(Jul. 8, 2010) Yesterday’s scorcher scorched wind power’s reputation and its long-term bottom line, too. Continue reading
Lawrence Solomon
Financial Post
July 8, 2010
Yesterday’s scorcher scorched wind power’s reputation and its long-term bottom line, too. This simple chart demonstrates why no company can make a profit supplying wind power to the electricity system without government subsidies, and why no society can count on wind power when the power is most needed.
The wind blew at its best in Ontario yesterday between midnight and 1 am (the first column in the chart), producing 214 megawatt-hours (1000 kilowatts to one megawatt) that hour. If wind was operating in a free-market electricity economy, it would have only earned $36.85 per megawatt that hour, or one-third to one-quarter the value of power during peak hours.
Over the next few hours, its next best hours for the day, wind continued to fetch very low real prices.
Then, when power prices soared along with demand as society got to work, the wind turbines went to sleep. The peak production of 214 megawatts dropped to as little as 11 and never rose above 60. To put these numbers in perspective, when Ontario needed the wind most, wind was producing as little as one twentieth of 1% of Ontario’s needs –essentially nothing. Even in its best hour, wind only met 1.21% of Ontario’s needs, and that’s because other, more flexible forms of generation, scaled back their production (unlike hydro or fossil fuel generation, wind is not dispatchable).
Even had wind been able to continue producing at its rate of 214 megawatts, it would have met less than 1% of Ontario’s peak needs. Not that 214 megawatts is all that good, in any case. In that first hour, wind was operating at under 20% of its own capacity. It has better days, when the wind blows stronger and longer, but not enough of them to make wind economical.
Because wind systems will always have days when they will contribute essentially nothing, and because society will not want power blackout on those days, the only prudent course for the managers of the electricity grid is to value wind’s capacity at essentially nothing. That means other types of generating plants will always be needed to back up any wind that’s built to supply the power grid, making wind even more uneconomical, and more nonsensical as a power source to be relied upon.
(July 8, 2010) Michael Trebilcock reveals the poor performance of wind power during Ontario’s recent heat wave. Continue reading
Long-term global cooling began in 2002, according to a just-released study in the Journal of Cosmology, a peer-reviewed publication produced at Harvard-Smithsonian’s Center for Astrophysics. Man-made global warming was real and dangerous, the study finds, but the danger has passed.
The study, authored by Qing-Bin Lu, a rising star at the Department of Physics and Astronomy at the University of Waterloo in Canada, explains why climate models have been so spectacularly wrong in trying to tie the global warming of the last half of the 20th century to CO2 — the climate modelers fingered the wrong culprit when they targeted CO2. The true culprits, Dr. Lu explains, were CFCs, the now banned substances that until the 1990s had been a refrigerant and propellant to products as diverse as air conditioners and hair spray cans.
Fortunately for the globe, environmentalists had CFCs banned because of their role in depleting the ozone layer, not realizing that the ban was simultaneously solving the global warming threat.
According to Dr. Lu, the phase-out of CFCs will be reversing the global warming effect by ushering in a 50 to 70-year period of global cooling.
Lawrence Solomon, Financial Post, July 7, 2010
Certifications ensuring that new homes and buildings are more environmentally-friendly and energy efficient do little in considering the health of their occupants, says a new report from Environment and Human Health, Inc. (EHHI), a non-profit organization dedicated to protecting human health. Focusing on the U.S. Green Building Society’s Leadership in Energy and Environmental Design (LEED) program, which awards buildings with certificates ensuring they are “green”, the group says the program is implementing standards that “are clearly insufficient to protect human health,” yet are being adopted by lawmakers across the U.S. and other developed countries.
The result is that lawmakers are rushing through “green” legislation—some of which is based on the LEED standard—and putting the health of their citizens at risk, all in an effort to promote an appearance of environmentalism.
Put more simply, they may be attempting to solve an abstract environmental harm—global warming—for a real one, human health.
The group contends that the LEED program ensures tighter buildings, resulting in less of an exchange between indoor and outdoor air. Indoor air, the group says, is often more contaminated than outdoor air—and this may intensify the chemical exposures of residents in a building, increasing the likelihood of unintended health consequences.
