No Economic Recovery Yet

One reads much about the recession now being over, the economy is improving, yet the recovery is a jobless recovery because employment is not increasing. Is there a way to independently evaluate the state of the US economy? I maintain that there is. Simply look at the refinery percent utilization chart, as shown below. If and when the economy starts growing again, this chart will show an upturn in utilization. (the "If" is included because with the current crop of bumblers in Washington running the show, it is by no means certain this recession will end.)

This is from the EIA website, and is updated weekly. Data is also provided in addition to the graph.

As can be seen, the latest figure for refinery percent utilization is 81.8 percent. This will likely drop another 5 percent to 76 percent by the middle or end of January 2010. Even in economically good times, refineries take the winter months to shut down for repairs and maintenance - not all of them at once, but many do. The chart has a general saw-tooth shape of a yearly minimum in January, then a steady increase until July or August, then a decrease again. The average difference between a peak and a minimum is approximately 10 percentage points.

UPDATE 1 (Nov 4, 2009): Utilization dropped again this week, "Refineries operated at 80.6 percent of their operable capacity last week." [end update]

UPDATE 2 (Nov 12, 2009): Here we go. Utilization dropped again this week, "Refineries operated at 79.9 percent of their operable capacity last week." [end update 2]

UPDATE 3 (Jan 21, 2010): Utilization dropped again this week, to 78.4 percent. Gasoline inventories increased, and crude prices dropped. [end update 3]

UPDATE 4 (Feb 5, 2010): Utilization dropped again to 77.7 percent. Large snowstorm and very cold weather on the East Coast this week will decrease gasoline demand for next week, so expect yet another decrease in utilization. [end update 4]

The graph also shows a steady down-trend since 2004 in utilization, which may reflect increasing vehicle efficiency.

Refinery percent utilization is also affected by imports of refined products, refinery capacity additions, and refinery shutdowns. Thus, it is not a perfect indicator of economic activity, but it is pretty good. There is one major refinery expansion starting up at this writing (Marathon at Garyville, Louisiana), which will provide approximately 1 percent additional capacity in the US. There is also one refinery closure announced by Sunoco, that will essentially offset the Marathon expansion. A much larger expansion is due online by Motiva, in 2012.

The waiting game is underway, with the refining companies each hoping the other guy will blink first and shut down a refinery. On the other hand, an optimist would find this an ideal time to buy a refinery, if he believes that demand will increase and prices will skyrocket due to Peak Oil shortages.

EPA Regulates Greenhouse Gases GHGs

The United States Environmental Protection Agency (EPA) yesterday announced that it is creating a new rule to regulate the emissions of CO2 and other greenhouse gases (GHG) under the Clean Air Act. The 60-day comment period is now open, and comments must be received no later than December 28, 2009. Several avenues are available for comments, and are shown in the announcement and replicated below.

From the summary provided by EPA:

"EPA is proposing to tailor the major source applicability thresholds for greenhouse gas (GHG) emissions under the Prevention of Significant Deterioration (PSD) and title V programs of the Clean Air Act (CAA or Act) and to set a PSD significance level for GHG emissions. This proposal is necessary because EPA expects soon to promulgate regulations under the CAA to control GHG emissions and, as a result, trigger PSD and title V applicability requirements for GHG emissions. If PSD and title V requirements apply at the applicability levels provided under the CAA, State permitting authorities would be paralyzed by permit applications in numbers that are orders of magnitude greater than their current administrative resources could accommodate. On the basis of the legal doctrines of ``absurd results'' and ``administrative necessity,'' this proposed rule would phase in the applicability thresholds for both the PSD and title V programs for sources of GHG emissions. The first phase, which would last 6 years, would establish a temporary level for the PSD and title V applicability thresholds at 25,000 tons per year (tpy), on a ``carbon dioxide equivalent'' (CO₂e) basis, and a temporary PSD significance level for GHG emissions of between 10,000 and 25,000 tpy CO₂e. EPA would also take other streamlining actions during this time. Within 5 years of the final version of this rule, EPA would conduct a study to assess the administrability issues. Then, EPA would conduct another rulemaking, to be completed by the end of the sixth year, that would promulgate, as the second phase, revised applicability and significance level thresholds and other streamlining techniques, as appropriate."

