Natural Gas NOW
Green political correctness is replacing business sense, ethics, morality and sound public policy in this country today, taking us into an absurd world of misplaced priorities.
The Wall Street Journal ran an article by Matt Ridley yesterday that does a phenomenal job of capsulizing the cost of green political correctness today. Entitled “Fossil Fuels Will Save the World (Really),” it eviscerates the opposition to oil and gas while presenting an optimistic perspective on our energy future if we but have the good sense to grasp what is already in our hands.
It’s what you’d expect from the author of the Rational Optimist, of course, and it builds on another wonderful book I just finished reading; The Moral Case for Fossil Fuels, by Alex Epstein. Epstein and Ridley have gotten to the root of the matter, demonstrating the need to stop accommodating green political correctness, which we do every time we apologize for fossil fuels. It’s time we asserted what should be obvious; fossil fuels have lifted us into better human lives, there are plenty of them left for the foreseeable future and the alternatives are not appealing, if we’re thinking clearly.
Ridley’s piece is particularly well-written and must be read in full, but here are a few nuggets to whet the appetite:
- In 2013, about 87% of the energy that the world consumed came from fossil fuels, a figure that—remarkably—was unchanged from 10 years before.
- [Fossil fuel development has given us] what the economic historian and philosopher Deirdre McCloskey calls the Great Enrichment. In the case of the U.S., there has been a roughly 9,000% increase in the value of goods and services available to the average American since 1800, almost all of which are made with, made of, powered by or propelled by fossil fuels.
- The collapse of the price of oil over the past six months is the result of abundance: an inevitable consequence of the high oil prices of recent years, which stimulated innovation in hydraulic fracturing, horizontal drilling, seismology and information technology.
- Wind power, for all the public money spent on its expansion, has inched up to—wait for it—1% of world energy consumption in 2013. Solar, for all the hype, has not even managed that: If we round to the nearest whole number, it accounts for 0% of world energy consumption.
- To run the U.S. economy entirely on wind would require a wind farm the size of Texas, California and New Mexico combined—backed up by gas on windless days. To power it on wood would require a forest covering two-thirds of the U.S., heavily and continually harvested.
Epstein goes deeper in his analysis and includes all sorts of charts, demonstrating the gift fossil fuels have been to human life. That, after all, should be the point, he argues, and he’s absolutely correct. We, far too often, accept the premise of green political correctness; that avoiding impact on the earth is somehow more important than the impact on human life.
It’s easy to be lulled into that nonsense as any number of regulations and environmental activist groups prove every day. It is, in fact, nearly impossible to build sewer plants today in many areas because the treated discharge might theoretically slightly lower the quality of the stream for fish while raising the quality of human life. Protecting human health today is, too often, a secondary priority, which illustrates how far we’ve gone in that direction, of course, but Epstein brings us back to reality with respect to energy at least. Here are some of the points he makes:
- Today the world uses 39% more oil, 107% more coal and 131% more natural gas than it did in 1980, much of those increases occurring in China and India. Meanwhile, the infant mortality rate in these two countries since 1970 has decreased by 70% and 58%, respectively, while global malnutrition and undernourishment have declined by 39% and 40%. Increased fossil fuel use has led to tremendous improvements in human life across the board.
- The more oil and gas we consume, the more our reserves increase. This is because increases in demand yield the human ingenuity to fill that demand, the real resource being not the fossil fuel, but our ability to extract and use it. That is why we have grown our natural gas reserves almost three times since 1980.
- As fossil fuel use has increased, pollution has decreased. Measures of air pollution, for example, indicate emissions of Carbon Monoxide, Volatile Organic Compounds, Particulate Matter, Nitrous Oxides and Sulphur Dioxide have all dropped by huge amounts since 1985, as fossil fuel use went way up.
- While CO2 emissions have gone up and atmospheric levels of CO2 have been increasing for at least 150 years, the number of climate-related deaths has decreased by 98% over the last 80 years because we’ve had the economic ability to adapt (climate and weather have actually changed very little, storm energy showing no signs of real change).
- When renewables advocates brag about Germany generating 50% of its energy from solar and wind, what they mean is that at any given moment, they can do so. They can also, at any given moment, generate 0% of Germany’s energy needs, which is why the actual generation is nowhere near 50% and that nation is increasing its coal use, significantly.
That last point, the unreliability of renewables, takes us back to the point of this post; the price of green political correctness, which is rising rapidly. This is easily demonstrated by focusing on some real life examples which I stumbled upon researching some things I wanted to add to John Holko’s excellent post of yesterday. I’m talking about the Town of Caroline, New York, which is in the Planet Ithaca orbit in Tompkins County.
Checking out the Town of Caroline website I noticed the town installed a geothermal and solar energy system in 2010. Part of the system is a continuous measuring and reporting feature, which the town publishes the data from on its website. When I went to the site, I noticed this chart, which, of course, demonstrates precisely what Epstein talks about in his book:
The pattern is also highly variable over the year, as the data for 2014 illustrates:
It’s been that way over the years, as well, with the system generating as little as 2% of annual generation in some months and up to 14% in others.
