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Wind & Solar ‘Transition’ Myth Busted: When Delusion & Reality Collide

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From STOP THESE THINGS

Harnessing energy was the secret of success for every first world economy. Destroying the systems that delivered it will be the reason for their demise and ultimate failure.

The notion that wind and solar can deliver the kind of power upon which those economies were built is nothing more than a grand delusion, driven by a rent-seeking class eager to cash in on massive subsidies, along the way.

Mark Mills tackles the subject below, skilfully busting the myth that the grand wind and solar transition is just a heartbeat away.

When Politics and Physics Collide
City Journal
Mark P. Mills
17 April 2024

The idea that the United States can quickly “transition” away from hydrocarbons—the energy sources primarily used today—to a future dominated by so-called green technologies has become one of the central political divides of our time. For progressive politicians here and in Europe, the “energy transition” has achieved totemic status. But it is fundamentally a claim that depends on assessing the future of technology.

While policies can favor one class of technology over another, neither political rhetoric nor financial largesse can make the impossible possible. Start with some basics. It’s not just that currently over 80 percent of our energy needs are met directly by burning oil, natural gas, and coal—a share that has declined by only a few percentage points over the past several decades; the key fact is that 100 percent of everything in civilized society, including the favored “green energy” machines themselves, depends on using hydrocarbons somewhere in the supply chains and systems. The scale of today’s green policy interventions is unprecedented, targeting the fuels that anchor the affordability and availability of everything.

In the U.S., the energy-transition policies center around the 2022 Inflation Reduction Act, the most ambitious industrial legislation since World War II. Both critics and enthusiasts note that the budget figure advertised when the legislation was passed—$369 billion—isn’t close to the real cost. A comprehensive Wood MacKenzie analysis shows that the Green New Deal’s price tag is closer to $3 trillion.

And that’s not all. Through regulatory fiat, the Environmental Protection Agency’s newly announced rules effectively mandate that more than half of all cars and trucks sold must be electric vehicles (EVs) by 2032. That will demand, and soon, the complete restructuring of the $100 billion U.S. automobile industry. At the same time, an EV-dominated future will also require hundreds of billions more dollars in utility-sector spending to expand the electric distribution system to fuel EVs. Added to that, among other similar administrative diktats, the Securities and Exchange Commission’s newly released “climate” disclosure rules (temporarily on hold) are intended to induce investors to direct billions of dollars toward energy-transition technologies. This rule will entail tens of billions annually just in compliance costs, never mind the shifts to investments it will create.

The total direct and induced spending on the energy transition could easily exceed $5 trillion before a decade passes, or sooner, if advocates prevail. For context, the entirety of World War II cost the U.S. roughly $4 trillion (in today’s dollars). More relevant in terms of domestic scope, building the entire U.S. interstate highway system cost just $600 billion (also inflation-adjusted).

The transition spending that’s coming will add up to far more money than the amount printed for economic “rescue” during the Covid lockdowns. Since all the Inflation Reduction Act, and related, spending has yet to flow through the economy, it bears asking why economists aren’t alarmed about reigniting inflation. Perhaps, behind closed doors, the Federal Reserve is worried.

It’s obvious that the motivation underlying this largesse is a kind of mania to “decarbonize” everything. However, one’s beliefs or predictions about climate have no bearing whatsoever on the features and costs of energy technologies, whether solar panels or lithium batteries; nor do they bear on realities such as the sources of the copper wires and other hardware needed to expand the grid. A growing number of analysts, both within and outside government, worry about the underlying realities that expose the hard limits to executing the “transition.”

Delivering reliable 24–7 electricity using episodic power sources (wind and solar) unavoidably necessitates both over-building (to supply extra energy) and some kind of energy-storage system. The combination of these two requirements leads to a doubling or tripling of delivered energy costs compared with the “spontaneous” cost of one machine operating.

Building wind and solar machines, along with the batteries needed, also requires a far greater quantity of metals and rare minerals—so-called energy minerals—than is associated with hydrocarbons to deliver the same amount of energy. A seminal paper from the International Energy Agency (IEA) estimated a fourfold to 40-fold increase in global mining would be needed for a variety of common energy minerals.

A more recent paper from Yale looked at a suite of 15 rare minerals required for “full decarbonization” and reached similar conclusions: the supply of various key “rare earth” elements would have to increase 60- to 300-fold. A Platts analysis of copper—the pillar of electrification and green tech, and essential for much else—found that, if transition plans proceed, the world would be, within a few years, short of copper, and that shortage would expand to levels in the tens of megatons within the decade. Such unprecedented increases in demand must be considered in light of the well-established history of ten-to-15-year lead times to find, and bring online, new mines.

The relevance of mining, in particular, is highlighted by how minerals themselves now constitute more than half the cost of building solar modules and lithium batteries. That means that the future costs of such hardware are firmly in the hands of global miners and minerals refiners. Ambitions to break China’s supremacy in supplying those refined energy minerals and components face challenges beyond time and money, not least policymakers’ unwillingness to reform industrial regulations.

Meantime, economists and regulatory lawyers fuel the fantasies of the transitionists by suggesting that markets can be manipulated to yield their desired outcomes. There is some truth to that, but manipulating parts of markets, and specific products, is entirely different than trying to do the same for the entirety of society, which is the transitionists’ ambition. The idea that this can be done at all, much less painlessly, redefines the word naïve.

But these challenges and materials shortfalls will, the economic theorists propose, induce more innovation. They imagine the “market” will rapidly produce new and better technologies that conquer lithium batteries’ aversion to cold, the limits of photovoltaic efficiencies, or the staggering energy-intensity of fabricating solar silicon, which requires about 100 times more energy per pound than steel. The last fact matters because of China’s 90 percent market share in producing solar silicon on its coal-fired grids. It is no exaggeration to say that the realities of solar silicon fabrication mean that solar subsidies and mandates have induced eager Californians to festoon their roofs with transmuted coal.

But there are real-world limits to the velocity of commercialization of all industrial-class technologies, and firm physics boundaries for all hardware. The limitations of economic theory become apparent at the scale of civilizational engineering, and economic incentives cannot alter physical laws that govern technology. Crucially, it’s a practical fact that the technologies available today are those that will be deployed in the coming decade, not speculative future inventions. And subsidizing today’s technologies tends to lock in the use of yesterday’s innovations. The transitionists who dismiss those who make such observations as “climate solutions deniers” have recently adopted a new tactic: labeling such perspective as “techno-pessimism.”

Given the magnitude of money at stake, and the centrality of energy, it’s rarely been so important to recognize the difference between pessimism/optimism and realism. There is much to be optimistic, even excited, about regarding the emergence of new technologies. But the overwhelming majority of innovations throughout history have been with energy-using, not energy-producing, technologies. Put differently: humanity’s imagination is far more fecund when it comes to finding ways to consume energy than to produce it. That’s one of those ineluctable realities of the universe. The options for producing energy are surprisingly limited, and new possibilities await the arrival of new physics. That arrival is certainly imaginable, indeed almost inevitable, but also irrelevant for the purposes of what we can build in the next decade or two.

The transitionists, however, hold it as axiomatic that the world is witnessing a foundational tech revolution within energy domains—hence their hyperbole about “exponential progress” and terms like clean tech, energy tech, or climate tech, meant to invoke the exponential growth in computing and communications. In that worldview, the hyper-spending is a way to accelerate the inevitable emergence of the “new energy technologies” (the preferred term in China).

Silicon Valley’s seemingly rapid production of other game-changing technologies (all energy-using) and globe-straddling companies have yielded an article of faith that, when enough money goes to enough smart people, amazing innovations will happen. The IMF economists phrased it thus in a report enthusing about an energy transition: “Smartphone substitution seemed no more imminent in the early 2000s than large-scale energy substitution seems today.” The transitionists use many variations of that analogy, but it is a category error on two counts.

