Tag: "human emissions"

Oregon & EPA Launch Aggressive Moves Against Coal

Oregon is now one of the first states to announce that it plans to officially wean itself off coal consumption. Governor Kate Brown signed a bill that prohibits the state’s utilities from purchasing coal-fired power after 2030. The bill is largely symbolic, since Oregon is not a coal producing state and consumes very little coal. In fact, Oregon produces and consumes far more hydroelectric energy than coal and natural gas.

  • The level of coal consumption has been steadily rising in Oregon.
  • Coal consumption is only 3 percent of all fossil fuel consumption.
  • Coal consumption is only 2 percent of all fuel and renewable energy consumption.
  • Hydroelectric power accounts for close to 35 to 40 percent of all of Oregon’s energy consumption.

In addition to Oregon’s anti-coal move, the Environmental Protection Agency (EPA) announced that 11 states have failed to submit plans to reduce sulfur dioxide air pollution. The EPA says the states have not reduced their emissions enough to meet federal limits or submitted plans to the EPA outlining how they will meet an October 2018 deadline for meeting standards.

Both of these efforts will more than likely have very little effect. Oregon is not much of a coal consuming state and the EPA’s deadline comes after the next federal administration is sworn into office.

Mar 14, 2016 | 5 comments | by

Utah Joins Oklahoma in Rejecting Clean Power Plan

The state of Utah has now joined Oklahoma in outright rejecting complying with the Clean Power Plan after the Supreme Court halted the regulations earlier in February. Utah was already a member of a coalition of 30 states challenging the EPA’s Clean Power Plan in the D.C. Circuit Court of Appeals. Under the plan, all states are required to come up with their own carbon emission reduction goals or have federal goals imposed on the state. It directs states to lower their greenhouse gas emissions by a third by 2030, specifically targeting the coal industry. An outright rejection may be viewed as the state is unwilling to come up with their own goals, thereby requiring the federal government to interfere in each state’s coal industry and electricity production.

Groups suing the agency say is an impossible goal that will raise energy prices and raise the potential for rolling blackouts. In addition, a study by NERA Economic Consulting concluded that:

The EPA has severely underestimated the cost of compliance with its regulation of carbon dioxide from power plants, and by doing so it is trying to make Americans believe that the government can force the electric generating sector to eliminate a massive amount of low-cost coal-fired generation for little or relatively no cost. U.S. consumers of electricity will pay for prematurely retiring coal-fired plants through substantially higher electricity prices. Because EPA has set emission reduction targets by state, the impact of the higher costs will not be borne equally, but 40 states (out of 47 affected) could see average electricity prices rise by 10 percent or more and 27 states could see average electricity prices increase 20 percent or more.

With the recent Supreme Court decision to stay the implementation of the Clean Power Plan, other states say they will continue to work on complying with the plan. EPA senior officials have said they will meet with any states that wish to voluntarily continue working on the regulations.

 

Mar 02, 2016 | 1 comment | by

New NERA Study Details Economic Impact of Clean Power Plan

A new study by NERA Economic Consulting explains the economic impact from increased regulations from the federal government’s Clean Power Plan (CCP) in great detail. The CCP’s goal is to reduce carbon emissions from new and existing fossil-fueled power plants in the United States. States have the responsibility to meet the CPP goals. If they fail to come up with a carbon reduction plan or submit a plan that does not comply with CPP, the federal government steps in with their plan to meet the CPP goals. CPP goals include:

  • All compliance scenarios lead to large reductions in average CO2 emissions.
  • Reductions range from 19% to 21%.
  • By 2031, annual emissions are expected to be 36% to 37% lower than in 2005.

NERA estimates that the impact of the CPP on the energy sector, electricity rates and to the economy include:

  • Total energy sector expenditure from 2022 through 2033 increases range from $220 to $292 billion.
  • Annual average expenditures increase between $29 and $39 billion each year.
  • Average annual U.S. retail electricity rate increases range from 11%/year to 14%/year over the same time period.
  • Losses to U.S. consumers range from $64 billion to $79 billion on a present value basis over the same time period.

