Tuesday, December 20, 2011


Three current articles from Australia below -- followed by more articles from the USA

A splendid example of projection from a Warmist who wouldn't have a clue about science

Paul Biegler below says it is their childish emotional state that motivates climate atheists. He is Australian Research Council postdoctoral fellow in bioethics at Monash University. He may know a lot about ethics but he shows no sign of knowing any climate science. He reveals his inspissated ignorance by his coat-trailing reference to "A truckload of science" in support of global warming -- but he names not one scientific fact from that "truckload". Why? Because no such facts exist. Warmism is prophecy that flies in the face of the scientific facts (See the header on this blog). It is believers in prophecy who are in a childish emotional state

Projection -- accusing others of your own faults -- is good rhetoric but is fundamentally dishonest

He does make extended reference to a concept from social science -- delay of gratification -- but as my paper on that subject showed, most of the generalizations put forward in that research field are false. So he is leaning on a broken reed there too. Deferment of gratification is only weakly generalizable so even if a skeptic were a "non-deferrer" in one way, it would be unlikely to explain his skepticism. So Biegler is ignorant of the facts there too. Perhaps he should do some real research some day, instead of just pontificating

Instant gratification is a powerful, but flawed, human motivator.

IF YOU are down a blind alley searching for that perfect Christmas gift for your climate sceptic friend, you could do worse than slinging them a book on Emotional Intelligence. Why? Research is mounting that your friend is the victim of one of the brain's many computing glitches. More particularly, he has been derailed by an emotional response that is at best unhelpful and at worst catastrophic. He has capitulated to the pleasure of the here and now.

In his recent book Brain Bugs, psychology professor Dean Buonomano summarises a wealth of evidence that when it comes to putting off rewards, many of us suck. In the most famous study, back in the 1960s, Walter Mischel sat unsuspecting toddlers at tables laid with a single marshmallow. They could eat it now or receive an extra one if they waited a short time. Some rug rats unceremoniously demolished the treat without delay, while others exercised supreme self-control and resisted temptation until the appointed moment. Follow-up of the youngsters two decades later found those who showed restraint had better college admission scores. Other studies have linked weakness of will with obesity and addiction.

From a food-gathering perspective, it is simply irrational to forgo a double treat for the sake of a few minutes' wait. But, of course, we expect most four-year-olds to act irrationally and, in so doing, they mirror adult behaviour from our own evolutionary past. In our primordial history, when futures were predator-ridden and uncertain, it made sense to grab the food now rather than wait for a bigger, but later, chow-down. This is an example of temporal discounting, where greater rewards in the future are tagged with lesser value in virtue of their temporal distance.

Adults remain prone to temporal discounting. Given the choice of $100 now or $120 in a month, most take the money and run, sacrificing what amounts to an annual return on their one-month investment of 240 per cent. How could we be so dumb? It turns out that the allure of the immediate reward is strongly reinforced by emotions at the more pleasant end of the spectrum. Put simply, it often feels better to be rewarded straight away than to wait.

Climate scepticism is a strong candidate example of temporal discounting. A truckload of science supports global warming and its attendant perils. Yet, addressing this temporally far-flung threat, while generating distant benefit for our planet's inheritors, will cost us real pleasure now. Self-imposed measures to reduce our carbon footprint do not bring universal glee, and the carbon tax will hit both our wallets and our wellbeing.

But one of the reasons for the astounding reproductive success of humans is our capacity to bring our cortical computing power, and its rationality, to bear on our insistent emotions, Plato's unruly horse.

Many emotions still help and validly guide action, such as the fright one feels when a car whizzes dangerously close as we cross the road. But others need reining in when faced with compelling evidence on future prospects. The ability to apply rational foresight to limit the sway of short-term emotional reward is a true intelligence.

The task is difficult, not least because many of our emotional decisions are backed by post hoc - but aberrant - rationalisation. Nowhere is this writ larger than in the domain of marketing and consumer behaviour. For example, a large body of evidence shows that the emotional reward of status enhancement fuels prestige-car purchases. Yet most of us either wilfully deny this, or simply lack introspective access to our true motivations. Instead we convince ourselves that it was the eight air bags or the stability control that clinched it.

In the climate realm, fabrication is also rife. Enthralled by their emotional biases, sceptics mouth desperate appeals to the corruptibility of scientists, or to the fallibility of climate prediction models.

