Sunday, March 23, 2014
European governments rip up renewable contracts
Governments across Europe, regretting the over-generous deals doled out to the renewable energy sector, have begun reneging on them. To slow ruinous power bills hikes, governments are unilaterally rewriting contracts and clawing back unseemly profits.
In Italy, one of Europe’s largest economies and one that lavished billions in subsidies on the renewable sector, the government in 2013 applied its so-called “Robin Hood tax” to renewable energy producers. Under the new rule, renewable energy producers with more than €3 million in revenue and income greater than €300,000 must now pay a tax of 10.5%.
That follows a 2012 move to charge all solar producers a five cent tax per kilowatt hour on all self-consumed energy. The government also told solar producers that it would stop taking their power – and would offer no compensation – when their output overwhelms the system.
The result of these and other changes, says the solar industry, has been a surge in bankruptcies and a massive decrease in solar investment.
In Belgium – where both regional and federal bodies hand out renewable subsidies – a number of retroactive changes have capped the largesse renewable producers once received. In one region the price for “green certificates” – which producers received for renewable energy – was slashed by 79%. The government original committed to buy green certificates at a benchmarked price for 20 years, then cut it to 10 years.
Belgium’s regulators tried to impose a fee on all energy added to the grid from small- to medium-sized solar producers. While the country’s court of appeals struck down that fee, a defiant regional government plans to reintroduce it next year, forcing all solar producers to pay an annual fee that varies with the power they pump into the grid. Various municipalities, meanwhile, are introducing taxes on new and existing wind turbines.
As in Italy, Belgium’s renewable sector in the county has gone dark –“imploded” in the view of a solar industry publication. Many companies shrank or went bankrupt.
In France the government last year cut by 20% the “guaranteed” rate offered to all solar producers, and retroactively applied it to projects connected to the grid in the previous three months. The government is also considering ending an 11% tax break on solar energy producers.
Perhaps the most dramatic moves occurred in Spain, for years the poster child for those touting a transition to green energy. Since 2000, Spain has given renewable producers $41-billion more for their power than it has fetched on the open market. To recover those subsidies, the Spanish government recently killed its Feed In Tariff (FIT) program for renewables, which paid them an outlandishly high guaranteed price for their power, replacing it with the market price for their power plus a subsidy deemed more “reasonable.” Companies’ profits are now capped at a 7.4% return, following which they must then sell their power at market rates. That measure is retroactive, with renewable energy producers who got too fat off their profits now being starved until they reach the 7.4% cap.
For example, if a company spent $100-million on a solar installation in Spain and was posting a return of 14%, or $14-million, annually on that investment, then the government would cut it off from subsidies until its total return – starting from when it was first built – fell to 7.4%, or $7.4 million, a year.
Wind projects built before 2005 will no longer receive any form of subsidy – a move a wind energy trade group called a “sacking” of the sector that will see more than a third of wind producers lose their subsidy.
The fallout in Spain was immediate. Its solar sector, which once employed 60,000 workers, now employs 5,000. The wind sector is estimated to have laid off 20,000 workers. Ikea – the Swedish furniture retailer that became enamoured of renewables – announced it was cutting its losses and abandoning a solar plant it had built in Spain. Investment in the sector also collapsed. In 2011, Spain attracted $10 billion in solar investment. In 2013, the level of investment dropped by almost 90%.
Spain’s Supreme Court offered no sympathy to the solar industry, in ruling against its argument that the government’s retroactive changes were wrong. “The evolution of the energy sector … was putting the financial sustainability of the electricity system at risk,” the court decided, adding that the companies “do not have a right [to expect the government compensation regime] not to be changed.”
Europe’s renewable energy investors are facing a harsh reality – that the promises from politicians can be taken away at any moment. Canada’s renewable energy investors may soon face that same reality.
Environmental groups tell Obama natural gas exports undermine climate goals
Environmental groups fired a shot Tuesday in the growing discussion about natural gas exports as they urged President Obama to block new export terminals on climate change grounds.
The flashpoint is a $3.8 billion Dominion Resources-proposed export facility in Cove Point, Md., on the Chesapeake Bay, which the groups are rallying to prevent as a burgeoning effort to prohibit exports of fossil fuels.
