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New Clean Coal Ad

Thank you Coen Brothers

Is Pawlenty changing his mind about energy?

In an apparent policy reversal, Minnesota state agencies told legislators that further climate change action may be unnecessary. Data have shown a drop in emissions from 2005 to 2006, and the assistant commissioner for air quality at the Minnesota Pollution Control Agency, David Thornton, and the new head of the Office for Energy Security, Bill Glahn, suggest that if that trend continues, Minnesota will meet its emission reduction goals in 2015 with no new policy actions.

This seems highly unlikely to me, and I find the suggestion disturbing.

Furthermore, they are suggesting that Big Stone II will reduce carbon emissions because it could replace two older coal plants (which won't happen), and that the only new policy suggestions from the Minnesota Climate Change Advisory Group (MCCAG) they support are eliminating the ban on new nuclear plants (which the MCCAG suggested should be studied) and implementing appliance efficiency standards.

Read more at MinnPost.com

Thanks to Keith for the heads-up.

Study evaluates clean energy technologies and declares winners

And the winner is wind! According to a study done by Mark Z. Jacobsen, a professor of civil and environmental engineering at Stanford, wind the cleanest of the "clean energy" technologies. Other winners, in order, are concentrated solar (the use of mirrors to heat a fluid), geothermal, tidal, solar photovoltaics (rooftop solar panels), wave, and hydroelectric. The losers include biofuels, nuclear, and "clean coal," which Jacobsen says are not nearly as clean as currently touted.

Not a huge surprise, but he used an apparently new method:

Jacobson has conducted the first quantitative, scientific evaluation of the proposed, major, energy-related solutions by assessing not only their potential for delivering energy for electricity and vehicles, but also their impacts on global warming, human health, energy security, water supply, space requirements, wildlife, water pollution, reliability and sustainability.

For more information, see:

Review of solutions to global warming, air pollution, and energy security
Wind, Water, and Sun Beat Biofuels, Nuclear, and Coal for Clean Energy
Stanford University Professor - Mark Z Jacobsen

Big Stone II

So I've been planning this post for a while, and during that time, the story has changed a bit....

In a somewhat unexpected move, the Minnesota PUC unanimously approved the transmission for the project on January 15. The provisions they placed on the project were:

  • Using a $26/ton carbon dioxide cost cap.
  • Using a $3,000/kw construction cost cap.
  • Adhering to the mercury, water, C-Bed, and other agreements made with the OES in the August 2007 settlement.
  • Closing Hoot Lake Plant as a coal-fired generation station no later than the end of 2018, unless it is later determined as necessary to cost-effectively meet customer needs (including environmental costs)
  • Evaluating the feasibility and prudence of building Big Stone II as ultra-super-critical rather than as a super-critical pulverized coal plant. If cost-effective, ultra-super-critical could result in an additional two percent efficiency gain. (see World Coal Institute for definitions)
  • Committing to building Big Stone II as carbon-capture retrofit-ready

So, I was disappointed in the project's progress, disappointed that the PUC is allowing it to go forward, and was prepared to post as such.

But then...

The EPA blocked it! They are questioning the permit that South Dakota gave the plant proposers last year. The EPA objects to the emission levels for sulfur dioxide and nitrous oxide, as well as the strength and appropriateness of the suggested emissions monitoring program. Thus, the plant needs a new, revised permit.

This will make the plant more expensive to build and could create problems with their recent approval of transmission from the MPUC (see construction cost cap). We'll just have to wait and see whether this determination by the EPA makes the project defunct or just prolongs the process.

But it sure is nice to have an environmentally-minded EPA again.

For more information, see:

Stop Oil Speculation Now

So I received an email today: "An open letter to all airline customers." In it, the major US airlines are alleging that $30-$60 of the cost of a barrel of oil is due to speculative costs, a price increase that occurs when speculators purchase oil only to resell it at a higher price. So they would like us, the consumers, to request that our government put a stop to this. The campaign can be found here. I don't know a whole lot about this, so I'm wondering if anyone who reads this (does anyone still read this?) knows much and could comment on the veracity of this claim as well as its implications. It seems plausible that there could be a cost increase from oil speculation. But how would you regulate it? What would a dramatically lower cost of oil do to our economy, or to the recent push to make more fuel-efficient cars, travel less, and consume less?

Tax Intl Fuel

If you are shipping a refrigerator from China to the U.S., the fuel used by the ship is not taxed. The International Herald Tribune has a story looking at international transportation.

The lack of taxes on these fuels has helped keep the cost of such shipping quite low, greatly encouraging products to travel further and further from production to consumer. The article points out that this is not always a net loss for those of concerned with using energy efficiently:

Some foods that travel long distances may actually have an environmental advantage over local products, like flowers grown in the tropics instead of in energy-hungry northern greenhouses.

Another complication is deciding how such a tax would be administered and collected - there is no authority governing all these international shippers.

Nonetheless, it strikes me that when we run into the pollution resulting from all this transportation, it should be taxed.