To err is human and we should forgive many their inability to constrain the draw of the emotions. But this failure is inexcusably egregious in our politicians who are steering the ship for the long voyage, not just around the next reef. To those who still succumb to immediate gratification at the expense of our long-term good, I say welcome any Christmas gifts on brain bugs and emotional intelligence with open arms. Our grandchildren's future could depend on it.


Lots of opposition to wind farms in the State of NSW

The cabinet debated new wind farm guidelines yesterday, with division over whether NSW should follow Victoria and order wind turbines to be set further back from houses.

The Shooters and Fishers Party, which shares the balance of power in the upper house with the Christian Democrats, said yesterday it wanted a moratorium on new wind farms.

Industry sources said a US Tea Party-style "astroturf" campaign, which mimics grassroots local opposition but is at least partly directed from elsewhere, was being waged against wind energy in NSW, which was expected to bring up to $10 billion in investment this decade as it accelerated to meet the national 20 per cent renewable energy target.

Wind farm opponents include a coalition of local groups under the banner "landscape guardians", and the Australian Environment Foundation, which sprang up seven years ago from a conference run by the right-wing think-tank the Institute of Public Affairs, but is now a separate group. "Our role is, if you like, aiding and abetting what local communities are doing and helping them voice their disapproval over wind farms," said the foundation's executive director, Max Rheese.

While local groups say they believe the inaudible noise and vibration from wind farms affect human health, the foundation does not think humans have a role in causing climate change and therefore believes wind farms are an expensive extravagance.

It hosted the British climate sceptic Lord Monckton last year and says it "questions the whole science behind anthropogenic global warming".

Mr Rheese said the foundation had paid for anti-wind signs at public meetings and lobbied the Shooters and Fishers Party, and the National and Liberal parties in NSW.

The Shooters and Fishers MP Robert Borsak said yesterday the party would wait for the cabinet decision but would use its critical position in the upper house to oppose any pro-wind farm legislation that came to Parliament.

The party had discussed wind farms with the foundation but had come up with its own policy calling for a moratorium and public inquiry into wind turbines, Mr Borsak said. "We do probably see eye to eye with them on this and many issues, but this is a party position that we have finalised internally."

The Premier, Barry O'Farrell, said in August it was his opinion that no new wind farms should be built in NSW, but it is understood there are divisions in cabinet about the issue.

The Nationals MP and Roads Minister, Duncan Gay, said yesterday his anti-wind farm views were well known and he hoped yesterday's cabinet meeting "addresses the sins of the past". "I live at Crookwell; we've certainly come under the brunt of poor planning and lack of community consultation of wind farms in the past . It puts friends against friends, neighbours against neighbours."

The Waubra Foundation is a national group arguing wind farms can cause illness because of the vibrations from turbines. It lodged a submission based on perceived health concerns with the government yesterday.

The chairman, Peter Mitchell, said his opposition to wind farms was based on health concerns and nothing to do with his background as a former director of oil and gas companies. "The critics here are really playing shoot the messenger, which I find ridiculous," he said.

The British equivalent of landscape guardians, "country guardians", was funded and supported by elements of the British nuclear energy industry.

Labor's environment spokesman, Luke Foley, said "flat earthers" were running a scare campaign against wind power.


Some electricity generators already on the brink -- with the carbon tax a last straw

LOY YANG POWER, a major supplier to the east coast electricity market, has been forced to ask the corporate regulator for special permission to continue trading in the face of financial strain due to debt refinancing and the carbon tax.

Details of the financial difficulty come less than a week after a federal government report predicted that, should the Loy Yang A plant be forced to close suddenly, wholesale electricity prices would nearly double, with an immediate flow on to household power costs.

The findings, contained in the federal government's draft white paper on energy, said wholesale power prices would surge by nearly 80 per cent in Victoria and by more than 45 per cent in NSW.
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Loy Yang Power's chief executive, Ian Nethercote, told the Herald the company had received a "no action" letter from the Australian Securities and Investments Commission - allowing it to continue to trade after debt totalling $565 million due in November became a current liability on its books.

Mr Nethercote said Loy Yang Power was already in talks with federal ministers, the Treasury and the government's new Energy Security Council about its share of $5.5 billion worth of free carbon permits set aside to help electricity generators through the introduction of the carbon tax.

The company, whose Loy Yang A plant in Victoria's Latrobe Valley supplies one-third of Victoria's power needs, was also talking to ministers and the council about the possibility of the government becoming its lender of last resort in its bid to refinance the debt.

Mr Nethercote said this was not "our preferred option" because "we imagine the conditions will be more onerous".

