Roger Caiazza

Bud’s Offshore Energy blog highlighted a new national energy report card that is of interest to readers here.  According to the Mackinac Center press release the report ranks energy sources by ranking eight key energy resource types “based on their ability to meet growing demand for affordable, reliable, and clean energy generation”.  The report concludes that “natural gas and nuclear power lead the rest of the class in generating clean and affordable energy”.

Jason Hayes and Timothy G. Nash co-authored this report from Northwood University’s McNair Center for the Advancement of Free Enterprise and Entrepreneurship and the Mackinac Center for Public Policy.  The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government.

Methodology

The report summarizes the scoring methodology:

Bottom Line Up Front: Each ranking area graded the energy resource on a scale of 1 to 10. If an energy source performed poorly, it received a 1, if it performed well, it received a 10.

The scores in each section were totaled and broken down from 1 to 50. The energy source was given a final letter grade of A to F based on its score out of 50. The grading system results in a comparative ranking that describes the energy resource as excellent (90-100 /A-range), very good (80-89/B-range), average (70-79/C-range), poor (60-69/D-range), and Failure (59 or below/F).  This methodology is roughly based on the American Society of Civil Engineers’ methodology described in the annual “A Comprehensive Assessment of American’s Infrastructure: 2021 Report Card for America’s Infrastructure” document.

The score card evaluated each energy source for five ranking areas:

1. Capacity and Reliability: We estimated the capability of this energy source to produce sufficient energy to meet demand. We also considered how plans to maintain existing (or build new) infrastructure and capacity will meet growing energy demand.
2. Environmental/Human Impact: We asked what are the environmental impacts, the human rights, or other labor issues associated with using this energy source.
3. Cost: We asked how the energy source competes with other energy sources in terms of pricing.
4. Technology and Innovation: We asked what technologies are used and what new technologies are being developed for this energy source.
5. Market feasibility: We considered whether the energy source relies on free-market forces to supply energy to the public. To what extent do subsidies and/or government mandates drive its adoption and use?

The report includes recommendations for policies that could be implemented to improve this sector’s performance.

Energy Sector Rankings

The report card, ranked by the final grades, puts natural gas and nuclear at the top of the class.

The Executive Summary of the report includes a summary for each energy sector that describes the ranking rationale.

Natural gas tops the energy sectors because it not only provides electric energy but also provides the ancillary support services necessary for the transmission system at a relatively low cost.  Aside from the irrational obsession with over hyped greenhouse gas effects it also has a low, albeit not zero pollution impacts.    I agree with the concern that reliability would be improved with on-site storage.

Natural gas: 94 % (A)

Natural gas is at a unique position in our energy supply.

The nation has experienced rapid growth in energy demand for a range of activities: electricity generation, home heating, transportation, manufacturing, etc.

As governments around the nation attempt to impose a transition from traditional energy resources to energy sources often referred to as renewables, natural gas is the energy source that is best suited to integrate with the intermittency inherent in the use of wind and solar. Gas provides a reliable, affordable, and increasingly clean source of energy in both traditional and “carbon-constrained” applications.

Gas faces headwinds in the form of increasingly extreme net zero energy policies that will constrict supplies if implemented as proposed. Gas could also improve overall reliability if onsite storage was prioritized to help avoid supply disruptions that can occur in just-in-time pipeline deliveries during periods of extreme weather and demand.

The second highest energy sector was nuclear.  The report card recognizes its zero emissions, that it provides electric energy and ancillary support services necessary for the transmission system, and that it is mature technology with the potential for extensive deployment.  Were it not for high development costs and market feasibility issues it would undoubtedly be the highest rated.

Nuclear: 88% (B+)

Nuclear energy represents a best-of-all-worlds energy resource for the United States. Given its history as the nation’s safest and most reliable electricity source and its ability to produce near endless amounts of completely reliable and emission-free electricity, nuclear is an obvious choice, especially given the nation’s current hyper-focus on net zero carbon dioxide emissions.

Nuclear’s primary challenges lie in two areas: initial costs and concerns over safety related to fuel storage or the potential release of radioactive materials.

