Cheaper Natural Gas Contributing To Lower Emissions

Carbon dioxide levels as measured by the EPA have reached a 20 year low across the United States. The decline is due in large part to the fact that utilities across the country have shifted away from coal to cheaper natural gas. Burning natural gas releases less carbon dioxide than coal does at the smokestack, so the fact that coal use has reached lows not seen since World War II is playing a major role in the decline.

While New Jersey has barred new coal-fired plants from being built, the state’s leading electric producer still operates two major coal plants in Jersey City and Mercer County, among the biggest emitters of carbon dioxide in the state.

Most air pollution from the two Public Service Enterprise Group coal plants has plummeted in recent years following almost $1 billion in technology upgrades. But the plants still produced 4.1 million metric tons of carbon dioxide in 2010, according to a U.S. Environmental Protection Agency database. Still, it was PSEG’s natural gas plant in Ridgefield that emitted the most greenhouse gases into the air from New Jersey with 2.6 million metric tons.

Governor Christie’s Energy Master Plan, released last year, bars new coal-burning plants from being built while calling for the state’s natural gas infrastructure to be expanded. So far it has.

A Tennessee Gas pipeline through the Highlands that carries methane mined from Pennsylvania through the controversial technique called hydraulic fracturing, or fracking, was expanded last year despite protests from residents and environmentalists. Construction on a second pipeline expansion project through West Milford, Ringwood and Mahwah is scheduled to begin soon and will quadruple capacity.

In a little-noticed technical report, the U.S. Energy Information Agency, a part of the Energy Department, said this month that total U.S. CO2 emissions for the first four months of this year fell to about 1992 levels. The Associated Press contacted environmental experts, scientists and utility companies and learned that virtually everyone believes the shift could have major long-term implications for U.S. energy policy.

While conservation efforts, the lagging economy and greater use of renewable energy are factors in the CO2 decline, the drop-off is due mainly to low-priced natural gas, the agency said.

A frenzy of shale gas drilling in the Northeast’s Marcellus Shale and in Texas, Arkansas and Louisiana has caused the wholesale price of natural gas to plummet from $7 or $8 per unit to about $3 over the past four years, making it cheaper to burn than coal for a given amount of energy produced. As a result, utilities are relying more than ever on gas-fired generating plants.

Both government and industry experts said the biggest surprise is how quickly the electric industry turned away from coal. In 2005, coal was used to produce about half of all the electricity generated in the U.S. The Energy Information Agency said that fell to 34 percent in March, the lowest level since it began keeping records nearly 40 years ago.

The question is whether the shift is just one bright spot in a big, gloomy picture, or a potentially larger trend.

Coal and energy use are still growing rapidly in other countries, particularly China, and CO2 levels globally are rising, not falling. Moreover, changes in the marketplace — a boom in the economy, a fall in coal prices, a rise in natural gas — could stall or even reverse the shift. For example, U.S. emissions fell in 2008 and 2009, then rose in 2010 before falling again last year.

Also, while natural gas burns cleaner than coal, it still emits some CO2. And drilling has its own environmental consequences, which are not yet fully understood.

“Natural gas is not a long-term solution to the CO2 problem,” Pielke warned.

The International Energy Agency said the U.S. has cut carbon dioxide emissions more than any other country over the last six years. Total U.S. carbon emissions from energy consumption peaked at about 6 billion metric tons in 2007. Projections for this year are around 5.2 billion, and the 1990 figure was about 5 billion.

China’s emissions were estimated to be about 9 billion tons in 2011, accounting for about 29 percent of the global total. The U.S. accounted for approximately 16 percent. Mann called it “ironic” that the shift from coal to gas has helped bring the U.S. closer to meeting some of the greenhouse gas targets in the 1997 Kyoto treaty on global warming, which the United States never ratified. On the other hand, leaks of methane from natural gas wells could be pushing the U.S. over the Kyoto target for that gas.

Even with such questions, ­public health experts welcome |the shift, since it is reducing air pollution.