State-level average electricity price increases demonstrate that many states could experience significant price increases:

  • 40 states could have average retail electricity price increases of 10% or more.
  • 17 states could have average retail electricity price increases of 20% or more.
  • 10 states could have average retail electricity price increases of 30% or more.

The highest annual increase in retail rates relative to the baseline also shows that many states could experience periods of significant price increases:

  • 41 states could have “peak” retail electricity price increases of 10% or more.
  • 28 states could have “peak” retail electricity price increases of 20% or more.
  • 7 states could have “peak” retail electricity price increases of 40% or more.
Nov 18, 2015 | 2 comments | by

Clean Power Plan Opposition Grows

A coalition of 24 states and a power company are suing to stop the Obama administration’s Clean Power Plan (CPP), calling it an unlawful federal bid to control state power grids.

As part of the lawsuit, the states seek to place a hold on the Clean Power Plan’s deadlines for meeting its carbon emission goals, which supporters have described as necessary to improve air quality but foes have criticized as arbitrary and unrealistically strict.

In addition to the lawsuit by the states, pro-business groups have also joined the fight against the Clean power Plan that mandates a massive reduction in carbon emissions in the next 15 years, arguing that it will jack up energy costs and slash jobs without making a dent in greenhouse gases.

U.S. Chamber of Commerce and 14 other business groups filed a lawsuit against the Environmental Protection Agency. Their lawsuit:

  • Claims the EPA has overstepped its authority by attempting a takeover of state power plants.
  • Seeks a hold on the rule’s implementation pending the legal challenge.
  • Parallels the lawsuit filed same day by 24 states.

The Rule requires a fundamental restructuring of the power sector, compelling States, utilities and suppliers to adopt EPA’s preferred sources of power and fuel and to redesign their electricity infrastructure in the process.

A preliminary analysis of the Clean Power Plan issued in October, 2014 by the NERA economic consulting calculated that the CPP could boost retail electricity prices 12 percent to 17 percent.

The Clean Power Plan would effectively shut down coal-fired power plants, which provide inexpensive and reliable electricity but cannot reduce their emissions to the required levels using current technology.

Thousands of businesses will stop providing support services to coal-fired plants and coal mines. Many coal mines will have to reduce operations or close entirely, laying off numerous employees in the process.

Oct 28, 2015 | 1 comment | by

Economic Gain Increases Environmental Quality

The relationship between environmental quality and economic development has been described as an environmental Kuznets curve: Initially, economic development exacerbates environmental problems; however, as an economy grows and develops, average incomes reach a certain point beyond which environmental indicators start to improve.  Indeed, as gross domestic product per capita increases, emissions of pollutants per $1 of gross domestic product falls. This is true also of industrial emissions of carbon dioxide, which was not traditionally viewed as an air pollutant, but is now regulated by the Environmental Protection Agency.  [See the table.] This suggests that economic progress is a prerequisite for improving environmental quality generally, and specifically for meeting carbon dioxide emissions reductions goals.

Carbon Dioxide Emissions

(kilograms of CO2 per $1 gross domestic product)

 

  1990 2000 2010
China 1.9695 1.0110 0.9084
India 0.6533 0.6538 0.5338
Japan 0.3341 0.3328 0.2966
Singapore 0.6105 0.3196 0.0510
South Africa 1.1881 1.0964 0.9692
United Kingdom 0.4272 0.3169 0.2416
United States 0.5988 0.5121 0.4174

 

Note: Dollars of GDP adjusted for purchasing power parity.

Source: Millennium Development Goals Database, United Nations Statistics Division.

Special contribution by NCPA research associate Jiawen Chen. 

Aug 26, 2015 | Leave a Comment | by

Obama Takes Aim at Big Trucks

On Friday, the Obama administration officially announced plans to further lower carbon emissions in the United States. This new rule, issued by the Environmental Protection Agency (EPA) and the Transportation Department, aims to increase the fuel efficiency of the large trucks crossing the country everyday. New regulations will also affect other trucks, such as delivery vehicles, dump trucks and buses.

