John Watkins on Virginia Energy Independence

A couple of days ago, I expressed skepticism regarding the usefulness of a state Senate task force formed to examine long-term energy policy for Virginia. I based my comments upon an article in the Richmond Times-Dispatch, which emphasized issues such as price gouging after hurricanes and heating bills for poor people. Those sounded like the ultimate in short-term issues, I observed. I should have reserved my skepticism for the article, not the task force.

It turns out that Sen. John Watkins, R-Powhatan, who will lead the study, truly is thinking long-term. In the op-ed pages of today’s Richmond Times-Dispatch, he advocated relieving Virginia’s dependence upon easily disrupted Gulf Coast natural gas supplies by supporting construction of a Liquefied Natural Gas terminal in the Commonwealth. I’m impressed. Watkins is thinking outside the box. I think he makes a strong case.

Virginia’s electricity supply, Watkins observes, is increasingly dependent upon clean-burning natural gas. The addition of gas-fired electric generators across the United States has outstripped the production of gas domestically, and environmental policies restrict the ability to produce more. What’s more, 25 percent of our natural gas comes from the Gulf Coast, which, as we have seen, is vulnerable to disruptions by hurricanes. The solution, he says, is to import more gas. “[Liquefied Natural Gas] is the best mid-term solution to ease the supply crunch because it is a safe and proven technology, and new terminals for receiving LNG from Alaska, South America, the Caribbean and other regions can be permitted and built in just a few years.”

Columbia, the gas pipeline company, already operates an LNG terminal in Chesapeake. Dominion operates another in Maryland. Says Watkins: “The addition of a major LGN import terminal in Virginia … would provide the Commonwealth with long-term energy stability and economic development resulting from a clean and reliable energy source. We would also gain natural gas supply diversity to provide price competition and serve as a cushion against future disruptions in the Gulf of Mexico.”

Watkins has a good idea, though I would argue that it’s only a start. If Virginia wants to insulate its energy supplies from the vagaries of hurricanes, terrorists and despots, we also should examine market-driven, environmentally sound solutions such as:

  • Expanding Dominion’s nuclear power capacity
  • Pushing electric-powered automobiles (substituting domestically generated electricity for imported petroleum)
  • Reforming the scattered, disconnected and low-density patterns of development that increase automobile dependence, Vehicle Miles Driven and gasoline consumption
  • Easing regulatory barriers that inhibit the spread of micropower (small-scale solar energy production and fuel cells to store electric energy)

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22 responses to “John Watkins on Virginia Energy Independence”

  1. Anonymous Avatar

    What about renewable energy? Clearly it is not in a position to replace oil or natural gas, but it can replace 5-10% of the energy used. If this was really forward thinking, there would be at least a mention of it? Also, how about incentives for hybrid vehicles? Again, while not a total sollution, it can be a significant contributor to energy independence.

  2. James Atticus Bowden Avatar
    James Atticus Bowden

    Here, here. And long, long, long term get Virginia’s universities to be leaders for Fusion instead of NJ and CA – of course they won’t be able to build there when it is commercially viable.

  3. LNG is okay. But VA already has two nuclear plants. Why not permit thise to add a new reactor or two each? Natural gas is going to get very, very expensive. Nuclear is much cheaper per kilowatt and does not pit homeowners who buy gas to ehaet water in their homes or to cook against Dominion Power’s purchases of gas.

    To truly think outside the box, Watkins and the General Assembly should go nuclear and also consider tapping into natural gas off of the Atlantic Coast, if it is there.

  4. Anonymous Avatar

    Sen. Watkins’ LNG play is very a sound strategy because so much natural gas is needed for industrial process (nylon, fertilizer, and others) where there really is no current substitute. Plus, natural gas is the single most-efficient form of home heating in climates like ours and north. His points about natural gas supply diversity being the real key are right on, as well.

    But you all are right — we need a comprehensive strategy, and it looks like one is taking shape.

    Sen. Wagner’s latest proposal, which was submitted to this subcommittee last week: Offshore, nukes, renewables (wind, solar, biodeisel), clean coal, coalbed methane, LNG, higher CAFE standards, methane hydrates, and higher energy efficiency standards for public buildings. It calls for a comprehensive state energy policy to be developed.

