Wednesday, August 5, 2015

Natural Resource Potpourri

I don't have the expertise in natural resource economics to really do a lot of writing on the topic. However, I want to make sure we cover it at least occasionally, so I'll probably stick to this potpourri format for now. I hope some day we find a contributor who is interested in this area.

Lynne Kiesling has a great post on the benefits of retail electric markets. Living in the state of Texas, I can attest to the advantages of this kind of direct competition between providers. Here's Kiesling:
The report’s policy recommendations are in keeping with the idea that market processes provide opportunities for producers and consumers to benefit through experimentation and trial-and-error learning, and that product differentiation through innovation is the most potent form of dynamic competition for creating meaningful consumer benefits.
Digital Trends has an interesting piece on electric vehicles and their actual impact on the environment:
The best outcome for EVs was a 24-percent improvement in global-warming potential over the average gas powered car, and between 10 percent and 14 percent over diesel. These numbers are nothing to sneeze at, but they change radically depending on the source of electricity that EVs are powered on. 
The above numbers rely on the European power mix, which more heavily favors nuclear, hydroelectric, and renewable sources of energy than other parts of the world. 
The global warming potential for EVs that rely on natural gas – generally considered to be the cleanest fossil fuel – show an improvement of only 12 percent over gasoline, and break even with diesel. 
Most alarming, EVs that depend on coal for their electricity are actually 17 percent to 27 percent worse than diesel or gas engines. That is especially bad for the United States, because we derive close to 45 percent of our electricity from coal. In states like Texas, Pennsylvania, and Ohio, that number is much closer to 100 percent. That’s right folks; for residents of some of the most populous states, buying an EV is not only toxic, it’s warming the planet more than its gas-powered counterparts.
Finally, The Breakthrough Institute and The Institute for Energy Research both weighed in on the EPA's so-called "Clean Power Plan."

From The Breakthrough Institute:
States get to choose from two ways of measuring their goal according to rate of emissions reductions and amount of emissions reductions. 
While EPA declined to provide an incentive to keep nuclear power plants online, it said it would subsidize wind, solar, and energy efficiency as part of its Clean Energy Incentive Program. 
The main source of bias is how the EPA sets its baseline against which states’ compliance will be measured. By not recognizing existing sources of zero-carbon power, the EPA rule is biased against nuclear, the largest source by far (two-thirds) of zero-carbon electricity generation.
The Institute for Energy Research concludes its piece:
The “Clean Power Plan” in its final form is no more beneficial to Americans than its proposed version that EPA issued last year. It will kill the U.S. coal industry—only to allow other countries to benefit from coal’s affordability and reliability. It will cost billions to replace existing electricity capacity with new intermittent renewable technologies for little gain since temperatures will be reduced by just 0.02 degrees Centigrade by 2100. The plan is all pain and no gain, which is why an increasing number of governors are informing the EPA that they do not intend to comply with their demands to rewrite state laws on electricity and cause harm to their economies.

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