NewEnergyNews: Can Decision-Makers Learn to Embrace Change in the Energy Risk Lab? “They can try making a billion-dollar decision without actually making a billion-dollar decision.”

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge: To make every day Earth Day.

YESTERDAY

  • LABOR DAY STUDY: CHINA NEW ENERGY MOVES AHEAD
  • NO QUICK NEWS TODAY. BACK TOMORROW.
  • THE DAY BEFORE

  • Weekend Video: The Economic Opportunity In The Climate Fight
  • Weekend Video: The Future Of Energy
  • Weekend Video: Advances In BioEnergy
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    THE DAY BEFORE THE DAY BEFORE

  • FRIDAY WORLD HEADLINE-CLIMATE CHANGE – IT GETS WORSE
  • FRIDAY WORLD HEADLINE-WHERE AND HOW WIND IS GROWING IN THE WORLD
  • FRIDAY WORLD HEADLINE-CHINA TO LEAD SOLAR MARKET GROWTH DESPITE OBSTACLES
  • FRIDAY WORLD HEADLINE-THE ENORMOUS POTENTIAL OF WORLD GEOTHERMAL
  • THE DAY BEFORE THAT

    THINGS-TO-THINK-ABOUT THURSDAY, August 28:

  • TTTA Thursday-PRESIDENT TO TAKE ACTION ON CLIMATE
  • TTTA Thursday-BIRDS AND ENERGY, THE BIGGER STORY
  • TTTA Thursday-NEW CA LAW STREAMLINES SOLAR PERMITTING
  • TTTA Thursday-DATA CENTER EFFICIENCIES CAN SAVE U.S. $3.8BIL/YR
  • AND THE DAY BEFORE THAT

  • THE STUDY: THE RISKIEST ENERGY IN THE WORLD
  • QUICK NEWS, August 27: VERIZON’S $40MIL SOLAR BUY; WIND PRICES HIT RECORD LOWS; NUKE INSPECTOR SAYS DIABLO CYN IS UNSAFE
  • THE LAST DAY UP HERE

  • THE STUDY: U.S. WIND RIGHT NOW
  • QUICK NEWS, August 26: CLIMATE MODELS PROVE RIGHT AGAIN; ABOUT INVESTING IN SOLAR; GM VS TESLA IN THE 200 MILE RACE -

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    Anne B. Butterfield of Daily Camera and Huffington Post, is a biweekly contributor to NewEnergyNews

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT)

    November 26, 2013 (Huffington Post via NewEnergyNews)

    Everywhere we turn, environmental news is filled with horrid developments and glimpses of irreversible tipping points.

    Just a handful of examples are breathtaking: Scientists have dared to pinpoint the years at which locations around the world may reach runaway heat, and in the northern hemisphere it's well in sight for our children: 2047. Survivors of Superstorm Sandy are packing up as costs of repair and insurance go out of reach, one threat that climate science has long predicted. Or we could simply talk about the plight of bees and the potential impact on food supplies. Surprising no one who explores the Pacific Ocean, sailor Ivan MacFadyen described long a journey dubbed The Ocean is Broken, in which he saw vast expanses of trash and almost no wildlife save for a whale struggling a with giant tumor on its head, evoking the tons of radioactive water coming daily from Fukushima's lamed nuclear power center. Rampaging fishing methods and ocean acidification are now reported as causing the overpopulation of jellyfish that have jammed the intakes of nuclear plants around the world. Yet the shutting down of nuclear plants is a trifling setback compared with the doom that can result in coming days at Fukushima in the delicate job to extract bent and spent fuel rods from a ruined storage tank, a project dubbed "radioactive pick up sticks."

    With all these horrors to ponder you wouldn't expect to hear that you should also worry about the United States running out of coal. But you would be wrong, says Leslie Glustrom, founder and research director for Clean Energy Action. Her contention is that we've passed the peak in our nation's legendary supply of coal that powers over one-third of our grid capacity. This grim news is faithfully spelled out in three reports, with the complete story told in Warning: Faulty Reporting of US Coal Reserves (pdf). (Disclosure: I serve on CEA's board and have known the author for years.)

    Glustrom's research presents a sea change in how we should understand our energy challenges, or experience grim consequences. It's not only about toxic and heat-trapping emissions anymore; it's also about having enough energy generation to run big cities and regions that now rely on coal. Glustrom worries openly about how commerce will go on in many regions in 2025 if they don't plan their energy futures right.

