The coal and oil/gas industries found themselves in the administration’s crosshairs even before President Obama was even elected. Who could forget his vow that electricity rates would necessarily skyrocket, or his pledge to bankrupt the coal industry. Remember the moratorium on offshore drilling that sent offshore rigs to other countries to drill, a policy for which the administration was deemed to be in contempt?
While scores of oil and gas leases have not yet received a permit, President Obama has been fast tracking the permitting process for solar and wind energy projects. In a piece published in the WSJ, the author states,
The pace of approvals for solar and wind projects in the U.S. is picking up under the Obama administration, with two new plants in California and Oregon winning approval this week.
The Interior Department says it has now pushed through 27 renewable-energy projects totaling 6,500 megawatts since 2009, compared with about 1,800 megawatts in all prior years, the result of more staff working on a fast-tracked permitting process.
Do these developments cause a reduction in the cost of power? Logically, if these developments are receiving permits on a fast track, it would indicate that they will be effective in reducing or at least stabilizing the cost of power. Sadly, this is not the case.
The National Center for Policy analysis investigates the claim that solar energy is in fact cost effective. That claim is found wanting.
New York Times columnist Paul Krugman has a particularly silly column today in the Seattle Times, proclaiming “That’s right: Solar power is now cost-effective.” His central claim, after he finishes attacking natural gas exploration, is that “we’re just a few years from the point at which electricity from solar panels becomes cheaper than electricity generated by burning coal.”
Solar energy, which the EIA notes as “Solar PV” for photovoltaic solar, has the third highest cost per megawatthour (MWh) of all new energy generation sources. As for Krugman’s claim that it is cheaper – or will soon be cheaper – than coal, it will be more than twice the cost of coal in 2016.
Solar energy is clearly not a cost-effective energy solution at this point, and it will not be 4 years from now. What about wind generation? Has it reached a point were it is truly viable? The CATO Institute has done the research and as expected, it is not favorable.
Wind’s aesthetics and economics have changed. Bucolic images of windmills are fading as noisy newer models top 400 feet, and public resistance keeps states like Massachusetts from meeting their own renewable energy quotas. According to the U.S. Energy Information Administration, wind’s costs per kilowatt-hour hit bottom in 2002 and have since increased by 60 percent. In 2004, the levelized cost of a coal-fired kilowatt hour was 3.53 cents, compared to 4.31 cents for nuclear, 5.47 for gas and 5.7 for wind. According to a study by Gilbert Metcalf of Tufts University for the National Bureau of Economic Research, removing subsidies to nuclear and wind power takes the former to 5.94 cents and the latter to 6.64.
Wind’s seeming competitiveness does not reflect its dependability. Geothermal and biomass can be dispatched to deliver energy when it is needed, but wind turbines require moving air to produce their power. Avoiding blackouts requires production and demand on an electrical grid be equal every second, so operators need gas-fired “load-following” generators that can adjust instantly. If wind exceeds 10 percent of a system’s capacity, the costs of maintaining reliability increase disproportionately and interconnection charges may not cover them. An outage of a conventional generator will most likely be an isolated incident that does not affect the operation of other ones. Wind is more likely to stop blowing without warning over an entire region, so protecting wind turbines requires larger percentages of reserves.
Moreover, wind is least available when it would be most valuable. During the five highest load hours of 2006, California’s 2,300 megawatts of wind energy generating capacity produced only 12.2 percent of their nominal capacities. For planning purposes, Texas lists a wind unit’s “effective capacity” as 8.7 percent of its nameplate value.
Wind generation is also not a reliable source of energy. At this point, it becomes necessary to call into question the entire prospect of green energy and an economy based upon it. There does happen to be an economy that was largely based on green jobs and energy; the Spanish economy.
The American Enterprise Institute has that data,
- Since 2000, Spain spent 571,138 euros on each green job, including subsidies of more than 1 million euros per job in the wind industry.
- The programs creating those jobs destroyed nearly 110,500 jobs elsewhere in the economy (2.2 jobs destroyed for every green job created).
- The high cost of electricity mainly affects production costs and levels of employment in metallurgy, nonmetallic mining and food processing, and beverage and tobacco industries.
- Each “green” megawatt installed destroys 5.28 jobs elsewhere in the economy on average.
- These costs do not reflect Spain’s particular approach but rather the nature of schemes to promote renewable energy sources.
The oil and gas industry says administration officials have their priorities backward. Oil and gas permitting on U.S. land quickened under the Bush administration and hit a peak during the 2007 fiscal year, when Interior approved 7,124 permits to drill for oil and gas on federal lands. The Obama administration, by contrast, approved 4,487 such permits in 2009 and 4,090 in 2010, according to BLM data.
How can the Obama Administration continue to fast track alternative energy initiatives when there is no data to support their value, and there exists volumes of data proving it is a terrible approach? Is this the reason then candidate Obama mentioned the necessarily escalating cost of energy? As Obama continues to advance his damaging green energy policies, the energy source that fueled the economic engine of the United States is left on the back burner at a tremendous cost to our economy.