Category: Energy Policy

Wake Up To Monday’s Hot Links

The Daily Escape:

Cypress trees, Lake Verritt, LA – November 2023 photo by Rick Berk Photography. Note the egret in the background.

For today’s Wake Up Call, we return to a staple of yesteryear, some hot links that caught Wrongo’s eye over the past few days.

Wrongo isn’t happy with how the Ukraine War has slipped from the consciousness of America’s media and thereby, from our view. Saturday’s WSJ offered an intriguing idea with its column, “Does the West Have a Double Standard for Ukraine and Gaza?” (free link). The article makes two excellent points. First, how these two wars have divided the world. Here’s a view of the division:

From the WSJ: (emphasis by Wrongo)

“Outrage and political mobilization have become subordinated to geopolitical allegiances—a selective empathy that often treats ordinary Ukrainians, Palestinians and Israelis as pawns in a larger ideological battle within Western societies and between the West and rivals such as China and Russia.”

Second, the article concludes by saying that the main difference between the two wars is that the Israeli-Palestinian conflict, with all its complexities, lacks the moral clarity of the Ukrainian resistance to Russia. They quote British lawmaker Alex Sobel:

“There is no moral justification for the Russian invasion. Zero. It’s just about Russian imperialism….But in Israel and Palestine, it’s about the fact that there are two peoples on a very small amount of land, and political and military elites on both sides are unwilling to settle for what’s on offer.”

Yes, America may have the moral high ground in both cases, and views can differ on how both wars are being waged. But as the article says in its second paragraph:

“The Russian invasion of Ukraine in February 2022 was unprovoked, while Israel sent troops into Gaza because of a mass slaughter of Israeli civilians…”.

Make of the article what you will, but it’s important to think through why you (like Biden) think both wars are morally equivalent.

Link #2 is apropos of the COP28 conference now underway in Dubai. Grist Magazine has an article: “Where could millions of EV batteries retire? Solar farms.” As solar energy expands, it’s becoming more common to use batteries to store the power as it’s generated and transmit it through the grid later. One new idea is to source that battery back up at least in part from used electric vehicle batteries:

“Electric vehicle batteries are typically replaced when they reach 70 to 80% of their capacity, largely because the range they provide at that point begins to dwindle. Almost all of the critical materials inside them, including lithium, nickel, and cobalt, are reusable. A growing domestic recycling industry, supported by billions of dollars in loans from the Energy Department and incentives in the Inflation Reduction Act, is being built to prepare for what will one day be tens of millions of retired EV battery packs.”

More:

“Before they are disassembled…studies show that around three quarters of decommissioned packs are suitable for a second life as stationary storage.”

Apparently there are already at least 3 gigawatt-hours of decommissioned EV battery packs sitting around in the US that could be deployed, and that the volume of them being removed from cars is doubling every two years.

Link #3 also shows the impact of the Inflation Reduction Act. Wolf Richter writes that:

“In October, $18.5 billion were plowed into construction of manufacturing plants in the US ($246 billion annualized), up by 73% from a year ago, by 136% from two years ago, and by 166% from October 2019.”

More:

“The US is the second largest manufacturing country by output, behind China and has a greater share of global production than the next three countries combined, Germany, Japan, and India.”

All of this construction spending will take time to turn into production. When these new plants are up and running and producing at scale, manufacturing’s share of US GDP will rise. And much of the new construction is happening in fly-over America, which can use the help.

Finding factory workers in sufficient numbers to support the new capacity will be a key. America has energy in abundance and has robotic manufacturing. So pulling production from overseas with fewer workers needed will be a giant plus for the US.

Link #4 is a downer. Civic Science says in this week’s 3 things to know column, that “Nearly 3 in 10 Americans say they have had to forgo seeing a doctor in the past year due to costs.” Here’s their chart”:

Civic Science says that 12% of US adults have had to miss or make a late payment on medical bills in the last 90 days, a two percentage point increase over September 2022.

A far larger percentage of Americans – 27% of the general population and about 30% of respondents under 55 years old or with an annual household income under $100,000 – report they could not go to a doctor in the past 12 months because they could not afford the cost. Gen Z adults and households making between $25K-$50K are more likely to have held off seeing a doctor due to cost (34% and 31% respectively).

We all know that medical costs have continued to rise and that medical debt is the leading cause of personal bankruptcy in the US. If Congress was really interested in helping provide for the general welfare, they would deal with this out of control problem.

Time to wake up America! There’s plenty going on that isn’t getting visibility in the mainstream media or on social media. You have to cast your net widely to be on top of the good and bad happening in the US.

