The Week That Was (To December 11, 2010)

Excerpts from Ken Haapala

The 16th Conference of Parties (COP) of the UN Framework Convention on Climate Change is finishing up in Cancun. The gathering is part of the UN's constant battle against UN claimed human-caused global warming. The conference started with a prayer Ixchel, a Mayan goddess, offered by Christina Figueres, the executive secretary of the conference. Perhaps some other gods were angered because the conference is closing with six days of record-breaking cold.

Whatever US monetary commitments come out of Cancun, they will require backing by the US House of Representatives, where all revenue bills must originate. The Republicans, many of whom doubt human-caused global warming, will control the House starting in January. They may have challenging questions for the State Department as it tries to explain its activities and the need to continue with additional COPs.

Given the extreme cold during last year's COP in Copenhagen and record breaking cold in Cancun during this year's COP, there may be few locations that would care to host such an activity in the future. Is this the way the world ends?

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During the Cancun conference, Science Magazine issued a press release to a few groups embargoed until late this week. [By declaring the article embargoed, Science Magazine demand it not be publicly disclosed until after publication.] The release highlighted a study that claims to demonstrate that the feedback from clouds is positive rather than negative.

If the net feedback from warming caused by CO2 emissions is positive, then the total warming from CO2 emissions could be significant, as claimed by the UN IPCC. If negative, then the total warming would be negligible. Normally, TWTW would not discuss such a technical topic; however, since TWTW carried a two part book review of Roy Spencer's book, Blunder, the article and Roy Spencer's rebuttal are referenced. In brief, Spencer says that the authors of the new article made the same mistake as previous modelers and confused cause with effect.

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The British Met Office is quickly losing any credibility it had remaining in England after the Climategate email leaks. In 2000, it predicted that, due to global warming, snow would become a rare event in England. In the latter part of 2009, it predicted that 2010 would be the hottest year on record. The 2009-2010 winter was one of extreme cold and a snow that covered the entire United Kingdom. According to reports, over 25,000 people died in England and Wales due to cold. This fall the Met Office predicted a mild winter for the UK. Thus far, December has been extremely cold in the UK and northern Europe and another snow storm covered most of the UK. Now, the Met is predicting that 2010 will be the hottest year on record, but not in England. [Or, elsewhere where it is cold?]

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The US EPA has declared it will delay the implementation of new regulations on ground level ozone and on industrial boilers. The latter requires the approval of a federal judge. In both instances the EPA stated it needs more time to study the regulations as well as to study the scientific and health issues of ozone and smog effects.

Certainly, the environmental industry is not pleased, particularly after many supported these regulations that EPA declared necessary to save lives.

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THE NUMBER OF THE WEEK: is less than 1%. Less than 1% of US electricity is generated from using oil according to the 2009 Electric Power Industry report by the US Energy Information Administration This fact clearly falsifies claims that mandates and subsidies for renewable sources to generate electricity are needed to reduce our dependence on foreign oil.

The report also states that due to the recession, electrical generation fell by the greatest amount in over 60 years. The total generation is the lowest since 2003. The largest decrease is in coal-generated power, now producing about 44.5% of electricity (from about 48.2%), the largest increase is natural gas generated power now producing about 23.3% (up from about 21.4%). Wind generates about 1.9% of total electricity (up from 1.3%). The figures for wind do not reflect the back-up requirements for wind due to its unreliability.

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Dr Pangloss Alive And Well At Cancún

Prof. Philip Stott

When it comes to UN climate conferences, I am constantly flabbergasted by the breathless naivety and forced optimism of certain politicians and environmental reporters, not to mention of green activists. It is as if Voltaire's very own Dr. Pangloss had set sail to Cancún with Candide. Despite having become a syphilitic beggar, Dr. Pangloss remains firm in his belief that "all is for the best in the best of all possible worlds", explaining that syphilis "… was a thing unavoidable, a necessary ingredient in the best of worlds; for if Columbus had not caught in an island in America this disease, which contaminates the source of generation, and frequently impedes propagation itself, and is evidently opposed to the great end of nature, we should have had neither chocolate nor cochineal."