Other energy industry sources said Loy Yang was emerging as the first big test of the government's policies aimed at ensuring the electricity market coped with the introduction of the $23-a-tonne carbon price in July without major disruption.

Mr Nethercote said it was "more than likely" Loy Yang would have had to get a no action letter from ASIC even without a carbon price, which will cost it about $450 million a year.

He said some of Loy Yang's customers had asked for more information about the company's financial situation and were reviewing the conditions they placed on their dealings with the generator. Other sources said several companies had stopped trading with Loy Yang.

Only the chairman of the Energy Security Council - a Tasmanian, Michael Vertigan - has been publicly announced, but the Herald has learnt the other eight members of the crucial advisory body have been appointed and the council has begun negotiations with several generators, investment banks and financial institutions.

The Tokyo Electric Power Company, operator of the Fukushima nuclear plant, owns 32.5 per cent of Loy Yang, but the company has denied its Japanese shareholder is looking to divest in order to concentrate on the clean-up operations required at home. Another 32.5 per cent is owned by AGL.

Loy Yang lobbied fiercely but unsuccessfully for an amendment to the carbon tax laws that would have allowed deferred payment when generators bought forward-dated pollution permits under the scheme, a provision included under the Rudd government's emissions trading scheme that would have reduced the sudden increase in their working capital requirements.

Loy Yang is ineligible for the government's scheme to pay for the closure of brown coal plants. Plants that could access it are Hazelwood, Yallourn and Morwell in the Latrobe Valley, Playford in South Australia and Collinsville in Queensland.


EPA rules threaten older power plants

More than 32 mostly coal-fired power plants in a dozen states will be forced to shut down and an additional 36 might have to close because of new federal air pollution regulations, according to an Associated Press survey.

Together, those plants _ some of the oldest and dirtiest in the country _ produce enough electricity for more than 22 million households, the AP survey found. But their demise probably won't cause homes to go dark.

The fallout will be most acute for the towns where power plant smokestacks long have cast a shadow. Tax revenues and jobs will be lost, and investments in new power plants and pollution controls probably will raise electric bills.

The survey, based on interviews with 55 power plant operators and on the Environmental Protection Agency's own prediction of power plant retirements, rebuts claims by critics of the regulations and some electric power producers.

They have predicted the EPA rules will kill coal as a power source and force blackouts, basing their argument on estimates from energy analysts, congressional offices, government regulators, unions and interest groups. Many of those studies inflate the number of plants retiring by counting those shutting down for reasons other than the two EPA rules.

The AP surveyed electricity-generating companies about what they plan to do and the effects on power supply and jobs. It was the first survey of its kind.

The estimate also was based in part on EPA computer models that predict which fossil-fuel generating units are likely to be retired early to comply with the rules, and which were likely to be retired anyway.

The agency has estimated that 14.7 gigawatts, enough power for more than 11 million households, will be retired from the power grid in the 2014-15 period when the two new rules take effect.

The first rule curbs air pollution in states downwind from dirty power plants. The second, expected to be announced Monday, would set the first standards for mercury and other toxic pollutants from power plant smokestacks. Combined, the rules could do away with more than 8 percent of the coal-fired generation nationwide, the AP found. The average age of the plants that could be sacrificed is 51 years.

These plants have been allowed to run for decades without modern pollution controls because it was thought that they were on the verge of being shuttered by the utilities that own them. But that didn't happen.

Other rules in the works, dealing with cooling water intakes at power plants and coal ash disposal, could cause the retirement of additional generating plants. Those rules weren't included in the AP survey.

While the new rule heralds an incremental shift away from coal as a power source, it's unlikely to break coal's grip as the dominant domestic electricity source. Most of the lost power generation will be replaced, and the coal-fired plants that remain will have to be cleaner.

"In the industry we retire units. That is part of our business," said John Moura, manager of reliability assessment at the North American Electric Reliability Corp. NERC represents the nation's electrical grid operators, whose job is to weigh the effect a proposed retirement will have on reliability. With so many retirements expected, that process could get rushed. "We are getting a little hammered here, because we see multiple requests," Moura said.

NERC, along with some power plant operators, is pressing the Obama administration to give companies more time to comply with the rules to avoid too many plants shutting down at once.

In addition to anticipated retirements, about 500 or more units will need to be idled temporarily in the next few years to install pollution controls. Some of those units are at critical junctions on the grid and are essential to restarting the electrical network in case of a blackout, or making sure voltage doesn't drain completely from electrical lines, like a hose that's lost its water pressure.

