Category Archives: Energy

The Real “War on Coal”

Blankenship at 2009 Labor Day rally

Blankenship at 2009 Labor Day rally

By Peter Galuszka

Over in West Virginia, some things never seem to change.

Families of the 29 miners killed on April 5, 2010 at Massey Energy’s Upper Big Branch are asking a federal judge to lift her gag order so they can testify before West Virginia legislators considering tougher rules that would make it easier for workers to sue employers over job-related injuries and deaths.

U.S. District Judge Irene Berger issued the gag order last year after Donald L. Blankenship, the former chief of Richmond-based Massey Energy, was indicted on four criminal charges for his role in the disaster – the worst one in 40 years. He is scheduled to go on trial in Beckley on April 20.

The question seems to be that the judge is protecting Blankenship’s rights over those of the people hurt by his management. It is not really news in the Mountain State that has always supported Coal Barons over workers. It’s a weird, neo-colonialist thing that never seems to change.

This month, Berger denied a move by several news agencies, including the Charleston Gazette and The Wall Street Journal, to lift the gag order.

As head of Massey Energy, which has since been taken over by Bristol-based Alpha Natural Resources, Blankenship was a true publicity hog. He was never shy about pushing his arch-conservative, pro-business views or bankrolling politicians and judges. Worrying about protecting his legal rights at the expense of free speech is a real travesty.

Yes, there is a “War on Coal” – but the other way around. The conflict is how coal bosses wage war on their employees and their families.

Interview: McAuliffe’s Economic Goals

 maurice jonesBy Peter Galuszka

For a glimpse of where the administration of Gov. Terry McAuliffe is heading, here’s an interview I did with Maurice Jones, the secretary of commerce and trade that was published in Richmond’s Style Weekly.

Jones, a graduate of Hampden-Sydney College and University of Virginia law, is a former Rhodes Scholar who had been a deputy secretary of the U.S. Department of Housing and Urban Development under President Barack Obama. Before that, he was publisher of The Virginian-Pilot, which owns Style.

According to Jones, McAuliffe is big on jobs creation, corporate recruitment and upgrading education, especially at the community college and jobs-training levels. Virginia is doing poorly in economic growth, coming in recently at No. 48, ahead of only Maryland and the District of Columbia which, like Virginia have been hit hard by federal spending cuts.

Jones says he’s been traveling overseas a lot in his first year in office. Doing so helped land the $2 billion paper with Shandong Tranlin in Chesterfield County. The project, which will create 2,000 jobs, is the largest single investment by the Chinese in the U.S. McAuliffe also backs the highly controversial $5 billion Atlantic Coast Pipeline planned by Dominion because its natural gas should spawn badly-needed industrial growth in poor counties near the North Carolina border.

Read more, read here.

(Note: I have a new business blog going at Style Weekly called “The Deal.” Find it on Style’s webpage —   www.styleweekly.com)

Dominion Solar Plant — a Sop to Environmentalists

Remington power station. Photo credit: Dominion Virginia Power

Remington power station. Photo credit: Dominion Virginia Power

by James A. Bacon

This should make PeterG happy: Dominion Virginia Power has announced its intention to build the first commercial solar energy plant in Virginia. The $47 million project, to be built in Northern Virginia, will generate 20 megawatts of electricity, enough to power about 5,000 homes.

The project will increase the average residential customer’s bill, based on average monthly consumption, by about four cents per month during construction and two cents per month once the facility goes into service.

According to the Richmond Times-Dispatch, Virginia environmentalists applauded Dominion’s move, although some wish that the company would be more aggressive.

I wondered, what if Dominion were more aggressive? How much would electric rates rise? Dominion Virginia Power has 2.1 million accounts. Assuming that the utility could provide solar electricity as economically for all 2.1 million as for the 5,000 homes served by the proposed Remington solar facility, it would take approximately 2,000  more Remington-scale facilities to provide electricity system-wide. That would translate into increased electric bills of $40 a month, or $480 per year.