“The trend is good. We like it. We are pleased that we’re shifting away from one of the dirtiest sources to one that’s much cleaner,” said Janice Nolen, an American Lung Association spokeswoman. “It’s been a real surprise to see this kind of shift. We certainly didn’t predict it.”

Power plants that burn coal produce more than 90 times as much sulfur dioxide, five times as much nitrogen oxide and twice as much carbon dioxide as those that run on natural gas, according to the Government Accountability Office, the investigative arm of Congress. Sulfur dioxide causes acid rain and nitrogen oxide leads to smog.

That decline is brought about by multi-year lows in the cost of natural gas as compared to coal production. It's far cheaper to burn natural gas than coal to produce the same amount of energy, which is why utilities are switching over to natural gas.

It's supply and demand - economics 101.

The coal industry is facing major problems as a result of the swift departure from coal use to natural gas. They're trying to figure out how to market and reposition coal productions so as to try and save coal industry jobs, but many of those jobs will not return unless costs for natural gas rise to the point that it becomes cost effective for coal to be mined/extracted.

Natural gas industry workers are benefiting from the coal industry woes - and regions that are rich in natural gas are seeing a renaissance. That includes locations along major oil shale deposits such as the Bakken and Marcellus fields. It's brought about windfalls to communities where natural gas is being exploited - the opposite of what is being experienced where coal mines are being closed because it isn't cost-effective to operate at current coal prices.

Environmental regulations are only tangentially affecting the job situation - it's the price of natural gas that is driving the swift turnover to natural gas for energy production.

Egypt Terminates Energy Deal That Began With Camp David Accords

This is a seriously disturbing turn of events in Israel-Egypt relations. Egypt has terminated its longstanding deal to provide Israel with natural gas.

Ampal-American Israel Corporation, a partner in the East Mediterranean Gas Company (EMG), which operates the pipeline, said the Egyptian companies involved had notified EMG they were "terminating the gas and purchase agreement." The company said in a statement that the Egyptian General Petroleum Corporation and Egyptian Natural Gas Holding Company had notified them of the decision, adding that "EMG considers the termination attempt unlawful and in bad faith, and consequently demanded its withdrawal". It said EMG, Ampal, which is controlled by Israeli businessman Yossi Meiman, and EMG's other international shareholders were "considering their options and legal remedies as well as approaching the various governments". Before the sabotage, Egypt supplied about 40% of Israel's natural gas, which is the country's main energy source. In October 2011 EMG took legal action against the Egyptian government's energy companies and filed an $8 billion lawsuit against the Egyptians, claiming they had breached agreements obligating them to supply natural gas to the company.

The Jerusalem Post has a slightly different accounting of the cessation of the deal, where Egyptian leaders say that this is merely a contractual dispute, but it does appear that they're pushing to stop the gas deal that has been largely in place since the the Camp David Accords. There's no word from the Israeli government about the change in the deal, but they're going to have to address this rather quickly because it's a significant hit to Israel's energy needs. In the year since Hosni Mubarak was deposed, Egyptian leaders have had increasing trouble in trying to secure the pipeline that runs to Israel. The pipelines have been sabotaged several times, but it's the political leaders' statements about threatening to cut off Israel's gas shipments that are more disconcerting. Eygptian leaders seem to be more interested in ratcheting up the political rhetoric against Israel than they are in improving their domestic economic situation. The Egyptian junta is more than willing to use Israel as a foil for what ails Egypt than they are to actually take positive steps to improve economic opportunities for those least fortunate in Egyptian society. Not only that, but the Egyptians are shortsighted if they think that turning against the Camp David Accords will help with the Egyptian economy. After all, Israelis used to visit Egypt (particularly the Sinai) and spend their tourism dollars. With all the upheaval since the beginning of the Arab Spring last year, tourism revenues are down sharply and it's even more extreme when dealing with the share of Israeli tourists visiting the country. As far as Israel's energy situation is concerned, they're going to be scrambling to find additional energy sources. Accelerating exploitation of the natural gas fields off the Israeli coastline will occur, but that will be against a backdrop of Palestinian claims that Israel is expropriating their resources (when you consider that Palestinians consider Israelis to be illegitimate regardless of what borders one considers for the State of Israel, you begin to understand why they'd be opposed to any kind of development of any natural resources, not just natural gas). It would also mean that Lebanon and Hizbullah might get active since the gas fields run north into Lebanese waters - so there will have to be accommodation there as well.

