This is from a thread on the Sierra Club's FRED list that asks whether we
support a carbon tax. Ned Ford is one of the most informed experts on
energy that I know in the Club. Below he discusses why a carbon tax
proposals are a disruption and will not happen fast enough.
Enjoy.
JBK
---------- Forwarded message ----------
From: Ned Ford <Ned.Ford(a)fuse.net>
Date: Mon, Aug 22, 2016 at 1:25 PM
Subject: Re: [GW-ACT-LEADERS] Sierra Club position on carbon fee and
dividend proposal to put a price on carbon?
To: CONS-SPST-GLOBALWARM-CHAIRS(a)lists.sierraclub.org
I have spent many years trying to explain why carbon taxes are not going to
be a big part of the picture.
https://www.youtube.com/watch?v=Kxryv2XrnqM is about disruptive technology
and it disrupts my own thinking even though I have been following most of
the trends he speaks about for many years. In short we don't need carbon
taxes because the technologies are producing the price differential more
effectively than a tax could.
That flies in the face of the often-repeated claim that carbon taxes are
more efficient or better than other strategies. What those people usually
mean is that carbon taxes are better than command and control. We haven't
used command and control for the major pollutants for several decades, so
it's a false premise.
What carbon tax advocates neglect is the huge differential between the
effect of a price on carbon on coal, and the same price's impact on
petroleum or natural gas. We seriously could use a natural gas or
petroleum tax. But it would have to be absurdly large as a tax on carbon,
compared to the price needed to end coal. About ten times larger. It
would be easy enough to separate the fuels and have different tax rates,
but the discussion never gets that far.
The fact of the matter is that carbon reductions are happening because
efficiency and wind and solar are cheaper. The more we use those three
technologies to address coal and natural gas generation, the lower the
prices and the faster the process. We are at a point today where an EV
costs a third or less than a gasoline car to drive any distance, and the
price differential will get greater. So we need a lot more clean
electricity than the nation is presently expecting to need, if just
replacing the current fuel mix (including the nuclear plants that can't run
forever) is the target. About 40% more total electricity by 2040.
If you view the link above you will understand how narrowly I'm talking
about the coming changes. Disruptive energy changes affect everything we
do. But the most important thing we can do is to concentrate on direct
state level activism to remove obstructionists from the path of efficiency,
wind and solar. Utility scale solar must come before distributed solar,
even though in ten years we may see the order of priorities change to
solar, wind and efficiency. If that happens, as Mr. Seba says, it won't be
purely economic. Or at least it won't be purely economic as we think about
it because people will be factoring in their convenience as a "cost" where
no dollars are involved. This means we probably won't ever become truly
efficient. But at the same time, efficiency in some form is driving every
single one of the technological disruptions he identifies and many more
that he doesn't.
I hope the Sierra Club ignores carbon taxes. Even if the Republicans are
demolished in ten weeks we can use the opportunity far better to remove
barriers to efficiency and to speed development of cost-effective wind and
solar than to spend another decade trying to get a tax package into
position that really works.
- Ned
On 8/22/2016 12:44 PM, Carolyn Amparan wrote:
Hello,
Does anyone know the Sierra Club's position on the Citizen Climate's Lobby
carbon fee and dividend proposal? If so, what is the status on the
specific proposal and a price on carbon in general?
I found there was a resolution considered in 2013 but have not found
anything more current on the national website.
Thanks,
Carolyn
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This is an obscure but incredibly important court victory, supporting DOE calculations of a "Social Cost of Carbon".
JBK
"...In a unanimous decision<http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2016/…> late Monday, the Chicago-based 7th Circuit U.S. Court of Appeals rejected an industry-backed request to overturn a 2014 rule that set energy efficiency standards for commercial refrigerators.
In doing so, the court specifically backed the so-called social cost of carbon, President Obama’s administration-wide estimate of the costs per metric ton of carbon dioxide emitted into the atmosphere — currently $36...."
Full story at:
http://thehill.com/policy/energy-environment/290859-court-backs-obamas-clim…
This is a fairly lengthy article, but the last sentence of the excerpt below says it all. Translation: "Screw the rate payer!"
