Sunday, June 28, 2009

AB 32 Hypocrisy vs Health and Poverty

I read the other day that Obama wants American people to come forward with their tales of health care woes. The idea is to have heart-rending stories of ill health that is either badly treated, or not treated at all because private health insurance is too expensive and not available.

I, too, would like to hear some tales from the poor, the elderly, and those on fixed incomes, plus those who are just getting by from paycheck to paycheck. I want to hear how their lives are affected by sudden increases in gasoline price such as occurred in summer 2008, and electric power prices such as occurred in California in 2001. This is central to my argument that Carbon Dioxide reduction, along with Cap and Trade legislation, will plunge many if not most of those mentioned above into even more dire straits.

Basic needs include food, clothing, shelter, and medication. Shelter no longer means simply a roof to keep dry from rain, but includes temperature moderation so people can live warm in winter and cool in summer. Some would include transportation costs as a basic necessity.

It is hypocritical of government, in my view, to pass strict regulations to reduce tiny amounts of air pollutants with a goal of preventing a very small number of illnesses or deaths, but then to pass Carbon Dioxide reduction laws that will increase costs of electric power and transportation fuels, thus forcing millions of people to choose between paying for electric power, medication, food, transportation fuel, or rent. Yet that is exactly what U.S. governments have done and are doing, at both the State and Federal levels. An example is California’s South Coast Air Quality Management District’s health impact studies on air pollutants; these and similar studies were used to justify laws that impose massive costs on industry and individuals to reduce some forms of air pollution including diesel particulate matter, nitrogen oxides, sulfur oxides, ozone, and non-diesel particulate matter such as construction-related dust. One can follow along at, and see many laws of this nature. A recent study known as MATES III shows a cancer risk of 1200 cancers per 1 million population, most of which (84 percent) is attributed to diesel particulate matter. The national EPA conducted similar studies nation-wide.

California laws to reduce diesel-related PM10 (particulate matter smaller than 10 microns) include requirements for catalytic oxidation filters, electric drayage trucks at ports, and electrification of ships at berth, among others. New diesel engines have strict emissions limits, with those manufactured from 2010 to have very low emissions. Also, California will prohibit any truck from entering the state unless that truck meets California emission standards. The costs of achieving the goals of these laws are immaterial; one must comply or pay the penalties.

Meanwhile, California passed the Global Warming Solutions Act of 2006, aka AB 32, which directs the Air Resource Board (ARB) to write strict regulations on reducing Carbon Dioxide and other so-called greenhouse gases. Also, the U.S. House of Representatives passed HR 2454, a federal greenhouse gas bill with goals similar to AB 32. Each would reduce greenhouse gases to 1990 levels by 2020, and 80 percent below the 1990 level by 2050. The net effect of these laws will be massive increases in electric power costs, transportation fuel costs, all goods that move by truck, and all services. The population groups mentioned earlier, the poor, elderly, on fixed incomes, and living paycheck to paycheck, will not be able to purchase energy-saving appliances, or new hybrid cars, but must pay for higher-priced merchandise including food. Many in those population groups live in rental apartments or homes, and cannot upgrade appliances on their own initiative. Only the landlord can do such upgrades. The higher price of transportation fuel is the same for all, whether poor or rich.

Thus we shall see millions of Americans forced further and further into poverty, forced out of their homes, unable to purchase medication or food, or sitting in the dark, sweating in the heat in summer, or freezing in the winter because governments passed laws to reduce Carbon Dioxide via carbon capture and sequestration, forcing utilities to provide power that is generated by renewable means, and forcing fuel companies to sell transportation fuel that includes expensive bio-fuels.

Carbon capture and sequestration is a very, very expensive means of removing carbon dioxide from the atmosphere. It may seem not so bad, at first, as electric prices will be increased approximately 4 to 8 cents per kWh. That is roughly a 30 to 80 percent increase over current prices. But, that price increase is based upon the availability of suitable geologic sites for storing the liquid Carbon Dioxide. Just like solid waste landfills, what happens when those geologic sites are full, and there are no more? How much more expensive will electric power become?

