Beyond Galilee

JQ: “To get the coal out Adani proposed a new rail line and a port expansion at Abbot Point. […] It’s unlikely that the proponents of new coal projects in Australia will ever again see a government as favorable as the Abbott government […]”

Once again, the critical decision points are always governmental and turn on whether infrastructure will be built. Price of coal might seem to be the driver, but this in turn depends primarily on a lot of other governmental, not market, decisions about what kinds of power plants to build.

decisions on what power plants to build … Isn’t that supposed to be how a carbon tax works? Raise the cost of high carbon energy generation, tip the scales towards lower carbon alternatives, either from LNG from Australia or local solar/wind.

Map maker: “decisions on what power plants to build … Isn’t that supposed to be how a carbon tax works?”

It does it really badly. Carbon taxes get passed along to consumers, and consumers don’t buy power plants. Consumers just use whatever the government has caused to be built.

I think we are seeing one consequence of quantitative easing, which had the effect of greatly exacerbating the normal cycle of over investment in commodities that usually comes with an upturn. There has been a vast over investment in oil, gas and coal over the past few years. Normally, the producers are fairly happy to withstand a few years of low prices, knowing at some stage there will be an upturn. But it seems pretty clear that the days of huge expansion (in China in particular) are gone. Its generally accepted now in the oil industry that low prices will last at least 3-5 years, and its likely to be at least as bad for coal – maybe much worse if the large number of older coal powered electricity plants are not replaced, and there is a major retraction in cement and steel manufacture in China (which seems inevitable).

The key point will, I think come when the financial world realises that there is no point in pumping yet more money into the sector in order to keep uneconomic plays going for some putative upturn. It will be very unpleasant for them to write off billions in investments, but they are not likely to have much choice. There are signs that this is already happening with oil and gas in the US and Brazil (in the latter case there has been huge investment in ‘pre-salt’ off-shore oil). If anything, it could be worse for coal as it is not as irreplaceable a commodity as liquid fuels.

If it was actually rebated to households, then of course it wouldn’t effect household investment or demand: if it’s rebated in the sense that average users get no charge and heavy users pick up the whole thing, it generates its own oppositional constituency, especially of people who for some reason are stuck with heavy use.

No large electricity generating plant, once built, is allowed to go out of business — the power sources for the grid are generally not overbuilt to that extent. Regulation varies by country, of course, but it most often works out so that they have a guaranteed rate of profit. So they will have to pass the cost on to someone.

Where it might come up is in new plants. “Look, the cost of power from coal is (price plus tax) and the cost of power from solar is (price), so let’s build a solar plant.” But what would be even more effective would be the government simply saying “We’re not going to build or permit any more coal plants: they all have to be solar (or whatever).” Since coal has to be eliminated, any time where the coal price plus tax appears to be lower, even if it’s rare, is a pricing failure.

The whole thing is a complicated Rube Goldberg device that’s intended to camouflage what has to be a governmental decision as a market decision.

When I wrote “go out of business”, I meant “go out of business unpredictably due to market factors”. Power plants do “go out of business” when the planned need for them is over or when governments decide that they do. Vermont Yankee is an unusual example because it was the subject of a conflict between state and Federal government: Entergy won its appeal in which a court ruled that Vermont couldn’t close it on August 14 2013, and then announced that it would close the plant due to economic factors two weeks later. If it really was economic factors and not Entergy not wanting to take the hit of continued resistance, then it was a rare case in which they could stop operating because the plant wasn’t wanted by local government.

With the “power sources for the grid are generally not overbuilt to that extent” I was trying to distinguish between existing power plants (and the existing grid) and new power plants. Basically, any kind of intervention whether regulatory / command-and-control or market-based (carbon tax, carbon trading etc.) is going to have to stop new coal plants. This is also the easiest place for command-and-control to work, since there aren’t owners of an existing plant who have to be dealt with. Carbon taxes aren’t going to put already-built and within-license coal plants out of business unless they are pretty much calculated to do so: in which case you might as well just put them out of business.

