Category Archives: energy

Resist

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That’s what the tech industry honchoes are doing vis-à-vis Republican moves to cut or eliminate altogether clean energy tax credits. They want to maintain their handouts.

The Data Center Coalition, a group that includes Microsoft, Alphabet’s Google, Amazon.com and Meta Platforms, recently made its pitch in a letter to Senate Majority Leader John Thune (R, SD), according to a copy viewed by The Wall Street Journal. The group asked him to preserve tax credits and loan funding that would be aggressively phased out in the version of the bill passed by the House of Representatives last month.
The bill is fueling industry concerns about rising prices and power shortages if planned investments don’t materialize.

There’s this, too:

The House bill would require solar, wind, and other projects to begin construction within 60 days of the measure’s enactment to receive tax credits. It would also require the projects to come online by 2028, setting a hard cutoff for any projects placed in service after that year. Under current law, the tax credits phase out over four years, starting in either 2032 or when the US power sector’s greenhouse-gas emissions fall to a quarter of their 2022 levels—whichever comes later.

Here’s the thing, though. This isn’t so much a rescission of the tax credits or removal of “loan funding” as it is a requirement that recipients not dilly-dally about their performance. To get/keep the credits and funding, they actually have to start doing the things—begin construction, for instance—required to “earn” the handouts. Then they have to stop slow-walking their performance, pocketing the money money without anything to show, and instead complete their promised project and bring their “clean-energy” facility on line by a date certain.

Their worry about rising prices and power shortages is a valid concern, but that’s not effectively addressed with tax credits or government loans for their projects. That’s effectively addressed by getting government regulations out of the way of fossil fuel-sourced energy. Natural gas is about as clean as it gets, even counting the fiction that atmospheric CO2—plant food—is a pollutant. Oil-based energy production is nearly as clean, as is modern coal-based energy. The actual pollutants from burning coal have long been cleaned up be well-established technologies.

Fossil fuel-sourced energy is lower priced in no small part because it’s utterly reliable, producing energy whether or not the sun is shining or the wind is blowing, and those fossil fuel facilities need no expensive, themselves polluting from mining through disposal, battery storage that lasts only a very few hours into a long-term weather or night-time outage.

Clean energy facilities don’t need the tax credits or artificial government loans any more than do fossil fuel facilities. When they’re ready for market, the market will call for them without taxpayer money being donated to them. The proper resistance is a pushback and retention of the tax credit cuts and rescissions.

Backwards

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Interior Secretary Doug Burgum thinks he has a deal with New York’s Progressive-Democratic Governor Kathy Hochul: he’ll lift the pause on an off-shore windmill project she wants if she’ll unblock a couple of natural gas pipelines that ex-Progressive-Democrat Governor Andrew Cuomo blocked. The pipelines would vastly lower energy costs for New York and for the northeastern States on the other side of New York from Pennsylvania, where the pipelines would have originated.

Burgum lifted the pause on the wind farm, and then—and only then—Hochul said she’d work with the Trump Administration and companies on “new energy projects.”

This is backwards, and it foolishly trusts a Progressive-Democratic Party politician to follow through in any serious fashion.

It’s easy enough for Burgum to lift the pause on the wind farm; he can do it with the stroke of his pen. It’ll take a while for Hochul to lift the ban on the pipelines—if she does it at all rather than just engaging in stalling rhetoric, empty words like work with…on “new energy projects.” The correct order for execution of this agreement would have been for Hochul to lift the ban and get construction started. Then lift the pause.

No, It Isn’t

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Clean Energy Is Under Attack Even Where It’s Booming goes the Wall Street Journal headline. There’s a hint regarding that buried in the middle of the article:

The hit to the power sector could prove significant. More than three-fourths of the proposed solar projects and more than one-third of the wind farms in long queues to connect to the power grid needed tax incentives to be economically viable as of January, said Corianna Mah, analyst at Enverus Intelligence Research.

No, clean energy is not under attack. Market-distorting, vote-buying subsidies and tax credits are under attack—as they should be. Clean energy will do fine when the market—us consumers—want it. If clean energy projects cannot succeed without those handouts, they aren’t economically—or technologically—viable.

See, for instance, natural gas. Oil, even cleaned-up coal, too, once the costs of regulatory impediments designed as actual attacks on hydrocarbon energy are subtracted off. But wait—oil subsidies…. Those are a tiny fraction of all those clean energy subsidies and tax credits. But yes, oil subsidies need to go away, also.

Two Responses

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The headline tells the tale.

California is winning the war on ‘Big Oil,’ but experts say victory will bring higher gas prices

California’s “victory” has resulted in this:

Valero Energy Corporation has announced it will idle or close its Benicia Refinery in California—just the latest in the exodus of fossil fuel companies from the state.
Six months ago, Phillips 66 announced the closure of its Los Angeles-area refinery by the end of this year—it’s since bumped the date up to October—and a few months before that, Chevron announced it would be moving its headquarters from San Ramon, California, to Houston.
After the two refineries close, it’s not clear exactly where California will find more gasoline and other finished petroleum products, such as jet fuel, to satisfy demand.

And this:

Newsom blamed oil companies for high gasoline prices and promised further regulation of the industry would solve the problem for residents.

Here are two responses, should the management teams of the companies involved (finally) find the backbone to implement them. One is for oil and natural gas companies outside California decline to sell any of their products into California. They easily can make the case that it’s not sound economically or business-wise to produce products that meet California’s enormously stringent requirements and still be able to sell into the rest of our nation at market prices.

The other is for car and truck companies to decline to sell their vehicles into California. They easily can make the same economic and business argument: it’s not feasible to produce vehicles solely for the California market, and making those California-compliant vehicles for nation-wide sales only drives the costs of those vehicles far above the market prices that otherwise would obtain.

Those moves also would satisfactorily answer Newsom’s problem. With no further oil and gas flowing into California from outside, there would be no gasoline for which to abuse gasoline prices. With no further vehicles being sold into California, there would be reduced demand for gasoline at any price, a demand that would fall to zero as existing ICE vehicles age out.

Winners all around.

Mistaken Emphasis

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Oil and gas companies are worried that, in the process of reducing the Federal employee work force, too many regulators who issue the permits these companies need to begin work on a project are being fired, and so the permits are being delayed.

Some companies are asking the administration not to lay off key personnel who deliver permits at federal agencies….
[C]ompanies receive permits to drill on US lands from Interior’s Bureau of Land Management, licenses to export liquefied natural gas from the Energy Department, and permits to build interstate natural gas pipelines from the Federal Energy Regulatory Commission.

This isn’t the problem the executives make it out to be. The regulators in those entities are not independent satraps who act entirely on their own recognizance. They do not issue the permits or reject them in their own name; they act in the name of their respective Department or agency heads, and those agency heads are not independent satraps, either; they act in the name of their respective Department Secretaries. As such, the agency heads are fully capable of issuing/rejecting permits, and ultimately the Secretaries are fully capable of overruling their subordinate agency heads and issuing/rejecting the permits themselves.

Of course the Leftists and a large collection of fee-seeking lawyers will jump on this with litigation, but ultimately the agency and Secretary actions should be upheld.

Still, they can’t act entirely alone. Matt Schatzman, NextDecade CEO wants those agencies to hire more workers and cut red tape so the industry can start more projects as quickly as possible. It’s not necessary to have both of those. More hires is not necessary in any event; legislation is: require permits to be issued or rejected withing 30 days of the initial application, or the permits are deemed issued. Require the regulators to defend in concrete, measurable, publicly accessible terms their rejection within two weeks of their rejection, or the permit is deemed issued.