Thursday, May 31, 2007

The Media Might Be On To Something...

Bay Area ABC affiliate KGO broke some serious news yesterday: California’s green energy mandate is going to constrict supply in the coming years. Wow… never saw that coming.

Not since Claude Raines uttered his famous line, “I’m shocked to find there is gambling going on here!” in the movie Casablanca, has there been a bigger, more disingenuous “duh” packaged for public consumption.

Or could it be that the media gatekeepers have truly been asleep at the switch and are finally waking up to the fact that the green mandate in California, while arguably well-intentioned and politically prudent, is fraught with problems?

To quote KGO, “But in summers after this one, supplying enough electricity might be a challenge because of new laws to fight global warming by reducing greenhouse gas emissions.”

The piece mentions underground CO2 storage as an option that leads us back to coal-generated power and it acknowledges that, due to the need for lots of new, expensive transmission capacity, alternative energy solutions have more than a few problems of their own.

Ready... fire… AIM!

What's The Price Of Being Green? [KGO ABC 7]

Wednesday, May 30, 2007

Calpine Expanding Geothermal Capacity.

Calpine plans to increase electricity production at its Geysers geothermal power plant in Northern California.

Calpine will add 80 megawatts of capacity at the 725-megawatt Geysers through a two-year, multi-rig drilling program for additional steam and repowering generating units.

The Geysers, comprising 30 square miles along the Sonoma and Lake County border, is the largest complex of geothermal power plants in the world. Calpine owns and operates 19 of the 21 power plants at The Geysers has a net generating capacity sufficient to power 750,000 homes, or a city the size of San Francisco.

Calpine plans expansion at Geysers power plant [Reuters]

Tuesday, May 29, 2007

CARB's Spending Spree.

$25 million to promote electric cars? According to Green Wombat, that's what CARB is spending on a variety of PR initiatives to make PHEV's mainstream.

The biggest boondoggle clearly is $150,000 to develop a TV show about converting regular cars to electic cars-- sort of American Chopper/Pimp My Ride kind of thing. I can't wait to see Al Gore in pair of coveralls on a set built to look like a mechanic's shop...

For more on CARB's eco-spending spree, check out Green Wombat.

Pimp My Plug-In Hybrid [Green Wombat]

Friday, May 25, 2007

Don't Let The Door Hit You In the ___ On the Way Out!

Today is get-away day and I’ve got one eye on the door… I hope everyone has a happy and safe Memorial Day Weekend…

If you need something to argue about in my absence today, this is pretty cool:

GE and Union Pacific have unveiled a new hybrid locomotive that recycles thermal energy from the engine block and stores it in on-board batteries.

If they could work the kinks out and apply this technology to rail freight in California, it would appear to be an enormous step forward.


Have a great weekend!

GE Unveils World’s First Hybrid Locomotive [Industry Week]

Thursday, May 24, 2007

Deja Vu All Over Again.

At the urging of Chairman Michael Peevey, the PUC today will consider reopening Direct Access, the lynchpin of California’s much-maligned electricity deregulation experiment.

Now that things like “rolling blackouts” and “Enron” are fading memories, Peevey wants to get back to allowing consumers to bypass big utilities and get their power form merchant energy producers. Consumer advocates are-predictably—freaking out.

Peevey is taking the position that Direct Access is not an inherently bad thing and that the energy crisis was based more on the wrong execution of the right idea. Consumer choice, he argues, will foster marketplace competition and drive down the price of electricity.

Bob Finkelstein from TURN, points out that Peevey can’t do anything without the consent of the legislature, which suspended Direct Access in 2001. Additionally, there is the small matter of those bonds that financed the state’s assumption of electricity contracts during the crisis—they have to be paid off by utility ratepayers and if consumers abandon the big utilities in droves, who’s going to foot that bill?

Peevey acknowledges that his plan raises “a thicket of legal and financial questions”.

PUC chief reopens debate; Deregulation plan was abandoned by state in 2001 [San Francisco Chronicle]

Wednesday, May 23, 2007

Environmental Mandates Grab Healines Without Sweating the Details.

A group of engineers, economists, and environmentalists from the University of California is set to release a report next week on how to implement Gov. Schwarzenegger’s Low Carbon Fuel Standard.