Basically I think that governments are going to have bite the bullet and acknowledge that this fundamentally is not an economic problem, that the externalities so far outweigh any other part of the “economics” of planetary crisis that this is really a political problem, and as such they have to make a political decision and not desperately try to make the magic of the marketplace take it all away.

“Rich, just to be frank here, you’re scatter-shot and don’t have any coherent, integrated multi-track POV here. ”

I think that the real difficulty is that you simply have difficulties with reading comprehension — just to be frank. For instance, I didn’t claim that activist opposition played no part in the shut down of VY: on the contrary, I was clearly implying that it did, as against the implication that market reasons were the cause of the shutdown. “If it really was economic factors and not Entergy not wanting to take the hit of continued resistance” — continued resistance from whom? — “then it was a rare case in which they could stop operating because the plant wasn’t wanted by local government.” Not wanted why? Because local government just decided that on its own?

I’ve written before about the “OMG you’re an anarchist and yet you advocate for government regulation!” bit. We have something like 15 years to have a significant effect on GHG infrastructure. So either we have worldwide anarchist revolution in that time, or we do this through governmental regulation. Which seems more likely?

Finally this is just wrong: “So long as the capital stocks and infrastructures of energy usage/consumption remain in place, the demand for fossil fuels and the like will persist.” There is no particular reason why we can’t decarbonize and still have essentially the same energy usage and consumption as we did before. Car engines powered by fossil have pretty much drop-in replacements with electric engines: power plants burning fossil can be replaced without revamping all of consumption. What’s more, consumption efficiency can be actually harmful because of the Jevons effect: if consumption efficiency goes up without a decision to ban fossil, the world as a whole could end up still burning all of the easily available fossil fuels.

You end your comment with the usual gambit: you look at facts, other people are emotional moralizers. Perhaps you’re right about some things and perhaps I’m wrong, but I suspect that your actual grasp on facts is not as solid as you think it is.

Omega Centauri: “but rather that our industrial/economic system is resistant to writing off sunk costs.”

Sure, I agree with that. It’s why I kept trying to distinguish between new plants and existing plants. There are many other sunk cost stakeholders, many of whom you mention: people with gasoline-powered cars, people with oil-fired home heating, coal miners who’ve spent their lives learning a trade — yes, all of that is true.

But that’s why I really think it’s best to be honest about what we’re doing and why we’re doing it. Over and over, with carbon taxes, opponents have said something like “this is tantamount to a war on coal.” Well, yes, we have to eliminate coal use. It has nothing to do with whether coal is cheap or expensive in monetary terms, because the environmental externalities are so much greater that the cost of coal in dollars really is irrelevant. We can design carbon pricing or trading schemes that try to gradually get buy-in, but there’s always something deceptive about them and people can understand that.

Here’s something that I don’t understand that people can educate me in. (I’m not being sarcastic — I really don’t understand.) As industrialized countries respond to this crisis and use less coal, the demand for coal drops, right? So presumably the price of coal is going to drop: lots of supply, less demand. No countries that I know of seem to be closing down their coal mining industries as a matter of policy rather than economics. The price of coal can’t drop to lower than the cost of digging up and shipping the coal, presumably, unless its subsidized, but there are a lot of subsidies left. So, as demand and price drops, what keeps other countries that don’t have carbon taxes or whatever from just burning the coal that the industrialized countries are no longer burning? If Bangladesh decides to buy the cheapest power sources it can find, isn’t coal going to get awfully cheap? Or is the cost of digging it up and shipping it high enough so that solar and other renewables are cheaper than that cost?

Matt: “You have previously, correctly identified the thing that prevents falling domestic coal consumption in industrialized countries from easily shifting to overseas consumption: key infrastructure and investment decisions controlled by governments. ”

OK, thanks. I’m used to thinking of rail / ship infrastructure as so built out that it’s essentially already built, but I forgot what kind of likely volumes we’re talking about. I’m also not used to thinking about places with geography that different from the U.S. — in the U.S., there still seems to be relatively unpopulated / low-cost large parcels of land in every direction. But I note that the article you says that the Thai government still plans to build nine coal plants, so there must be room for them somewhere unless you expect all sites to be blocked.