The LEED program, as it is currently designed, shows almost a complete disregard for this phenomenon. And because, as EHHI highlights, many of the materials being used in LEED buildings contain known contaminants, residents may be facing an increased exposure to indoor chemical mixtures.
Worse still, developers can obtain the highest LEED standard, platinum, without receiving any points (the certificate is awarded on a points basis, 110 in total) in the human health category. In fact, out of the potential 110 points—80 are needed for platinum status—only 7 have the primary intent to limit hazardous chemicals within a building.
The organization behind the LEED certificate, the U.S. Green Building Society, is private—made up, predominantly, of engineers, architects, building product manufacturers, real estate and construction companies. But governments have been helping to promote this “green” building certificate by adopting new laws that reward LEED certification, including loan guarantees, lower-interest loans, mortgage interest rate reductions, income tax credits, property tax reductions and other public subsidies.
The Green Building Council does not make public its evaluation of individual building components and performance. It is also not beholden to the public, as it does not adhere to the Administrative Procedures Act or the Freedom of Information Act.
“The Green Building Council’s award…conveys the false impression of a healthy and safe building environment, even when well-recognized hazardous chemicals exist in building products,” the authors of the EHHI report say.
G20 leaders in Toronto tried to avoid the fate of colleagues felled by warming advocacy
(Jul. 3, 2010) Last week’s G8 and G20 meetings in Toronto and its environs confirmed that the world’s leaders accept the demise of global-warming alarmism. Continue reading
Lawrence Solomon
Financial Post
July 3, 2010
G20 leaders in Toronto tried to avoid the fate of colleagues felled by warming advocacy
Last week’s G8 and G20 meetings in Toronto and its environs confirmed that the world’s leaders accept the demise of global-warming alarmism.
One year ago, the G8 talked tough about cutting global temperatures by two degrees. In Toronto, they neutered that tough talk, replacing it with a nebulous commitment to do their best on climate change — and not to try to outdo each other. The global-warming commitments of the G20 — which now carries more clout than the G8 — went from nebulous to non-existent: The G20’s draft promise going into the meetings of investing in green technologies faded into a mere commitment to “a green economy and to sustainable global growth.”
These leaders’ collective decisions in Toronto reflect their individual experiences at home, and a desire to avoid the fate that met their true-believing colleagues, all of whom have been hurt by the economic and political consequences of their global-warming advocacy.
Kevin Rudd, Australia’s gung-ho global-warming prime minister, lost his job the day before he was set to fly to the G20 meetings; just months earlier Australia’s conservative opposition leader, also gung-go on global warming, lost his job in an anti-global-warming backbencher revolt. The U.K.’s gung-ho global-warming leader during last year’s G8 and G20 meetings, Gordon Brown, likewise lost his job.
France’s President Nicolas Sarkozy, who had vowed to “save the human race” from climate change by introducing a carbon tax by the time of the G8 and G20, was a changed man by the time the meetings occurred. He cancelled his carbon tax in March, two days after a crushing defeat in regional elections that saw his Gaullist party lose just about every region of France. He got the message: Two-thirds of the French public opposed carbon taxes.
Spain? Days before the G20 meetings, Prime Minister José Luis Rodríguez Zapatero, his popularity and that of global warming in tatters, decided to gut his country’s renewables industry by unilaterally rescinding the government guarantees enshrined in legislation, knowing the rescinding would put most of his country’s 600 photovoltaic manufacturers out of business. Italy’s Prime Minister Silvio Berlusconi similarly scrapped government guarantees for its solar and wind companies prior to the G8 and G20, putting them into default, too.
The U.K may be making the biggest global-warming cuts of all, with an emergency budget that came down the week of the G20 meetings. The two government departments responsible for climate-change policies — previously immune to cuts — must now contract by an extraordinary 25%. Other U.K. departments are also ditching climate-change programs — the casualties include manufacturers of electric cars, the Low Carbon Buildings Program, and, as the minister in charge put it, “every commitment made by the last government on renewables is under review.“ Some areas of the economy not only survived but expanded, though: The government announced record offshore oil development in the North Sea — the U.K. granted a record 356 exploration licences in its most recent round.