To help you wake up, we turn to Shane MacGowan, frontman for the Irish group the Pogues who died last week. He left behind a body of work that merged traditional Irish music and punk rock. He wrote many songs that could easily be mistaken for traditional Irish tunes including this one, which was also used as the music for wakes by the Baltimore Police Department in the great, great HBO series, “The Wire“. Here’s “The Body Of An American” from their 1986 album, “Poguetry in Motion”:

RIP Shane.

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Saturday Soother – May 20, 2023

The Daily Escape:

Daffodils, Laurel Ridge, Litchfield CT – May 2023 photo by Dave King

The oil industry enjoys special economic status in the US. That is demonstrated by the tax breaks and outright subsidies we give them. Hannah Dunlevy notes that:

“In 2020, the explicit and implicit fossil fuel subsidies cost the United States $662 billion, around $2,006 per capita. Cutting just two tax breaks for the fossil fuel industry — the intangible drilling costs subsidy and the percentage depletion tax break — could generate $17.9 billion in government revenue over ten years, according to Congress’s non-partisan Joint Committee on Taxation.”

Biden’s fiscal year 2024 budget proposed cutting some of tax subsidies for oil and gas companies, which would save the US $31 billion over ten years. It will probably not survive the current Debt Ceiling and budget discussions.

One hidden subsidy that the oil industry enjoys is when wells are no longer productive – they are idled. If it’s no longer profitable to return idled wells to production, they need to be plugged. And the cost of plugging a well can be $100,000 or more.

The problem is that when wells start to decline, they are sold by Big Oil to smaller producers. When the well is sold, the plugging and cleanup liability passes to the new buyer. And often, the new buyer simply walks away from the uneconomic well, creating what the industry calls “orphaned wells”. But if a company doesn’t plug its wells before walking away, the cleanup costs will ultimately fall to taxpayers and current operators.

This has already happened with thousands of wells in California and may happen to millions more across the country. Pro Publica reports that there are more than two million unplugged oil wells scattered across the US. California is just the tip of the iceberg.

Petroleum reservoir engineer Dwayne Purvis laid out the reality at a recent conference. His research shows that more than 90% of the country’s unplugged wells are either idle or minimally producing and unlikely to make a comeback.

California is the canary in a coal mine. Shell and ExxonMobil recently agreed to sell more than 23,000 California wells which they owned through a joint venture, to a German asset management group IKAV for an estimated $4 billion. This means that a subsidiary of IKAV now owns about a quarter of California’s oil and gas production, largely in Kern and Ventura counties.

This ownership shift moves the subsequent environmental liability from Big Oil powerhouses to firms with smaller capitalization, increasing the risk that aging wells will be left orphaned, unplugged and leaking oil, brine and methane. For California and other states, this could repeat what was seen in coal mining, which led to taxpayers bearing all of the cleanup costs.

The oil industry has created layers of LLCs that are used to screen Big Oil from the dirty end of the oil business, like responsibility for cleaning up the messes that they make. And these firms can easily declare bankruptcy rather than pay for cleaning up orphan or idle wells.

ProPublica reports on an analysis by Carbon Tracker Initiative, a financial think tank that used the California regulators’ draft methodology for calculating the costs associated with plugging oil and gas wells and decommissioning them along with their related infrastructure.

The cost categories included plugging wells, dismantling surface infrastructure and decontaminating polluted drilling sites. That would cost California about $13.2 billion. Adding inflation and the price of decommissioning miles of pipeline could bring the total cleanup bill to $21.5 billion.

Meanwhile, Purvis estimates that California oil and gas production will earn only about $6.3 billion in future profits over the remaining course of operations; nowhere near sufficient to pay for the cleanup, even if those profits could be captured by the state.

That’s just California. These costs are what economists call “Externalities”. An externality is an indirect cost (or benefit) to a party (taxpayers) that arises as an effect of another party’s (Oil Companies) economic activity. The problem is that the price of their product doesn’t include the externalities. That means there is a gap between the profit of these corporations and the aggregate loss to society as a whole.

Republicans have a tried and true solution for this problem. Taxpayers pay the bills. We’re back to the “privatize profit, socialize the losses” game that corporations have played forever. Maybe the correct terminology should be socialism for the rich.

They prefer to call it keeping government off the backs of job creators.

Time to let go of California’s messy problem and find a few minutes to center ourselves before next week which will bring either financial Armageddon, or a diminished Biden. At the Fields of Wrong, we had a freeze last Wednesday that caused us to cover the newly planted vegetables and bring the Meyer Lemon tree indoors. Spring in Connecticut can always show up with a backtracking nod towards winter.

But on this rainy Saturday, grab a chair by a big window and listen to Debussy’s “Nuages” (‘Clouds’) from his “Trois Nocturnes”. Leopold Stokowski and the Philadelphia Orchestra made the first American recording of Debussy’s “Three Nocturnes” for a 1950 LP.