'Global warming' was likewise reduced to a clapped-out beggar last year in frozen Copenhagen. Yet, in the best of all possible worlds, this Danish debacle is now seen as a good thing, because it brought a sense of reality to the delegates in Cancún, who still, of course, neatly proceeded to avoid any legally-binding commitments on emissions, and on pretty well anything else for that matter, putting off the whole charade until next December in sunny Durban, South Africa. My, how this ship of fools traverses the globe - Candide and Gulliver have nothing on them! And, it is worth remembering that Cancún was the 16th Conference of the Parties no less.

Even more difficult to comprehend, however, is the desperate desire for a post-Kyoto Protocol. After all, it is not even as if the Protocol reduced carbon emissions in any meaningful way. In truth, it appears that emissions actually rose after the Protocol was put in place on December 11, 1997. The average annual growth in atmospheric carbon dioxide over the last 50 years (as measured at Mauna Loa, Hawaii, in parts per million by volume - ppmv) was around 1.37 ppmv. In contrast, the average since 1997and Kyoto has risen to about 1.97 ppmv. So much then for the value of internationally-binding protocols.

This would perhaps be a cause for wry amusement were it not for the fact that political and economic policies predicated on UN Climate Conference agendas are raising costs and burdens for everyone around the world, and especially so at a time when the financial crisis is putting much in jeopardy. In the UK, our ludicrous political obsession with carbon footprints is warping energy policy, dangerously loading energy prices and costs, heaping retrogressive debt on 5 million people in energy poverty, and undermining UK competitiveness, and all at a time when vast new reserves of cheap energy in the form of gas and oil shales are becoming a reality.

As Benny Peiser, Director of The Global Warming Policy Foundation (GWPF), wisely argues:

"No other country has been as foolish as Britain to enact extremely aggressive and completely unrealistic climate targets. For the UK, to keep going it alone is not merely suicidal but pointless.

Nor does it make sense to make British industry - and manufacturing in particular - even more uncompetitive, or to drive it overseas, by gratuitously driving up energy costs.

The Government should now suspend its unilateral and extremely costly climate targets until such time as all other major nations have signed up to the same course."

This is even more the case when we note the extraordinary decline of global-warming coverage and interest throughout the British media since Copenhagen. Until this last Friday, one would have hardly known that Cancún was a two-week conference, and, even now, after it has limply concluded, the coverage is so slim as to merit comment.

For example, as far as I can judge, in the main 'Sunday Times', the conference does not achieve a single mention, while the climate-change obsessed 'Observer' manages only half-an-inside page and a short, mealy-mouthed editorial partly worthy of Dr Pangloss himself.

The reality is surely dawning, if too slowly, that, to paraphrase Voltaire's famous 1767 letter to Fredrick the Great, King of Prussia: "Global warming is the most ridiculous, the most absurd and cost-raising farce that ever infected the world."

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Islands in the climate storm

If Pacific islands are being washed away due to climate change-induced floods, how come land prices are stable?

According to environmental activists, the Cancun climate negotiations may be the last chance to save the Earth. Most politicians agree. But what do the markets say?

This question has haunted me since I attended the previous summit to save the Earth, namely the United Nations Climate Change Conference held in freezing cold Copenhagen a year ago.

The loosely worded accord that anti-climaxed the Copenhagen summit was a bitter disappointment to many in the developing world. The Sudanese ambassador compared it to ‘asking Africa to sign a suicide pact’. He also claimed Western inaction was tantamount to genocide by climate change.

The prime minister of Tuvalu, Apisai Ielemia, said rich Westerners were allowing his nation to perish. He showed a group of journalists, me among them, a video of floods that threaten to wash his tiny Pacific island nation to the sea.

While some Sudanese hyperbole is to be expected at UN conferences, surely the Pacific island nations should be listened to. It’s one thing to dispute obscure points of aquatic physics sitting comfortably in your office, but the people of Tuvalu are apparently on the frontline of climate change.

After showing the film, Ielemia took questions from journalists who were clearly shocked by the footage. I, too, got a chance to ask a question of the accommodating prime minister. ‘Mr Prime Minister. In view of the impending deluge, how much have land prices fallen on Tuvalu?’ I stammered.

