Vol. V, No. 18
Senators, Utilities, and Environmentalists To Hold Closed-Door Meetings
Electric utility executives and environmentalists are set to begin a series of closed-door stakeholder meetings this month on proposed revisions to the Clean Air Act. According to John Fialka of The Wall Street Journal (September 4, 2001), the meetings will be sponsored by Senators Robert Smith (R-NH) and James Jeffords (I-VT) and will be conducted by the Senate Environment and Public Works Committee, which Jeffords chairs. Congressional staff members and federal regulators will observe the discussions.
Most of the utilities reportedly invited to participate by the committee appear to favor regulation of carbon dioxide emissions, which they believe will boost their corporate profits. According to the Journal, the utilities invited include Enron, El Paso Energy, Calpine, Trigen, and NiSource.
These meetings will focus on two legislative proposals to reform the Clean Air Act. The first, developed by EPA Administrator Christie Todd Whitman, features a three-pollutant approach to reducing emissions of nitrogen oxides, sulfur dioxide, and mercury from coal-fired power plants. These reductions would be phased in by 2012. Although this plan is being marketed by EPA, it is being criticized by officials at the Department of Energy - who assert that it would cause plant closures, service disruptions, and higher electricity prices for consumers.
EPA’s plan would also give power companies greater leeway in making emission reductions. Instead of imposing individual targets for each plant owned by a company, the new legislation would create a single overall target for each pollutant and enable firms to choose how to meet it. In addition, it would harmonize the agency’s regional haze, toxic emissions, and pollution-control equipment programs - ensuring that plants are not subjected to conflicting and contradictory regulations. Finally, it would scrap the agency’s new source review program, which requires companies to install new pollution-control equipment at plants whenever capacity is extended or major renovations are made.
The other proposal on the agenda is the “Clean Power Act of 2001”, a bill sponsored by Jeffords and other Senators, which includes carbon dioxide regulation as part of the multi-pollutant approach.
German Industry Opposes EU Emissions Trading Plan
The European Commission is working on a draft emissions trading plan that it hopes to have ready by the end of the year. The plan would be a mandatory, company-based system. It also poses the possibility that companies that participate in emissions trading would become exempt from Germany’s existing eco-tax, while those that do not would have their taxes increased.
The German energy industry, however, is opposed to the plan. “We have been formally involved (in talks), but none of the industry’s comments have been taken into account in the EU’s draft directive on emission trading,” said Eberhard Meller, head of the association of German power suppliers, VDEW.
German industry prefers a voluntary, country-based scheme that would offer greater incentives to participate. Moreover, the Kyoto Protocol calls for national, not company-based caps. “Emissions trading at a company level would ruin the Kyoto Protocol in fact, since international industries fear they will have to comply with state-of-the-art technologies, or be punished,” said Joachim Hein, of the industrial consumers group, DBI (Reuters, August 29, 2001).
Wind Power Cheaper than Coal?
“The cost of wind energy is now less than that of coal.” With that startling declaration, Mark Z. Jacobson and Gilbert M. Masters, with the Department of Civil Environmental Engineering at Stanford University, conclude that the U.S. could meet its Kyoto target by replacing 59 percent of coal energy with between 214,000 and 236,000 wind turbines (Science, August 24, 2001).
How do they come to this conclusion? They point out that the direct cost of energy from a new coal power plant is about 3.5 to 4 cents per kilowatt-hour (kWh). But, claim the authors, there are many costs associated with coal use that are not accounted for.
“Coal-mine dust kills 2,000 U.S. miners yearly, and since 1973, the federal black lung-disease benefits program has cost $35 billion,” say Jacobson and Masters. “Coal emissions also cause acid deposition, smog, visibility degradation, and global warming; its particles increase asthma, respiratory and cardiovascular disease, and mortality.” Including these costs, say the authors, increases the cost of coal to 5.5 to 8.3 cents per kWh.
Wind power, on the other hand, only costs 3 to 4 cents per kWh. There is no mention of externality costs associated with wind power, however. Many of the costs that are attributed to coal are dubious, to say the least. Linking asthma to particulate pollution seems weak, since asthma rates have been going up even while particulate concentrations have fallen.
Moreover, most experts attribute the rise in asthma to higher levels of indoor air pollution. The harmful effects of acid deposition have been greatly exaggerated, and there is no evidence of any costs associated with higher carbon dioxide levels or global warming.
Glen Schleede, president of Energy Market and Policy Analysis, Inc., has heavily criticized the report. He notes several external costs associated with wind power that are ignored by Jacobson and Masters, including scenery impairment, noise, property value losses, the need for massive infrastructure investment to transport electricity from remote wind farms, and the provision of backup power to alleviate intermittency problems associated with wind power.
Moreover, the assumptions behind the analysis are wrong. Schleede points out, for example, that Jacobson and Masters assume that windmills have a capacity factor of between 35.8 and 39.6 percent. In reality, capacity factors are much smaller. Schleede assumes a 30 percent capacity factor (which is still higher than that currently seen in practice) to determine that it would take as many as 366,000 wind turbines to replace 59 percent of coal power.
