Forbes - Ken Silverstein
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| White House Getty |
2018 has once again been underscored by
the loudest guy in the room, or in this case, the world: Donald Trump.
2019 will only ramp up the volume. But the noise, though, is getting
more obnoxious while his words and actions have become inescapable.
Indeed, the president is described as a con artist. And his energy and
environmental policies are just as dirty — a throwback to a bygone era
when the milkman delivered and the gas station attendant pumped your
gas.
Setting aside Trump’s personal
peccadilloes, he has tried to totally turn back Obama’s environmental
policies. There’s also Trump’s indifference toward CO2 emissions and his
denial of climate science as well as his attempted reversal of vehicle
tailpipe emissions standards. And then there’s the try at propping up of
uneconomic coal-fired power electricity as well as the proposal to ease
natural gas-related methane emissions. The list goes on.
But Trump’s biggest faux pas this past
year has been his misguided insistence that the U.S. must apply tariffs
on certain products coming out of China and namely, solar panels. To
this end, solar development in the United States is feeling the heat.
Meantime, China has responded in-kind and it has specifically targeted
oil and natural gas exported from the U.S. And once China gets locked
into new long-term contracts, the U.S. could be frozen out of these
lucrative markets.
Just as former White House Counsel John
Dean warned the nation in 1973 that a “cancer was on the presidency,” a
similar malignancy may now be upon us in 2018. But this column will
drill down on Trump’s policies, which could stick around a lot longer
and which could have a far-reaching impact.
Nine: On a positive note, the
shale gas revolution continues to provide both economic and
environmental opportunities. When it comes to using natural gas for
electric generation, the fuel is replacing coal. And that is helping to
drive down CO2 levels, which are tied to global warming. The good news is that CO2 emissions are 18% less than they were in 2005, says the
Energy Information Administration.
And when it comes to shale gas and its
byproducts being used for the manufacturing process, that too is giving a
boost to regions of the country that need a second wind: Appalachia, in
particular.
In fact, a 2018 study says that the
Utica and Marcellus Shale basins will
provide 37% of the nation’s natural gas production by 2040, making it
the best place nationally for manufacturers to invest — even better than
the Gulf Coast.
IHS Markit concludes
that the region, which is made up of Ohio, Pennsylvania and West
Virginia will “provide a significant financial advantage” when compared
to the Gulf Coast.
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| A climate activists with a colorful mask attends the March for Climate in a protest against global warming in Katowice, Poland, Saturday, Dec. 8, 2018, as the COP24 UN Climate Change Conference takes place in the city. (AP Photo/Alik Keplicz) ASSOCIATED PRESS |
Eight: But the negative side of greater shale gas exploration means the potential for more
methane leaks,
which are 80-times more powerful than CO2 and which are also
responsible for trapping heat. In 2000, shale gas accounted for 5% of
all gas production in the United States and today it is about 60%,
according to
U.S. Energy Information Administration.
With that, a 2018
study published in the journal Science says that the U.S. oil and gas
business emits 13 million metric tons of methane from its operations a
year. And that is 60% more than the U.S. Environmental Protection Agency
has estimated. In fact, the leak rate from existing operations is 2.3%,
which is greater than EPA’s estimate of 1.4%. Despite the serious
concerns and the available technologies, Trump’s
Environmental Protection Agency released
a draft to ease up the time frame for which oil and gas companies must
inspect and fix their leaks for fracking sites on publicly-held lands.
Seven: The states are on the
leading edge of enacting policies to curb emissions and especially CO2.
One idea to emerge — and a lot of environmentalists don’t like it — is
the one to save the existing
nuclear energy fleet.
Right now, 99 nuclear reactors provide about 20% of the nation’s
electricity and 56% of its carbon-free power. At the same time, the
industry says that its operating costs have fallen by 19% since 2012.
But six plants have shut down over the
last five years, either the result of safety issues or the fact that
they have been unable to compete with cheap natural gas generation. To
help save those plants, New Jersey enacted laws to keep open PSEG’s
Salem and Hope Creek nuclear plants operating.
It follows Connecticut, which is working
to save Dominion Energy’s facility. Ohio and Minnesota are in the
process of doing the same for First Energy and Xcel Energy,
respectively. Those states follow Illinois and New York, which enacted
laws to credit nuclear units owned by Exelon and Entergy, respectively,
for the clean energy they generate.
