John Constable: Energy Cost Is Why We Disagree About Climate PolicyGWPF Energy, 4 June 2017

Dr John Constable: GWPF Energy Editor

By withdrawing the United States from the Paris Agreement President Trump has put the burden of proof on those private investors and nation states that believe renewable energy is economically beneficial. Far from being a disaster, this is a step towards a reasonable and spontaneously attractive climate change policy.

Like many of those vilified for their views on the subject of climate change, President Trump is more of an energy policy sceptic than an anti-rational “denier” of atmospheric science. He senses, and with good reason, that the aggregate of energy policies proposed to mitigate climate change brings with it the threat of major wealth destruction and a reversal of several centuries of exponential increases in human well-being.

Mr Trump sees this from his own national perspective, believing, again with good reason, that the policies are extremely and comparatively disadvantageous to the United States. However, this narrow view is a subset of and entirely compatible with the broader conclusion that renewable energy policies will be damaging to human prospects at the global level, however much they may favour certain countries in the short term.

Those who disagree with him are, for the most part, either explicitly or implicitly affirming the contrary proposition, namely that the renewable energy transition envisioned is already economic and will bring enhanced global prosperity.

That is the black and white of the matter; you either think that the low carbon energy policies make sense, or you don’t, and it is this root level division that provides the most profound explanation of why we disagree to any extent about climate change. If there were no differences of opinion about energy, there would be hardly any disagreement about climate change policy.

Furthermore, this account not only explains the fact of the quarrel, but also the haut en bas and moralising tone of Mr Trump’s critics. If you believe that economic, low-emitting renewable energy is already available, then it will also seem to you that only ill-will and stupidity prevents its adoption, and thus that President Trump’s decision to withdraw from the Paris Agreement is ignorant at best and probably malign.

But his views are neither of these things. The reasoning is certainly elliptical, and the manner is brusque, to say the least, but in the last analysis he simply has a different view about the economic consequences of renewable energy, views that are in fact widely held amongst both specialists and the general public.

The case for renewables is not proven, and in spite of a rolling barrage of positive PR round the industry there are still very good grounds for reserving judgment. Even if the claimed equipment cost reductions are real, and this is extremely dubious in the case of wind power, the economic lifetimes remain deeply uncertain, and the electricity system integration costs for uncontrollable generators are without doubt extremely high. Upbeat babble about electricity storage, smart metering and ingenious demand management cannot conceal the fact that these “solutions” all tend towards increasing the capitalization of the electricity sector, thus greatly reducing its productivity, a clear recipe for higher consumer costs and for deeply unpleasant macroeconomic impacts.

As with many problems in technology and commerce, a resolution to this matter cannot be delivered politically or administratively. It is, to use Easterly’s convenient phrase, not a matter of administrative deployment, but a research question, the answer to which can only be discovered by free experiment and the taking of risks. Indeed, the President’s de facto rejection of state support for alternative energy actually brings this discovery closer.

A number of US corporates and other interests are now declaring that they will continue to invest in low carbon technologies in spite of the President’s decision to withdraw from the Paris Agreement. Fine. Let them do so. If the enthusiasts are right, then renewable technologies will sweep the board through fundamental and real advantage, bringing general benefit. If they are wrong, the lesson will be learned painfully and in full public view but with limited malinvestment.

So in pursuit of truth, let us remove all the deep market coercions that are currently feeding the suspicions of President Trump, amongst others. Delete the portfolio standards, abolish the tax credits and income support subsidies, and make the ‘alternative’ technologies pay their costs on the system and earn their their place in the wholesale markets through normal competition. And by all means do the same for equivalent subsidies to fossil fuels, though green campaigners will be disappointed to find that these are not nearly as common as they think.

Many “Parisians” are now consoling themselves with the thought that a Trump presidency cannot last more than eight years at the most. That is an evasion. The reality to which Mr Trump has given voice is enduring. It can be temporarily suppressed, but it will not go away. The disagreement about energy is not trivial. Cheap energy is the cause of prosperity. Climate policies grounded in anything other than cheap energy will not be sustainable.