    2013-11-05-FigureES4_FULL.jpgclick to enlarge

    Scrutinizing data for prices on delivered coal nationwide, Glustrom's new report establishes that coal's price has risen nearly 8 percent annually for eight years, roughly doubling, due mostly to thinner, deeper coal seams plus costlier diesel transport expenses. Higher coal prices in a time of "cheap" natural gas and affordable renewables means coal companies are lamed by low or no profits, as they hold debt levels that dwarf their market value and carry very high interest rates.

    2013-11-05-Table_ES2_FULL.jpgclick to enlarge

    2013-11-05-Figure_ES2_FULL.jpg

    One leading coal company, Patriot, filed for bankruptcy last year; many others are also struggling under bankruptcy watch and not eager to upgrade equipment for the tougher mining ahead. Add to this the bizarre event this fall of a coal lease failing to sell in Wyoming's Powder River Basin, the "Fort Knox" of the nation's coal supply, with some pundits agreeing this portends a tightening of the nation's coal supply, not to mention the array of researchers cited in the report. Indeed, at the mid point of 2013, only 488 millions tons of coal were produced in the U.S.; unless a major catch up happens by year-end, 2013 may be as low in production as 1993.

    Coal may exist in large quantities geologically, but economically, it's getting out of reach, as confirmed by US Geological Survey in studies indicating that less than 20 percent of US coal formations are economically recoverable, as explored in the CEA report. To Glustrom, that number plus others translate to 10 to 20 years more of burning coal in the US. It takes capital, accessible coal with good heat content and favorable market conditions to assure that mining companies will stay in business. She has observed a classic disconnect between camps of professionals in which geologists tend to assume money is "infinite" and financial analysts tend to assume that available coal is "infinite." Both biases are faulty and together they court disaster, and "it is only by combining thoughtful estimates of available coal and available money that our country can come to a realistic estimate of the amount of US coal that can be mined at a profit." This brings us back to her main and rather simple point: "If the companies cannot make a profit by mining coal they won't be mining for long."

    No one is more emphatic than Glustrom herself that she cannot predict the future, but she presents trend lines that are robust and confirmed assertively by the editorial board at West Virginia Gazette:

    Although Clean Energy Action is a "green" nonprofit opposed to fossil fuels, this study contains many hard economic facts. As we've said before, West Virginia's leaders should lower their protests about pollution controls, and instead launch intelligent planning for the profound shift that is occurring in the Mountain State's economy.

    The report "Warning, Faulty Reporting of US Coal Reserves" and its companion reports belong in the hands of energy and climate policy makers, investors, bankers, and rate payer watchdog groups, so that states can plan for, rather than react to, a future with sea change risk factors.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    It bears mentioning that even China is enacting a "peak coal" mentality, with Shanghai declaring that it will completely ban coal burning in 2017 with intent to close down hundreds of coal burning boilers and industrial furnaces, or shifting them to clean energy by 2015. And Citi Research, in "The Unimaginable: Peak Coal in China," took a look at all forms of energy production in China and figured that demand for coal will flatten or peak by 2020 and those "coal exporting countries that have been counting on strong future coal demand could be most at risk." Include US coal producers in that group of exporters.

    Our world is undergoing many sorts of change and upheaval. We in the industrialized world have spent about a century dismissing ocean trash, overfishing, pesticides, nuclear hazard, and oil and coal burning with a shrug of, "Hey it's fine, nature can manage it." Now we're surrounded by impacts of industrial-grade consumption, including depletion of critical resources and tipping points of many kinds. It is not enough to think of only ourselves and plan for strictly our own survival or convenience. The threat to animals everywhere, indeed to whole systems of the living, is the grief-filled backdrop of our times. It's "all hands on deck" at this point of human voyaging, and in our nation's capital, we certainly don't have that. Towns, states and regions need to plan fiercely and follow through. And a fine example is Boulder Colorado's recent victory to keep on track for clean energy by separating from its electric utility that makes 59 percent of its power from coal.

    Clean Energy Action is disseminating "Warning: Faulty Reporting of US Coal Reserves" for free to all manner of relevant professionals who should be concerned about long range trends which now include the supply risks of coal, and is supporting that outreach through a fundraising campaign.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    Author's note: Want to support my work? Please "fan" me at Huffpost Denver, here (http://www.huffingtonpost.com/anne-butterfield). Thanks.

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    Anne's previous NewEnergyNews columns:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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    Your intrepid reporter

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  • Tuesday, January 29, 2013

    Can Decision-Makers Learn to Embrace Change in the Energy Risk Lab? “They can try making a billion-dollar decision without actually making a billion-dollar decision.”

