Category Archives: Politics

Trump’s Coal Obsession
 To Force Perry, GOP
 To Abandon Free Market

So, it has come to this—Rick Perry, the man who seven years ago couldn’t remember that the Energy Department was one of the government agencies he wanted to eliminate is now essentially going to be entrusted with running the nation’s electricity grid as secretary of the very same department for the next two years.

Or, at least that is the indication from the latest memo (which can be found here) circulating around Washington in the Trump administration’s never-ending effort to rewrite the rules of capitalism, that wonderful free market enterprise the GOP has so often defended in years past. Democrats have frequently been at the receiving end of GOP barbs about the free market, with Republicans warning anyone listening that they were the only thing standing between the country and, that’s right, socialism. See Secretary Perry’s particularly relevant quote below about President Obama from 2012. Oh my, how things have changed.

I think Barack Obama is a socialist. I think he cares for his country – don’t get me wrong about that – but I think he truly misunderstands what this country was based upon, the values that America was based upon, which was free enterprise and having the ability to risk your capital and having a chance to have a return on your investment.

–Rick Perry

Anyway, the general GOP defense of the free market used to run something like this: When cheaper, better products come along, incumbent industries get hurt, some survive and evolve while others go out of business. It’s messy, but that’s what makes America great.

Well, that exact messy transition is under way now in the electric power industry, and not even a two-year grid nationalization, for that in effect is what is being considered, is going to stop it.

Renewable energy is getting cheaper almost by the day and, coupled with storage, offers the much ballyhooed “baseload” power that seems to appeal to Trump and his tag-alongs. At the same time, the administration’s own energy dominance agenda ensures that natural gas will be in plentiful supply and remain low in cost for all the existing and planned new natural gas-fired generating facilities across the country. Those facts can’t be wished away by half truths about resilience and reliability.

Continue reading Trump’s Coal Obsession
 To Force Perry, GOP
 To Abandon Free Market

Trump’s Coal Revival Nothing More Than Talk According to EIA Data

More facts showed up this week telling the same story about coal—the revival isn’t coming.

These new facts (see here for an earlier post about ‘stubborn facts’), courtesy again of the independent Energy Information Administration, show that coal production in the United States totaled 773 million short tons in 2017. This was up 6 percent from 2016, but better keep the champagne corked. The increase was due entirely to exports, a volatile market that is not conducive to long-term growth. To wit, in the five years from 2012-2016, exports swung from a high of 125.7 million short tons to a low of 60.3 million short tons.

In the vastly more important domestic market, particularly the electric power sector, which accounts for 85-90 percent of overall annual coal consumption, demand dropped, falling by a little more than 12 million tons in 2017. And those tons are never coming back: EIA’s latest Short-Term Energy Outlook (available here), its first to include projections through 2019, projects that electric power demand for coal will continue falling, dropping to 629.5 million tons that year, down from 666.4 million tons in 2017.

Continue reading Trump’s Coal Revival Nothing More Than Talk According to EIA Data

The Facts Tell The Story: Coal Comeback Is Nothing But A Trump Delusion

“Facts are stubborn things.”

John Adams, our second president, generally gets credit for this wonderful aphorism, but regardless of who was the first to say it, the observation itself is what matters: You simply cannot wish away facts. This came to mind earlier this week when I looked at the Energy Information Administration’s monthly electric power overview (which can be found here); it’s a publication that only the geekiest of energy wonks would ever read, particularly on a regular basis. However, dry as it may be, it does one thing exceedingly well: It presents facts, just as they are—not as people may want them to be.

One of the many such facts that caught my eye this month concerns electricity generation from coal, that shiny black rock that seems to be the moving force behind all the Trump administration’s energy and environmental policies. ‘The war on coal is over,’ his minions mouth repeatedly. ‘We are going to bring the jobs back,’ the president assures miners at every opportunity.

Problem is, facts are stubborn things. In the EIA review, which covers the first nine months of 2017, coal-fired electricity generation fell compared to the comparable year-earlier period. To be fair, it didn’t drop by much, sliding 1.5 percent to 919,805 thousand megawatt-hours from 934,267 thousand mwh a year ago. However, if the war is over and the jobs are coming back, then there should have been no slide at all; indeed, there should have been an increase.

The slide in coal-fired generation also pushed coal production for the sector, which accounts for the vast majority of U.S. coal consumption, down during the first nine months. Overall, just over 504 million tons of coal were used to generate electricity, down from 509 million in 2016—which was the lowest production year for the industry since 1979. Hardly the turnaround the Trump administration repeatedly trumpets.

What the administration definitely doesn’t trumpet in its incessant tweets and coal-dominated decision-making, is that during this same nine-month period, generation from non-emitting wind and solar jumped 13.6 percent, climbing to 284,584 mwh from 250,482 mwh in 2016. Combined with hydro, renewables generated just over 525,000 mwh of electricity annually for the first nine months of the year, within hailing distance of the nation’s nuclear sector, which has generated just under 600,000 mwh so far this year.