NJ Transit Does Not Expect To Raise Fares in 2012

Thank goodness for small miracles. NJ Transit has announced that it doesn't intend to increase fares once again in 2012. Considering that the level of service has been quite poor - despite NJ Transit metrics claiming otherwise - riders are going to breathe a temporary sigh of relief.

Executive Director James Weinstein told members of the Assembly Budget Committee on Monday the fiscal 2013 state budget does not include any fare increases.

Weinstein also explained the agency has ordered 1,400 buses, which will be phased in to replace older vehicles.

The NJ Transit budget includes the purchase of 1,400 new buses, but I've got to wonder whether these new buses will be significantly more fuel efficient than buses currently in use.

With rising fuel costs, a modest boost to fuel efficiency would have significant monetary effect on the agency. The 2011 annual report. Consider the following:

Fuel and propulsion expenses increased $18.6 million,
or 14.5 percent. Fuel expenses increased $16.2 million, or 19.4 percent, as a result of a $0.52 per gallon increase in the cost of diesel fuel. Propulsion expenses increased $2.4 million, or 5.4 percent, reflecting an increase in charges from the National Railroad Passenger Corporation (Amtrak) for traction power on the Northeast Corridor rail line. Utilities expenses decreased $5.7 million, or 12.4 percent, as a result of reduced expenses for non-propulsion electricity, heating gas and telecommunications.

Fuel expenses increased nearly 20% as a result of a major rise in diesel fuel costs.

What's particularly infuriating is that getting fuel economy specifications for various buses in service is quite difficult. MCI, which produces the bulk of buses NJ Transit operates, does not include a fuel economy figure for its buses, including its most current iteration of the D series (the most common bus in NJ Transit operation).

Despite claims that fuel economy standards could be relatively easy to implement in buses and trucks, it seems that fuel economy standards and improving fuel economy in bus fleets is far more difficult to achieve. For starters, it might be worth it for the EPA to focus on requiring manufacturers to list the fuel economy for its vehicles so that customers - transit agencies - can decide how best to spend the money rather than to continue working with manufacturers who have always provided vehicles albeit with not the best fuel economy. If a transit agency is working with a manufacturer that already provides good fuel economy, so much the better but there's no way to know.

Fact is that with fuel costs continuing to rise, this will eat away at fare increases and transit budgets despite higher demand. NJ Transit should do more to inform its customers and manufacturers of its needs to have higher fuel efficiency vehicles to maximize its investment in its bus fleet.

LED Bulb That Won Government Contest To Go On Sale

"LED Bulb That Won Government Contest To Go On Sale" is how headlines should read, but the Washington Post and right wingers are instead claiming that this is a government subsidy - emphasis on the subsidy - and that the LED bulbs are more expensive than those that are currently on the market.

Nothing quite like mixing apples and oranges.

First a bit of background. Legislation enacted during the Bush Administration called for the phasing out of incandescent bulbs, starting with the 100 watt and moving down to lower wattage bulbs in the course of a couple of years.

The whole idea was to improve energy efficiency in lighting and to reduce dependency on foreign energy sources. It's a wholly laudable idea and a CFL equivalent to a 100 watt bulb uses a fraction of the energy with the same light output (in lumens). LED bulbs offer the promise of a comparable savings over CFLs, with less concern over releases of mercury that are used in CFL (and even on that point, rules now restrict and limit mercury within the bulbs). LED bulbs would also last significantly longer than CFL and wouldn't suffer from the problems that many CFL bulbs do in terms of time to warm up to full temperature, change in light color as the bulbs age, etc.

However, LED bulbs cost more - a lot more - than CFL bulbs, but the costs are expected to drop as production increases and economies of scale take hold.

To help spur domestic manufacturing of LEDs, which are sophisticated pieces of electronics, the federal government came up with a contest - $10 million to the winning design.

The L Prize was meant to ease this transition by enticing manufacturers to create affordable bulbs to replace the most common type, the traditional 60-watt.

