Category Archives: Dirty Power

News concerning unsustainable, environmentally damaging power generation.

Another Coal Plant Turned Off

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A Massive Coal Plant That Asked for Trump’s Help Has Gone Dark
Bloomberg News, 11/19/2019

At 12:09 p.m. local time on Monday — after churning out electricity for almost five decades — the largest coal-fired power plant in the western U.S. permanently closed, becoming the latest testament to the fossil fuel’s decline. Once a flash point in President Donald Trump’s campaign to save America’s coal industry, the Navajo complex in the Arizona desert will now spend the next three years being dismantled and decommissioned.

Tribal leaders spent years appealing to the Trump administration for help saving the plant, characterizing it as the president’s chance to fulfill his campaign promise to revive America’s Coal Country. The fact that the Interior Department owns a 24% stake in the complex gave him all the more reason to make an example out of it. Then-Interior Secretary Ryan Zinke vowed to explore all options for rescuing the site.

For all its political ties, the Navajo complex proved no match against market forces. The shale boom unleashed record volumes of low-cost natural gas, undermining the economics of coal generators across the U.S. Cheaper and cleaner wind and solar farms also began squeezing the plant’s profits.

Coal simply cannot compete with low methane prices and the continued fall or renewable costs. Hydro/solar/wind power generation are the only power generation methods where the fuel comes to you. No exploring, drilling, pumping, refining, transporting by pipe or rail required.

Big Oil in Big Trouble

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Economics of Electric Vehicles Mean Oil’s Days As A Transport Fuel Are Numbered
Forbes 9/2/2019

The future is not looking bright for oil, according to a new report that claims the commodity would have to be priced at $10-$20 a barrel to remain competitive as a transport fuel.

The new research, from BNP Paribas, says that the economics of renewable energy make it impossible for oil to compete at current prices. The author of the report, global head of sustainability Mark Lewis, says that “renewable electricity has a short-run marginal cost of zero, is cleaner environmentally, much easier to transport and could readily replace up to 40% of global oil demand”.

As a result, the report says, the long-term break-even oil price for gasoline to remain competitive as a source of mobility is $9-$10 per barrel, and for diesel $17-$19 a barrel

More and more analysts, industry insiders, and business/economics journalists are beginning to see the looming iceberg the oil industry is sailing toward with no awareness of their peril.

The current “oil boom” brought about by fracking was the result of new technology, and huge sums of borrowed money. The oil industry has always had a “boom/bust” cycle where the rising price of oil causes more rigs to be built, resulting in a glut of oil, which then drives down the price, bankrupting the late arrivals and the early players who didn’t have enough sense to get out before the prices collapsed. This then resulted in a contraction of the oil supply, causing the prices to rise again.

Rinse and repeat every decade since Titusville.

The new variable in this economic see-saw, is the rise of EVs and global warming. At some point, society is going to impose restrictions on oil extraction, which would limit supply and drive up the price. This would normally be welcomed by the oil industry, as consumers and industry must have oil for transport. But, unlike times past, there is an alternative to internal combustion engines powered by oil byproducts, electrically powered vehicles. Cheaper, cleaner, and with less impact of the environment.

So, as the price of oil rises, consumers are driven to EVs, which are cheaper to fuel, operate and maintain. The more people who switch, the lower the demand for oil, which drives the most expensive producers to bankruptcy, which reduces the supply of oil, keeping the price high.

“For the oil majors, the challenge is on a scale that they have never faced before, and business-as-usual is simply not an option,” the bank says, with any projects with break-even costs of $20 a barrel or higher facing the possibility that up to 40% of their output at below the cost of production.”

California next to ban new gasoline cars sales?

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California Considers Following China With Combustion-Engine Car Ban
Bloomberg News

The internal combustion engine’s days may be numbered in California, where officials are mulling whether a ban on sales of polluting autos is needed to achieve long-term targets for cleaner air.

Governor Jerry Brown has expressed an interest in barring the sale of vehicles powered by internal-combustion engines, Mary Nichols, chairman of the California Air Resources Board, said in an interview Friday at Bloomberg headquarters in New York. Brown, one of the most outspoken elected official in the U.S. about the need for policies to combat climate change, would be replicating similar moves by China, France and the U.K.

“I’ve gotten messages from the governor asking, ‘Why haven’t we done something already?’” Nichols said, referring to China’s planned phase-out of fossil-fuel vehicle sales. “The governor has certainly indicated an interest in why China can do this and not California.”

Embracing such a policy would send shockwaves through the global car industry due to the heft of California’s auto market. More than 2 million new passenger vehicles were registered in the state last year, topping France, Italy or Spain. If a ban were implemented, automakers from General Motors Co. to Toyota Motor Corp. would be under new pressure to make electric vehicles the standard for personal transportation in the most populous U.S. state, casting fresh doubts on the future of gasoline- and diesel-powered autos elsewhere.

“Shockwaves” is an understatement. Certain pumpkin-hued individual’s head will explode all over the golf course when they read this. If California follows through, expect a major counter-offensive from the oil and auto industry.