Nobody is quite sure how this is going to work, as the LCFS which seeks to create by Executive Order a competitive market for alternative vehicle fuels is more a concept than an actual plan at this point.

But according to the Lawrence Berkeley National Laboratory, the initiative will displace one-fifth of California’s gasoline consumption with lower carbon fueld sn put more than 70-million alternative or hybrid vehicles on the road. The LCFS requires a 10% reduction in carbon from vehicle fuels by 2010.

Under the program producers can either develop and sell low carbon fuels or purchase credits from other suppliers.

State Wants To Spur Gas Alternatives [KPBS]

Tuesday, May 22, 2007

PUC Takes a Shot at Sunrise Powerlink Project.

The PUC’s Division of Ratepayer Advocates has dealt an early blow to the proposed Sunrise Powerlink project, a $1.3 billion transmission line being pushed by SDG&E.

The line, which would run from El Centro to north San Diego County, is designed to offset a projected 250 MW power shortfall that advocates are predicting for 2010. Both the CEC and the ISO have validated the conclusion that additional capacity is necessary.

But, in advance of public hearings in July, the PUC’s report could be a significant factor in determining the Surnrise’s fate. A decision on the permit application is expected in January 2008.

PUC unit isn't convinced that power line is needed[San Diego Union Tribune]

Monday, May 21, 2007

Arnold Leaves Door Open For LNG.

For those of you who don't frequent the comment section of this blog, this could be news:

In the biggest political no-brainer of all time, Gov. Arnold Schwarzenegger has formally denied the Cabrillo Port LNG project that was, for all intents and purposes, dead anyway.

In issuing the denial, the Governor, did however, state his desire to see an offshore LNG facility somewhere in California. As reported in the San Francisco Chronicle:

"Although I strongly support building an offshore LNG facility in California, based on the unmitigated and significant environmental impacts associated with Cabrillo Port LNG's proposed project, I disapprove this application."

Now the LNG issue moves south to Long Beach, where Esperanza energy has announced its plans to move forward with its own offshore energy project. As discussed last week, the project appears to have the cautious support of the City of Long Beach because it is more secure and more environmentally friendly than previously proposed LNG projects, not to mention the fact that it would generate significant revenues for the City of Long Beach.

The ancillary economic benefits of Port Esperanza should be staggering as well. Just imagine the huge influx of new property taxes the city will be able to collect when Pierce Brosnan and the rest of the Malibu Millionaires build new waterfront mansions in Long Beach so they can continue their fight against LNG. (Wait... they're not coming???)

Governor rejects proposed offshore liquid gas terminal [San Francisco Chronicle]

Friday, May 18, 2007

Damned if you do, Damned if you don't.

A couple of weeks ago we ranted about the activist community's hypocritical allegations that "oil companies" were gouging consumers by taking refineries off-line for longer periods of time than necessary.

Now, writing in today's LA Times, Elizabeth Douglass tells the story of Valero, the company that makes 14% of the gasoline in southern California. Valero was scheduled to take its refinery in Wilmington off-line in April for maintenance but the CEC asked Valero to hold off because the resulting supply disruption would exacerbate rising gas prices.

Valero complied. Now the AQMD is fining Valero $5,000 a day because it delayed the planned maintenance that CEC asked it to postpone. Welcome to California.

For me, the pull quote from Douglass's piece is this:

"Although the state badly needs more fuel production, the few refinery expansion projects on the drawing board face fierce neighborhood opposition and California's new goals for reducing greenhouse-gas emissions. Similar conflicts are becoming acute at the state's ports, the only lifeline to outside supplies of crude oil and gasoline."

As we used to say in grammar school, "quod erat demonstrandum."

Valero can't win with regulators [Los Angeles Times]

Thursday, May 17, 2007

BP & Rio Tinto Bet on Clean Coal Power.

BP and Rio Tinto, the world's third largest mining company, have formed a joint venture called Hydrogen Energy that will develop clean coal power technology.

The basic idea is to ultimately build coal-fired plants that produce de-carbonized energy by making hydrogen (good) while trapping and storing CO2 (bad), resulting in drastically reduced greenhouse gas emissions.