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| Porsche Panamera 4 E-Hybrid on the electric charging station. Plug-in hybrid vehicles and electric cars replaces the classic fuel vehicles in future. Getty |
Six: In 2009, car makers had
agreed with President Obama to produce vehicles that got better gas
mileage. But they had a change of heart once President Trump was sworn
in. They have now given the Trump administration their blessing to
reverse course: instead of the 54.5 miles per gallon that Obama would
require — over-and-above the current 35 mpg — Trump has settled on 37
mpg by 2025.
But California is responding by saying that the tougher
vehicle emissions standards set
by the Obama administration only add a few hundred dollars to the price
of a new car and that has not deterred consumers who finance them over
five years. It, along with nine other states, will fight the Trump
administration in court.
The silver lining here is that
automakers are committed to commercializing
all-electric models.
Indeed, at least 13 companies have such brands, including Tesla,
Volkswagen, Nissan, BMW, Mercedes-Benz, General Motors, Ford and Toyota.
According to U.S. the
Energy Information Administration, electric vehicles are now 1.6% of the overall car market. But that could increase to 6% in 2025.
Five: While experts predict that
electric batteries for cars will hit stride around 2027, battery storage
for utilities got a big boost in 2018. Wind and solar energies have
been responsible for about
60% of all of generation. That has caught the eye of electric utilities.
Xcel Energy,
which has a goal of going fully renewable by 2050, says that it can do
do so without huge burdens on its customer base. To that end, it has
asked for energy storage proposals that could help bolster its would-be
wind and solar projects. It got 430 such bids, compared to 55 in 2013.
The U.S.
Energy Storage Monitor 2017 Year-in-Review
says that 1,000 megawatt-hours of that capacity was deployed between
2013 and 2017 and it is predicting that more than 1,200 megawatt-hours
of energy storage will get deployed in 2018 alone; last year, it was 431
megawatt-hours.
Moreover, the
Federal Energy Regulatory Commission voted
in mid February to allow grid managers to compensate energy storage the
same as traditional power generators. Energy storage would thus
graduate beyond the injection of electrons to prevent lights from
flickering out and into the wholesale energy markets. Storage devices
can also start up in seconds while generators take much longer.
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| Blue Wind Turbine 3d illustration Getty |
Four: Renewable energy continues to be a bright spot on the energy horizon.
Bloomberg New Energy Finance
predicts that wind and solar electricity will make up 50% of the
world’s energy mix by 2050. That will be a function of the falling price
of the underlying technologies as well as $548 billion being invested
in storage capacity.
Moreover, wind costs have fallen by 67%
since 2009 while utility-scale solar has dropped by 86% since that time,
notes financial advisor
Lazard.
With that, corporations have contracted to buy 7,000 megawatts of
renewable energy over four years, which is expected to grow to 60,000
megawatts by 2025, says the
Edison Foundation Institute for Electric Innovation.
“Since the 1970s, fossil fuels have
commanded a consistent 60-70% share of the global power generation mix.
We think this 50-year equilibrium is coming to an end, as cheap
renewable energy and batteries fundamentally remake electricity systems
around the world,”
Bloomberg New Energy Finance’s 2018 report says.
Three: Coal’s continuing saga continues to be bleak. According to
Bloomberg New Energy Finance,
about 16,200 megawatts of coal generation is expected to retire in
2018, meaning coal will supply less than 30% of the domestic electricity
market. Similarly, the Energy Information Administration adds that
renewables, excluding hydro, will hit
10% of the U.S. electricity market this year.
Meantime, the Bureau of Labor Statistics says coal jobs are at their lowest level since the mid 1980s: 51,000 nationally.
Wind and solar jobs total 474,000, combined, or 100,000 and 374,000, respectively.
But the
Trump administration has
said that it will try and use the regulatory levers to buttress coal
plants that it thinks are vital to the country’s energy security. Its
rationale is that such facilities are reliable and keep electricity
purring along during harsh weather conditions.
The Federal Energy Regulatory Commission
has dismissed that thinking, however, noting that reserve margins are
greater than they have ever been and even in areas that rely on coal. In
other words, the grid is more dependable than ever, all while wholesale
prices are dropping and the level of harmful emissions is going down.
Because coal will still be relied upon
not just in this country but also developing countries, it is important
that the fuel become cleaner. Coal, in fact, is responsible for a third
of all manmade emissions.
To that end, Congress enacted a law this year to give a
tax credit of $50 per ton for CO2 that is buried and $35 a ton for CO2 that is re-utilized. With that,
Net Power
is working with Toshiba Corp. to burn natural gas in oxygen to create
pure CO2 — much of which is captured, heated and used to create
electricity. The remaining CO2 is captured and either sequestered
underground or used to enhance oil recovery. It says that its project is
now more viable because of this new law.