First, the physics of energy-producing machines are profoundly different than those of energy-using information tech. If silicon-based photovoltaics could scale the same way silicon-based computing can, then we should soon expect to see a solar panel the size of a postage-stamp, costing a dime, capable of powering the Empire State Building. Similarly, if battery “tech” scaled like computer tech, we would soon see a shoebox-sized battery, costing next to nothing, that could power a jumbo jet.

The point is not only that such outcomes are impossible, with the physics we know, but that invoking computer-tech growth patterns outside of computing itself is silly. The same is true of non-green-energy machines. Combustion engines have plenty of room for efficiency gains—indeed, far more room for improvement than green-energy hardware—but they can’t improve at exponential rates. Otherwise, we could one day expect to see ant-sized car engines capable of generating 1,000 horsepower.

There’s another category error in analogizing energy tech to computer tech. Consider the IMF’s musings on smartphone substitution and energy substitution. Unshackling the personal phone from wired connections didn’t doom wires and cables for communications—instead, it created an enormous expansion in communications traffic that, collaterally, drove greater need for wires and cables. Analogously, it is more likely that the use of lithium batteries, rather than eliminating the use of internal combustion engines, will engender greater use of them (for example, in hybrids, and not just for cars but also for aircraft and other machines).

In general, the transitionists’ tropes contain a fundamental forecasting error: failure to recognize differences in the inherent utility of different classes of (energy-producing) technologies, and thus their longevity. The transitionists’ favorite metaphor—horses replaced by cars—is the exception rather than the rule for many technology domains. Airplanes didn’t eliminate seagoing ships; both expanded into different primary utility functions.

The simplistic notion embedded in the central animating vision of the energy transition is the claim that fossil fuels are “old tech” that is about to be replaced, wholesale, by modern “energy tech.” Some things aren’t easily, or ever, replaced but instead find either narrowing utility (as a share of an economy or market) or continue without diminution because of improvements over time. Examples include the wheel, cabling, wires, roads—or, in the materials domains, glass, steel, concrete, and even stone for buildings.

History shows only a few examples of “old” sources of energy being abandoned. The world transitioned entirely away from whale oil for illumination around 1850, and societies transition away from burning dung whenever possible (though it’s still widely practiced in poor countries). For everything else—from water wheels to burning coal and even wood—there are no “transitions.”

Global wood-burning still supplies more than twice the energy of all solar and wind installations combined. Even in the U.S., more wood is burned for fuel today than in 1824. The “transition” has been in the collapse in the share of energy that wood supplies. Thus, it is vexing for the decarbonizing camp that global consumption of coal is rising, which alone puts the lie to the technological trope that wind/solar is inherently cheaper. If that were true, the markets would need no inducements to abandon coal. Instead, globally, both coal and wind/solar are expanding because they have different utility functions. They are expanding in those markets where demand is booming and where supply choices are unfettered.

Perhaps the most damaging claim of the transitionists is that mandates and massive subsidies can induce markets to respond with truly radical innovations. Yes, higher taxes, rules, and regulations cause market players to react by finding creative ways to circumvent them. But foundational innovations—the game-changers—don’t emerge from governments imposing high costs and limits on behaviors. This reality is starkly evident with the deep naivete about mining and minerals supplies, or with the carbon tax offered as an “efficient” way to induce alternatives to hydrocarbons. The effect of a carbon tax is simply to make all things more expensive because all things use hydrocarbons.

If policymakers continue to pursue taxes, subsidies, and mandates for the purpose of avoiding hydrocarbons, markets will indeed react—but the market’s responses to higher prices and lower availability will be, in the main, deprivations. These are realities, not exhibitions of pessimism. Valid reasons exist to be optimistic that superior, and even radically different, energy technologies will eventually emerge. The realism relates to when these things will arrive. Timing matters, and it’s a long process from foundational discoveries to widespread commercialization. One iconic example of real-world velocities is the time it took to make the lithium battery sufficiently useful to render electric cars viable for tens of millions of people: from foundational innovation to the first Tesla was three decades. The same pattern is visible across the energy landscape.

We’ve witnessed amazing technological transformations over the past half-century when sufficient money was deployed to design and build machines, whether for warfighting, highways, or space travel. As Elon Musk recently said, “I think technology is the closest thing to magic that we have in the real world.” Musk doubtless knew he was reframing a maxim coined a half-century ago by the science fiction writer Arthur C. Clarke: “Any sufficiently advanced technology is indistinguishable from magic.”

But rockets, including those of SpaceX, fly using hydrocarbons. EVs get built using diesel fuel. Solar cells are fabricated using coal. Neodymium magnets for wind turbines are acquired and processed by using coal, oil, and natural gas. Industries consume natural gas to fabricate the myriad polymers and metals needed for society, as well as the fertilizers that help feed the world.

If you want a nontechnical guess at what the future holds, consider the question as viewed through the lens of finance, not physics. Larry Fink, CEO of investment behemoth BlackRock, a person and firm widely associated with “transition” enthusiasm, recently published an annual letter where he observed, after visiting 17 countries, that “leaders believe that the world still needs both . . . renewables and oil and gas.” As for BlackRock’s bet on that future, Fink notes that his firm has more than $500 billion invested in energy firms on behalf of clients, 75 percent of which is with traditional, not “green,” energy. That doesn’t sound much like a “transition,” does it?
City Journal

Grand Energy ‘Transition’ Unravels: Power-Starved Dutch Ditch Renewables & Go For Gas

From STOP THESE THINGS

Europe’s wind and solar ‘transition’ continues to unravel, with the Dutch the latest to ditch the pitch to so-called ‘renewables’. Small (geographically) and industrious, the Dutch have always managed to punch well above their weight, dominating seafaring trade through history and, these days, producing a staggeringly large proportion of the foodstuffs that are consumed around the globe.

But, like most of their European neighbours, the Netherlands has squandered billions of subsidies on chaotically intermittent wind and solar, with little to show for it – other than ruined landscapes and unliveable homes.

Now the hard cold reality of sunshine and/or weather-dependent power generation is starting to bite. Various provinces simply can’t keep the lights on, and have called timeout on the grand ‘transition’ to sunshine and breezes.

When the sun sets and/or calm weather sets in, it’ll be good old gas (an apparently not-so-evil fossil fuel) powering Dutch homes, businesses and industries around-the-clock, as Carl Deconinck explains below.

Dutch province of Utrecht returns to fossil fuel as power-grid faces meltdown
Brussels Signal
Carl Deconinck
25 April 2024

The Dutch province of Utrecht announced it will switch back to fossil fuel to relieve the overworked electricity grid, as the road to net-zero in the Netherlands hits some major obstacles.

The outgoing Dutch Climate Minister Rob Jetten, leader of the Democrats 66 (D66) party, along with local grid operators, announced a set of measures to fight the power-grid overload in Utrecht province. It is expected to be the first of many regions in the country that will have to take action to avoid future problems.

To maintain electricity provision to the public and businesses in Utrecht, there will be a switch back to gas. At moments of peak demand, the local Government will deploy gas generators.

Smart charging stations will be switched off during peak times but the regional authorities and grid operators are working on an exemption option for owners of electric vehicles to top-up their batteries if they need to.

Instead of fully-electric heat-pumps, hybrid heat-pumps are being promoted. These hybrid models can be connected to boiler-heating systems and are less demanding on the electricity grid.

The Dutch public service broadcaster nos reported that the projected shortage equals the needs of 125,000 homes in Utrecht.

