Roundup: Lawsuits, Bond Issues, and Wind Energy

Chevron has come out swinging against the city of Richmond which last year passed Measure T, a business license fee that is estimated to cost Chevron anywhere from $16 million-$26 million per year.

In a lawsuit filed yesterday against the city, the company presented a "kitchen sink complaint" that claims the Business License fee violates everything from state laws against taxing business inventory, to state regulations on sales and use taxes, to the Commerce Clause of the United States Constitution. Needless to say, Christmas came early this year for the lawyers, and this will not be decided any time soon.

This episode is but a minor distraton to Chevron, however, which is proving to be one of the few corporate citadels in this free-falling economy. Yesterday, Chevron completed a $5 billion bond issue as one of the biggest players in what Bloomberg is calling a record month for non-financial debt issuances. I guess it's good to be Chevron these days...

On an unrealted note, and as a follow-up to yesterday's post about Solano County being one of only a couple of brights spots on the California Wind Energy front, Chris Bowman profiles in the Sacramento Bee Enxco's development efforts in Solano, and the economic impact it is having on displaced workers there.

Forecast: Light to Moderate Winds

In the yachting world, sailboat racers have a derogatory term for weather conditions that make competition temporarily impossible due to lack of wind: "DFC" (Dead F&#%ing Calm). That term could be aptly applied to the wind energy industry in California these days.

Yesterday, it was noted that Iowa has surpassed California as the number 2 state in terms of wind energy. Today, the San Jose Mercury News has a piece about the grim future of wind energy in our state.

The Merc quotes Mark Tholke of wind energy company Enxco who cites the credit crunch, a frustrating state permitting process, and the lack of transmission access in places where the wind blows best in California as reasons why the industry has hit the skids. According to Tholke, look for only "two or three" projects to be built in 2009.

Buying power from wind energy projects in neighboring staes is emerging as a more attractive option than siting and building new projects here in California, but Tholke notes that two areas in California do show promise for future development: Tehachapi and Solano County.

Wind energy still slow in California [San Jose Mercury News]

When is a Blue state not a blue state?

Writing in Renewableenergyworld.com, Clint Wilder observes that political divisions within the Democratic party threaten President Obama's ability to implement his aggressive alternative energy agenda.

Using the example of a carbon cap and trade system, Wilder argues that, while there are a lot of "blue" (i.e., Democratic) states, among them are numerous "purple" and "green" states.

Green states are just what you would expect-- states along the West Coast and in New England taht have been at the forefront of the clean tech and alternative energy battle. Purple states, however, are those rust belt and midwestern Democaratic enclaves that are home to strong industrial, farming, and manufacturing bases. For purple states, the economic realities of carbon cap and trade are stark.

Wilder notes that bellweather states like Iowa, which is now the #2 state in America in terms of wind power, will lead by example and demonstrate that green energy can work in some of these states that have an intellectual appreciation for energy reform, but a politically realistic understanding of what it will entail.

Obama-Era Carbon Policy Must Transform Old Divisions [renewableenergyworld.com]

The Sun Could Shine On Palmdale Airport Again

In an effort to displace some of the passenger load at Los Angeles International Airport, a plan was hatched to promote the use of regional airports in and around L.A. Burbank Airport (now "Bob Hope Airport") remains a perennial passenger favorite, and airports in places like Long Beach and Ontario have also become significant travle hubs. However, the mother of all white elephants has been the Palmdale Airport, in the high desert northeast of Los Angeles.

United Airlines tried to make a go of Palmdale operations, but recently pulled the plug and the Los Angeles World Airports Authority followed suit soon after, announcing that it would give up the facility's operating certificate, rendering it useless for commercial air travel.

Another recent policy boondoggle that has been in the news a lot lately is the controversail "Measure B" in Los Angeles which has been ram-roddded onto the ballot. Measure B, if passed, would require L.A. to get 40% of its power from renewable sources.

Palmdale Airport and Measure B seem to have been meant for each other as now there is talk of turning Palmdale Airport into a massive solar farm.

What is intriguing about the idea is that it could just work. Unlike other massive solar projects that are sited way out in the ultra-boondocks, this location is essentially within L.A., alleviating the need to build a long "Sunrise Powerlink" like transmission line.

The problem, though is a political one. Palmdale Airport was born out of eminent domain and the process was expressly for transporation. Using it for solar requires a host of approvals, from the County to possibly even the air force.

