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Nuke Waste Confidence: A Confluence of Ironies

By Kennedy Maize

Here’s an interesting set of ironies. The Republican majority on the U.S. Nuclear Regulatory Commission has taken a position that, at least formally, blocks new nuclear reactors in the U.S., while the sole Democrat on the commission, Chairman Greg Jaczko, widely viewed as opposed to the agenda of the nuclear industry, has voted against the GOP majority and for a more open door to new nuclear reactors.

The formal issue is the NRC’s “waste confidence” finding. This is a legally-required ruling where the NRC must say that the U.S. has reasonable plans to store spent nuclear fuel in a way that assures public safety. A year ago, the NRC agreed that this was the case, agreeing to draft statement by the NRC staff. The staff ruling came in the face of serious doubts about the viability of the Yucca Mountain, Nev., project, the sole approach of the U.S. government toward spent nuclear fuel storage, other than on-site storage in cooling pools or dry casks.

In late September, the only two Republican members of the NRC – former chairman Dale Klein (a favorite of former Defense Secretary Donald Rumsfeld) and Commissioner Kristine Svinicki (an aide to former Idaho Republican Senator Larry Craig)– voted to reject the NRC’s staff’s draft 2008 finding, based on the decision of the Obama administration to dump the Yucca Mountain, Nev., waste dump.

That the vote was partisan is not in doubt. While Jaczko, a disciple of Senate Majority Leader Harry Reid, has been an opponent of the Yucca Mountain project, the Republicans in the Senate and on the NRC, have supported the project.

The NRC has two vacancies, both set for Democrats, but the Obama administration has not moved to fill the. Under law, the NRC consists of three members of the president’s party, and two members of the minority party.

The NRC waste confidence ruling is necessary before U.S. companies can move forward to build new nuclear projects. The NRC in 1990 formally approved a waste confidence finding. But Klein and Svinicki voted in October to revisit the issue, given that the Obama administration has essentially pulled the funding plug on the Yucca Mountain project, providing no substantial money for the project in the Department of Energy’s latest budget proposal.

Klein, NRC chairman during the George W. Bush administration, said, “I strongly believe that the commission should give the public an opportunity to comment on whether and, if so, how the administration’s recent announcements of changes in the nation’s high-level waste repository program should affect the proposed update.” Does the public have any significant views on the Yucca Mountain issue or the nation’s nuclear waste policy? Doubtful.

Jaczko, in a separate statement a day later, said he supports the earlier, October 2008, NRC staff decision, noting that the “staff paper makes it clear that the commission’s waste confidence decision is not based on the Yucca Mountain program, but rather that safe disposal for high-level waste and spent fuel in a mined geological repository is technically feasible.”

The nuclear industry lobby treated the NRC decision as a temporary anomaly. Steve Kraft, the Nuclear Energy Institute’s chief waste lobbyist, told The Energy Daily, the NRC decision “was not something we were expecting, but it is not the end of the world.” Kraft predicted that the NRC, after getting new information, presumably from the industry, “will come up with maybe not exactly the same answer, but certainly an answer that satisfies the question, and have the rule in place fairly soon, hopefully sometime in the first quarter of 2010.”

Kraft may be spinning a desired outcome of which he has no real knowledge.

Said a long-time observer of the nuclear industry, “I’d be surprised if the NRC can deal with this issue in 2010, not just in the first quarter. Klein wants to leave the commission, the White House hasn’t come up with Democrats to fill vacant seats, and the waste issue is on the way-far-back burner, where Harry Reid wants to keep it. In the meantime, there doesn’t seem to be much interest on Wall Street in financing new nukes. Don’t hold your breath on this one.”

Don’t Let the Dim Bulbs Prevail in the Lighting Market

By Kennedy Maize

In journalism, we call it “burying the lead.” That’s what the New York Times did in a Sept. 25 story headlined “Build a Better Bulb for a $10 Million Prize.” The story said that the U.S. Department of Energy is prepared to pay $10 million for development of an efficient, cost-effective replacement for the venerable, everyday 60-W incandescent light bulb.

That’s interesting, but the real story is that the government is now admitting, after more than 25 years of hype, that the compact fluorescent light bulb (CFL) is a failure. This is despite a major marketing effort by the government, designating the CFL bulb as an “Energy Star” product, worthy of purchasing by those consumers who want to be “green.” At the urging of federal and state governments, many utilities are subsidizing purchase of CFL bulbs (including a clumsy, embarrassing program from Allegheny Energy two years ago, sending the bulbs to its customers without properly informing them that the cost of the lightbulbs would be added to their bills).

DOE has now admitted that CFLs won’t meet the needs of most consumers. The market has also demonstrated this fact. Consumers aren’t buying the more expensive CFLs. In a separate article in the Times (Sept. 28), the head of DOE’s Energy Star program wrote to the lighting industry that sales of CFLs were plummeting, down 25% from 2007 figures. Richard Kearney wrote that “it’s apparent that the market is heading in the wrong direction.” His prescription: more subsidies for the politically-correct bulbs. Wrong choice.

DOE’s new $10 million “L Prize” program demonstrates the problems with CFLs and the government’s brainless response to market failure. DOE has specified that the winner of its $10 million light bulb sweepstakes must provide the same amount of light and color, produced by the old-fashioned 60-W Edison incandescent bulb; it must use only 10-W of power, last 25,000 hours; 75% of the bulb must be made in the USA (a clear sop to union labor).

