'Googling's' Still a Funny Word

I was googling myself over lunchbreak today (an activity engaged in about once/week. Yeah, I'm that narcissistic). I found two things of note. The first you don't care about: UM published the energy sustainability report I helped write last year:

Energy Phase I

What's also sweetness is this little diddy:
Apparently Washburn published a picture of the Model UN gang back in 2006 with the caption Members of the Washburn University Model UN Team Jump for Joy in Tiananmen Square. Because nothing screams 'WE SHOULD CELEBRATE GOOD TIMES AT THIS EXACT SPOT!' like Tiananmen Square. And no, white boy can't jump. My air is merely a camera illusion.

Environmental(ist-induced) Disasters

Unintended consequences are a wonderful source of intrigue and entertainment to me. I absolutely love them. At night, we cuddle up (we alternate big spoon) and I whisper sweet nothings into their ear. I’ve got a thing for the study of unintended consequences.

In the realm of environmental policy, we saw a cap-and-trade measure* implemented under Bush I to reduce SOx emissions actually increase the usage of older, inefficient, and highly polluting plants than would have otherwise occurred in the free market. This was because older plants were grandfathered in, and did not have to be compliant with the new rules – only new plants did. This made new plants comparatively more expensive under the regulated system, even though they would have been cleaner. Although we benefitted long-term, the short-term result was actually more pollution.

While a reasonable person could have guessed this would have been the case, not all policymakers are reasonable. It’s relevant because pushback against nuclear power is occurring in both the United States and abroad (think Germany) following the horrific events in Japan. As can be expected, the immediate pushback has been to make new construction of nuclear power more difficult.

There are two problems with this – one specific to the nuclear industry, and the other for the energy sector as a whole. For nuclear power, it would be one thing if this were to cause us to start shutting down nuclear plants. But aside from New York Governor Cuomo’s push to shut down Indian Point (long a goal of his), I’m not hearing much push for this – more attention is being focused on moving away from constructing new nuclear power. However, if we make it more difficult to build new plants, we’re left with the crappy, unsafe ones. This is the exact opposite we want. The safest plants will always be new ones built by engineers privy to materials and information not available 40 or 50 years ago.

The second item to consider is that if we do start phasing out these old plants because we don’t trust them, how do we replace the lost electricity production? NIMBYism has prevented us from building wind turbines, coal-fired plants, dams, large-scale solar, and just about any other power production source you can think of. The outcome of this situation is more expensive energy, which kills economic growth. Uber-environmentalists may get excited about this, but they fail to consider that our replacement power is going to be coming from those old, nasty coal-fired plants and current peaker plants. This would also reduce the reserves that can be brought online in the event of increased demand, resulting in blackouts and their associated dangers (think Enron’s manipulations of the California energy market the impacts on the elderly stuck in unairconditioned apartments once the power goes out). That’s how unintended consequences work.

Full Disclosure: despite Brian Adornato’s attempts to dissuade my position, I want some more nuclear up in this bitch.

*For platitudinal conservatives, I hope this information doesn’t make your head explode. Yes, cap-and-trade was implemented in the early 1990s to reduce sulfur emissions from coal burning power plants under a Republican President by enforcing the EPA’s Clean Air Act. The final cost was ten times less than industry estimated it would be, and we made leaps and bounds in reducing acid rain while achieving millions of dollars in health care costs savings by reducing the incidences of asthma, bronchitis, and other respiratory diseases. Yeah, that actually happened.

Why the US Chamber of Commerce (Should) Support Clean Tech

Inconsistent tax policies are bad for business growth. This is a regular contention, explaining frustration when state governments provide tax breaks one year and revoke them the next. An uncertain business climate isn't good for encouraging investment. The transitive connection is that any economic uncertainty hampers business growth, ranging from serious debates over minimum wage increases to energy costs.

This creates a fascinating argument for increasing renewable energy development in the utility sector. According to the NY Times, wind energy development this year has dropped 72% from 2009. Renewable energy costs continue to drop, but the decrease in demand for fossil fuels during the recession has caused coal, oil, and gas prices to drop faster. However, once the economy begins growing again, we expect fossil fuel prices to reverse trend and escalate.

Reliance on natural gas and coal will always portend varying energy price inputs. This is particularly true for natural gas - coal is a more stable commodity. Therefore, coal would theoretically produce a better business climate. Yet renewable energy options provide even greater stability (wind turbines always cost the same amount to spin).

Following this logic, clean energy should enhance GDP growth, ceteris paribus. We can accept this if renewable energy costs are, on average, the same as that from coal or gas over time, because they provide more consistency. There should also be a comparative advantage if wind energy is slightly more expensive than the average cost of fossil fuel energy, because it's still providing that consistent climate that business investors love. The question is, how much more expensive before this is no longer the case? 3¢ per kWh? 1¢? So low that, although existent, it is negligible for all but the most energy intensive industries?