BP already has a gas-fired plant up and running in Scotland that is using the technology and it has plans to have a second plant up and running at its facility in Carson, CA by the end of 2012. The Carson plant would produce 500 MW and would use coke as a feedstock.

The end-game for both plants is to optimize the technology to the point where we coal becomes a feasible long-term energy alternative again.

Reporting on the joint venture, Bloomberg notes that the U.S. and China, which are the two largest energy consumers and CO2 emitters on the planet, both have enormous coal reserves and are unlikely to abandon the mineral as an energy source, thus making the BP/Rio Tinto technology timely and necessary.

The Bloomberg article notes that the BP plant in Scotland pumps CO2 to an oil field 2.5 miles beneath the North Sea. According to the company's press release, at the Carson facility, BP plans "capture some four million tonnes of CO2 a year and transport it for reinjection into geological formations in southern California for permanent storage."

BP, Rio Tinto Venture to Develop Clean Coal Energy [Bloomberg]

Wednesday, May 16, 2007

LNG Not Dead Yet?

Last night the Port Esperanza folks presented to the Long Beach City Council and got a surprisingly warm (although still cautious) reception.

Port Esperanza seeks to address proactively the two big issues that scuttled two previous proposed LNG projects: security and environmental impact.

By siting Port Esperanza 15 miles offshore from Long Beach and including a heavy security convoy to accompany incoming tankers, the safety questions that plagued Sound Energy Solutions ill-fated on-shore facility are largely answered.

And by using a warm stream of discharge water from the East Long Beach power plant to warm up the super-cooled LNG, Port Esperanza will not require internal combustion engines to heat the arriving LNG, making it a zero-emission facility (BHP Billiton’s Cabrillo Port project in Oxnard was effectively killed over emissions.)

So the City of Long Beach appears to be taking the position, “If you can minimize safety and pollution risks, and make Long Beach a lot of money, we’re willing to talk.”

The project ultimately has to be approved by a gaggle of state and federal agencies, but support from the City of Long Beach could be an important barometer for the project's prospects for success.

Council receptive to offshore LNG plan [Long Beach Press Telegram]

Tuesday, May 15, 2007

SCE Courting Biomass Energy

Southern California Edison, already the biggest purchaser of renewable energy in the country, is targeting small biomass energy producers to add to its stable of renewable energy suppliers.

Through its new “biomass standard contract,” California biomass projects with generating capacities between 100 kilowatts and 1 MW, can now sign 10-20 year contracts with Edison. In the aggregate, SCE expects to pick up 250 MW of additional biomass capacity.

The contracts are subject to PUC approval and are available until Dec. 31, 2007; they may be withdrawn after a total of 250 MW are enrolled.

Southern California Edison Offers New Type of Renewable Energy Contract to Expand Biomass Generation [Press Release]

Monday, May 14, 2007

Yahoo!'s New Soap Box.

Yahoo!, which last month announced its plans to be carbon-neutral by the end of 2007 is launching a new service today called "Yahoo! Green." Essentially, the site is a new information portal designed to educate consumers about simple steps they can make to combat global warming.

If Yahoo! Green is as advertised-- a single destination on the web where people can learn about easy to implement behavioral modifications that, in the aggregate, can make a big difference in the fight against climate change, then its a good thing. Making basic, even inconvenient changes to one's daily routine is preferrable to the sweeping, global-economy-wrecking initiatives proposed by some of the more radical global warming activitsts.

Furthermore, as noted last week, the only way we are going to affect significant behavioral change is to reach out to educate the public. While a Yahoo! portal is not the same thing as as a face-to-face encounter with an individual consumer, its reach and influence as an Internet media company is undeniable.

So net-net, this looks like a good and worthwhile project, but I reserve the right to pull that endorsement if and when it joins the chorus of impractical reactionary interests who wrap an across-the-board anti-corporate agenda in the cloak of environmental/social responsibility.

Yahoo Puts Marketing Muscle into Climate Campaign [Reuters]

Friday, May 11, 2007

Breezy Predictions for US Wind Energy.

The American Wind EnergyAssociation is on the record projecting that the US will increase its wind power capacity by 25% in 2007. The Association said that more than 3,000 MW of wind power turbines will be added this year, which is enough capacity to power 825,000 homes.