Two: The peril of rising temperatures and
climate change will loom for decades to come. But the threat level has increased since Trump was sworn in. And 2019 was a marked year.
The
UN Intergovernmental Panel on Climate Change report
released in October says that keeping temperature increases to 3.6
degrees Fahrenheit by mid Century won’t be enough to avert environmental
catastrophes. To make matters worse, at the current pace, such
temperature rises could be greater than 7 degrees Fahrenheit. The
economic and environmental damages would thus become irreversible.
Meantime, 13 government agencies released the fourth
National Climate Assessment
six weeks later. Experts there found once more that climate change is
primarily human-induced and that global average temperatures are the
highest they have ever been.
Importantly, the president has withdrawn
from the Paris climate agreement that calls on nations to limit their
temperature rises to no more than 3.6 degrees Fahrenheit by mid century,
from pre-industrial levels. He is also trying to get out of the Clean
Power Plan that would reduce this nation’s CO2 emissions while he has
placed tariffs on solar panel imports.
The
International Energy Agency said
that global CO2 emissions rose, globally,1.4% to 32.5 gigatons in 2017.
About two-thirds of the increase is coming from China and India, which
are actively addressing air quality issues.
Along those lines, the
U.S. Senate confirmed Brett Kavanaugh
to the Supreme Court in October. Kavanaugh replaced Justice Anthony
Kennedy, who provided the deciding vote to allow the EPA the right to
regulate CO2.
Even Kavanaugh has called Obama’s Clean
Power Plan that seeks to cut CO2 by 32% by 2030 a “laudable policy.” But
he also tamped down his endorsement of the plan during a court hearing
by saying, “If Congress does this, they can account for the people who
lose their jobs. If we do this, we can’t.”
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| FIEL - In this Sept. 24, 2018, file photo, shoppers sit on a bench with a decorated with U.S. flag browsing their smartphones outside a fashion boutique selling U.S. brand clothing at the capital city's popular shopping mall in Beijing. China will go along with changes meant to update global trade rules but they must protect Beijing’s status as a developing country, a Cabinet official said Friday, Nov. 23, 2018. (AP Photo/Andy Wong, File) ASSOCIATED PRESS |
One: The biggest energy issue to
hit this year is not one that has been lingering around but rather, it
is one that was brought about solely because Trump is a believer in
tariffs, calling himself “a tariff man.”
Economists agree on almost nothing — except that
free and fair trade produces
better business and healthier economies. And that axiom especially
holds true when it comes to the relationship between the United States
and China, considering that the Asian nation is the second biggest
economy in the world and that it is a voracious consumer of oil and
natural gas. In fact, the two economies are inextricably linked to the
import-export markets.
In fact,
oil and natural gas make up
8% of the gross national product and
provide nearly 10 million jobs in the United States, the American
Petroleum Institute says. Absent a trade war, by 2020, the United States
could be exporting 70 billion cubic meters of LNG and by 2040, the
number could be 110 billion cubic meters, says the
International Energy Agency in
Paris. Chinese gas demand is forecast to grow by 60% between 2017-2023,
all of which is tied to China’s domestic policies to reduce local air
pollution by switching from coal to gas.
China has become the second largest
importer of U.S. crude oil. Until June 2018, it imported 350,000 barrels
per day, according to the
U.S. Energy Information Administration.
That equates to $1 billion of such purchases. But it turned off the
spigot in August and September, although it says it will turn it back
on.
And, roughly $8 billion worth of
utility-scale solar projects — those that connect to the transmission
grid — have been killed or delayed, says the Solar Energy Industry
Association and Wood Mackenzie Power & Renewables, in a
new paper that looks at the impact of
solar panel tariffs
on imports through 2022. The same analysis says that 9,000 jobs will
have been lost or forsaken as a result of the president’s tariffs that
were implemented in January.
Trump imposed a 30% tariff on
all solar panel imports. It will decline by 5% a year. The tariff is
intended to “save” domestic solar makers but American solar companies
comprise only 5% of the global production market.
Conclusion: President Obama
lifted the country out of recession by, in part, using government’s
levers to foster a green energy economy — one that critics said would
fail and do little to scrub the environment.
President Trump has tried to reverse those same policies, maintaining that his goal has been to level the playing field while creating jobs.
The two philosophies are diametrically
opposite. And while Obama’s economy was slow out of the starting gate,
it was consistently upward and prolonged. Trump’s economy, by
comparison, had an impressive start fueled by corporate tax cuts but two
years in, it is sliding back. The takeaway: a low-carbon economy
produces economic results. As such, policymakers, globally, should
should hasten the transition, not drag their feet.
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