentation came from one of the following sources: • The Economist • Fortnightly, the bi-weekly publication of public utilities reports • Livescience.com • There is no Conservamericaeditorialization or opinion in this power point.

  28. ConservAmerica Recommended Positions • Cleaner, Here, Now • America should take advantage of domestic natural gas supplies through responsible fracking – this abundant fuel source is clean, affordable, and has the potential to return manufacturing jobs to the U.S. • Nuclear power and hydropower: the cleanest & cheapest power in the world • Tax incentives and regulatory rate processes should incent more nuclear and hydropower to reduce ghg emissions and decrease electric costs for consumers

  29. ConservAmerica Recommended Positions • Efficiency benefits every customer • Vehicle, building, and appliance efficiency provide far greater reductions in ghg emissions than renewable energy • Increased efficiency reduces electric rates, gasoline prices, and home heating and cooling costs • Smarter cities, improved agriculture, and healthier forests • R&d credits for agriculture should be doubled, and inefficient subsidies eliminated • Building efficiency

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