Of course, nobody is saying that Dominion should go 100% solar. But that simple exercise gives you an idea of how incredibly expensive solar electric power is in Virginia. And my calculations probably under-state the cost of large-scale conversion to renewables. First, Dominion is saving money in Remington by building on land that it already owns. Second, it’s building adjacent to an existing power-generating station, which means it is spending less on transmission infrastructure. Third, the solar capacity will be coupled with an existing natural gas-powered generating plant, which will allow Dominion to easily ramp up production or scale in back, depending upon the variable production coming from the solar unit. That obviates the need to build expensive back-up surge capacity to compensate for when the sun’s not shining.

Bacon’s bottom line: I interpret the Remington solar plant as a P.R. stunt that throws a sop to environmentalists who have criticized the company for adding so little to its renewable energy portfolio. At the same time, the small scale of the project limits the damage to the rate base. Two cents more per month per household doesn’t sound like much. Nobody will care.

I’m not a big fan of Dominion’s approach to generating and transmitting electric power, but I’m glad to see that it’s not rushing pall mall into uneconomical renewable power sources. Sooner or later, those power sources will become competitive with fossil fuels. At that point in time, I have every confidence that Dominion will make the shift on a much larger scale. In the meantime, electric rate payers will appreciate the utility’s priority of keeping rates low.

Wind Power Hits Some Nasty Gusts

offshorewindturbines By Peter Galuszka

Wind power has taken some hits with the New Year.

A proposed 145-acre, 20-megawatt project in Clarke County is being scuttled because Dominion Resources has shown little interest in buying its power. In New England, a pioneering offshore wind project, Cape Wind, is on the ropes because of the merger of two utilities and opposition by one of the Koch brothers.

According to the Winchester Star and blogger Iveymain, OCI Power is pulling the plug on its plan to erect 100,000 solar panels – enough to power 20,000 homes –due “due to the lack of long-term solar procurement efforts by Dominion and other VA utilities.”

There is no clear program in Virginia to push solar power. The General Assembly and Gov. Terry McAuliffe have paid lip service to the idea but haven’t done anything to actually fund it. Moreover, Virginia has no mandatory renewable portfolio standard as do other states so efforts for renewable energy are set up to dawdle. Dominion also has been slow, if not downright negative, about buying renewable party from third party sources.

Cape Wind off Cape Cod had been might have been the nation’s first real offshore wind farm. It would run 130 turbines in Nantucket Sound with electric utilities buying the output.

But the project’s price tag of $2.5 billion seemed daunting. One group, National Grid had agreed to buy half the power, but another utility, NStar, wanted to drop its interest in the project when it was being taken over in a $17.5 billion merger with Northeast Utilities.

Cape Wind had drawn opposition from people one might expect, such as conservative activist William Koch, who owns millions of dollars’ worth of seafront vacation real estate, but also from odd sources such as the late TV anchorman Walter Cronkite who likewise owned waterfront land.

Closer to Virginia, there have been auctions of offshore areas from wind farms. Dominion has about $50 million in federal funds to build two, six-megawatt turbines 27 miles off the Virginia shore. Dominion says it wants to develop wind, but the reality is that it wants to take tiny steps to it while dominating the market.

Another factor is the rush to natural gas that has Dominion and other regional utilities pitching billions worth of pipelines. Cheap gas hurts renewables because it takes away the urgency to get them going.

That may change. There is so much gas and oil, in fact, that drilling is slowing quickly. Petroleum prices are way low. This is a normal cycle. When production slows because of low prices, supply will likewise diminish. When that happens, prices will rise and drilling will be robust again.

The problem is really an economic one. As long as natural gas remains in its current cycle, it’s going to be really hard to force a play into wind – at least – without some kind of top-down, government involvement. Dominion, once again, is getting away with playing it just as it wants.

Takeaways From Bob McDonnell’s Sentencing

Mcd sentencedBy Peter Galuszka

The outpouring of support for convicted former Gov. Robert F. McDonnell was overwhelming at his sentencing hearing yesterday at which he was told that he will serve two years in a federal penitentiary.