In 2006, the year over year capacity increase was 20%.

Most of the new capacity will be in Texas which last year overtook California as the wind energy leader in the US. Texas expects to add 1,000 MW this year.

U.S. wind industry to add 3000 MW in 2007 -group [Reuters]

Thursday, May 10, 2007

Turning Grease Into Energy.

Chevron is working on a cool new project in Rialto, CA which will turn FOG into clean, renewable energy.

(Not "FOG"as in "atmospheric haze"-- FOG is an acronym for "Fats, oils and grease" that are generated as waste products from restaurants and other commerical kitchen facilities.)

Until now, private haulers were paid to take FOG to a landfill where, as it decomposed, it created methane gas, which contributes to global warming.

What makes this project somewhat remarkable is that the numbers actually seem to pencil out, which is rare for most "out of the box" energy proposals.

The facility will cost $15 million to build, but Chevron is eligible for a $4 million rebate under California's Self-Generation Initiative Program. Preliminary estimates indicate that the facility will save $800,000 a year in electricity costs for the city (and eliminate 5.5 million tons of greenhouse gas emissions annually).

While I don't know the deatails of Chevron's deal with the city, you have to believe they're getting paid a percentage on that annual savings or some similar arrangement. With relatively meager net construction costs of $11 million, costs can be fully recouped in fairly quickly.

If the project is successful, it could be a great model for other cities to follow.

Chevron, Fuel Cell Energy Announce Renewable Power Plans [Seeking Alpha]

Wednesday, May 09, 2007

WalMart Cuts A Good Deal.

WalMart announced that BP Solar will install solar arrays on 7 WalMart stores in California, capable of generating 4.3 MW.

Under the deal, WalMart pays nothing and has no operation responsibility, but gets to keep all of the REC's. BP Solar likes the deal because it expands marketshare.

This is just a small piece of a larger WalMart initiative that involves a total of 22 stores in California and Hawaii. Company officials estimate that, in the aggregate, the project will 20 million kWh per year and remove 6,500-10,000 metric tons of greenhouse gas emissions per year.

BP Solar to Supply Systems for Wal-Mart Solar Power Pilot Project [BP Press Release]

Tuesday, May 08, 2007

L.E.A.P.S. On the Ropes.

Back in February we talked about Nevada Hydro's attempt to get public fiancing for its proposed Lake Elsinore Hydroelectric Project by tapping the Transmission Access Charge (TAC) for a little free money. The idea sounded "aggressive," but now it sounds "dead."

CAL ISO weighed in yesterday with a report it delivered to FERC in which it opposed the move in the strongest possible terms.

Without public money, there is basically no way this thing gets built because it is projected to lose $150 million a year.

Hydro plant financing plan panned [North County Times]

Monday, May 07, 2007

Wind Power is For the Birds

A new National Academy of Sciences report basically accuses the wind power industry of being thugs, hell-bent on bird genocide (my interpretation).

The report basically states the obvious—massive, spinning wind turbines pose a threat to migrating birds. It notes that in 2004, in the Altamont Pass alone, 1,300 birds were killed in turbine strikes.

The NAS calls bird deaths an ecological “cost” to be weighed against the economic and environmental “benefits” of wind power, but it stops short of saying whether such costs outweigh the benefits, or vice-versa.

Commercial wind-generating capacity already has quadrupled to more than 11,000 megawatts since 2000, enough to power more than 3 million average homes for a year. Yet it remains a marginal part of the nation's energy portfolio, providing about 1 percent of the nation's electricity today.

A copy of the report is available Turbines spinning power, problems [Oakland Tribune]

Friday, May 04, 2007

Mr. Bryson Goes To Washington.

In testimony before a House Energy & Commerce subcommittee yesterday, Edison CEO John Bryson announced that he has found a way to fix the nation's power grid.

Coming off (at least in the print reporting) a little like Doc Brown from the movie Back to the Future ("Marty... I've invented the flux capacitator!!!"), Bryson informed the Committee that a new proprietary Edison technology called "Synchronous Phasor Measurement," combined with an advanced monitoring system and new digital control technologies, will help prevent regional power blackouts.

