Open e-mail to Rep. Neugebauer:
Randy,
As you know from my previous e-mails, I'm not a big supporter of the EPA and Democratic (socialistic) philosophy. However, Democrats and even Pres. Obama will occasionally do something right.
According to C&E News, there was a recent effort in the Senate to allow only the states to control emissions from coal-burning electricity generating power plants. The present EPA regulation involves national control. The measure attempting to revert back to state control was defeated, which is a good thing.
The fact is that gaseous and particulate emissions of coal-burning power plants do cross state lines, and therefore are a National problem, rather than a State problem.
In addition, we know from previous experience that at least some emissions of coal-burning power plants are significantly detrimental to the environment. Some years ago, the Northeast was particularly affected by acid rain, which significantly increased the acidity of lakes and ponds. The acidity changed the floriculture of these water reservoirs and in many cases was detrimental to fish population. Actual monetary harm to the economy was probably negligible, but most people believe that we have an obligation to preserve the natural environment, wherever possible, and within the limits of economic good sense.
The acid rain problem was technically traced to sulfur contamination in coal being burned in the power plants. The sulfur contaminant burned to give gaseous sulfur dioxide. The sulfur dioxide later oxidized in the atmosphere to sulfur trioxide, which in turn reacted with rainwater to form sulfuric acid. It was the sulfuric acid content of rainwater which caused the environmental change. The problem was resolved by reducing the sulfur content of coal burned at the power plants. We hear no more about acid rain.
The likelihood is that some sulfur is still being burned in power plants leading to sulfuric acid, but the concentration is now so low as to basically alleviate the acid rain problem. The key point here is not only recognizing emission contaminants potentially detrimental to the environment, but also recognizing concentrations that actually do damage.
The accent on power plant emissions at present involves sulfur dioxide, carbon dioxide, nitrogen oxides, and mercury.
We have experience to know that sulfur dioxide is a detrimental environmental contaminant, which concentration must be controlled to a non-detrimental level.
Carbon dioxide has become a political football for purposes of redistribution of wealth through taxation. It is a natural constituent of the atmosphere, and there is no data to show that even significant increases in concentration are detrimental to the environment.
NOx is a mixture of NO and NO2. One of these gases has been traced to further atmospheric reaction to form ozone, which is environmentally protective at high atmospheric levels, but detrimental to humans at ground-level. In addition to human toxicity, it is generally considered to be involved in smog formation. There is some justification for control of NOx from power plants. The question remains as to what is a reasonable level of permissible concentration, where there is no obviously significant damage. It is also possible that power plants can install catalytic systems to reduce NOx concentrations. This has already been accomplished in automotive vehicles. It will cost the power plants to install such catalytic equipment, and the cost will be transferred to increased electricity cost for the consumer. There is a level of justification, but it should not be overdone.
I have previously written about mercury emission. Mercury in the atmosphere is brought to ground level by rain. In swampy areas, microbiological action converts the mercury to methylmercury, which is toxic to humans and wildlife. However, note that the conversion to methylmercury is only applicable to a very limited ground area, and even in that area, we have not noticed detriment to the environment. In effect, there is no significant case for controlling mercury emissions. For those who still have doubt, we could justify spending a little money on research.
Covers energy sources, economis of energy, fossil fuels, solar and wind, government and private programs
Tuesday, November 29, 2011
Monday, November 14, 2011
Congress Must Move on Canada-US Oil Pipeline
E-mail to Rep.Neugebauer:
Pres. Obama has just scuttled the proposed oil pipeline from Canada to the US. The expected advantages to the US were a large number of US construction jobs and availability of low-priced oil in the US.
Why would Pres. Obama scuttle such an obviously advantageous program? There are several considerations, all of which are of importance to Pres. Obama. A low crude oil price in the US would give lower gasoline prices. This would be disadvantageous to Pres. Obama's personal program of converting the automobile industry into electric vehicles. Low-cost energy would foster the general economy of the US. This could be disadvantageous to Pres. Obama's program to redistribute wealth globally. We have previously pointed out that environmental groups in the US have been taken over by Communists, who also support global redistribution of wealth. Environmentalists are also large contributors to Pres. Obama's reelection campaign. Environmentalists use devious mechanisms, such as spotted owls, snail darters, and now possible contamination of aquifers in order to stymie any economic growth in the US.
In scuttling the pipeline proposal, Pres. Obama only indicated a postponement. However, the Canadians realistically said they would follow a different route of oil export to China. Once that is set up, the US will be on the outside looking in.