Full story at:
http://www.wvgazettemail.com/news-business/20160805/firstenergy-loses-11b-m…
After announcing a quarterly loss of $1.1 billion<https://www.sec.gov/Archives/edgar/data/1031296/000103129616000101/ex991fe-…> because of the future closures of two uncompetitive coal-fired power plants in Ohio, FirstEnergy says it will seek to "de-risk" by pushing plants onto electricity customers in states like West Virginia.
Charles Jones, CEO of FirstEnergy, the parent company of MonPower and Potomac Edison, announced in an earnings call <https://www.documentcloud.org/documents/3005292-First-Energy-Earnings-Call-…> on July 29 that the coal-heavy utility would seek to remove itself completely from the competitive energy business and, in the meantime, would try to offload plants to regulated markets, where the company is guaranteed a profit.
"Longer-term, we do not believe competitive generation is a good fit for FirstEnergy and we are focused on regulated operations," Jones said. "We cannot put investors and our company at risk."
Jim Kotcon
Is this an admission that the "free market" does not work in the traditional
electric power utility model?
"Charles Jones, CEO of FirstEnergy, the parent company of MonPower and
Potomac Edison, announced in an earnings call on July 29 that the coal-heavy
utility would seek to remove itself completely from the competitive energy
business and, in the meantime, would try to offload plants to regulated
markets, where the company is guaranteed a profit."
http://mynewsonthego.com/charleston/EPaper/?pageid=d33b9dcb-f8ef-4800-ab20-9
e327ee0ba1b
FirstEnergy loses $1.1B
06 Aug 2016 - Charleston Gazette Mail
By Andrew Brown
Staff writer
Firm eyes selling Pleasants plant to MonPower in 'de-risk' move
After announcing a
quarterlyhttps://www.sec.gov/Archives/edgar/data/1031296/000103129616000101/
ex991fe-06302016.htm
<http://mynewsonthego.com/charleston/EPaper/%3Ca%20href=> ">loss of $1.1
billion because of the future closures of two uncompetitive coal-fired power
plants in Ohio, FirstEnergy says it will seek to "de-risk" by pushing plants
onto electricity customers in states like West Virginia.
Charles Jones, CEO of FirstEnergy, the parent company of MonPower and
Potomac
Edison,https://www.documentcloud.org/documents/3005292-First-Energy-Earnings
-Call-Q2-2016.html <http://mynewsonthego.com/charleston/EPaper/%3Ca%20href=>
">announced in an earnings call on July 29 that the coal-heavy utility would
seek to remove itself completely from the competitive energy business and,
in the meantime, would try to offload plants to regulated markets, where the
company is guaranteed a profit.
"Longer-term, we do not believe competitive generation is a good fit for
FirstEnergy and we are focused on regulated operations," Jones said. "We
cannot put investors and our company at risk."
West Virginia likely will play a big part in that corporate strategy. Jones
made it clear
inhttps://www.documentcloud.org/documents/2841966-First-Energy-First-Quarter
-2016-Earnings-Call.html
<http://mynewsonthego.com/charleston/EPaper/%3Ca%20href=> ">another earnings
call earlier this year that the Akron-based business
wantshttp://www.wvgazettemail.com/article/20160312/GZ01/160319819
<http://mynewsonthego.com/charleston/EPaper/%3Ca%20href=> "> to sell the
Pleasants power plant, north of Parkersburg, to its subsidiary companies in
West Virginia.
The proposed transfer of that coal-fired plant, which would shift the risk
of the 36-year-old generating station off of investors and onto electricity
customers in the northern half of the state, has already prompted opposition
from groups like the Sierra Club, West Virginia Citizen Action Group and the
state government's Consumer Advocate Division.
Those groups took issue with the company's
http://www.psc.state.wv.us/scripts/WebDocket/ViewDocument.cfm?CaseActivityID
=441858 <http://mynewsonthego.com/charleston/EPaper/%3Ca%20href=>
&NotType=%27WebDocket%27">integrated resource plan - a 15-year energy and
demand forecast - that was presented to the West Virginia Public Service
Commission earlier this year.
The plan had reported that an existing coal-fired power plant (now known to
be Pleasants) would be the cheapest generating option for customers and that
electricity demand for MonPower and Potomac Edison was expected to increase
by 2.2 percent, largely because of the natural gas industry in the state.