Two categories of standards were created, one for the front part of big trucks, called tractors, and one for trailers that trucks haul. The tractor standard will be implemented for those built in 2021 and require efficiency increases of up to 24 percent. This will be the first time, however, that regulations extend to trailers. The first federal standards for big trucks were announced in 2011 for any truck models built between 2014 and 2018.

The rules threaten to impose undue burdens on the trucking industry — an industry responsible for the transportation of food, raw goods, and most freight in the country. Adjusting to these new rules will require improvements in aerodynamics and the use of lighter materials as well as tweaks in current engine and transmission technology. The EPA stated the industry would be able to recoup their costs within two years for trucks with trailers. For smaller trucks and buses, the recoup time may be as long as three to six years.

These new regulations are just the next step in a long line of new rules implemented under the Obama administration. In his first term, President Obama discussed limitations on automobile emissions. These were followed by new rules set by the EPA for power plants and more recently potential regulations on airplane engine emissions.

 

Jun 22, 2015 | 2 comments | by

Germany Leads Charge for New Emission Commitments at G7

German Chancellor Angela Merkel won a key victory in her fight against climate change when the G7 agreed to adopt emission targets to limit the increase in future global temperatures. Chancellor Merkel had hoped the G7 would adopt these measures to show a united front prior to the climate summit in Paris this December.

The G7 plan aims to meet an emissions target outlined by a United Nations recommendation to reduce emissions in 2050 from 40 to 70 percent below 2010 levels. Many believe this would be enough to stop global temperatures from reaching dangerous levels.

It would, however, also come at a very high cost as many utility plants using fossil fuels would have to be shut down permanently. The cost of reducing emissions comes at an especially heavy price for developing countries, who simply cannot afford to divest from traditional forms of energy.

During the summit, Canada and Japan were the most hesitant to sign these commitments. Since the 2011 Fukushima nuclear accident, Japan has had to rely more heavily on coal, while Canada has seen economic growth opportunities from the oil boom in the Alberta tar sands. Pressure from both President Obama and Chancellor Merkel eventually convinced the two countries to sign onto the commitments after they had worked to water down the statement.

These commitments follow five controversial years in which five of the G7 countries have increased their coal use. While pressuring developing countries to lower emissions, Great Britain, Germany, Italy, Japan and France have burned 16 percent more coal in 2013 than in 2009. Only the United States and Canada have lowered their emissions, due to a boom in natural gas consumption. The Stockholm Environment Institute also reported that developing countries were on track to reduce emissions more than industrialized nations.

For now, the commitments come without specific plans to lower emissions. Environmental lobbyists criticized the lack of real plan, saying the countries’ failures to agree to their own immediate binding emission targets weakened the promise of reduced emissions.

 

Jun 10, 2015 | Leave a Comment | by

The Real Cost of Clean Power Plan

The Environmental Protection Agency’s Clean Power Plan Proposed Rule to cut carbon emissions from power plants, specifically targets coal power plants. Not only would this hurt United States energy supplies, but also greatly increase energy costs that would hit consumers by raising their electricity bill.

The following shows the difference between the analysis of the costs of the National Economic Research Associates and the Environmental Protection Agency (EPA).

The EPA estimates:

Annual cost estimates for complying with the Clean Power Plan range from $5.4 billion to $7.4 billion in 2020, to $7.3 billion to $8.8 billion in 2030. These annual cost estimates factor in both the costs of investments in transitioning to lower-carbon electricity options and the savings that result from investments in energy efficiency.

NERA estimates:

EPA’s Clean Power Plan could cost consumers and businesses a staggering $41 billion or more per year, far outpacing the costs of compliance for all EPA rules for power plants in 2010 ($7 billion) and the annual cost of the Mercury and Air Toxics Standards rule ($10 billion). The analysis also finds that additional coal retirements would total 45,000 megawatts or more of coal-based electricity, posing a major threat to electric reliability in many parts of the country.

Jun 01, 2015 | Leave a Comment | by

Wrongly Justifying Electric Car Tax Breaks

Math errors. Exaggerations. Phony metrics. Trickle-down economics. The recent e-mail from JJ McCoy of the Seattle Electric Vehicle Association to the legislature has it all.