As implied above, Pres. Obama's stated excuse was possible contamination of a drinking water aquifer. An aquifer is an underground layer of permeable rock, gravel, sand, or silt which can contain and through which water can flow. For example, Lubbock is at the terminus of the Ogallala aquifer, which originates in Colorado and allows water to flow underground from melting snows and rains in Colorado. There is no such thing as a drinking water aquifer. Aquifers can become contaminated with pollutants, similar to what can happen in lakes and streams, but usually the aquifer size is so great that pollution is generally insignificant. In addition, the underground layer of permeable rock etc. is usually so broad, in relation to the diameter of a pipeline, that even a burst pipeline would have little effect on aquifer contamination. This is especially true when it would be obvious to pipeline operators that not repairing a significant pipeline leak will cost them a significant loss in oil revenue. Another comparison is that even in the design of the human body, a potential pollutant pipeline in the form of intestine passes through areas close to vital organs, such as heart, kidneys etc. without difficulty.
For various reasons, Pres. Obama has scuttled this pipeline. It may not be too late to resurrect it, but the longer we wait, the more difficult will be a reversal. Congress should not accept this obvious opportunity to increase jobs and improve the general economy of the US. Congress should take some action now, against Pres. Obama and the Department of Energy or whichever agency is ostensibly responsible for this atrocity.
..
Pres. Obama has just scuttled the proposed oil pipeline from Canada to the US. The expected advantages to the US were a large number of US construction jobs and availability of low-priced oil in the US.
Why would Pres. Obama scuttle such an obviously advantageous program? There are several considerations, all of which are of importance to Pres. Obama. A low crude oil price in the US would give lower gasoline prices. This would be disadvantageous to Pres. Obama's personal program of converting the automobile industry into electric vehicles. Low-cost energy would foster the general economy of the US. This could be disadvantageous to Pres. Obama's program to redistribute wealth globally. We have previously pointed out that environmental groups in the US have been taken over by Communists, who also support global redistribution of wealth. Environmentalists are also large contributors to Pres. Obama's reelection campaign. Environmentalists use devious mechanisms, such as spotted owls, snail darters, and now possible contamination of aquifers in order to stymie any economic growth in the US.
In scuttling the pipeline proposal, Pres. Obama only indicated a postponement. However, the Canadians realistically said they would follow a different route of oil export to China. Once that is set up, the US will be on the outside looking in.
As implied above, Pres. Obama's stated excuse was possible contamination of a drinking water aquifer. An aquifer is an underground layer of permeable rock, gravel, sand, or silt which can contain and through which water can flow. For example, Lubbock is at the terminus of the Ogallala aquifer, which originates in Colorado and allows water to flow underground from melting snows and rains in Colorado. There is no such thing as a drinking water aquifer. Aquifers can become contaminated with pollutants, similar to what can happen in lakes and streams, but usually the aquifer size is so great that pollution is generally insignificant. In addition, the underground layer of permeable rock etc. is usually so broad, in relation to the diameter of a pipeline, that even a burst pipeline would have little effect on aquifer contamination. This is especially true when it would be obvious to pipeline operators that not repairing a significant pipeline leak will cost them a significant loss in oil revenue. Another comparison is that even in the design of the human body, a potential pollutant pipeline in the form of intestine passes through areas close to vital organs, such as heart, kidneys etc. without difficulty.
For various reasons, Pres. Obama has scuttled this pipeline. It may not be too late to resurrect it, but the longer we wait, the more difficult will be a reversal. Congress should not accept this obvious opportunity to increase jobs and improve the general economy of the US. Congress should take some action now, against Pres. Obama and the Department of Energy or whichever agency is ostensibly responsible for this atrocity.
..
Monday, November 7, 2011
Repeal the Energy Policy Act of 2005 and the Energy Independence & Security Act of 2007.
Open e-mail to Rep. Neugebauer:
Randy,
On October 27, 2011, I e-mailed you asking that you energize the Congress to repeal the Energy Policy Act of 2005 and the Energy Independence & Security Act of 2007. They were ill conceived originally. They involve unnecessary government subsidies, which we cannot afford, and contain restrictions on private business development.
I now present additional information, which supports this position. Another way to look at it is that, in establishing the two Acts, Congress did not take into consideration the power of subsequent technology development from existing private industry. I refer specifically to the ethanol provisions of the two Acts, which mandates ethanol use in motor fuels, even though gasoline is less expensive on the market.