Support for global-warming programs is also in tatters in the U.S., where polls show — as in Europe — that the great majority rejects global-warming catastrophism. The public resents repeated attempts to pass cap and trade legislation over their objections, contributing to the fall in popularity of President Barack Obama and Congress. Public opinion surveys now predict that this November’s elections will see sweeping change in the United States, with legislators who have signed on to the global-warming hypothesis being replaced by those who don’t buy it.
In the lead-up to the Toronto meetings and throughout them, one country — Canada — and one leader — Prime Minister Stephen Harper — have stood out for avoiding the worst excesses associated with climate change. Dubbed the Colossal Fossil three years running by some 500 environmental groups around the world, Canada — and especially Harper — are reviled among climate-change campaigners for failing to fall into line.
Not coincidentally, Canada has also stood out for having best withstood the financial crisis that beset the world. Fittingly, Canada and its leader played host to the meetings.
“Newspapers Retract ‘Climategate’ Claims, but Damage Still Done,” reads the headline in Newsweek this weekend, in a column over the latest controversy in the global warming debate. The headline, and the article beneath it, are so inaccurate that Newsweek should retract them.
For starters, no newspaper that the column describes retracted any claims about Climategate, the scandal that hit the United Nations Intergovernmental Panel on Climate Change last November when private emails showed, among other things, that all of the IPCC’s temperature data was suspect. The newspaper retractions – all two of them, by the UK’s Sunday Times and a much earlier change of heart by a small German daily — dealt with Amazongate, one of the many scandals that followed Climategate.
Next, the Newsweek column states that “In perhaps the biggest backpedaling, The Sunday Times of London, which led the media pack in charging that IPCC reports were full of egregious (and probably intentional) errors, retracted its central claim—namely, that the IPCC statement that up to 40% of the Amazonian rainforest could be vulnerable to climate change was ‘unsubstantiated.’ … The Times‘s criticism of the IPCC—look, its reports are full of mistakes and shoddy scholarship!—was widely picked up at the time it ran, and has been an important factor in turning British public opinion sharply against the established science of climate change.”
The Times article was hardly pivotal in turning British public opinion against the climate alarmists. For one thing, public opinion had turned against climate alarmism months earlier, even well before Climategate, so much so that the British government took out paid TV ads in 2009 in an explicit attempt to win back public opinion. For another, the retracted Times article did little to publicize Amazongate – by the time the Sunday Times article appeared, Amazongate was old news, having been covered by hundreds if not thousands of media outlets around the world. Here’s the timeline.
On January 25, the British blog site, EUReferendum broke the Amazongate story. The press coverage began the same day, with a London Telegraph headline announcing “After Climategate, Pachaurigate and Glaciergate: Amazongate.” Between then and January 31, when the Sunday Times article appeared in print, Amazongate became firmly established as an another example among many of shoddy, error-filled scientific work by the IPCC. None of the other articles published in that week have seen a need to retract. Even the Sunday Times’ retraction came only after months of litigation, indicating that some felt there was no need to retract. The basic thrust of the Amazongate stories remains valid, even if one of the many media outlets that covered Amazongate decided it had stepped over the line in its presentation of the story.
One thing the Newsweek column got right. The damage to the reputation of the IPCC has been done.
Lawrence Solomon, Financial Post, June 29, 2010
(June 28, 2010) British Columbians instinctively know what the Brits and other Europeans started to discover between 1999 and 2004. That is that value-added and carbon taxes are highly regressive and no government can cost-effectively administer the follow-up programmes whose stated objectives are to mitigate the highly regressive nature of the original income-to-tax shift.
In 1999, the UK Treasury commissioned a study of the “Effects of taxes and benefits on households”, to get a better sense of the balance in their tax system. This study is now repeated, annually, to let parliamentarians see whether the government is succeeding at its stated objective of making their tax system more neutral or even progressive. But over the last 10 years, the system continues to become more, not less regressive.