Huib van Essen of the Utrecht Provincial Executive said the measures would “have a significant impact on reducing the overload on the power grid”, adding that the use of gas-plants was “unfortunately necessary” for this.

Without implementing appropriate measures, the province is forecast to experience frequent electricity blackouts, which would jeopardise the construction of new housing and industrial complexes, nos said.

Utrecht is the first province to opt to return to fossil fuels but other areas and provinces, in particular Flevopolder and Gelderland, are also said to be working on similar measures.

Without nationwide measures being implemented, nos reported that approximately 1.5 million people in the Netherlands could be subject to power outages until 2030.

Other issues would include the malfunction of electrical devices and lighting.

The problems for households and small consumers come on top of long-standing issues for the Dutch industrial sector, which is consuming electricity at much higher rates than previously.

Waiting times for new or upgraded connections, necessary for businesses to enhance their sustainability efforts, are also on the rise.

The shift back to fossil fuels in the Netherlands follows a decision by the Scottish Government to abandon its flagship target of reducing greenhouse gas emissions by 75 per cent by 2030.

It said it had an “unwavering commitment” to achieve net zero by 2045 but on April 18 called the targets for 2030 “out of reach”.

Scotland’s leadership was one of the first in the world to declare a “climate emergency”, in 2019.
Brussels Signal

Dems Who Back Biden’s Crackdown On Fossil Fuels Suddenly Worried About High Gas Prices

From The Daily Caller

By NICK POPE

CONTRIBUTOR

Numerous Democrats who have helped the Biden administration restrict fossil fuel development and production are now concerned about high gas prices as the 2024 elections loom.

A group of 23 Senate Democrats — including Senate Majority Leader Chuck Schumer, Massachusetts Sen. Liz Warren and Pennsylvania Sen. Bob Casey — signed a Thursday letter to Attorney General Merrick Garland asking him to have the Department of Justice (DOJ) investigate major energy companies for allegedly colluding to raise gas prices for Americans and fatten their bottom lines. The suggestion that oil companies are illegally collaborating to rip off American consumers is not new to Democrats, who have revived the narrative as prices at the pump tick up ahead of the 2024 elections.

“The federal government must use every tool to prevent and prosecute collusion and price fixing that may have increased gasoline, diesel fuel, heating oil, and jet fuel costs in a way that has materially harmed virtually every American household and business,” the letter states. “We therefore urge the Department of Justice to investigate the oil industry, to hold accountable any liable actors, and to end any illegal activities.” (RELATED: Democrats Up Pressure On Big Oil To Answer For Alleged Profiteering As Americans Blame Biden For Gas Prices)

Big Oil – DOJ Letter by Nick Pope

The letter references ExxonMobil’s recent acquisition of Pioneer Natural Resources and amplifies the Federal Trade Commission’s (FTC) allegation that Chris Sheffield, the founder and ex-CEO of Pioneer, tried to organize collusion between American and OPEC energy producers to artificially inflate profits. Sheffield, however, has strongly contested this allegation, saying that the “FTC is wrong to imply that [he] ever engaged in, promoted or even suggested any form of anti-competitive behavior” in a statement.

Beyond Warren, Schumer and Casey, other signatories include Democratic Sens. Chris Murphy of Connecticut, Sheldon Whitehouse of Rhode Island, Ed Markey of Massachusetts, Sherrod Brown of Ohio and Independent Vermont Sen. Bernie Sanders. Each Senator who signed the letter also voted for the Inflation Reduction Act (IRA), Biden’s flagship climate bill, and have also supported many other facets of the Biden administration’s efforts to move the U.S. away from fossil fuels.

Warren’s voting record has earned her a 95% lifetime approval score from the League of Conservation Voters (LCV), one of the country’s largest influential environmental groups that openly rejects fossil fuels, and a 100% score for 2023. Last year, Warren voted against an attempt to rein in the government’s push to regulate a wide array of consumer appliances, a bill promoting the Mountain Valley Pipeline and to protect a Labor Department rule pushing asset managers to incorporate climate risks in their investment decisions.

Casey voted in favor of the Mountain Valley Pipeline, but joined Warren on the other two votes. He also voted against a 2022 effort to increase the number of government-issued oil lease sales and opposed another 2022 move that would have prevented federal permitting or regulatory actions from hindering fossil fuel development.

Schumer also voted to support the Mountain Valley Pipeline in 2023, but he has voted in line with what LCV advised in every other instance since Biden took office in 2021, with one exception. He has opposed four legislatives proposals that would have made it easier or less expensive to produce oil and gas throughout Biden’s first term.

Murphy voted against the Mountain Valley Pipeline, and also opposed legislation that would have increased offshore and onshore oil and gas development.

Whitehouse voted against the Mountain Valley Pipeline, as well as numerous legislative efforts to enhance oil and gas leasing activity. Markey, meanwhile, has consistently voted against legislation intended to make it easier to produce oil and gas for his entire career.

Brown voted to support the Mountain Valley Pipeline, but he has opposed four initiatives meant to boost oil drilling through Biden’s first term. Sanders, one of the most left-wing lawmakers in Washington, also voted against the four same legislative efforts and has consistently opposed bills designed to make drilling easier throughout his career.

Gas prices are increasing as the pivotal 2024 elections approach on the calendar. In January, the national average per-gallon price of all formulations of gasoline was approximately $3.08, a figure that has increased to $3.60 as of May, according to data from the U.S. Energy Information Administration (EIA).

The administration is moving to release about one million barrels of gasoline from the Northeast Gasoline Supply Reserve to try to bring down prices this summer. The administration also released 180 million barrels of oil from the Strategic Petroleum Reserve (SPR) ahead of the 2022 midterms, selling several million barrels to Chinese companies and leaving the SPR at its lowest levels in decades.

Numerous economists and analysts, and even the CEO of Chevron, have credited the price increases in part to the Biden administration’s $1 trillion-plus climate agenda.

The administration has made many decisions that restrict domestic oil and gas production, pushed aggressive environmental regulations impacting energy producers and established massive subsidy programs to favor sources of green energy like wind and solar. These choices have the combined effect of driving up prices that consumers pay at the pump and elsewhere over time, according to the American Energy Alliance, a right-leaning energy advocacy group.

In January 2020, just before the onset of the pandemic, Americans paid an average of $2.55 per gallon for all types of gas, according to the EIA. Those figures have grown considerably since November 2020, the month that President Joe Biden won the presidential election; the average price sat at $3.61 per gallon in April 2024 after peaking at $4.92 in June 2022.

Democrats pushed similar messaging about major energy companies and collusion in 2022, when gas prices were causing political headaches for Biden and fellow Democrats ahead of the 2022 midterm elections. However, analysts from the Dallas branch of the Federal Reserve argued at the time that corporate collusion was not one of the factors driving up retail gasoline costs, pointing out that energy producers actually have almost zero control over the prices set by gas station operators.

The offices of Schumer, Warren, Casey, Brown, Murphy, Durbin, Whitehouse and Sanders did not respond to requests for comment.

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Why Unintended Consequences from Pushing Green Energy

From Science Matters

By Ron Clutz

We have been treated to multiple reports of negative consequences unforeseen by policymakers pushing the Green Energy agenda. A sample of the range:

Ford ready to restrict UK sales of petrol models to hit electric targets, Financial Times

Why US offshore wind energy is struggling—the good, the bad and the opportunity, Tech Xplore

Another solar farm destroyed by a hail storm—this time in Texas, OK Energy Today

Storm Ravages World’s Largest Floating Solar Plant, Western Journal

DOE Finalizes Efficiency Standards for Clothes Washers and Dryers, Energy.Gov

Strict new EPA rules would force coal-fired power plants to capture emissions or shut down, AP news

Companies Are Balking at the High Costs of Running Electric Trucks, Wall Street Journal

Landmark wind turbine noise ruling from High Court referred to attorney general, Irish Times

Etc., Etc.

