Irwins Cheerful Energy Policy Outlook

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Irwins Cheerful Energy Policy Outlook

• Linda G. Stuntz
• Hudson Institute
• November 18, 2008

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Irwins Key Myths

• That we can rely on expanding domestic production
  or on the output of friendly nations to do more
  than ameliorate upward price pressures. -
  indisputable
• That policymakers or markets can affect the
  demand side sufficiently to end our substantial
  reliance on imported oil. - not even staunchest
  CAFE advocates believe conservation alone will
  suffice
• That natural gas, wind or solar power, ethanol,
  or nuclear power are significant and economically
  viable alternatives to imported oil, 70 of which
  we use for transportation. center of the debate

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The Third Myth Examined

• We dont use nuclear, natural gas, wind or more
  than 10 ethanol blends to power our cars.
• How then are these supposed to displace oil from
  transportation?
• Ethanol? limitations apparent.

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Electrification

• The World According to Plug-In Hybrids
• A few problems, though, even apart from battery
  issues
• We dont make electricity from the right (green)
  things.
• Green sources of electricity generally are
  located far from consumers.
• Green Electricity is intermittent and small
  scale. Wind generation was 67.9 higher in July
  08 than July 07, but still contributed only
  0.8 of total national generation.

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Net Generation Shares by Energy Source Total
(All Sectors), Year to Date Through July, 2008
Source http//www.eia.doe.gov/cneaf/electricity/
epm/execsum.pdf
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We Already Face Challenge of Meeting Increased
Demand

• Demand for electricity is projected to rise by
  nearly 17 in the coming ten years. This is
  equivalent to saying we will need one new power
  plant for every six we have today, along with
  significant additions of transmission
  infrastructure.
• Source NERC 208 Long Term Reliability
  Assessment

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We Are Not Building Enough Transmission

• According to NERC, Potential generation capacity
  would grow by about 21 over the next ten years.
• But, total miles of planned transmission
  additions are only projected to increase by about
  9.5 over the ten year period.
• Need much more transmission to reliably integrate
  projected location-constrained resources such as
  wind, nuclear, clean coal, and others into the
  bulk power system.

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Reality Intrudes on Renewable Electric Potential

• Wind Availability Compared to Demand Centers
• Note
• Blue indicates areas with high wind potential,
• Brown indicates large demand centers, and
• Green indicates areas with little wind potential
  and
• smaller demand centers

Source EPRI NREL
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Coal at Point of No Return?

• Over 35,000 MW of coal-fired generation have been
  cancelled or deferred in the past five years
  approximately the amount of electricity needed to
  power the entire U.S. Pacific Northwest.
• Operating constraints and investments required
  to reduce SO2, NOx, HG could force early,
  unplanned retirements of coal plants across North
  America, particularly in face of mandated carbon
  reductions.
• EPA Environmental Appeals Board ruled 11-13-08
  that EPA had no reason not to regulate CO2
  emissions from new coal plants.

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Dash to Gas Risks

• Natural gas plants being built instead of coal
  are typically located in different places.
  Significant upgrades to the transmission system
  will be required to bring this new generation
  online.
• Even assuming adequate supplies via shales or
  LNG, increased reliance on natural gas raises
  other reliability concerns
• adequate pipeline and storage capacity for these
  units, which will increasingly be required to run
  for longer periods of time. Pipeline capacity and
  storage will be of particular concern in Florida
  where nearly 50 of electric generation relies
  on natural gas, and in the West where only 5 of
  the nearly 400 active North American storage
  facilities are now located.

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Answer Blowing In the Wind?

• As the earlier map suggests, with the exception
  of Texas, less than 7 of the United States
  population inhabits the top ten states for wind
  potential. In Texas alone, integrating wind power
  within the state has required the addition of
  2,300 miles of high voltage transmission lines in
  the coming years.
• Forced curtailments of wind generation occurring
  already due to insufficient transmission
  capacity. No end in sight despite T Boones
  efforts.

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End Notes

• Governor Schwarzenegger yesterday issued an
  Executive Order to increase Californias RPS to
  33 by 2020 although CA will not meet the goal of
  20 by 2010 that it has now.
• According to UN data released 11/17, greenhouse
  gas output from developed countries, including
  the U.S., has risen 2.3 since 2000.
• What a world, what a world Wicked Witch,
• Wizard of Oz.