And while the administration clearly is not a fan of renewables, more growth in this sector is just around the corner. The American Wind Energy Association says 84,000 MW of wind capacity are installed across the United States, with another 25,000 MW under construction. Similarly, the Solar Energy Industries Association reports that 47,000 MW of solar capacity has been installed in the U.S., with another 21,000 MW of utility-scale solar generation currently in the construction pipeline.

As much as Trump and his backers like to blame renewables and the environmental community for the downfall of coal, the stubborn little fact is that the war, such as it was, against coal was waged, and won, by natural gas. From an expensive afterthought used largely just as a peaking resource during periods of high demand in the early 2000s, natural gas has taken ever-larger chunks of the electric generation market since then. From less than 20 percent of the total in 2001 (when coal’s share was roughly 50 percent), natural gas’ share of the market has climbed steadily, reaching 34 percent in 2016 and topping coal as the largest single source of electricity in the United States (see graphic below).

This transition, in turn, was due to another simple, stubborn fact: Huge quantities of formerly uneconomic gas supplies in the Mid-Atlantic and surrounding regions became accessible at affordable prices due to the commercialization of horizontal drilling and fracking technologies. As EIA noted earlier this year in one of its Today in Energy news stories (available here): “The increase in natural gas generation since 2005 is primarily a result of the continued cost-competitiveness of natural gas relative to coal.”

No war, no hidden agendas, just stubborn economic facts—obvious for anyone to see, provided, that is, they are willing to look.

–Dennis Wamsted

 

Corporate Green Goals
 Playing A Key Role
 In Pushing Utilities
 Toward Renewables

The Trump administration’s budget proposal for the coming year threatens to do exactly what the president promised as a candidate: eviscerate federal funding for climate change programs. The Energy Department’s highly successful renewable energy office would be particularly hard hit, with the administration’s proposal calling for a roughly 70 percent cut in funding—from just over $2 billion currently to $639 million next year. While wrong-headed, the proposals won’t slow the nation’s renewable transition, which is now being powered, to a large extent, by the corporate sector.

This change, which I discussed here, was highlighted in an interview last month by Chris Beam, the new president of American Electric Power’s Appalachian Power subsidiary, which currently gets 60 percent of its electricity from not-so-clean coal. Speaking to editors and reporters at the Charleston Gazette-Mail, Beam said: “At the end of the day, West Virginia may not require us to be clean, but our customers are.”

And that is exactly what is happening across the country, corporate customers are forcing utilities to expand their renewable energy offerings, whether that is to keep existing customers or to attract new companies into their service territories. As Beam added, according to the Gazette-Mail’s Ken Ward Jr.: “So if we want to bring in those jobs, and those are good jobs,…they [corporate customers] have requirements now, and we have to be mindful of what our customers want.”

Continue reading Corporate Green Goals
 Playing A Key Role
 In Pushing Utilities
 Toward Renewables

Trump Coal Obsession
 Largely Irrelevant
 To Electric Utility CEOs

The Trump administration’s obsession with the coal industry has driven many of its early energy and environmental policy initiatives—with the Energy Department’s thinly veiled baseload power plant review just the latest in a string of efforts to buttress the troubled sector. But none of these policies are going to change coal’s central problem: The utility industry, far and away its largest customer, is steadily moving away from the black rock. This transition won’t happen overnight, but the direction is clear, as a close review of recent utility executive statements and company publications clearly demonstrates.

Consider the message delivered by Allen Leverett, president and CEO of Milwaukee-based WEC Energy Group, in the company’s latest annual report:

                “I also believe that some form of carbon emission regulation is ultimately inevitable. As the regulation of carbon emissions takes shape, our plan is to work with our industry partners, environmental groups and the state of Wisconsin to reduce carbon dioxide emissions by approximately 40 percent below 2005 levels by 2030.

                “In 2016, about half of the electricity we delivered to our customers was derived from low- or no-carbon sources such as natural gas, nuclear fuel, wind farms and hydroelectric facilities. However, we want to continue to make progress in this area. Relatively flat electricity demand growth, coupled with natural gas and coal economics, has driven us to re-evaluate our generation portfolio. Taken as a group, I want any changes that we make to reduce costs, preserve fuel diversity and keep us on a path to reducing our carbon emissions.”

In other words, there will be no new coal generation in the WEC fleet, and the company’s reliance on the fuel, currently around 50 percent of its needs, is going to drop. In particular, the company has plans to build new natural gas-fired generation in the Upper Peninsula of Michigan and close its five-unit, 359 megawatt Presque Isle facility there, which now burns roughly 1.2 million tons of coal annually according to the company, whose two electric utility subsidiaries serve more than 1.5 million customers in Wisconsin and the UP of Michigan.

Or consider the comments made by Lynn Good, chairman, president and CEO of Duke Energy, during the Charlotte, N.C.-based company’s annual meeting earlier this month:

                “By retiring coal plants and bringing on more natural gas and renewables, we have already reduced our carbon emissions by nearly 30 percent since 2005. Today, we are among the top five companies in terms of renewable capacity, and we are committed to doing more.

                “We have set a new goal to reduce our carbon emissions by 40 percent from the 2005 level by 2030.”

Continue reading Trump Coal Obsession
 Largely Irrelevant
 To Electric Utility CEOs