The article in the Times noted that consumers “rebelled against the (CFL) bulb’s shortcomings: the light output from compact fluorescent bulbs was cold and unpleasant, their life was much shorter than claimed, many were large and undimmable, they would not work in cold environments, and they contained polluting mercury.” My artist wife, a major consumer of cable TV home makeover shows, noted that she had never seen an interior designer recommend CFLs as part of a remodeling job.

In short, CFL’s are a classic market failure, which DOE is now trying to address by more market intervention. It won’t work.

The agency faces a real problem. In 2007, a feckless Congress, aping command-and-control economies in Europe, mandated a phase-out of incandescent bulbs by 2012. It was a classic example of legislative stupidity.

What to do? DOE’s response: try to find a technological winner, as decided by a panel of Washington bureaucrats, and impose that on the marketplace. That’s where we are now.

My guess is that nothing the light bulb makers – Phillips, GE, and Osram Sylvania – can come up with will satisfy consumers used to cheap, effective, if inefficient, Edison bulbs. The inefficiencies, in aggregate in the total economy, may be great, but they don’t translate to an average household.

The result, initially, will be a thriving black market for incandescents (stockpile now, boys, for sales later), followed by a repeal of the provision in the law.

My advice is that the government should do absolutely nothing, and then go back to Congress to argue that the legal requirement was ludicrous, and government should let people make their own decisions about light bulbs. Any other course of action is, well, dim-bulbism.

Climate Policy High Road and Low Road

By Kennedy Maize

Oh! ye’ll take the high road and
I’ll take the low road,
And I’ll be in Scotland afore ye–

Old Scottish folk ballad

When it comes to climate legislation, the Obama administration has chosen the low road – administrative action by the Environmental Protection Agency. At the same time, the administration is also backing the high road – legislative action by the U.S. Congress.

My suspicion is that neither will get to Scotland. That’s a good thing.

I define the EPA’s proposed rule under the Clean Air Act as the “low road” because it is an attempt to skirt the processes that the country usually uses when confronting game-changing issues, such as global warming. Those are decisions traditionally made by the direct representatives of the people, the Congress. The approach of the administration – which appears to assume that legislation in Congress will fail — while approved by the Supreme Court, is still a stealth path to significant policy. It’s undemocratic by definition.

The administration proposes to regulate carbon dioxide using provisions in the air law, most recently amended in 1990, that provide vague authorities, twisted to accommodate the administration’s policy preferences, regardless of the views of the representatives of the people. The action presumes that Democratic and environmental activists know better than the American people about whether greenhouse gases are a problem.

The EPA route will involve a notice of proposed rulemaking, an extended comment period, and a promulgation of a final rule. Each step along the way will provide opportunities for parties on all sides of a very complex issue to sue the agency, clamoring for tests in the federal courts. It will be a policy dog’s dinner.

The federal circuits likely will come up with differing opinions on the validity of the EPA’s proposed rules, leading to multiple decisions in the appeals circuits. That suggests an ultimate Supreme Court review. The crux of the EPA approach, given the constraints of the air law, is traditional command-and-control, focusing on rules for every major stationary CO2 emitter. Experience has shown that this approach, while it reduces pollution, is inefficient and costly, and may produce less environmental bang for the taxpayer buck

While many environmental groups favor that familiar approach, it’s not going to work. CO2 is not a criteria pollutant, and establishing arcane regulatory approaches such as “best available control technology,” “prevention of significant deterioration,” and “new source performance standards” just won’t get to the goals of the regulators. CO2 is a different air pollution duck, where the usual command-and-control conventions won’t work.

The regulatory approach will produce outcomes that none of the parties to the dispute will view as legitimate. There will be disputes over whether command-and-control and technology rules are producing adequate reductions. Nor will regulators be able to determine with any certainty whether “pollution” generators are meeting their regulatory goals, as measurement will be arbitrary and opaque.

Nor do I see any way to expedite the legal process in the courts. It may be a decade or so before the validity of the EPA’s proposed plan gets a judicial thumbs up or thumbs down, or, most likely, a thumbs horizontal, with multiple remands to lower courts. Can you spell “gridlock”?

The administration is proposing the regulatory approach because it fears the results of the high road: congressional action in the name of representative government. It is plain to me that Congress will not approve anything like the House-passed Waxman-Markey everything-including-the-environmental-kitchen sink legislation. Nor will the just released draft crafted by Democratic Senators Barbara Boxer of California, chairman of the Senate Environment and Public Works Committee, and John Kerry of Massachusetts, chairman of the Senate Foreign Relations Committee, take wing and fly through the Senate.

Ironically, as the Washington Post noted in an editorial, the Boxer-Kerry bill provides only for a CO2 emssions cap, but not, as in the House bill, a cap-and-trade regime. That suggests a major fight in the Senate, if not in committee, then on the floor, perhaps then in a House-Senate conference committee.

The Senate Democratic leadership is simply scared silly of cap’n’trade. So it punts, with the Senate Finance Committee on the receiving end. Acknowledging that the Boxer-Kerry bill doesn’t address the “trade” component of cap’n’trade, Kerry said that the hot, green cap’n’trade potato is going to be in the hands of the Senate Finance Committee, chaired by Montana Democrat Max Baucus.

As with health care legislation, I suspect Baucus will end up with the legislative whip hand, as the climate legislation could potentially derail the administration’s plans for vastly expanding federal powers while, at the same time, reducing the deficit. But the committee could easily fumble the punt, to continue the football metaphor.