CCS, or carbon capture and sequestration, requires huge capital investment and equally large ongoing operating costs. The capital investment is to provide counter-current absorber vessels in which exhaust gases from a coal-fired power plant or process furnace flow upward through a liquid that flows downward. The liquid absorbs the carbon dioxide, and is known as a “rich” liquid. The rich liquid then is pumped to another vessel, known as a regenerator, where heat is applied to the rich liquid, thereby releasing the carbon dioxide as a relatively pure gas. The liquid, now free of carbon dioxide, is designated a “lean” liquid. The lean liquid is then pumped to the top of the absorber vessel. The pumping consumes electrical power, and heat to the regenerator may be from steam or a hot oil.

Additional capital is required to compress the carbon dioxide, and in some cases, liquefy it. The motors to run the compressors and liquefaction chillers also consume great quantities of electric power. Once the carbon dioxide is transported to the disposal site, usually a well deep in the ground, more energy is required to compress or pump the carbon dioxide into the well. All of these costs are added to the basic price of electricity.

Higher costs of electricity are deadly to the vulnerable groups in our society. Carbon reduction laws are wrong for that reason alone, if for no others. There are others, of course, including the lack of correlation between carbon dioxide concentration in the atmosphere and average global temperature over time.

Government is hypocritical in passing diesel-emission reduction laws on the grounds of improving health, then passing carbon reduction laws such as AB 32 that will increase misery and illness.

Roger E. Sowell, Esq.

Friday, June 26, 2009

Waxman Markey Bill Up For Vote

The climate change-stopper known as Waxman-Markey is up for a vote today in the U.S. House of Representatives. The vote is expected to be close. I predict that the bill will pass by a very narrow margin, perhaps only one vote. (Update: it passed, 219 to 212)

Waxman-Markey provides for the same broad goals as AB 32 in California: 1990 levels of CO2 by 2020, and 80 percent below that by 2050. Both standards are economy killers, and job chokers. The U.S. stock market will plunge as the economy withers further and more people are out of jobs. Those reaching or approaching retirement, and those in retirement already, will see their market-based funds shrink much further than that of 2008. The political pushback will be immense. People get very cranky when they have no money, and logic tells them that politicians did this to them.

When power plants are shut down, when brownouts and blackouts occur regularly, and businesses close their doors because they cannot afford to operate, the people will know who is responsible.

The American people always have a choice, and that is to vote. Laws that are passed can be repealed. Politicians that vote for bad laws can be voted out.

This is a very sad day for America, once the land of the free and the home of the brave.

It is time for the engineers to speak out, speak up, and end this madness.

Roger E. Sowell, Esq.
B.S. Chemical Engineering

Sunday, June 14, 2009

References for AB 32 Speech June 16 2009

My June 16th speech to American Institute of Chemical Engineers, Los Angeles Chapter, is only two days away. I am very much looking forward to making this presentation. AB 32 is very controversial, with some saying it has already boosted California's economy, while many others (including me) maintain that government intervention of this magnitude and in so many economic sectors (essentially all of them) will kill California.

Below are links to each of the areas of AB 32, provided here for those who want to perform more reading and analysis. There are literally thousands of pages of text thus far, and the regulations for the 2020 goals are on schedule, but not close to completion.

Text of AB 32

Scoping Plan documents and links

Measure Plan Timeline (with links to each measure)

Semiconductor Manufacturers links

Pavley Standards links

Low Carbon Fuel Standard links

Refinery measures links

Cement Plant measures links

Energy Efficiency and Co-Benefits Audits links

Economic Evaluations of AB 32 with peer review links

Cap and Trade links

The following is the proposed draft regulation of November 2009 for Cap and Trade. This proposed regulation will be revised after a public comment period.