EPA acknowledges that making such a sweeping change would result in an overwhelming number of permit applications to state authorities, thus EPA is proposing to limit the size of affected facilities, and will revisit the issue after six years. The size limit is 25,000 metric tonnes per year of CO2-equivalent emissions, which is the same threshold established by California's AB 32 for GHG reporting. In practice, this works out to approximately 50 million Btu per hour if the fuel source is natural gas. For a coal-fired source, the threshold is approximately 27 million Btu per hour. Thus, this rule will affect all major facilities such as refineries, power plants, chemical plants, and petrochemical plants.

COMMENTS TO EPA can be made via online, email, fax, US mail and courier, and hand delivery.

Online: http://www.regulations.gov . Follow the online instructions for

submitting comments. Attention Docket ID No. EPA-HQ-OAR-2009-0517.

e-mail: a-and-r-docket@epa.gov. Attention Docket ID No.

EPA-HQ-OAR-2009-0517.

Fax: (202) 566-9744. Attention Docket ID No. EPA-HQ-OAR-2009-0517

Mail: EPA Docket Center, EPA West (Air Docket), Attention

Docket ID No. EPA-HQ-OAR-2009-0517, U.S. Environmental Protection

Agency, Mailcode: 2822T, 1200 Pennsylvania Avenue, NW., Washington, DC

20460. Please include a total of 2 copies. In addition, please mail a

copy of your comments on the information collection provisions to the

Office of Information and Regulatory Affairs, Office of Management and

Budget (OMB), Attn: Desk Officer for EPA, 725 17th Street, NW.,

Washington, DC 20503.

TIPS for MAKING COMMENTS

EPA provides the following suggestions or tips for making comments:

· Identify the rulemaking by docket number and other identifying

information (subject heading, Federal Register date and page number).

• Follow directions--The agency may ask you to respond to specific

questions or organize comments by referencing a Code of Federal

Regulations (CFR) part or section number.

• Explain why you agree or disagree; suggest alternatives and

substitute language for your requested changes.

• Describe any assumptions and provide any technical information

and/or data that you used.

• If you estimate potential costs or burdens, explain how you

arrived at your estimate in sufficient detail to allow for it

to be reproduced.

• Provide specific examples to illustrate your concerns, and suggest

alternatives.

• Explain your views as clearly as possible, avoiding the use of

profanity or personal threats.

• Make sure to submit your comments by the comment period deadline

identified.

Up Up and Away STNP Costs Already Escalating

The price for the South Texas Nuclear Project expansion just went up by $4 billion, now at $17 billion. Toshiba (the designer) apparently cannot agree on the price - thus the City of San Antonio is re-thinking this - and postponing their decision on whether to invest in 20 to 40 percent of the expansion. This is absolutely amazing, since nuclear proponents insist (indeed, shout it from the rooftops!) that Toshiba's Japanese nuclear plants are old technology by now - with modular construction and known costs. Apparently not! Stay tuned in Texas!

see this and this link.

This is an amazing jump in the price, roughly 33 percent, and construction has not yet started! When one adds in the inevitable delays, unforeseen conditions, change orders, escalations for materials, services, and labor, then interest on the construction loans, plus legal costs, this plant (if it ever gets built) will easily cost $25 to $30 billion.

And that is why nuclear power plants make zero sense in the USA.

California ARB Backs Down on Diesel Engines

This week California's Air Resources Board (ARB) announced a major shift in the ongoing matter of diesel engine emissions from off-road equipment. Fleet owners had expressed grave concerns over reduced safety and increased injuries if these large diesel particulate filters (DPF) are installed, and added that existing California law would be violated. ARB acquiesced by announcing that they intend to clarify the rules, and such DPFs will not be required where their installation would impair the equipment operator's vision in any direction.