Here is the first “Nocturne”, a musical impression of slow-moving clouds:

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Saturday Soother – May 13, 2023

The Daily Escape:

Sunset, Monument Valley, AZ – April 2023 panoramic photo by Rich Vintage Photography

The ripples from Trump’s appearance on CNN continue. Politico reports that: (brackets by Wrongo)

“Nearly under his breath….Trump said that he and…Putin “used to talk about” Moscow’s intention to launch [an] invasion in Ukraine.”

What’s Trump talking about? The invasion happened in February 2022, more than a year after Trump left office. In fact, Russia didn’t even begin massing troops on the Ukraine border until March 2021 while Trump was already at Mar-a-Lago. Russia’s troops were partially withdrawn by June 2021, although the military infrastructure was left in place. The second build-up began in October 2021, lasting until the invasion in February 2022.

Politico says that Trump mumbled at some point, that he and Putin discussed Russia’s intention to launch a second, larger incursion of Ukraine. Was Trump talking to Putin about a possible invasion of Ukraine after Trump left office? If so, what are the chances that Trump shared his news with Biden?

Today, let’s spend a bit more time on one of the reasons why we must rebuild our energy grid. Wolf Richter of Wolf Street writes that in 2022, electric vehicles (EVs) made their first visible dent in US gasoline consumption: (parenthesis by Wrongo)

“Gasoline consumption in the US dipped by 0.4% in 2022…(vs.2021) to 369 million gallons per day…. below where it had been in 2002, and down by 5.7% from 2019, and by 5.9% from the peak in 2018, according to data from the Energy Department…”

Wolf reminds us that employment grew in 2022 by 4.8 million. And miles driven by all passenger and commercial vehicles, including those powered by diesel, ticked up nearly 1% to 3.17 trillion miles in 2022, according to the Federal Highway Administration:

Miles driven still haven’t recovered to 2019 levels (-2.8%). That’s probably due at least in part to reduced commuting during the Covid Work From Home times. Now, many office workers are either working from home entirely, or are going into the office on some days and working at home on others.

So the data show that the economy grew and people drove more miles, but they bought less gasoline:

The above chart shows the impact of the various recessions on gasoline consumption.  The deep dip in 2020, and the 2021 recovery only brought gas consumption back to 2002 levels. Then they fell off again in 2022.

The question is why wasn’t there a further recovery in gas consumption from 2021 to 2022? One factor is the rising fuel economy of American vehicles. This started many years ago, and it continues today. But Richter says that the growth in ownership of EVs has dented US gasoline consumption:

“EV sales in 2022 grew to a share of about 7% of total new vehicle sales in the US. In California, EV sales in 2022 accounted for 17% of total sales. These numbers are starting to show up at the gas station as a decline in gasoline sales.”

Still a 7% share of market is small and for now, the impact on gasoline sales is also small in the US.

Another way to look at this is that while gas consumption declined, electricity sold to end-users in the US broke out of 15 years of stagnation and set a new record. The chart below shows that electric utilities have been a no-growth business for more than a decade, but now the volume of electricity sold is suddenly spiking:

Wrongo isn’t sure if these trends will continue, but continued growth in the number of EVs on America’s roads seems undeniable. EVs have lower energy costs and lower maintenance costs. That economic reality seems guaranteed to be sustained in the coming decades. The battery cost curve will continue to decline and the rare metals required in EV batteries are beginning to be helped by both new supply and changing battery chemistry.

Still, Wrongo isn’t a fan of EVs. Perhaps when EV charging stations become ubiquitous, he will reconsider. And there will be a place for the ICE engine for a very long time.

That’s enough for this week. It’s time for our Saturday Soother, where we disconnect from the crisis du jour and spend a few relaxing moments before charging headfirst into whatever next week brings. Here at the Mansion of Wrong, we’re off to the garden store to find vegetable plants for our puny garden.

It looks like a beautiful weekend in the northeast, so grab a chair outside and watch and listen to Manuel De Falla’s Danza from “La Vida Breve” (Life is Short or The Brief Life). It is from Falla’s 1905 opera. Here it is performed live at the ancient Roman Theatre in Cartagena Spain, by Paola Requena and Isabel Martínez who perform as the Carmesí Guitar Duo:

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About The Energy Grid

The Daily Escape:

Coyote Gulch, Escalante, UT – May 2023 photo by Chirag A. Patel

Wrongo and Ms. Right watched the Knicks vs. Miami and Ted Lasso rather than dipping into the political rally for Trump held by CNN. But other news outlets reported on it. Apparently, the live audience gave him a standing ovation as he entered the set. They laughed when he called E. Jean Carroll “a whack job” and belittled her claim of sexual assault:

Trump suggested that the US should default on its debt if Biden didn’t agree to the cuts that House Republicans want. He pledged to pardon many of those convicted in the Jan. 6 attempted coup. He refused to back Ukraine in its war against Russia.

