Monday, July 25, 2011

CARB Cuts AB 32 by Half

It's a momentous time in California, with the Air Resources Board (ARB or CARB) just announcing reduced targets for CO2 emissions under the Global Warming Solutions Act of 2006, aka AB 32. see this link. The short version is that ARB have cut the required reductions approximately in half. The reasons cited are 1) reduced economic activity in California, and 2) some federal laws that were not in place in 2008 now require similar reductions, thus, it would be double-dipping to count those.

Some background, and the numbers, California's AB 32 requires the state to reduce "greenhouse gas" emissions to 427 million tonnes per year of CO2-equivalent, by the year 2020. The CO2-equivalent (CO2-e) allows non-CO2 gases to be converted and counted as if they were CO2. The 427 million tonnes is what ARB calculated were emitted during 1990 - and it's really just an educated guess. No one really knows how much was emitted in 1990. Before the recent announcement, ARB had estimated that in 2020, California would emit approximately 600 million tonnes CO2-e without AB 32. This is the BAU (business as usual) case. The difference, 600 minus 427, is 173 which must be reduced by a long list of items that make up the AB 32 Scoping Plan.

I am not trying to take any credit for the reduction that ARB has just announced, however, in December 2008, I did write a letter to ARB's chairperson and stated that it was not accurate for AB 32 to claim credit for federal laws already on the books. see this link for the letter. Those reductions would occur even without AB 32. Of course, I received no reply to my letter. One particular item I wrote about was reduced emissions due to more-efficient cars, which in California is known as the Pavley standards. The federal law recently adopted most of the Pavley standards.

ARB's new target for reductions by 2020 is about half of the previous target, with 80 million tonnes CO2-e. ARB states that the deep and prolonged recession has reduced some of the CO2-e already.

We can all stay tuned, as California's economy worsens still more. At the current rate of collapse, the target 427 million tonnes CO2-e will be met entirely by economic recession in about, let's see, four more years. Call it 2016.

Roger E. Sowell, Esq.

Chinese Nuclear Power Plant Costs

This post was prompted by something I've seen written many times on various blogs and news reports for the past couple of years, that new nuclear power plants are NOT expensive. In fact, they say, China is building dozens of them for about $2 billion (US dollars) per reactor, where the reactor produces 1000 MW. I have my doubts about the $2 billion per reactor, (which is $2,000 per kW) as those who read and follow SLB are probably aware. In the USA, some recently-published numbers for proposed new nuclear power plant projects are more like $8,000 per kW. As an example, the now-defunct South Texas Nuclear Power Plant Expansion was to have two reactors at 1100 MW each, with a published cost estimate of $17 billion. That works out to $7,730 per kW, but it also ignores the inevitable cost over-runs, and extra interest costs for long delays. I would be surprised if that STNP Expansion would be built for less than $25 billion or roughly $12,000 per kW.

Therefore, I was quite interested to read a news item today, regarding a large new nuclear power plant under construction in southern China. The plant will have six reactors, at 1000 MW each. Total cost should be $12 billion, using the $2,000 per kW figure I've seen bandied about. Yet, CLP Holdings, LTD, purchased a 17 percent interest in the plant for $11 billion. CLP is a utility company in Hong Kong. CLP's 17 percent represents roughly the output from one-sixth of the entire plant, or one reactor. If 17 percent of the plant is worth $11 billion, then the entire plant is worth approximately $64 billion. That works out to a bit more than $10,000 per kW. That is much more in line with what new nuclear plants are projected to cost in the USA.

Roger E. Sowell, Esq.

Saturday, July 23, 2011

Nuclear Plants Delayed Again

More news this week from the dismal world of building a new nuclear power plant. As if the AREVA-designed project in Finland is not having enough troubles, now the same design is having serious problems and delays in France, at Flamanville. (on the Normandy coast near the English channel). see this link for one of several stories.

New nuclear power plants are routinely plagued by costly delays, and cost over-runs. The recent news states a two-year delay, from 2014 to 2016, and a cost over-run of 1 billion Euros (from 5 billion up to 6 billion). As always with these monstrosities, it is very likely that neither target will be met. Startup will likely be later than 2016, and the final cost much more. How much more, it is difficult to say.

In a perfect world, governments would require each nuclear power plant to be a self-contained business entity, responsible for its own profits and losses. If this were the case, the true costs of nuclear power would be transparent and available for all to see. Would the new reactor in Finland sell power for 3 cents per kWh, as so many pro-nuclear advocates insist is the true cost of nuclear power? That is very unlikely, since approximately 25 to 3o cents per kWh is required just to pay off the capital costs, and the operating costs. How about the new reactor at Flamanville? Same thing holds true.