"We can't say there isn't going be an issue. We know there will be some challenges," Moura said. "But we don't think the lights are going to turn off because of this issue."

That hasn't stopped some critics from sounding alarms. Rep. Darrell Issa, R-Calif., said in a letter to the White House this month that the EPA mercury rule could "unintentionally jeopardize the reliability of our electric grid." At a speech in New Hampshire in November, GOP presidential candidate and former Utah Gov. Jon Huntsman predicted summer blackouts. A recent U.S. Chamber of Commerce ad said a single EPA regulation "could threaten America's energy supply."

Particularly at the older, less efficient plants most at risk, coal already was at a disadvantage because of low natural gas prices, demand from China and elsewhere that was driving up coal's price, and weaker demand for electricity.

For many plant operators, the new regulations were the final blow. For others, the rules will speed retirements already planned to comply with state laws or to settle earlier enforcement cases with the EPA. In the AP's survey, not a single plant operator said the EPA rules were solely to blame for a closure, although some said it left them with no other choice.

"The EPA regulation became a game changer and a deal changer for some of these units," said Ryan Stensland, a spokesman for Alliant Energy, which has three units in Iowa and one in Minnesota that will be retired, and four in Iowa that are at risk of shutting down, depending on how the final rules look. "Absent the EPA regulations, I don't think we would be seeing the transition that we are seeing today. It became a situation where EPA broke the back of coal."

Some believe the change is long overdue. The two rules will cut toxic mercury emissions from power plants by 90 percent, smog-forming nitrogen oxide pollution by half, and soot-forming sulfur dioxide by more than 70 percent.

"Many of them are super old. They've either got to be brought up to code, fixed with the best available technology, or close them down," said Sen. Barbara Boxer, D-Calif., who heads the Senate Environment and Public Works Committee. "You can't keep on going."

The impact is greatest in the Midwest and in the coal belt _ Kentucky, West Virginia and Virginia _ where dozens of units probably will be retired.

Coal "is the fuel that is local to this area," said Leonard Hopkins, the fuel and compliance manager for the Southern Illinois Power Cooperative, which serves rural electric customers in 25 counties in the state. "We are scrambling to find ways to comply."

His options: switch to a lower sulfur coal, install additional pollution controls or retire the oldest boiler and buy cheaper power from elsewhere.

For many of the country's oldest coal-fired plants, retirement is the cheapest option. "It is more expensive to retrofit these plants than retire them and build new generation," said Chris Whelan, spokeswoman for Kentucky Utilities, which announced in September that it was retiring three coal-fired power plants in the state. The plants, which came on line in 1947, 1962 and 1950, employ 204 people.

Whelan said the company is "going to do everything we can to reallocate the work" by shifting employees to a new gas-fired power plant.

In some places, a job at the power plant is the best thing going. Thirty people work at the Central Electric Power Cooperative plant in Chamois, Mo., where EPA regulations have put the plant in danger of shutting down. Some employees are looking to see if there are other power plants where they could find work.

"We always knew there was a chance we could get shut down," said Robert Skaggs, who has worked at the 50-year-old power plant for 10 years and is also an alderman in the town of 400. "It's pretty obvious. Our plant is an old plant."

Chamois Mayor Jim Wright saw the sewing factory leave and doesn't understand why coal has to do the same. "Coal's coal. If you are going to dig and ship it to China, you might as well burn it here," he said.

Electricity bills are also a concern. Kentucky Utilities expects its customers to see as much as a 14 percent rate increase to make up for the $800 million it is spending to replace what will be retired, and the $1.1 billion it plans to spend on anti-pollution upgrades. Other power companies have applied to recoup the cost of retrofits or of building new gas-fired power plants. The EPA estimates that industry will spend $11 billion complying with the two rules by 2016.

For others, the biggest issue with plant retirements is the loss of property taxes. As plants wind down and close, their assessed value drops, reducing what they pay to local governments.

In Salem, Mass., Dominion plans to retire two units at the Salem Harbor Station later this year, a move that could halve the plant's workforce in a town famous for its 17th century witch trials and where the major business is tourism. The loss of its 50-year-old power plant poses two dilemmas: how to replace its biggest taxpayer and what to do with the 60 acres of waterfront property when the plant is gone.

"It's not like losing a Dunkin' Donuts," said Mayor Kim Driscoll, noting that attractions such as Baltimore's Inner Harbor took decades to redevelop from abandoned industrial property.