  5. uvagrad2002 Avatar
    uvagrad2002

    LNG is an intermediate term solution, but expect a steep learning curve and bottlenecks in the next 5 years. The bottlenecks will occur in shipping capacity. Currently all shipyards that build LNG tankers are running at full steam, but there are hardly any LNG tankers available to the spot market. There will also be bottlenecks at liquification facilities. The world-wide LNG industry is still in its infancy.

    Why not consider wind turbines on VA shores and additional nuclear along with LNG as a multi-pronged solution to today’s high energy prices?

    Also, do not expect a Virginia terminal to help only Virginia NG users. NG is priced nationally and additional import capacity in VA is going to be reflected in national pricing. VA’s chief benefit would be from the basis differential due to delivery on VA’s shores.

  6. Eric McErlain Avatar
    Eric McErlain

    Dominion is already in the process of applying for an Early Site Permit for a new nuclear reactor at the current North Anna site. More than a few of my nuclear industry colleagues have been supporting Dominion out in the field in their fight against environmental extremists.

  7. Ray Hyde Avatar

    “The addition of gas-fired electric generators across the United States has outstripped the production of gas domestically, and environmental policies restrict the ability to produce more. “

    Jim,sometimes I wonder how, as an exponent of free market theories, you can sleep at night.

    LNG terminals were built, and mothballed, because of their supposed possible catastrophic consequences. Natural gas was touted for years as the inexpensive and clean alternative to home heating oil. Millions of home owners were suckered into paying thousands to junk their furnaces in favor of natural gas.

    Meanwhile, environmental laws were passed which effectively prohibited power plants from using any other source. One result is that gas heat users will face the highest increase in costs among all sources of home heat, because they have to compete with power plants that have, not only no other real alternative, but also no way to produce more of the stuff.

    A free market ought to price pollution control requirements such that they are in synch with what the market can provide, without benefiting one source of energy over another. At the same time, there should be incentives to provide less expensive control alternatives.

    Natural gas is inherently cleaner and than fuel oil. But major plants can absorb the costs of cleaning their emmissions more easily than the average home.

    It makes sense to distribute the cleanest fuel to where the least technology is available to clean it up. those that use the clean fuel, should then expect to pay a premium which can be refunded to those users saddled with the cost of major abatement equipment.

    A BTU is a BTU, but clean BTU’s have different costs, although they do not necessarily have different prices. The environmental rules are completely out of whack here.

    If Watkins wants to do something fo the Virginia economy, why promote more imported energy? This is dumb as toast.

    I don’t suggest this as an economic or environmental solution, not knowing the numbers, but one place to look might be coal gassification.

    Your other Blog posts have suggested other alternatives, among them solar. Solar has clear problems, and maybe it can only support 5 to 10% of our needs.

    That puts it in the same category as mass transit, pedestrian friendly planning and bike paths: a minor player, but still important within the constraints of cost and usefulness.

    I have to tell you, the way things are now, I could probalby make more money renting my fields as space for solar arrays or wind turbines than I can farming them. I don’t see that a LNG terminal does a thing for the Commonwealth, let alone for me.

    When LNG can pay for its own insurance, then I will favor it as much as I will favor nucleat power when it can pay for its own insurance. We kill quite a few woodchucks every year, who are providing a service to those who seek an alternative to fuel oil: they ought to be required to meet equivalent insurance and pollution regulations as other providers, given what we know about the market.

    I see this as very similar to the urban/rural development dichotomy we so often discuss: neither side is paying their fair share, neither side is enjoying the maximum benefit.

    It ought to be a central, long term goal of govenment to keep the balance, and not favor one over the other, as best we have the knowledge to do so.

  8. Jim Bacon Avatar

    Ray, I don’t disagree with what you’ve said here. Upon what basis do you question my dedication to free market principles?

  9. Greens have to propose an alternative plan, and it cannot consist of just wind farms- unless you like getting bogged down in debate in Highland County.

