clean power plan

There are several articles about coal plants in Germany, it's not as straightforward as they were built to replace nukes. Here's one that seems to lay it out pretty well: The German Coal Conundrum – German Energy Transition

 

This is interesting, as only a few days ago I seem to recall you were writing about Kenneth Lay with what sounded like disapproval. At least, you wrote very colorfully of what a bad person he was, if a bit more vaguely on the exact nature of his crimes. And yet, here you seem to be referring directly to the large extraction of wealth from ratepayers that his company accomplished in the late 90s through deliberate diversion of power on the grid and carefully-timed shutdowns of peaking plants.

Mr. Lay long maintained that any talk of those (later proven) manipulations belonged in the realm of 'conspiracy theory'; the plan was to have that whole stark lesson on massive fraud in an underregulated market be somehow mistaken for impersonal economic forces working themselves out. Here you seem to be carrying his banner forward. Is that what you intended?

-Chap

 

While the CO2 reductions are at the center of all the chirping about the Energy policy, I would really welcome fewer mountains of toxic fly ash being generated by coal burning.

 

Yes that's true I think at the end of the day everyone sees that (mercury, particulates, etc etc\). Ironically it was not possible to minimize those pollutants directly via EPA, instead they had to go after CO2 which is non-toxic (except for green house effect).

My approach in the past was to argue about that other stuff, CO2 was the least of my complaints.

 

Dude think about it a moment.
I think a 20x increase in energy price is a bad thing.Yes I realize it was engineered by Enron.
How could that sentiment glorify Enron or Ken Lay ?
Now we have Enron connected Tom Steyer pushing the same buttons.
No Im not a fan of Ken Lay or Steyer.

 

Extravagant@25 there are records to examine


Rates and Chart Tables - Electricity (2000 thru 2011)


and a claim of 20X looks extravagant. Lay, having died, left any ill-gotten gains behind here on earth. I am also curious why those cannot be 'repatriated', but it has everything to do with the courts, and nothing to do with Lay.

If now, we are looking at new ways to mange CO2 and revenues, harking back to Lay is 'look, a squirrel!'

 

wjtracy, I agree that pinning any death on CO2 is iffy. The collaterals (PM2.5, SOx, NOx) are much more obvious harms now.

 

I like the CA rate data. It's amazing CA *average* electric rates are so low (15-16 cents kWhr). Most CA-folks here say that number seems too low, they are paying more like 24 cents in their Tier. Here in Va., we are getting an argument from progressives that we need to be more like CA. They are saying, CA has gone full-out on renewables and the average elec cost is only 3 cents more than Va. So I am trying to get to the bottom of it.

I know CA imports a lot of cheaper power, so if we subtracted out imports, CA elec would probably be higher in state border generation. Also there may be some error in the numbers. EIA gives similar numbers up to today, but they have a proviso that average elec rates are hard to calculate, and they say a little about how they do it.

Here is one version of EIA data:
State Electricity Profiles - Energy Information Administration

This data does not pass the "funny look test", but keep in mind this data is average residential+commercial. There is another table showing residential only. But people are showing me this data. It does not seem to jibe with what people are actually paying (eg; MA is 24 cents/kWhr anecdotal (bisco) vs. 13.8 cents/kWhr here.

 

Felt the same way at first, but after going through some utility data makes a lot more sense now. Looks like it comes down to largely municipal vs. private utility large variations and punitively progressive rates under certain utilities. The 15-16 cents/kWh residential rate you quoted may be the correct "average".

Here is what may be going on. Like myself, a disproportionate number of folks with PHEVs/BEVs live in a house (and therefore can plug-in at home). That means significantly more square footage to heat and cool than the average residence. That pushes people like myself easily into higher tiered rates we're it not for solar. For us in the PriusChat demographic, ~25 cents/kWh in California is probably accurate.

But on the other side, the average residence size in California and electricity needs per square foot are smaller than the national average. That means many in California are living in apartments, condos, and small homes and could be keeping mostly to the lower tiers.

Coldest areas of the U.S. have the largest homes, while the smallest homes are in milder climates
In the Midwest, where space heating accounts for half of home energy consumption, residents heat more space on average than any other part of the country. In Wisconsin, for example, the average heated square footage is nearly 2,100 square feet. By contrast, homes tend to be smaller in parts of the country where space heating is less intense. In California, where most of the population resides in mild or hot climate regions, the average heated square footage is 1,180.
Residential Energy Consumption Survey (RECS) - Analysis & Projections - U.S. Energy Information Administration (EIA)

And then there are very large municipalities like LADWP (Los Angeles) whose's top tiers are below the the State average. If I am reading this right, LADWP tops out at only $14 cents/kWh!
https://www.ladwp.com/ladwp/faces/wcnav_externalId/a-fr-elect-rate

Then there are municipalities like SMUD (Sacramento) who brag:
SMUD's rates are among the lowest in California, and on average are more than 27 percent lower than those of neighboring PG&E.
smud.org | Rate comparison

Then there is San Diego Gas and Electric which has rates almost double SMUD!