In the USA, the South Texas Nuclear Project Expansion has been scrapped, which is a shame actually. It would have been very instructive to have that project proceed, with massive cost over-runs, and lengthy schedule delays so that the true cost of nuclear power from it would be at least 30 cents per kWh. In a world literally running over with natural gas at $4 per million Btu, and technology easily available to build efficient Combined Cycle Gas Turbine power plants that produce almost 60 units of electrical power for each unit of natural gas input, 30 cents per kWh puts nuclear power plants out of the running.

Still, there are a couple of other candidates for demonstrating the nuttiness of new nuclear power plants in the USA, in particular the Vogtle proposed plant. Perhaps it will be the new poster-boy for why the USA cannot afford any more nuclear power plants, and inflict high utility bills on the good customers in the South.

Roger E. Sowell, Esq.

California's AB 32 Jobs Still Absent

From my earlier posts on SLB regarding AB 32, California's Global Warming Solutions Act of 2006 (Nunez), it is clear that I hold a dim view of the law, the necessity for the law, the so-called scientific basis for the law, and its effect on the state's economy. This post is an update on the last aspect, the effect on the state's economy. For some perspective, AB 32 has a multitude of components, with more than 70 separate line items in the Scoping Plan. It is generally stated by the media, and even some within the Air Resources Board (ARB or CARB), that AB 32 will not be implemented until January, 2012. That is misleading at the best, and an outright false statement at the worst. AB 32 has a number of line items already in place, in fact, there are "Early Action Items" listed prominently on ARB's website. However, some of the line items will be in force next January, while one rather large piece has been delayed until at least 2013. The big delay is for Cap and Trade. More on that a bit later.

AB 32 was (or is) supposed to change California's emissions of CO2 and a few other so-called "greenhouse gases" by reducing those emissions according to a timetable. The initial reduction and time-target was down to 1990 levels by 2020. This means that, on an absolute tons emitted per year basis, by 2020 California would emit the same amount as was emitted in 1990. In practice, that requires approximately a 30 percent reduction compared to the "business-as-usual" case. CARB uses the abbreviation BAU for business-as-usual. An additional target was then set by the Governor to 80 percent below the 1990 level by the year 2050. Stated another way, California in 2050 can only emit 20 percent of what it emitted in 1990. After allowing for economic growth and population growth, the "80 by 50" requirement actually requires more than a 90 percent reduction in CO2 emissions compared to the BAU for 2050.

As I've written elsewhere on SLB, expecting to achieve this is quite absurd. The "80 by 50" requirement is absolutely a death-knell for California's economy. No economy in modern times (or ancient times, for that matter) has ever demonstrated an ability to conduct commerce, transportation, supply reliable and affordable energy (i.e. electricity), produce agricultural crops, produce and deliver clean water, collect and dispose of waste, and all the other aspects of a large and diverse economy with such a low CO2 output. None. But, CARB and the California government have the utmost faith that it will be done. They have some vague notions that fossil fuel-fired power plants will have the CO2 captured and sequestered, that cars, trucks, and buses will run just fine on bio-fuels or hydrogen or electricity, and a great portion of electricity supply will be from renewable sources such as wind and solar. They have grand plans for each citizen to conserve and reduce electric power consumption by some vague means, and by a "smart grid" that will reduce power consumption even more.

So much for the basics.

All of AB 32's requirements are supposed to be technically feasible, and are touted as creating jobs for California's economy. With January 2012 less than six months away, it is time to look for those jobs. Supposedly, California companies are producing bio-fuels, for example. Solar panels are another big requirement, and the jobs to manufacture and install them. Smart grid components and the installers for them is another item. The list of AB 32 items and the jobs they are supposed to create is long. Yet, the most ridiculous of the jobs-related aspects is what ARB stated in the beginning: each Californian will have approximately $250 per year of extra, disposable income as a result of AB 32. That works out to approximately $5 per week, which is enough to buy a cup of premium coffee each week. The additional sales of coffee will create great numbers of jobs in the retail sector.

The reality is that California is leading the entire nation in unemployment rate - with the sole exception of Nevada. The recent figures for June, 2011 are now public and show California with 11.8 percent. (Nevada is at 12.4 percent). So, the question remains unanswered, where are the AB 32-related jobs in California? Only six months from now, nearly all of the 70-plus line items are to be in place. Will millions of new jobs magically appear on January 1, 2012? Will coffee baristas be in short supply, so that most of the just-graduated teens can find employment? Somehow, that seems rather unlikely.

Roger E. Sowell, Esq.