I’m also not used to thinking about places with geography that different from the U.S. — in the U.S., there still seems to be relatively unpopulated / low-cost large parcels of land in every direction. But I note that the article you says that the Thai government still plans to build nine coal plants, so there must be room for them somewhere unless you expect all sites to be blocked.

I don’t know the Thai situation as well as other nations, but I wouldn’t be sure that there is room for all of them somewhere. Starting in 2005 India planned the ambitious Ultra Mega Power Projects series of 12 enormous coal plants using the highest-efficiency generation technology and low cost domestic coal. As of 2015 2 have been completed, 1 canceled outright, 3 deferred indefinitely, and the remainder not formally cancelled or deferred but nonetheless having failed to complete any generating units, often because of disputes over local land rights. Land rights disputes have also slowed efforts to build high capacity transmission corridors to serve centralized generating plants and have slowed efforts to expand domestic coal production.

In Pakistan coal projects have been even more delayed and canceled. Pakistan has huge domestic coal reserves and an acute need for more electricity. But the security situation discourages foreign involvement in infrastructure projects (though some Chinese companies are working on it) and there is not a domestic industrial base for coal plant construction. The government orders electricity generators and distributors to provide more electricity but is perpetually late and behind on payments to them, so compliance is minimal. Even the existing electrical system runs well below theoretical capacity because the government is perpetually behind on buying the fuel to run plants. Many Pakistani plants were built to run on oil when it was cheap in the late 1990s and are much more expensive to run now. In theory it should be possible to replace the oil based plants in just a few years, like Western countries did in the 1970s following oil price shocks, but so far there has been no substantial progress.

Matt as much as I like dual use, I question whether we can afford it. We litterally need terawatts of mostly solar. I think its highly likely the price of panels will drop enough that the cost of the mounting structure will become key. The higher off the ground we mount, the more its going to cost. There are three PV covered parking lots within five miles of where I’m typing, all on on very robust structures roughly twenty feet off the ground. I can’t imagine any would/could have been built without large subsidies, the cost of such being about three times the cost of ground mounts. One datum that supports that, is that there is virtually no commercial rooftop PV, of shopping center parking lot PV. Lots of residential roofs, and highschool parking lots, buts thats about it. At least here in California there is lots of scarcely used land, and if this drought becomes the norm, there will be even more. But, we need renewables everywhere there are people, not just in the favorable places.

R.P @13:

No, I didn’t misinterpret your sentence or intention. I recognized that it was garbled, as so much of your comments here. But this kerfuffle began when you gratuitously attacked, (i.e. not reasonably criticized), carbon taxes, without showing much in the way of understanding the point.

SO then we get this:

“There is no particular reason why we can’t decarbonize and still have essentially the same energy usage and consumption as we did before. Car engines powered by fossil have pretty much drop-in replacements with electric engines: power plants burning fossil can be replaced without revamping all of consumption. What’s more, consumption efficiency can be actually harmful because of the Jevons effect: if consumption efficiency goes up without a decision to ban fossil, the world as a whole could end up still burning all of the easily available fossil fuels.”

Which just goes to show that not only are you not really any sort of left-anarchist, just a bog standard status quo left-liberal reformist, who likes to cross-dress, mainly to stigmatize other leftists, but you aren’t much of an environmentalist either. (The Jevons or rebound effect BTW is a real possibility, but much over-estimated, as economic brakes pretty quickly kick in to limit it). AGW is scarcely the only environmental, ecological or natural resource crisis we face. It’s more like their intensification rather than their source. A common estimate is that resource usage/consumption is already 50% higher than any sustainable level, (with at least a couple of billion in population increase already on the way), and achieving a truly sustainable, yet still advanced economy will require much more efficient resource utilization. (To economize means to produce more with less, or to use fewer resources per unit output, but it all depends on which resources one wants to economize upon).