    LNG is not a bad step if it can be seen as an interim step step before going to more distributed, renewable (safer, more efficient) power. As I said before, fuel cells can store energy from natural gas or solar- but every house should have a fuel cell in order to get to DISTRIBUTED power.

    One big problem with LNG is that it can be a bigger security headache- Norfolk could easily be blown up if LNG is concentrated in one port entrance. Thats not to mention the long term problems with extracting and securing from foreign places.

    We have to be more forceful in explaining how solar is more efficient, more safe than nuclear.
    We have to explain to the public that solar does not mean just clunky panels from the ’70’s.

    WE CANNOT COUNT ON THE CORPORATE MEDIA TO TELL THE TRUTH ON THIS (and, evidently, we cannot counton Bacon’s Rebellion blog either)!

  10. James Atticus Bowden Avatar
    James Atticus Bowden

    Scott: Truth. We can handle the truth. Let’s see some numbers on size, cost, BTUs for solar etc.

  11. http://www.greenandgoldenergy.com.au/

    http://www.treehugger.com/files/2005/10/sunball_-_the_w.php

    Ah, don’t ya just love the enthusiasm of the underdog? Green and Gold Energy of Adelaide, South Australia, sound as though they are poised to take on the heft of, not just the nuclear lobby, but also the solar industry, as well. They believe their SunBall Solar Appliance is the bee knees of domestic energy delivery. Their calculations suggest the Sunball should provide electricity to residences cheaper than current grid pricing. How are they going to manage this feat? Well, the Sunball (a bit smaller than a basketball) uses triple junction solar cells, which are apparently related to the same panels driving the Mars rovers, Opportunity and Spirit. A one square metre of flat panel made from such cells would supposedly cost about $100,000 AUD. So instead the Sunball uses them in 1cm2 configurations, and then places an optical acrylic Fresnel lens above the cell. This captures 500 times more light and focuses it down on the cell. More >

    A heat spreader connected to the rear aluminium hemisphere effectively diffuses the heat build up. All this is combined with a dual-axis, dawn-to-dusk internal tracker, which follows the sun throughout the day. The assembly is said to have an efficency of >33%, whereas many flat panels are about 15%. Remarkably the cost for a Sunball is expected to only be about $1,600 AUD, when they hopefully go on sale in February 2006 (with export planned for June 2006). May their dreams be realised. ::Sunball via ::The New Inventors

    PS: According to figures offered by Green and Gold Energy, even using solar cells with just 10% efficiency, we could cover just 0.16% of the land area on Earth with photovoltaics and supply 20 TW (Terawatts) of power globally. Today we are using about 13 TW.

    http://www.treehugger.com/files/2005/10/power_genie_-_n.php

    A good number of TH respondents commenting on their green lifestyles mentioned that they turn electrical appliances off at the wall, thus reducing the infamous ‘Phantom’ load of standby energy. According to the makers of the Power Genie, if all of Australia followed this example, then we‘d save 12% of our electricity usage, the equivalent of $500 million AUD and 5 million tonnes of greenhouse gases. Annually! But let’s face it, not everyone is as dedicated as TH readers. So the Power Genie is not a behavioural, but a technological solution. Place it in the correct configuration and it will turn off all connected appliances, simply by turning off one main appliance. Say you have a TV, DVD player, stereo and lamp all in one room. Using the Power Genie you’d only need to switch off the lamp on leaving the room and everything else would shut down too. No more crawling under furniture to find power sockets. No more standby lights blinking eerily in a darkened room. (Would work for office settings too. In an energy exercise, a government department employed someone to make sure all the equipment was off, in the whole 13 floors, not merely on standby. Result? An energy saving of 16% was realised.)

  12. The recent hurricanes in the Gulf knocked out power to many essential public safety and emergency response buildings, creating risks to life and property that could be minimised in the future if the federal government and states greatly expand the use of on-site, cleaner energy to power these missions, according to a new report. The 12-page report illustrates how some states are creating a new “energy security” model for emergency management — they are using new technologies such as solar power and fuel cells to reduce the risk of power failure at mission critical buildings.
    The report released by the nonprofit Clean Energy Group is “Energy Security & Emergency Preparedness: How Clean Energy Can Deliver More Reliable Power for Critical Infrastructure and Emergency Response Missions–An Overview for Federal, State and Local Officials.” The report is available for download at: http://www.cleanenergystates.org/library/Reports/CEG_Clean_Energy_Security_Oct05.pdf.