Thursday, June 11, 2009

Republican Plan to Increase U.S. Nuclear Plants

The Republicans at the national level have released their plan to provide energy in the U.S., and it includes building 100 new nuclear power plants within the next 20 years. I am a conservative Republican, but I cannot support such a proposal. Actually, I am a Compassionate Rational Consequentialist, but that is a subject for another day.

As I have shown before, increasing the percentage of the nation's power derived from nuclear power plants increases average electric power price (see this link and scroll down to "is nuclear power affordable". Pay particular attention to the chart I provide). When the true cost of new plants is included, the power price will escalate to 30 or even 40 percent more than its present cost.

The horrible consequences of such a massive increase in electric power rates fall especially hard on the poor, the elderly, those on fixed incomes, and those just barely getting by paycheck to paycheck.

New nuclear power plants will cost from $8 to $10 billion per 1,000 MW, with the power produced at 30 t0 40 cents to pay for the plants (on an un-subsidized basis). This is absolute nuttiness when so many preferable alternatives exist.

It is far better to install natural gas fired combined cycle plants, and burn our abundant and cheap natural gas. It is better still to install wind turbines with gas plants as backup, or solar, and install underwater turbines to generate power from ocean currents. There are at least seven alternatives to consider for grid-scale power storage, as I wrote about here.

One hundred more nuclear power plants at $10 billion each would cost 1,000 Billion, or $1 trillion. The same amount of power can be provided by natural gas at one-eighth the cost, or approximately $120 billion. It is elementary economics that it would be a waste of capital resources to waste money on nuclear power plants.

In any event, no investor in their right mind will build a new nuclear plant in the U.S. without government subsidies. It is of great concern to me that Toshiba, a Japanese company, has formed a partnership with a U.S. company to build their nuclear plant design in south Texas, to double the capacity of the infamous South Texas Nuclear Project. It is quite possible that Toshiba will absorb the losses and cost overruns to be able to state that the project cost only $5 billion per reactor, as advertised.

Roger E. Sowell, Esq.

Sunday, June 7, 2009

Time to Repeal AB 32

Part of the following is merely my speculation as to thought processes and motives of others. The facts are true.

The year was 2005, George W. Bush had just been re-elected and inaugurated for his second term as President, and the U.S. was not about to ratify the Kyoto Protocol to curb CO2 and other greenhouse gases. The Democrat party was in disarray. It was by no means certain Democrats would win the White House in 2008, and in any event Hillary Clinton was the leading candidate. It was even less certain that the country would elect a woman, especially Ms. Clinton with all the baggage she carries. The President, Bush, would not sign a climate change bill even if one was presented for his signature. Given these premises, certain Democrat state legislators in California took matters into their own hands, writing and passing AB 32, California's Global Warming Solutions Act of 2006. It took until 2006 for final passage and signature by the Governor.

The global warming scientists at the IPCC had painted a dire picture for Democrats to absorb, including rising sea levels causing massive flooding, increased temperatures leading to glaciers melting and Sierra snowpack disappearing, and public health disasters related to increased temperatures. All of these predicted disasters were blamed solely on increasing CO2 in the atmosphere, which they said increases global air temperatures. California Democrats in the legislature were convinced, at least enough to vote for AB 32. In addition, curbing CO2 through a variety of measures laid out in AB 32 was stated as being good for California's economy, would increase jobs, and would put money in every Californian's pocket.

Unfortunately, little of that was true then, and certainly not true now. The evidence shows that in 2005, global air temperatures had been rising for around 20 years, but had leveled off. Sea levels at San Francisco had dropped dramatically from 2004.

In just four years, 2005 to 2009, the global air temperature has dropped further, to within 0.1 degrees of the 1979 value. Sea levels offshore San Francisco continue to drop. The predicted California heat waves that cause electrical blackouts have not happened since September, 2007. The exact cause of the decline in air temperatures globally is subject to debate. Some attribute the cause to a quiescent sun, with very few sunspots. Others name a cyclical shift in ocean temperatures, both in the Pacific and Atlantic Oceans. Some point to volcanoes, but there have been no major eruptions in the time frame. What is beyond dispute is that CO2 has continued to increase in the atmosphere. The crucial causal link between CO2 concentration and global air temperatures just does not exist. No one of intelligence can dispute that.