For those who think that there’s an opening in 2024 among GOP partisans to either vote for someone other than Trump or gasp!, vote for a Democrat, you are sadly mistaken.

A big part of the press (obviously including CNN) just can’t bring itself to admit the truth about the current state of the Republican Party. And they don’t really see it as their job to engage in such denunciations, even to protect the nation.

America is chockfuckingfull of Republicans who are, as Hillary said, “deplorables”. And they’re not all in New Hampshire. It’s way past time for the press to acknowledge this sad fact.

But today, let’s talk about the US energy grid. Our transition from fossil fuels to a green energy future will require a huge investment in our current electric grid. This probably means we’ve understated the costs of America’s energy transition. From Haley Zaremba, at OilPrice: (emphasis by Wrongo)

“In order to keep up with the expansion of renewable energy production capacity, the United States will have to more than double the current size of the electric grid. Stimulus from both the public and private sectors are hitting their intended mark, and the clean energy sector is booming. However, much of the potential environmental benefits of electrification will be completely wasted if we don’t have the power lines and grid capacity to transmit that power from where it’s being produced to where the demand is concentrated.”

Zaremba quotes McKinsey, who say that building sufficient wind and solar farms to power the clean energy transition will require overcoming three major hurdles: Finding enough land at an affordable price, building up the power grid to support the influx of electricity, and fixing the archaic and inefficient permitting process that governs these processes.

America needs massive investment in our national energy simply to stand still, regardless of the source of electricity.

But it’s important to identify today the key energy sources of the future because that determines how we specify and build the upgraded grid. A grid based on renewable sources requires a denser network and more long distance direct current lines, while conventional grids need a relatively small number of very high capacity short distance alternating current lines (i.e. from a cluster of small modular nuclear reactors (SMRs) to the nearest city).

Either option is expensive and each brings its own set of regulatory issues. Zaremba notes that:

“Building power lines alone is an enormous bureaucratic hurdle that can take years to gain approval. The  average review of renewable energy projects takes about 3.5 years, but there are cases in which a single transition line took over a decade to be completed…”

According to the US DOE, the country will need 47,300 gigawatt-miles of new power lines by 2035. That represents a 57% expansion of the existing grid. And the real issue is the glacial pace of the bureaucratic review processes which underlie permitting and oversight of clean energy projects as well as grid expansion.

Zaremba closes with:

“Fixing the presently nightmarish permitting and approval system will be integral to decarbonizing the US economy…and making sure that the efforts already underway to decarbonize the nation’s energy mix are not squandered. It’s great that wind and solar capacity are being added at a record-breaking rate, but it’s all a waste if, once completed, there’s no permit allowing them to plug into the grid – or if there’s no grid at all.”

As if on cue, on Wednesday Biden signed on to Sen. Manchin’s (D-WVA) plan to speed the approval of some fossil fuel projects and to hasten the construction of new transmission lines. The NYT quotes John Podesta, Biden’s senior adviser for clean energy innovation:

“Right now, the permitting process for clean energy infrastructure, including transmission, is plagued by delays and bottlenecks…”

Manchin’s bill has some holding their noses because it is so pro-fossil fuel. But should it become law, perhaps the US government will be able to speed up approval for at least some of the green energy projects.

In summary, there’s lots to do and no sure way to get it all done.

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China’s Triangulation Of Russia And The West

The Daily Escape:

Joshua tree in bloom, Joshua Tree National Landmark SW, UT – March 2023 photo by Lisa Simer

We’re back at the Mansion of Wrong after a few lovely days in St. Helena, CA. Surprisingly, it seems that lots of things happened while we were away. From Heather Cox Richardson:

“So, for all the chop in the water about the former president facing indictments, the story that really seems uppermost to me today is the visit China’s president Xi Jinping made today to Moscow for a meeting with Russia’s president Vladimir Putin.”

In 2015, shortly after Russia intervened in the Syrian Civil War, Wrongo asked a visiting Russian author who spoke at our local library whether Putin wanted to move Russia closer to the west or to the east. He said unequivocally that Putin was a product of the west and would keep Russia in the west’s orbit.

It’s clear that he was wrong. Russia has moved away from the west, possibly permanently. Earlier in March, Wrongo said the following:

“The US is attempting to isolate both China and Russia. With Russia, we’re using ever-tightening economic sanctions. With China, we’re building a geographic containment strategy among our allies in Asia.”

And on Monday, Chinese President Xi met with Russian President Putin in Moscow. Here’s a meeting summary from the blog Institute for the Study of War:

“… [the meeting]…on March 20…offered a more reserved vision for Russian-Chinese relations than what Putin was likely seeking. Xi and Putin touted the strength of Chinese-Russian relations in their meeting…but offered differing interpretations of the scale of future relations….on March 19 Putin published an article in Chinese state media in which he argued that Russia and China are building a partnership for the formation of a multipolar world order in the face of the collective West’s seeking of domination and the United States pursuing a policy of dual containment against China and Russia.”