Late this week, the Consumer Advocate Division and the
https://www.documentcloud.org/documents/3006112-PSC-Staff-and-CAD-Ask-for-Fi
rstEnergy-RFP.html <http://mynewsonthego.com/charleston/EPaper/%3Ca%20href=>
">PSC's staff called on FirstEnergy to file a formal request for proposal
that would require the company to compare other energy sources, including
new or existing wind, solar and natural-gas plants.
"The staff and CAD believes that these companies, especially in light of the
inexorable collapse of the coal industry driven primarily by the
availability of cheaper and more plentiful natural gas, continue to rely on
acquisition practices that are not in the best interests of the consuming
public and the economy of the state," their lawyers said.
Results from the PJM Interconnection, a regional transmission organization
that manages the energy market for 13 states, including West Virginia, seem
to contradict the company's findings in its resource plan, too.
https://www.documentcloud.org/documents/2842771-PJM-Market-Report-2015.html
<http://mynewsonthego.com/charleston/EPaper/%3Ca%20href=> ">Market results
show that, between 2014 and 2015, regional electricity sales from coal-fired
power plants dropped by 17.8 percent in the PJM. Gas-fired power plants sold
28.4 percent more in 2015 than they did the year before, and
evenhttps://www.documentcloud.org/documents/2842688-PJM-Capacity-Auction-Res
ults-2019-2020.html
<http://mynewsonthego.com/charleston/EPaper/%3Ca%20href=> ">more efficient
gas-fired plants are set to come online in the coming years.
The groups opposed to the transfer of Pleasants have argued that the sale of
the plant would be a corporate bailout for the company's investors, at the
expense of West Virginia electricity customers.
The
https://www.firstenergycorp.com/newsroom/news_releases/firstenergy-to-deacti
vate-units-at-two-ohio-power-plants-.html
<http://mynewsonthego.com/charleston/EPaper/%3Ca%20href=> ">closure of the
company's two plants in Ohio resulted
inhttps://www.sec.gov/Archives/edgar/data/1031296/000103129616000095/ex991le
ttertoinvestmentcom.htm
<http://mynewsonthego.com/charleston/EPaper/%3Ca%20href=> ">$1.5 billion in
charges and contract termination fees, or $2.99 per investment share. As a
result, three of FirstEnergy's subsidiaries have been put on a credit watch
by the ratings agency Standard and Poor's. Those subsidiaries
soonhttps://www.moodys.com/research/Moodys-Downgrades-FirstEnergy-Solutions-
Corp-and-Allegheny-Energy-Supply-Co--PR_352838
<http://mynewsonthego.com/charleston/EPaper/%3Ca%20href=> ">could be
downgraded to a "non-investment grade" rating.
Comments by FirstEnergy's executives also call into question whether
MonPower and Potomac Edison's demand for electricity is actually going to
increase by 2.2 percent in the coming years. The company has cited that
forecast demand as the reason it needs to purchase a plant the size of
Pleasants.
In the conference call, FirstEnergy officials said electricity demand among
all of its affiliates had actually dropped by 2.7 percent in the past four
months.
The company had a similar decline in the first four months of 2016, and
Jones described the company's future outlook for electricity demand as
"anemic."
James Pearson, FirstEnergy's executive vice president and chief financial
officer, said any increase in electricity demand from the natural-gas
industry had been offset by industrial declines in the steel and coal
industries. He said energy efficiency measures - which have lagged behind in
West Virginia - also were reducing residential demand in FirstEnergy's
service territories.
During the conference call, one investment analyst led off a testy question
by saying it was obvious from Jones' tone that "frustration has gone to peak
level" at FirstEnergy.
Jones responded by downplaying the difficulties the market-based portion of
the company is facing, and went on to lament the dipping regional energy
prices that are
https://www.documentcloud.org/documents/2842790-Capacity-Changes-in-PJM.html
<http://mynewsonthego.com/charleston/EPaper/%3Ca%20href=> ">largely being
driven by new natural-gas turbines.
"Is it frustrating that we're shutting down tens of thousands of megawatts
of generation in our country that's got life left in it because of the way
this market is working?" Jones said. "That is very frustrating to me."
Reach Andrew Brown at andrew.brown(a)wvgazettemail.com, 304-348-4814 or follow
@Andy_Ed_Brown on Twitter.