These reports point to regulators again attempting to force social and economic behavorial changes against human and physical forces opposing the goals. A detailed explanation of one such failure follows.

Background Post:  Why Raising Auto Fuel (CAFE) Standards Failed

There are deeper reasons why US auto fuel efficiency standards are counterproductive and should be rolled back.  They were instituted in denial of regulatory experience and science.  First, a parallel from physics.

In the sub-atomic domain of quantum mechanics, Werner Heisenberg, a German physicist, determined that our observations have an effect on the behavior of quanta (quantum particles).

The Heisenberg uncertainty principle states that it is impossible to know simultaneously the exact position and momentum of a particle. That is, the more exactly the position is determined, the less known the momentum, and vice versa. This principle is not a statement about the limits of technology, but a fundamental limit on what can be known about a particle at any given moment. This uncertainty arises because the act of measuring affects the object being measured. The only way to measure the position of something is using light, but, on the sub-atomic scale, the interaction of the light with the object inevitably changes the object’s position and its direction of travel.

Now skip to the world of governance and the effects of regulation. A similar finding shows that the act of regulating produces reactive behavior and unintended consequences contrary to the desired outcomes.

US Fuel Economy (CAFE) Standards Have Backfired

An article at Financial Times explains about Energy Regulations Unintended Consequences  Excerpts below with my bolds.

Goodhart’s Law holds that “any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes”. Originally coined by the economist Charles Goodhart as a critique of the use of money supply measures to guide monetary policy, it has been adopted as a useful concept in many other fields. The general principle is that when any measure is used as a target for policy, it becomes unreliable. It is an observable phenomenon in healthcare, in financial regulation and, it seems, in energy efficiency standards.

When governments set efficiency regulations such as the US Corporate Average Fuel Economy standards for vehicles, they are often what is called “attribute-based”, meaning that the rules take other characteristics into consideration when determining compliance. The Cafe standards, for example, vary according to the “footprint” of the vehicle: the area enclosed by its wheels. In Japan, fuel economy standards are weight-based. Like all regulations, fuel economy standards create incentives to game the system, and where attributes are important, that can mean finding ways to exploit the variations in requirements. There have long been suspicions that the footprint-based Cafe standards would encourage manufacturers to make larger cars for the US market, but a paper this week from Koichiro Ito of the University of Chicago and James Sallee of the University of California Berkeley provided the strongest evidence yet that those fears are likely to be justified.

Mr Ito and Mr Sallee looked at Japan’s experience with weight-based fuel economy standards, which changed in 2009, and concluded that “the Japanese car market has experienced a notable increase in weight in response to attribute-based regulation”. In the US, the Cafe standards create a similar pressure, but expressed in terms of size rather than weight. Mr Ito suggested that in Ford’s decision to end almost all car production in North America to focus on SUVs and trucks, “policy plays a substantial role”. It is not just that manufacturers are focusing on larger models; specific models are also getting bigger. Ford’s move, Mr Ito wrote, should be seen as an “alarm bell” warning of the flaws in the Cafe system. He suggests an alternative framework with a uniform standard and tradeable credits, as a more effective and lower-cost option. With the Trump administration now reviewing fuel economy and emissions standards, and facing challenges from California and many other states, the vehicle manufacturers appear to be in a state of confusion. An elegant idea for preserving plans for improving fuel economy while reducing the cost of compliance could be very welcome.

The paper is The Economics of Attribute-Based Regulation: Theory and Evidence from Fuel-Economy Standards Koichiro Ito, James M. Sallee NBER Working Paper No. 20500.  The authors explain:

An attribute-based regulation is a regulation that aims to change one characteristic of a product related to the externality (the “targeted characteristic”), but which takes some other characteristic (the “secondary attribute”) into consideration when determining compliance. For example, Corporate Average Fuel Economy (CAFE) standards in the United States recently adopted attribute-basing. Figure 1 shows that the new policy mandates a fuel-economy target that is a downward-sloping function of vehicle “footprint”—the square area trapped by a rectangle drawn to connect the vehicle’s tires.  Under this schedule, firms that make larger vehicles are allowed to have lower fuel economy. This has the potential benefit of harmonizing marginal costs of regulatory compliance across firms, but it also creates a distortionary incentive for automakers to manipulate vehicle footprint.

Attribute-basing is used in a variety of important economic policies. Fuel-economy regulations are attribute-based in China, Europe, Japan and the United States, which are the world’s four largest car markets. Energy efficiency standards for appliances, which allow larger products to consume more energy, are attribute-based all over the world. Regulations such as the Clean Air Act, the Family Medical Leave Act, and the Affordable Care Act are attribute-based because they exempt some firms based on size. In all of these examples, attribute-basing is designed to provide a weaker regulation for products or firms that will find compliance more difficult.

Summary from Heritage Foundation study Fuel Economy Standards Are a Costly Mistake Excerpt with my bolds.

The CAFE standards are not only an extremely inefficient way to reduce carbon dioxide emission but will also have a variety of unintended consequences.

For example, the post-2010 standards apply lower mileage requirements to vehicles with larger footprints. Thus, Whitefoot and Skerlos argued that there is an incentive to increase the size of vehicles.

Data from the first few years under the new standard confirm that the average footprint, weight, and horsepower of cars and trucks have indeed all increased since 2008, even as carbon emissions fell, reflecting the distorted incentives.

Manufacturers have found work-arounds to thwart the intent of the regulations. For example, the standards raised the price of large cars, such as station wagons, relative to light trucks. As a result, automakers created a new type of light truck—the sport utility vehicle (SUV)—which was covered by the lower standard and had low gas mileage but met consumers’ needs. Other automakers have simply chosen to miss the thresholds and pay fines on a sliding scale.

Another well-known flaw in CAFE standards is the “rebound effect.” When consumers are forced to buy more fuel-efficient vehicles, the cost per mile falls (since their cars use less gas) and they drive more. This offsets part of the fuel economy gain and adds congestion and road repair costs. Similarly, the rising price of new vehicles causes consumers to delay upgrades, leaving older vehicles on the road longer.

In addition, the higher purchase price of cars under a stricter CAFE standard is likely to force millions of households out of the new-car market altogether. Many households face credit constraints when borrowing money to purchase a car. David Wagner, Paulina Nusinovich, and Esteban Plaza-Jennings used Bureau of Labor Statistics data and typical finance industry debt-service-to-income ratios and estimated that 3.1 million to 14.9 million households would not have enough credit to purchase a new car under the 2025 CAFE standards.[34] This impact would fall disproportionately on poorer households and force the use of older cars with higher maintenance costs and with fuel economy that is generally lower than that of new cars.

CAFE standards may also have redistributed corporate profits to foreign automakers and away from Ford, General Motors (GM), and Chrysler (the Big Three), because foreign-headquartered firms tend to specialize in vehicles that are favored under the new standards.[35] 

Conclusion

CAFE standards are costly, inefficient, and ineffective regulations. They severely limit consumers’ ability to make their own choices concerning safety, comfort, affordability, and efficiency. Originally based on the belief that consumers undervalued fuel economy, the standards have morphed into climate control mandates. Under any justification, regulation gives the desires of government regulators precedence over those of the Americans who actually pay for the cars. Since the regulators undervalue the well-being of American consumers, the policy outcomes are predictably harmful.

What’s Next?

The H Stands For Hype

From Watts Up With That?