And this very support stands in marked contrast to McDonnell’s performance on the witness stand during his marathon trial last summer. There he alternated between saying that he “holds himself accountable” and then blaming his aides, vitamin salesman Jonnie R. Williams and, of course, his estranged wife Maureen who was set up to take the fall.

So which Bob is really Bob?

In U.S. District Judge James R. Spencer’s courtroom, the hours’ long reading of letters of support and 11 witness testimonials from the stand became tedious and repetitive. Bob kneels down to comfort a sick woman. Bob helps out Katrina hurricane victims on his week-long vacation, builds a basketball court and breaks his jaw. Bob restores voting rights to 8,128 convicted felons who had served their time. Bob’s only flaws are his gullibility and naïvite. Bob writes thank you notes.

The most impressive supporter by far was L. Douglas Wilder, the former Richmond mayor who became the first-ever African-American governor. Always unpredictable, the Democratic politician came down hard on Bob’s side, saying he’s known him for years and found him to “to be of his word.” Wilder touched off applause in the courtroom he blamed Williams as “the man who started this bribe” as “the one who got away clean.”

All of these people were trying to convince Judge Spencer that Bob should not get jail time but 6,000 hours of community service. One option would be to stick him in a service coordination job on the island nation of Haiti. The job normally would pay $100,000 including benefits but Bob wouldn’t get the money and would work and have to sleep in a hot and buggy room. Other possibilities including holding an unpaid $60,000 job coordinating a food bank in southwest Virginia.

To his credit, Judge Spencer didn’t bite. Prosecutor Michael Dry said that McDonnell is free to do all the community service he wants after he serves his time behind bars. McDonnell could have gotten more than 12 years in prison. Spencer gave him two.

The sentence is on the light side but is probably fair. McDonnell has been tremendously humiliated. He completely dishonored his public trust and will go down in history as the Virginia governor who was corrupt. At least he is getting some jail time.

And he might win on appeal. It’s not a slam dunk but there is respected legal opinion out there that “honest services fraud” can be viewed in a tight or loose focus. Spencer chose a tight focus but we will have to see if the appeal McDonnell has filed gets to the U.S. Fourth Circuit and then Supreme Court.

Next up is wife Maureen, who is a tragic figure and also was convicted of corruption. Her own daughters characterized her as a sick woman who badly needs help. Some columnists have pumped her up, saying she’s the unsung heroine stuck raising the kids while the ambitious politician is selfishly away building his career.

Something about that argument doesn’t ring true to me. Maureen McDonnell may well have despised the time Bob spent away from her but she also was right beside him, pushing her own agenda such as selling nutraceuticals and backing pet programs such as marketing Virginia wines and helped injured military veterans. As First Lady, she was no shrinking violet when it came to letting her wishes known to state employees.

She comes up for sentencing Feb. 20 and now that her husband’s fate is known, it seems likely she won’t get any jail time. If so, maybe she can get the help she seems to badly need and the McDonnell family can start to heal their terrible wounds.

One of the character witnesses Tuesday was William Howell, the Republican Speaker of the House of Delegates who provided the enormously valuable insight that “people would describe Bob as a Boy Scout.” Not only is Howell’s remark insipid, it hides how much he’s responsible for maintaining the total mess that policing ethics among Virginia public officials has become.

No matter how many Wednesday morning Bible studies Howell says he attended with McDonnell, he still did nothing to improve regulation of political donations and gifts. If anything, he’s the problem not the solution since he minimizes every decent initiative to rationalize Virginia’s loosey-goosey system. If there were clear rules, McDonnell may never have gotten caught in his quagmire. He might have known when to avoid crossing the line.

Howell told the court that the General Assembly is busy setting its house right and that McDonnell’s predicament “Most certainly . . . has had a deterrent effect.” That was likely the most ridiculous statement during the five hours of court testimony on a horrid sentencing day.