Big Stone II ruling out from MN Administrative Law Judges

The long awaited ruling from the Minnesota courts concerning the route permitting for transmission lines running from the Twin Cities to the Big Stone II project is out. From the ruling:    

Based upon the foregoing Conclusions, the Administrative Law Judges make the following:

RECOMMENDATION IT IS HEREBY RESPECTFULLY RECOMMENDED that:

16. The Commission GRANT the Applicants’ Petition for a Certificate of Need for the construction and operation of the Transmission Project.

17. The Commission ISSUE Routing Permits for the transmission lines (a 230 kV line from the South Dakota border to the Morris Substation and a 345 kV line from the South Dakota border to the Granite Falls Substation) along the route preferred by the Applicants and authorize construction of the lines, substations, and other associated facilities described in the applications, including a new site for the Canby Substation as described in the record.

18. The Commission consider imposing one or more of the conditions suggested by the Department.

19. The Commission consider requiring the Applicants to purchase a portion of their future energy and capacity needs from the Mesaba Project pursuant to Minn. Stat. § 216B.1694, subd. 2(a)(5).

20. The Commission find that the Final Environmental Impact Statement prepared by the Department is adequate.

Dated: August 15, 2007

_________________________
STEVE M. MIHALCHICK
Administrative Law Judge

_________________________
BARBARA L. NEILSON
Administrative Law Judge

   

More Cowbell, Not More Coal!

Kelly just emailed us to alert us to a new coal plant proposed in South Dakota for Minnesota consumers.

The proposed project is called the NextGen Energy Facility. You can see Basin Electric Power Cooperative's service area map at this link.

All of the public scoping meetings for the project's Environmental Impact Statement are scheduled to be held in South Dakota, not in the states that Basin says would be markets for the power.

Anti-wind, pro-coal

GreenJobs reports that Chairman Nick Rahall (D-WV) (hmm, I'm sure it's just coincidence that he's from coal-laden West Virginia) of the House Natural Resources Committee has introduced a new bill that is extremely hostile towards new and existing wind projects. The bill would require a cumbersome certification process by the Fish and Wildlife Service that would (in the words of the American Wind Energy Association):

Bar any new wind power project until new Fish and Wildlife Service (FWS) rules are issued – a process likely to take years – and require FWS certification of every turbine * Require all existing turbines, even small residential units, to cease operating 6 months after issuance of new FWS rules until they are “certified,” an unwieldy bureaucratic process applying to many thousands of turbines that, again, will take years * Make it a crime, punishable by a $50,000 fine or a year in jail, to construct or generate electricity from an unapproved turbine, even for home use * Undermine state and federal efforts to promote renewable electricity generation and subvert the growing movement to reduce global warming pollution * Create an unworkable bureaucracy that will delay clean, emissions-free wind energy projects throughout the U.S.

Hopefully, this bill won't go anywhere, especially in light of promises to fight global warming by the House leadership.Meanwhile, the NY Times reports there is bipartisan support for federal subsidies for coal-to-liquid fuel plants. Dick Gephardt has even been signed on as a lobbyist for Peabody Energy, a major coal producer.

Mesaba Halted?

A super quick post - word has it that the Administrative Law Judge has released findings of fact, conclusion of law, and recommendation on the potential IGCC power plant in northern Minnesota. Conclusion: not so much.

The Administrative Law Judges conclude that it is not an "Innovative Energy Project" within the meaning of Minn. Stat. §216B.1694, subd. 1. Therefore, we also conclude that Excelsior Energy is not entitled to enter into a Power Purchase Agreement (PPA) to provide baseload capacity and energy to Xcel.

Additionally,

The Administrative Law Judges conclude that neither the technology nor the Project is or is likely to be a least-cost resource. Therefore, we also conclude that the Project is not entitled to supply Xcel with at least two percent of the electric energy Xcel Energy provides to its retail customers.

The Star Tribune covered this story, noting that the PUC will decide this plant's fate in the summer.

Natural gas cartel

Marketplace of American Public Media reported that natural gas producers were meeting in the Middle East to discuss the possibility of forming a cartel akin to OPEC. This is possible in the near future as liquified natural gas (LNG) becomes more of a worldwide commodity and reserves become increasingly concentrated in the Middle East. This is bad news for consumers and also bad from the standpoint of moving to alternative fuels, as cartels like OPEC can manipulate prices and give inconsistent price signals to the market.

The US needs to consider setting a price floor on oil and also natural gas in the future, as Thomas Friedman and others have called for.

Gas Tax Increase in MN

Gas tax graphicThe Star Tribune had an article today about the legislation proposed by Sen. Steve Murphy, DFL-Red Wing, to increase sales taxes on gasoline in Minnesota. It has been inserted as part of the transportation bill being voted on by the Senate today. The proposal aims to more than double the state's gasoline tax from the current $0.20/gallon to over $0.40/gallon in 10 years.

The merits of this and increased vehicle efficiency standards have been discussed on this list in the past at:

http://energista.org/node/347

http://energista.org/node/214

While I support increasing the cost of doing business as usual as a way to influence consumer behavior I am skeptical about this proposal. First, it contains only a small funding connection to increasing viable alternatives to the behavior being disincentivised. Second, it does not contain provisions to reducing the disparate impacts on those who do not have alternative transportation modes available. For instance, rebates to offset price differentials for higher efficiency vehicles for use by small businesses and in rural areas.