The Town of Caroline’s system, whatever value it may otherwise have, is not a reliable source of electric energy. It’s strictly supplementary. It requires backup with fossil fuels, natural gas being the best of those. Does it still make sense on that basis, though?
We find the answer to that question in a financial audit conducted in 2013 by the New York State Comptroller. The audit was obviously intended to paint a rosy picture of the venture, described as follows (emphasis added):
In 2004, Board members donated all or a portion of their income to provide a portion of the municipality’s energy needs by wind power. Shortly afterwards, Town residents became more involved in assisting the Town in becoming independent of fossil fuels. In 2006, a group of public officials and Town residents formed Energy Independent Caroline (EIC) which, later in 2006, was officially designated as a Town Advisory Committee by the Board. In 2009, the Town started construction of the new Town hall that would be near- carbon-neutral, equipped with photovoltaic solar panels, geothermal heating and cooling, solar tubes for day lighting, and positioned to increase contact with the sun and block cold air. The building and its energy producing/saving components were finalized at the beginning of 2010…
Solar panels [were] installed on the south-facing side of the building. The total cost of the solar panels, including installation, was $97,903. To offset this cost, the Town received a grant from the New York State Energy Research and Development Authority (NYSERDA) for $63,000 and donations from Town residents totaling $6,000, which reduced the impact on taxpayers by $69,000, or 70 percent of the total cost of the solar panels.
A geothermal heat pump system [was] installed to maintain the building temperature, instead of a traditional heating and air condition system. A geothermal heat pump is a central heating and/or cooling system that pumps heat to or from the ground. It uses the earth as a heat source (in the winter) or a heat sink (in the summer). This design takes advantage of the moderate temperatures in the ground to boost efficiency and reduce the operational costs of heating and cooling systems. Costs to purchase and install the geothermal system totaled $29,800, but the Town received a grant from NYSERDA for $2,300 to offset this cost.
A Town hall that was purposely positioned facing south with no windows or doors on the north side. The Supervisor told us this was purposely done to increase building contact with the sun and block cold air coming in from the north.
Sun tubes installed on the roof of the Town hall to channel light from outside to illuminate the building’s interior. Six sun tubes greatly reduce energy consumption by artificial lighting.
By incorporating renewable energy technologies and efficient building placement and design, the Town Board has reduced the amount of energy purchased and the greenhouse gas emissions for Town facilities. Since April 2010, the Board has generated 48,584 kilowatt-hours (kWh), of which 22,202 kWh were utilized by the Town, resulting in savings of $2,500, or a 36 percent reduction in energy purchased. The remaining 26,382 kWh (48,584 minus 22,202) were sold back to the energy provider, resulting in additional savings of $3,000. The Board also has reduced carbon dioxide emissions by 76,000 pounds, which is equivalent to annual greenhouse gas emissions from seven passenger vehicles, or carbon dioxide emissions from the electricity use of five homes for one year.
The Town of Caroline system, based on this analysis, cost a total of $127,703, of which $71,300 was paid by other taxpayers, ratepayers or donors. The net savings are $5,500 per year. These were calculated on a basis favorable to the project as the footnotes indicate they assume higher electric prices than are likely going forward given the lowered cost of electric generation due to natural gas. Moreover, the $5,500 per year is before considering maintenance or replacement costs of the equipment, which are subject to warranties of five years (10-25 years for output).
Giving the system the benefit of the doubt, let’s simply divide $127,703 by 25 years to come up with our annualized capital costs. The number is $5,108 per year, before considering maintenance, repair and replacement costs and Caroline is going to save $5,500 per year – theoretically. Is that a good deal? Not so much.
Oh, it’s a great deal for Caroline, at least in the short term, but for everyone else paying the bills it makes no sense whatsoever. Calculate the net present value of a $5,500 income stream over 25 years at a 5% discount rate and you’ll get $77,517 – a loss of $50,186 on the investment. Everyone outside of Caroline got taken to the cleaners and the more Cuomo spends on solar scams and the NY Green Bank, which exists to feather the nests of wealthy Wall Street types, the worse the problem will get.
The Caroline folks, of course, will rationalize why other taxpayers and ratepayers should subsidize them by bragging about how much CO2 they’re preventing from going in the atmosphere. Leaving aside the fact CO2 is the stuff of life and something we breathe out every day (about 724 pounds per year per person) this is a phony argument. The town even includes this demagogic graphic on their site to go with an estimate of just how much CO2 (98,836.13 lbs to date). Extrapolating from the Comptroller’s analysis, that’s equivalent to annual greenhouse gas emissions from 10 passenger vehicles, or carbon dioxide emissions from the electricity use of seven homes for one year. The State of New York, in other words, just went $50,000 into the hole to take an average of two cars a year off the road for the next 25 years.
We’ll continue this discussion in future posts but that’s the price of green political correctness. It’s pretty damned high and illustrates exactly what both Ridley and Epstein are talking about.
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