Virginia’s Top Stories in 2014

mcd convictedBy Peter Galuszka

The Year 2014 was quite eventful if unsettling. It represented some major turning points for the Old Dominion.

Here are my picks for the top stories:

  • Robert F. McDonnell becomes the highest-ranking former or serving state official to be convicted of corruption. The six-week-long trial from July to September of the Republican former governor and his wife, Maureen, was international news. In terms of trash, it offered everything – greed, tackiness, a dysfunctional marriage, a relationship “triangle,” and an inner glimpse of how things work at the state capital.  More importantly, it ends forever the conceit that there is a “Virginia Way” in which politicians are gentlemen above reproach, the status quo prevails and ordinary voters should be kept as far away from the political process as possible. It also shows the unfinished job of reforming ethics. The hidden heroes are honest state bureaucrats who resisted top-down pushes to vet dubious vitamin pills plus the State Police who did their investigative duty.
  • Eric Cantor loses. Cantor, another Republican, had been riding high as the 7th District Congressman and House Majority Leader. A wunderkind of the Richmond business elite, Cantor was positioned to be House Speaker and was considered invulnerable, at least until David Brat, an unknown college economics professor and populist libertarian, exploited fractures in the state GOP to win a stunning primary upset. Cantor immediately landed in a high-paying lobbying job for a financial house.
  • Terry McAuliffe takes over. The Democrat Washington insider and Clinton crony beat hard-right fanatic Kenneth Cuccinelli in a tight 2013 race. He bet almost everything on getting the GOP-run General Assembly to expand Medicaid benefits to 400,000 low income Virginians. He lost and will try again. He’s done a pretty good job at snaring new business, notably the $2 billion Shandong-Tralin paper mill from China for Chesterfield County. It will employ 2,000.
  • Roads projects blow up. Leftover highway messes such as the bypass of U.S. 29 in Charlottesville finally got spiked for now. Big questions remain about what happened to the $400 million or so that the McDonnell Administration spent on the unwanted U.S. 460 road to nowhere in southeastern Virginia.
  • Gay marriage becomes legal. A U.S. District Judge in Norfolk found Virginia’s ban on gay marriage unconstitutional and the U.S. Supreme Court pushed opening gay marriage farther. The rulings helped turn the page on the state’s prejudicial past, such as the ban on interracial marriage that lasted until the late 1960s.
  • Fracking changes state energy picture. A flood of natural gas from West Virginia and Pennsylvania has utilities like Dominion Resources pushing gas projects. It’s been nixing coal plants and delaying new nukes and renewables. Dominion is also shaking things up by pitching a $5 billion, 550-mile-long pipeline through some of the state’s most picturesque areas – just one of several pipelines being pitched. The EPA has stirred things up with complex new rules in cutting carbon emissions and the state’s business community and their buddies at the State Corporation Commission have organized a massive opposition campaign. McAuliffe, meanwhile, has issued his “everything” energy plan that looks remarkably like former governor McDonnell’s.
  • State struggles with budget gaps. Sequestration of federal spending and defense cuts have sent officials scrambling to plug a $2.4 billion gap in the biennial budget. It is back to the same old smoke and mirrors to raise taxes while not seeming to. Obvious solutions – such as raising taxes on gasoline and tobacco – remain off limits.
  • College rape became a hot issue after Rolling Stone printed a flawed story about an alleged gang rape of a female student at the prestigious University of Virginia in 2012. Progressives pushed for raising awareness while conservatives took full advantage of the reporter’s reporting gaps to pretend that sex abuse is not really an issue.
  • Poverty is on the radar screen, especially in Richmond which has poverty rate of 27 percent (70 percent in some neighborhoods) and other spots such as Newport News. Richmond Mayor Dwight Jones got a lot of national press attention for his campaign to eradicate poverty but it is really hard to understand what he’s actually doing or whether it is successful. The real attention in Richmond is on such essentials as replacing the Diamond baseball stadium, justifying a training camp for the Washington Redskins and giving big subsidies for a rich San Diego brewer of craft beer.
  • Day care regulation. Virginia has a horrible reputation for allowing small, home day care centers to operate without regulation. Dozens have children have died over the past few years at them. This year there were deaths at centers in Midlothian and Lynchburg.
  • The continued madness of the Virginia Tobacco Indemnification and Community Revitalization Commission. This out-of-control slush fund in the tobacco belt continued its waywardness by talking with Democratic State Sen. Phil Pucket about a six-figure job just as Puckett was to resign and deny a swing vote in the senate in favor of expanding Medicaid. The commission also drew attention for inside plays by the politically powerful Kilgore family and giving $30 million in an unsolicited grant to utility Dominion.