The official government analysis clearly shows that this is due to the overall shift of the basis of taxation from income to consumption taxes.
At this time, in the UK, the VAT eats up almost 11% of poor families’ disposable income and only 6% of wealthy families’ disposable incomes. Given the fact that wealthy households disposable incomes are 11 to 16 times higher than the poorest 20% of families in BC, such a regressive tax could only be mitigated if our taxmen exempted the poor families from ALL income AND consumption taxes.
British Columbians don’t understand what the Premier and the academic economists are saying to them because it does not make sense in the context of their day-to-day experience. In the Premier’s defence, a large share of the academic community says that financing corporate tax cuts with a shift to HST/VAT is a good idea. All of the available European data indicates that the instinct of angry BCers is correct and the academic arguments are incorrect.
It is important, I think, to start separating the—valid, in my view—argument that tax burdens have to be reduced for business income from the—invalid, in my view—arguments that we should finance corporate income tax cuts by introducing new value-added taxes. We should be financing corporate income tax cuts with reductions in direct corporate subsidies, first, and then significant adjustments to the treatment of capital gains and investment income in a neutral-to-progressive personal income tax regime, second.
The UK Treasury currently offers significantly more VAT exemptions and discounts than are incorporated in the BC/Canada GST regime, with the sole objective of mitigating the impact of the income-to-consumption tax shift on poorer families. For example, the UK VAT on any home energy purchases (fuel or electricity) is 5%—1/3 the GST rate that BCers will start paying next week. Residential energy consumption is also exempt from the UK’s “carbon tax” (the Climate Change Levy), but not from BC’s carbon tax.
Even with these differences, the UK tax regime has proved highly regressive—which means, by definition, the BC regime will prove even more regressive than the UK regime.
To see how regressive VAT is in the UK, take a look at the 2008/09 “Effects of taxes and benefits on households here. Go to Table 3 to see that all “indirect taxes” (which are consumption taxes) combine to eat up 28.2% of the incomes of the poorest 20% of UK families after counting income support payments, home heating rebates (which were just cancelled in the new UK budget) and VAT rebates.
But these consumption taxes combined to eat up only 12.8% of the disposable incomes of the wealthiest 20% of families.
I actually find Figure 4 in the workbook of the UK tax system analysis most interesting. It shows that in order to balance the systematically unbalanced/unfair basic system, it is now the case that 60% of UK families receive more in government cash subsidies and free “in-kind services” than they pay for in combined net income and consumption taxes. Given that it costs roughly 8 pence on the pound to collect taxes and 20 pence on the pound to administer the tax rebate and in-kind service delivery programmes, the UK government would now operate more efficiently if it simply terminated all forms of taxation (consumption and income) for 60% of families.
In fact, if the result is an opportunity to cut out many of the government-administered cash recycling programmes for lower income families, after exempting 60% from all forms of taxation, the UK government could well also afford to cut marginal tax rates for the 40% wealthiest of families!
BCers instinctively know we don’t need to make this big mistake, even if they are unaware of the widely available evidence that we should not finance corporate income tax cuts with new consumption taxes. What I find astounding is the complete lack of awareness of the widely available European evidence in the analysis completed by a majority of Canada’s “leading” economists.
Aldyen Donnelly, June 28, 2010
Lawrence Solomon
Financial Post
June 26, 2010
How U.S. labour and environmental rules blocked Dutch spill-cleanup technology.
Some are attuned to the possibility of looming catastrophe and know how to head it off. Others are unprepared for risk and even unable to get their priorities straight when risk turns to reality.
The Dutch fall into the first group. Three days after the BP oil spill in the Gulf of Mexico began on April 20, the Netherlands offered the U.S. government ships equipped to handle a major spill, one much larger than the BP spill that then appeared to be underway. “Our system can handle 400 cubic metres per hour,” Weird Koops, the chairman of Spill Response Group Holland, told Radio Netherlands Worldwide, giving each Dutch ship more cleanup capacity than all the ships that the U.S. was then employing in the Gulf to combat the spill.
