Category Archives: energy

Electricity Price Controls

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New Jersey’s newly elected Progressive-Democratic Governor, Mikie Sherrill wants them.

Ms Sherrill used her maiden speech to lay out her plans to ease electric rates. “In short, you are sick of the status quo,” she said, “Well, guess what, guys, so am I.” Guess what: Her proposals are more of the same progressive policies that have fueled higher prices: Subsidies, mandates, and price controls.

Especially those price controls.

Her worst idea is a pause on utility “rate increases or cost recoveries to the extent permitted by law.” This is a price control that will reduce grid investment, including in new supply. ….
If utilities can’t pass on their costs, they will skimp on maintenance. It’s that simple.

Of course, those rate increases or cost recoveries permissions are specified by State laws, and Sherrill and her legislature can alter those laws at will. Her “extent permitted” is disingenuous.

Maintenance skimping is well-known to renters in rent-controlled apartments.

If the provider—landlord or utility (or any other)—can’t recoup his costs as those increase, whether they’re supply costs, regulatory compliance costs, or taxes, he has less money to spend on procuring the items he needs to produce electricity or rental housing or… and especially critically, he has less to spend on simply maintaining what he has. Rental homes/apartments and power generators deteriorate, those residences become badly substandard to the point of uninhabitable, and power generation becomes unreliable. That last is bad in a hot summer, and it’s deadly in a cold winter.

With unreliable power generation, we get rolling blackouts where broad areas in succession see the lights go out; oil, natural gas, and coal generators, all of which depend at bottom on electricity, stop; and electric heating (or cooling) systems stop. On-off cycling from those rolling blackouts, even if in longer intervals than shorter, adds to the wear and tear on the generators, and on the heating and cooling systems, requiring increased maintenance for which those price controls, and rent controls, severely limit the money available to pay.

But never mind. Progressive-Democrats want those price controls because that’s their exercise of political power.

Nuclear Power and Progressive-Democrats

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Both Republican politicians support, and Progressive-Democrat politicians profess support, for nuclear power as a major source of energy for our economy. Progressive-Democrats, though, seems superficial. Here, for instance is Congressman Frank Pallone (D, NJ):

I’ve been supportive of [nuclear], and we’ve been supportive of it as Democrats mostly on a bipartisan basis, but all that is linked to safety. If anything happens that gives the impression or actually makes it so that people’s lives are at risk, or we have some kind of incident, that’s going to be the end of it. I’ll speak for myself but I won’t be able to support it anymore.

Safety matters in nuclear power, just as it does in handling electricity, natural gas, gasoline—and driving down the street and grilling on the patio. There have been three major incidents involving nuclear power. They were Three Mile Island, Chernobyl, and Fukushima.

The Three Mile Island incident involved a partial meltdown stemming from a stuck valve resulting in loss of coolant to the reactor and operators failing to recognize the fact of the loss of coolant soon enough. Despite those failures, the reactor’s overall design prevented further damage, and radiation release was minimal—generally equivalent to the amount a patient receives during a chest X-ray—and there were no fatalities.

The Chernobyl incident resulted in several immediate casualties and a number of follow-on casualties, and it was the result of serious operator error and poor design. The incident occurred during a test of power-out shutdown procedures that was carried out despite an existing serious power drop during ongoing operations. The design failure was demonstrated by the attempt to shut down the reactor during those conditions resulting in a large power surge that the system could not handle.

The Fukushima incident was driven by a well-offshore earthquake followed by a tsunami, and it had a reactor meltdown, which would seem an especially dangerous and lethal failure. However, the reactor was designed and built to handle all of that but the tsunami, which flooding caused loss of power, leading to the meltdown. By design, the meltdown was contained. Radiation release was extremely limited, and the fatalities ensuing consisted of hospitalized patients and nursing home resident elderly who died while being evacuated due to failures of the evacuation process. No fatalities from the reactor failure occurred.

Nuclear power is safe, when the designs are sound and, especially, when construction and subsequent operation are carried out carefully and in accordance with specifications. When those factors are met, nuclear power compares very favorably with the fatality rates from driving an automobile or truck, from flying commercial, and from riding the train. They compare favorably with the fatality rate inflicted on birds by windmills, and with the loss of habitat from building solar farms.

