Thanks to the Colorado Springs Gazette for carrying my op-ed in which I encourage U.S. leadership in technology development through the U.S. Department of Energy’s Coal FIRST initiative.
Missed this interesting article in Morning Consult first published on December 9 of last year. It provides a summary of the Global CCS Institute’s annual global status report on carbon capture technologies. Some highlights:
- Nineteen operating, large-scale CCS projects currently dot the globe, 10 of which are in the United States;
- More than 25 million metric tons of CO2 were stored over the year through CCS;
- The year also marked the launch of the Gorgon project off Australia’s coast which, once fully operational, is expected to store 3.4 to 4 million metric tons of carbon annually, making it the largest dedicated geological storage facility to date;
- In terms of capture and storage capacity, the pipeline for CCS projects worldwide ticked up again in 2019 by 37 percent from 2017, continuing a growth trend since that date after seven years of decline that the report attributes to the global financial crisis, which resulted in market uncertainty and reduced CCS investments;
- To date, there are at least 42 CCS facilities in the United States have been completed or are in operation, construction or advanced development, including pilots and test centers, according to the institute. Those projects span enhanced oil recovery, enhanced coal bed methane recovery, dedicated geological storage and other projects.
This is good news because fossil fuels continue to be a major provider of energy worldwide. We need these advanced technologies to allow fossil fuels to provide reliable and affordable energy into the future.
Real Clear Energy carries an article by Samuel Davis, Jr. (Chairman of the APGA Board of Directors), in which he argues that Natural gas bans leading to forced electrification are bad public policy. This new energy monopoly will force homeowners and businesses to forgo their preferred energy source and settle for costlier, less reliable electricity.
Over at Real Clear Energy, Jude Clemente has this post discussing the decision in the court case that ExxonMobil did not deceive or mislead investors over climate change impacts. There, the New York Attorney General had sued the oil and gas giant, alleging the company had misled investors over the true cost of climate change.
“The Office of the Attorney General failed to prove, by a preponderance of the evidence, that ExxonMobil made any material misstatements or omissions about its practices and procedures that misled any reasonable investor,” Judge Barry Ostrager of the trial-level state Supreme Court wrote in his ruling.
“The office of the Attorney General produced no testimony from any investor who claimed to have been misled by any disclosure, even though the Office of the Attorney General had previously represented it would call such individuals as trial witnesses,” he added.
One of Clemente’s themes is that all of these climate change cases are frivolous and a tremendous waste of taxpayer dollars. Agreed. But even more importantly, he reminds us just how important oil and gas are to us:
The hollowness of these climate cases is really as obvious as it seems. ExxonMobil and the other producers aren’t the oil and gas users: we are. Oil, for instance, is literally the basis of globalization, the sine qua non of our increasingly connected world. Oil and its petrochemicals are ingrained in basically everything that we do, the foundation of over 6,000 products that we use everyday. Most ironically, oil is an essential component of the manufacturing processes to create, transport, and install renewable energy systems.
Gas will supply 40% of U.S. electricity this year, up from 20% a decade ago. And not just the backup for intermittent wind and solar power, gas is expected to easily add the most new generation in the years ahead. “10 ‘Reality Check’ Problems That Must Be Addressed By Opponents Of Coal, Oil And Natural Gas.” As a cleaner fuel with less CO2 and criteria emissions, our shift to gas is specifically cited by the International Energy Agency as the reason why the U.S. is lowering emissions faster than any other nation ever – “in the history of energy.”
Our love affair with their indispensable products will continue to give oil and gas companies the ultimate “social license to operate:”
- Every day, Americans use 410 million gallons of oil-based gasoline
- Every day, Americans use 170 million gallons of oil-based diesel fuel
- Every day, Americans use 75 million gallons of oil-based jet fuel
- Every day, Americans use 90 billion cubic feet of natural gas
Looking forward, the U.S. Department of Energy couldn’t be clearer: oil and gas will still supply the bulk of all U.S. energy supply through 2050 – as far out as it currently models. Further, just looking through the 2020s, the International Energy Agency has the U.S. accounting for 85% of new oil and 35% of new gas globally. Already the largest oil and gas producer, we are set to become the largest exporter of these essential fuels within a few years. Those seeking expansionism and oil and gas hegemony know this of course, and they are doing all that they can to derail the age of U.S. Energy Dominance: “Intelligence: Putin is Funding the Anti-Fracking Campaign.”