We know that fossil fuel scarcity will continue pushing coal and gas prices up over time. We also know that technological breakthroughs will continue to bend the cost curve of clean tech development down. So as clean and dirty options become increasingly cost competitive, the attractiveness of providing consistent input prices should push the case for wind, solar, and other options over the top for the business community. The caveat here is the necessity of foresight. Wind power is still more expensive to development today. The question is whether this justifies not planning for tomorrow.

James McMurtry - We Can't Make It Here (Anymore)

Electricity usage exhibits a massive demand curve, peaking in the afternoon and sloping down at night. The peaking plants used to produce afternoon power are highly inefficient to operate (see graph), and drive up your utility bill. Although electrical bills reflect the average price of production, peak power really skews this calculation. Thus, programs and policies such as smart metering are gradually gaining support as governments look for solutions to smooth the natural demand curve.

There are some really cool things you can do with smart metering. I even wrote a policy proposition paper over smart meters to land my current job. Ironically, I'd like to see smart metering rendered useless.

My approach to solving issues of demand curve requires a technological leap or two, but isn't that far off. As energy storage systems (batteries, flywheels, pump storage, etc.) become more efficient, you can (economically) store more energy to release during peak demand hours. Then you can smooth the supply curve and produce at a constant level all day long. At four in the morning power plants would produce excess that is stored. At four in the afternoon electricity is underproduced, but the excess is then released into the system.

This makes electricity really cheap because crappy peaker plants are phased out. As a result, we get to keep more energy-intensive industries at home. As the U.S. postures closer to a tariff tit-for-tat with China, we might even regain some lost manufacturing such as steel production. Making tangible things domestically again would be really, really sweet. Additionally, more efficient energy storage solves problems of intermittency with renewables and makes the hippies happy.

Cheaper electricity, economic development, facilitation of clean energy, and awesomely huge flywheels across the nation. Furthermore, the prospect of smoothing production without screwing with demand minimizes deadweight losses. These are things you can't argue with. The title of this entry is one of my top 5 favorite songs. Even if you're not a fan of Americana, it's hard to argue with the greatness of this joint.



Look How Much Peaking Power Costs In The Summer!

















Graph stolen from: 'Demand Side Management,' Energy User News, August 2004, Volume 29, No. 8

You're Invited!

Dear President Barack Obama,

First, I would like to congratulate you on choosing the University of Michigan to provide the commencement address to the class of 2010. (You may think it odd for me to be congratulating you on this decision, but I believe all smart choices should be commended.) As a graduating Master of Public Policy Student at the Ford School of Public Policy, you should know that I'm totally stoked about your arrival - even if we do share our differences on both policy approaches and methods of governance.

As you are likely well aware, John F. Kennedy once used the stairs of the Michigan Student Union to outline his vision of the Peace Corps to the world. We boast a proud, progressive history here that captures the American Dream while ushering in bold new ideas to make this nation even greater. Commencement addresses can be an excellent platform to reveal grand visions that produce laudable fruition, e.g., the Marshall Plan, and high expectations are set for the plan you will provide to over 100,000 onlookers. *Spoiler Alert*: Does our potential to become America's Clean Energy Hub have a role in the inspiration you hope to instill in us?

Additionally, I would like to take this time to formerly extend an invitation to celebrate the graduation of the Class of 2010 at Das Pink Haus. The residence of 902 Brown is a mere two blocks from the stadium, greatly reducing your travel time. During our time together you will find the bathrooms clean, the furniture comfortable, and the space spacious. It is occupied by masters students at the Ford School of Public Policy, and includes many a loyal supporter. Drinks we be on the house, for your money will be no good here (unless, of course, you don't mind printing a little more to help out some guys graduating with pesky student loans). In return for your visit, we promise impartial feedback on the new plan you will introduce on May 1. Economic, statistical, cultural, and other analysis is assured from some of the best future minds in the business. A personal concentration in the nexus between the environment and energy systems enhances my personal excitement regarding your proposal for a new generation of sustainable energy systems (sorry if I'm dictating content too much here).

We'd like to keep the event low-key, so try to invite too many friends over; Carol Browner and a couple others are free to stop by, but they're gonna have to chip in $5 for a plastic cup. I know you're an extremely busy man responsible for fixing a legacy of problems caused by past and present forces, so you needn't respond immediately to this invite. However, an RSVP (including regrets) by April would be much appreciated so we can determine what to do with roommate Jason Arredondo (he's an entrenched member of the Chicago political machine, and would be no good to have around you). If you have any other questions, or need me to text presidential convoy instructions, please don't hesitate to contact me. My number is (785) 580-XXXX. It's easiest to reach me in the morning, but I can take a call in class as long as I don't miss too much lecture. Good luck putting GHG emissions back on the table, and I hope to hear from you soon.

Sincerely,

Dave Thoman

P.S. Tell Bob Gates he also drinks for free.