“The fundamentally anti-fossil fuel energy efficiency and renewable energy advocates ran with Obama’s Executive Order 13693, Planning for Federal Sustainability in the Next Decade, to turn ‘deep decarbonization’ theories into official public policy. The goal? Convert all consumer natural gas use to electricity by 2050.”

“In short, U.S efforts within the DDPP infrastructure are orchestrated by the United Nations through one consulting firm, reviewed by two DOE labs, and funded by Tom Steyer. How’s that for a concentration of power in opposition to a free market economy?”

“Advocacy of ‘electrify everything’ and ‘Deep Decarbonization’ are still being funded by taxpayer dollars. While we assume the Trump Administration is not fully aware of this, the fact remains: This cannot be reconciled with the President’s America First Energy Plan to “lower costs for hardworking Americans and maximize the use of American resources.”

Yesterday we provided a bit of history relative to the war on natural gas. Part II discusses current situation and the case going forward.

The fundamentally anti-fossil fuel energy efficiency and renewable energy advocates ran with Obama’s Executive Order 13693, “Planning for Federal Sustainability in the Next Decade,” to turn “deep decarbonization” theories into official public policy. The goal? Convert all consumer natural gas use to electricity by 2050.

A web search of the term “deep decarbonization” leads directly to the Deep Decarbonization Pathways Project (DDPP).  With a little more digging from there, the following site identifies that the DDPP is sponsored by the  United Nations Sustainable Development Solutions Network (SDSN). In the United States, the DDPP is represented by the U.S. Deep Decarbonization Pathways Project (USDPP). So far, the USDPP has published the following reports:

1. Policy Implications of Deep Decarbonization in the United States [1] describes how the pace and scale of physical infrastructure changes required to reduce greenhouse gas emissions 80% below 1990 levels by the year 2050 informs the development of coherent, effective energy policy.
2. Pathways to Deep Decarbonization in the United States [2] assesses the feasibility and cost of a low-carbon transformation. It describes four different technology pathways to a decarbonized energy system by mid-century that meet America’s energy needs and support robust economic growth

The following series graphics are excerpted from the first study:

Figure 2. U.S. Energy System in 2014

 

 

Figure 3. Deeply Decarbonized U.S. Energy System in 2050 (Mixed Case)

The essence of these first two graphs is that the direct use of natural gas direct use consumption within “buildings” and “industry” would need to be redirected to the indirect use of natural gas via electricity to attain the critically important state of “deep decarbonization.”  The following graph indicates (in the case of residential consumers) that this conversion process would cost them each $36 more per month on average. (Click on graphic to expand.)

Figure 7. Average Household Spending for Energy Goods and Services, 2050 Mixed Case

The following except from their site identifies some of the main US players:

About the USDDPP

Policy Implications of Deep Decarbonization in the United States and EnergyPATHWAYS model development are the products of a research team led by Dr. Jim Williams (Director of the DDPP and Chief Scientist at Energy and Environmental Economics (E3)) along with Ben Haley and Ryan Jones (Senior Consultants, E3). Pathways to Deep Decarbonization in the United States was a joint research effort led by E3 in collaboration with Lawrence Berkeley National Laboratory (LBNL) and Pacific Northwest National Laboratory (PNNL). The project director was Dr. Jim Williams, with Dr. Andrew Jones (LBNL) and Dr. Haewon McJeon (PNNL) conducting GCAM modeling, and Ben Haley conducting EnergyPATHWAYS modeling. Work has been supported by the Sustainable Development Solutions Network and NextGen Climate America.

In short, U.S efforts within the DDPP infrastructure are orchestrated by the United Nations through one consulting firm, reviewed by two DOE labs, and funded by Tom Steyer. How’s that for a concentration of power in opposition to a free market economy?

In November 2016, the Obama Administration basically endorsed these studies with its release of the  United States Mid-Century Strategy for Deep Decarbonization. The purpose of this was to lay the plan for achieving the Obama Administration’s commitment to the UN-centered “Paris Agreement” for curbing climate change.