By Robert Bryce’s Substack

The Sun is mainly made of hydrogen. But there is nothing new under the Sun, and that includes hydrogen.

That Old Testament reference — “what has been will be done again; there is nothing new under the sun” — is appropriate here because the hype about hydrogen seems nearly as old as the Bible itself.

On June 10, 1975, during the 94th Congress, the House of Representatives held the first of two “investigative hearings on the subject of hydrogen — its production, utilization, and potential effects on our energy economy of the future.” The hearing was chaired by Mike McCormack, a Democrat from Washington state, who claimed hydrogen “has the potential of playing the same kind of role in our energy system as electricity does today.”

In 1996, the Chicago Sun-Times declared “The first steps toward what proponents call the hydrogen economy are being taken.” In 2003, Jeremy Rifkin, an “economic and social theorist,” published The Hydrogen Economy: The Creation of the Worldwide Energy Web and the Redistribution of Power on Earth. In that book,Rifkin claimed that “Globalization represents the end stage of the fossil-fuel era.” Turning “toward hydrogen is a promissory note for a safer world,” he averred.

President George W. Bush bought the hydrogen hype. In his 2003 State of the Union Address, he said, “With a new national commitment, our scientists and engineers will overcome obstacles” to taking hydrogen-fueled automobiles “from laboratory to showroom so that the first car driven by a child born today could be powered by hydrogen, and pollution-free.” A few months after that speech, his administration announced a collaborative effort with the European Union for the “development of a hydrogen economy,” including the  technologies “needed for mass production of safe and affordable hydrogen-powered fuel cell vehicles.” The White House claimed in a 2003 press release that the effort would “improve America’s energy security by significantly reducing the need for imported oil.”

The history of the hype matters because we live in ahistorical times. Or, as author Jeff Minick explained in 2022, we are plagued by “presentism.” Presentism, Minick wrote, “is the reason so many young people can name the Kardashians but can’t tell you the importance of Abraham Lincoln or why we fought in World War II.”

Presentism helps explain why, on April 30, the New York Times published a piece headlined, “Hydrogen Offers Germany a Chance to Take a Lead in Green Energy,” which ignores the long history of hydrogen’s failure to live up to the forecasts. But blaming presentism can’t account for the vapidity of the article, which hinges on this nut graf:

The concept of hydrogen as a renewable energy source has been around for years, but only within the past decade has the idea of its potential to replace fossil fuels to power heavy industry taken off, leading to increased investment and advances in the technology. (Emphasis added.)

The idea of hydrogen may (or may not) be taking off, but hydrogen is not a “source” of energy, it’s an energy carrier. Calling hydrogen an energy “source” is like calling Stormy Daniels an “actress.”

Hydrogen is abundant in the universe. But it’s not a source of energy. Instead, like electricity and gasoline, it must be manufactured. The most common ways are by splitting water through electrolysis, or via steam-methane reforming, which uses high-pressure steam to produce hydrogen from methane.

There are other forehead-slapping statements in the Times article written by Stanley Reed and Melissa Eddy, who traveled to the German city of Duisburg to visit a factory that makes electrolyzers. “If adopted widely,” they wrote, “the devices could help clean up heavy industry such as steel-making, in Germany and elsewhere.” Well, yes, if “adopted widely.” But despite decades of frothy predictions from Rifkin and others, electrolyzers haven’t been adopted widely because making and using hydrogen on a large scale is — as my friend, Steve Brick, puts it — “a thermodynamic obscenity.”

The cover of Rifkin’s 2003 book.

Reed and Eddy ignore the energy intensity of making hydrogen, only offering that by using “electricity to split water” the electrolyzer “produces hydrogen, a carbon-free gas that could help power mills like the one in Duisburg.” That’s true. But how much electricity is needed? And where the heck is German industry, which is already being hammered by expensive gas and power, going to get the juice? At what cost? Those questions are not addressed.

To be clear, lots of other media outlets are hyping hydrogen. And the hype is surging because of fat government subsidies. Reed and Eddy explain that the German government has earmarked some $14.2 billion “for investment in about two dozen projects to develop hydrogen.” Here in the U.S., the 45V tax credit in the Inflation Reduction Act provides lucrative subsidies for hydrogen production. Big business is lining up to get those subsidies. In February, energy giant Exxon Mobil warned that it might cancel a proposed hydrogen project at its Baytown, Texas refinery depending on how the Treasury Department interpreted the “clean” hydrogen rules in the IRA.

Regardless of tax credits and subsidies, making and using hydrogen is a high-entropy, high-cost process. As a friend in the oil refining business told me last year, “If you like $6-per-gallon gasoline, you’re gonna love $14-to-$20-per-gallon hydrogen.”

As for Brick’s “thermodynamic obscenity” line, the numbers — which I’ll examine in a moment — are easy to understand. Hydrogen is insanely expensive, in energy terms, to manufacture. It takes about three units of energy, in the form of electricity, to produce two units of hydrogen energy. In other words, the hydrogen economy requires scads of electricity (a high quality form of energy) to make a tiny molecule that’s hard to handle, difficult to store, and expensive to use.

Among the biggest challenges in handling and storing the gas is the problem of “hydrogen embrittlement,” which can occur when metals are exposed to hydrogen. That means we can’t use existing gas pipelines or tanks to move and store the gas. As for using the gas, yes, it can be blended with natural gas and put into turbines or reciprocating engines. However, the best way to use it is in a fuel cell. And from where will those devices come? I’m old enough to collect Social Security. I’ve been reporting about the energy sector for nearly four decades, and yet, in all that time, I’ve seen precisely three fuel cells.  

How much would the hydrogen economy cost? In 2020, Bloomberg NEF estimated that producing enough “green” hydrogen to meet 25% of global energy demand would require “more electricity than the world now generates from all sources and an investment of $11 trillion in production and storage.”

The obscene thermodynamics of hydrogen can be understood by looking at an announcement made last year by Constellation Energy. According to a March 10, 2023 article in Nuclear NewsWire, a new hydrogen production project at the company’s Nine Mile Point nuclear plant in New York, “is part of a $14.5 million cost-shared project between Constellation and the Department of Energy.” Of that sum, $5.8 million was coming from the DOE. The article explained that “Using 1.25 megawatts of zero-carbon energy per hour,” the plant’s electrolyzer will produce “560 kilograms of clean hydrogen per day.”

The math is simple. The plant uses 30 megawatt-hours of electricity to produce 560 kg of hydrogen per day. One MWh of electricity is equal to 3,600 megajoules of energy, and one kg of hydrogen contains about 130 MJ of energy. Therefore, Nine Mile Point uses 108,000 MJ of electricity to produce 72,800 MJ of hydrogen, or 1.5 MJ of electricity for 1 MJ of hydrogen.

Such a lousy EROEI (energy return on energy invested) should immediately disqualify hydrogen from serious energy policy discussions. But that, of course, hasn’t happened. It must also be noted that the EROEI is worse than what I stated above because the hydrogen, once produced, must be stored and fed back into another energy conversion device to make electricity or heat. In that process, more energy will be lost.

I’ll end with a bit more history. In 2004, the National Research Council and the National Academy of Engineering published a 267-page report called “The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs.” In the concluding section, the report said, “making hydrogen from renewable energy through the intermediate step of making electricity, a premium energy source, requires further breakthroughs in order to be competitive.” It continued:

There are major hurdles on the path to achieving the vision of the hydrogen economy; the path will not be simple or straightforward. Many of the committee’s observations generalize across the entire hydrogen economy: the hydrogen system must be cost-competitive, it must be safe and appealing to the consumer, and it would preferably offer advantages from the perspectives of energy security and CO2 emissions. Specifically for the transportation sector, dramatic progress in the development of fuel cells, storage devices, and distribution systems is especially critical. Widespread success is not certain.