"The truth is that Cove Point, like other proposed [liquefied natural gas] export terminals, will raise U.S. gas prices -- harming virtually all Americans -- while becoming a historic catalyst for more fracking across the Mid-Atlantic and triggering a huge new pulse of climate pollution," wrote the 16 groups, which included the Sierra Club, Earthjustice and Environmental Action.
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The groups demanded Obama direct the Federal Energy Regulatory Commission to perform an environmental impact statement for the project rather than the less stringent environmental assessment it decided to pursue last week.
"We call on you to reverse course on this plan and commit instead to keeping most of our nation’s fossil fuel reserves in the ground, in line with the recommendations of most of the world’s leading climate scientists," they said.
But the missive is coming amid growing Capitol Hill support for exporting natural gas for geopolitical reasons.
Republicans, with some Democrats, are pushing the Obama administration to expedite export approvals as a means to reduce Russia's grip on energy supplies in Central and Eastern Europe, a position it uses to wield political influence.
Those lawmakers have pointed to the situation in Ukraine, where the country's state of Crimea voted to join Russia over the weekend in a referendum the United States has refused to recognize. Russian President Vladimir Putin officially announced that it had annexed Crimea on Tuesday.
But export proponents argue the Energy Department's approval process is too slow. It must determine that shipments to nations lacking a free-trade agreement with the U.S. are in the public interest. It has given the OK to six such projects, with 24 pending.
Sens. Mark Warner, D-Va., and John Hoeven, R-N.D., pushed the administration Tuesday to render a decision on the outstanding applications within 60 days and expand preferable natural gas export status beyond free-trade nations, while also conducting a strategic review of U.S. energy policies and establishing a joint U.S.-European Union initiative on energy security.
"[A]cting strategically to increase our natural gas exports will weaken Putin’s grip on energy supplies for Europe and Ukraine,” Warner said. “We’re suggesting a comprehensive, bipartisan approach that will have a positive impact in the near term and the longer term on the energy security of Ukraine and the EU.”
In the House, the Energy and Commerce Committee's Subcommittee on Energy and Power is scheduled to hold a hearing next week on a bill that would immediately green-light all natural gas export applications on file at the Energy Department. The measure also would make it easier for future projects to gain approval by allowing all World Trade Organization members to go through the less-stringent review currently afforded to nations that have free-trade deals with the U.S.
Opponents of natural gas exports have argued that the U.S. won't be supplying Ukraine or the rest of Europe anytime soon, if at all. Just one U.S. export terminal is slated to go online before 2017, and even then much of the gas is likely Asia-bound, where the price spread is greatest.
Some Democrats also have suggested exports would raise domestic natural gas prices, undercutting a competitive advantage for U.S. manufacturers.
A December 2012 Energy Department-commissioned study by NERA Economic Consulting said marginal price increases would occur, but that natural gas exports were still a net winner for the economy.
Environmental groups aired the price issue in their letter, and said exports would incentivize hydraulic fracturing, or fracking, that many of them oppose.
"President Obama, exporting [liquefied natural gas] is simply a bad idea in almost every way. We again implore you to shift course on this disastrous push to frack, liquefy and export this climate-wrecking fossil fuel," they said.
Can fracking save the world?
If the early 21st century is the “golden age of gas,” as the International Energy Agency has declared, who will be its king? Until 2009, the answer seemed obvious: Russia. But a funny thing happened on the way to the “third Rome” that Russian nationalists view as their destiny. In that year, propelled by the technological innovations of hydraulic fracturing (or “fracking”) and horizontal drilling, U.S. gas production surpassed that of Russia.
As crisis erupts in the Ukraine and policymakers struggle to regain our footing amidst its geopolitical aftershocks, we can indeed be grateful that the United States has surpassed Russia as the world’s largest producer of natural gas. Though largely symbolic, observers have still noted the psychological importance that the rise of shale gas and the fall of Russia from the top of the world’s “League Table” of natural gas producers has had in the offices of Gazprom and the Kremlin. Within the worldview of Russian President Vladimir Putin's and his inner circle of KGB veterans, this sort of thing might seem to matter a great deal. Meanwhile, as U.S. leaders react to the Ukrainian crisis, the call has now gone out from both Democrats and Republicans for the U.S. to wield its “gas weapon” and commence exports to Europe immediately.