For the next five years, Salem will make up for Dominion's dwindling $4.75 million tax bill with state money, but after that the future is unclear.

"It's a big chunk of change when you're looking at we still have the same number of kids in school, we still have the same number of calls for police and fire, we have the same number of parks and resources that need to be maintained and kept up," Driscoll said. "That's not to say there aren't folks locally that are happy with the fact that a coal-based plant won't be here forever. There are certainly folks here that see it as a way for Salem to flourish in other ways."


EPA Ponders Expanded Regulatory Power In Name of 'Sustainable Development'

The U.S. Environmental Protection Agency wants to change how it analyzes problems and makes decisions, in a way that would give it vastly expanded power to regulate businesses, communities and ecosystems in the name of "sustainable development," the centerpiece of a global United Nations conference slated for Rio de Janeiro next June.

The major focus of the EPA thinking is a weighty study the agency commissioned last year from the National Academies of Science. Published in August, the study, entitled "Sustainability and the U.S. EPA," cost nearly $700,000 and involved a team of a dozen outside experts and about half as many National Academies staff.

Its aim: how to integrate sustainability "as one of the key drivers within the regulatory responsibilities of EPA." The panel who wrote the study declares part of its job to be "providing guidance to EPA on how it might implement its existing statutory authority to contribute more fully to a more sustainable-development trajectory for the United States." Or, in other words, how to use existing laws to new ends.

According to the Academies, the sustainability study "both incorporates and goes beyond an approach based on assessing and managing the risks posed by pollutants that has largely shaped environmental policy since the 1980s."

It is already known in EPA circles as the "Green Book," and is frequently compared by insiders to the "Red Book," a study on using risk management techniques to guide evaluation of carcinogenic chemicals that the agency touts as the basis of its overall approach to environmental issues for the past 30 years.

At the time that the "Green Book" study was commissioned, in August, 2010, EPA Administrator Lisa Jackson termed it "the next phase of environmental protection," and asserted that it will be "fundamental to the future of the EPA."

Jackson compared the new approach, it would articulate to "the difference between treating disease and pursuing wellness." It was, she said, "a new opportunity to show how environmentally protective and sustainable we can be," and would affect "every aspect" of EPA's work.

According to the study itself, the adoption of the new "sustainability framework" will make the EPA more "anticipatory" in its approach to environmental issues, broaden its focus to include both social and economic as well as environmental "pillars," and "strengthen EPA as an organization and a leader in the nation's progress toward a sustainable future."

Whatever EPA does with its suggestions, the study emphasizes, will be "discretionary." But the study urges EPA to "create a new culture among all EPA employees," and hire an array of new experts in order to bring the sustainability focus to every corner of the agency and its operations. Changes will move faster "as EPA's intentions and goals in sustainability become clear to employees," the study says.

The National Academies and the EPA held a meeting last week in Washington to begin public discussion of the study.

Even as it begins to go public, EPA, which has come under renewed fire for its recent rulings on new auto emissions standards and limits on coal-fueled power plant emissions, is being determinedly low-key about the study.

Initially questioned about the document by Fox News weeks ago, an EPA spokesman eventually declared that "we are currently reviewing the recommendations and have not yet made any decisions on implementation." During the deliberations, he said, "the agency will seek a wide range of perspectives on the recommendations from the business community, non-governmental organizations, the scientific community, and others."

The spokesman also said that EPA had "no current plans" for the so-called "Rio + 20" environmental summit next summer "that pertains to the Green Book's recommendations."

The U.N. summit meeting, however, is mentioned in the Green Book itself as an instance where "sustainability is gaining increasing recognition as a useful framework for addressing otherwise intractable problems. The framework can be applied at any scale of governance, in nearly any situation, and anywhere in the world."

When it comes to applying the framework via EPA, the study says it is likely to happen only "over time." The Red Book risk assessment approach now in use, it notes, "was not immediately adopted within EPA or elsewhere. It required several years for its general acceptance at EPA and its diffusion to state and local agencies."

What is "sustainability" in the first place? That is a question the study ducks, noting that it is only advising EPA on how to bring it within the agency's canon.

The experts take their definition from an Obama Administration executive order of October, 2009, entitled Federal Leadership in Environmental, Energy and Economic Performance. It defines sustainability in sweeping fashion as the ability "to create and maintain conditions, under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic, and other requirements of present and future generations."

The study specifically notes that "although addressing economic issues is not a core part of EPA's mission, it is explicitly part of the definition of sustainability."

The experience of the European Union is deemed "particularly relevant" to achieving the sustainability goal.