The ideal fuel for motor vehicles is liquid form, which can be carried and enable the vehicle to have an operating range of several hundred miles. Gasoline admirably satisfies this requirement. Electricity and natural gas have enough deficiencies that they are not competitive. However, other liquid fuels might also be acceptable, including ethanol. But again, we need to consider price and availability.
In the October 24 issue of Chemical and Engineering News, there is an article by Alexander Tullo entitled, "Celanese Takes an Ethanol Plunge".
We have in the US tremendous coal reserves. It has been a long-standing objective of the chemical industry to convert coal to a liquid fuel for automotive use. Several processes have been developed, but none of these have met the cost requirements to compete with gasoline. However, Celanese now claims to be able to do this.
In order to analyze whether Celanese really has something, we need to be first concerned with measurement. Since petroleum is a prevalent energy source, it has been convenient to relate any other sources to petroleum. In their announcement, Celanese has used figures involving Barrel of Oil Equivalents (BOEs), but most liquids are sold on a per gallon basis. First, we need to understand a BOE and second, we need to be able to convert $ / BOE to $ / gallon.
A standard petroleum barrel contains 42 US gallons. Inherent in the barrel of oil is a quantity of available energy, which is 5,800,000 British Thermal Units (BTUs). Other fuels may then be calculated for their energy contents relating to the energy content of a barrel of oil. The term is a "Barrel of Oil Equivalent", or a BOE. Therefore, if I want a comparative prices of alternative fuels, I can compare their BOE prices with the price of an actual barrel of oil. However, a fixed barrel volume is only applicable to 42 gallons of petroleum. BOEs for other fuels are not true barrels. For example, gasoline has an energy content of 125,000 BTUs per gallon. To have the same quantity of energy as a barrel of crude oil, 46.4 gallons (5,800,000 / 125,000) are required. The BOE for gasoline is then, 46.4 gallons, not 42 gallons
In its announcement of the a low-cost route to ethanol from coal, Celanese has forecast that, with its new TCX Process, it could produce ethanol at a selling price (not cost) of $60 per BOE. For comparison, Celanese said that petroleum and corn fermented ethanol were both selling at $100 per BOE. A check of the market prices confirmed the price of $100 per barrel of crude oil, which is the same as the BOE. There is no reported price for a BOE of ethanol, but spot price at Chicago is $1.68/ gallon
The above figures are not really comparable, because they do not take into account differences in taxes and subsidies. In addition, crude oil cannot be used directly in automotive vehicles, while ethanol can be used directly, even if only at low rates of mixing with gasoline. Therefore, we need adjustments to obtain comparable figures. These adjustments have been made in the attachment.
The net result is that gasoline price at the refinery is $2.39 per gallon. Corn fermented ethanol, when corrected for subsidy and less energy content as compared to gasoline is $3.60 per gallon. It makes no sense to use corn fermented ethanol as a motor fuel, especially when we have ample reserves of crude oil, which can be tapped and refined to gasoline. Note also that even with the giveaway of a $.51 gal subsidy, corn fermented ethanol costs $3.09 per gallon, compared to gasoline at $2.39 per gallon.
Finally, Celanese's TCX ethanol looks to be cheaper than gasoline on a comparable energy basis ($1.30 per gallon versus $2.39). We can be hopeful that it will come to realization, but it is presently pie-in-the-sky. There are also two other disadvantages. Automotive vehicles are now constructed to only be able to use a blend of ethanol with gasoline. This could be solved to allow complete ethanol use, but likely at considerable cost to vehicle modification. In addition, the lower energy content of ethanol versus gasoline will reduce the driving range, unless there is an increase in carrying capacity.
Randy, we go back to the start. Congress must repeal the Energy Policy Act of 2005 and the Energy Independence & Security Act of 2007.
Ref: http://www.eia.gov/oog/info/gdu/gasdiesel.asp
Randy,
On October 27, 2011, I e-mailed you asking that you energize the Congress to repeal the Energy Policy Act of 2005 and the Energy Independence & Security Act of 2007. They were ill conceived originally. They involve unnecessary government subsidies, which we cannot afford, and contain restrictions on private business development.
I now present additional information, which supports this position. Another way to look at it is that, in establishing the two Acts, Congress did not take into consideration the power of subsequent technology development from existing private industry. I refer specifically to the ethanol provisions of the two Acts, which mandates ethanol use in motor fuels, even though gasoline is less expensive on the market.
The ideal fuel for motor vehicles is liquid form, which can be carried and enable the vehicle to have an operating range of several hundred miles. Gasoline admirably satisfies this requirement. Electricity and natural gas have enough deficiencies that they are not competitive. However, other liquid fuels might also be acceptable, including ethanol. But again, we need to consider price and availability.