Pallone surely knows this, which makes his “support” very much a superficial position.

It’s time the naysayers—and not only some Progressive-Democrat pretenders—to get out of the way. Nuclear power is much greener than wind or solar, and it is much steadier and more reliable at generating electricity.

Regulation vs Regulation

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In an article centered on a so-called balancing act by Big Oil in an environment in which the Trump Administration is rolling back a broad swath of climate regulations, the news writers had this:

The industry’s biggest trade groups have said they support effective and reasonable regulations. Nixing the programs, the lobbyists said, would create an impossible choice for the industry—ask the administration to reinstate some rules, or walk back its previous support for some regulations.

This is timidity writ large. If the trade groups and the managers of the groups’ constituent companies really think this, that, or those rules are good ideas, then they should self-regulate along those lines. There’s nothing to stop them; there’s nothing forcing them to render themselves dependent on government diktats.

Lobbyists have signaled to the EPA that creating a regulatory vacuum could invite new lawsuits.

The proper response to those lawsuits is to stop being so desperate to settle and to stop hiding behind Government apron strings. With the climate regulation roll back, there are fewer grounds on which to base a lawsuit, and the proper response to those remaining that are brought is to refuse to settle, push the pace on the trials, and burn the suers to the ground in open court. That’ll be expensive in the early stages, especially as they’re forced by activist district judges to go through the appeals process, but it will reduce long-term legal costs far more by obviating a large number of lawsuits in the aftermath of those early ones.

It’s past time for business managers, especially including those running energy producing businesses, to recall the nature of their management roles.

The central imperative of a management position in the United States is to manage a company in a way that satisfies the company’s owners. There is nothing in that imperative that requires a manager to manage his company in a way that satisfies the demands of Government beyond simply following law. Those managers who are that timid that they need to be told what to do by Government need to be replaced; they’re unfit for their management positions.

This is America. Business managers are free to act on their own initiative; they are not required to wait on Government.

Oil Producers in a Difficult Spot?

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That’s the central thrust of a couple of news writers in Wednesday’s Wall Street Journal. Their lede:

Big Oil has a tough balancing act: help further President Trump’s “energy dominance” agenda and stick to its climate goals at the same time.

And

The escalating assault on climate initiatives puts large drillers such as Exxon Mobil, Chevron, and Occidental Petroleum in an awkward posture. They have pledged to curb their emissions—and unveiled plans to spend billions of dollars on low-carbon technologies such as carbon capture and storage, hydrogen and biofuels.

This whole idea of a “tough balancing act” is utter nonsense. The Trump administration simply is moving to take the shackles off American energy production.

Nor is there anything at all in the Trump administration’s assault rolling back of climate initiatives that make no economic or climate sense that prevents those and other businesses from continuing those pledges. On the contrary, in the present and improving environment, “Big Oil,” natural gas producers, coal miners, wind and solar energy producers—all of them—are better able to make their production decisions, including those concerning their emissions, based on sound business decision-making and not in response to government pressures to produce only certain types of energy.

Can’t Come Soon Enough

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EPA Administrator Lee Zeldin is moving to rescind an Obama-reign rule that classified atmospheric CO2—plant food—as a pollutant and a threat to public health.

The rescission can’t come soon enough; it’s cost us more than enough already in dollars and foregone hydrocarbon-sourced—which is to say, cheap and reliable and clean—energy generation. It’s cost us more than enough already in dollars diverted to patently unreliable “green” energy sources like solar and wind, the former which fails utterly when the sun doesn’t shine ( and that’s not only at night), and the latter which fails utterly when the wind doesn’t blow or it blows too hard. Windmills have additional, drastically destructive, impacts on birds, on aquatic life, and on our beaches when offshore windmills shed their blades.

Naturally, the Climate Funding Industry and a potful of fee-seeking lawyers will sue and try to tie up the rescission for as long as they can. That just puts a premium on pushing ahead, promptly, with the rescission.