Harvey may hurt oil prices short term, but the glut continues

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Hurricane Harvey has severely damaged the Texas Oil Cost, shutting down refineries which will probably disrupt gasoline supplies, resulting in price hikes. Despite this, the long term forecast is still that we are in an oil glut, and barring major hostilities in the Middle East, prices are going to remain soft. The word to learn today is “contango”:

Contango occurs when the current futures price of an asset (as quoted in the futures market) is higher than the current spot price of the underlying asset. (meaning today’s prices are much less due to excess supply)

“Floating storage off Singapore reached an all-time high in February,” Smith told CNBC’s “The Rundown.”

“We started to see Singapore floating storage dropping off last month from that record high of 60-million barrels, but we saw it rebound last week.”

Ahead of the OPEC production cut, producers ramped up production and exports to maximize revenues, with OPEC sending over three- fifths of its production to markets in the Asian region.

February arrivals hit 16.1 million barrels per day. That’s 1.1 million barrels more than last year’s average and nearly 300,000 barrels higher than the previous record set in February 2016, according to ClipperData.

The region’s refineries cannot process that much crude, so the influx lifted Singapore floating storage to 64-million barrels in early February, the highest level on available records. It has fluctuated since then, but remains well above recent averages.

“As long as we see 60-million barrels floating offshore in Singapore, it is just indicating that the market is still oversupplied and is not absorbing all this oil,” Smith said.

Of course, any excuse, valid or not, to raise prices and start gouging drivers will be taken. The cost getting the oil to the refineries has not changed, there are just suddenly fewer refineries to make fuel, and pipelines to transport what fuel is in the area are shut down. This situation could see fuel prices rise up to $1 gallon.

Health cost for renewable vs fossil energy 7 cents per kilowatt hour.

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Health benefits of wind and solar offset all subsidies
Ars Technica

A paper in Nature Energy this week dives into the weeds by trying to estimate the economic benefits of wind and solar power across the whole of the US. Berkeley environmental engineer Dev Millstein and his colleagues estimate that between 3,000 and 12,700 premature deaths have been averted because of air quality benefits over the last decade or so, creating a total economic benefit between $30 billion and $113 billion. The benefits from wind work out to be more than 7¢ per kilowatt-hour, which is more than unsubsidized wind energy generally costs.

Two ways to look at this: Either we should be subsidizing the cost of solar/wind at 7 cents/kWh or we should be adding a 7 cents/kWh tax to all fossil-fuel generated electricity (coal/oil/NG).

WV Wants annual $4.5 billion subsidy for coal

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West Virginia governor wants to sell Trump on a $4.5 billion coal bailout by calling it a “homeland security initiative”
Washington Post

Jim Justice, the Republican governor of West Virginia, is floating a federal proposal to bail out the struggling Appalachian coal industry at a cost to taxpayers of up to $4.5 billion a year.

As Justice described it to the Wall Street Journal, under the proposal, the federal government would pay out $15 to eastern power companies for each ton of Appalachian coal they purchase.

Justice is attempting to sell the proposal as a “homeland security initiative” for protecting the eastern energy grid. He told a West Virginia newspaper that “if you’re all on gas or you’re all on gas and western coal and somebody puts a bomb at a gas junction point or somebody puts a bomb on a bridge coming from the west, you could very well lose the entire eastern power grid.”

Right, and if we switch to distributed generation (roof-top solar and neighborhood/city-wide solar farms) then someone blowing up a pipeline (pipelines do explode with worrying frequency, but because of incompetence, poor maintenance, and accidents, not because of “terrorism”) has a negligible effect on the grid. Centralized power distribution (like we have now) is HIGHLY vulnerable to mishap, neglect, natural disaster, and attack.

$4.5 billion would be better spent on modernizing the grid, moving from coal to renewable power and re-training coal miners for green energy jobs. Seems to me that it is better to work outside in the fresh air and sunshine, than in a hole in the ground.

Why waste $14 billion when you can waste twice that?

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After failure of SC nuke plant, backers seek federal aid
AP Wire

Proponents of nuclear power are pushing to revive a failed project to build two reactors in South Carolina, arguing that the demise of the $14 billion venture could signal doom for an industry that supplies one-fifth of the nation’s electricity.

Even though the nation’s 99 commercial nuclear reactors supply about 20 percent of U.S. electricity, no new nuclear plant has been built from scratch in more than 30 years. Supporters were alarmed when two South Carolina utilities halted construction on a pair of reactors that once were projected to usher in a new generation of nuclear power to provide reliable, cost-effective, carbon-free electricity for decades.

Instead the project was plagued by billions of dollars in cost overruns, stagnant demand for electricity, competition from cheap natural gas and – most importantly – the bankruptcy of Westinghouse Electric, the lead contractor.

The July 31 suspension of the partly completed V.C. Summer project near Columbia, South Carolina, leaves two nuclear reactors under construction in Georgia as the only ones being built in the U.S. The collapse of the nearly decade-old project in South Carolina could cost ratepayers billions of dollars for work that ultimately provides no electricity and could signal that new nuclear plants are impossible to complete in the United States.

“These reactors failing would be the end of a nuclear renaissance before it even started,” said Sen. Lindsey Graham, R-S.C.

Okay, here’s the deal: Give us an HONEST accounting of what it will cost to run this power plant. You must include the cost of liability insurance (No one will write a liability policy for a nuke, so the taxpayers get stuck when it goes Fukushima) and the cost of handling the waste products that must be safeguarded for several eons (50 rent-a-cops a day, 24 hours a day, every day for the next…oh, let’s say 24,000 to 2 million years.