Indeed, those seeking to damage the U.S. oil and gas industry with frivolous lawsuits aren’t just hurting Americans they’re doing the bidding of our adversaries.
In RealClearEnergy, William Murray explains how the region’s anti-pipeline stance causes price spikes and helps Russia.
In the history of prophecy, only two revelations can be made with perfect accuracy: Winter is coming (not just for “Game of Thrones” fans in 2019), and New England energy prices will spike when it gets cold.
The reason energy prices are so easy to forecast in New England is simple: Hyper-localism and enviro-ideology have blocked construction of several needed natural gas pipelines into the region in the past decade, leaving it the only part of the country that has constrained supplies of natural gas.
While the winter so far has been relatively mild, meteorologists are looking at February as a time when severe winter weather will start to hit hard. If and when this happens, demand for heat will spike, and scarcity pricing will ensue for both heating fuel and electricity. Last January, during a weather pattern affectionately known as a “winter bomb cyclone,” energy prices in parts of New England spiked more than 400 percent.
How does this help Russia? Murray explains:
Usually the response from politicians on energy prices has been to complain about price-gouging and capitalist pig-dog oil companies. This year, however, governors from Massachusetts and the other five New England states — Connecticut, Rhode Island, New Hampshire, Vermont and Maine — are trying something different: They’re asking Congress to grant the region an exemption to a 99-year-old shipping law — the Jones Act — so that cheap natural gas can be moved by ship from Texas and Louisiana to Boston.
If you’re saying to yourself, “Why can’t it be shipped already?” then you’re asking the right question. It turns out the Jones Act blocks shipments between U.S. ports from ships that aren’t built in the United States or owned by U.S. citizens. While this wasn’t an issue during the mid-20th century, over the past several decades the commercial ship-building industry in the United States has become completely uncompetitive. As a result, the Massachusetts Department of Energy Resources now complains that there are “no Jones Act-qualified carriers” to ship gas to the Northeast, and that even if there were, the shipping costs are 3-5 times higher than those of foreign vessels.
This unfortunate set of circumstances means that when natural gas supplies run short, New England receives most of its liquefied natural gas (LNG) from Trinidad and Tobago and sometimes from Russia — yes that Russia! Through the first nine months of 2018, the facility at Everett, Massachusetts, was forced to import 48 billion cubic feet of natural gas, enough to power 240,000 homes in the region for a year, from other countries.
Given the current gridlock in Washington DC, I wouldn’t hold my breath that Congress will take any action to solve the problem.
One of the articles highlighted in my “In The News Today….” post for today is from S&P Global, which reports that Longview Power LLC, the company behind one of the newest and most efficient coal-fired power plants in the U.S., is seeking investors to help make the plant part of a diversified energy complex with new solar and natural gas facilities just outside of Morgantown, W.Va.
Here are the details from author Taylor Kuykendall:
The power generator is planning to build a 1,200-MW combined-cycle natural gas power plant and a 50-MW solar facility adjacent to its 700-MW Longview Power advanced supercritical coal-fired power plant, Longview President and CEO Jeffery Keffer said in a Jan. 16 interview. The company expects that the new gas plant will cost about $930 million, while the solar project will cost about $70 million. Longview engaged global investment bank Houlihan Lokey Inc. to help find new investors and raise capital for a complex it is calling the Longview Power Clean Energy Center.