The political problem that faces the Senate, and the Finance Committee, is the prominence of coal-state legislators. Just as West Virginia Democrat Jay Rockefeller was the administration’s nemesis on the “public option” in health care reform, so he is likely to be when it comes to climate legislation. He’s the senior Democrat on the committee after Baucus.

Let’s tick off a few of the coal states that have a dirty dog in the fight: Pennsylvania, Maryland, West Virginia, Tennessee, Kentucky, Alabama, Ohio, Indiana, Illinois, Missouri, Colorado, Wyoming, Montana, Utah, North Dakota, New Mexico, Arizona, Texas, Washington, Alaska. I may have missed a few, but the point is that coal is a mighty force in the Senate, not just a pasteboard villain.

The Obama administration faced a partisan split on health care. It faces a bipartisan, and regional, split on climate legislation. Coal states and coal-consuming states appear to me to be at the controls of the administration’s climate juggernaut in Congress. It is politically powered by coal.

What does that mean? My take is that nothing approaching U.S. climate legislative consensus will be available by December and the latest climate policy festival in Copenhagen. The U.S. will try the kind of policy shuck-and-jive that Al Gore performed at Kyoto in 1997, with ridiculous results. Let’s hope the administration’s soft-shoe is less persuasive in Denmark than it was in Japan, where the result was a U.S.-brokered deal that the U.S. Congress eschewed, and that is universally viewed as a policy failure.

In fairness, let’s acknowledge that the “high road” faces the same post-legislative obstacles as the EPA low-road. The EPA will have to promulgate proposed rules under any legislation that Congress passes. Those rules will go through the same legal meat-grinder as the administration’s approach. We’re probably looking at another decade of policy stalemate either way. Nevermind.

I don’t think the U.S. will ever embrace the kind of hard, pedal to the brake, climate policy greens have been advocating for more than a decade. The evidence doesn’t support such an approach, as the climate appears to be reluctant to follow the guidelines laid out by the half-cocked wizards of climate modeling. The politics suggest that hard regulation, rather than adaptation, would be poisonous policy, both confiscatory and incompetent.

Perhaps the best advice comes from the late Ronald Reagan, when, as U.S. president, he famously said (although he may have been borrowing from someone else, as he was wont to do), “Don’t just do something, stand there.”

Environmental Myth No. 2- PCBs cause human cancers

By Kennedy Maize

In 1979, researcher Renate Kimbrough of the Centers for Disease Control, part of the Department of Health Education and Welfare (now Health and Human Services), shocked the electrical world with an epidemiological study. She found that GE employees from the transformer works at Schenectady, N.Y., exposed to high levels of polychlorinated biphenyls for years, had high incidences of cancer.

The chemical was used as a insulator in transformers. PCBs were valuable because they meant that transformers were unlikely to catch on fire when they failed.

Earlier work with rats, done by Kimbrough had suggested that the chemical could cause cancer. She then took her laboratory research into the field to see whether rat exposures were relevant.

As a result of the in-vivo experiments and Kimbrough’s later epidemiological research, funded by GE, Kimbrough concluded that there was a likely, but slight, positive link between PCB exposure and cancer. The Environmental Protection Agency moved rapidly and unilaterally to ban the use of PCBs. That ban that stands today.

In making the regulatory decision to kill PCBs, EPA convened no scientific process to evaluate the evidence. There was no required adversarial process. The agency simply acted on its own.

As a result of the EPA action, without any litigation or evidentiary process, the electricity business has spent billions of dollars replacing PCBs, remediating sites, and the like. GE caved in after many years of contention and agreed to a Hudson River dredging process that, if PCBs are dangerous, increases the danger, by releasing them from sediments and entraining them in the water. It’s a classic example of misguided regulation.

Today, almost every article or news story about PCBs in the non-technical media describes them as “cancer causing.” That’s simply not true. There is no evidence that PCBs cause human cancers. Indeed, Kimbrough 20 years later – with a lot more epidemiological data – concluded that her earlier research was wrong. PCBs were not linked to cancers in workers that had massive exposures to the chemical.

Few media outlets covered Kimbrough’s disclaimer. One was my friend and former colleague Jack Cushman, who wrote in the New York Times in 1999, “The largest ever study of occupational exposure to toxic PCB chemicals has found no significant increase in cancer deaths among workers who were exposed on the job.”

That’s fine reporting, but note the use of the presumptive word “toxic” in the sentence. There is nothing “toxic” about PCBs.

Similarly, a few years ago, Gregg Easterbrook wrote an interesting article about the environmental cleanup for the New York Times magazine. His argument was that the focus on controlling PCBs, Radon, and Alar was misguided. His article referred to “cancer-causing PCBs.” He wrote a far better and more interesting article for the New Republic in 2004, downplaying the hysteria about PCBs in the Hudson River.

I called Gregg out about the claim of carcinogenesis in the Times, and he agreed with me, replying that an overwrought copy editor inserted the offending “cancer-causing” phrase. I believe him, as science writers for major media outlets have often complained to me that they hype their stories to the very edge of credibility, in order to get them played in the paper or on the broadcast, and then the editors hype them over the top.

Next-Radon.

Environmental myths part 1 — EMF

By Kennedy Maize

A few environmental myths about electric power just won’t die. I’ll begin to discuss some of them in this blog.