In the October 24 issue of Chemical and Engineering News, there is an article by Alexander Tullo entitled, "Celanese Takes an Ethanol Plunge".
We have in the US tremendous coal reserves. It has been a long-standing objective of the chemical industry to convert coal to a liquid fuel for automotive use. Several processes have been developed, but none of these have met the cost requirements to compete with gasoline. However, Celanese now claims to be able to do this.
In order to analyze whether Celanese really has something, we need to be first concerned with measurement. Since petroleum is a prevalent energy source, it has been convenient to relate any other sources to petroleum. In their announcement, Celanese has used figures involving Barrel of Oil Equivalents (BOEs), but most liquids are sold on a per gallon basis. First, we need to understand a BOE and second, we need to be able to convert $ / BOE to $ / gallon.
A standard petroleum barrel contains 42 US gallons. Inherent in the barrel of oil is a quantity of available energy, which is 5,800,000 British Thermal Units (BTUs). Other fuels may then be calculated for their energy contents relating to the energy content of a barrel of oil. The term is a "Barrel of Oil Equivalent", or a BOE. Therefore, if I want a comparative prices of alternative fuels, I can compare their BOE prices with the price of an actual barrel of oil. However, a fixed barrel volume is only applicable to 42 gallons of petroleum. BOEs for other fuels are not true barrels. For example, gasoline has an energy content of 125,000 BTUs per gallon. To have the same quantity of energy as a barrel of crude oil, 46.4 gallons (5,800,000 / 125,000) are required. The BOE for gasoline is then, 46.4 gallons, not 42 gallons
In its announcement of the a low-cost route to ethanol from coal, Celanese has forecast that, with its new TCX Process, it could produce ethanol at a selling price (not cost) of $60 per BOE. For comparison, Celanese said that petroleum and corn fermented ethanol were both selling at $100 per BOE. A check of the market prices confirmed the price of $100 per barrel of crude oil, which is the same as the BOE. There is no reported price for a BOE of ethanol, but spot price at Chicago is $1.68/ gallon
The above figures are not really comparable, because they do not take into account differences in taxes and subsidies. In addition, crude oil cannot be used directly in automotive vehicles, while ethanol can be used directly, even if only at low rates of mixing with gasoline. Therefore, we need adjustments to obtain comparable figures. These adjustments have been made in the attachment.
The net result is that gasoline price at the refinery is $2.39 per gallon. Corn fermented ethanol, when corrected for subsidy and less energy content as compared to gasoline is $3.60 per gallon. It makes no sense to use corn fermented ethanol as a motor fuel, especially when we have ample reserves of crude oil, which can be tapped and refined to gasoline. Note also that even with the giveaway of a $.51 gal subsidy, corn fermented ethanol costs $3.09 per gallon, compared to gasoline at $2.39 per gallon.
Finally, Celanese's TCX ethanol looks to be cheaper than gasoline on a comparable energy basis ($1.30 per gallon versus $2.39). We can be hopeful that it will come to realization, but it is presently pie-in-the-sky. There are also two other disadvantages. Automotive vehicles are now constructed to only be able to use a blend of ethanol with gasoline. This could be solved to allow complete ethanol use, but likely at considerable cost to vehicle modification. In addition, the lower energy content of ethanol versus gasoline will reduce the driving range, unless there is an increase in carrying capacity.
Randy, we go back to the start. Congress must repeal the Energy Policy Act of 2005 and the Energy Independence & Security Act of 2007.
Ref: http://www.eia.gov/oog/info/gdu/gasdiesel.asp
Friday, November 4, 2011
Understanding Cap & Trade
Cheryl Hogue has an article entitled, "Unfriendly Skies" in the October 17 issue of Chemical and Engineering News. It is basically about an argument between international air lines and the European Union. The European Union (EU) says that when airlines fly into EU airspace, they generate significant quantities of carbon dioxide through the burning of their jet fuel. The EU says the airlines are subject to "Cap & Trade", which essentially means they must pay a tax. The airlines object because it will cost them money.
This is only a small segment of the many arguments which involve Cap & Trade in the EU. It may be interesting to review Cap & Trade, for what it really is; a government tax.