    Can Decision-Makers Learn to Embrace Change in the Energy Risk Lab? “They can try making a billion-dollar decision without actually making a billion-dollar decision.”

    Herman K. Trabish, August 17, 2012 (Greentech Media)

    Energy regulators, who will decide this nation’s energy future on a state-by-state basis, were recently invited to play games with the nation’s energy challenges.

    National Association of Regulatory Utility Commissioners (NARUC) Director of Grants and Research Miles Keogh explained that in order to help regulators “deal with a vast ocean of extremely complex and extremely dynamic issues,” he has been building and running energy emergency tabletop exercises since the post-Hurricane Katrina period.

    In 2010, NARUC began thinking about an energy challenge that “wasn’t a hurricane or a cyber-attack, but something policy-driven.” The group began running games challenging regulators to think about new transmission, grid preparation for electric vehicles, andintegrating high levels of renewables.

    With recent EPA and DOE funding, Keogh said, NARUC developed The Energy Risk Lab, a game to prepare regulators for real-world changes in power plant regulations they will faceover the next five years.

    The game, on which GTM sat in, dealt first with three major new power plant rules: (1) Mercury and Air Toxic Standards (MATS) (2) Cross State Air Pollution Rule(CSAPR), and (3) the Clean Air Act, Section 111B, NSPS (New Source Performance Standards).

    It also asked regulators to consider (4) the Clean Water Act, Section 316B, (5) unknown potential carbon pricing, (6) hydraulic fracturing moratoria, (7) gas price volatility, (8) a national Clean Energy Standard, and (9) a rapid, energy-intensive economic recovery.

    The game “gives policymakers and decision-makers an opportunity to try out different responses to a complex market, policy and technology environment,” Keogh said. “They can try making a billion-dollar decision without actually having to make a billion-dollar decision.”

    By revealing response patterns, The Energy Risk Lab has become “a policymaker behavioral predictive tool,” Keogh said. “You can model how a transmission line is going to work or how a market is going to behave but it is difficult to predict how human policy makers will respond to policy conditions.” As a result, it has rendered two big insights and one small insight, Keogh said.

    “We have people with a lot of experience with power plants,” he explained. “When we get them all together and map out the time each takes, in sequence under the EPA regs, we have a hard time getting the time each expected for their piece and fitting that into the three-year compliance period for the first big rule we’re worried about, MATS.”

    EPA presently requires MATS compliance by April 2015. Keogh did not say the EPA must reconsider its deadline. “All I can say for sure,” Keogh said, is that in the game, “it’s hard to make all those pieces sequence up in a way that takes less than three years. That’s the little outcome.”

    The first big insight, Keogh said, “is that strategic action is more effective than reactive action. If you figure out what you are going to do and then do it, that makes for a better outcome than if you react to every problem right in front of you.”

    Being strategic and not looking only at the first rule but considering other rules, Keogh explained, may lead to wrong specific decisions but will tend to have a better outcome. “Folks who acted strategically, who made a plan for dealing with more than just the one rule, didn’t have to go back and fix their messes as they went along,” Keogh said. “A strategic approach always leads to a more favorable outcome than a reactive approach.”

    “The other big takeaway, Keogh said, is that having more options helps you manage your risk. Preserving options and generating new options leads to better outcomes than heading toward an obvious near-term solution.”

    That raises another very important question, Keogh said. “Are we making 50-year investments in infrastructure based on a two-year fuel price horizon?” If we don’t preserve some of our options and generate other options that aren’t just driven by that two-year fuel price horizon, he explained, we won’t have the insurance of a diverse portfolio. “When you are dealing with uncertainty, you broaden your portfolio to deal with variability,” he explained.

    “In the near term, it is more expensive to generate a diverse portfolio, but over the course of the game -- and, I think, in the real world,” he said, "[that] will lead to better outcomes than having a single, monocrop kind of portfolio.”

    The “breakout story” of the session GTM observed, Keogh said, was how comfortable utility representatives are with utilizing demand-side resources as an actual resource. "I didn’t think people would be comfortable retiring a coal plant and replacing it with demand-side resources outright. But in the context of the game, folks are more comfortable than we had expected.”

    That was important, he said, because “folks who really doubled down on efficiency in the context of the game were opening up a whole package of options that diversified their portfolio.”

    It opened up, he added, options that made them immune to things others were later hit with.

    It was an “eye-opener how much efficiency and demand response punch above their weight. They look like little resources, but they really help a lot. Renewable resources, in the context of the game, played a role but it wasn’t a transformative role,” Keogh said. “They didn’t play the outsized or unexpected role, in terms of providing benefits, that demand response and efficiency did.”

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