Obama on climate change: big talk, not much action

Posted on June 26, 2013 by meisele

The President’s climate change program offers nothing new to impact carbon emissions.

On June 25, President Obama announced a goal of curbing greenhouse-gas emissions 17% from 2005 levels by 2020. The key program to accomplish this is “…establish carbon pollution standards for both existing and new power plants.”

This would be the first-ever federal effort to regulate greenhouse-gas emissions from electricity generating power plants, the source of about one-third of such carbon emissions in the U.S. The main strategy is to reduce the use of coal, in favor of cleaner, less carbon emitting fuels, mainly natural gas.

Obama is only a decade behind! In the past decade (see charts), the electric utility industry has already reduced its coal usage by over 1/3, from 51% of total electricity generation in the U.S. to 37% in 2012, as reported by the Nuclear Energy Institute .

Natural gas has taken up all of the slack, because natural gas fired plants are physically smaller, can be situated near customers in large cities, have much shorter regulatory approval cycles, and because horizontal deep fracking drilling has made natural gas plentiful and cost effective, now and in the future for North America. Over 90% of the new capacity for electricity currently in the approval process in the U.S. is for natural gas fired plants. Natural gas’s portion of total electricity will continue to rise, with or without regulation by the federal government.

President Obama’s plan includes other measures meant to reduce emissions, including $250 million in federal loan guarantees for cleaner fossil-fuel energy projects; new fuel-economy standards for heavy trucks; and greater cooperation between the U.S. and major economies including China, India and Brazil. These proposals are either too small to have a meaningful impact, or they lack any specific proposals that could achieve meaningful results. Big talk, but little results will come.

Mr. Obama’s proposals don’t require congressional approval. One can expect legal and congressional challenges to regulating carbon emissions from power plants. But the electric utility industry will continue its progress away from coal, with or without those regulations.

New Federal gas fracking rules are coming

Posted on May 4, 2012 by meisele

The Obama administration has been circulating new environmental-safety rules for hydraulic fracturing on federal land, setting a new standard that natural-gas wells on all lands eventually could follow. Expect the Interior Department to release them within a few days. These rules will help create more public confidence in this new technology and help the industry move forward.

The new rules address concerns that the method of extracting natural gas known as “fracking” can contaminate groundwater. Among other things, they create new guidelines for constructing wells and treating waste water, according to a draft of the proposed rules reviewed by The Wall Street Journal.

Any chemicals used in the fracking process would have to be disclosed, but not until after they have already been used in the drilling.

The fracking rules apply to natural-gas drilling on federal and tribal lands, where about one-fourth of fracked wells are drilled. The new rules could serve as a template for state regulation in the future.

Santa wish list for Energy lovers

Posted on February 17, 2012 by meisele

President Obama released his FY2013 Energy budget, which, according to Secretary of Energy Steven Chu, makes investments in innovation, clean energy and national security. It’s a something-for-everyone strategy, including clean energy R&D, solar cost reduction efforts, nuclear site cleanup, and extending the 1603 Federal loan guarantee program. There are additional programs for bioenergy, geothermal, ocean wave energy and solar, among others.

Given the $ trillion deficit of this proposed budget, Congressional Republican’s reticence to support the administration in an election year, and the lack of agreement on a national energy policy, this Energy budget, like many Santa’s wish lists, probably won’t get completely fulfilled. Maybe the stockings won’t be completely empty, either.

Dumping? Or competition?

Posted on January 26, 2012 by djadmin

President Obama meets China’s Vice President Xi Jinping today. A hot topic will be the alleged solar panel dumping by Chinese manufacturers, which has been hurting U.S. manufacturers. Is it dumping? Or competition?

Viewed from learning curve economics, two megatrends have changed the solar module landscape. First, five years of massive national subsidies in Europe and Japan have been slashed or eliminated. Second, the solar industry has matured to the level where it now has its own dedicated silicon cell supply, rather than taking the excess capacity of the semiconductor industry. These impacts mean the industry has reverted to its long term cost curve as the basis for pricing, rather than artificially high prices.

Viewed from the political lens, solar is a lightning rod for near term posturing. Obama’s administration needs recovery from the Solyndra debacle and show that it wants to create jobs. The U.S. industry has suffered, as unexpectedly quick price cuts have damaged bottom lines.

Expect strong language from both sides. But dont expect real sanctions anytime soon. For the plain truth is that its a new, tougher competitive environment for solar modules. Get used to it.