So since you distained to examine the official flow chart of raw U.S. energy input vs. actual work, (in which 60% of input does no work), and it’s obvious that most of the waste comes from 1) thermal methods of electric generation and 2) a petroleum based transport system, preferring to shill for Tesla Motors, let’s look at some actual factors. The Tesla Roadster has a battery weight of some 700 lbs. and gets 300 miles. 20 gallons of gasoline weighs 120 lbs. and should get 500 miles. So right there, leaving aside the spacial engineering problem, 1/3 of the efficiency gain is lost carrying the extra weight. Leaving aside the issue of supporting infrastructure. And I would have no idea how much of the earth would have to be dug up to provide for all that battery storage. Further, the average auto contains 270 bn joules of embedded in its manufacture alone, not to mention other raw materials, and in the U.S. the average auto is used just 75 minutes per diem. If such a transport system were substantially replaced by electrified urban mass transit, reducing the required vehicles by say 12 mn annually, the energy savings alone would equal 3 quadrillion BTUs, more than 3% of current energy use. (Not to mention other resource savings or social benefits).

A really sustainable advanced production economy would require much energy, but also much more efficient resource usage, including recycling of wastes, (which would also require energy). But have you considered any such prospect?

And then we get the likes of this:

” Well, yes, we have to eliminate coal use. It has nothing to do with whether coal is cheap or expensive in monetary terms, because the environmental externalities are so much greater that the cost of coal in dollars really is irrelevant.”

Really? Do you actually want to put some numbers on that? No one pretends that the full externalities can be put into a monetary price, but it sure could help. JQ puts the carbon price, (which actually should be a carbon equivalent GHG price), at $50/ton. Lord Stern at $80/ton. The VT House bill at $100/ton after 10 years, (though it has no real chance of passing soon and such a steep schedule would likely be stripped out before passage). It’s already too late, but a carbon price must be introduced in increments to prevent more costly economic disruptions. And did you miss the point that it would be applied at the border on imports, which would effect investment decisions not only here, but in much of the world which wishes to export to here? The whole point is to drive a wedge between the “market” price and the real costs, however approximately, and since, if effective, a “tax” would drive down the demand price, a certain overshoot on the “real” price would be desirable IMO.

But then you’re not interested in any substantive discussion, are you Rich? Instead, whenever your adventitious intentions are questioned, you resort to ad hominems. (not that ad hominems are always wrong, but you don’t seem to have any sense of their valid and invalid contexts and uses). The only real sense in which you’re an “anarchist” is 1) that you hold to an entirely voluntaristic conception of human agency/behavior and 2) that you similarly hold to a crudely intentionalist hermeneutics. (Framing must be wrong because, obviously, the mind is transparently receptive to understanding the external world/environment and it operates according to its own entirely self-generated intentionality). Because it’s obvious that people are never confused, ambivalent or conflicted, since they always get what they intend or want. Which just allows for your rather whiny self-insistency on your own intentions and “moral purity”, (i.e. self-righteous narcissism), to the detriment of others. I’m just surprised that no one has called you out on the obvious bigotry of so many of your comments here, (and you do comment a lot and often quite contentiously, making up much of some threads).

Woo boy, jch is doing that age-old standard where he’s insulting, then accuses me of turning to ad homs. No doubt his own are OK because he has a proper understanding of their valid and invalid contexts. I could care less whether you think I’m a good anarchist or not, jch: I guess the advantage of being “a reluctant and ambivalent neo-Hegelian statist” is that you’ve basically created a one-shot category designed to keep anyone from catching you in a contradiction. I think it’s quite revealing that you like to use “cross-dress” as an insult, and if you think I’m talking about moral purity, then you’re only demonstrating the fact that I’ve often noticed that you have no idea how to read what anyone else writes.