The first is that exposure to electrical and magnetic fields from high-voltage power lines causes cancer. This long-shot-down claim resurfaces repeatedly. It is simply wrong, and multiple scientific studies – including a massive, multi-year analysis by the National Institutes of Health in the 1990s – have established that there is no credible link between power lines and cancer. The health claim is not only a dog that won’t hunt, but a dead dog.

Yet, whenever a new, major power line project is proposed, opponents trot out the cancer scare. Yawn. They would do better to focus on real issues – property values, destruction of homes, farms, and forests, and the economics (that is, the windfalls that accrue to the power companies, but not to the locals) – than the bogus health issue.

I recently attended a session at Shepherd State University in Shepherdstown, W.Va., where the West Virginia Public Service Commission was getting public input on the plan by American Electric Power and Allegheny Energy to build a 765-KV line from AEP’s Amos coal-fired plant near Charleston, W.Va., to a substation in Maryland, and hence into the PJM system to supply energy-short New Jersey with electric power, a total of over 200 miles and three states. It is known as the PATH (Potomac Appalachian Transmission Highline) project.

The project is one of the Department of Energy designated “national interest” transmission projects under the 2005 Energy Policy Act, which could (but likely won’t) end up with a federal eminent domain regime.

There are lots of solid reasons to oppose this project, as well as to support it (I don’t have a position on it). The opponents at the meeting raised significant issues. The most powerful objection is that the line will take (legally) large swaths land in West Virginia’s eastern panhandle, and deliver no benefits to the locals who will see homes gobbled up by eminent domain, along with forest land, and land that could be developed for profit.

The project likely will crush the property values of the current owners, and recompense them inadequately. The state, which has approved the project,determines what the “fair market value” of the land taken, as is characteristic of these projects.

But opponents, in throwing the policy kitchen sink at the plan, could not eschew raising the health effects argument. The argument has been demolished repeatedly, including the NIH review. I refer careful readers to the National Cancer Institute’s fact sheet on EMF.

Several opponents cited the “health threat” of EMF. One of the opponents speaking at the meeting Sept. 22 claimed that power companies had conspired to subvert the science and suborn the scientists.

That’s conspiratorial garbage. I’ve followed the EMF issue closely for 30 years, including playing a role in getting the review of the science done by the National Institutes of Environmental Health Sciences, and not an industry-backed organization, when I worked at the American Public Power Association. No court has ever found that power lines have caused human health effects, despite numerous suits over the years.

Nonetheless, the EMF scare persists. Oponents of power line projects are, either through ignorance or willfullness, unable to resist playing the health card joker. The problem for them is that the Public Service Commission staff are smart and well-read. They know that EMF claims are bogus. Asserting the health claim undermines the credibility of the opponents.

My advice to opponents of power line projects is to duck the health claims and focus on economic and environmental issues. If I were advising opponents, I would tell them, look at the state statutes and consult with experienced legal practitioners before the commission. Find out what criteria the law and precedent establish for approving or denying such projects. Focus your arguments on those lines of argument, giving the regulators realistic reasons why they can disapprove a project.

In my next blog, I will take up another persistent environmental myth: the human health effects of PCBs.

On the Death of Mary Travers

By Kennedy Maize

This blog has nothing to do with energy or power. It’s about music.

But I suspect that there are enough readers out there who will connect with it to make the blog worthwhile.

I’m writing about the death on Sept. 16 of Mary Travers, 72, the dominant force of the folk group Peter, Paul and Mary. Some of you may never have heard the group, which led the folk revival of the early 1960s. But for me, and others of my age, they were seminal.

This blog is based on some email exchanges with close friends of my age, who revered the group as much as I did, for their music and their (left-wing) politics.

I loved PPM, but never saw them live, as some of my friends did. I was particularly blown away by Mary’s voice: strong, true, soaring. Peter and Paul were backup; she was the show musically and physically, with her characteristic gesture of head-tossing her long, blond hair as she sang. She was an icon, inspiring, among other imitators, a character in the Muppets.

I began, an early teen, as an R&B and doo-wop fan of the music of the late 1950s, as they morphed into early Rock and Roll. Chuck Berry, Bill Haley and the Comets, Buddy Holly, Richie Valens. Elvis.

I liked folk a lot in my early years in college, and later in the civil rights and anti-war days after college. Dave Van Ronk was hard-core. Dylan was genius. Judy Collins had a lovely, pure voice. Pete Seeger was a minor god; I was a major figure in getting him to come to the National Institutes of Health for a large anti-war rally when I worked there (1970-1976). But PPM were primo.

I will confess, I have a particular fondness for female singers in all genres, hence my love for Mary Travers’s vocals.

Then the Beatles came along. Dylan went electric. And Motown, oh, Motown. Farewell, folk.

Went through a Country phase in the late 1970s and 1980s, when I couldn’t relate to what then was R&R. I particularly liked classic Country, including Ray Charles, George Jones, and, my favorite of all time, a local girl (Winchester, Va.), Patsy Cline, one of the greatest voices in any genre. I’m also a big Willie Nelson fan. His work defies catagorization.

In recent years, I’ve retreated to classic jazz, which is great to listen to when I’m writing. Among modern performers of classic jazz, my favorite is singer-pianist Diana Krall (her “Cry Me a River” is stunning. It’s bitter, with an in-your-face message to her former lover). From the 60s, I like Art Blakey and the Jazz Messengers a lot. Also Mingus, Monk, Miles.