Since the end of the Cold War and the collapse of the Soviet Union, Western Europe has been continually moving toward a socialist culture. However, the bad economics of socialism is starting to catch up. We see this in the economic problems of Greece, followed by Italy and Spain. Even Germany will eventually not be exempt. I believe the existing governments will all go down to defeat as the EU is unable to meet its obligations to the population. These obligations involve government benefits of unemployment insurance, free housing, free medical care, etc.. In an effort to maintain solvency in the various governmental coffers, and the EU in total, various tax forms have been developed. The latest of these is the "Carbon Tax", which has been previously previously disguised under the term Cap & Trade.
The Obama Administration has seen Cap & Trade operating in Western Europe and has been impressed by its success, in spite of various difficulties that have emerged. The attractive aspect has been a potential source of tremendous government revenue to support a socialistic program of giveaways and maintain governmental power.
In order to sell Cap & Trade to its populations, the EU and the United States have developed a sales technique. The EU has already established the program, while the US is still toying with it. The sales technique is routine for the devious selling of all goods and services. Scare the customer into buying to avoid perilous consequences and convince him that it doesn't cost anything. Ancillary to that is the use of complexity, new terminology and scientific innuendo, so that the customer normally cannot understand what is occurring, without significant effort on his part, and usually which he is unwilling to contribute. Cap & Trade very adequately covers all these points, but it behooves some of us to try to explain it, so that the public has an opportunity to adequately understand what it is buying.
We have already covered the government motivation for instituting Cap & Trade. We now concentrate on the specific selling techniques. First, the fear factor. If government can relate carbon dioxide emissions from burning fossil fuels to climate change, with disastrous results of such climate change, the fear factor has been established. Projections for climate change can easily result in dire consequences without any proof that those consequences will really occur. A few of the proposed dire consequences of climate change are melting of the polar ice sheets with rising sea levels to flood civilized areas, eliminating ice at the North Pole which will lead to the destruction of polar bears, the development of more violent storms and tsunamis as oceans are warmed, etc.. The Obama administration has already spent many millions of dollars in research to establish such connection between carbon dioxide atmospheric concentration and climate change, but has been unsuccessful.
With respect to Cap & Trade cost to the public, yhere is general government admission that there will be an increased cost, but that will be minimal considering the advantages of eliminating the dire consequences of climate change previously mentioned.
The matter of complexity is beautiful in its development to confuse the public. However with a little attention to logic and patience. it can be understood and considered in its proper perspective. Let's use the present EU system, which is functioning, and which is probably a model for anything that the US might adopt.
The EU has surveyed the various sources of CO2 emission, which are generally electricity generating plants using coal, oil, and natural gas. Note that the objective here is to identify entities which can be easily taxed. Note also that airlines have now been added to this list. Conversely, while private automobiles generate significant carbon dioxide, it would be more complex to tax each automobile user. Apparently the thought has not yet come to EU officials that they could apply Cap & Trade to automobile manufacturers.
For the moment, consider only electricity generating plants. The EU survey has already established "normal" CO2 emissions from each of those plants. Simple addition then gives total CO2 emissions in a year. Each of the CO2 emission producers is given an EU permit to emit its "normal" amount of CO2. The next year, the EU says all emitters must reduce their CO2 emissions by 10%. Power Plant A has several choices. It can reduce its supply of electricity to its customers, install equipment to capture carbon dioxide from its emission stream, or purchase permits from other power plants who may not be using their allocation permits for one reason or another. Notice that any of these options increase costs to the producer, which passes the costs on to the consumers as price increases. At this point, the EU has not collected a nickel in taxes.
The next year, the EU says everybody must cut their CO2 emissions by 30%. The same options as previous exist for each power plant. Power Plant A takes a responsible attitude that it cannot reduce its electricity supply to its customers by 30%. Similarly, preliminary calculations on installing CO2 sequestration equipment shows it would be more expensive than the possible purchase of allowances from other permit holders. However, when it goes to the market to purchase CO2 allowances from other power plants, it finds that none are available. The EU recognizes, and has already predicted that this would occur, and allows another option, which is the purchase of an additional allocation permit issued by the EU. Since there are now many power plants that need additional CO2 allocation permits, the EU makes new permits available by auction. Let's guess that the auction price is $15 per ton of CO2. Power Plant A needs 10,000 tons of additional permit allocation to keep supplying its customers. Therefore, it pays the EU $150,000 for the additional permit. Power Plant A considers this an additional cost of doing business and passes along that cost as a price increase to each of its customers. It might be a few hundred dollars to each customer. Notice that the EU receives $150,000 and that $150,000 is paid by the electricity consumers. In effect, Cap & Trade is a use tax.