Basically, you’re doing what JQ has often commented on here: making the AGW problem larger by insisting that we have to completely rework how society uses energy. Would that be a good idea? Maybe, in some cases. Does it make it less likely that we will actually solve the most immediate and pressing problem? Yes. It’s kind of exactly like going to an AGW thread and talking about how people took a whole lot of activist energy and turned that towards trying to shut down a nuclear plant.

@23
I’d add, that even if a widespread switch to electrified mass transit were feasible, it would still rely, ultimately, on generation of clean electricity and as such, building the right kind of power plants (i.e. decarbonized) would still be a condition precedent to the change you propose. Not saying what you propose isn’t right or doesn’t make sense, just not sure it doesn’t put the cart before horse.

@26-28:

I was saying that both production and consumption ends would need to be reconfigured (of course, over time), and that “clean” energy production is important is almost to obvious to say. (Since energy is what does work, and is required to reconstruct the system, the more renewable electricity comes on line, the more it is available to do the work, which feed-back dynamic is some small ray of hope).

BTW increasing urban concentration has been in the U.N reports since the ’90’s, and that cuts against suburban and exurban sprawl, which will provoke resistance from the upper-middle class and their “property values”, a highly influential voting group, just as substituting electrified rail,- (not in any way a new technology),- for truck freight will be resisted by trucking interests. (And NIMBYism and litigiousness run rife in the U.S.) But that just indicates the obstacles to be overcome. (With today’s IT, highly personalize mass transit systems are perfectly possible, as witness the absurd effort to produce self-driving cars).

I emphasize usage/consumption, because ex-transport, actual household consumption is just 12% of the total, so even if measures such as weatherization are low-hanging fruit and easily and quickly pay for themselves, they are just a small part of the solution. The average person doesn’t realize that most energy beyond its generation is actually intermediate.

If you look at the flow chart I provided, (and it concerns flows and not stocks), it’s clear that the largest source of waste energy on the “production” side, (though that’s not a clear distinction), derives from thermal methods of energy production and from the petroleum based transport sector. My ball-park estimate is that eliminating such waste would require maybe 16 quads of replacement and alternative energy, in order to eliminate 40 quads of useless energy. (Renewal energy is largely electricity; bio-fuels are mostly a bad idea).

But the idea that maintaining the quantitative “standard of living”, based on wasteful energy use/consumption, among other natural resources, is to be championed just amounts to the latest version of the “white man’s burden”.

JQ only focuses on AGW and distains any other environmental concern, (perhaps because it appeals to his statistical skill set). But IMHO he bases his “optimism” on just temperamental factors and airy macro-economic abstraction.

The “2000 watt society” proposes a global per capita equalization. I doubt that that would be possible, or even necessary. But it is clear that the largest damage comes from the first world and not the “developing” world, and the best we can do is not promote or export our “mistakes”.

RP 15: I worry about that too, a lot. However, if the US and EU were (were!) determined to phase out coal and impose meaningful carbon taxes (or something equivalent), they could without a doubt design a system that would impose the same carbon taxes on imports from countries that do not themselves participate in the carbon pricing system. TINA economists will loudly proclaim that we can’t do that because Free Trade and apple pie but really there is no reason in the world why this couldn’t happen, it’s a straightforward question of political will.

TM: “However, if the US and EU were (were!) determined to phase out coal and impose meaningful carbon taxes (or something equivalent), they could without a doubt design a system that would impose the same carbon taxes on imports from countries that do not themselves participate in the carbon pricing system.”

I’m not so much concerned about imports as exports. Most current carbon tax schemes don’t actually charge a tax on e.g. coal shipped to another country. (British Columbia: “purchase of use of fuels within the province”: Chile: emissions from power sector: Denmark: consumption: France: consumption: Iceland: import: Ireland: consumption (I think): Japan: consumption: Mexico: sales and imports: Norway & Sweden I don’t know: UK: electricity generation). But without one all that you have are the infrastructural, land-use, and domestic-industry protections that Matt mentioned above to keep all that coal from being exported and burned elsewhere.