The power generator, built in late 2011, originally supplied its own coal from an adjacent coal mine. However, that became increasingly costly, and the plant now sources its coal from a nearby longwall mine another company operates. With its coal mining property and the current power generation site, Longview already has the land it needs for the new project. The company said it also has rights of way for gas pipelines and has initiated the interconnection and permitting process for the new solar and gas assets.”We see in this marketplace a need for other advanced, highly modern energy generation from other types of fuel and matching that up with what we have got here at the coal plant,” Keffer said. “The marketplace is changing. We’ve always got to be adjusting. All the electricity generators in this country need to be adjusting, and there’s not one answer.”
Existing infrastructure makes the project “very developable,” Longview COO Steve Nelson said, lowering the risk of development and construction usually associated with a new facility. The facilities are being targeted for completion by late 2022 or early 2023, Nelson said.
“What we’re trying to do is get the very best technology situated on top of the resources, and it is centrally located in North America’s best market,” Nelson said. “At the end of the day, we don’t see ourselves as a coal-fired generation service supplier. We just see this overall as a responsible and viable business decision to diversify our fuel supply and the type of electricity product we’re going to offer.”
The additional facilities would provide increased revenue and provide a “natural hedge” for a company now operating only a single coal plant. So far, unlike many of the older coal plants in the region, Longview’s coal facility has proved to be a workhorse in a market that has seen more coal plant retirements than success stories in recent years.
Longview is the newest coal plant operating in the PJM Interconnection and is the most efficient coal-fired power plant in North America, the company said in its publications about the plant. Its average heat rate of 8,718 kWh translates to lower costs, allowing the plant to dispatch before all the other fossil fuel plants in the region, including newer combined-cycle power plants and older coal plants, Keffer said.
“You hear all the time about coal being resilient and needed for baseload,” Keffer said. “Well, the economics for these older coal plants isn’t demonstrating that anymore, but we are.”
Market forces will continue to drive the retirement of “older, antiquated plants” in the region, Keffer predicted. Meanwhile, the rise of gas generation capacity is consuming more of the fuel and could put pressure on the recent trend of lower-cost natural gas. Solar will be a useful supplement to Longview’s power generation, he said, but at the same time, a 17% availability factor in the area means it is “not going to keep the lights on and the heat on in the middle of the winter.”
“Our energy generation, our electricity system really needs an all-of-the-above approach,” Keffer said. “Those pushing on one or another — either preserving very aged and antiquated plants that are costly or those that believe the answer is all renewables — are missing the boat in terms of making sure we have resilient and dependable energy.”
This is a great concept–combining new and super-efficient coal plants with other sources of energy to create a diverse energy center. I hope that more companies consider this option for providing reliable and affordable energy.
An interesting piece appears in Real Clear Energy today. In the piece, Guy F. Caruso, former head of the U.S. Energy Information Administration, writes about 3 principles should guide the new FERC appointee (for more information on the vacancy, read here).
The piece is decidedly pro-natural gas, and while I agree that natural gas is an important piece in our energy puzzle, I do have some issues with his conclusions.
Now, let’s address his 3 points. First, Mr. Caruso says that FERC should not pick winners and losers in the energy market, and that a new appointee should oppose any initiative to compensate coal and nuclear power plants for providing grid resilience. Coal and nuclear plants have fuel stored at the plant sites, and thus are not subject to transportation issues. This is a big advantage for providing grid reliability. One of the drawbacks for using natural gas for generating electricity is that there is very little gas storage on site, so the plants are reliant on receiving a steady supply from pipelines. The trouble is, gas plants are not always able to get the natural gas they need to generate electricity, especially in the winter. Gas plants compete with homeowners for the fuel, which homeowners use to heat their homes. And, when the temperature is really cold, not as much gas can move through the pipelines. Gas prices can spike when it gets really cold (see Polar Vortex Exposes Natural Gas Supply Problem).
Second, he says that the U.S. must fully recognize the value of natural gas. By that, he means coal and nuclear plants should be closed down and more gas plants should be built. He also advocates for building more gas pipelines. At this point in his article, he chides me for my “criticism” of natural gas:
This should call into question views recently expressed by former Missouri utility regulator Terry Jarrett, who argues that fuel constraints and price spikes should make us skeptical about natural gas. Instead of propping up coal, as Jarrett suggests, the better approach is to invest in natural gas pipelines.