That means either the private utilities like PG$E are soaking us, and/or some city municipalities are subsidized by others in the State that are not in these municipalities. Smells like a rat any way you cut it.

 

....also natural gas is cheap right now by your home heat numbers, so to the extent CA is balance nat gas after renewables, that helps. Nuclear prices are also way down in the later years of plant life, not including decommissioning costs coming up. Even before CPP was adopted,we have been at a minimum cost in electricity due to reliance on old infrastructure, and the cheapness of nat gas for new facilities.

 

Cheap for now indeed. So much of this natural gas has come online in recent years by way of shale gas. Most of the energy economists seem to feel this resource will peak and diminish at a much faster rate than oil. Who knows if technology will be able to keep up as it has done remarkably well with oil extraction. If not, electricity rates may not look as rosy in the future.

 

Referring to the natural gas component only. Professor James Hamilton (UCSD Professor of Economics) is a specialist in the energy sector, particularly fossil fuels. His blog econbrowser.com often links to and also brings energy analyst bloggers in the comments section and other energy economists.

For example, a quick search pulls up the parallel shale oil:
"...among the challenges to making ongoing profits at this game are the very rapid rates at which production flows decline after peaking..."
Making money from the Eagle Ford Shale | Econbrowser

Future production from U.S. shale or tight oil | Econbrowser

Lots of the details are in the blogging comments that I am not sure the search engine will capture.


And from Nature (just for you, from University of Texas at Austin):

...To provide rigorous and transparent forecasts of shale-gas production, a team of a dozen geoscientists, petroleum engineers and economists at the University of Texas at Austin has spent more than three years on a systematic set of studies of the major shale plays. The research was funded by a US$1.5-million grant from the Alfred P. Sloan Foundation in New York City, and has been appearing gradually in academic journals1, 2, 3, 4, 5 and conference presentations. That work is the “most authoritative” in this area so far, says Weijermars.

If natural-gas prices were to follow the scenario that the EIA used in its 2014 annual report, the Texas team forecasts that production from the big four plays would peak in 2020, and decline from then on...

Natural gas: The fracking fallacy : Nature News & Comment


Agree that electricity rates are much more stable than oil and hence gasoline prices and that there is little reason to believe this will change drastically in the future, but perhaps become a bit more volatile with electricity. Yes, hydro, nuclear, solar, wind, and geothermal should continue to blunt price shifts significantly.

 

My feeling we are in a new paradigm of cheaper nat gas (long term) and oil. Everyone keeps saying we need to assume future cost escalation of nat gas, but that was the old rule-of-thumb last 40 years that got proven wrong. Anyways that's me.

>>The Big News here in Virginia we are taking the boxing gloves off. The downward revised CO2 target we got from EPA Monday, some say, is already where we planned to be with some new natural gas plants already planned. Some people say it's politics as our Gov Terry McAuliffe is well connected and he is a very dynamic negotiator. I caution that I think the Va. CO2 target still could be very challenging, but I seem to be standing alone at the moment. So the final CPP plan is much less "draconian" for Va. so some of my feelings about how hard it was to meet the targets must be toned down. Maybe some states still looking at a very difficult task. I heard TX also got some relief.

When the Press said on Sunday the targets were even getting harder (32% vs. 30%) I thought Va. was really in trouble. But in the end we got relief.

 

This is regarding the much newer shale gas, not decades old conventional gas. Oil and gas fields follow predictable production/extinction curves. For conventional oil and natural gas, they are much slower to rise and fall than shale oil or gas.

Most of our new natural gas supplies and the current reason for low prices, is shale gas. I'm not suggesting a peaking of natural gas production soon for the U.S.. It might be, but there are many unknowns here and the days of cheap natural gas could fade away much sooner than advanced resource depletion.

Yes, the peak conventional oil and natural gas doomsday sayers have been proven wrong time and time again. Who knows if this will happen with shale gas/oil vs. any potential future extraction techniques.