Bryson told the Committee:

“We will invest $1.2 billion equipping every household and small business we serve with a state-of-the-art, ‘smart,’ all-digital electricity meter that will be a small, powerful computer and communication system,” said Bryson. “Among the benefits will be time-of-use pricing options that will create incentives for customers to save money by shifting some of their use to off-peak hours when electricity costs are lower.”

He predicted that such technology could reduce peak demand on the grid by 1,000 MW.

[Edison Press Release]

Thursday, May 03, 2007

Solar Power Market Is Evolving.

The venture capital community's interest in solar has been talked about a lot, but now the deal-trades are running stories about a new trend in solar-- companies are seeking to corner the solar market by vertically integrating and controlling everything from production to distribution.

Red Herring notes that production of solar equipment used to be the real money-maker: Build the panels, wafers, cells, etc.; sell them at a high-demand-inflated price; and let somebody else figure out how to make money with them.

Now, with external pressures from cut-rate markets like China, margins are shrinking and manufacturing isn't the cash cow it once was.

So companies are looking to get into the distribution game as well. By controlling manufacturing and distribution, the hope is that they can cut front-end costs drastically enough to mitigate some of the inefficiencies on the back end.

Check out the Red Herring piece, it's a quick, interesting read.

Solar Energy Coming of Age [Red Herring]

Wednesday, May 02, 2007

The PUC's Novel Approach to Consumer Education.

Tomorrow, representatives of the Public Utilities Commission will be in San Bernardino for the "Utility Bill Fair," a half-day event where consumers can meet with representatives from their cell phone companies, water agencies, natural gas companies and power providers. Consumers will have the opportunity to ask questions and learn about-- and sign up for-- incentive programs and conservations measures.

Face time. What a novel concept.

If California is serious about changing consumer behavior when it comes to energy usage patterns, service providers all over the state, in every energy sector are going to have to educate their customers and facilitate their use of innovative new programs designed to encourage smarter energy consumption.

No amount of promotional inserts stuffed behind a monthly bill will induce enough consumers to alter their plans or change their behaviors.

Similarly, as long as service providers continue to hide behind impenetrable automoated phone trees ("Please slelect from one of the following 19 options... press pound to hear the options again..."), people simply will not make the effort to take advantage of new, more efficient energy options.

As antiquated a notion as this may sound, the kind of personal interaction that the PUC is doing tomorrow in San Bernardino is what is going to be required to effect a wholesale change in consumer behavior.

Utility Bill Fair will be in SB Thursday [San Bernardino Sun]

Tuesday, May 01, 2007

California Gas Prices Hit All-Time High.

According to the Department of Energy's weekly survey, this week the average cost of self-serve regular gasoline shot up 4.3 cents to an average of $3.359 per gallon-- an all-time high. Nationwide, the average price is $2.971.

In a stupefying act of hypocrisy-- event for the activist community-- the Foundation for Taxpayer and Consumer Rights, in today's Los Angeles Times, blames the high cost on "oil companies" for not expanding refining capacity.

Everybody knows refining capacity is the problem-- a problem exacerbated by the fact that California has seasonal gasoline forumlations to comply with clean air regulations. But to suggest that "oil companies" are wholly to blame for a dearth of refining capacity is ludicrous.

Can you imagine the outcry if an "oil company" announced plans to build a new refinery in California? Just imagine it! Environmentalists, NIMBY's, and a whole host of other activists would go absolutely bananas, pulling out all the stops to block it.

Similarly, imagine if an "oil company" announced plans to merely expand an existing refinery-- you can bet there would be a similar outcry.

So that leaves folks like the FTCR to hang their hat on allegations of foot-dragging by refiners-- allegations that they take refineries off-line for longer periods of time than are necessary in order to create supply shortages.

Has that ever happened? It would be naive to believe it hasn't, but is that the root cause of California's refinery shortage or merely a symptom of the fundamental problem of too much demand and too little capacity?

Gasoline is a zero-sum game in California. We either need to make more of it-- that means more refining capacity (i.e., more or expanded refineries) or it means decreased demand (i.e., some meaningful effort to modify the driving habits of Californians). Don't count on either any time soon.

Gasoline costs driven to a record [Los Angeles Times]