A Philips spokesman declined to talk in detail about the bulb or its price because the product has yet to be formally launched. It is expected to hit stores within weeks and is available online. But the spokesman said the L Prize bulb costs more because, as the contest required, it is even more energy-efficient, running on 10 watts instead of 12.5 watts. It is also brighter, renders colors better and lasts longer.

Still, the contest set price goals. According to the L Prize guidelines, manufacturers were “strong­ly encouraged to offer products at prices that prove cost-effective and attractive to buyers, and therefore more successful in the market.” The target retail price, including rebates from utilities, was to be $22 in the first year, $15 in the second year and $8 in the third year.

Energy Department officials defended the award, saying that they expect the cost of the L Prize bulbs to drop over time. “The L Prize competition played a critical role in driving manufacturing and engineering innovations in the U.S. lighting industry and helping to make the next generation of energy-saving LED lighting options more affordable for con­sumers,” said department spokes­woman Niketa Kumar.

This is a contest along the lines of the X Prize to develop private reusable spacecraft. It's meant to spur development in an area, and it allows for multiple manufacturers to consider ways to improve manufacturing and development.

So, even if the company that won the prize doesn't succeed in its business goals - other companies that participated in the contest might do well because of insights gained as a result of that participation.

Still, it's going to be hard for a domestic manufacturer to move ahead against competition from LEDs manufactured in places like China or India, where manufacturing costs are far lower.

It's meant to spur interest and development in alternative lighting to fuel-hog incandescents and on that point, it's going to save consumers quite a bit of energy costs over the long run.

Power Remains Out For Millions In Northeast; Connecticut Remains Hardest Hit

While I may have gotten power restored yesterday, millions of other people in the NYC metro area and up into New England are still suffering for lack of power.

PSE&G has been ramping up its response, and they've got more trucks and equipment stashed at the parking lot for Garden State Plaza than when they used it as a staging area for Hurricanes Irene and Lee. They're using the lot to stash equipment ranging from poles and transformers to power lines and other key equipment to get the distribution lines up and running.

Connecticut Light and Power is saying that it hopes to get power restored to 99% of its customers by Sunday. There are also reports that CLP's response may have been slow because the company hadn't paid contractors for work done during the storm response to Hurricane Lee and Irene.

On Tuesday, Butler also said that he was aware of reports that a slow response from out-of-state contractors who were hesitant to travel to Connecticut to aid in power restoration was because they had not been paid from their work during tropical storm Irene.

When asked if the non-payment had been an issue that prompted the contractors to avoid showing up sooner in Connecticut this week, Butler said, "I'm not aware that it has been.''

"I know our customers are extremely frustrated,'' Butler said. "It's not a pleasure to have customers without power.''

He added, "Unlike Irene, it's cold at night. ... We recognize the frustration.''

Butler is the COO of CLP; and the company better be looking at revisiting the policy in light of the devastating outages that affected all parts of Connecticut and nearly took CLP off the grid entirely.

Trying to pin the blame on the lack of mutual aid from PSE&G or Con Ed makes no sense, not when utilities up and down the East Coast from Pennsylvania, New Jersey, and New York were struggling to deal with millions of outages themselves. PSE&G was bringing in crews from Ohio and elsewhere to assist; so too was Con Ed; yet CLPwas finding it difficult to track down mutual assistance? That would appear to have more to do with the CLP company policy than the mutual assistance companies.

Even the feds are noticing that the storm response is slower than during Irene, particularly in Connecticut:

Bryan says utility companies didn't have time to get additional workers from other regions in place before the snowstorm like they were able to do before Irene in August. The companies had several days to prepare for Irene and only a few days to prepare for the snowstorm, which hit the region harder than was forecast. At midweek last week, some forecasters said the storm was going to miss New England.

Thousands of extra crews from across the country are now helping to restore power in the Northeast, where some utility customers aren't expected to get their electricity back until next week.

"When you know you've got a hurricane coming, part of the mutual assistance package is to pre-stage crews," Bryan said. "So after the hurricane has come and gone, you already have crews on the outskirts ready to come in and start working. … This storm hit, and these crews were not mobilized."

