Guest essay by Eric Worrall
h/t john – The White House has ordered Secretary of Energy Rick Perry to prevent the loss of more coal and nuclear plants, to ensure US energy independence.
Statement from the Press Secretary on Fuel-Secure Power Facilities
INFRASTRUCTURE & TECHNOLOGY
Issued on: June 1, 2018
The United States of America has the most technologically advanced and developed infrastructure in the world, with access to a reliable, dependable, and diversified electric grid.
President Donald J. Trump believes in total energy independence and dominance, and that keeping America’s energy grid and infrastructure strong and secure protects our national security, public safety, and economy from intentional attacks and natural disasters.
Unfortunately, impending retirements of fuel-secure power facilities are leading to a rapid depletion of a critical part of our Nation’s energy mix, and impacting the resilience of our power grid.
President Trump has directed Secretary of Energy Rick Perry to prepare immediate steps to stop the loss of these resources, and looks forward to receiving his recommendations.
What has gone wrong? Why would the cheapest forms of energy be having such a hard time?
A statement by then energy secretary of Britain from a few years ago provides insight into what is going wrong.
… The second phase of modern energy policy began when Tony Blair signed the Renewable Energy Target in 2007.
[Political content redacted]
What has this left us with?
We now have an electricity system where no form of power generation, not even gas-fired power stations, can be built without government intervention.
And a legacy of ageing, often unreliable plant.
Perversely, even with the huge growth in renewables, our dependence on coal, the dirtiest fossil fuel, hasn’t been reduced.
Indeed a higher proportion of our electricity came from coal in 2014 than in 1999.
So we still haven’t found the right balance. …
Read more: https://www.gov.uk/government/speeches/amber-rudds-speech-on-a-new-direction-for-uk-energy-policy
Government cannot create wealth, but political idiocy can destroy wealth. It doesn’t matter to people considering building new coal and nuclear plants, or refurbishing old plants, that President Trump supports coal and nuclear power, because investments in coal and nuclear have multi-decade timescales.
Democrat hostility to coal and nuclear power make it extremely risky to invest in long term projects which could easily be sabotaged by punitive taxes or regulations.
I’m a strong believer in free markets – but in this case politicians have wrecked the market.
This ignorant green political interventionism has put the West in extreme peril. Business owners who believe they might be shut down next week don’t spend money maintaining their equipment. The only rational behaviour in such circumstances is to run the plant into the ground, spending the absolute minimum possible to extract whatever profits can be extracted before some politician pulls the plug.
But this strategy of running plants into the ground is an end game. Running equipment into the ground accumulates a huge technical debt of maintenance which has been deferred. Sooner or later minimal low cost maintenance is not enough, something serious breaks, and the owners of that plant have to decide whether to risk spending large sums fixing expensive problems, or shut the plant down.
Right now the balance of risk suggests the smart course from a business perspective is to shut down the plant. All of them.
US energy infrastructure is a ticking timebomb. All the political support in the world won’t make green energy viable. If President Trump doesn’t find a solution to this problem, the lights will go out.
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Worrell uses a statement about power generation in Great Britain to explain power generation in the USA. These are very different markets subject to very different regulations.
The statement about Great Britain was made by a politician, who Worrell in the next paragraph claims cannot be trusted with energy markets.
Worrell then argues that some politicians can be trusted to fix energy markets, not by removing unnecessary regulations, but by adding to the regulatory burden.
Colour me unconvinced by Worrell’s argument, or indeed his soundness of mind.
The power market is where the Chicagoist of Chicago economists would argue for government intervention.
The grid is a natural monopoly.
Peak capacity is a public good.
Reserve power is a public good.
Frequency is a coordination problem.
Economies of scale imply market power.
Price discrimination is easy.
There are plenty of externalities.
There are large numbers.
For Amber Rudd read Elmer Thudd, with a team from FoE/Greenp–s writing the script. This year the still had enough coal-fired capacity to cope with the ‘beast from the east’, but unless someone in our govt has the guts to echo Trump’s call, in another couple of years it would be brown-outs at best, and grid collapse a serious possibility.
Coal has been squeezed out of the UK mix by ‘green’ legislation, some imposed by the EU, some home-grown. The fake CO2 scare has been used to tax our industries to destruction and poorer households towards destitution. It is the tulip fever/South Sea Bubble/Darien adventure of our days, and future generations (there will be some!) will wonder how so many apparently intelligent people could have been taken in by it.
I also have a deep-down sneaky feeling that if there is a ‘big oil’ conspiracy waiting to be discovered anywhere, this is where it will be: how better to max your gas assets than by getting your main competitor swept from the board?