….Xi offered a less aggressive overarching goal for Russian-Chinese relations in his article published in Russian state media….in which he noted that Russia and China are generally pursuing a multipolar world order but not specifically against an adversarial West. Xi instead focused…on presenting China as a viable third-party mediator to the war in Ukraine….

David Ignatius concluded in the WaPo that the meeting was about:

“A strong China…bolstering a weak Russia….The Chinese aren’t providing weapons (yet), but Xi certainly offered moral and psychological support in what might be described as a get-well visit to an ailing relative….The paradox of the Ukraine war is that Putin’s bid for greater power in Europe has made him weaker. This diminished Russia will fall increasingly under China’s sway….Maybe that’s the biggest reason for Xi’s…visit: He is bolstering a flank against America and the West.”

China’s dominance over Russia will grow if Russia cannot find a way to end the war in Ukraine. Russia has lost its energy markets in Europe because of the invasion, so it must depend heavily on demand from China. China’s growing economic power in Asia coupled with its capabilities in space, cyber, and artificial intelligence will increasingly dwarf Russia’s.

Russia’s economy is concentrated on exports of energy. It also has a major population problem. The Economist reports: (emphasis by Wrongo)

“Over the past three years the country has lost around 2million more people than it would ordinarily have done, as a result of war, disease and exodus. The life expectancy of Russian males aged 15 fell by almost five years, to the same level as in Haiti. The number of Russians born in April 2022 was no higher than it had been in the months of Hitler’s occupation.”

More:

“…the life expectancy at birth of Russian males plummeted from 68.8 in 2019 to 64.2 in 2021, partly because of Covid…Russian men now die six years earlier than men in Bangladesh and 18 years earlier than men in Japan.”

And the Economist says the exodus of well-educated young people at the start of the Ukraine War also hurts Russia’s future. According to its communications ministry, 10% of IT workers left the country in 2022. Many were young men, further skewing Russia’s unbalanced sex ratio. In 2021 there were 121 females over 18 for every 100 males. More:

“Demographics is rapidly making Russia a smaller, worse-educated and poorer country, from which young people flee and where men die in their 60s.”

As Wrongo said, separating China from Russia used to be a central goal of US foreign policy. The Biden administration tried that strategy in reverse: Warming relations with Moscow at the June 2021 summit in Geneva in part to concentrate on the challenge China presented.

How did that work out?

Now it’s China trying the role of triangulator. Xi’s playing off the split between the US and Russia, helping Putin, but also keeping some distance while building China’s bona fides with the third world.

Xi’s also used China’s close relations with Iran to make a diplomatic breakthrough between the Saudis and the Iranians, something that the US could never achieve.

We seem powerless to blunt what’s happening before our eyes.

And all the while, the Republican Party of the world’s greatest superpower argues about drag queens and wokeness.

Wake up America! Check out what China, Russia, Iran and Saudi Arabia are building for us. You’re not going to like it.

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Nuclear Power vs. Solar And Wind

The Daily Escape:

Bright Angel Trail, Grand Canyon NP – February 26, 2023 photo by Adam Schallau Photography. The Grand Canyon NP was created on 2/26/1919.

There’s lots of talk about America’s need to move away from traditional sources of energy to renewable energy. Wolf Richter gives us some perspective: (brackets by Wrongo)

“Electricity generation, as measured in gigawatt-hours, [faced] near-stagnation in demand since 2007, as efforts to make everything more efficient…produced results…[but]…These upfront costs by electricity users…reduced electricity consumption. For electric utilities, it meant that they were stuck in a demand quagmire….But…in 2022…electricity generation rose by 3.5% from 2021, to a new record of 4,297,000 gigawatt-hours…”

Wolf helpfully provides a chart of electricity generated by type:

The decline in coal and the remarkable increases in natural gas and renewables are easy to see. The renewables category includes wind, hydro, solar, geothermal, and biomass.

The green line above is for nuclear power, which very few people think of as a “green” source of power generation. Wrongo believes we need to reconsider nuclear power if we are to hit our ambitious targets for lowering greenhouse gas emissions in the next few decades.

Jonathan Rauch in The Atlantic has a long and well-reasoned article about how, after a decade of regulatory and financial uncertainty, small modular light-water nuclear reactors are getting closer than ever to commercialization. Rauch describes the vision is for small nuclear reactors:

“Forget about those airport-scale compounds…and 40-story cooling towers belching steam. This reactor will sit in an ordinary building the size of…a suburban self-storage facility. It will be mass-produced in factories for easy shipping and rapid assembly. Customers will be able to buy just one, to power a chemical or steel plant, or a few, linked like batteries, to power a city.”