 

Proven reserves and economic feasibility of extraction is important and covered and this is closely related to my point, not arguing there. But as noted, the only point I was making was that "much of this natural gas has come online in recent years by way of shale gas. Most of the energy economists seem to feel this resource will peak and diminish at a much faster rate than oil."

Such as in the second article referenced: "once output from a typical Bakken well begins to decline, within 24 months its production flow is down to 1/5 the level achieved at its peak." This is much faster than a conventional oil or natural gas well. And the article ties that in to the conclusion that "this is an expensive way to try to get oil, and there may have been some overselling of how much these fields are actually going to deliver."

Agree that marginal production costs are important and drive consumer prices. We're in a lot of uncharted territory. I personally put more weight in the academic economists (as opposed to corporate analysts) as they are less likely to have a product to up sell, investors to please, lobbying special interests, etc.

Agree on the second part, but on the first part, that changed very recently.

U.S. Field Production of Crude Oil (Thousand Barrels)

U.S. peak oil production seemed to have peaked in 1970 and few thought that peak would ever again be surpassed (self included). But as the EIA data shows, the peak was again matched in just the last few months. It is stalled now as all of the new U.S. production was unconventional oil that is more expensive to extract and now struggling at the current $44-45 per barrel WTI price.

Shale natural gas and oil follow similar more rapid extinction curves. Certainly, if proven reserves of these continue to increase unexpectedly and if technology continues to surprise us with how affordably these resources can be extracted, combined with world improvements in efficiency softening demand, cheap natural gas and/or oil could be around for a very long time.

If natural gas prices return to and stay at 2008 prices, this will slowly work its way into the consumer price of electricity. I would also be fine with this if that's what was required to remove coal from the electricity mix. The external costs of coal (CO2, particulate matter, SOx, NOx, etc.) make coal much more expensive than is seen in the electricity price. We just need to price these things right up front as we pay for it sooner or later with health and environmental ill effects.

 

Perhaps there is a hang-up in terms and reading into the unstated.

There are no claims about economists who “think US natural gas proven reserves will drop faster than oil”. There was not discussion on my part about “proven reserves” and that is why I previously mentioned I was not arguing about them. Although not explicitly stated, this is a reference to production only. And the production only referred to natural gas in the United States, not oil as explained below. Reserves, even “proven reserves” are educated guesses and sometimes wrong, still the initial point was not to about reserves. Production, however, is precisely measured after-the-fact.

“Peak oil” or peak gas, is a reference to production, not reserves. There is and hopefully always will be a higher amount of oil and natural gas in the crust of the earth than we will ever extract due to cost, environmental, and health issues. Certainly there are different levels of reserves within this, such as proven reserves…

Also, to clarify things, this was not a reference specifically to U.S. natural gas and oil. Oil is traded worldwide with relatively great efficiency, and adjusting for oil quality (sweet/sour/light/heavy), it doesn't matter a great deal where produced when it comes to market price. Natural gas on the other hand is much cheaper in the U.S. than other places mostly because of the recent shale/fracking produced abundance here and costs and political barriers of exporting it. So it has to be noted that U.S. natural gas prices are largely set by the U.S. market, whereas oil/gasoline is set by the worldwide market.

Look at the EIA link from the previous post - not sure why you still feel U.S. oil peaked. A few years ago, looking at the data, one would have made a good guess that U.S. oil peaked in 1970, but we know now it did not. It hit the same peak again just a few months ago due to shale oil. If oil prices go up again soon (seems doubtful) the U.S. will probably set yet another significantly higher peak at some time. But even when U.S. production eventually lessens, world oil production and prices should not fall back to the pre-shale baseline, but rather to world conventional oil trends.

Looking at the slopes of growth and diminishment of conventional oil production in the U.S. and other nations, it takes decades of fall away on each side of the peak. Now look at natural gas production (U.S. Natural Gas Marketed Production (Million Cubic Feet)) in the U.S. where we are clearly the leaders in natural gas fracking. From 2006, production of natural gas has grown 2/3. Yes, crude oil in the U.S. has doubled during that time (shale oil) when it peaked again just recently.

Either way, energy economists such as Hamilton note that the back side of oil and natural gas production curves at a field or national level should mirror largely what happened on the front side. Therefore, shale gas production should fade away at the back end similar to the degree of its front end. This is steeper than the many decades of conventional oil and indeed closer to shale oil.

So to clarify and restate the earlier statement in question with a little more detail: natural gas, which is almost entirely regionally produced and consumed in the United States should obtain peak output (production - not reserves) and diminish at a much faster rate than world oil, the later of which is almost entirely traded globally.