Six thousand extra utility crews were either working in the Northeast on Tuesday or getting close to arriving, officials said.

Connecticut Gov. Dannel P. Malloy, who asked the Department of Energy for help in coordinating the cleanup and power restoration response, said Tuesday that he was disappointed that the number of out-of-state crews helping in the state was lower than expected. A spokeswoman for the governor said he wasn't criticizing the utilities' response, just trying to do everything he could to get the power on quicker.

About 700 extra workers on Tuesday were helping the 200 regular crews of Connecticut Light & Power Co., the state's largest utility, which had requested 1,000 additional crews. The weekend storm caused more than 830,000 outages in the state — a record — and about 650,000 customers remained in the dark Tuesday.

Bryan said it appeared there were problems in the way extra workers were being distributed in the region.

"If you look at the outages in Connecticut, which basically equal the outages of all the other places combined, you really don't have yet a fair distribution of workers, mutual assistance teams out here doing this," Bryan said.

CLPadmits that they didn't request mutual assistance before the storm hit, as they did in preparing for Hurricane Irene. That was a serious mistake on their part, and one of the reasons why it is going to take as long as it is for power restoration.

The latest figures on outages is here.

North Jersey Still Suffering From Widespread Power Outages

For a second straight day, Northern New Jersey is without power across much of the region following the deadly nor'easter that left snows of nearly two feet in some places, but the lasting effects are the thousands of trees that were downed or damaged as a result of the heavy snow combined with leaves till being on the trees.

That's a recipe for disaster - taking out power line after power line. The nasty weather and snow further hampers the efforts to restore power since power lines block roads that have to be plowed so that crews can get to where they have to repair lines. You had to clear lines so that the plows could get through. It was the proverbial chicken or egg problem for some parts of New Jersey, Connecticut, Massachussetts (which saw some areas get 2+ feet of snow) and the Hudson River Valley in New York.

As with the recover from Hurricanes Irene and Lee, people are wondering why utilities aren't being forced to locate utilities underground, where they wouldn't succumb to weather events like this every time the wind blows.

It's a good question and states and localities have a patchwork of rules regarding utility hookups.

Some require that new developments place utilities underground at the developers' expense. Others have no requirements.

It all comes down to cost.

Placing the lines underground may be more costly at the outset - 8-10 times more expensive than running lines on utility poles. Those are costs that are passed on to utility consumers. The underground lines are also potentially more expensive to replace as their life expectancy isn't nearly as long as overhead lines under normal conditions. Also, power restoration after floods are extremely troublesome for underground lines. Whereas a flood event may leave the overhead lines undisturbed, a flood for underground utilities may requires days or weeks of work to restore power.

Thus, it's a balancing act as to whether a given area would benefit from overhead or underground lines.

However, with the recurrence of major outages in the area, it's time that the utilities reconsider the overhead lines in troublesome areas.

Moreover, all the utilities should look towards ramping up their tree maintenance programs to prune back trees in and along their rights of way to prevent downed trees taking out entire towns and communities.

Germany Shuts Down Nuclear Plants With No Plan For How To Make Up Energy Difference

In the wake of the Fukushima nuclear disaster and the Japanese quake/tsunami, Germany made the rash decision to shutter nuclear power plants across the country.

I say it was a rash decision, because instead of figuring out whether the country could actually handle the decision to take that many nuclear power plants offline, it decided that it would take the plants offline and see whether the country could handle the loss after the fact.

Nuclear plants have long generated nearly a quarter of Germany’s electricity. But after the tsunami and earthquake that sent radiation spewing from Fukushima, half a world away, the government disconnected the 8 oldest of Germany’s 17 reactors — including the two in this drab factory town — within days. Three months later, with a new plan to power the country without nuclear energy and a growing reliance on renewable energy, Parliament voted to close them permanently. There are plans to retire the remaining nine reactors by 2022.

As a result, electricity producers are scrambling to ensure an adequate supply. Customers and companies are nervous about whether their lights and assembly lines will stay up and running this winter. Economists and politicians argue over how much prices will rise.

