Jun 02 2014

On the EPA CO2 Reduction Target

Today, the EPA and President Obama unveiled a plan to reduce major power plant CO2 emissions by 30% in 16 years (by 2030).  This will basically kill the coal-fired power industry, and subsequently the coal mining industry in America.

There is much discussion on the net about how foolish this is, such as:

  •  The reduction in emissions will have, even by the EPA’s prediction, a negligible impact on so-called global warming, by 2100.  Can you even measure 0.018ºC difference in atmospheric temperature?  Even more, a scientist testified before Congress on Friday 29 May 2014 dismantling the IPCC AR5 report, which is really the basis for the EPA action.
  • The economic impact will be massive.  The U.S. Chamber of Commerce figures the plan could scotch $50 billion a year in GDP and prevent the creation of more than 220,000 jobs per year. The hit to household disposable income would be more than $550 billion a year.   Note how this has ALREADY happened in Germany, Spain and Ontario.  The supposed reduction in “social costs” of health issues are dubious.  Much like in Ontario where the government claimed that green energy would reduce hospitalizations for breathing disorders by greater than 100% (i.e. there weren’t that many such hospitalizations)
  • The reduction in coal-fired power generation will be offset by gas-fired and renewable energy sources.  However, renewable energy isn’t on-demand – it depends on the sun shining and the wind blowing.  And we have seen in Europe and Ontario how high prices for power have to go to justify these renewable projects.  And we see in California and elsewhere the derelict remains of windfarms that didn’t pay out…

There are a few other issues here that I haven’t seen written about today:

  • The so-called shale gas boom may not be going quite as expected.  For a couple of years now, the estimates of recoverable natural gas from shale deposits has been FALLING.  Why?  Because it turns out that shale gas deposits require A LOT of drilling to maintain product rates.  Unlike traditional natural gas deposits, shale gas is labour and capital intensive and the wells have very rapid decline curves.  Therefore, the hope that natural gas can replace coal at similar costs into the future may not actually turn out, and we could in the not too distant future have high gas prices and thus high power prices again.  That said, technological advancements such as those that led to shale gas being possible could continue (given high enough prices).
  • One option could be nuclear power, including thorium cycle reactors such as those India is developing.  However, the regulatory regime in the United States is so dysfunctional and prone to political meddling that nuclear projects are now likely to take 20 years from proposal to startup.  Horrifying when you consider that the first nuclear plant in America (Hanford, WA) was designed and built and started up in under three years (1942-44) without modern technology like computers.    However, to make nuclear power economic will require higher prices and a significant reduction in regulation that doesn’t lead to greater safety.

Obama has set out clearly where he always promised to be – a green, left-leaning socialist who doesn’t understand economics, science or good sense.  This should be a political gift to the Republicans, if only they can figure out how not to screw it up.

For Canadians, there is a great risk that Harper is pushed by the media or bureaucrats to attempt to align to the US policy.  This would be extremely foolish.  We should take this as a clear message that Keystone XL will never be approved under this US Administration, focus on other export options like Northern Gateway, TransMountain Expansion and Energy East (push these through ASAP).  We should adopt the Australian policy of avoiding economic damage due to climate legislation.  We should REFUSE to be held hostage by the socialist in the White House.

The decline of America continues….

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  1. fhl

    before we follow the united states why not look at what the hard working CanadianConservative Government under PM Harper is accomplishing

  2. Cynical Bard


    I must remind you that Canada is pursuing policies in the same direction as the US. Some of them, ethanol in motor fuel for example is based on a math model that no attempt has ever been made to validate the model, yet we are spending billions on it conclusions . Other studies how that there is actually an increase in greenhouse gas emissions from ethanol use. But we don’t need to validate the model because the government has the answer it wants to justify more government.

    Many people believe that the growth of government is a good thing, and any model that justifies it must be correct, regardless of real world science.

    In my opinion, a mathematical model that has never been validated, by history matching or a real world operation, is just another video game, and nothing more.

  3. Cynical Bard

    And I believe there is a program to shut down all our coal fired plants when they reach 40 years of age,

    And some of our coal fired plants in Alberta pay wind farms for subsidies. (req’s) at a price which is approximately what coal power costs.

    And Carbon dioxide is not a pollutant, and there is no correlation between global temperatures and carbon dioxide.

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