Tuesday, June 30, 2009

Government Commits Public Lands for Solar

Interior Secretary Ken Salazar signed an order yesterday 1,000 square miles of Western land for solar energy development. More than half of the acreage is in California.

The Los Angeles Times reports:

"The proposed California solar-generating areas are projected to have the annual capacity to produce 39,000 to 70,000 megawatts of electricity at full development -- enough to serve millions of homes. There are three large solar projects undergoing environmental review in the state."

Salazar wants to thirteen solar projects underway by 2010.

So far, the reaction from conservationists has been measured, but you can bet that development on this scale on public lands will not be without its entanglements. Stay tuned.

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Monday, June 29, 2009

Strange Bedfellows

Newsflash: Valero is embracing wind energy. Sort of.

Valero has installed a wind farm adjacent to one of its Texas facilities. At peak production, the farm will generate 50 MW, enough to power the adjacent facility nearly half of the time.

According to a report:

"The company hopes to lock in fluctuating electricity prices by developing its own source of power, rather than relying on the grid, and to cut the $1.4-million-a-month electricity bill at the seven-decade-old refinery. The $115 million wind farm, which will be ready to operate at full capacity in August, will pay for itself in about 10 years at current electricity prices, company officials said."

It's a win-win for Valero because, not only will the wind farm lower its electric bill, it will generate plenty of REC's for Valero to sell on the open market.

Despite all of the talk out of Washington about the number of jobs green energy will create across the country, it is interesting to note that, in this particula case, the wind farm creates a grand total of 3 new jobs (the number of people required to operate it once it is up and running)-- compared to 1,500 jobs required to run the adjacent facility.

Using renewable energy to power fossile fuel production may not be exactly what green energy advocates had in mind, but it certainly appears to make sense.

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To Tax or Not to Tax?

Last night Assembly Democrats passed a budget package that includes an almost 10% tax on oil production. The move is not unprecedented as Arkansas did something similary last year and Pennsylvania has a similar tax proposal this year. But legislators in Louisana are moving in the opposite direction, cutting taxes on oil and gas production in an attempt to attract more drilling.

The Wall Street Journal quotes WSPA's Joe Sparano who is (obviously) openly critical of the California proposal: "California is a very difficult state to do business in to start with," said "Anything that adds to that burden logically is going to have a negative impact on economic growth."

Advocates of the tax argue that tax planning plays little or no role in a commpany's decision to drill or not to drill in a state-- it's all about how much oil and gas is in the ground. To wit, a Montana think tank produced a report that used a control group of Montana and Wyoming, which concluded that, despite the two states' radically different tax structures, oil and gas activity was more or less the same.

Thursday, June 25, 2009


Energy Secretary Steven Chu opened his checkbook today, in a big way, doling out $154 million in stimulus cash to support energy efficiency and renewable energy projects in New Hampshire, Missouri, North Carolina, and right here in California. In fact, California took in the lion's shae of that money--more than $90 million.

According to the write-up in eGov Monitor:

"California will leverage its program funding to provide a statewide energy efficiency retrofit program and cost effective clean energy systems for residential, commercial, and industrial buildings and facilities. The revenue savings that result from these efficiency measures will provide an ongoing source of revenue to continue implementing additional cost-effective efficiency measures. Additionally, California plans to develop and implement a public education, marketing, and outreach effort to ensure the benefits and value of energy efficiency are well understood.

Also as part of California’s State Energy Program, the California Energy Commission (Energy Commission) is investing $15 million through June 30, 2012, in building a workforce to meet alternative fuel and advanced vehicle technology needs through its Green Jobs Training Program. The Energy Commission will expand on this plan and will leverage existing partnerships with $20 million in Recovery Act funding to create a more extensive green workforce focused on energy efficiency and clean energy sources, including wind and solar energy.
After demonstrating successful implementation of its plan, the state will receive more than $113 million in additional funding, for a total of $226 million for the entire program."

No word yet on whether legislators in Sacramento have come up with a way to count this cash infusion as "revenue" for budget purposes...

Wednesday, June 24, 2009

Back In the Saddle Again...

Well, that was sure fun.

Let me just say that, it's easy to talk about public policy in the abstract, but you get a whole new appreciation for its implications when you're forced to experience personally the issue being regulated.

Fresh from what was supposed to be a two day brush with the health care delivery system (that turned into a week), I have a whole new respect for the incredible standard of care we have in this country. Heaven help us if we actually adopt a Canadian style goverment health care delivery system. But I digress... this is about energy policy not health care.