Finding suitable sites for so many windmills (which are 300 ft. tall) would pose serious difficulties. Schleede’s full critique, “Science article is wrong in claiming that wind energy is cheaper then coal,” can be found at www.heartland.org.
Speaking of costs, a proposed wind farm on a remote hillside in northeast Scotland has met with significant resistance. According to the September 1 issue of the Independent (London), “Accusations of foul play, misinformation, environmental destruction and dirty tricks have abounded in a fight over the siting of 21 turbines, each as large as a 30-story block of flats.” Worries about the adverse effects on local property values are a major concern to property owners in the area.
Renewable Energy Can’t Compete in UK
Britain’s energy regulator, Ofgem, has told the government that more subsidies may be required for renewable energy if it is to meet the stringent greenhouse gas targets it has set for the country, according to the Financial Times (September 1, 2001). Britain has set a goal of reducing greenhouse gas emissions by 23 percent below 1990 levels by 2010, and it wants half of those reductions to come through the use of renewable energy.
After implementing the New Electricity Trading Arrangements (NETA) five months ago, there has been a drop in wholesale electricity prices of 20 to 25 percent for large power generators and a drop of 17 percent for smaller generators including renewable energy generators.
Producers of renewable energy claim that the new arrangement has harmed them disproportionately relative to the rest of the electric power industry, mainly because they are unable to predict power output due to the intermittency problems that plague renewable energy. NETA “requires power producers to forecast output four hours in advance, and to buy any shortfall at premium prices.”
Ofgem’s chief executive, Callum McCarthy, is unapologetic. “Put simply, reliable plant commands a premium under NETA, as the majority of electricity customers want a reliable source of supply and the electricity system needs to be kept in balance to maintain the security and quality of supply” (Daily Telegraph, September 1, 2001).
“If for wider environmental reasons the government wishes to encourage forms of renewable generation whose output is less predictable or less reliable,” said McCarthy, it should “consider additional support to these types of generators” (Financial Times).
A Greener Planet
A new study slated to appear in the September 16 issue of the Journal of Geophysical Research-Atmospheres has found that warmer temperatures and elevated levels of carbon dioxide have led to a greening of the northern hemisphere. Contrary to conventional wisdom, which portrays global warming as an unmitigated disaster, this new study confirms what numerous other studies have found; that many benefits may result from a warmer planet.
A press release from the American Geophysical Union explains that, “Researchers using satellite data have confirmed that plant life above 40 degrees north latitude (New York, Madrid, Ankara, Beijing) has been growing more vigorously since 1981 due to rising temperatures and buildup of greenhouse gases, and Eurasia seems to be greening more than North America, as existing vegetation is more lush for longer periods of time” (www.enn.com).
One of the researchers, Ranga Myneni, of Boston University, “suggested that these results are indicative of a greener greenhouse. ‘This is an important finding because of possible implications to the global carbon cycle,’ he said…. Further, Myneni said, under the Kyoto Protocol, most of the developed countries in the north can use certain vegetation carbon sinks to meet their greenhouse gas emissions reduction commitments. If the northern forests are greening they may already be absorbing carbon dioxide. Myneni said, ‘As to how much and for how long, that needs more research.’”
Warming and Cooling in Alaska
Global warming alarmists have repeatedly pointed to warmer temperatures in Alaska as a major sign that significant global warming has already arrived. Recent research, however, has found that Alaska has undergone similar periods of warming before man began to burn fossil fuels.
In a study in the August 21 issue of the Proceedings of the National Academy of Sciences, Dr. Feng Sheng Hu, a professor of plant biology and geology at the University if Illinois, and his co-authors, constructed a continuous 2,000-year temperature record of the area by analyzing sediment samples from Farewell Lake, near the northwest foothills of the Alaska Range. What they found was that there were two periods of warm climatic conditions that occurred in A.D. 0-300 and 850-1200, which were also characterized by dryer than normal conditions.
An article about the study noted that Dr. Hu and postdoctoral associate Will Turner did a follow up study that found that forest fires were more abundant during the Little Ice Age than during warming periods, contradicting global warming predictions (www.news.uiuc.edu/).
• The Los Angeles Times (September 1, 2001) reports that the San Fernando Valley is experiencing its coolest summer since 1987. According to Tim McClung, a Weather Service meteorologist, “The average temperature in downtown Los Angeles in July was 71 degrees, 3.9 degrees below the normal average of 74.9. The average August was 72 degrees, 4 degrees below the average of 76.”
THE COOLER HEADS COALITION
Alexis de Tocqueville Institution
Americans for Tax Reform
American Legislative Exchange Council
American Policy Center
Association of Concerned Taxpayers
Center for Security Policy
Citizens for a Sound Economy
Committee for a Constructive Tomorrow
Competitive Enterprise Institute
Defenders of Property Rights
Frontiers of Freedom
George C. Marshall Institute
National Center for Policy Analysis
National Center for Public Policy Research
Pacific Research Institute
Small Business Survival Committee