For some reason my question completely silenced the room packed with environmental press. After what I will charitably call an inquisitive stare, the prime minister gave his longwinded answer full of long-term projections of rising ocean levels. To be fair, he concluded with a simple declaration: ‘Land prices have not been affected.’

This baffles me. The Tuvaluans have experienced the very floods Ielemia had just shown us. If the ocean is encroaching the island, surely it would make sense to sell all your land, at any price, while you still have some. This should cause a dramatic drop in land value as the market gets flooded (no pun intended). But no, land prices are stable.

The story gets even more baffling when one looks at the Maldives. Remember, this is the tiny nation in the middle of the Indian Ocean where the government held an underwater cabinet meeting in November 2009 to emphasise the imminent peril of climate change-induced rises in the ocean levels. But in the Maldives, too, land prices are holding.

Indeed, land is selling for as much as one million Euros per hectare, comparable to the finest vineyards of the hilly and deluge-safe Champagne region of France. These prices are ridiculous considering that the best informed party, the government, says everything will soon wash away.

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Prophecies come in cycles too

From Time Magazine:

“The discoveries of changes in the sun’s heat and the southward advance of glaciers in recent years have given rise to conjectures of the possible advent of a new ice age.” Time Magazine, September 10, 1924.
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“Gaffers who claim that winters were harder when they were boys are quite right… weather men have no doubt that the world at least for the time being is growing warmer.” Time Magazine, Jan. 2, 1939
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“Climatological Cassandras are becoming increasingly apprehensive, for the weather aberrations they are studying may be the harbinger of another Ice Age.” Time Magazine, June 24, 1974
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“Scientists no longer doubt that global warming is happening, and almost nobody questions the fact that humans are at least partly responsible.” Time Magazine, April 9, 2001

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New transmission lines to remote areas: Another "green" raid on the wallet of the little guy

How would you like to pay higher utility bills to finance expensive electricity from solar and wind power, which you would never use? That’s the issue now before the Federal Energy Regulatory Commission (FERC), and it deserves more public and political scrutiny before it becomes a reality.

FERC has a draft rule that could effectively socialize the costs of paying for multi-billion dollar transmission lines to connect remote wind and solar projects to the nation’s electric power grid. If FERC rules in favor of Big Wind and Big Solar, the new policy would add billions of dollars onto the utility bills of residents of at least a dozen states—including California, Michigan, Oregon and New York—that will receive little or no benefit from the new power lines.

Transmission lines connect coal, natural gas and nuclear plants to the electric grid so that power can be delivered to homes and businesses. The costs of building this infrastructure, hooking up to the national electric grid and transporting electricity to the end users has traditionally been paid by the industries and passed on to rate payers. This long-standing user-pays policy would be replaced with a policy of everyone pays under FERC’s plan.

As FERC chairman Jon Wellinghoff has put it: “This is a country where transmission lines have traditionally been built by the incumbents who serve that area; the question is whether we should continue that policy in the future.” He told Congress that we should steer away from pricing that would “calculate the precise monetary benefits expected to accrue from a new transmission facility.” But that’s exactly what investors try to do in assessing the economic viability of any new project.

The big winners from socializing transmission costs would be wind and solar projects that tend to be in remote areas, like the desert or offshore. In many cases, thousands of miles of new transmission lines would have to be built to get the power to the end user. Google recently announced it will be a major investor in a $5 billion wind farm off the coasts of New Jersey, Delaware and Virginia that will require hundreds of miles of underwater transmission lines. No one is saying who will pay for those transmission costs, but it’s a safe guess the investors are betting that FERC will decide to socialize them.

Very big dollars are at stake in this fight. By some estimates the cost of building out new transmission lines to accommodate renewable energy and other new electric power sources could exceed $160 billion. Wind and solar proponents insist that renewable energy standards can only be reached if transmission costs are shared by everybody. This sounds like an admission that these energy sources are inefficient sources of power that can’t compete in the marketplace without subsidies. The policy the renewables are pushing would be analogous to taxpayers underwriting the cost of tankers and truckers that transport oil to service stations.

Senators Harry Reid of Nevada and Jeff Bingaman of New Mexico, both of whom have big wind and solar projects in their states, pushed a Senate energy bill this summer that would have socialized these transmission costs. That bill has stalled, so FERC—supported by the White House and Democratic leaders—may move on its own.