Nationwide, we have seen one of the coldest winters ever, and just this past week there was unseasonable and rare snow in June in the northern Sierras. Temperatures in Southern California are below average for the month of May, with cold rain falling the first week of June.

Where does that leave us? We are faced with draconian changes to the California economy from AB 32 mandates, to name only a few: Low Carbon Fuel Standard, Renewable Portfolio Standard, Cap and Trade, plus 70 others identified by California's Air Resources Board. Yet we have incontrovertible evidence, as stated earlier, that CO2 reductions will do nothing to change global air temperatures.

The benefits of AB 32, when all its requirements are implemented, are projected by ARB to be a measly $4 per week in every Californian's pocket. On such a slim improvement, is it prudent to disrupt markets in such a far-reaching and massive fashion? Meanwhile, expert economists who studied AB 32 and its Scoping Plan in great detail concluded the entire AB 32 is flawed to the core. One telling statement, by ARB, is that for every dollar invested in AB 32, two dollars will be returned. Yet, many of the requirements have no dollar return, and for those that do have a return, ARB will not state how many years must pass for those two dollars to show up.

Of course, the answer must be NO. It is time for Californians to face the facts, and stop AB 32 before more damage is done to the economy. This is a time of great financial upheaval in California, with one $42 billion budget deficit recently staved off but at a very high price including higher taxes and borrowing. Not even six months later, the state faces a $23 billion deficit that is unlikely to be solved. Additional burdens on businesses, industry, and residents as imposed by AB 32 will kill California.

AB 32 must be repealed, and repealed now.

Roger E. Sowell, Esq.

Saturday, June 6, 2009

Cap and Trade Legal Issues

California's state global warming law, AB 32, presents a number of potential legal issues with respect to the Cap and Trade provisions. Many of these same issues will apply to the federal legislation, once that effort results in a law.
In no particular order, then, the legal issues include Early Action Credit; Conflict of Laws wherein AB 32 requires a company to install a project, yet a local Air District permit is refused; Influencing Cap and Trade regulations through appropriate advocacy; Cap and Trade strategies; Review and guidance on Compliance Plans; and Legal Challenges to specific regulations.

Early Action Credit
This refers to the time at which improvements to a facility that result in GHG reductions shall be credited. Some facilities have installed improvements before the AB 32 rules were or will be implemented. However, it is not yet clear which improvements, and how far back in time, the credits for this will be allowed. A knowledgeable attorney can advocate effectively for appropriate credits.
Conflict – AB 32 requires project, AQMD permit refused
A conflict between state agencies arises where AB 32 requires a project to be installed, yet a local air district such as the AQMD refuses to issue a permit for its construction.
Cap and Trade Advocacy
During the rules formulation period that is presently in progress, entities have the opportunity via the public participation process to make comments, meet with committees and ARB board members, and generally make their views known in an effort to influence the regulations.
Cap and Trade Strategies
When the final regulations for cap and trade are in place, there will exist several strategies to employ for compliance, and maximizing profits. As an example, does one spend capital to reduce GHG emissions, or purchase carbon credits? If one elects to spend the capital and generate carbon credits, does one sell those credits into the market, or hold them (bank them) for future use? If one is allowed to, and has the resources, should one purchase carbon credits as an investment? Should a facility that emits GHG speculate in the carbon credit market?
Compliance Plan Guidance
An entity should develop a compliance plan that may be integrated with other corporate plans, such as capital spending plan. The AB 32 compliance plan will vary from one entity to another.
Legal Challenge to Requirements
There may be some requirements under AB 32 that may be challenged legally on a number of bases. Each part of AB 32 requirements must comply with the legislative requirements.