It could get worse. In the next year, the EU could say all emissions are now being cut by 50%. We go back to the auction block for new allocation permits. The auction price is now established at $50 per ton. Power Plant A needs another 10,000-ton allocation permit. This time it costs $500,000, which goes to the EU as a use tax paid by the electricity customers. However, there are the other two options to avoid this tax. That is to go out of business, or install CO2 sequestration equipment. It is only the latter which presents some semblance of control on the tax gouging by the EU. Remember also that this is the model for any similar operation in the United States. It is fraudulent to the extent that there is no clear indication that CO2 emissions must be controlled.
This is only a small segment of the many arguments which involve Cap & Trade in the EU. It may be interesting to review Cap & Trade, for what it really is; a government tax.
Since the end of the Cold War and the collapse of the Soviet Union, Western Europe has been continually moving toward a socialist culture. However, the bad economics of socialism is starting to catch up. We see this in the economic problems of Greece, followed by Italy and Spain. Even Germany will eventually not be exempt. I believe the existing governments will all go down to defeat as the EU is unable to meet its obligations to the population. These obligations involve government benefits of unemployment insurance, free housing, free medical care, etc.. In an effort to maintain solvency in the various governmental coffers, and the EU in total, various tax forms have been developed. The latest of these is the "Carbon Tax", which has been previously previously disguised under the term Cap & Trade.
The Obama Administration has seen Cap & Trade operating in Western Europe and has been impressed by its success, in spite of various difficulties that have emerged. The attractive aspect has been a potential source of tremendous government revenue to support a socialistic program of giveaways and maintain governmental power.
In order to sell Cap & Trade to its populations, the EU and the United States have developed a sales technique. The EU has already established the program, while the US is still toying with it. The sales technique is routine for the devious selling of all goods and services. Scare the customer into buying to avoid perilous consequences and convince him that it doesn't cost anything. Ancillary to that is the use of complexity, new terminology and scientific innuendo, so that the customer normally cannot understand what is occurring, without significant effort on his part, and usually which he is unwilling to contribute. Cap & Trade very adequately covers all these points, but it behooves some of us to try to explain it, so that the public has an opportunity to adequately understand what it is buying.
We have already covered the government motivation for instituting Cap & Trade. We now concentrate on the specific selling techniques. First, the fear factor. If government can relate carbon dioxide emissions from burning fossil fuels to climate change, with disastrous results of such climate change, the fear factor has been established. Projections for climate change can easily result in dire consequences without any proof that those consequences will really occur. A few of the proposed dire consequences of climate change are melting of the polar ice sheets with rising sea levels to flood civilized areas, eliminating ice at the North Pole which will lead to the destruction of polar bears, the development of more violent storms and tsunamis as oceans are warmed, etc.. The Obama administration has already spent many millions of dollars in research to establish such connection between carbon dioxide atmospheric concentration and climate change, but has been unsuccessful.
With respect to Cap & Trade cost to the public, yhere is general government admission that there will be an increased cost, but that will be minimal considering the advantages of eliminating the dire consequences of climate change previously mentioned.
The matter of complexity is beautiful in its development to confuse the public. However with a little attention to logic and patience. it can be understood and considered in its proper perspective. Let's use the present EU system, which is functioning, and which is probably a model for anything that the US might adopt.
The EU has surveyed the various sources of CO2 emission, which are generally electricity generating plants using coal, oil, and natural gas. Note that the objective here is to identify entities which can be easily taxed. Note also that airlines have now been added to this list. Conversely, while private automobiles generate significant carbon dioxide, it would be more complex to tax each automobile user. Apparently the thought has not yet come to EU officials that they could apply Cap & Trade to automobile manufacturers.
For the moment, consider only electricity generating plants. The EU survey has already established "normal" CO2 emissions from each of those plants. Simple addition then gives total CO2 emissions in a year. Each of the CO2 emission producers is given an EU permit to emit its "normal" amount of CO2. The next year, the EU says all emitters must reduce their CO2 emissions by 10%. Power Plant A has several choices. It can reduce its supply of electricity to its customers, install equipment to capture carbon dioxide from its emission stream, or purchase permits from other power plants who may not be using their allocation permits for one reason or another. Notice that any of these options increase costs to the producer, which passes the costs on to the consumers as price increases. At this point, the EU has not collected a nickel in taxes.