On a local (Prince Georges County, Md.) note, the late Eva Cassidy was very special. I actually cry, real tears down the face, whenever I hear her “Autumn Leaves.” It is probably the most beautiful female vocal I’ve ever heard. There is a depth of sadness in everything she did in her short life that stabs into my heart.

Sorry to subject you to this personal and eclectic musical tour, but the death of Mary Travers got me into a musical reverie.

One of my email correspondents recalled his last live PPM concert, at the Corn Palace in Mitchell, S.D., in 2006, the opening of the George and Eleanor McGovern Library, when Mary Travers was recuperating from the leukemia that finally killed her this year. He wrote, “They were wonderful, particularly when they got George to sing his favorite folk song with them: ‘Freight Train.’”

By the way, “Freight Train” is another local (Washington, D.C.) classic. Libba Cotten, who was a maid for the Seeger family in D.C., helping to raise Pete, Mike, and sisters Peggy, Penny, and Barbara, picked up a guitar after several decades of not playing, and kindled a career late in her life.

I saw her play many times in D.C. in the 1960s and 70s, several times in intimate settings, just Ms. Cotten and half-a-dozen fans in a small room in her apartment. She was left-handed and played a right-handed acoustic guitar “upside down (first string high, last string low)” as she had learned as a girl in North Carolina, from playing banjo.

Forgive my musical ramblings, but, for me, that makes a nice break from energy and environmental politics. So much more interesting than cap’n’trade.

Roundup: Energy Legislation, California, and Trash-to-Cash

By Kennedy Maize

Partisan Correctness: Does Harry Reid Speak for Harry Reid?

Who’s speaking approximate truth here? Senate Majority Leader Harry Reid (D-Nev.) said this week in a press conference that he expects energy and climate legislation, which has narrowly passed the House, will get punted into next year. The reason, Reid said, is the protracted struggle over health care legislation.

At a press conference last Wednesday, Reid was asked whether he might split the energy and climate sections of the narrowly-passed House climate bill, and move them separately. As reported in the Wall Street Journal, Reid replied that “we have to do this health care matter. We have, now, the president’s talking in the last few days about how important [financial] regulatory reform is. So, you know, we are going to have a busy, busy time the rest of this year. And, of course, nothing terminates at the end of this year. We still have next year to complete things if we have to.”

Reid was right about the way the Congress works. Each Congress runs for two years. So the work of the current Congress, including House passage of cap-and-trade legislation, carries over into next year if it doesn’t get passed this year.

But the politics are more pressing. If the climate legislation – which could be more controversial than health care – gets bumped into 2010, that’s an election year, with the full House and a third of the Senate up for election. Look out, advocates of climate legislation.

So, a few hours later, Reid’s spokesman, Jim Manley, appeared in Senate press gallery to serve up a quickly cooked waffle. He said Reid “still intends to take health care reform, [financial] regulatory reform, and cap-and-trade to the Senate floor by the end of the year.”

In my opinion, that’s horsefeathers. Manley was engaging in the lingua franca of Washington politics: partisan correctness. The Democrats are afraid to enrage the green left, which believes climate legislation is the most important cause since the Nuclear Winter scare of the 1980s (how’s that for a turnaround?). The GOP is so fearful of its blood-thirsty right that is unable to acknowledge that the acting-out Joe Wilson (R-S.C.) is a petty liar.

The Wednesday (Sept. 16) Washington Post had a long A-section article on the full legislative agenda that faces the administration and the Congress as the year comes to a close. Climate legislation got a bare mention, as the article focused on “funding the entire government for fiscal 2010, as well as dealing with the abolition next year of the estate tax and the expiration of the policy that guides money for maintaining highways.” That’s heavy political lifting.

ClimateWire quoted Sen. Byron Dorgan (D-N.D.), chairman of the Democratic Policy Committee, “I think it’s increasingly difficult to have a climate change bill done before the end of the year.”

….

California Scheming

Here’s more on the ever-entertaining failure of environmental politics in California, courtesy of our own POWERnews. It seems that the California legislature wants to up the ante on the state’s renewable portfolio standard to 33% by 2020. The current RPS (20% by 2020 that excludes politically-incorrect hydro) is an apparent failure.

Nobody other than a besotted green or a frightened legislator believes that 33% is attainable. Republican Gov. Arnold Schwarznegger clearly doesn’t believe the 33% goal is attainable. He’s called the legislative approaches “poorly drafted and overly complex.” So, his answer: an executive order to the California Air Resources Board to adopt a 33% RPS by regulation by next year.

Huh? Dope-slap to the head. There’s no way the CARB and adopt an RPS regulation and get it through the courts by next year. Maybe by five years, and that’s optimistic.

If you believe that what is not possible by legislation is easily possible by regulation, raise your hand. I don’t see any hands.

The California Public Utilities Commission is clearly skeptical. The CPUC said last year that a 33% target would require “an infrastructure build-out on a scale and timeline perhaps unparalleled anywhere in the world.” Nonetheless, the CPUC approved the goal. None of the CPUC members will be around when the goal kicks in, so they have no skin in the California renewables game.

California is a state that, facing bankruptcy earlier this year, was paying its bills with scrip, aka IOUs. No wonder the critics call it “LaLa land.” It’s not just a reference to Hollywood, but to Sacramento.

According to POWERnews, citing the California Energy Commission, 10.6% of the state’s total system power in 2008 came from renewables, defined in the Golden State as geothermal, wind, solar, small (insignificant?) hydro, and biomass. That’s down from 10.7% in 2007. That’s probably not statistically significant. It’s politically significant.