    The report recommends that the federal and state governments greatly improve power reliability at first responder stations and other critical facilities. Many of these facilities now either have no backup power or only have backup diesel generators. After Hurricane Katrina, the grid went down in many places and diesel fuel could not be delivered to generators that then failed; massive power outages resulted, jeopardizing public safety and disrupting emergency communications. Large scale power outages also occurred during hurricanes Rita and Wilma.

    “Without reliable power in a disaster, public safety is at risk,” said Lewis Milford, president of Clean Energy Group. “These hurricanes proved that our public safety buildings remain dangerously vulnerable to power outages.

    “As Congress and the states take up energy issues after these Gulf hurricanes, they should call for the installation of new, more reliable on-site electricity generation at public safety facilities,” added Milford. “To protect citizens, we need reliable power at first responder stations, ‘911’ call centers, hospitals, emergency shelters and other mission critical facilities. Clean dependable power is now a public safety need.”

    The report describes specific projects that are already working in the field to support critical facilities around the country, in states such as California, Connecticut, Massachusetts, New Jersey, New York and Pennsylvania. “Many of these on-site clean energy projects are funded by state clean energy funds,” said Milford. “These states see solar power, fuel cells and wind as an energy security solution, and are leading the way to the future. We can’t afford to rely on the same old energy systems that failed us when we needed them the most.”

    The report notes that “while these installations will not solve all future emergency power problems – massive flooding can overwhelm equipment no matter how it is powered – these additional measures could make a life-saving difference.” The report makes the following key recommendations for action:

    Federal

    • The federal government could help ensure greater energy security by requiring that its own mission critical facilities use on-site clean energy generation

    • The federal government could direct the use of on-site clean energy technologies in any federally-funded reconstruction of critical public buildings in the Gulf

    • It could assist Gulf states to pay for on-site clean energy technology installations through a federal-state funding partnership

    State & Local

    • State and local governments could investigate local opportunities to use on-site clean energy technologies at emergency shelters, first responder stations and other critical infrastructure

    • State legislatures could require the installation of on-site clean energy technologies at state mission critical facilities to reduce the risks from power failures

    • States could create incentives to support use of clean energy technologies at public facilities

    • States could establish incentives for the private sector to install new on-site clean energy protection at hospitals, university laboratories and other critical private buildings

  13. Anonymous Avatar

    Scott, I strongly disagree with your comment about LNG as a safety issue, and it’s plainly not factual. There are already LNG storage facilities in Chesapeake and Roanoke, so the state has some experience with them. LNG does not “blow up.” It is not flammable in its liquid state. It is not stored under pressure.

    When LNG is regasified, it is flammable in the same way natural gas is. But it is not regasified until it is put into the pipeline.

  14. Ray Hyde Avatar

    I think I overstepped again, sorry.

    When I see a government official proposing support for what would otherwise be a private enterprise, I assume that support is going to take the form of some kind of incentive. You said you supported his thinking.

    To my way of thinking, our energy supply is already unbalanced and in jeopardy because we have fallen into the trap of believing that nothing is clean enough, with the result that we have insuficient refinery capacity and excess reliance on natural gas. Solar is clean, quiet and pollution free: until you figure what it is going to cost to run the plants to manufacture all the glass required.

    Coal is literally dirt cheap, until you figure the costs to clean the stacks and dispose of ash. Etc. Etc.

    Scott is right: we can’t count on anyone to tell the truth, there is too much money involved, and too many political agendas. Energy production and use is a prime case of location dependent decision making, that in addition requires that we make some judgements on external costs. We can’t really have a free market here, all we can do is try to see that one bad solution isn’t lobbied to death by another one that turns out to be even worse.

  15. Ray Hyde Avatar

    There was an explosion at an LNG plant in Algeria that destroyed much of the plant and caused damgae outside the plant’s boundaries.

    This was an accidental explosion. A deliberately caused explosion could be much worse.