That European strategy involves a virtually all-encompassing regulatory vision. The study notes that its priorities include "climate change and clean energy; sustainable transport; sustainable consumption and production; conservation and management of natural resources; public health; social inclusion, demography, and migration; and global poverty and sustainable development challenges."

In an American context, the study says sustainable development "raises questions that are not fully or directly addressed in U.S. law or policy." Among them: "how to define and control unsustainable patterns of production and consumption and how to encourage the development of sustainable communities, biodiversity protection, clean energy, environmentally sustainable economic development, and climate change controls."

The study notes that sustainable development is "broader than the sum of U.S. environmental and conservation laws." It adds that "a great deal more needs to be done to achieve sustainability in the United States."

The experts say they found the legal authority for EPA to foster sustainable development without further congressional approval in the wording of the National Environmental Policy Act of 1969, or NEPA. The study says the law, the cornerstone of U.S. environmental policy, declared that the "continuing policy of the Federal Government" is to "create and maintain conditions, under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic, and other requirements of present and future generations."

(In fact, the study quotes selectively from that portion of NEPA. What that section of the Act says in full is that "it is the continuing policy of the Federal Government, in cooperation with State and local governments, and other concerned public and private organizations, to use all practicable means and measures, including financial and technical assistance, in a manner calculated to foster and promote the general welfare, to create and maintain conditions under which man and nature can exist in productive harmony, and fulfill the social, economic, and other requirements of present and future generations of Americans.)

What ends that tacit authority should be used for are far less clear, because the study asserts that they need to be made up and codified as EPA goes along.

"EPA needs to formally develop and specify its vision for sustainability," the study says. "Vision, in the sense discussed here, is a future state that EPA is trying to reach or is trying to help the country or the world to reach."

The study offers up new tools for EPA to do the job. As opposed to environmental impact assessment, the study encourages the use of "sustainability impact assessment" in the evaluation of the hundreds and thousands of projects that come under EPA scrutiny to see whether they are moving in the proper direction

"Environmental impact assessment tends to focus primarily on the projected environmental effects of a particular action and alternatives to that action," the study says. Sustainability impact assessment examines "the probable effects of a particular project or proposal on the social, environmental, and economic pillars of sustainability"-a greatly expanded approach.

One outcome: "The culture change being proposed here will require EPA to conduct an expanding number of assessments."

As a result, "The agency can become more anticipatory, making greater use of new science and of forecasting."

The catch, the study recognizes, is that under the new approach the EPA becomes more involved than ever in predicting the future.

"Forecasting is unavoidable when dealing with sustainability, but our ability to do forecasting is limited," the document says.

One forecast it is safe to make: the study shows whatever else the new sustainability mission does for EPA, it aims to be a much, much more important-and powerful-- federal agency than it is, even now.


Is Global Warming Really Harming Africa's Sahel Region?

Dubious Warmist "science" again

Global warming activists are sounding four-alarm fire bells over a new study claiming global warming is causing drought and killing trees in the Sahel region of sub-Saharan Africa. Much like previous claims that have fallen by the wayside, the notion that global warming is devastating the Sahel is unlikely to stand the dual tests of time and scientific scrutiny.

According to the new study, a rise in temperatures and a decline in precipitation during the 20th century reduced tree densities in the Sahel by approximately 18 percent from 1954 through 2002. Lead author Patrick Gonzalez says in a press release accompanying the study, "Rainfall in the Sahel has dropped 20-30 percent in the 20th century."

Lead author Gonzalez is also a lead author for the United Nations Intergovernmental Panel on Climate Change (IPCC), whose funding and very existence are dependent on the assertion that humans are causing a global warming crisis. Moreover, IPCC is on record claiming global warming is causing an increase in drought, so having a new study claiming global warming is causing drought and related problems in Africa's Sahel region bolsters the shared interests of Gonzalez and IPCC.

Turning to the science, assertions that global warming is causing drought and tree deaths in the Sahel is surprising news to many scientists and Sahel observers. The Sahel is a relatively narrow band of land stretching east-west across the African continent at the southern edge of the Sahara Desert. Contrary to what Gonzalez reports in his new study, many studies have documented improving conditions in the Sahel as the earth has warmed.

"The southern Saharan desert is in retreat, making farming viable again in what were some of the most arid parts of Africa," New Scientist reported in 2002. "Burkina Faso, one of the West African countries devastated by drought and advancing deserts 20 years ago, is growing so much greener that families who fled to wetter coastal regions are starting to go home."