Is it any surprise that the gubernator’s political poll ratings have plunged further and faster than those of George W. Bush?

Is this an opportunity for Democrats in the upcoming elections, where Ahnold is not going to be on the ballot, thanks to the state’s two-year term limits for governor? Probably, but there is no indication that the Democrats are any more realistic than the Austrian strongman (five Mr. Universe titles) about renewable energy and the California economy.

…

Can Coke Bottles Make Sweet Crude?

Closer to home, a Montgomery County, Maryland, waste transfer station is going to host an allegedly commercial-scale technology to turn plastic household waste into light oil “for less than $10 per barrel.” Call me skeptical, as I’ve seen trash-to-cash pyrolysis projects fail repeatedly in the 1980s.

A Washington, D.C., firm led by South Koreans, with technology it developed in South Korea – Envion Inc. – is pushing the project. Envion says it uses a “closed loop, catalyst-free system to take plastic and convert it back into oil safely, efficiently and economically.” That’s the claim by Envion CEO Michael Han. It is an oxygen-free chemical process, also known as pyrolysis, using heat in the absence of O2 to break down organics into component chemicals.

While the claimed technology raises skepticism, at least the company is not suggesting that it can compete in world oil markets. The company asserts an unproven: that it can produce a light oil from recycled plastic at remarkably low cost. But it does not say it can produce volumes that could influence the market for oil. In a press release, the company says, “With full national deployment, the Envion oil generator could generate over 150,000,000 barrels of oil each year in the United States alone.”

Sounds like a lot? Not really. The U.S. current consumes about 16 million barrels a day of oil, according to the Energy Information Administration. And the notion that the Envion technology could reach “full national deployment,” whatever that means, is clearly, a reach.

Envion’s real business play is to reduce material flowing to U.S. landfills. Montgomery County, according to the Washington Post, is lending free space for a prototype plant, which Envion is financing on its own. The Post quoted the manager of the trash transfer station that the county in the Washington, D.C., suburbs “handles about 100 tons of recyclable material a day…and sells hundreds of tons of recycled plastic to bidders every month.” The county will reclaim the space in October, because it will need it for fall leaf recycling. Envion has no U.S. government funding, according to the newspaper, but is financed by the Han family and some outside capital.

Let’s Get Real about Health Care

By Kennedy Maize

Companies that offer health insurance plans to their employees – and that covers most power companies – need to pay close attention to the Washington debate on national health insurance plans now current in Congress. So far, most of the sound and fury over the Obama (and congressional) plans are bogus, kicked up by folks who want to sink the administration, much as the Clinton ill-designed health care plan in 1993 nearly derailed that Democratic administration.

The opposition last summer ginned up by whack-job Republicans and devotees of Lyndon LaRouche, the screamers at the August town meetings, was entirely bogus.

President Obama’s speech in early September to a joint session of Congress should have dispelled the more apocalyptic August anger about Obamacare. “Death panels,” insuring illegal aliens (we won’t insure them, but we will treat them when they are sick or injured, and we will all pay for that), and “rationing” by government bureaucrats are all phony-baloney. In particular, the complaint of “rationing” is what private insurance companies do routinely. We ration by income.

The rant of “socialized medicine” doesn’t understand that about a third or more of all Americans already get their health insurance through the federal government in Medicare, Medicaid, the Veterans Administration, the Indian Health Service, the military system, the federal employee health benefit program (including members of Congress), and the children’s state health insurance plan (SCHIP). The complaint that federal bureaucrats will be making health care decisions ignores that profit-driven insurance bureaucrats are now making health care decisions on what the plan will cover and the doctor can do, based mostly on profit considerations, not health outcomes.

The overwrought complaints don’t hold up to scrutiny. I’m a Medicare recipient, so I benefit from “socialized medicine.” Republicans, in the form of a totally cynical Republican National Committee chairman Michael Steele, now say they want to protect me from any reforms (meaning cost increases or benefit reductions) of Medicare, because, in part, Medicare is irrational and inefficient. Huh? I heard Steele on a National Public Radio interview, and he was simply offering incoherent partisan bafflegab.

I suggest that every power company human resources manager with decisions about health care for employees consult the new book –The Healing of America, A Global Quest for Better, Cheaper, and Fairer Health Care – by former veteran Washington Post foreign correspondent T.R. Reid. He and his family lived for years in other developed countries and partook of their health care systems. Reid set off several years ago to examine the realities – not the Washington political sound bites – of how health care works in the major developed countries of the world: — the U.S., the U.K., France, Germany, Canada, Japan, etc. – as well as some up-and-comers such as Taiwan, Singapore, and South Korea.

Reid identifies three basic models of health care: Bismarckian (based on the model developed in Germany in the 19^th Century by autocrat Otto von Bismarck), which uses the private-sector to distribute universal health care, but doesn’t allow for-profit insurance (that was the original U.S. Blue Cross/Blue Shield approach); the Beveridge model, best characterized by the United Kingdom’s National Health Service, where the government pays doctors and hospitals and citizens essentially shell out nothing for health care (that’s what most experts mean by “single payer”); and the “out-of-pocket” paradigm, typical of third-world countries, where health is a matter of who has money to pay for medical care.