As background, ARB has an ongoing campaign to remove diesel smoke from the air, as this smoke contains particulate matter (PM10) that causes health issues. ARB divides the world into two categories, stationary and mobile sources. Within the mobile source category, ARB further divides into on-road and off-road categories (and a few others not pertinent here). On-road trucks and vehicles have had regulations in force for some time. Off-road, diesel-powered equipment such as is used for heavy construction has a regulation that goes into effect March 1, 2010, only four months away at this writing. The vendors have developed (and continue to develop) after-market devices (DPFs) that are installed after the engine's muffler. These devices use different technologies, but the basic principle is to filter or trap the small particles, and burn the particles within the device thus creating CO2 and a small amount of water vapor and NOx. Residual ash is left in the DPF and must be removed periodically.

The point of contention is blocking the equipment operator's vision due to the size of the DPFs. The larger the engine, the larger the DPF, and in some cases, large engines require two DPFs arranged in parallel flow. The DPF may be approximately 2 feet long and 10 inches in diameter. Such a device can obstruct the equipment operator's vision, which could lead to increased accidents and injuries. It is common on construction sites for workers to walk and work very near a piece of heavy construction equipment.

California has existing regulations that prevent the installation of devices on equipment that decrease the safety. Equipment designers go to great lengths to design their equipment in as safe a manner as possible, using low hoods, elevated operator seats, large windows, strong but narrow window frames, and locating the engine exhaust pipe where it will least obstruct the operator's view.

While ARB has yet to release its final regulations and the exemption for operator visibility, based on language in the announcement, it is likely that DPFs will not be required if the DPF will not fit under the hood and out of sight.

From ARB's website:

"ARB, the Occupational Safety and Health Standards Board, and the Division of Occupational Safety and Health (Cal/OSHA) have agreed on an interim policy to address retrofit visibility concerns for off-road diesel vehicles. The interim policy will exempt any vehicles that cannot be retrofit without impairing the operator’s vision to the front, sides, or rear of the vehicle from the March 1, 2010 retrofit requirement for large fleets of off-road diesel vehicles. ARB will release details regarding the method to measure visibility impairment, as well the process for applying for an exemption as soon as possible.

For more information and a background on this issue, you may view the interim policy online.

Fleets that must complete retrofits in 2010 should begin by retrofitting those vehicles for which retrofits may be installed without impacting operator visibility (for example, under the hood or out of site of the operator)."

Celebrating 10000 Hits

Today marks a milestone for Sowell’s Law Blog, having just turned 10,000 hits along with 4,000 unique visitors.

In the blogging world, one never knows if anyone will ever read a word that gets published. Or if anyone does, who they are and where they are (although I am aware that there exists tracing technology for that). The pace of hits is increasing, now turning about 1500 per month, up from 1000 just five months ago.

As I wrote a few months ago on the occasion of 3,000 hits, I do not write this to attract the masses. Still, it is very gratifying to see that 4,000 people from 76 countries have stopped by. My interests in blogging tend to focus on the areas where the law and technology intersect, especially technology that encompasses energy, climate change, and engineering malpractice.

The laws of California also play a large role, as I am licensed in California. However, the federal laws also catch my attention.

I have noticed that the hits increase just before and after I make one of my speeches, which usually are made to audiences of engineers. I have four speeches scheduled for 2009, with a presentation to American Institute of Chemical Engineers at their annual meeting in Nashville, Tennessee on November 11, 2009. The presentation's topic is California's Global Warming Solutions Act: What Chemical Engineers Should Know. The presentation will be published in the meeting's proceedings.