First, while initial costs to build can be high, they can be amortized over a 60- to 100-year expected life cycle. Additionally, costs can be addressed by reigning in the overactive nature of the Nuclear Regulatory Commission. Second, the industry’s record demonstrates it is the nation’s safest source of electricity.

Perhaps no better example of this technology’s safety, reliability, and usefulness exists than the nation’s fleet of nuclear-powered aircraft carriers, submarines, and cruisers. Building on Admiral Rickover’s innovations, the U.S. Navy has reliably and safely powered a significant portion of its fleet with nuclear power for decades. As we have done in many other areas, it is possible to use the knowledge gained in this area in the civilian nuclear fleet.

Given the safety and reliability of both our military and civilian nuclear, concerns over meltdowns or having the fuel used to build nuclear weapons are more in the realm of science fiction than reality. The United States was once the world leader in developing safe, reliable nuclear technologies. We should focus on rebuilding that status.

Coal and hydroelectric are ranked next with the same with a total of 40 points.  I think that ranking by electric system characteristics and not weighing environmental impacts is the reason.

Coal is a mature technology that provides electric energy and ancillary support services necessary for the transmission system and has the potential for extensive deployment.  I would have ranked the capacity reliability a point higher because coal can be stored on-site and that I think is an important characteristic too often overlooked. 

Coal: 80% (B-)

Despite its low cost, abundant domestic supply, and reliability, Western nations—USA, Canada, UK, and across Europe—have targeted coal for closure largely due to climate change concerns. While most pollution concerns associated with coal use can be addressed with widely available emissions reduction technologies, coal does emit more pollutants and CO2 than natural gas.

Due to growing regulatory pressure and effective competition from low-priced, domestic natural gas, coal use is declining in North America, as well as Europe. However, coal use worldwide— especially China and India—continues to grow rapidly. Across Asia, coal use is growing so rapidly that attempts to cease its use in the West as a climate change mitigation measure are being wholly eclipsed.

The primary challenges faced by the coal industry are 1) a long-term campaign on the part of government and green special interests to stop its use, and 2) very effective competition from low-cost fracked natural gas, which is displacing coal as a primary baseload generation option.

The grading for conventional hydroelectric recognized this is another mature technology that provides electric energy and ancillary support services necessary for the transmission system.  Unfortunately, there is little potential for further deployment and the current plans to destroy hydro dams are inconsistent with the supposed need to fight the “existential threat” of climate change.  In my opinion that is almost as stupid as shutting down nuclear plants prematurely.

Conventional hydroelectric: 80% (B-)

Hydroelectric is the one form of renewable generation that is completely dispatchable and has no emissions associated with its operations (compared with biomass).

While hydroelectric would seem to meet most of the tests of the environmental movement, it is often targeted for removal because it requires a great deal of bulk material in its construction and interrupts or changes natural river flows and floods riparian zones (displacing wildlife and human inhabitants). Given the expansive nature of large hydroelectric facilities, it is unlikely that any new developments could be permitted in North America.

In my opinion petroleum fuels were a bit under-rated.  This is another mature technology that provides electric energy and ancillary support services necessary for the transmission system.  Admittedly it is important in limited areas but provides critical support in those markets.  However, I agree the potential for any further development is very low.

Petroleum fuels: 70% (C-)

Petroleum products play a very small role in the production of U.S. electricity. They are almost a rounding error and are used primarily in older or geographically limited areas (like the Hawaiian Islands or Northeastern markets because of historical use).

I probably would have rated geothermal closer to petroleum fuels.  As noted, it suffers from the same lack of potential development.