The next year, the EU says everybody must cut their CO2 emissions by 30%. The same options as previous exist for each power plant. Power Plant A takes a responsible attitude that it cannot reduce its electricity supply to its customers by 30%. Similarly, preliminary calculations on installing CO2 sequestration equipment shows it would be more expensive than the possible purchase of allowances from other permit holders. However, when it goes to the market to purchase CO2 allowances from other power plants, it finds that none are available. The EU recognizes, and has already predicted that this would occur, and allows another option, which is the purchase of an additional allocation permit issued by the EU. Since there are now many power plants that need additional CO2 allocation permits, the EU makes new permits available by auction. Let's guess that the auction price is $15 per ton of CO2. Power Plant A needs 10,000 tons of additional permit allocation to keep supplying its customers. Therefore, it pays the EU $150,000 for the additional permit. Power Plant A considers this an additional cost of doing business and passes along that cost as a price increase to each of its customers. It might be a few hundred dollars to each customer. Notice that the EU receives $150,000 and that $150,000 is paid by the electricity consumers. In effect, Cap & Trade is a use tax.
It could get worse. In the next year, the EU could say all emissions are now being cut by 50%. We go back to the auction block for new allocation permits. The auction price is now established at $50 per ton. Power Plant A needs another 10,000-ton allocation permit. This time it costs $500,000, which goes to the EU as a use tax paid by the electricity customers. However, there are the other two options to avoid this tax. That is to go out of business, or install CO2 sequestration equipment. It is only the latter which presents some semblance of control on the tax gouging by the EU. Remember also that this is the model for any similar operation in the United States. It is fraudulent to the extent that there is no clear indication that CO2 emissions must be controlled.
The Department of Energy Continues to Pour Taxpayer Money Down a Rar Hole
In the October 17th issue of Chemical & Engineering News, Jeff Johnson has a nice informative article on the Department of Energy's expenditures for loan guarantees and grants to promote "Clean" energy.
At the end of September, the Department of Energy awarded $4.7 billion loan support for four photovoltaic solar projects in California, $1.5 billion to install ground-level solar panels, $1.4 billion to install rooftop solar panels, $1.2 billion for a Solar Ranch, and $646 million for a thin-film solar project. This is all funded by the American Recovery & Reinvestment of 2009, which I previously strongly recommend should be repealed by Congress. In separate funding, the Department of Energy added another $1.12 billion in loan guarantees. Collectively, the Department of Energy is committing $26 billion to clean energy loans.
in addition, the Department has expenditures of $156 billion in Advanced Research Projects Agency-Energy (ARPA-E) grants to inventors and "technology entrepreneurs". The ARPA-E grant projects involve biofuel production, alternatives to rare earth minerals, storage/transport/use of thermal energy, automating the electricity grid, and grid connection of photovoltaic (solar) generated electricity. Those funds are almost equally distributed among universities, small businesses, and large business.
I have previously said and will say again that these programs are a complete waste of taxpayer money. There is absolutely no need to try to replace the traditional sources of energy, such as natural gas and petroleum with solar and wind. We have in the US large reserves of oil, natural gas, and coal. These energy sources can be tapped at costs significantly below anything that could involve solar energy or wind.
I need to hear nothing about "clean" energy. Carbon dioxide from burning fossil fuels is well-handled by the natural environment. All efforts by the Administration to connect CO2 atmospheric concentration with climate change have failed, in spite of the millions of dollars the various government agencies have poured into research to prove otherwise.
I have also recommended previously that the Department of Energy should be eliminated. It was originally set up by Congress and can be removed by Congress. From practical considerations, the Senate will obviously vote for its continued existence and the President will support it. However, the House must go on record as having taken the initiative, and after the forthcoming elections of 2012, we will be able to see some positive action through a new Senate and President.
At the end of September, the Department of Energy awarded $4.7 billion loan support for four photovoltaic solar projects in California, $1.5 billion to install ground-level solar panels, $1.4 billion to install rooftop solar panels, $1.2 billion for a Solar Ranch, and $646 million for a thin-film solar project. This is all funded by the American Recovery & Reinvestment of 2009, which I previously strongly recommend should be repealed by Congress. In separate funding, the Department of Energy added another $1.12 billion in loan guarantees. Collectively, the Department of Energy is committing $26 billion to clean energy loans.
in addition, the Department has expenditures of $156 billion in Advanced Research Projects Agency-Energy (ARPA-E) grants to inventors and "technology entrepreneurs". The ARPA-E grant projects involve biofuel production, alternatives to rare earth minerals, storage/transport/use of thermal energy, automating the electricity grid, and grid connection of photovoltaic (solar) generated electricity. Those funds are almost equally distributed among universities, small businesses, and large business.