Bloomberg moved a story today about a Pew Center for Climate Change study that hung a 20% number on the cost of wind energy-- as in, it will cost 20% more than natural gas generated energy.

According the article:

"Harnessing and delivering enough wind power to make it a significant source of energy in the U.S. may raise its cost by 20 percent, according to the Pew Center for Climate Change.

Building transmission lines would cost as much as $4 billion a year, and managing its variability would add further to its price, the Pew Center said in a report today. Prices would still be competitive with other energy sources if the U.S. approves legislation to limit greenhouse gases, the group said."

But economics be damned, there is a political imperative driving our national appetite for wind energy that will level the playing field between wind and fossil fuels. It won't make wind any cheaper, it will just make other energy more expensive. (Can you say "lose-lose"?)

If you slap carbon capture and storage requirements on traditional energy sources like coal or nuclear, wind-- as expensive as it is--actually is cheaper. In government economics, this actually makes sense.

It's good to be back.


Wednesday, June 17, 2009

In The Shop For Repairs...

No posts for a day or two... minor hospital procedure, but wifi challenged! Talk amongst yourselves!!!

Tuesday, June 16, 2009

Still More on Green Energy Job Creation...

While not quite as grandiose as the predictions the President likes to make, a new study by the non-profit Blue Green Alliance claims that a renewable energy standard will generate 850,000 new jobs:

"According to studies performed over the past seven years, by organizations California Energy Commission and the Berkeley Center for Renewable Energy, renewable sources generate greater employment, four to six times as many (per megawatt), when compared to equivalent investments in fossil fuels. The report postulates that a 25-percent requirement of 18,500 MWs of power from wind, solar, geothermal and biomass by 2025 would create jobs for a group that are the "backbone of the middle class," according to David Foster, the Blue Green Alliance's Executive Director."

You can download the report and draw your own conclusions...

Monday, June 15, 2009

A Bleak Outlook for Coal

A piece in the Wall Street Journal looks at the effect of plunging natural gas prices on the already cloudy future for coal.

With the price of natural gas less than half of what it was a year ago ($4 per million BTUS, compared to $13 per million BTUS last July) coal's share of the domestic electricity generation market is likely to free-fall (coal accounts for roughly 50% of domestic power generation; natural gas 21%).

According to the Journal:

"New natural-gas discoveries, however, in Texas, Louisiana, Pennsylvania and elsewhere, have created a gas glut that analysts expect to linger. Energy consulting firm Wood Mackenzie predicts gas prices won't recover until 2015.

Power companies are beginning to ratchet back investments in coal-generated plants to take advantage of low gas prices and hedge against costly climate-change legislation."

The write-up includes this rather dim forecast from the coal industry:

""There basically is no spot market for coal right now," adds Jim Thompson, managing editor of the Coal and Energy Price Report in Knoxville, Tenn., a coal-industry newsletter. "Coal companies are living off their utility contracts."

Utilities mostly obtain coal through multiyear contracts. As a result, even though spot coal prices have fallen, prices paid by utilities are expected to rise 2% this year to an average of $2.11 per million BTUs. Next year, the EIA expects coal prices to dip slightly to an average of $1.91 per million BTUs."

Lower Natural-Gas Price Leaves Coal Out in Cold [Wall Street Journal]

Friday, June 12, 2009

Going Obama One Better

You've all heard the president's claims about job creation from alternative energy. It started out as 3 million new jobs "created" by a national commitment to alternative to energy, but when he started to get questions about the methodology behind that statement, he retreated a bit and changed his stump speech to jobs "saved or created."

Either way it's virtually impossible to prove or disprove, which is why it is such a political winner.

Well the University of California has no use for such equivocation. David Roland-Holst, a UC Berkeley economics professor, has authored a study that finds that "moving half of California's electric power needs to renewable energy sources such as wind, solar or biomass would help create half-a-million jobs over the next 40 years." Boom. Take it to the bank.

In fact, Roland-Holst sees this as the silver bullet solution to all of California's budget problems, which should be music to our green-energy-enthusiast-Governor.

Specifically, the study's assumptions are:

"using clean sources for half the state's electric power while increasing efficiency by 1.5 percent each year would create 500,000 new jobs with a $100 billion payroll."

$100 billion translates into some serious tax revenue... maybe he's on to something. Who's to say? Well, how about Dave O'Reilly and Carl Pope.

They argued it out this week in San Francisco-- guess where each one stood on the issue?

