In Energy Studies, No Renewables, Please

Karmis of VT's Center for Coal Research

Karmis of VT’s Center for Coal Research

By Peter Galuszka

For years, Virginia Tech has operated the Center for Coal Research which is dedicated to studying bituminous product, enhance its marketability and make mining it safer and less environmentally destructive.

The center receives funding and has sponsors and an advisory board made up of big utilities like Dominion, coal-hauling railroads like Norfolk Southern, a few state officials and coal company executives from Alpha Natural Resources, Arch Coal and Patriot Coal. No environmental advocates are advisers nor are proponents of renewable energy.

So, it was with considerable interest that I was introduced to a new “watchdog” group named the Checks and Balances Project, based in Northern Virginia and  funded by advocating clean energy and sustainability such as the New Venture fund and Renew American Prosperity Inc.

In several intriguing blog posts, Scott Peterson, a former media spokesman for the New York Stock Exchange and now executive director of Checks and Balances, asks why Michael Karmis, an internationally-known VT coal expert, was asked to write the cost-benefit analysis for the State Energy Plan released last month that will guide the General Assembly in passing laws relating to energy.

Peterson notes that Karmis’s report was a foundation document used by the State Corporation Commission staff when it gave a big thumbs down to the U.S. EPA’s proposed rules to cut carbon dioxide. The SCC claimed that the rules would shutter much coal-fired generation (much of which was going to be shut down anyway) and that renewables like solar and wind are too expensive, unreliable and scarce to replace the lost generation capacity.

I blogged about this repeatedly in recent weeks and I asked why Virginia has such a puny share of renewable energy compared to its neighboring states. I got responses from the SCC and also from Dominion as well as the Virginia Chapter of the Sierra Club and posted them.

Peterson’s points are spot on. Why would the state and the SCC go to such an overwhelmingly pro-coal group for what seems like a self-serving and self-dealing cost-benefit analysis? Do Virginians not deserve input from other players pushing forms of energy? Why did they not consult economic forecasting groups specializing in energy but chose instead Chmura Economics & Analytics of Richmond, which has no special energy expertise and has been criticized (by me) for tending to say what state officials want.

It is really a shame that the administration of Gov. Terry McAuliffe is following the same stacked-decks that former Gov. Robert F. McDonnell used to use. During his time in office, I outlined several instances where McDonnell chose “advisors” mostly from the coal and nuclear and natural gas industries to “study” energy needs or whether uranium mining near Chatham would be safe.

Also take a look at who the sponsors of the Virginia Tech coal center are:

  • Alpha Natural Resources of Bristol bought the extremely troubled and controversial Massey Energy whose renegade CEO, Don Blankenship, was so loose with safety and so strong on production demands that 29 miners lost their lives in a massive blast at the Upper Big Branch mine in West Virginia on April 5, 2010, according to three probes of the incident. I wrote a book about it.
  • Arch Coal is one of the most controversial users of ecologically devastating mountaintop removal surface mining in southwest Virginia, Kentucky and West Virginia,.
  • Evan Energy Investments is a Richmond-based firm started by E. Morgan Massey, whose family started A.T. Massey coal which later became Massey Energy. E. Morgan Massey had no corporate duties at Massey Energy during the 2010 blast but during the 1980s, he beat the United Mine Workers by instituting his “Massey Doctrine” of tough negotiating.
  • Patriot Coal is a spin-off of Peabody Coal, the largest coal firm in the U.S. Peabody had assets in the Central Appalachians but found that its western U.S., Illinois Basin and foreign operations were more profitable so it created Patriot. The spin off has been bankrupt at least once and has been criticized for trying to cut benefits for retired miners who had worked for Peabody.

To be sure, several state and federal organizations are also sponsors and I’m told that the center does do worthwhile working on setting up computer-based networks of sensors that would automatically shut down a deep mine’s operations if it found bad levels of explosive coal dust or methane. It also has done work to find carbon capture technologies that could allow coal to be burned cleanly.

The larger point is that the state is structured in ways that do not provide a place at the table for people not associated with big, traditional, base-loaded energy such as coal and nuclear power stations. Many accounts show that solar and wind are becoming much more technically and cost effective. Although the U.S. Department of Energy does not expect wind or solar to be more than about 20 percent of the total energy mix any time soon, its growth is picking up speed.

If more houses and businesses adopt solar panels as they get cheaper and better, they will reduce their need for Big Energy. As that happens, the large utilities, coal firms and railroads may get stuck with trillions of dollars’ worth of “stranded” and unused assets. Guess will end up paying for a lot of them? The ratepayers, of course, with the SCC’s blessing.

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2 responses to “In Energy Studies, No Renewables, Please

  1. There is no way solar panels are going to eliminate the need for the Grid, or Big Energy, unless and until batteries (or equivalent bulk-electricity storage devices) become as cheap and reliable as carbon-based generators. Solar simply isn’t reliable enough, except perhaps in the middle of a desert, and then only in daylight hours. A solar generator is not a “baseload” (24/7) generator.

    Solar power WILL eliminate the need for a lot of electric generation from other sources WHEN it’s available, but we’ll still need the Grid for backup power. And, the cost of that backup power will climb because the embedded cost of the Grid can’t be spread over as many units of energy. That’s precisely the extra cost Dominion is attempting to recover through those surcharges on customers installing solar panels.

    There’s talk of solar and wind power eventually driving the Grid into a cost ‘death spiral’ where it becomes cheaper for consumers to generate on-premises from diverse tiny gasoline-powered units (despite the inefficiencies of scale), or even do without, rather than fall back on buying from the Grid during night-time/windless hours. In that event electric utilities would find themselves with ‘“stranded” and unused assets’ aplenty. There would also be businesses shutting down at night (because they couldn’t afford non-solar/non-wind electricity to stay open), a steep penalty on the use of electricity after dark or on stormy days in the home, and other such politically-unpalatable consequences. Consumers and businesses won’t put up with it. Which is why it’s not likely to happen.

    The only other possible scenario is that solar and wind power and the Grid continue to co-exist. We need all of them. Ideally, we will get all of them without subsidizing any of them. Shifting the costs around to underwrite the cost of solar panels and to over-pay for solar power may serve societal goals like reduced carbon emissions, but it’s not the way to run an efficient economy, and it could create stranded costs where there otherwise wouldn’t be any.

    I simply don’t think it’s wrong for the SCC or its Staff to worry about such things.

  2. Acbar misses the point in his comments. The question is why, in the cost-benefit analysis that the Governor, his staff, and the Virginia legislature will use to guide them in their response to the federal Clean Power Plan, did they not consult any renewable experts? Virginia has them at the University of Virginia, at Virginia Tech, and others. But instead the same old gang of coal, electricity, and railroads who have been running things in Virginia for decades and benefiting handsomely got the contract to produce the analysis with apparently no questions asked.

    The world and the nation is changing fast in the face of disruptive technologies of solar and wind. Acbar’s comments and the response by so many advocates of the old energy system remind me of what must have been said by stable owners and feed providers at the turn of the 20th Century. That motorized buggy will never work!

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