I have previously said and will say again that these programs are a complete waste of taxpayer money. There is absolutely no need to try to replace the traditional sources of energy, such as natural gas and petroleum with solar and wind. We have in the US large reserves of oil, natural gas, and coal. These energy sources can be tapped at costs significantly below anything that could involve solar energy or wind.
I need to hear nothing about "clean" energy. Carbon dioxide from burning fossil fuels is well-handled by the natural environment. All efforts by the Administration to connect CO2 atmospheric concentration with climate change have failed, in spite of the millions of dollars the various government agencies have poured into research to prove otherwise.
I have also recommended previously that the Department of Energy should be eliminated. It was originally set up by Congress and can be removed by Congress. From practical considerations, the Senate will obviously vote for its continued existence and the President will support it. However, the House must go on record as having taken the initiative, and after the forthcoming elections of 2012, we will be able to see some positive action through a new Senate and President.
Tuesday, November 1, 2011
Eliminate Subsidies and Loan Guarantees for Energy Production & Use
Open e-mail to Rep. Neugebauer:
SUMMARY
Government should not be involved in subsidies for solar module production, nor in installation for their use.
DETAIL
The October 10 issue of Chemical and Engineering News has a nice article by Melody Bomgardner on the solar industry. She clearly points out that there two aspects to this industry, which are economically different. The first is production of solar modules, and the second is their use or installation.
We are already familiar with the bankruptcies of Solyndra and Evergreen. In addition, two German firms recently announced that they would close US factories. SpectraWatt, which is a spinoff of Intel filed for bankruptcy in August. All of these companies were unable to compete with low-priced polycrystalline silicon from China.
There are three commercial materials which have photovoltaic properties. They are polycrystalline silicon, copper indium gallium disulfide, and cadmium telluride. Calisolar is one of the few US silicon producers still trying to compete with the Chinese. First Solar is competing with its low-cost cadmium telluride. All told, strong production competition in the global solar module market pushes down prices for solar modules. This has the advantage of improving the market for installation.
However, Germany has recently been shrinking its solar subsidies and Italy has instituted a cap on payments for solar installations. Western Europe is generally deficient in oil and has attempted to increase energy availability through solar installations. The US government has been trying to mimic these European efforts, but is behind the curve. Western Europe is starting to recognize the futility of the operation, as it cuts its subsidies. The US Government is still gung ho.
Considering the oil factor, the market for solar installations in the US is significantly reduced to specialty cases, which is as it should be, since without subsidies, it cannot compete with oil us as a primary energy source. Therefore, it is ridiculous for the US government to be propping up a less efficient energy operations through taxpayer subsidies in these times of budget deficits and huge national debt.
I strongly urge Congress to eliminate all subsidies for production of solar modules and their installation, as well as stopping the administration from granting loan guarantees to solar energy companies, which must fail in a competitive in a competitive energy market.
SUMMARY
Government should not be involved in subsidies for solar module production, nor in installation for their use.
DETAIL
The October 10 issue of Chemical and Engineering News has a nice article by Melody Bomgardner on the solar industry. She clearly points out that there two aspects to this industry, which are economically different. The first is production of solar modules, and the second is their use or installation.
We are already familiar with the bankruptcies of Solyndra and Evergreen. In addition, two German firms recently announced that they would close US factories. SpectraWatt, which is a spinoff of Intel filed for bankruptcy in August. All of these companies were unable to compete with low-priced polycrystalline silicon from China.
There are three commercial materials which have photovoltaic properties. They are polycrystalline silicon, copper indium gallium disulfide, and cadmium telluride. Calisolar is one of the few US silicon producers still trying to compete with the Chinese. First Solar is competing with its low-cost cadmium telluride. All told, strong production competition in the global solar module market pushes down prices for solar modules. This has the advantage of improving the market for installation.
However, Germany has recently been shrinking its solar subsidies and Italy has instituted a cap on payments for solar installations. Western Europe is generally deficient in oil and has attempted to increase energy availability through solar installations. The US government has been trying to mimic these European efforts, but is behind the curve. Western Europe is starting to recognize the futility of the operation, as it cuts its subsidies. The US Government is still gung ho.
Considering the oil factor, the market for solar installations in the US is significantly reduced to specialty cases, which is as it should be, since without subsidies, it cannot compete with oil us as a primary energy source. Therefore, it is ridiculous for the US government to be propping up a less efficient energy operations through taxpayer subsidies in these times of budget deficits and huge national debt.
I strongly urge Congress to eliminate all subsidies for production of solar modules and their installation, as well as stopping the administration from granting loan guarantees to solar energy companies, which must fail in a competitive in a competitive energy market.