The U.S. health care system, argues Reid, consists of all of the models, without a coherent vision. Medicare (which, thanks to longevity, is my health care plan) is Bismarkian, and remarkably similar to the Canadian health care system, as well as those in Germany and France. The U.S. even adopted the Canadian moniker of “Medicare”, although the Canadian system covers everyone, not just geezers 65 or older. The system for federal employees – including members of Congress – is similar to this system, which involves lots of choice, lots of payers, but no opportunity to deny coverage. Most folks get covered by employer-financed plans, through many private insurance companies

The U.S. health care system for American Indians and for military veterans is the British Beveridge plan: the government offers total coverage (in the case of the American Indian health system, cradle-to-the-grave coverage) at no cost to the patients. Most analyses of these systems gives them high marks, although, when I worked in the Public Health Service (the National Institutes of Health) in the early 1970s, there were gripes that doctors who worked for the Indian Health Service were second-raters who couldn’t make it in private practice. I never saw any evidence of that.

Then there is the system for those who can’t afford their own health insurance, don’t work for employers who offer it, and aren’t poor enough to qualify for Medicaid. That’s the third-world system, and our system for the uninsured (mostly folks who work but don’t have on-the-job insurance and can’t afford individual plans).

Also, the system for folks who are self-employed or own small businesses, is totally out of whack. Because these people are unable to take advantage of pools of insured, they end up with outrageously expensively insurance.

When I left a job not too long ago, I qualified for continuation of my existing, employer-sponsored insurace (COBRA) — at nearly $1,000/month. When I sought a private plan for my self and my wife six months later, I was able to find coverage for $600/month, but with a $5,000 deductible for each of us.

Also, the first plan that offered to cover me then rejected me for a pre-existing condition, high blood pressure, although I had never been diagnosed with high blood pressure and never been prescribed high blood pressure medicine. The rejection was based on a single BP reading in hospital as I was about to undergo major abdominal surgery. Damn right my blood pressure was high.

In the U.S. system, if you don’t have insurance, you pay what you can and depend on the kindness of strangers (charities, taxpayers, and those with private insurance) and expect sub-standard care. That leads to tens-of-thousands of deaths each year for folks in the U.S. who succumb to treatable illnesses because they lack means to pay for health care when it is needed. They eventually get treated, but that treatment often is too late. We, the insured, including the insured employees of power companies, or the taxpayers, eat the costs that are passed on to our health insurers and show up in our bills.

T.R. Reid makes a fundamental point. The U.S. health care system – the only one in the developed world that does not recognize health care as a basic right and a moral issue – has large economic incentives against preventive care and major drivers that push up costs and rates for the insured. Why should an insurance company trying to maximize profit pay for prevention, knowing that the insured customer is likely to change plans or lose covered within a short period of time? Preventive care may not pare costs in the short term, as recent studies have concluded. But it could cut costs in the long term.

The for-profit insurance scheme in the U.S. pushes insurance companies to refuse to insure “pre-existing” conditions and deny coverage when illness arrives, because that kind of coverage flows to the bottom line as losses. That makes economic sense for the insurers. But it’s perverse social policy, unlike anything anywhere else in the developed world.

Employers should be concerned that the current system takes workers off the job, rather than keeping them at work, where they produce value for the company.

For human resource managers attempting to get a grip on health care issues, T.R. Reid’s book is required reading, as the political debate over national health care reform proceeds in Congress. Reid lays out in clear prose just how other countries deal with health care (and, in his case, with a chronically-damaged shoulder), how they control costs (most don’t do a good job, and neither do we, in spades), and what makes sense for a rational, compassionate U.S. policy that will rest on the decision the rest of the developed world has embraced: universal health care is right for all citizens.

As a business proposition, universal health care along the lines of any of the models Reid has described, other than the U.S. system, make sense. The current U.S. hodge-podge system subjects employers to unpredictable and ungovernable costs. That’s bad management and bad business.

The book is T.R. Reid, The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care, The Penguin Press, New York, 2009, available in a Kindle edition from Amazon.com.

Are the Wheels Coming Off Climate Legislation?

By Kennedy Maize

Look out, the political wobbles are beginning for Senate climate legislation. The wheels could come off anytime soon now.

The Energy Daily reported that the Senate’s schedule for taking up climate legislation won’t begin on Sept. 8, as originally announced. Instead, said Sen. Barbara Boxer (D-Calif.), chairman of the Senate Environment and Public Works Committee, the work on the bill will start later this month. I doubt it.

Boxer’s rationale was the death of Sen. Edward Kennedy (D-Mass.), recent hip replacement surgery for Sen. John Kerry (D-Mass.), and the coming battle over health care reform. What I see in this is the beginning of a retreat on the part of Senate Democrats from a battle over energy.

A joint statement from Boxer and Kerry, who also serves on the Senate Finance Committee, where intensive, and so-far unproductive bipartisan health care negotiations have been carrying on for months, said Senate Majority Leader Harry Reid (D-Nev.) had agreed to a delay in consideration of an energy bill. Boxer and Kerry said in their statement that their “goal is to introduce our bill later in September.”

Don’t bet big bucks. This is the classic now-you-see-it, now-you-don’t legislative legerdemain. My B.S. meter went “Woo, Woo, Woo,” and the pointer pegged off-scale when I read this story.

Here’s how it works when the leadership has decided it wants to duck a floor fight on controversial legislation. First, slow down the committee process, instructing the chairman (Boxer, in this case) to cool it for a while. Then, instruct the committee to draw out hearings and markup until the end of the session looms. Then, late in the year, acknowledge that there just isn’t enough time for full consideration of such a complicated, important bill.