    Technically anonymous is right: it does not blow up, but you wind up with a gassifying fireball of rapidly increasing size.

    All of Scott’s points are well taken, and there is a lot more to do in these areas.

  16. Jim Bacon Avatar

    Scott, Check out my column in the just-published Bacon’s Rebellion. I put in a plug for micro-energy!

    Ray, I agree with you that the lobbyists are driving energy policy far more than the merits. See my comments in the same column on that very point.

  17. Jim Bacon Avatar

    P.S. Ray, I know you’ll disagree with my column regarding the need for land use reform. That’s a given. But hopefully you’ll agree with most of the rest.

  18. Ray Hyde Avatar

    I don’t disagree that we need land use reform. I have a problem with “reform” that is based on value judgements. I have a problem with reform that means subsidised windfalls to some while others are sentenced to provide external benefits for free. I have a problem with thinking that land use reform is going to solve our transportation issues, ever, let alone immediately. I have a problem with espousing a free market – except for land use. I have a problem with supporting incentives for various desired activities while opposing the taxes necessary to create the incentives.

    We can’t assume that less auto use is better unless we know and agree on the ramifications. We can’t assume that more auto use is better, either. We don’t know enough to understand the ramifications, and if we did, we would still disagree on what course of action to take. Same goes for more, or less, natural gas, coal, nuclear, and solar usage.

    There are real land use problems that need to be reformed. On one hand we increasingly see a situation in which non-owners control an owners destiny without compensation. At the same time, if an owner is able to develop, he is imposing external costs on others. In both cases, someone is requiring action on the part of someone else without payment. What we need to reform is how those actions are viewed and compensated. This should be done in such a way that the net financial effect of a free market is obtained for all the participants, while at the same time adjusting for external costs, and providing a safe, convenient, cost effective, and attractive place to live.

    Same goes for energy usage. As far as I can see micro energy, pedestrian design, and bike paths are all part of a larger picture, and their use may increase or decrease over time. We should support them in a manner consistent with their potential, but not as means unto themselves, or for purely subjective reasons.

    Manassas is holding a forum on what constitutes open space, and how much is required. This is an important dialog to have. Open space is being catalogued and described as parkland, active use, passive use, farmland, private, public, etc. One item under discussion is approaching some owners to determine under what conditions some public use can be made of privately held open space. In this case the privately held space is owned by gated communities, but you can see where this is going.

    We agree that current zoning law is producing some terrible results, what we don’t know is what to do about it.

  19. Anonymous Avatar

    Ray Hyde, you are right about the Algeria incident, but wrong about its lessons for a receiving terminal. The risks are plainly different. See this link from the Left Coast. http://www.energy.ca.gov/lng/news_items/2004-01_algeria_factsheet.html

  20. Ray Hyde Avatar

    “If the state shouldn’t pick winners or losers, shouldn’t grant subsidies and shouldn’t hand out tax incentives, what can it do…” (my connection here) “….to emphasize in-fill and redevelopment over extending development farther into the rural hinterlands?

    You made good arguments for a free market energy policy in the front of your aricle. I have no complaints, no arguments, just compliments.

    I don’t see how those arguments apply to land use reform. How do you not pick winners and losers and at the same time encourage infill and oppose rural development? Given that you do that, how do you keep a level playing field without subsidies or incentives?

    We agree that government should allow people to live and work in close proximity. What happens if it turns out that people don’t want it, and the market supports scattered development?

  21. Ray Hyde Avatar

    I saw that argument: the point is that explosions can happen. I don’t buy the titanic argument. What about the explosions in Ohio, China, and Belgium?

  22. Scott’s post made me think of this article I was reading called The Coal to Liquid Debate Part 1 because it discusses why coal to liquid could come to fruition. Mainly because we do need energy and it seems oil is just starting to show signs that its about to begin drying up. It’s obvious the theme here is that this a multifaceted problem and is going to need a multifaceted solution in order to solve it. I’m just saying that this gave me a little bit more insight into why people think this might be a feasible solution. Scott’s post is a good example of why this might be a good thing to have even though its highly unattractive to most people.

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