Electric car advocates in Washington State are again asking for a sales tax break on top of the existing federal tax credit they receive of $7,500. Their sales tax break costs the state about $10 million a year. To put that in context, that is about one-quarter of the Washington State Salmon Recovery Funding Board’s annual funding.

Put simply, when McCoy’s math is corrected, the environmental value of the $39 million tax break is only $2.6 million — a waste of $36.4 million — not the $18 million benefit he wrongly claimed.

As we’ve pointed out, these tax breaks go predominantly to the wealthiest 10 percent — people who are not price sensitive and would have likely purchased an electric car anyway.

Even worse, much of the argument in favor of extending the sales tax breaks is not only wrong, it contradicts other claims electric car lobbyists make.

Case in point is the e-mail sent by JJ McCoy, lobbyist for the Seattle Electric Vehicle Association and Northwest Energy Coalition. It demonstrates how far those lobbying for these wasteful and ineffective subsidies have to go to assemble an argument.

Here are the claims made by McCoy and the Seattle Electric Vehicle Association, and the reality.

Claim: If the sales tax exemption is allowed to expire, Washington’s market share for plug-in vehicles will drop 63% — that, according to a study by the Keybridge Economic Group, led by former Clinton Council of Economic Advisors Robert Westcott, PhD.

Reality: Actually, the Westcott study does not prove sales would fall this much — it simply assumes it. They write “sales in Washington are assumed to drop from 1.2 percent of total vehicle sales to just 0.5 percent of sales” [emphasis mine]. They get the 0.5 percent figure by using the Oregon level of 0.8 percent and then adjusting downward. Why? The study authors don’t explain. They simply say, “several state-specific factors have created a particularly conducive environment” in Oregon, but don’t explain what the factors are.

McCoy uses this phony math to claim the tax breaks increase sales by 2,100 cars a year. If we use the actual Oregon level as a baseline, the number is 1,111. Even this number is exaggerated. Washington’s median income is about 15 percent higher than Oregon’s, offering a much better environment for buyers with disposable income to buy expensive, luxury cars.

Even with McCoy’s completely unsupported assumption, however, his math does not add up.

Claim: Each of those 2,100 extra cars, powered by Washington’s very clean grid, will avoid nearly 5 tons of carbon emissions annually compared to the average 25 mpg gas car.

Reality: This math is completely inaccurate. Who says so? The Seattle Electric Vehicle Association itself. Its own “EVangelism” flier says electric vehicles would avoid 4.2 tons of CO2 emissions compared to a 23.6 MPG car, or 3.8 tons compared to a 25 MPG car — about 25 percent lower than what McCoy told legislators.

Claim: That’s nearly 75 tons over the 15-year life of the car, and may even be more…

Reality: The Westcott study, the one McCoy cites just two paragraphs earlier, says the average lifespan of an electric vehicle is 12 years, not 15 years. Again, McCoy contradicts his own source studies to exaggerate the benefits of an EV by another 20 percent.

Using McCoy’s own calculations of 3.8 tons per year and a 12-year lifespan, the actual amount of CO2 avoided would be 45.6 tons per year (assuming the grid is 100 percent clean, which it is not). That is 40 percent less than McCoy’s exaggerated e-mail claimed.

Claim: Those avoided emissions are worth $57 million using OFM/Commerce standard methodology for valuing the Social Cost of Carbon (currently about $65 per ton).

Reality: McCoy makes numerous mistakes here.

First, the Social Cost of Carbon is not $65 per ton, it is $65 per metric ton — which reduces the cost by about ten percent (even that number is about five times higher than the EPA calculates). The cost of carbon is universally calculated in metric tons. He doesn’t seem to know the basics of carbon economics.

Second, his own math doesn’t add up to $57 million. He claims, wrongly, that the benefit would increase EV sales by 2,100 cars per year for four years — 8,400 cars. He claims, wrongly, that each car would reduce CO2 emissions by 75 tons over its lifetime. And he claims, wrongly, that each ton is valued at $65. So, the four year total should be 8,400 x 75 x $65, which equals $40,950,000, not $57 million. He’s off by another 22 percent.