Widespread success of the hydrogen economy wasn’t certain in 2004, and it’s not certain now. Or, to put it in ecclesiastical terms, there’s nothing new under the hydrogen sun.

Nuclear Energy Could Be A Godsend For Biden’s Green Agenda. Here’s What’s Holding It Back

Nuclear power plant with yellow field and big blue clouds

From The Daily Caller

By NICK POPE

CONTRIBUTOR

Nuclear energy is effective at scale and produces no emissions, but the technology may not be poised to play a leading role in President Joe Biden’s green agenda.

American policymakers, primarily Democrats and their appointees, are pushing hard to realize the Biden administration’s goal of having the U.S. power sector reach net-zero emissions by 2035, but wind, solar and other renewable generation sources have not yet shown the same degree of reliability that nuclear has demonstrated. Despite these facts, Biden and lawmakers have so far failed to simplify the nuclear regulatory and permitting process, according to energy sector experts who spoke with the Daily Caller News Foundation.

The Biden administration often mentions nuclear alongside solar and wind, but U.S. nuclear capacity has remained mostly stagnant since 1980, according to the U.S. Energy Information Administration (EIA). While new solar and wind projects are being announced and built with generally increasing frequency, only a handful of new nuclear reactors have come online in the past twenty years, a trend that may not change in the absence of significant policy and regulatory changes, according to EIA and power sector experts who spoke with the DCNF.

“Nuclear’s costs are enormous, because of the regulatory morass created by the Nuclear Regulatory Commission (NRC). It would be better to scrap the whole thing and go back to the Atomic Energy Commission, which actually worked to ensure safe, secure and affordable nuclear technologies,” Dan Kish, a senior research fellow at the Institute for Energy Research, told the DCNF. “Nuclear would be the obvious answer if the Greens and Biden truly want to electrify everything and reduce carbon dioxide emissions, but they also oppose natural gas that has reduced coal emissions, so I wouldn’t hold my breath. They don’t seem to want anything that solves the problems they insist exist, so I expect them to continue to reject things that actually work.”

The Biden administration has spent at least $1 trillion to advance its climate agenda, and generous subsidies in the Inflation Reduction Act (IRA) and bipartisan infrastructure law of 2021 are designed to accelerate a transition away from fossil fuels. Both the infrastructure package and the IRA contain provisions designed to forestall the early retirement of nuclear facilities. However, neither law sufficiently streamlined the complex regulatory environment for nuclear or significantly reduced the overhead costs of building new capacity, John Starkey, director of public policy for the American Nuclear Society, told the DCNF.

The incentives in the IRA and infrastructure bills are a “great start,” but “more assistance for cost overruns and early mover support for first-of-a-kind advanced reactors would also be helpful,” Starkey told the DCNF.

The administration has expressed a desire to build up a domestic supply chain for nuclear power, which is dominated by Russia and China. However, Biden also designated a nearly one million acres of uranium-rich land in Arizona as a national monument in August 2023, prohibiting future mining claims in the covered area. (RELATED: Enviros Cheered New York For Shutting Down Huge Nuke Plant. Then Emissions Jumped)

There are currently 54 operational nuclear power plants and a total of 93 commercial reactors in the U.S., which combine to supply about 19% of America’s electricity, according to EIA. The average nuclear reactor is 42 years old, and licensing rules restrict their lifetimes to a maximum range of 40 to 80 years, according to EIA.

The potential promise of nuclear energy is also apparent to many policymakers from around the world; more than 20 nations, including the U.S., pledged to triple nuclear energy generation to bring down emissions during COP28, the United Nations climate summit held at the end of 2023 in the United Arab Emirates. However, realizing that pledge in the U.S. may be more difficult than making it given the high costs and regulatory environment that prospective builders and operators of nuclear plants must navigate, multiple energy sector and nuclear experts told the DCNF.

“I think the fundamental issue with nuclear power is a question of risk aversion. People have a very strong association of nuclear power with nuclear accidents and radiation leaks and very severe health hazards. And there is debate,” Brian Potter, a senior infrastructure fellow with the Institute for Progress, told the DCNF. “There’s a lot of debate, which I’m not an expert on, as to how real those risks are.”

“The organizations tasked with overseeing and managing tend to be very risk averse and have a very burdensome process for approval and getting these things built,” Potter continued. “And so overall, it just makes it really, really hard to build these things or to relax regulations around making them easier to build.”

In terms of levelized capital costs, nuclear energy is the most expensive per unit of energy produced of all forms of generation other than offshore wind under the assumption that operation will start in 2028, according to EIA data aggregated by Statista.

Notably, many Democrats and environmentalists are opposed to nuclear energy largely because of perceived safety risks. Historically, major nuclear incidents — Three Mile Island, Chernobyl and Fukushima — have caused significant environmental damage or loss of life, and often are followed by increases in regulation designed to prevent another disaster.

But those incidents, tragic and destructive though they were, are not representative of nuclear power’s overall level of safety, according to Starkey.

“I sense a cooling even from a lot of environmentalist groups that used to sour on nuclear who are now saying ‘wait a minute,’” Starkey told the DCNF. “With regard to things that have happened in the past when it comes to nuclear accidents, the public and Congress, in a bipartisan way on both sides, I’m starting to see more of an understanding of what’s happened. And that deep fear of radiation from 10, 15, 20 years ago, it’s starting to tamper down a little bit.” (RELATED: Elon Musk Calls For More Fossil Fuels And Nuclear Power To Avert Energy Crisis)

The NRC — the federal entity that is primarily responsible for regulating nuclear power —  does not impose a regulatory burden that is too onerous, Starkey added. However, the agency is trying to become “leaner and meaner” while also “maintaining a vigorous standard of safety,” Starkey said.

“We are focused on appropriately balancing our regulatory footprint while continuing to ensure we’re carrying out our safety mission,” an NRC spokesperson told the DCNF. The spokesperson also referred the DCNF to a March speech from NRC Chair Christopher Hanson in which he said that his agency is anticipating applications for two combined licenses, one design certification, one standard design approval, one manufacturing license, three operating licenses and nine construction permits.

Congress has also identified a need for streamlining in the nuclear space, passing a package of nuclear reform bills in the House this week in strong bipartisan fashion. However, the plan of some senators to use the Federal Aviation Administration (FAA) reauthorization bill as a legislative vehicle for the nuclear package failed, according to the Washington Examiner.

Despite the missed opportunity on the FAA bill, Starkey remains confident that the nuclear package could still find its way through the Senate at some point in the coming weeks as more chances come around.

The Department of Energy did not respond to a request for comment.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

How AI is outsmarting Green energy, zero carbon fantasies

From CFACT

By Larry Bell

3385524 – human head emerging from a water and binary code surface. digital illustration.

Big, artificial intelligence-related companies are soon coming to realize that net-zero emissions plans to kill and replace fossil energy with wind and solar is a dumb notion that will leave them and American power consumers competing in the dark.

As noted by Wall Street Journal writers Jennifer Hiller and Scott Patterson, giant data centers providing computing power needed for artificial intelligence are setting off a four-way battle among electric utilities trying to keep the lights on, tech companies that like to tout their climate credentials, consumers angry at rising electricity prices, and regulators overseeing investments in the grid and trying to turn it green.

Alphabet, Microsoft, and Amazon, three of the largest AI data center users, have previously criticized a proposal by utility company Georgia Power to expand natural gas use at the expense of hurting their renewable energy programs.

The problem is that those centers require huge amounts of reliable electricity to operate, and no nearly adequate hydrocarbon replacement exists.