Given new technologies currently in advanced testing, even if a local disaster cuts the power to the reactor cooling system, this new type of reactor will not melt down, spew radioactive material, or become too hot and dangerous to approach. It will remain stable until normal conditions are restored.

But for decades, nuclear has flopped as a commercial proposition. It has broken its promises to deliver new plants on budget and on time. And despite an enviable safety record, the public still fears catastrophic accidents. The Three Mile Island plant’s partial meltdown in 1979 was the US nuclear industry’s worst accident. Although no one died or was injured, it hardened the public and environmentalists against increasing the use of nuclear power in the US. In fact, the plant’s second reactor operated without problems until 2019 when it was decommissioned. Today legacy nuclear power supplies about 18% of American electricity, and the US has fired up only one new nuclear power reactor since 1996.

It seems perverse to avoid nuclear, since it’s carbon-free, and as few realize, very safe. Only the 1986 accident at Chernobyl has caused mass fatalities from radioactivity. Remember, that plant was subpar and mismanaged by Western standards.

Excluding Chernobyl, the total number of deaths attributed to a radiation accident at a commercial nuclear power plant is zero or one, depending on your interpretation of Japan’s 2011 Fukushima accident. Yes, more than 2,000 people may have died in Fukushima, but most of that happened during the evacuation.

Solar and wind have huge problems because of how much land they require. According to Armond Cohen of the Clean Air Task Force, meeting all of the eastern US’s energy needs requires 100,000 square miles of solar panels, an area larger than New England. Wind is worse: It requires more than 800,000 square miles of onshore windmills to meet the eastern US power needs, an area the size of Alaska plus California. NIMBY opposition will prevent the building of sufficient power generation from wind and solar.

Contrast this with the space required by small nuclear reactors: They would take up about 500 square miles of nuclear plants, equal to the size of Phoenix, Arizona to power the eastern US.

Dozens of companies and labs in the US and abroad are pursuing small nuclear plants. GE Hitachi Nuclear Energy has a signed agreement to build the first grid-connected small modular reactor (SMR) for Ontario Power Generation. It will be a 300-megawatt light-water SMR in Ontario, Canada.

NuScale Power, a pioneer in small reactors, cleared the ultimate US regulatory hurdle when the US Nuclear Regulatory Commission certified the design of NuScale’s 50-megawatt power module. It’s the first design ever approved for use in the US. The US Department of Energy is helping to fund NuScale’s project at the Idaho National Laboratory, including $1.35 billion in funding. The first of six clustered SMRs at the site is expected to go online in 2029, with the rest expected to follow in 2030.

Biden’s Inflation Reduction Act also provides a tax credit for advanced nuclear reactors and microreactors.

Ultimately, choice of energy generation will come down to cost. Solar is widely deployed today because it’s the lowest-cost generation source. But how can it scale?

If SMRs can demonstrate a cost advantage in real-life operation, orders will follow. And the long-promised nuclear renaissance might actually arrive.

Along with a better shot at a low carbon future.

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Sunday Cartoon Blogging – February 19, 2023

(Wrongo and Ms. Right are sending healing thoughts to friend and blog reader Gloria R.)

There was a small article in the NYT saying that European gas prices had dropped to pre-Ukraine war levels:

“On Friday, the European benchmark price of gas fell below 50 euros ($53) per megawatt-hour for the first time since late 2021. Prices spiked above €300 per megawatt-hour in mid-2022, as Russia curtailed gas exports to Europe after its invasion of Ukraine.”

This isn’t what economists forecasted as the mid-winter energy situation in Europe, which all of a sudden has too much natural gas. It seems Russian gas isn’t indispensable to Europe. Natural gas is, but not necessarily Russian gas. Of course, the mild European winter was a big factor. And regional natural-gas inventories, which are at about 65% capacity, on average, are at their highest levels in years, according to a Bloomberg analysis.

Russia and its gas company Gazprom spent decades building the European (and specifically) the German market. The cost was the building of massive infrastructure to move their gas to Europe. Then Russia pissed it all away last February.

At great cost, they’ll eventually build new infrastructure to move all that gas to Asia and elsewhere. On to cartoons.

America has been reduced to this:

Or is it this?

Nikki says we need younger politicians:

Why the balloon story doesn’t go away:

More about America’s sickness:

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Sunday Cartoon Blogging – November 13, 2022

While we were focusing on the midterms, Biden flew to Egypt to appear at the COP27 climate conference where he took a brief victory lap before heading to Cambodia and then to Bali for the G20 summit (which Putin is skipping).