Fortunately, the “loser” states are finally catching on to how much this cost-shifting would add to their utility bills. Last year Governors Jan Brewer of Arizona, Jim Gibbons of Nevada, Christine Gregoire of Washington, Ted Kulongoski of Oregon and Arnold Schwarzenegger of California opposed the plan as “inappropriate to assess the cost of transmission build-out to customers that cannot make use of the facilities, or who elect not to because they can access more cost effective options that do not rely on large, new transmission investments to meet environmental goals.”

Eleven eastern governors have raised similar objections, arguing that this policy would “undermine the significant renewable energy potential along the East Coast by subsidizing distant terrestrial wind resources which would stifle economic recovery in the east by destabilizing competitive electricity market structures and increasing energy prices in regulated markets.” Massachusetts Secretary of Energy and Environmental Affairs Ian Bowles, hardly a Milton Friedman apostle, describes cost-sharing as “a radical Soviet-style approach to transmission planning.”

One of the biggest losers would be Michigan. One economic analysis sponsored by Michigan utilities found that, despite some initial gains for certain wind projects in the northern part of the state, under a proposed regional payment scheme, “Michigan will be sending hundreds of millions of dollars annually outside the state to fund transmission projects which not only provide little value to the State, but will actually harm our ability to develop our own renewable energy market.” Michigan rate payers would have to subsidize 20% of the cost of some $16 billion of transmission projects outside the state. Talk about outsourcing.

This is all the more maddening given that renewable energy projects already receive tens of billions of dollars of loans, grants, tax credits, earmarks, renewable energy mandates, stimulus money, and on and on. According to a 2007 U.S. Department of Energy study, wind and solar already receive subsidies that are more than 20 times greater per kilowatt of electricity than conventional power sources. But as with ethanol, even these subsidies are never enough.

Senator Bob Corker of Tennessee has sponsored legislative language that would instruct FERC to allocate transmission line costs in a way that is “reasonably proportionate to measurable economic and reliability benefits.” In other words, no charging rate payers in New Jersey for the costs of a wind farm in Texas based on vague benefits of reduced planetary carbon emissions.

The courts have also generally ruled that pricing for electric projects must be commensurate with benefits derived by rate payers. If Congress or FERC mandate a cost-spreading scheme for transmission projects, then the highest subsidies will go to the least efficient projects. That wastes money and energy, which doesn’t sound too green to us.

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British Consumers will pay the cost of going green as energy reform will add £500 a year to bills

Environmental reforms to the energy market, to be unveiled this week, will result in huge gas and electricity price increases over the next ten years. Under the changes, householders will have to pay an extra £500 a year by 2020 effectively to subsidise the cost of new nuclear power plants and wind energy.

The Government has been forced into the reforms by claims from energy companies that unless there are more incentives, green investment will not happen and Britain will miss tough climate change targets.

Over the next seven years most old coal-fired power stations and nuclear plants will be shut. With demand set to grow, the country faces the danger of blackouts. To avoid this, energy companies say the most economical way to keep up energy production would be to build more gas-fired power stations, but this would destroy any hopes of meeting the Government's carbon emission targets.

So on Thursday, Energy Secretary Chris Huhne will unveil a White Paper outlining plans for a 'carbon floor price'. This will artificially raise the price of the carbon allowance to penalise fossil fuel generators.

Under the European Emissions Trading Scheme, companies get allowances, or permits, for the amount of CO2 they may emit. These can be bought and sold, which means there is a 'market price' for carbon emissions. Critics-argue that the scheme was poorly designed and so the market price has fallen too low.

The Government is also expected to propose capacity payments for low-carbon electricity generation. This would reward companies for making their electricity generation capacity available to the grid, even if it is just as a back-up.

It is also expected to stop the building of new coal-fired power stations unless they are equipped with carbon-capture technology.

These measures will cost money. Britain now pays about £1 billion a year in subsidies for renewable energy, which adds about £80 to a typical household's annual bill. Energy experts say that propping up nuclear and renewable energy could cost every household more than £500 a year by 2020.

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