Putting a carbon tax of coal exports is pretty much equivalent to saying that your country isn’t going to export any coal. So it’s going to be another round of the conversation that I already alluded to: 1) tax implemented, 2) opponents say “but this means no coal exports!”, 3) people who supported the tax tie themselves up on knots trying not to admit the obvious, that yes it means no coal exports.

I agree of course that eventually, coal mining needs to phase out globally, and countries with big coal reserves aren’t likely to leave them in the ground voluntarily. There must be strong economic incentives against burning the coal.

TM @ 35: The problem is that “eventually” is getting a whole lot closer in time, for this issue, than it ordinarily is. I don’t think that any economic incentives are going to work in a cross-national sense: it’s too difficult to design them so that they cover all of the different kinds of nations.

If we’re talking about how to do this politically, then we have the choice of saying that we’re going to implement a tax, that we’re going to hurt our country’s competitiveness, or that we’re going to eliminate coal. I think that it’s actually an easier task, politically, to just say what we actually need to do.

Does anyone have a good reference for what happened in Australia, politically, around the 2012 – to – 2014 implementation and repeal of the carbon tax?

Mat in #19: Thanks for the history of the Indian plan for Ultra Mega coal plants from 2005. I’ve been puzzled by the government’s strange plans for multi-gigawatt “ultra mega” solar farms in Rajasthan (which has lots of desert) and, amazingly, Ladakh, which consists of inaccessible mountains. Solar has negligible economies of scale above 10 MW or so, according to the very credible US NREL. In India, with a rickety and unreliable grid, giant solar plants create large transmission problems and lower reliability. Fortunately, common sense is winning out, and the “ultra mega ” plants are becoming virtualized and broken up into realistic chunks of at most 500 MW.

I think most mega class PV farms aren’t really contiguous anyway. They also aren’t built in a day, and are gradually connected as construction proceeds. Its may be more a more a case of consolidating management and ownership/financing, than it is a matter of being physically contiguous.

It may also be that a 500MW plant gets publicity, 20 25MWers just don’t get much publicity.

I think most mega class PV farms aren’t really contiguous anyway. They also aren’t built in a day, and are gradually connected as construction proceeds. Its may be more a more a case of consolidating management and ownership/financing, than it is a matter of being physically contiguous.

I too think they will be constructed in phases and each phase will start supplying grid power as it’s completed, rather than several hundred megawatts coming on line all at once. But according to the latest reports they really are planning some very large centralized projects. This plan has 20 gigawatts of capacity spread over 25 parks. If the capacity is distributed equally across parks, each park would be larger than any solar farm currently in operation. The high degree of concentration also makes the system more fragile with regard to weather or faults in the transmission system. Clouds passing over one of the parks can send output plummeting and then spiking up again by several hundred megawatts over the course of minutes. Spreading projects out helps average out localized weather effects and smaller, more numerous grid connections are more fault tolerant and waste less energy in transmission before the electricity reaches users.

Do you know anything about India using PV for rural electrification? That would seem one of the most obvious, most efficient and most beneficent uses for the technology. Also, are they promoting solar water heating?

What do people think of Carma, by the way? Last updated in 2012.

@Omega Centauri: On a day where the CAISO solar output curve was irregular I was able to look at the curve and at satellite weather photos and spot the dip in the curve from the 550 MW Topaz solar farm getting cloud cover. The farm is only 5.5 km from module edge to module edge on the narrower axis, 6 km on the other. At the time Topaz represented nearly 10% of all solar capacity measured on the CAISO grid. I have found published research comparing small distributed systems (e.g. rooftop) vs. utility scale plants, but have yet to find a formal comparison of e.g. 25 megawatt scale projects vs. 500 megawatt scale projects. I suppose my declarations should be footnoted with “citation needed – original research?”.

@Rich Puchalsky: I like the idea of Carma, though the data is growing increasingly stale. Thanks for pointing it out. I frequently use SourceWatch to look up power plant data, or the EIA reports if I want a lot of details, but I don’t think either of them has fused that information into a convenient clickable map.