An "analysis of satellite images completed this summer reveals that dunes are retreating right across the Sahel region on the southern edge of the Sahara desert," New Scientist explained. "Vegetation is ousting sand across a swathe of land stretching from Mauritania on the shores of the Atlantic to Eritrea 6000 kilometres away on the Red Sea coast. Nor is it just a short-term trend. Analysts say the gradual greening has been happening since the mid-1980s."

"There are more trees for firewood and more grassland for livestock. And a survey among farmers shows a 70 per cent increase in yields of local cereals such as sorghum and millet in one province in recent years," New Scientist added.

These trends have continued throughout the past decade. In 2009 scientists at Boston University used satellite data to study African vegetation patterns since the mid-1990s. As reported by BBC News, "satellite images from the last 15 years do seem to show a recovery of vegetation in the Southern Sahara."

"The broader picture is reinforced by studies carried out in the Namib Desert in Namibia," BBC News added. "This is a region with an average rainfall of just 12 millimetres per year - what scientists call `hyper-arid'. Scientists have been measuring rainfall here for the last 60 years. Last year the local research centre, called Gobabeb, measured 80mm of rain."

Scientists at Brown University and the University of Minnesota-Duluth confirmed a longer term improvement in African soil moisture. After studying African drought patterns since the 1400s, the scientists reported in January 2007 in the peer-reviewed science journal Geology that Africa is "experiencing an unusually prolonged period of stable, wet conditions in comparison to previous centuries of the past millennium."

Moreover, "the patterns and variability of twentieth-century rainfall in central Africa have been unusually conducive to human welfare in the context of the past 1400 yr," the scientists explained.

The same patterns are occurring globally. Analyzing satellite imagery that has been available since 1982, scientists reported in a 2003 peer-reviewed study in Science, "We present a global investigation of vegetation responses to climatic changes by analyzing 18 years (1982 to 1999) of both climatic data and satellite observations of vegetation activity. Our results indicate that global changes in climate have eased several critical climatic constraints to plant growth, such that net primary production increased 6% (3.4 petagrams of carbon over 18 years) globally."

With so many studies and data indicating global warming is benefiting soil moisture, plant growth and forest expansion in the Sahel region, Africa as a whole and globally, the new assertion that global warming is causing a climate crisis in the Sahel is speculative and controversial at best.


Another Sweet deal for Buffett – Who pays? You do!

by Bruce Krasting

Yesterday, First Solar (FSLR) announced that it had sold its interests in a big solar project called Topaz. The buyer was MidAmerican Energy Holdings, a subsidiary of Berkshire Hathaway. So Warren B. is behind the transaction. I think he got another sweetheart deal. This time, it’s the taxpayers who will be making Buffett richer.

The transaction is between two companies. As a result there has been little disclosure of the actual terms and conditions. The following is my thinking on what is behind the transaction. If I have it wrong, the nice folks from Omaha can send me a note and I’ll publish their response.

There are a number of angles to consider in this story. I’ll outline a few and try to tie them together.

The Topaz solar project is in San Lois Obispo, California. Construction began a month ago, and will not be completed until 2015. The facility is designed to produce 550MW of energy. The cost per MW of these types of facilities is between $3mm and $4mm per MW. Using the mid point of $3.5mm you get an estimated cost of construction of $1.925 billion. Add in another $75mm of soft costs and the total should come to $2 billion.

Bloomberg confirms my estimate on the completion costs of Topaz with this headline.

Buffett has purchased the rights to build a solar farm. The money he is putting up will be the construction costs over the next four years. First Solar will get some consideration as it has absorbed all the front-end costs, but it would be a mistake to assume that FSLR is getting anything close to $2B from Buffet. (Neither of the press releases from the companies mentions cash consideration.)

Buffett’s only condition to the deal is that the Power Purchase Agreement ("PPA") that Topaz has previously entered into is affirmed to Berkshire’s lawyer’s satisfaction. This is a critical part of the deal.

California’s monster electric utility, Pacific Gas & Electric (PGE), has entered into a 25 year PPA with Topaz. With PGE taking all of the power from Topaz, the risks in the deal fall sharply. The output of Topaz has already been successfully monetized. All that needs be done is complete the construction and then let the sun shine.