Still, three cheers for The Donald for asking the questions that might save the USA.
What has gone wrong? Obviously the wildly irrational belief that economic order springs spontaneously, but in an unknowable way, from the complexity of the market. Otherwise known as occult economics from the London School of Economics’ von Hayek parading as the Chicago Boys (remember Pinochet?).
This dogma paraded here is hilarious. Imagine – occult economics touted against the occultism of renewables!
von Hayek’s Austrian School originated in Bernard Mandeville’s Fable of the Bees reprinted as Private Vice, Public Virtue, identified as the key underlying thesis by von Hayek. Mandeville being the founder of the occult Hellfire Clubs of Ireland and England.
The USA has indeed got a British problem.
Just recently in the Berlin Bundestag the new opposition quite rightly loudly condemned the “great transformation” as Voodoo; a quick review of von Hayek is also urgent.
Nuclear is indeed hard, fusion especially, which is why to do it. Voodoo just does not cut it at 100 million degrees.
Still the same facts of energy life in every nation, everywhere and every when:
Energy is life…Cheap energy is prosperity.
Thanks for the nice analysis of welcome news. Just as an aside, this weekend’s (2-3 June 2018) Wall Street Journal ran a generally negative account of the Administration’s plan on page two of its news space, commenting that
“A boom in natural gas production and renewable power has lowered prices and forced coal and nuclear competitors out of business, a trend Mr. Trump has promised to slow.”
That almost sounds arguable except for the “competitiveness” of renewable energy. Reporting like that like always brings me up short with the reminder while the WSJ’s op/ed pages are penetratingly conservative, its news columns are about as standard a mix of faux reportage pabulum as any on CNN or CBS. That is why it is refreshing to find better researched coverage here on WUWT.
Leo, your reference to hydro reminded me of this statement:
Hydroelectric power accounts for 11% of the total primary energy usage in New Zealand with imported oil and oil products making up 70% of the primary energy.[8] Hydroelectric power accounts for 57% of the total electricity generation in New Zealand. (ref: Ministry for the Environment (December 2007). Environment New Zealand 2007 (PDF). ME847. Wellington, New Zealand. p. 113. ISBN 978-0-478-30191-5).
For a country that reputedly has a very high hydro-generation penetration these numbers shocked me. Could you imagine trying to make NZ a totally “carbon” energy free zone? It is absolutely impossible.
Richard of NZ, NZ emits just 0.1% of total human emissions of co2.
Here is the IEA pie chart of TOTAL energy that most NZers are puzzled by when they see it for the first time.
Of course China would replace your emissions in a few good working days, but I suspect most of your pollies wouldn’t know any of these facts.
Certainly your very dumb PM wouldn’t understand.
http://www.iea.org/stats/WebGraphs/NZ4.pdf
Nuclear is the only choice. Thorium reactors (and other reactor designs) offer the world unlimited power at low cost and very limited pollution. To borrow from JL – Imagine.
Sources like this would allow people around the world to desalinate salt water to fresh. Imagine what would happen if we had unlimited supplies of clean fresh water, that we could use to irrigate crops. Imagine an endless supply of crops.
But unlimited power will take away power from the ruling class. And really PO the environ-clowns.
My God, a leader who cares about his country’s wealth and well-being.
Australia’s recent leaders by contrast, one gives our wealth away to the Clinton Global Initiative and then get a cushy job with self-same organisation, another burns houses down with loony pink batts scheme and then wants to become UN President, the third supposedly conservative and yet supports carbon tax. (Mr Rabbit excluded from list of contrast).
“Age” of a plant is BS. If you retube a 40 yr. old boiler, is it still a 40 yr. old boiler?
If the climate warming alarmists were truly concerned about global warming – which they claim is an imminent threat to all humanity and must be reined in as a top priority to save not only the human race, but most other life on the planet – they should be embracing nuclear power whole heartedly, as nuclear power produces about nil in the way of carbon emissions.
However you will find the “green” crowd also hates nuclear power and will do anything in their power to stop nuclear plants as well. Instead they keep pushing for solar, which depends on battery systems that require as much mining of arcane metals and materials (by foreign workers who labor in salve-like conditions, often) and then call it “clean”.
Their end game becomes clearer when they keep pushing the mantra that we need to just use less, learn to have less, go back to a spartan pre-industrial lifestyle, have fewer children (Americans already have one of the lowest birth rates in the world), and give all our money to the Third world as punishment for our climate “sins”.
Whenever you try to talk to them about viable solutions they just keep repeating that there aren’t any, and the only option is to abandon modern technology and society and give away all of our money.