To protect against the possibility that its equipment wouldn’t capture all the oil gushing from the bottom of the Gulf of Mexico, the Dutch also offered to prepare for the U.S. a contingency plan to protect Louisiana’s marshlands with sand barriers. One Dutch research institute specializing in deltas, coastal areas and rivers, in fact, developed a strategy to begin building 60-mile-long sand dikes within three weeks.
The Dutch know how to handle maritime emergencies. In the event of an oil spill, The Netherlands government, which owns its own ships and high-tech skimmers, gives an oil company 12 hours to demonstrate it has the spill in hand. If the company shows signs of unpreparedness, the government dispatches its own ships at the oil company’s expense. “If there’s a country that’s experienced with building dikes and managing water, it’s the Netherlands,” says Geert Visser, the Dutch consul general in Houston.
In sharp contrast to Dutch preparedness before the fact and the Dutch instinct to dive into action once an emergency becomes apparent, witness the American reaction to the Dutch offer of help. The U.S. government responded with “Thanks but no thanks,” remarked Visser, despite BP’s desire to bring in the Dutch equipment and despite the no-lose nature of the Dutch offer — the Dutch government offered the use of its equipment at no charge. Even after the U.S. refused, the Dutch kept their vessels on standby, hoping the Americans would come round. By May 5, the U.S. had not come round. To the contrary, the U.S. had also turned down offers of help from 12 other governments, most of them with superior expertise and equipment — unlike the U.S., Europe has robust fleets of Oil Spill Response Vessels that sail circles around their make-shift U.S. counterparts.
Why does neither the U.S. government nor U.S. energy companies have on hand the cleanup technology available in Europe? Ironically, the superior European technology runs afoul of U.S. environmental rules. The voracious Dutch vessels, for example, continuously suck up vast quantities of oily water, extract most of the oil and then spit overboard vast quantities of nearly oil-free water. Nearly oil-free isn’t good enough for the U.S. regulators, who have a standard of 15 parts per million — if water isn’t at least 99.9985% pure, it may not be returned to the Gulf of Mexico.
When ships in U.S. waters take in oil-contaminated water, they are forced to store it. As U.S. Coast Guard Admiral Thad Allen, the official in charge of the clean-up operation, explained in a press briefing on June 11, “We have skimmed, to date, about 18 million gallons of oily water—the oil has to be decanted from that [and] our yield is usually somewhere around 10% or 15% on that.” In other words, U.S. ships have mostly been removing water from the Gulf, requiring them to make up to 10 times as many trips to storage facilities where they offload their oil-water mixture, an approach Koops calls “crazy.”
The Americans, overwhelmed by the catastrophic consequences of the BP spill, finally relented and took the Dutch up on their offer — but only partly. Because the U.S. didn’t want Dutch ships working the Gulf, the U.S. airlifted the Dutch equipment to the Gulf and then retrofitted it to U.S. vessels. And rather than have experienced Dutch crews immediately operate the oil-skimming equipment, to appease labour unions the U.S. postponed the clean-up operation to allow U.S. crews to be trained.
A catastrophe that could have been averted is now playing out. With oil increasingly reaching the Gulf coast, the emergency construction of sand berns to minimize the damage is imperative. Again, the U.S. government priority is on U.S. jobs, with the Dutch asked to train American workers rather than to build the berns. According to Floris Van Hovell, a spokesman for the Dutch embassy in Washington, Dutch dredging ships could complete the berms in Louisiana twice as fast as the U.S. companies awarded the work. “Given the fact that there is so much oil on a daily basis coming in, you do not have that much time to protect the marshlands,” he says, perplexed that the U.S. government could be so focussed on side issues with the entire Gulf Coast hanging in the balance.
Then again, perhaps he should not be all that perplexed at the American tolerance for turning an accident into a catastrophe. When the Exxon Valdez oil tanker accident occurred off the coast of Alaska in 1989, a Dutch team with clean-up equipment flew in to Anchorage airport to offer their help. To their amazement, they were rebuffed and told to go home with their equipment. The Exxon Valdez became the biggest oil spill disaster in U.S. history — until the BP Gulf spill.
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