Palmdale airport land may become a solar farm [Los Angeles Times]

Taking Shots at the Economic Arguments for Green Energy

Writing in today's Wall Street Journal, the Manhattan Institute's Max Schulz turns both barrels on President Obama's claims that an aggressive commitment to alternative energy will create new jobs and be a boon to the economy.

It a very broad concept piece, Schulz makes arguments familiar to anyone who has ever been to this blog: renewable energy is inherently inefficient, it will require subsidies and drive up costs.

But Schulz makes the valid point that these drawbacks don't make alternative energy "bad." It's not green energy he has a problem with, it's the specious notion that it is an economic catalyst that irks Shulz.

He notes, "There may be legitimate arguments for taking dramatic steps to fight climate change. Boosting the economy isn't one of them."

Don't Count on 'Countless' Green Jobs [Wall Street Journal]

The Renewable Engine That Could-- "I think I can..."

A new PUC report concludes that if all of the renewable energy projects in California that were proposed in 2008 were to be implemented, those projects would generate 24,000 MW and California's goal of 33% of all electricity coming from renewables by 2020-- often panned as unachievable-- is actually quite doable.

What does this mean as renewable energy projects are being shelved left and right due to the current economic conditions? In the real world, probably not much, but form a public relations perspective, it gives renewable energy advocates a fresh card to play in the debate over California's alternative energy agenda.

The San Francisco Chronicle notes:

"Still, Wednesday's report was the commission's most optimistic to date on reaching California's goals. Last year, a similar report from the same group warned that getting 33 percent of the state's electricity from renewable power would require "an infrastructure build-out on a scale and a timeline perhaps unparalleled in the world."

California's renewable energy goals feasible [San Francisco Chronicle]

Standoff

The spirit of legislative and regulatory brinksmanship that has engulfed Washington, D.C. and Sacramento is rearing its ugly head in energy policy, as well.

Yesterday, a business group in Colorado called the "Western Business Roundtable" slammed the Western Climate Initiative's plan to reduce greenhouse gas emissions. The WCI, which consists of seven Western States and four Canadian Provinces put forth its cam & trade plan in September.

According to Margot Roosevelt in the Los Angeles Times:

"The Western Climate Initiative, touted as a model for national global warming legislation, will strain the region's electricity grid and prolong the economic recession, a business group asserted Tuesday.

The initiative was launched in September by seven Western governors, including California's Arnold Schwarzenegger, and four Canadian provincial premiers. It seeks to slash regional greenhouse gas emissions by about 15% below 2005 levels in the next 12 years.

But a report commissioned by the Colorado-based Western Business Roundtable asserted that the initiative would "impose significant new costs on consumers and retard job creation in the Western U.S. over the coming decade" but would offer "no scientifically measurable benefit in terms of reduced global climate temperatures as far out as the year 2100."

If the partisan wrangling that we have seen at the state and federal level are any indication of the new political reality in this country, getting anything substantial accomplished could be nothing more than a pipe dream...

Business group condemns climate initiative on economic grounds [Los Angeles Times]

Bill Clinton Does L.A.

Bill Clinton was in Los Angeles over the weekend, but he wasn't there to hang out with movie stars or for a television appearance. What drews the gadfly former President to southern California? Traffic lights.

Clinton's charity, the Clinton Climate Initiative apparently is a big supporter of energy-efficient LED traffic lights and he attended a ribbon-cutting ceremony with LA Mayor Antonio Villaraigosa (who reminds us more than a little bit of Bill Clinton--ane we're not talking politics here!) where the City of L.A. announced its plans to retrofit 140,000 traffic lights with LED , at a cost of $57 million.

The Torrance Daily Breeze has the story:

Clinton promotes switch to LED lights [Torrance Daily Breeze]

Taking "Drill Baby Drill" to the Extreme

Things are so depressing in California these days that maybe we should turn our sites someplace else... like the Arctic Circle!

The Wall Street Journal has an interesting piece about a Norweigan company that is harvesting LNG from the Arctic Circle.

The Journal notes:

"The project, called Snoehvit, has taken StatoilHydro and the entire oil and gas industry into uncharted territory. Before, no one had ever produced liquefied natural gas in the Arctic -- or in Europe, for that matter. And blazing that trail has been fraught with problems, putting Snoehvit behind schedule and over budget.

But the lure of the Arctic has proved irresistible, and not only for StatoilHydro. The region is thought to contain just over a fifth of the world's undiscovered oil and gas resources. Even conservative estimates put its reserves at 100 billion barrels of oil."

You can't get much more remote than the Arctic Circle and weather, distance, etc. is an obvious factor to the viability of full scale operations there, but the resources are plentiful, to say the least.