It’s important to understand that Uncle Warren has a seat at this table because the Department of Energy failed to approve a big loan to Topaz prior to 9/30/2011 (the deadline to get federal subsidies). The DOE did substantial work before nixing the deal. This PDF link to the DOE shows just how much had been accomplished prior to 9/30. (How much did this report cost the DOE/us? Many millions.) All of the necessary approvals and engineering work had been completed. Construction of these solar farms is not all that complicated once the approvals and site work has been signed off on. Buffet got a deal that was teed up and ready to go. Construction commenced a month ago. Warren bought into a deal in the 11th hour. He got a shovel ready investment. He has very little risk at this point.

When Topaz is completed, energy will be produced. Pursuant to the PPA Topaz/Buffet will receive checks monthly from PGE for the next 25 years. That stream of revenue is assured. PGE is a single A. Its long-term debt yields are in the mid 4% range. I’m certain that Buffet got a better yield than that. But the yield is not what brought Buffet into the deal. It was taxes and his desire to avoid them that got this deal inked. Again, that Bloomberg Headline:

It's clear that as part of the deal, Buffett got the tax breaks associated with Topaz. The federal tax subsidies for solar construction belong to Buffett. The numbers are huge.

Once completed, the owners of a solar farm get one of two massive incentive payments:

1) The owner gets a cash grant equal to 30% of the construction cost, or;

2) The owner gets a break on their federal taxes equal to (get this) 100% of the cost of the project. This “Bonus tax deduction” can be used to reduce federal taxes in the year that that the project is first completed.

Berkshire Hathaway paid 29% taxes in 2010. This would imply that it would opt for the cash payment of 30% ($600MM!). But BRK is actually faced with a statutory tax rate of 35%. Therefore the value of the tax reduction could be as high as $700mm. (Warren can engineer any income necessary to max out the tax deduction.)

The PPA with PGE will return all of Buffett’s $2B of investment plus a return of at least 5%. But when you add into the calculation that in four years Buffett gets a mega tax-break the implied returns soar. I did an IRR assuming a 2015 construction completion, $2b cost and a 25-year payback. It comes to a return of 15 -17% pa. This is a terrific return from what is functionally an A risk.

This monster result is exclusively the result of the tax breaks Buffet will enjoy. In other words, “you” are making Warren richer.


As I indicated, the PPA with PGE is central to Buffett’s investment. It’s important to understand why PGE has stepped up to facilitate Topaz. California (and 30 other states) have passed laws that mandate that electric utilities MUST produce or acquire a percentage of their electricity from alternative sources. In California. Executive order S-14-08 mandates that 30% of all power sold in California must come from alternative sources by the years 2020. This means that PGE is in a bind. It HAS to have alternative energy or it can’t grow. So PGE came into the Topaz deal desperate for a supply of power that did not come from fossil fuels. Topaz solved (in part) PGE’s problems.

There is one technical aspect to the Buffet/Topaz deal that I don’t quite understand. The rules on the tax breaks/rebate are very clear. Not less than 5% of construction must have been completed by 9/30/2011 in order to qualify for the subsidies. As I have indicated construction of Topaz did not commence until November. It would appear that the requirements for the subsidies has not been met. The possibility exists that the DOE agreed to allow for the subsidy and waived the 9/30 deadline. Another possibility is that the DOE gave credit toward the 5% completion by allowing for the pre-construction soft costs of the project. If it is the latter, I’m confused. Other projects that I’m aware of did not get credit for pre-construction soft costs. One additional possibility is a waiver of the completion requirements was granted, AKA "Side Deal".

When the DOE money did not come through, it must have been a big blow to the White House. Topaz was a big prize for them. I wonder if Obama called his pal Buffett and asked for a "fix". Warren B. delivered. But, as usual, he charged a pound of flesh. Obama got what he wanted. He avoided another solar disaster when WB stepped in.


-Buffett gets another sweetheart deal that makes him richer.

-PGE gets a long-term supply of alternative energy that allows them to grow for a few more decades.

-First Solar gets out of a huge headache. It gets get to sell solar panels to Topaz.

-The citizens of California that will use this power will get nothing. They will continue to pay the highest rates for electricity in the country.

-The US tax payers foot the bill for another $600 - $700mm. That's the "Vig" for Warren. Those taxpayers also get nothing in return.



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1 comment:

slktac said...

It seems Mr. Biegler may be convinced he understands human behaviour, but his math skills are lacking. Receiving $120 in a month versus $100 up front is not a 240% return. It's only a 240% return if you get $120 every month for a year. And that wasn't the deal. It's a 20% return, which is not bad, but it's no where near where Mr. Biegler's math put it. I hope his math in calculating climate change is not so very flawed.