Cap What? And Trade What?

By Tom Butz

What are we capping, and what are we trading? We have succeeded in reducing emissions of sulfur dioxide (SO2). Now the environmental movement is about to attempt to apply the same concept to carbon dioxide (CO2). This is a very big mistake, for the following reasons:

-The SO2 reduction program was successful because there were PROVEN technologies of reducing SO2 at the time, and the technologies continued to improve to result in reduced costs.

-Power plants that had the right to emit defined levels of SO2 suddenly were faced with an economic advantage of being able to sell the allowances, and shut down the less efficient plant, to allow for a newer larger plant, with lower emission levels of SO2 than the older plants.

-The economic engine of making the right choices was in full bloom. Emissions were reduced, additional power plants were built, technologies improved, and this is a great example of letting the market be free to make the right choices.

The same concept of Cap & Trade is being blindly touted as a means of reducing CO2. The concept is being sold under the guise that we can implement wind, solar, and conservation in order to accomplish a new version of Cap and Trade. There are some very important differences in implementing Cap and Trade for CO2 reduction.

First, let’s take a look at the level of reduction that is being called for. We are looking at a current level of CO2 emissions in the range of 6 billion tons of CO2. The bill is calling for a reduction from the 2005 levels (about 5 billion tons) of 40% of 2005 levels by 2030, and 83% reduction of the 2005 levels by 2050. This sounds very aggressive, and could be considered “forward thinking”. I consider this targeted reduction as completely ridiculous for the following reasons:

-There are currently no technical means of reducing CO2 from the emissions of power plants. No proven technology, but there are billions of research dollars being invested for a means of cleaning up the flue gas and capturing CO2. The best target for this technology being available in 2015, but this is not certain, and there are likely to be HUGE unknowns in trying to remove CO2 from such a huge amount of gas volume.

-Another major issue on capturing CO2 from plants is that it will take the equivalent of 30% of the plant output. This means that for a total fleet of about 300,000 MW of generation providing 50% of our total electricity needs, it will require an additional third, or 100,000 MW of additional generation to power this reduction technology.

-We also have a huge issue on where to store the CO2 once it is captured. Studies have been made looking at underground caverns of various types, but there are HUGE levels of uncertainty on how we can be sure the storage will work, if there is enough space, and how we can keep the CO2 stored. I call this the gopher hole problem. How can this possibly make sense?

-Trying to reduce CO2 from coal plants by fuel switching to natural gas is not feasible for coal generation, as it will result in such a huge increase of gas usage, that the price would go through the roof. Even if the fuel switch could be accomplished, the cost per ton of CO2 for this “cap and trade mirage” would double the cost of electricity.

-Renewable energy from wind currently provides about one half of a percent of our total energy needs. Wind generates power when the wind blows, and the electricity system has a unique characteristic of being “just in time delivery.” The electrical energy that we use is created in relatively the same instant it is consumed. Having wind on the system works to a certain level, but other generation needs to “follow the load” and adjust to both changes in the load, and changes in the wind.

-Irresponsible plans such as the www.google.org energy plan that called for retiring all coal and replacing it with wind would result in a third world electricity system that could not operate 24 hours a day seven days a week as we require. Let me say it as clearly as possible: huge implementation of wind generation will result in a blackouts that are beyond any acceptable level of service that we need to fuel our lives and economy. Intermittent resources such as wind can be “shaped” to follow load using a storage technology such as pumped hydro systems (not acceptable due to stirring up lake bottoms) or a battery storage system. Battery storage is feasible, but it has a fairly significant cost.

-Automobiles use about 17% of our total energy usage, and are projected to provide about 48% more vehicle usage, at roughly the same amount of energy, as driven by the mandated mileage standards. We are seeing a collision course that will blow gas prices through the roof, as we are restricting domestic drilling, and calling on some abstract ideal of having a huge influx of hybrid and electric vehicles. We need low priced access to oil products, as there will continue to be a large sector of vehicle usage that cannot be provided by electric vehicles. Increases in electric vehicles will require more electric generation, and where will this come from?

The bottom line with the cap and trade bill is that this is the most outrageous irresponsible idea that doesn’t have any real estimates of technologies available, costs, reliability, or viable alternatives. We cannot have such ridiculous levels of reduction, and claim that the “market” will find a solution. The republicans have proposed a much more responsible plan outlining funding for research and making sure that we continue to fuel our economy with low priced, reliable energy resources. The current path that we are on will result in much much higher prices, a stunted economy, and billions of dollars flowing from strapped consumers and businesses to all the favorite projects that are “green”. No thanks, this idea is terrible, and I can guarantee that if it passes, you will see a stifled economy suffer a kick in the gut.