“It’s easy to say, ‘Let’s just go for renewables,’ and I’m quite sure we can someday do without nuclear, but this is too abrupt,” said Joachim Knebel, chief scientist at Germany’s prestigious Karlsruhe Institute of Technology. He characterized the government’s shutdown decision as “emotional” and pointed out that on most days, Germany has survived this experiment only by importing electricity from neighboring France and the Czech Republic, which generate much of their power with nuclear reactors.

Then there are real concerns that the plan will jettison efforts to rein in manmade global warming, since whatever nuclear energy’s shortcomings, it is low in emissions. If Germany, the world’s fourth-largest economy, falls back on dirty coal-burning plants or uncertain supplies of natural gas from Russia, isn’t it trading a potential risk for a real one?

The world is watching Germany’s extreme energy makeover, as politicians from New York to Rome have floated their own plans to shut or shelve reactors.

The International Energy Agency, generally a fan of Germany’s green-leaning energy policy, has been critical. Laszlo Varro, head of the agency’s gas, coal and power markets division, called the plan “very, very ambitious, though it is not impossible, since Germany is rich and technically sophisticated.”

Even if Germany succeeds in producing the electricity it needs, “the nuclear moratorium is very bad news in terms of climate policy,” Mr. Varro said. “We are not far from losing that battle, and losing nuclear makes that unnecessarily difficult.”

Experts are expecting to see blackouts, brownouts, and economic losses as a result of a power generation system that is now far less robust and far more susceptible to disruptions because so much generating capacity is being taken offline in such short time without any new capacity being brought online.

The problems may not be felt immediately within Germany's borders, but they will be soon enough as other countries scramble to find generating capacity and are more likely to turn to gas and coal plants to make up the difference. The net result will be a worsening of air quality over Europe, and despite advances made on wind and solar power, there are times when those sources will not be sufficient to provide capacity.

Turning the back on nuclear power is a tremendous mistake, and one that Germans and the rest of Europe will come to regret.

Scattered Power Outages As Heat Wave Bakes Big Apple

Con Ed is reporting scattered power outages as its equipment literally fries in the record-breaking heat hitting the New York City metro area. Newark hit a record of 106. Central Park hit 103.

The NY ISO is currently distributing 33,907.9 MW while the PJM is only hitting 150,363 MW.

Power Grid Groans Under Strain

Yesterday saw near record demand for power despite a sour economy in the New York City metro area even as record demand was hit on the PJM grid that distributed power through much of the Middle Atlantic states. Today is expected to be even hotter with records likely to fall through much of the NYC Metro area - meaning even greater demand.

Already, Con Ed is warning customers in parts of the Westchester and Queens that they may see voltage reductions (aka brownouts) as the grid is ill-equipped to deal with the strain even after billions of dollars have been poured into infrastructure improvements following major failures during the 2006 summer that led parts of Queens to be without power for more than a week.

There were several scattered outages as underground lines burned out due to the tremendous strain and heat but nothing widespread.

Let's hope it stays that way.

Peak usage is expected between 5-6pm.

Real time PJM grid: 140,598 MW.
Real time NY ISO: 32,139.0 MW

UPDATE:
Around 12:30, the NY ISO is reporting 33,835.2 MW while the PJM is showing 148,733 MW, but that's less than what PJM predicted for this time 153,372 MW. (PJM has a chart showing actual versus predicted usage).

UPDATE:
It's nearly 3:30PM, and the NY ISO is reporting 33,919.6 MW. PJM is showing 151,059 MW (peak load so far today of 152,024 MW). With record temperatures falling all around the NYC metro area, the NY ISO is likely to break its prior records.

That Sound You Hear Is The Power Grid Groaning

Power grids throughout much of the US are groaning under the tremendous power demands due to the heat wave stretching across the country. In New York, the current load is 32905.5 MW (as of around 2pm) according to the NYISO, which operates the grid in New York. Other operators are expecting record or near record demand:

PJM, which operates the biggest power grid in the U.S. Mid-Atlantic and Midwest, forecast electric usage would peak at 154,300 MW on Thursday, which is much higher than the 149,000 MW peak the grid forecast for this summer but still below the 158,448 MW peak record set in August 2006.