Dominion’s Pipeline: The Battle Is Joined!

john wayne By Peter Galuszka

One hundred and seventy-eight Virginians will be getting  not-so-merry Christmas presents from the electric utility Dominion Resources soon – official notifications that lawsuits have been filed against them that Dominion demands access to their land so it can survey for a $5 billion natural gas pipeline.

According to the Waynesboro News Virginian, Dominion sued 20 Nelson County property owners and 27 more in Augusta County earlier this week. The rest may be sued in the near future and they will have three weeks to respond.

Dominion is one of several southeastern utilities that want to build the Atlantic Coast Pipeline, a 42-inch wide tube stretching from near Clarksburg, W.Va. across the Appalachians and southeastward into Augusta, Nelson and other Virginia counties before heading on down to North Carolina a Tidewater. The pipeline is to transport new natural gas produced by hydraulic fracturing or “fracking” in the Marcellus Shale formation that stretches from New York on into Virginia.

Dominion’s spokesmen say they have the right to cross private property to survey land for a possible pipeline route if they have asked for permission and have not received it. Not so, say some people I spoke with in Nelson County. Anne Buteau who runs an organic farm there told me that the law does not explicitly give Dominion the right to trespass on their land if they say no as many have. It just says that Dominion can ask and if they get no response, then they can move in, she says.

This will obviously be a legal issue to resolve as the cases move into the court. And, this is all pretty new stuff to Virginians who much haven’t had to contend with big energy firms encroaching on their land.

Go a little west and southwest, of course, and it’s a whole different story. As a former West Virginia resident I know well how coal firms will go as far as they can encroaching on private property and streams to get at coal seams they want to blast apart in surface mines. Subsidence from deep mines is also a long-standing problem.

Such a swarm of issues has been around for a century and a half in the coalfields, but not in the picture perfect areas such as Nellsyford in Nelson County. It’s a rude awakening since America’s energy revolution is truly stirring things up and confronting people with issues they hadn’t dealt with before.

I’m of two minds of it. First, natural gas is still safer than coal which still provides maybe 35 percent of our electricity. Fracking has also produced a boomtown rush of shale gas and oil that has turned the American position completely around in a very few years to the country’s advantage. It is fueling a long-in-coming economic recovery and giving the U.S. the economic muscle to tell Vladimir Putin and the Iranians where to stick it.

Yet, fracking does pollute and it does release methane from improperly drilled wells. Pipelines can and do explode and catch fire. It seems odd (and something one never reads about in Virginia) that New York has decided to keep its ban on fracking for gas. Do they know something that Virginia’s leadership doesn’t? Or are we just going to dismiss them as clueless Yankees?

Dominion is pushing ahead hard for this deal, presumably, because its window isn’t really that large. One has to ask, what’s the rush? Prices for natural gas, along with crude oil prices, are dramatically low. So low, in fact, that the mad dash to frack seems to be dampening. There is even talk in the Wall Street Journal that low global crude prices might make the highly controversial Keystone XL pipeline economically unneeded and too much hassle.

My guess as to why Dominion wants the ACP so badly and so fast is that it now has the chance to share the $5 billion cost (assuming it doesn’t get another unsolicited multi-million dollar donation from the Virginia Tobacco Indemnification and Community Revitalization Commission) with several other utilities. It does need to think about future generation needs as old coal-fired and other plants shut down. Building a new nuke at North Anna might cost $15 billion – a lot more. Dominion isn’t saying. Gas is now cheaper and acceptable.