The problem is, there is lots of opposition to building new pipelines. In “Gas Pipeline Plans Face Stiff Opposition,” The Hartford Courant highlights the sometimes stiff opposition to new pipelines in New England, where natural gas is the major producer of electricity. New natural gas power plants won’t work very well if there aren’t enough pipelines to support them.
Third, he advocates for increased exporting of natural gas. I’m all for that.
I don’t consider it criticism when I point out some of the disadvantages of relying too heavily on natural gas to produce electricity. All of the sources we use today–coal, nuclear, natural gas, hydro, renewables–have their pros and cons, and we shouldn’t rely too heavily on any one of them as the exclusive solution to our energy needs.
All in all, Mr. Caruso has written a very thoughtful piece. I agree with a lot of what he says. We need natural gas, but I just don’t believe that it can shoulder the entire burden of producing our electricity reliably and affordably.
According to a piece in E&E News, The limitations of America’s reliance on switching from coal to natural gas to lower emissions came into focus in 2018. Here’s the conundrum:
Power companies’ reliance on gas is a double-edged sword for climate hawks. When a natural gas plant replaces a coal facility, there is a climate benefit. Gas plants emit about half of what’s puffed into the air by their coal counterparts. EIA estimates that coal-to-gas switching is responsible for two-thirds of power-sector emissions reductions between 2005 and 2017. Renewables account for the remaining third.
But when gas plants run harder to meet an increase in electricity demand, emissions go up.
That’s what happened in 2018, when a combination of weather events and a hot economy prompted the first increase in electricity demand in years. Power-sector emissions rose 1.9 percent as a result, as gas plants ran more to satisfy robust demand for electricity.
The “expert” relied on to explain this seems to fault utilities for this “problem”:
“This isn’t the huge transition that is necessary to meet the climate challenge, and I do think utilities are a big part of it,” said Leah Stokes, a professor who studies power-sector and political trends at the University of California, Santa Barbara. “It’s easier to build a natural gas plant, fits with business as usual, and they can ramp it on and off.”
Blaming the utilities is misplaced for several reasons. This is because utilities all across the United States are adding more renewables, and have been doing so for the past several years. Renewables’ share of U.S. energy consumption has now doubled since 2008, as coal’s share crashed in the same period from 48% to 30%.
But a bigger reason that utilities are not to blame is because their main responsibility is to provide reliable and affordable energy to their customers. The best way to do that at the present time is to use the old reliables–coal, natural gas, and nuclear.
We would be far better served to have an “all of the above” strategy when it comes to energy. We need all sources of generating electricity to ensure the we receive the reliable and affordable energy we need to heat and cool our homes, and power our businesses and industries. That includes the continued use of fossil fuels.
In the news today…
- The Wall Street Journal reports U.S. carbon emissions rose 3.4% in 2018, after three years of declines, as the effects of a strong economy outstripped a sharp decline in the number of power plants burning coal to generate electricity.
- The Washington Post reports that Kentucky Governor Matt Bevin is asking the Tennessee Valley Authority not to close the remaining coal-fired unit at its Paradise electricity plant.
- Utility Dive reports that FERC Commissioner Bernard McNamee will not recuse himself from FERC’s grid resilience proceeding, he said in a Monday letter to Senate Democrats, unless it comes to “closely resemble” the debate over the coal and nuclear bailout proposal he helped craft at the Department of Energy.
- Vox and Forbes report new research shows Colorado could save $2.5 billion by replacing aging coal generation with clean energy including wind, solar, energy storage, and natural gas.
- E&E Greenwire reports Governor Tom Wolf (D) is stepping up the fight against climate change and setting targets to slash Pennsylvania’s greenhouse gas emissions over the coming decades in a heavily populated and fossil-fuel-rich state.
- POLITICO Pro reports House Energy and Commerce Committee Chairman Frank Pallone (D-N.J.) on Tuesday rejected the call for Democratic energy committee members to shun contributions from fossil fuel companies and other industries as too extreme.