In the world of energy infrastructure, however, the pace of change moves much slower than that of a major international crisis. The first U.S. export terminal for liquified national gas (LNG) is still under construction in Sabine Pass, Louisiana, and is not scheduled to come online until late 2015. Moreover, the contracted destination for most of the currently planned U.S. exports of natural gas is Japan, where demand skyrocketed after the Fukushima disaster and the shuttering of that country's nuclear power plants. According to BP, the 2012 average price (evening out seasonal variations) per million British thermal units (Btu) of natural gas was $16.75 in Japan, more than 50 percent higher than the average German import price of $11.03 -- and more than 600 percent higher than the U.S. benchmark Henry Hub price of $2.76 in that year. Nonetheless, even though exports to Europe will not occur anytime soon (and possibly never given the prevailing market conditions), globalizing the market can't hurt over the long term.
Every cubic foot of US natural gas sold to Japan could, for example, free up another unit of gas from Qatar or the Middle East to be available for Europe to replace sources from Russia.
In the long run, it never hurts to add to supplies. In the oil market, we have already seen the advantages that fracking and other unconventional extraction methods such as oil sands have provided to the U.S. geopolitical bargaining position. Added supplies from North Dakota and Alberta, Canada have more than made up for losses in production due to sanctions on Iran and the freeze on investment in Venezuela. This has placed enormous pressure on those regimes as they face reduced export volumes without the price increases that they rely on for buying the quiescence of their populations.
Diffusion of fracking technology can also help. It would allow countries in central Europe tap their own shale gas reserves -- instead of maintaining or increasing their use of coal, including moist brown coal or lignite, which is even dirtier, more polluting, and carbon-intensive than the anthracite black coal we are accustomed to in the United States.
Finally, such diffusion is likely to make its biggest impact in the world beyond Europe. The U.S. Energy Information Administration (EIA) currently estimates that the largest reserves of shale gas deposits are in neither Europe nor the United States, but in China. This represents a tremendous opportunity. If natural gas is used to replace coal in Chinese power generation, the resulting reduction in greenhouse gas emissions would dwarf any other technologically feasible step that any single country could take.
So yes, fracking can help save the world -- so long as we are patient enough to see a decade-long process through to its end.
THE GLOBAL COOLING AWARENESS PROJECT (GCAP)
An increasing number of scientists are worried that global cooling, not warming, currently poses the greatest threat to life. To register their growing concerns, scientists are being asked to join a new campaign to help educate the public and policymakers.icebergs
At the forefront of the campaign is the Space and Science Research Corporation (SSRC) of Orlando, Florida, a leading independent US climate research company. It is the foremost institution in the United States dedicated to the analysis and planning for the next climate change - forecast to bring decades of record cold weather.
John L. Casey, SSRC President says, "The SSRC possesses the capability to conduct planning and research on how best to prepare individuals, businesses, and governments at all levels for the next climate change to a period of long lasting and potentially dangerous colder weather."
Fellow scientists, unconnected with SSRC, at Principia Scientific International (PSI) share Casey's concerns. PSI's own independent research supports the analysis that our planet appears to be entering a prolonged cooling phase not seen since the Little Ice Age (LIA), a climatically harsh era that saw untold famine and war during the 17th and 18th Centuries.
The Kerry Climate Capers
By S. Fred Singer
It looks like John Kerry’s peace efforts may not garner him a Nobel Prize—so why not try Global Warming?
“The science is unequivocal, and those who refuse to believe it are simply burying their heads in the sand. We don’t have time for a meeting anywhere of the Flat Earth Society. And in a sense, climate change can now be considered another weapon of mass destruction, perhaps the world’s most fearsome weapon of mass destruction.” – John Kerry, in Jakarta on Feb 16, 2014
Our Secretary of State, John Kerry, sometimes known as “Ketchup Kerry,” has serious ambitions for fame and fortune. Actually, he has already achieved fortune—by marrying two wealthy women, the second of which made him a billionaire—with five residences, a yacht, and a private jet. But fame has eluded him—so far. Many speculate that he is trying to get the Nobel Peace Prize, like Barack Obama and Al Gore before him—and PLO terrorist chieftain Yasser Arafat before them.