One theme on SLB is that of global climate change, and man’s role in any changes. As my postings indicate, I am of the opinion that man has nothing to do with any global climate change. Furthermore, there is inadequate data on prior temperatures and weather phenomena, so that any comparisons to the past are pure guesswork. The evidence shows that gross misrepresentations have been made (deliberately? Or negligently?) as to the historic temperature record, thereby seriously undermining any claims that “man did it” and “carbon is killing us.” Fundamentals of engineering, physics, and process control dictate that all of the climate-change science is false. Actual, measureable events bear this out, whether they be fewer hurricanes, colder winters, shorter growing seasons, colder oceans, sea levels not rising, polar ice caps growing, or no “hot spot” in the atmosphere. The global-warming crowd has nothing to point to that vindicates their dire predictions, except for ever-increasing levels of CO2 in the atmosphere. I am, of course, aware that my position is contrary to that of many leading scientists. I could be wrong, but then several aspects of long-proven physics must then be wrong, too. The evidence shows that CO2 is not warming the earth.

Another favorite theme is Peak Oil, or rather, the Peak Oil Myth. This is a fascinating study in hoodwinking the few.

Yet a third favorite theme is the foolishness of nuclear power plants, due to their exorbitant high costs, ever-present danger of nuclear radiation, long-lasting toxic legacy of spent nuclear fuel isotopes, and the grossly unfair and disproportionate impact of their high electric power prices on the lower income echelons of society.

A fourth theme is the advent and growing presence of renewable energy systems, from solar, wind, wave, geothermal, bio-based, and ocean current. It is fascinating to me to read comments by others that such renewables are bit players, and will never be mainstream. The actual evidence shows that to be wrong, as renewable energy in California comprises more than 14 percent of all power generated and sold in the state. Only natural gas provides more energy. That is not true for all states, but in the largest state by population, that clearly shows that renewables play a significant role. The key to much greater use of renewables is large-scale energy storage.

Thank you to all who stop by here, and especially to those who leave a comment.

Early Winter Storm and Record Cold

California's AB 32, the Global Warming Solutions Act of 2006, was passed to prevent catastrophic events from occurring in the state. Such events include "a reduction in the quality and supply of water to the state from the Sierra snowpack," (Cal. Health and Safety Code, Section 38501(a), where AB 32 is written)

As I write this (October 12, 2009 at 9:00 p.m. PDT), a massive Pacific storm is approaching the U.S. west coast and California. The local news headlines shriek that "3 to 6 inches of rain" are expected to fall. This is quite an event for Southern California, where 14 inches is the average rainfall during an entire year. The storm is quite large, and is expected to bring snow to the northern portions of the Sierras at the higher altitudes. California's primary source of water is melting snow from the Sierra Mountains. California also receives water from the Colorado river, wells, and a very small amount from seawater desalination.

It has also been quite cold, record-breaking cold, in fact, for the past few days. Not only in California, but across much of the U.S. A baseball playoff game was postponed due to record cold and snow this past Saturday night in Denver, Colorado.

Once again, the actual events do not bear out the predictions and concerns of the global warming scientists. This record cold event is not supposed to happen. Big storms that bring snow to the Sierras are supposed to be fewer, and certainly not appear before December. The reason for the disparity between the climate alarmists' predictions and reality is that CO2 has nothing to do with the earth's air temperature or water temperature.

AB 32 is supposed to create green jobs, improve the economy, keep the electric grid operating reliably with 33 percent of the state's power provided by intermittent, renewable power such as wind and solar, all while drastically reducing CO2 emissions. CO2 is to be reduced by approximately 30 percent by 2020 compared to 1990 levels - and that is on an absolute basis, not adjusted for population growth. This is very similar to the federal bill passed earlier this year in the House of Representatives.

As the months go by, it becomes more and more obvious that jobs are not being created, the climate is not warming, the seas are not rising, heat waves are not happening more frequently, and polar ice caps are not shrinking. It also becomes painfully obvious that California has passed the point of sustainable environmental regulation. When regulations stifle the economy and jobs are lost, it is time to repeal the regulations. Jobs are far more important than any mythical global warming based on bad science. California's unemployment is higher and the recession is far deeper than in most of the 49 other states, yet one would expect that to be the opposite since California already has a high percentage of renewable energy in the electrical mix. AB 32 proponents insist that more renewables and less CO2 emissions improves the economy and creates more jobs. Where are the jobs in California, then?