The rise of ChatGPT and similar large-language AI models require huge amounts of computing power, which has turbocharged data-center demand.

As former Microsoft vice president Brian Janous observes, whereas “No data center wants to be tied to the need for new fossil resources, that’s the problem… You can’t throw this much [data-center] capacity at the system and not have some degree of fossil resources to support it.”

An explosion of new hyperscale data centers in Northern Virginia will consume enormous amounts of power, some using as much as currently used to supply the city of Seattle.

Referred to as “Data Center Alley,” the area is home to about 150 data warehouses, which support about 70% of global internet traffic through a spider web of crisscrossing power lines.

Amazon Web Services, Amazon.com’s cloud-computing business, has previously invested $52 billion in the region with plans to add another $35 billion by 2040.

Amazon has reportedly enabled 19 solar farms in Virginia and is the world’s largest corporate renewable energy buyer.

Nevertheless, the company also struck a $650 million deal to buy a data center in Pennsylvania powered by a 2.5-gigawatt nuclear plant.

Dominion Energy, which supplies electricity to most of the Virginia data centers, projects its power requirements to quadruple over the next 15 years, representing 40% of the utility’s demand in the entire state.

Dominion CEO Robert Blue said: “We’re going to continue to be a big builder of renewables. We’re building a big offshore wind farm. We’re building a lot of solar. We’re adding a lot of storage. … But we also recognize that we’re going to need some more natural gas in order to keep the lights on.”

In addition to developing more natural gas plants to balance power grids from expansions of intermittent renewables, rising demands are also delaying some retirement of coal plants.

Duke Energy has told Carolina regulators it will need either three new gas-fired plants or keep existing coal plants open longer than planned.

Dominion wants to build a 1,000-megawatt natural gas plant in Chesterfield County, where a coal plant closed last year, stating that the addition is critically important for reliability.

Significant costs for these increased power demands — including transmission infrastructures — will be passed on to household and business consumers.

Dominion projects that grid investments, plus the new projects, will raise average utility bills for Virginia customers from around $133 a month to $174 over 15 years.

Meanwhile, electricity demand by power data centers is projected to increase by 13% to 15%, compounded annually through 2030, a shortage that is already delaying new centers by two to six years.

As Federal Energy Regulatory Commissioner Mark Christie warned last month, “The problem is that utilities are rapidly retiring fossil-fuel and nuclear plants. We are subtracting dispatchable [fossil fuel] resources at a pace that’s not sustainable, and we can’t build dispatchable resources to replace the dispatchable resources we’re shutting down.”

We don’t have to rely on supersmart AI to warn us that this is really dumb policy.

It’s Been A Brutal Year For Offshore Wind — Despite Analysts’ Best Guesses

From The Daily Caller

NICK POPE

CONTRIBUTOR

Some analysts predicted that the U.S. offshore wind industry would bounce back after a rough 2023, but many of the same problems that plagued the industry last year have continued to burden developers through the beginning of 2024.

Energy data analytics provider Wood Mackenzie, consultants from Deloitte, Reuters and environmental lawyers for a law firm called Locke Lord variously projected that the U.S. offshore wind sector would rebound after a distressing 2023. However, four months in to 2024, the inflation, higher borrowing costs, logistical problems and supply chain woes that battered the industry in 2023 have not relented, forcing developers to cancel or seek to renegotiate deals as they did in 2023.

“Obviously, providing affordable and reliable energy for everyone is a challenging endeavor,” Kevin Dayaratna, a senior research fellow for the Heritage Foundation, told the Daily Caller News Foundation. “Even despite all of the subsidies these alternative forms of energy – such as offshore wind – have received, they have still failed to become a significantly mainstream source of energy.” (RELATED: Blue State Doubles Down On Offshore Wind After 2023’s Massive Failure)

Since the start of 2023, approximately 60% of all contracts signed by American offshore wind developers have been cancelled, according to E&E News. Ørsted, a Danish company and one of the world’s leading offshore wind developers, backed out of two major planned projects in New Jersey in 2023, while other players like General Electric, British Petroleum (BP) and Equinor attempted to renegotiate with state governments as economic headwinds eroded projects’ profitability.

Similar developments have played out to start 2024, with developers up and down the east coast backing out of deals to sell power from their projects as the same fundamental economic problems persist despite the projections of some market experts and media outlets.

“Vessel owners and operators are actively contracting with original equipment manufacturers and project developers to reserve vessels for project construction in 2024 and beyond,” Locke Lord attorneys M. Benjamin Cowan and Emily Huggins Jones wrote on January 3. “Thus, despite significant headwinds in 2023, with improving economics, more flexible procurement procedures, continued federal support, and increasing legislative support, the U.S. offshore market appears to have weathered the worst of the storm and is poised for growth in the coming year.”

On the same day that the two attorneys published their market analysis, Equinor and BP backed out of a contract with New York state to provide power generated by their planned Empire Wind 2 offshore wind farm due to inflationary pressures. Subsequently, three other New York offshore wind projects were cancelled on April 19.

“The offshore wind sector, which faced setbacks in 2023, is expected to rebound in 2024 with tangible opportunities and a record number of tenders,” Wood Mackenzie wrote on January 25. “In summary, 2024 holds the promise of a global wind energy resurgence, with key areas of focus including market recovery, reliability, profitability for [original equipment manufacturers] and the offshore wind sector’s evolving dynamics.”

The day after Wood Mackenzie published those words, Ørsted announced that it had backed out of Maryland’s orders approving its Skipjack 1 and 2 projects off the state’s coast. The company said at the time that inflation, high refinancing costs and supply chain issues combined to render the state’s subsidies economically unviable, but that it would not give up on the projects altogether. (RELATED: Environmental Laws That Impeded Pipelines For Years Could Trip Up Biden’s Sprint Toward Offshore Wind)

Several senior employees of Deloitte, one of the country’s top consulting firms, also projected confidence that the offshore wind industry would be able to turn things around in 2024.

“Offshore wind investments dropped in 2023 amid challenges with costs and permitting, but the tide is expected to turn in 2024 as construction and operations get underway at several key projects,” reads a February 9 piece by Deloitte consultants Marlene Motyka, Jim Thomson, Kate Hardin and Carolyn Amon published in The Wall Street Journal’s “sustainable business” section. “Transmission is a factor in many constraints on renewable deployments, although [Infrastructure Investment and Jobs Act] and [Inflation Reduction Act] programs and grants could start tackling transmission issues in 2024.”

Reuters, a global news outlet, echoed some of this optimism in its own projection that the American offshore wind industry would rally after 2023’s turbulence.

“The U.S. offshore wind industry is eying a brighter 2024, with work expected to start on several projects following a year marked by stalled developments and billions of dollars in write-offs,” reads a Reuters piece published in December 2023 under the headline “U.S. offshore wind poised for success next year after turbulent 2023.”

The industry’s problems are also complicating President Joe Biden’s climate agenda. The Biden administration has set a goal of having offshore wind providing enough electricity to power 10 million American homes by 2030, but Reuters reported in November 2023 that the target is almost certainly out of reach due to the industry’s struggles.

The industry has struggled despite the availability of robust federal subsidies, including tax credits contained in the Inflation Reduction Act, Biden’s signature climate bill. Despite the industry’s missteps, the administration is pushing ahead with its offshore wind agenda, releasing a robust five-year leasing schedule for the industry on Wednesday that could see up to a dozen lease sales through 2028.

“Biden’s offshore wind fetish ignores the realities affecting the industry here and abroad, but that is the hallmark of all his energy and climate schemes,” Dan Kish, a senior research fellow at the Institute for Energy Research, told the DCNF. “Warren Buffett once said the only reason to build wind turbines is the tax credits, and he was talking about onshore wind. Offshore wind is three times as expensive, and it only makes sense with sweetheart electric rates for the builders gifted to them by politicians looking for golden parachute jobs with wind companies after consumers boot them out of office when they start getting their bills.”