One sure way would be arranging a real and lasting Middle East peace accord between Arabs and Israelis. Good luck with that! The Palestinians’ popularly elected Hamas government, now ruling Gaza with an iron hand, has already made it crystal-clear that they do not want any kind of peace agreement. The other half of the Palestinian Authority (PA) runs the disputed West-Bank territories, which Israel captured in a defensive war in 1967. On the West Bank, there is no elected government; at least there hasn’t been one for many years. Abu Mazen (Mahmoud Abbas), whose term as president of the PA expired six years ago, does not want to risk an election, which he is sure to lose to the terrorist Hamas.
Another big hope for Kerry is to achieve a nuclear breakthrough with Iran. But such a feat is also likely to elude him, since it seems fairly certain that Iran will break any agreement in order to build a nuclear weapon.
Never discouraged, Kerry is also trying to achieve peace in what has become a civil war in Syria. Not much chance of that, either. Bashir Assad, backed by Iran and maybe Russia, will never resign as president of Syria—and the Sunni Moslem majority fighting him is unlikely to give up. These rebels feel sure that demography will win out in the end—and they draw major support from Turkey, Saudi Arabia, and Sunnis elsewhere.
But ever resourceful, Kerry has now tried a new gambit: Climate Change, formerly known simply as “Global Warming.” In a heavily publicized speech in Jakarta, Indonesia, he slammed climate skeptics, labeling them “deniers,” “shoddy scientists,” likening them to believers in a “flat earth.” For good measure, he also invoked the phony 97% consensus on climate science.
However, a survey of more than 1,800 members of the American Meteorological Society showed that less than half believe humans are the primary cause of any recent warming. Reviews of published climate papers by the Nongovernmental International Panel on Climate Change (NIPCC) report on thousands of peer-reviewed studies that contradict the alarmist global-warming narrative; the Chinese Academy of Sciences has published a condensed version of NIPCC reports. But many scientific organizations and academies are still sharply split on the issue of dangerous AGW (anthropogenic global warming).
Clearly, Kerry is aiming for the big climate meeting in Paris in 2015, which he hopes will lead to a new Kyoto Protocol. Good luck with that also! Quoting Dr Charles Battig, “the failed 2010 Kerry-Lieberman ‘American Power Act’ apparently lives on in Kerry’s psyche.” Also, Kerry seems to have forgotten, conveniently, that as a Senator in July 1997 he voted for the anti-Kyoto Byrd-Hagel Resolution. Perhaps someone should remind him.
Much has changed since 1997; but one constant is that the proponents of AGW have yet to publish any firm evidence that man-made CO2 is doing anything dangerous. They hadn’t done it in 1988 when James Hansen told a Congressional committee that we are headed to disaster; they hadn’t done it in 1997 when the Kyoto Protocol was signed by almost 200 countries (but never ratified by the US Senate); and they haven’t done it now.
So the science about global warming cannot be called “settled.” It no longer supports AGW—if indeed it ever did; in fact, there has been no significant warming trend for at least 16 years, while atmospheric carbon dioxide increased by more than 8%. Japan, India, and Russia are opposed to a new Kyoto Treaty, as are Australia and Canada. The position of China is enigmatic; apparently, Kerry takes their polite smiles for assent. But economic considerations, and the need to create more jobs, dictate further industrial expansion and use of the cheapest means to create energy: fossil fuels, primarily coal.
So how is Kerry doing these days? Not at all well on his foreign policy ventures—and his pronouncements on climate have been ridiculed by most scientists, except for confirmed “Global Warming Nazis”—to use the label invented by Dr Roy Spencer.