Lawsuit Says CO2 Is a Pollutant in Texas

From a Houston Chronicle article, "Public Citizen's lawsuit, which was filed Tuesday in Travis County District Court, accuses the [Texas Commission on Environmental Quality] regulatory agency of violating the state's Clean Air Act by refusing to issue standards for controlling the emissions of carbon dioxide from coal-fired power plants." The environmental group seeks to force the state of Texas to regulate CO2 emissions because, they say, CO2 causes global warming.

One can imagine how this plays with the public in Texas, the state with more refineries than any other, the greatest oil and gas production after Alaska, and hundreds of associated chemical and petrochemical plants. The comments following the article are excellent reading.

A limit on CO2 emissions, if restricted to coal-fired power plants, would be damaging enough. But, such a ruling would open the door to additional regulation of CO2 emissions from refineries, petrochemical plants, and chemical plants, plus other industries (steel and cement spring to mind), and of course natural gas-fired power plants.

TCEQ Chairman Bryan Shaw, a realist, hit the nail on the head when he stated “Reducing CO2 in Texas will do nothing to lower CO2 globally, but will have the effect of sending U.S. jobs to China and India.”

As I show in my speeches on California's AB 32, a state law that requires massive reductions in CO2 emissions, one state cannot possibly make a difference. California produces approximately 2 percent of all CO2 emissions in the world due to energy consumption. Texas produces approximately the same. A 20 or 30 percent reduction from a 2 percent base, implemented 11 years from now, would never be noticed in the world, and would be instantly overwhelmed by one year's modest increase in developing countries.

The science is not supportive of the position embraced by the US EPA, that CO2 causes atmospheric warming globally. The supposed mechanism for the global warming effect is that CO2 molecules in the atmosphere absorb electromagnetic radiation in the infra-red range, or heat, as that heat is traveling upward toward outer space. The CO2 molecules then, the theory goes, re-radiate their absorbed energy in all directions, such that roughly half the energy is directed downward toward the earth's surface. The downward-directed heat then slightly increases the earth's surface temperature, and causes more water to evaporate from the oceans. The additional water vapor in the atmosphere then traps yet more heat, causing a runaway heating effect. Climatologists use the word "forcing" to describe the mechanism. The climate models are hopelessly inaccurate and have not yet predicted any of the events of the past 10 years - colder air, colder oceans, fewer hurricanes, growing ice caps, shorter growing seasons, early snowfalls in Autumn, late snowfalls in Spring, normal or zero ocean level increase, and indeed, lower sea levels in many areas including offshore San Francisco. The climate models have a basic assumption of constant relative humidity in the atmosphere, and if the air is indeed warmer, more water vapor should be held in the atmosphere.

Several real mechanisms act to thwart the climate modelers and their models. First, and this is by no means an exhaustive list, is clouds. More humidity creates more clouds, which cool the earth in at least two ways. One way is to increase the albedo or reflectivity of the earth, which allows less sunshine (heat energy) to reach the surface. Another way is increased rain, whereby great amounts of heat is released at high altitude where the water vapor condenses to rain drops. Water releases approximately 1000 Btu per pound upon condensing.

The second real mechanism is normal cycling of ocean basin temperatures. Third is the flow and position of the northern hemisphere jet stream. Fourth is the action of arctic winds and currents, and their effect on the floating ice pack. Time-lapse photography shows that the recent decrease in arctic ice is largely due, if not entirely due, to the effect of wind pushing the ice out of the arctic and into warmer waters where the ice melts. Such an event created the iceberg that sank the Titanic.

There is plenty of sound science for the state of Texas to rely upon that leads to the opposite conclusion reached by the US EPA: CO2 is not a dangerous pollutant, and therefore should not be regulated as one.

Let us hope that Texas does the right thing. Declare CO2 to not be a dangerous pollutant.