This week in concert with critical thought prompted by the EPRI electrification conference, I introduce Rant Revelations. Some are not new, but it is time to start a list.
Profit Rules
Decarbonization can only happen if it is profitable. That is how we decarbonized to current levels. Whether it’s production tax credits for wind energy that make coal not competitive or high natural gas prices that make coal competitive, profit wins. In time the piper will be paid as intermittent and subsidized renewable energy will run out its string of lowering energy prices requiring new thermal generation to avoid grid instability and blackouts.
Physics Wins
Last week, I wrote that our industry seems to believe everything will be electrified in 10 years – heat pumps and electric vehicles everywhere. Well, physics will have a say about that. Last week, Utility Dive reported that the Midcontinent Independent System Operator, MISO, won’t start distributed energy (e.g., batteries and small solar) aggregations until 2030. This was to the chagrin of state regulators. It reminds me of the grid engineer who said, “I won’t make law if you [lawmaker] don’t design the grid.”
Instead, MISO wants “to work on other market, and underlying system enhancements,” which I bet is code for figuring out how in the heck can they maintain reliability while the intermittent renewables drive 24/7 thermal plants off the grid and out of business.
A former FERC[1] official writes in RealClearEnergy that a current NERC[2] official said, “the pace of our grid transformation is a bit out of sync with the underlying realities and the physics of the system.” That is because politicians and many regulators who set outlandish goals don’t know the first thing about physics and engineering.
Control Requires Communism
Two years ago, I first harangued the geniuses at General Motors for announcing plans for an electric Hummer. One such 9,000-pound hulk (three times the weight of my cars) was on display at EPRI’s conference.
ACEEE recently howled that this behemoth results in more emissions just from the fuel than a decent mill-running gas-powered Malibu sedan. Electrify! But not that way. Hey dude, see the desire for profit above and unintended consequences below. You can’t control people who are still free to make choices and money.
There are No Unintended Consequences, Just Consequences
The Biden administration has lobbed multiple salvos to pinch the supply of oil. Examples from The Wall Street Journal (not opinion):
- Biden Signs Executive Orders on Face-Mask Mandate, Keystone Pipeline, Paris Accord,
- Biden Seeks to Block New Offshore Drilling in Atlantic, Pacific,
- Biden Administration Cancels Oil-and-Gas Drilling Leases in Gulf of Mexico, Alaska Coast,
- Biden’s Climate-Change Policy Targets Oil Industry
Explain away high prices for other reasons but those are the headlines and facts. What’s the point, Jeff? The point is this sends a signal to the oil industry and voters. Smaller, investor-owned drillers are returning cash to investors rather than investing in new production. Large producers like Exxon forge ahead to make more money. Maybe that’s why Exxon is featured on Larry Fink’s ESG index.
This will have an impact on coming elections and views of fighting climate change – kind of like in the Hummer section above – we didn’t mean that!
Water Always Finds the Leak
Remember Russia’s war with Ukraine? It may no longer be in the headlines, but it’s still being waged. In a bipartisan deal, the ignorance in Washington sent $40 billion in weapons to Ukraine to fight the Russians. Meanwhile, our “allies,” Germany, Italy, Netherlands, and Poland, sent $40 billion to Vladimir Putin through the purchase of fossil fuels. How does that make you feel? It makes me burn with rage. To compensate, Germany mandates a return to coal from zero-carbon nuclear. How does that make you feel?
The upshot: oil will always find its way to market.
People, Not Things, Are Responsible
Consider Years of Dominoes Fall in Texas, in which I described an energy-only wholesale market[3] provides no benefit for competitive generators to provide reserve margin to ensure the power stays on. A competitive market results in minimizing cost and thereby spending nothing to harden systems against extreme cold. Wind and solar tax incentives drive reliable thermal generators out of the market. Grid operators cycled off power to include natural gas wells which then froze their fuel supply. The outages contributed to the deaths of more than 200 people. The extreme cold caused this? No. There was plenty of blame to go around from the Koch brother’s libertarianism to the Big Green’s push for and lawmaker obligatory tax policies.
Disinformation is a Credible Different View
Terms like disinformation and denier divide and stifle debate. Consider “science.” Opposing sides can selectively pick or ignore data to derive the desired result. That’s not science. It’s narrative building. The Disinformation Governance Board was tagged with Ministry of Truth from Orwell’s 1984. The Ministry of Truth controls the media.
Force Breaks Things
See the MISO example in Physics Wins above. If the engineers and planners at MISO hadn’t pulled back to think things through, our grid designers with law degrees in government would break the grid. Forcing electrification by choking petroleum supplies will damage, if not break, electrification via regime change. Debate rather than denier would be a great first step.
[1] Federal Energy Regulatory Commission
[2] North American Electric Reliability Corporation