Norwegian Oil Firm Goes to Energy's Last Frontier [Wall Street Journal]

Rough Sledding for Ethanol

Now that Congress is about to pass, and the President is eager to sign, the biggest economic boondoggle of my lifetime, thanks to the New York Times, we can once again turn our attention to one of the longest running economic boondoggles: ethanol.

The Times reports on the state of the ethanol industry and, not surprisingly, it isn't pretty. According to the write-up, "Bob Dinneen, president of the Renewable Fuels Association, a trade group, estimated that of the country’s 150 ethanol companies and 180 plants, 10 or more companies have shut down 24 plants over the last three months. That has idled about 2 billion gallons out of 12.5 billion gallons of annual production capacity. Mr. Dinneen estimated that a dozen more companies were in distress."

The culprit is a sever constriction in gasoline demand throughout the country. One of the more conspicuous effects of this constriction is that development of celluslosic ethanol, which was supposed to alleviate the econmic impacts on price and availability of food and feedstock caused by corn ethanol, is essentially dead in its tracks.

Here's a telling quote from an economist interviewed by the Times:

"Cellulosic ethanol is something that is always five years away and five years later you get to the point where it’s still five years away,” said Aaron Brady, an energy expert at Cambridge Energy Research Associates, a consulting firm.

But, perhaps my favorite observation (to bring this full-circle back to the impending Stimululs Package) is this:

"This is not how it was supposed to be when Congress mandated in 2007 that refiners blend increasing amounts of ethanol into the country’s transportation fuel supply."

Unintended consequences of pork-barrel legislation? Really? You don't say.

Ethanol, Just Recently a Savior, Is Struggling [New York Times]

Salazar Weighs In On Offshore Drilling

When Ken Salazar was announced as Interior Secretary-designate, we mused about the pick's implications for energy polcy, specifically with respect to offshore oil drilling. Well, now Secretary Salazar has officially weighed in with something of a mixed message.

Salazar officially put the brakes on offshore drilling approved by the Bush Administration, but did not slam the door completely on the idea of future drilling. He promises a comprehesnive offshore energy plan within 45 days that incoporates not only oil and gas, but renewable alternatives like wind and wave energy as well.

According to the Ventura County Star:

"Salazar ordered government surveys to determine what energy resources are available off the nation’s coasts. He also extended the comment period for a new energy plan another six months and said he would hold four hearings across the country to allow for input from states and other interested parties.

“A ‘drill only’ approach — onshore or offshore — is not enough,” he said. “We need a new, comprehensive energy plan that takes us to the new energy frontier and secures our energy independence.”

The Bush administration’s draft proposal would have created a five-year drilling plan for what is known as the Outer Continental Shelf, which circles the U.S. shoreline."

Interior backs away from more coastal drilling [Ventura County Star]

Sergey and Larry To the Rescue!

This was just a matter of time... With all of the recent press about the cost and viability of building a new Smart Grid, you just knew that this was a challenge too tempting for the Google guys to stay away.

The New York Times and others are reporting that Google is expected to announce today that it is getting in the Smart Grid game, rolling out technology to support actual grid infrastructure to be developed by someone else.

According to the Times:

"Google is one of a number of companies devising ways to control the demand for electric power as an alternative to building more power plants. The company has developed a free Web service called PowerMeter that consumers can use to track energy use in their house or business as it is consumed.

Google is counting on others to build devices to feed data into PowerMeter technology. While it hopes to begin introducing the service in the next few months, it has not yet lined up hardware manufacturers. "

Google Taking a Step Into Power Metering [New York Times]

Smart Grid = Big Bucks, Bigger Headaches

When an ad for a new "smart grid," poppued up during the Super Bowl, you knew the that somebody stood to make big, big bucks from the idea, but today, Rebecca Smith dives into the issue in the Wall Street Journal. According to a new study, the price tag is $100 billion, and the cost of the supporting generation infrastrcutue would dwarf that.

As reported in the Journal:

"The transmission system would cost up to $100 billion. Building the wind turbines needed to generate the desired amount of power would cost about $720 billion, the study estimates -- making the total investment about equal to the size of the current stimulus bill. The money would be spent over a 15-year period, and would be financed primarily by utilities and investors."

But cost is just the tip of the iceberg... Buried in Smith's article is the real issue behind the issue:

'The projected cost of the system is only one hurdle. Getting the high-voltage power lines build across the country would require the assent of local authorities and landowners, and might require federal intervention. "For that 15,000 miles of lines, I promise about 15,000 lawsuits," said Mr. Moeller."