Last, this bill is a huge bucket of new and increased taxes. From the article,

The bill also includes these other levies, all dedicated to roads, bridges and transit:

• Higher registration renewal fees on future new car purchases, but no increases on currently owned vehicles.

• A half-cent rise in the general sales tax in the seven-county Twin Cities area, imposed without a voter referendum, plus a $20 excise tax on new vehicle sales in the metro.

• Local-option authority for half-cent sales-tax increases in the rest of Minnesota, subject to voter approval.

• Authority for all 87 counties in the state to impose a $20-per-vehicle annual wheelage tax. Three suburban counties levied the current maximum of $5 per vehicle last year.

• Increased fees for leased vehicle registrations, license plates, titles and drivers' licenses, plus a $20 reinstatement fee for a license suspended for theft of gasoline.

I think this is ultimately makes it a very difficult bill to swallow politically. The Governor has indicated a willingness to veto increased taxes. The committee vote was split along party lines. Plus, this will make it more difficult for the DFL leadership to pull along support within their own ranks; particularly in the House.

Incidentally, the Governor's proposal is even worse. He wants to borrow more money to fund a more limited number of projects.

Republican Gov. Tim Pawlenty's own no-new-tax transportation plan calls for $1.7 billion in borrowing over 10 years to accelerate more than two dozen highway projects. The money would be paid back mostly via a transfer of existing motor vehicle sales taxes to roads and transit authorized by voters in November.

Ethanol and Coal

Using coal to produce ethanol and a really dumb idea and state policies should guard strongly against it. Though using coal makes ethanol production significantly cheaper, the environmental impact is worse than actually continuing reliance on gasoline. It increases emissions of all kinds and generally is poor for the environment.

Nonetheless, some ethanol producers in MN are moving toward coal rather than natural gas. I'm thrilled to see California using intelligent policies to blunt that trend.

California Gov. Arnold Schwarzenegger and his state's Legislature have embraced a plan to rate all motor fuels by greenhouse gas emissions over their entire life cycles, from production to transportation to ignition.

Measured that way, ethanol made from plant residue would earn an excellent rating. Ethanol from corn would do moderately well. And corn ethanol made in a coal-fired plant? That would rate poorly — even lower than ordinary gasoline, according to Schwarzenegger's office.

Using coal to produce biofuels negates the environmental reasons to embrace biofuels and, in my opinion, causes more harm than good.

Market and Coal

In a sign that the market is increasingly moving against coal and other technologies responsible for high Greenhouse Gas (GHG) emissions, TXU is being bought out and its plans to build many more coal plants have been scaled back. TXU is an energy company that serves 2.5 million customers in Texas.

If the investors succeeded in taking over TXU, Mr. Reilly said, they would commit themselves to scale back significantly on TXU’s plan to build 11 new coal plants and adhere to a strict set of environmental rules.

I have not been following this story closely, but I take it to be good news that a company looking to build more coal plants was punished by the market.

Within TXU, the controversial plan to build a raft of coal plants had become so damaging to its stock price that its board had been privately weighing a plan to scrap part of the project, said people involved in the talks, bringing the number of new plants to 5 or 6 from 11. Shareholders had sent the stock on a roller coaster ride from more than $67 a share to as low as about $53 over concerns about the risk and vast expenditure; the stock closed at $60.02 on Friday.

The article is not totally clear, but it appears that TXU will still build three coal plants and cancel plans for the other eight. Of the three plants still going forward, at least one is being fought by locals and may not be approved. As of now, this action does not seem to have impacted other utilities who still want to invest in coal facilities.

As for where TXU is going, this seems like a good start.

The group, which included Mr. Reilly, Mr. Bonderman and Frederick Goltz of Kohlberg Kravis, worked out a "10-point plan" that included a commitment by the investors to return the carbon-dioxide emissions by TXU to 1990 levels by 2020 and support a $400 million energy efficiency program.

Though I am thrilled to see the market acting on signals from people and government actions (signals pointing to a rising price to emit GHGs), we still have a lot of work to do to make government policies correctly inform the market and line up the incentives correctly.

Ethanol and Coal

Given the short-sighted and counterproductive idea of using coal to produce ethanol (rather than natural gas), I was at first horrified to read about a new ethanol plant in North Dakota which uses coal.

Then I realized it was using waste heat from the coal plant.

The ethanol plant is co-located with the 1,100 MW Coal Creek Station and will use excess heat from the adjacent power plant to process an estimated 18 million bushels of corn into 50 million gallons of fuel ethanol annually. Blue Flint may be unique in the ethanol industry in its co-location with the power plant.

While this strikes me as a good idea from Headwaters and Great River Energy, I see that they are also cooperating on a coal-to-liquids plant. Coal to liquids is awesome for the anti-oil-import crowd but a rather poor idea after factoring in the externalities of coal extraction and climate change.

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