Kerry’s “flat earth” analogy has been neatly shot down by Professors Richard McNider and John Christy, of the University of Alabama. They point out, quite logically, that the flat earth position was held by the Establishment and that the skeptics of that time, including Pythagoras, relied on empirical evidence that the Earth was round. So Kerry has the argument just exactly 180 degrees wrong.
Kerry also raises the specter that AGW is worse than weapons of mass destruction (WMD). So how many millions has AGW killed so far? If truth be told, a slightly warmer climate (since about 1850) and more carbon dioxide in the atmosphere have promoted more productive agriculture and may have saved many millions from starvation. Besides, the Medieval Warm Period (MWP) was warmer than today and permitted a higher standard of living. It was the Little Ice Age (LIA) that killed off millions by starvation and disease during 1400-1800.
Two Democratic lawmakers are defending John Kerry’s remark likening climate change to a weapon of mass destruction. Sen. Sheldon Whitehouse (R.I.) and Rep. Henry Waxman (Calif.) said Sen. John McCain (R-Ariz.) and former Speaker Newt Gingrich (R-Ga.) were wrong to criticize Kerry’s speech on the consequences of climate change. “Secretary Kerry needs allies in this fight for the future of our planet,” the Democrats wrote in a letter to McCain and Gingrich. “History will not look back and fault him for leading the charge to prevent the worst impacts of climate change while we still have time. But,” they added, “history may question why Republican leaders who were once their party’s champions on climate change fled the field at a crucial moment.” Gingrich took to Twitter and airwaves to call Kerry “delusional” and “dangerous to our safety.” McCain also faulted Kerry for comparing climate change to terrorism, poverty and epidemics, asking “on what planet does he reside?”
[Incidentally, the latest fear imagined by Global Warming Nazis is the “methane bomb.” They imagine that a warming will release billions of tons of methane from frozen tundra, and maybe even from the ocean, causing overwhelming greenhouse warming. However, we can point to the warmer MWP and the much warmer periods of 5000-8000 years ago: no such methane release was observed.]
Yet, there are plenty of controversies left. Scientific supporters of AGW are still working earnestly, trying to explain the absence of a significant warming trend of the last 16 years. In the meantime, mischief-makers, actively promoted by the White House, are trying to blame global warming for weather disasters. Good examples are the instability of the Polar Vortex that brought extremely cold weather to the US this past winter—while Obama has been trying hard to blame the California drought on AGW. In Britain, chief meteorologist Dame Julia Slingo has blamed the unusual flooding in southwestern England on AGW. Her views have been disputed by the UK Met Office; her own scientists have “hung her out to dry.”
Meanwhile, Algore is still actively promoting AGW—just to show he really earned his Nobel Peace Prize. At the 20-million-dollar home of Tom Steyer, the billionaire hedge-fund manager trying to raise 100 million dollars for AGW propaganda, Gore referred to him as “Mr. Tipping Point.” The group does not ignore extra-terrestrial concerns about Global Warming. At the recent annual UFO conference, it was announced that Aliens want a warmer planet before they will come to Earth. Apparently, they’ve forgotten the remarkable speech by the late Michael Crichton: “Aliens Cause Global Warming.”
When it comes to AGW, Kerry is as much of a clown as Gore—and so is the White House staff. The serious argument now is the one before the Supreme Court, which has to decide by July whether the EPA Endangerment Finding (EF) about CO2 can be used to effectively stop the building of new coal-fired electric plants and even shut down existing ones. The bad science of the EF will likely be rehashed by the Court, but there is a little chance of reversing its truly awful 2007 decision in Massachusetts v. EPA, which declared non-toxic and beneficent CO2 a pollutant. On the contrary, all signs point to the fulfillment of Obama’s 2008 campaign promise to make electricity prices “sky-rocket.” How sad.
Old king coal
Natural gas prices at a four-year high have utilities shifting to coal to generate 4.519 million megawatt-hours a day, the most since 2011, government data show. Within three years, coal’s share of power production could climb to 40.3 percent from about 39 percent last year, while gas’s share will probably drop to 27 percent from 27.5, the U.S. Energy Information Administration said.