Geothermal: 66% (D+)

Geothermal plays a limited role in the production of U.S. electricity. Much like petroleum products, geothermal is almost a rounding error and is used primarily in geographically limited areas (like the Western states and the Hawaiian Islands)

Wind and solar receive failing grades.  Both are rated lowest for similar reasons.  When they are compared to the capability of the other energy sources to provide sufficient energy to meet demand the need for energy storage and supporting ancillary services, they are appropriately ranked lowest.   Even though they are zero-emissions resources there are “numerous other grid reliability, environmental, economic (or cost), and social issues associated with its use that are often overlooked”.  When human rights impacts are included, they should be rated lower than the other sources.  Wind and solar are only relatively cheaper if the costs to provide reliable energy and transmission system ancillary services are ignored.  I think this ranking correctly scores this category.  The technology/innovation category recognized that there are limited opportunities to improve the energy output.  The market feasibility scoring considered “whether the energy source relies on free-market forces to supply energy to the public.”   I do not believe that wind and solar could survive without massive subsidies so believe this scoring is appropriate.

Wind: 56% (F)

Wind is one of two so-called renewable energy generation sources widely promoted for its claimed ability to reduce the environmental impacts of electricity generation. Wind is marketed as being able to reduce carbon dioxide emissions, protect the environment, reduce electric rates, and improve grid reliability.

While it is true that wind does not produce carbon dioxide as it produces electricity, there are numerous other grid reliability, environmental, economic (or cost), and social issues associated with its use that are often overlooked.

Given that society increasingly relies on a steady and reliable supply of affordable energy, government policies that mandate and heavily subsidize a transition to wind generation represent a growing threat to human health and well-being.

Solar: 58% (F)

Solar is the second of two so-called renewable energy generation sources (wind is the first) widely promoted for its claimed ability to reduce the environmental impacts of electricity generation. Like wind, solar is marketed as being able to reduce carbon dioxide emissions, protect the environment, reduce electric rates, and improve grid reliability.

Like wind, solar does not produce carbon dioxide as it produces electricity. However, there are numerous other grid reliability, environmental, economic, social, and human rights issues associated with its use that are often overlooked.

Given that society increasingly relies on a steady and reliable supply of affordable energy, government policies that mandate and heavily subsidize a transition to solar generation also represent a growing threat to human health and well-being.

This summary of the report is only an overview.  The report is comprehensive with 107 pages of text.  There is extensive documentation with 297 references.  As a result, the rationale for the scoring is extensive.

Conclusion

The conclusion of the report states:

Demands for a hurried transition from conventional, reliable energy sources to unreliable and expensive renewable alternatives are threatening the reliability of the North American electric grid. Pushing for increased efficiency and improved environmental performance is a laudable (and achievable) goal. However, we cannot allow misplaced environmental zeal to obscure electricity’s pivotal role in promoting human health and well-being and powering our society.

Advocates for wind and solar hold them up as essential to environmental and climate health. However, rushing a systemwide transition to these untested and unreliable energy options puts human lives and the North American economy at risk. Their inherent intermittency will strain the ability of the grid to meet growing energy demands and the ability of ratepayers to cover the high costs they impose on the grid. In contrast, the reliability and affordability of fossil and nuclear fuels cannot be ignored. Admonitions from grid managers warning about the dangers of rushing to close reliable sources of electricity generation only serve to highlight the risks associated with the premature rush to transition to wind and solar.

This research demonstrates the high environmental and economic costs of hurrying the grid transition. While fossil and nuclear fuels do have environmental costs, we also have the technological capacity to address those costs as we continue to trust their unparalleled reliability for essential energy services.

Wind and solar energy have been marketed as a means of having our energy and environmental cake and eating it, too. We are told they are clean, cheap, and reliable. However, a closer look at their real costs, growing environmental impacts, and questionable human rights records leads to serious questions about their ability to serve as a realistic energy option.

Transitioning a service as important as the nation’s electric grid cannot be rushed. It requires a far more careful and pragmatic approach than we see from elected officials and utilities nationwide. The rushed transition is neither reasonable nor prudent and must be reconsidered.

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Roger Caiazza blogs on New York energy and environmental issues at Pragmatic Environmentalist of New York.  More details on the Climate Leadership & Community Protection Act are available here and an inventory of over 400 articles about the Climate Act is also available.   This represents his opinion and not the opinion of any of his previous employers or any other company with which he has been associated.