But, as we’ve seen, even $40,950,000 is a significant exaggeration. Using the accurate numbers, the total is 4,444 x 45.6 x $59, which equals about $12 million — about one-fifth the amount McCoy claimed.

Again, that calculation uses McCoy’s own numbers cited elsewhere. Using his numbers, he is off by 79 percent.

But it gets much worse.

The key is not the social cost of carbon, but the amount it costs to reduce a metric ton of carbon using other approaches. For example, investing in efforts to reduce methane emissions from landfills costs about $13 per metric ton on the open market and can go down as low as $3. McCoy wants the state of Washington to spend $65 to get what it can receive for $13. If climate change is really as threatening as he and others claim, why would he be willing to waste 80 percent of the money spent to reduce carbon emissions?

Using the market price of carbon reduction, the actual carbon-reduction value of the EV sales tax break is a paltry $2.6 million over four years.

Claim: This is a surplus value of $18 million over the $39 million that HB 2087 will reduce state and local revenue by over its 4-year duration.

Reality: Using the correct calculation, it is actually a loss of $36.4 million to subsidize wealthy electric car buyers. Put another way, for every dollar the state provides subsidizing electric cars to reduce carbon, more than 93 cents is wasted. Nobody who is serious about cutting carbon emissions would advocate such a wasteful environmental policy.

A similar version of this blog post appeared at the Washington Policy Center.

May 04, 2015 | Leave a Comment | by

American Energy Renaissance Act — Why Oil and Gas Matter

The American Energy Renaissance Act of 2014 — a bill proposed by Senator and now presidential candidate, Ted Cruz — proposes many drastic changes to the status quo surrounding energy and environmental regulations, some of which include:

  • Giving only states the right to regulate hydraulic fracturing
  • Preventing the Environmental Protection Agency (EPA) from regulating carbon dioxide (CO2), methane, water vapor and nitrous oxide emissions
  • Repealing regulations on crude oil exports

Passage of the bill would be lauded by energy proponents, and while as a whole it would be no victory for traditional environmentalists, one of its provisions stands out, as it seeks to phase out engine-damaging ethanol fuel and create a higher standard for fuel economy. One can only truly understand the magnitude of improving fuel economy across the board by first looking at CO2 emissions by source:

Greenhouse Gas Emission

Transportation, which is second only to the electric power sector in terms of carbon dioxide emissions, could see significant long-term reduction in emissions while creating a surplus in disposable income for Americans and business owners. Notably, passage of the bill does not imply that American oil companies would be at a significant disadvantage due to the simple fact that it would open a whole new niche for American crude in the international economy.

Energy CO2 Emissions

Also striking is coal’s share of carbon dioxide emissions in the electric power industry — for coal’s actual share in energy generation as seen below, it seems almost unwarranted:

Electric Power Generation

Natural gas, while still not yet as widespread as coal, is very cost competitive, with liquid natural gas (LNG) at less than $10 per British thermal unit (Btu) while normal gas flirts with numbers around and below $5. Furthermore, if natural gas cannibalized market share from the coal sector — as is likely given the amount of continuing regulations on coal — it would help both the economy and the environment. Indeed, the Energy Information Administration asserts that for every million Btu generated, coal can release between 214 and 228 pounds of CO2 while natural gas creates almost half at 117 pounds per million Btu. While opponents of natural gas could cite its past price volatility, the past 5 years have been quite stable and the fracking boom is no reason to believe that the energy will be subject to much variance, at least not besides cyclical winter-heating and summer-cooling fluctuations, which coal can also be subject to. On the contrary, the market for coal is either becoming too expensive due to relentless regulation or disappearing altogether, especially abroad in developed countries.

The consumer free market response to any good or service in production is to demand quality proportional to whatever price level that consumer is willing and able to pay. With time, more countries are joining the ranks of developed nations who — like the U.S. — are characterizing themselves as more than willing to pay premiums on energy for better environmental quality. Additionally, natural gas has a history of matching or even beating domestic coal prices in the private sector, while mounting pressure on the public sector is slowly opening the international markets for both gas and oil.

Apr 08, 2015 | Leave a Comment | by
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