An arctic blast has helped put the U.S. on pace for the coldest winter in more than 30 years through January, prompting utilities to burn more of the less expensive coal. The U.S. is poised to emit the most carbon dioxide in three years, undermining President Barack Obama’s efforts to reduce pollution and steer utilities away from the fossil fuel.
“The idea of coal disappearing is not an effective climate change policy,” said John Thompson, an analyst at the Boston-based Clean Air Task Force. “Coal use is growing.”
Thompson said implementing technology that allows utilities to capture carbon is better than trying to eliminate coal because other countries are increasing use of the fuel.
Coal on the New York Mercantile Exchange has risen 13 percent to $57.58 a ton, from its 12-month low of $50.84 on Sept. 4. Gas has surged 58 percent to $5.223 per million British thermal units. Prices reached $5.557 on Jan. 29, the highest since January 2010.
Temperatures during the U.S. heating season, which runs from November to March, have been below the 20th century average, with December coming in the coldest since 2009, according to the National Climatic Data Center in Asheville, North Carolina.
U.S. electricity output in the week ended Feb. 8 was 11 percent higher than the same week a year earlier, data from the Edison Electric Institute, a Washington-based group that represents power companies, show.
That’s helped to push gas prices up more than 50 percent from a year ago while coal prices have slipped 1.9 percent during the same period. An average U.S. natural gas plant can make a profit of $3.04 a megawatt-hour, based on March prices, compared with a profit of $31.58 for the typical coal-fired generator, data compiled by Bloomberg show.
The counter argument for coal’s rebound is that a return of mild winters combined with record gas production could knock back gas prices, making coal less competitive to burn, said Lucas Pipes, an analyst at Brean Capital LLC in New York.
Coal commanded 50 percent of total U.S. electricity. generation as recently as 2005. It sank to a record low of 37 percent in 2012 as gas prices tumbled to a 10-year low of $1.902 in April of that year.
Hydraulic fracturing, or fracking, unlocked shale deposits that previously were uneconomical to produce and helped cause a glut of gas. Mild winters in 2012 and 2013, also contributed to lower utility reliance on coal, according to Hans Daniels, executive vice president at Doyle Trading Consultants LLC, a Grand Junction, Colorado-based coal analysis company.
The utility industry’s turn away from coal swelled stockpiles above 200 million tons in 2012 for just the second time in the last 20 years, Energy Information Administration data show. Coal stocks have fallen 14 percent through October, the most recent month for which data is available, according to the government.
As utilities eat through the excess supply, they set the U.S. on a course to boost carbon dioxide emissions by 1.2 percent to the highest since 2011, the EIA said in its Feb. 11 Short-Term Energy Outlook.
Burning coal emits 205.7 pounds of carbon dioxide per million British thermal units compared with 117 pounds per million Btu for natural gas.
Obama’s Mercury and Air Toxics Standards, or MATS, will be implemented next year, forcing older plants to install technology to reduce the pollutants or retire. In his Jan. 28 State of the Union Address Obama signaled that he’s prepared to act without Congress to advance parts of his agenda and said the country has to “act with more urgency” to fight climate change.
Electricity generation contributed about 39 percent of the U.S.’s carbon dioxide emissions in 2012, government data show. Still, the country’s efforts to reduce pollution may be muted if other nation’s increase coal use, said Wyatt King, resident expert on climate and environmental issues at Washington-based Albright Stonebridge Group.
Coal is the fastest growing energy source in the world, rising 2.3 percent a year through 2018, and poised to dethrone crude oil as the largest source by 2020, the International Energy Agency said in its December Medium-Term Coal Market Report.
That’s being driven mostly by China, “where coal is powering an industrial revolution,” Laszlo Varro, head of the agency’s gas, coal and power markets, said in a Jan. 29 presentation at the Center for Strategic and International Studies in Washington. The fuel is also experiencing a resurgence in Europe as the continent’s economic woes increase its appetite for cheap electricity, he said.
“We get a sense that coal is backing natural gas out of the stack,” said Brison Bickerton, head of strategy at Freepoint Commodities LLC in Stamford, Connecticut. “Coal burn should remain on for some time. Prices are incentivizing unused coal capacity to come on and back out natural gas demand.”
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