It's all in the Mercury News's write up... enjoy:

Thursday, June 11, 2009

A New Front In the Cap & Trade War

Opponents of cap and trade have played just about every card in the deck in an effort to repel the proposed carbon emissions trading scheme, with arguments running the gamut from environmental (it doesn't stop carbon emissions, it sanctions them with the purchase of an offset) to economic (this is a simply a tax on business that will drive up costs to consumers).

Still, the proposal barrels on.

Enter a new stakeholder: the tired, poor, huddled masses yearning to be free.

A consortium of environmental justice groups have filed suit in San Francisco Superior Court against the Air Resources Board. The suit alleges that the Board has not done enough to prevent diproportianate impact on vulnerable communities, and that it is ineffective and unenforcable, putting it in violation of the mandate established by AB 32.

Basically, the idea seems to be that evil corporate interests will simply buy their carbon offsets and keep pumping out emissions in industrialized areas which tend to where at-risk communities live.

We'll see where it goes...

Wednesday, June 10, 2009

An Ocean of Possibility (and Cost)

One particular corner of the renewable energy world that has been off my radar screen recently is the much balleyhooed wave energy and/or marine current energy. It's no secret that, while this is hypothetically feasible, it's an economic boondoggle.

To back that up, consider this statistic from a report prepared for the California Renewable Energy Transmission Initiative:

"...wave and marine current power generation can cost as much as $445 per MWH and $410 per MWH, respectively. Other renewables like wind, solid biomass, hydroelectric and geothermal have clean energy generation costs nearing $150 per MWH."

The write-up in Earth2Tech admits that this isn't exactly "news" but it does kind of jump off the page at you when you see it in print.

Tuesday, June 09, 2009

Where The Green Jobs Are

Ask anyone in California to enumerate the differences between northern and southern California and you are likely to get two very distinct profiles.
Rightly or wrongly, NorCal has a more progressive political reputation and nowhwere is that more manifest than in environmental issues. So it would stand to reason that northern California would be the cradle of the state's new green energy economy, right?


According to a new "Green Economy Map" of California, it is southern California where the green economy has taken root and where it is likely to grow and prosper.
According to a Reuters report:

"Los Angeles County has more businesses than any other county in California that stand to benefit from the state's leadership on climate change, according to a first-of-its-kind map of green businesses in California.

The map was released in conjunction with a report outlining how the Los Angeles area can leverage its environmental leadership to create economic opportunities.

The California Green Economy map features more than 2,200 businesses statewide in four categories-energy generation, energy efficiency, green building and transportation-that are likely to grow as California transitions to a low-carbon economy. "

In fact, Los Angeles, San Diego, and Orange Counites top the charts in the study. For full disclosure it should be noted that the map was released as part of a report on L.A.'s "greenprint," and one indisputable truth of "studies" in general is that data is fungible, but the findings are nevertheless, notable.

Monday, June 08, 2009

Sonoma Steps Up to Hyrdrogen Fuel Cells

Sonoma County apparently as sealed a deal to power to its campus of administrative buildings, inlcudeing a courthouse and a jail, with hyrdrogen fuel cells. Earlier this year, there was chatter that such a deal was in the works, but yesterday a Connecticut newspaper reported that the deal was completed.

According to the Waterbury Republican-American:

"Danbury-based FuelCell Energy Inc. said Friday it has sold a power plant to Sonoma County, Calif., to power a 14-building county office complex, which includes a prison, in Santa Rosa, Calif.The Direct FuelCell, or DFC, power plant will be built at FuelCell Energy's 65,000-square-foot manufacturing facility in Torrington.

It will generate 1.4 megawatts of ultra-clean electricity, and its byproduct heat will be recovered and used to replace approximately half the natural gas the county currently purchases to make hot water for space heating, cleaning and cooking, the company said."

Friday, June 05, 2009

Ted Craver for President!

Edison CEO Ted Craver is wasting his talents in the private sector-- he should be in politics! In an interview with Reuters, Craver demonstrated and Obama-like ability to hedge his comments, take both sides of the same issue, and use consumers as a human shield for his true agenda.

On the subject of renewable energy, he noted that consumers are willing to pay more for clean energy (i.e., we're all in this together, let's save the planet) BUT we can't hit consumers over the head with huge price spikes so we need time to phase in renewables gradually (i.e., don't make me actually bet the ranch on renewables...).

Mirroring this hedged position, Reuters notes that the Edison corporate structure consists of two primary operational entities-- Southern California Edison, which is the largest purchaser of renewable energy in the country, and Edison Mission Group which generates most of its power from buring coal.

Telling Reuters that in a "carbon constrained world" utilities will need to "adapt or die," Craver signals a willingness to take the plunge, albeit very slowly.