That’s the climate stall-ball game the Democrats appear to me to be playing right now, and it’s no surprise. Health care is eating the Obama mandate, and, as the Washington Post reported recently, the anti-climate forces have seized the momentum. That looks like a double whammy for the donkeys, a completely unacceptable outcome. They will have to chose one issue to ride, and, as I have argued before, it will be health care.

The Energy Daily reported, “Reid previously had ordered the chairman of senate committees with jurisdiction to complete their work on the climate legislation by September 28, but his statement made no mention of a new deadline for committee action on the bill.

When queried as to when committees must wrap up their work on the measure, Reid’s spokesman said, in an e-mail: ‘As soon as possible.’”

Yep, that’s the classic waffle-straddle-gafflebag. I’ve covered Congress for more than 30 years. I have a pretty good sense of smell when it comes to waffle-making. Don’t expect Senate consideration of climate legislation in 2009.

The Republicans, with nothing to lose, called the Democrats on their game. Ranking Republican Jim Inhofe of Oklahoma, former chairman of the committee, said, on the money, “The news today — that Sen. Boxer and Sen. Kerry will delay introduction of their cap-and-trade bill — came as no surprise. The delay is emblematic of the division and disarray in the Democratic Party over cap-and-trade and health care legislation — both of which are big government schemes for which the public has expressed overwhelming opposition.”

Agree or disagree with Inhof’s views on “big government,” he certainly pinpointed the problems among the Democrats, where coal-state forces are at least as powerful as the green folks arguing for restrictions on fossil-fired generation.

What happens next is difficult to predict. The issue likely gets kicked into a 2010 election year, where coal-state legislators of both parties will probably campaign on opposition to the administration’s energy plans. I’d guess it won’t be pretty for environmentalists. In the words of the poet Randy Newman, “I could be wrong now, but I don’t think so.”

Bobby Hefner Basks in Gas Bonanza

By Kennedy Maize

Bobby Hefner, the doyen of deep gas, is back on the energy policy scene in a big way. That’s the only way Hefner has ever wanted to be seen: on a big canvas.

Back in the 1980s, Hefner’s Oklahoma-based GHK company was the prophet of natural gas finds way down below where anyone else had ever expected to drill, down to 24,000 feet. He raised a lot of money, had some success at high drilling costs, and landed in a lot of litigation.

Today, according to The Economist magazine, Hefner said he “feels vindicated.” That’s because the U.S. is awash in natural gas. “I used to say we were awash in gas,” Hefner told the magazine. “Now I say we are drowning in it.” The pessimism about U.S. gas reserves of couple of years ago has been replaced with bounding optimism.

For electric generators, the good news as 2009 rolls to an end is that natural gas – the cleanest, by any measure, of fossil fuels – has defied most predictions and has turned into a most plentiful producer of new, practical electricity. The most recent reports from the U.S. Energy Information Administration found natural gas prices at the Henry Hub at $2.76 per million BTU, an futures prices a the New York Mercantile Exchange September contracts were at $2.91 per MMBTU.

Bolstering the low gas price estimates – after a period in which analysts said natural gas would rise to track crude oil prices – the U.S. Potential Gas Committee issued a report that estimated U.S. reserves at 1.8 trillion cubic feet, the highest in the committee’s 44-year history. John Curtis of the Colorado School of Mines and head of the committee, said that the estimate “reaffirms the Committee’s conviction that abundant, recoverable natural gas resources exist within our borders, both onshore and offshore, in all types of reservoirs.”

The Potential Gas Committee is an independent, industry-funded institution that examines natural gas reserves in the U.S. Said Curtis, “Our knowledge of the geological endowment of technically recoverable gas continues to improve with each assessment. Furthermore, new and advanced exploration, well drilling and completion technologies are allowing us increasingly better access to domestic gas resources—especially ‘unconventional’ gas—which, not all that long ago, were considered impractical or uneconomical to pursue.”

In a press release, the gas committee noted, “When the PGC’s results are combined with the U.S. Department of Energy’s latest available determination of proved gas reserves, 238 Tcf as of year-end 2007, the United States has a total available future supply of 2,074 Tcf, an increase of 542 Tcf over the previous evaluation.”

So Bobby Hefner is ecstatic, although the future gas play appears to be in Devonian shale formations, not at incredible depths offshore, where Hefner made his mark.

The new gas forecasts have put the brakes on enthusiasm for new liquefied natural gas projects in the U.S. The gas glut means new LNG makes no sense in supplying a domestic market for either heating or power generation. Cambridge Energy Research Associates, long bullish on LNG, is backing off considerably, although its reports are not available to those unwilling pay large petrodollars to read them.

Meanwhile, in Canada, prospects of moving gas from the Peace River region of British Columbia to Vancouver have resulted in eco-terrorism. The Economist reports that there have been six bomb blasts since last fall attempting to disrupt the pipeline network that collects gas from the Dawson Creek area in the middle of the province along the Alberta border.

Dawson Creek, notes the magazine, is one of the hottest gas plays in North America, a shale area opened up by modern drilling technology, including horizontal drilling and hydrofracturing. “Nobody has been hurt and the damage has been minor, but the risk of a huge explosion is great,” said the magazine.

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Are the Wheels Coming Off Climate Legislation?

Bobby Hefner Basks in Gas Bonanza

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