Wood Mackenzie, Reuters, Deloitte, Locke Lord and the White House did not respond to requests for comment.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

Exit Stage Right: Investors Are Bailing On Green Funds

From The Daily Caller

NICK POPE

CONTRIBUTOR

Investors are fading on green energy investment funds due to worries about the sector’s ability to grow and the possible return of former President Donald Trump to the White House, Reuters reported Wednesday, citing analysis conducted by a firm called LSEG Lipper.

Funds that invest specifically in green energy companies and products around the world saw investment outflows totaling $4.8 billion during the first quarter of 2024, the largest amount in a single quarter on record, according to Reuters. Meanwhile, the S&P Global Clean Energy Index has tanked by about 10 percentage points this year while the S&P 500 Energy Index — a fund that features many oil and gas companies — is up by more than 16% this year so far.

“This is what Consumers’ Research has been warning about from the very beginning. The idea that the rush into [Environmental, Social and Corporate Governance (ESG)] and green investing would be good for investors and shareholders was always a lie,” Will Hild, the executive director of Consumers’ Research, told the Daily Caller News Foundation. “Now, with higher interest rates and a completely different energy paradigm, the folly of these boondoggles is becoming apparent.” (RELATED: Citigroup Reports Huge Share Of Its Clients Are Not Ready To Reach Key Climate Targets)

Many large financial institutions in the U.S. have embraced ESG investing in recent years, characterizing it as a practice that allows for investors to profit while also helping to effectuate positive societal changes. Opponents like Hild have countered that the strategy violates the fiduciary duty that institutions have to their investors by injecting politicized considerations into financial decision-making that ought to be entirely apolitical.

Now, some of the leading asset managers in the world, such as BlackRock and State Street, are under investigation by the House Judiciary Committee for their ESG practices, while State Street and JP Morgan’s asset management arm have withdrawn from Climate Action 100+, a coalition that pushes companies to slash emissions and adopt other corporate climate policies.

Globally, some of the green funds that saw the biggest capital outflows in the first quarter of 2024 include Handelsbanken Hallbar Energi, a Swedish fund that lost $458 million of investment, and the iShares Global Clean Energy ETF, which lost $335 million, according to Reuters. Meanwhile, the Ninety One Global Environment Fund lost $226 million of investment in the first quarter.

The apparent downturn in investor confidence and interest in green energy funds appears to be happening despite the Biden administration’s push to advance its massive climate agenda and similarly costly initiatives undertaken by European states like Germany. Governments like those of the U.S. and Germany have spent vast sums of money to subsidize technologies like wind and solar power generation, but green energy has yet to displace fossil fuels as the lifeblood of the world’s developed economies.

If investor interest in green energy funds and products continues to dissipate, it is unlikely that international climate goals established or reaffirmed at 2023’s United Nations climate summit in Dubai will be met, according to Reuters.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

UK To Force “Green” Energy on North Sea Oil & Gas Platforms

From Watts Up With That?

Guest “You can’t fix stupid” by David Middleton

H/T “rhs” for this Fox News article:

UK could force oil, gas platform companies to convert rigs to green energy or face shut down: reports

North Sea Transition Authority targets 2030 deadline to design platforms for green energy solution

 By Greg Wehner Fox News

Published March 28, 2024

Oil and gas rigs in United Kingdom waters of the North Sea could be forced to convert over to green energy or low-carbon fuels, or either face closure or getting banned from opening new platforms, in an effort to reduce emissions, according to reports.

The Telegraph reported there are currently over 280 oil and gas platforms in UK waters, which produce about 3% of the total CO2 emitted by the country per year.

The same rigs, though, produce nearly half of the UK’s energy.

[…]Fox News

Why can’t the media use the words “platforms” and “rigs” correctly?

These are “rigs”:

National Offshore Industries Association

A drilling rig drills wells. It is moved onto a location to drill wells. Drilling rigs then move on to the next project. The notion of powering drilling rigs with “green energy” is exceptionally stupid. (See The Solar-Powered Oil Field… An Adjustocene Fable). Offshore drilling rigs are usually powered by diesel engines. Here’s the Transocean Deepwater Invictus for an example:

Power & Machinery

Main Power 6 x HHI HiMSEN H32/40V V-type diesel engines rated 7,000 kW,720 rpm, each driving 1 x 8,125 kVA AC generator

Emergency Power One Caterpillar 3516B V-type diesel engine rated 1,780 kW, 1,800rpm driving 1 x AC generator

Power Distribution 3 x Siemens NXPlus C Plus, 11 kV Switchboards with AKA Advanced Generator ProtectionTransocean

When oil & gas discoveries are made, production platforms are installed.

These are “platforms”:

National Offshore Industries Association

Since production platforms are generally fixed structures (unless moved by hurricanes or subsea mudslides), they can be hooked up to the onshore power grid, however it is far more cost effective to power them with diesel and/or natural gas powered generators. The natural gas often comes from the production stream. The notion of powering production platforms with “green energy” is still fairly stupid, but actually possible.

The Green Hostage Crisis

Nearly half of the UK’s energy production comes from North Sea oil & gas platforms. Forced electrification of the platforms could result in a 3% reduction in the UK’s CO2 emissions. Holding 50% of your energy production hostage for a 3% reduction in CO2 emissions… Ron White would say:

Keeping the Lights On: UK Regulators Meet With North Sea Producers on Brownfield Electrification

The North Sea Transition Authority has previously said failure to invest in platform electrification could threaten future production rights.

February 21, 2024

By Trent Jacobs

UK regulators met recently in Aberdeen with oil and gas producers and technology suppliers to discuss strategies to enhance the electrification of the nation’s offshore platforms.

Power generation accounted for almost 80% of UK offshore oil and gas emissions in 2022—or about 2 mtpa. On the whole, the upstream industry represents a 3% share of all UK greenhouse gas emissions, according to the North Sea Transition Authority (NSTA).

The authority has previously voiced concerns that the domestic industry must intensify its efforts to achieve the government’s goal of halving emissions from oil and gas production by 2030.

“Platform electrification is a key step on the road to net zero. The North Sea has long been a testbed for pioneering technologies and right now we need innovative solutions to crack the significant challenge of electrification, cut emissions, and accelerate the transition,” Bill Cattanach, the head of supply chain for NSTA, said in a statement.

[…]

Despite a consistent reduction in total emissions by the UK industry since 2020 and a nearly 50% reduction in flaring over the past 4 years, the NSTA has stressed the urgent need for action. Last year, it warned all UK North Sea operators that future production rights might be contingent on their commitment to field electrification.

[…]Journal of Petroleum Technology Part One

How does the North Sea Transition Authority envision oil field electrification?

North Sea Transition Authority

Piece of cake… On paper.

What happens when governments make economically illiterate demands?

Wood Mackenzie presented analysis at last year’s SPE Offshore Europe conference suggesting that with 80% of UK North Sea resources already extracted there is likely less than 600 million BOE remaining—leaving little to no economic case for electrification projects at many sites.

Additionally, a report from Offshore Energies UK (OEUK) predicted that up to 180 of the nearly 280 offshore platforms in the UK North Sea will cease production by the end of the decade due to natural declines. The trade group’s study further noted that 20 fields ceased production last year, while only two new fields were brought online.Journal of Petroleum Technology Part Deux

Who else thinks that the NSTA would actually prefer to see the premature abandonment of North Sea oil and gas fields, rather than the electrification thereof?

What electrification demand is next?