The essence of this agreement was to the above-cited reduction of greenhouse gasses by 80% below 1990 levels by the year 2050.  In the United States, the primary strategies for achieving this goal were through the Obama Administration’s Clean Power Plan (CPP) along with weaning US consumers off the direct use of fossil fuels in their homes and businesses.

Part and parcel to this strategy is the implicit “deep decarbonization” assumption that all natural gas end-use energy can and should be converted to electricity because renewable forms of electricity stand ready and able to do it all; with a negligible adverse impact upon our economy. Both the CPP and Paris Agreement are now gone, however, as justification of US energy policies.

The Threat–and Where We Go from Here

Advocacy of “electrify everything” and “Deep Decarbonization” are still being funded by taxpayer dollars. While we assume the Trump Administration is not fully aware of this, the fact remains: This cannot be reconciled with the President’s America First Energy Plan to “lower costs for hardworking Americans and maximize the use of American resources.” [3]

As evidenced by Lawrence Berkeley National Laboratory’s article titled Aggressive Efficiency and Electrification Needed to Cut California Emissions,[4] this movement started in California and revealed itself in 2011.

DOE’s Office of Energy Efficiency and Renewable Energy (EERE), through its  “National Labs,” have helped fund efforts to bring about an electric energy monoculture as demonstrated by the aforementioned Policy Implications of Deep Decarbonization in the United States and Pathways to Deep Decarbonization in the United States. The executive summaries in each of these publications state: “in collaboration with Lawrence Berkeley National Laboratory (LBNL) and Pacific Northwest National Laboratory (PNNL).” Less often mentioned is the need for highly advanced technologies, many not yet available, to maintain the grid’s stability, nor the vast ‘investments’ needed to build a capable grid.

In November of 2016, this was formally endorsed by the Obama Administration’s “United States Mid-Century Strategy for Deep Decarbonization.”[5]

The jihad for electrifying everything is still going strong. For example, on April 14, 2017, the National Renewable Energy Laboratory (NREL) announced its Power-Up Study: Exploring a More Fully Electrified U.S. Economy.[6] More recently, LBNL, issued the following news release titled “Berkeley Lab Helps California Get to Zero Net Energy Homes.”[7] Some key excerpts follow:

• California has established ambitious goals to reduce energy consumption in buildings, including a policy goal for all new residential buildings to be zero net energy (ZNE) by 2020. Now the Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab) has launched two projects to help the state meet its ZNE building goals.
• The DOE’s Building America program is also supporting the air quality project, the results of which will inform DOE’s Zero Energy Ready Home program.
• If we want to achieve deep carbon reductions then ultimately we want to sharply reduce or eliminate natural gas consumption.

Policy makers should remember that studies such as that by Berkeley Lab are about what could be, not what should be.

Like the study that Secretary Perry called for on April 14, we urge DOE to conduct a study that quantifies the benefits of the direct use of natural gas.  The results of this study could be incorporated into the announced grid reliability study and those findings could serve as the basis for a truly diversified “all the above” energy policy to best serve American consumer interests.

The alternative is that “electrify everything” and “Deep Decarbonization” advocates simply endure the Trump Administration (or co-opt it) until they can get back to implementing the UN’s new world order.

———————-

[1] Source: http://ift.tt/1YrFdmk

[2] Source: http://ift.tt/1Hkj4lE

[3] Source: http://ift.tt/2jHtX9p

[4] Source: http://ift.tt/2r4FFA6

[5] Source: http://ift.tt/2r4pS4j

[6] Source: http://ift.tt/2r4wuPU

[7] Source: http://ift.tt/2r4v7kA

---

Mark Krebs, an engineer by training, has been involved with energy efficiency design and program evaluation for more than thirty years. He has served as an expert witness in dozens of energy-efficiency filings, which he summarized in a Public Utilities Fortnightly article, “It’s a War Out There: A Gas Man Questions Electric Efficiency” (December 1996).

Tom Tanton is Director with Energy and Environmental Legal Institute. Mr. Tanton has 40 years in energy and environmental policy, focused on enabling technology choice and economic development. Mr. Tanton has testified to numerous state Legislatures and Congress as an expert on energy policy. He formerly served as Principal Policy Advisor at the California Energy Commission.