One also wonders why Dominion can’t figure out pipelines routes that are not so upsetting. Why couldn’t they use rights of way along Interstate 81 or other highway? Why not workout deals to put them near existing rail lines?

As I work in my office waiting for lame callbacks during the holidays, I have taken to watching old westerns on Netflix. I just finished “The Sons of Katie Elder.” I haven’t watched them in years and never was that big a fan but I have to admit, there are some really story lines there.

A recurring theme has to do with land rights – be it water, a railroad, gold, whatever. And fighting for one’s personal property is as American as John Wayne on a horse. So, I say, ride on! Stay with it, Pilgrims!

 

Easy Savings: LED Street Lights

LED street lights in action -- China

LED street lights in action — China

by James A. Bacon

Installing LEDs  in street lights may be no panacea for municipal budget woes, but the payback is so high that one can’t help but wonder why every local government in Virginia isn’t doing it.

It’s heartening to heart that Virginia Beach, Virginia’s most populous city, is taking the plunge. Well, dipping its toe might be a more accurate description. According to the Virginian-Pilot, Highway Electric of Chesapeake will install about 180 LED street lights in the median of the newly expanded Princess Anne Road beginning January 5.

The main drawback of LEDs (light emitting diodes) is that they are more expensive than the high-pressure sodium lamps they replace: $6,600 compared to $4,800.  But fewer LEDs are needed to light Princess Anne Road — 182 compared to 257 of the sodium lamps —  so the total project cost is lower.

Moreover, maintenance and electricity costs are lower. An LED street lamp lasts five times longer than conventional lights. Over time, that saves the cost of buying new lights and the cost of sending crews to replace them. They also consume about half as much electricity as a sodium light. Virginia Beach spends about $5.4 million a year lighting all of its street lights, according to the Pilot. The city expects to be saving $650,000 annually within ten years by phasing in the LED lights.

Arlington County had converted 85% of its street lights to LEDs by August. But only a few Virginia localities have implemented the technology.

Bacon’s bottom line: The payback is so high that any citizens ought to get up in arms if their locality is failing to take advantage of this cost savings. But why not go a step further? Local governments can save even more by attaching sensors that detect the movement of cars and people. The lights turn on when someone is walking or driving nearby and turn off when no one’s around. As a bonus, burning less electricity reduces carbon dioxide emissions and power-plant pollution.

Admittedly, in Virginia the picture is complicated by the fact that Virginia Dominion Power owns many street lights. I’m not clear on how much say-so local governments have over how those lights are maintained. With that caveat, smart LED street lights is low hanging fruit that every local government should be plucking.

Keeping Them Fed

Sloppin' them hogs!

Sloppin’ them hogs!

By Peter Galuszka

Here’s a little touch of cartoon humor courtesy of our friends over at the Blue Virginia blog. An artist was apparently was inspired by one of my postings from a couple weeks ago.

Enjoy!

Our Throwaway Culture

00968005.JPGBy Peter Galuszka

As the holidays approach, what happens to the gifts after you give them?

Many end up in the trash.

I pondered those questions in the December issue of the Chesterfield and Henrico Monthlies. It deals with a polyglot of forces including the planned obsolescence of many goods, especially electronics, global trade cycles, and, most important of all, how Virginia communities deal with disposing of their gifts once they are no longer the latest “in” thing?

“The Throwaway Society” dates back maybe 70 or more years. It is not a new concept at all and it actually hit its prime in the 1940s when it was popularized by the very same industrial designer who gave us the Oscar Mayer Wienermobile.

Oscar-mayer-wienermobile600Today, the cycle often begins at a Chinese wharf and circumnavigates the world. Playing integral roles are lowly county dumps and the companies they hire to recycle what they can and dispose of hazardous materials found in virtually anything electronic.

It’s an off-beat story but it may be a fun read.

Not to spoil your Christmas or anything.