Thursday, June 04, 2009

Taking Solar to the Extreme in San Diego

The inescapable takeaway from a write-up in Energy Current about reactions to the recently proposed draft energy blueprint for San Diego is that at least one county supervisor must have sunstroke.

The plan is, at worst consistent with the rest of California's stated energy objectives, and, at best, pretty aggressive. Not so, says San Diego Supe Dianne Jacob who panned the blueprint for setting anemic solar energy goals.

According to Energy Current:

"That draft said the region should use energy more efficiently, modernize its electric grid and boost reliance on green power to the point that sun, wind and other clean sources account for half of local electricity by 2030.

But the plan focuses far more on large, remote commercial solar and wind farms than on the small panels people put on their roofs. "


"SANDAG's draft policy suggested boosting the amount of sun power generated by residential rooftop panels from 50 megawatts today to 210 megawatts by 2020 and 249 megawatts by 2030. "

Jacob's response? Not enough rooftop solar.

Currently rooftop solar is capable of supplying 1% of the region's power needs. The county blueprint calls for increasing that 400%.

Jacob's response reminds me of the great story about Los Angeles philanthropist Dorothy Chandler accepting a check from a wealthy donor for one of her civic improvement charities, glancing at it, and-- to the donor's horror- tearing up the check in front of a room full of A-list attendees, and saying, "It's not nearly enough."

Official warns against wimpy solar goal [Energy Current via Yellow Brix via North County Times]

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Wednesday, June 03, 2009

I'd Like To Buy A Vowel...

The answer to the nuclear conundrum that lies at the heart of California's moratorum on new nuclear power facilities, could be found in a single vowel.

Commercial nuclear reactors rely on nuclear fIssion, which produces the nuclear waste that we have no place to keep, but nuclear fUsion could not only generate power but eliminate nuclear waste.

This is a perfect solution in theory only because, to date, achieving nuclear fusion-- basically the same reaction that takes place within the sun or within a thermonuclear weapon-- has been impossible. However, with the unveiling of the new super laser at the National Ignition Factility, Discovery Magazine speculates that nuclear fusion, just might be possible, and it might be the solution to eliminating nuclear waste.

According to Discovery:

"In a fusion-fission hybrid reactor proposal suggested by NIF researchers, a fusion chamber would be surrounded by a blanket of fissionable material, like nuclear waste, that would serve as an additional fuel source…. It would work by using the neutrons from fusion to help turn nuclear waste into nuclear fuel and then burn it until almost none is left..."

Tuesday, June 02, 2009


Lots going on today but several things to note:

The State Lands Commission threw a haymaker at Arnold last night over his proposal to revive offshore drilling at Tranquillon Ridge. John Garamendi called it a "naked power grab" and the Commission passed a resolution urging legislators to kill the proposal. The Los Angeles Times has the story.

The Wall Street Journal has a gratuitous but comprehensive blistering editorial against ethanol. Not much new but if you want to brush up on your facts about why ethanol is a boondoggle, it's a pretty succinct primer. Here is the link.

Lawrence Livermore laboratory unveiled the world's strongest laser which Escapist Magazine describes thusly: "[the laser] boasts 192 separate laser beams and takes up an entire football field of space, can be focused on a single point no bigger than the size of a pencil eraser, making the NIF the world's strongest laser beam." Here is the link.

Monday, June 01, 2009

Claim Jumping in the Name of Clean Energy

The government apparently is waking up to the consevationist vs. alternative energy controversy.

The LA Times reports that the Interior Department smells a rat in the recent spate of acquisitions within the renewable energy sector, speculating that the deals have more to do with land speculation (with government land) than energy. A formal investigation is underway.

Much like the dot-com companies of a few years ago, it's difficult to put a valuation on green energy start-ups, and often their land rights are their biggest assets, so companies are filing applications at a fast and furious pace.

According to the Times:

"Three years ago, the bureau had six applications for solar energy projects on file. Over the last year, it has received 130 additional applications from 50 companies, covering about 600,000 acres -- much of it in one of the sunniest regions on Earth, the Mojave Desert.

Some applicants are asking for parcels as small as 250 acres. Then there is Cogentrix Solar Investments, which is seeking more than 300,000 acres."

The companies themselves say they are just doing what needs to be done to meet the renewable energy mandate set forth by the state of California and that environmental trade-offs are inevitable.

San Francisco Peter Weiner who represents some of these companies was as candid as anyone has been in this whole debate, telling the Times:

"But it would be a mistake to think we can free ourselves from foreign oil and fossil fuels without impacting other environmental values."