This particular climate conference is largely focused on what, if anything, the industrialized countries owe to poor nations that are suffering climate disasters which they did little to cause. The catch phrase for this is “Climate Reparations”.

It’s hard for America to be a global leader on climate given our internal political issues. We’re always going to be just a few Electoral College votes away from electing a climate denier. So the world can’t count on us. But America will never pay climate reparations. We must at least TRY to get clean water in US cities first.

Even after 157 years, we won’t really consider paying reparations to the descendants of our fellow citizens for the sin of slavery. The political will to pay reparations to brown skinned folks on the other side of the world will never be a majority view in America.

There was both good news and bad news about the 2022 midterms. The good news is that the outcomes were not as catastrophic as predicted. The bad news is that they were bad enough. While all the races aren’t finished and all the votes aren’t counted, we know the Senate will be controlled by the Democrats. It’s likely that the GOP will control the House. Still, it’s very clear there’s a very large segment of American voters who fail to read the writing on the wall about the threat of an authoritarian takeover of American democracy. Even though that writing is in large, blinking neon letters. On to cartoons.

The authoritarians are pensive:

The incredibly shrinking authoritarians:

The Georgia runoff doesn’t mean what you think it means:

The MAGA celebration ended early:

MAGA is still with us:

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Europe’s Vulnerability To Russian Gas

The Daily Escape:

Morning light – Norbeck Pass, Badlands NP, SD – July 2022 photo by Rick Berk Photography

After imposing sanctions on Russia for their invasion of Ukraine, Germany and all of Europe are now facing an energy crisis unlike ever in their history. Gas deliveries from Russia have been halted altogether, exposing the dependence of European energy consumers on pipelined gas from Russia.

Strategically, Germany’s dependence on Russia is a muddle. Germany has depended on Russian natural gas since the Cold War. And it steadily increased its reliance on Russian gas while reducing alternative sources of energy such as nuclear power, even after Russia invaded Ukraine in 2014.

On September 5th, Russia said it would close its Nord Stream I pipeline for as long as Western sanctions are in place. This initially sent gas prices higher by 30%. They currently stand at around $400 expressed as the equivalent of a barrel of oil.

The energy shock has morphed into a political and economic shock. In Germany, steelmaker ArcelorMittal is shutting down a plant in Bremen. Germany is spending €65 billion (1.8% of GDP) on measures including a price cap on electricity for households and firms.

France has enacted a retail price freeze for energy. French gas prices are frozen until at least the end of 2022, and the rise in electricity prices is capped at 4%.

Now, 14% of families in England are behind on their utility bills. The UK’s prime minister Liz Truss unveiled a plan to freeze prices for two years, which could cost more than £100 billion (4.3% of its GDP) and will be financed through government borrowing.

But the threatened loss of Russian gas also caused European governments to make big changes by lowering demand and lining up new gas supplies. That has lowered gas futures prices. From Wolf Richter:

“The front-month October TTF contract in the Netherlands – a benchmark for northwest Europe – plunged by 8% on Monday from Friday, and by 44% from the peak on August 26, to €191.02 per megawatt-hour (MWh) at the close today…”

On the supply side, the Netherlands has started operations of two floating liquefied natural gas (LNG) import and storage terminals in the port of Eemshaven. These floating storage and regasification units (FSRU) receive the LNG, store it, re-gasify it, and then send the natural gas via pipeline into the land-based distribution network in the Netherlands, from where it can be further distributed throughout Europe. Three more FSRUs are planned.

Germany had failed to build a single LNG import terminal as an alternative to Russian piped gas, but it has now chartered five FSRUs, three of which will start operating this winter. Germany has also been filling its gas storage facilities at record pace. They are currently 87.9% full, according to Gas Infrastructure Europe. For the EU overall, storage facilities are 83.6% full, well above the EU’s 80% target.

Strategically, Germany (and the EU) can’t simply return to the old normal once (IF) Ukraine hostilities end. Germany’s vulnerability to its natural gas dependence on Russia has irrevocably shaken up the economies and politics of Germany and most of Europe.

Germany seems to have finally figured this out. In the short run, (2-3 years) the consequence will be that Germany’s and EU’s consumers and industrial users will face natural gas prices that are much higher than they were two years ago. Higher-cost LNG will be a larger part of the energy mix, with low-cost pipeline natural gas from Russia a smaller part.

As Wrongo said recently, Russia cannot easily sell all of the natural gas that it’s not selling to Europe, because the pipelines can’t be moved overnight. And Russia has no LNG export facilities linked to its production sites. So Russia will have to cut some production at these sites and will lose the revenues associated with that lost production.

Also in the short run, Europe’s governments will struggle to balance relief for its citizens against letting energy prices rise high enough to discourage use. These governments are scrambling to find alternative sources while cutting consumption as deeply as they can. But winter is coming, and if they aren’t able to find successful workarounds, economic growth will slow, and European voters may demand that their governments drop sanctions on Russia.