Here's the full article:

New Grid for Renewable Energy Could Be Costly [Wall Street Journal]

Venture Capital AWOL on Energy

If you want to see the effect the economic downturn/recession/depression is having on the alternative energy sector, look no further than venture capital investment in Cleantech.

For the year, a healthy $4.7 billion flowed into Cleantech coffers in 2008-- not too shabby. However, the AP reports that the dropoff between the third and fourth quarter was downright frightening:

"Fourth-quarter venture capital investment totaled $954 million, down 44 percent from $1.7 billion invested in the third quarter of 2008, according to an analysis released Tuesday by Ernst & Young LLP. "

44%.

If we are going to come anywhere close to creating the 3 million (or whatever the number is this week) jobs the President promises form alternative energy development, the private sector is going to have to play a role. However, it certainly looks like frozen credit markets are sending a stark signal that makes the viability of the President's agenda even more doubtful.

Alternative energy's banner year ends with a clang [Associated Press]

Chu to California: You're Toast.

Recently, I mused about the ability of the admittedly brillian scientist Steven Chu to handle the Beltway bureacracy, but now it appears Dr. Chu has a bigger challenge-- handling the media. The new Energy Secretary, it seems, has the bedside manner of an executioner!

Chu told the Los Angeles Times that global warming will potentially destroy the entire agricultural industry in California by the end of the century. Some would argue that this kind of alarmist, tough talk is what is required to make people step up and take notice of the urgency with which the climate change crisis must be dealt. Others would argue that this kind of indelicate language from a Cabinet secretary is reckless.

Here's a snippet:

"Speaking with the Los Angeles Times, Mr. Chu, a Nobel Prize-winning physicist who ran the Lawrence Berkeley National Laboratory before joining the Obama administration, said that warming temperatures could eliminate up to 90 percent of the Sierra snowpack, which provides water to many of the state’s 76,000 farms.

“I don’t think the American public has gripped in its gut what could happen,” he told the newspaper. “We’re looking at a scenario where there’s no more agriculture in California.”

Energy Secretary: Climate change could wipe out Calif. farming [Bright Green Blog, Christian Science Monitor]

Who's The Boss?

When it comes to setting and driving the nation's green energy agenda, who's in charge? President Barack Obama, who made a deeper push into alternative energy a pillar of his campaign and one of the top priorities of his presidency... or Senate Environment and Public Works Chair and California Senator, Barbara Boxer?

Yesterday, Boxer tried to steal a little of the Presidential thunder by unveiling a six point plan of her own that largely reiterated a lot of the same goals that she, the President, and others have been articulating for some time now. However, the plan had a heavy-- and somewhat ambiguous-- emphasis on states' rights that seems to be drawing a not so subtle battle line between her Committee and the White House.

The Wall Street Journal wonders just what it means in terms of specifics, and notes that if green energy has any chance of moving forward as a political agenda item, Boxer and Barack are going to have to learn to get along.

Boxer’s Brief: California Senator Sketches Global Warming Principles [Environmental Capital blog, wallstreetjournal.com]

More On The Cost of Solar

A friend passed along a notable blog post yesterday that presents yet another (but highly readable) cost comparison between solar and nuclear.

Here's a taste:

"Solar power, installed - not including transmission or storage infrastructure - costs about $7.0 million per megawatt of output; this equates to $7.0 billion per gigawatt. If this sounds expensive, it is, but to get a truly accurate price you have to also take into account yield. Even in sunny California, solar energy (in terms of full-sun-equivalent hours), can only be harvested on average for 4.5 hours per day, which means to get 500 gWh of solar generated electricity each day in California, you would need to install 111 gigawatts of solar arrays (500/4.5), which would cost $777 billion dollars."

The entire post is at:

Joe Romm and the Price of Sunshine [Energy From Thorium (blog)]

Los Angeles DWP Solar Plan Criticized

Did Los Angeles DWP Director David Nahai pull a fast one when he got the LA City Council to vote to put Measure B on the March ballot without a lot of the supporting financial detail that typically accompanies consideration of such a proposal?

Nahai said he couldn't produce the numbers in time but now the LA Times is channeling Woodward and Bernstein and citing meeting minutes uncovered through a FOIA request that indicate that the matter had been discussed internally at DWP almost a year ago... more than enough to assemble the information the Council needed.

Measure B is a $4 billion plan to place solar arrays throughout Los Angeles, which would be maintained by DWP.

City Council Members are backing away from their support of the plan and accusations are flying. The Times has the entire story:

DWP solar plan was rushed to ballot despite months-earlier talks [Los Angeles Times]