That is a political problem that Russia hopes to exploit this winter.

Europe’s response to the Russian invasion of Ukraine has exposed both its vulnerability to Russian gas, and also the poor strategic decisions that it and Germany have made over several decades: to take the cheapest, simplest solution to Europe’s growing energy needs.

Russia is hoping that it will gain some leverage in the diplomacy regarding an endgame in Ukraine and the anti-Russia sanctions regime this winter.

And like always, regardless of the outcome, no politician will be harmed while playing this game.

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Russia, Iran Form Energy Cartel

The Daily Escape:

Sunset, Lookout Point, Harpswell, ME – August 2022 photo by Rick Berk Photography

Good strategy is supposed to include a look at what the logical outcomes may be, once you’ve implemented your strategic plan. Was that done when the US and the EU decided to sanction Russia about its Ukraine invasion after having sanctioned Iran, well, for being Iran?

When you treat much of the world as your enemy, you should expect them to eventually find common cause and fight back. We’re speaking about the world’s supply of natural gas (NatGas). There is a new alliance between Russia and Iran on NatGas. At Oil Price, Simon Watkins says that a new energy cartel is forming: (brackets and emphasis by Wrongo)

“The US $40 billion memorandum of understanding (MoU) signed last month between [Russia’s] Gazprom and the National Iranian Oil Company (NIOC) is a steppingstone to enabling Russia and Iran to implement their long-held plan to be the core participants in a global cartel for gas suppliers in the same mold as the Organization of the Petroleum Exporting Countries (OPEC) for oil suppliers.”

The article describes how Russia and Iran are creating a NatGas OPEC. The two countries are first and second respectively in holding the world’s largest NatGas reserves. Russia has just under 48 trillion cubic meters (tcm) and Iran has nearly 34 tcm, so the two countries are in an ideal position to form a cartel.

NatGas is a vital commodity. It is widely seen as the optimal product in the transition from fossil fuels to renewable energy. And controlling the global flow of it will be the key to energy-based power over the next 10 to 20 years. This has already been demonstrated in Russia’s hold over the EU through its NatGas supplies.

From a top-down perspective, this Russia-Iran alliance might also draw other Middle East gas producers, who have tried to be neutral between the Russia-Iran-China axis or the US-EU-Japan axis.

Qatar has long been seen by Russia and Iran as a prime candidate for this kind of gas cartel because it shares its gas field with Iran. Iran has exclusive rights over 3,700 sq.km of the well-known South Pars field (containing around 14 tcm of gas), with Qatar’s North Field comprising the remaining 6,000 sq.km (and 37 tcm of gas).

If they can enlist Qatar, this new cartel would control 60% of world gas reserves, allowing them to control NatGas prices globally. It would be logical for prices to rise, given the growing demand for NatGas in the coming decades.

America can dodge this bullet for a few years because proven gas reserves in the US amount to about 13.5 tcm. So, at the current level of production we can produce sufficient NatGas for another 13-15 years.

But this means that in a decade or so, the US, Europe, and Asia will all be more dependent on imports from Russia, Iran, and Qatar, while competing with the rest of the world for our share in order to maintain our economy and lifestyle.

So, strategy can be a bitch. By creating a global political and economic environment that pushes Russia, Iran, and Qatar into a cartel, we’ve created a significant future economic vulnerability.

There are immediate NatGas cost implications in the US today. Bloomberg’s article, A ‘Tsunami of Shutoffs’: 20 Million US Homes Are Behind on Energy Bills, paints a picture:

“…about 1 in 6 American homes…have fallen behind on their utility bills. It is, according to the National Energy Assistance Directors Association (NEADA), the worst crisis the group has ever documented. Underpinning those numbers is a…surge in electricity prices, propelled by the soaring cost of natural gas.”

That’s 16% of American homes for the math challenged. Winter in the US may not be as big a disaster as in the UK and Europe, (better insulation). But plenty of people here will have to choose between food and heat.

The world is sorting itself out into blocks of countries aligned with each other. Russia, China, Iran and perhaps India, want their own commodity-based financial system to reduce their exposure to the political impacts from the West’s corporate/state “free” market system, which has used trade as a weapon for the past few decades.

There are two ways of looking at this. We could just build this energy vulnerability into our economic planning and prepare to devote a growing share of our GDP to paying the cartel for more NatGas.

Or, we could immediately start seriously building out our renewable energy capacity. There’s a model. Europe is attempting to pivot away as quickly as possible from its dependence on Russia.

We could do the same thing.

That could reduce our exposure to imported NatGas because it’s largely a bridge from coal to renewables. Massive investing in renewables would give Russia and Iran a shorter bridge than they think they’re getting.

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