New York ISO, which operates the state's grid, forecast the peak would top 33,200 MW Thursday, which is higher than the 32,700 MW peak the grid forecast for the summer but still a little shy of the 33,939 MW peak record set in August 2006.

In New England, ISO New England forecast demand this week would peak on Friday at about 27,400 MW, which is just below the grid's 27,500 MW peak forecast for the summer and the 28,130 MW peak record set in August 2006.

In Ontario, the grid operator forecast demand Thursday would top 25,900 MW, which is much higher than the 23,500 MW peak the grid forecast for this year summer but still below the 27,005 MW peak record set in August 2006.

One of the reasons that the power demands aren't as high as their 2006 peaks has to do with the fact that the ongoing sluggish economy has meant that there are fewer businesses drawing power combined with more energy efficient products being utilized across the marketplace (lighting, air conditioning, computers, and other consumer and business products). Efforts for voluntary reduction of power consumption are also being utilized by power companies to reduce the strain on their grids.

UPDATE:
As of around 3pm, the NY ISO is reporting a Real-Time Load of 33156.5 MW. That's coming close to the peak predicted by the ISO earlier today, but expect the number to rise as people begin leaving work for home and turning on their air conditioners.

PJM interconnect is showing 156,995MW and closing in on their peak predictions.

UPDATE:
4:10 PM - and the PJM is showing 158,122 MW while NY ISO is showing 33257.8 MW. In both instances, they've exceeded their usage estimates from earlier in the day, and we've still got another two hours before the usage slides back. Power usage is expected to be even higher as we go into the weekend meaning that the odds for power problems will increase in the next few days as equipment folds under the severe heat and could cause localized brownouts and blackouts.

EPA Promulgates New Smokestack Emission Rules

The EPA has promulgated new rules that should improve air quality for 240 million people, which will take effect beginning in 2012. It is a rewrite of a rule that the EPA passed during the Bush Administration but was invalidated by a federal judge in 2008.

The new regulation, known as the Cross-State Air Pollution Rule, is essentially a rewrite of a rule issued by the administration of President George W. Bush that was invalidated by a federal judge in 2008. The regulation, known popularly as the transport rule because it involves emissions that are carried eastward by prevailing winds, is a significant toughening of an acid rain program that was part of the 1990 amendments to the Clean Air Act.

The agency said that utilities could meet the new standards at a modest cost using commonly available technology like smokestack scrubbers. Under some E.P.A. projections, the new rule would create jobs in pollution-control business and significantly improve labor productivity by reducing the number of workdays lost to respiratory and other illnesses.

The utility industry and many Republicans in Congress, however, contend that the new rule, along with other pending E.P.A. air quality regulations, will require the closing of dozens of aging coal plants and impose heavy financial burdens on power companies and their customers.

“The E.P.A. is ignoring the cumulative economic damage new regulations will cause,” said Steve Miller, president of the American Coalition for Clean Coal Electricity, a group of coal-burning utilities. “America’s coal-fueled electric industry has been doing its part for the environment and the economy, but our industry needs adequate time to install clean coal technologies to comply with new regulations. Unfortunately, E.P.A. doesn’t seem to care.”

An industry-financed study found that new air pollution rules would cost tens of thousands of jobs and raise electricity rates by more than 20 percent in some parts of the country.

Senator James M. Inhofe, Republican of Oklahoma, called the new rule an impediment to economic growth and job creation.

“True environmental progress will not come from these costly, heavy-handed regulations that harm the very people E.P.A. claims to protect,” Mr. Inhofe said in a statement. “Real progress on clean air is best achieved through common-sense multipollutant legislation that streamlines the Clean Air Act’s many redundant and overlapping mandates.”

“The bottom line,” he added, “is that reducing emissions does not have to be this expensive — the Obama E.P.A. just wants it to be.”

Supporters of the new rule said that any costs would be more than offset by health and other benefits. The E.P.A. estimates the annual benefits of the cross-state pollution rule at between $120 billion and $280 billion a year by 2014.

The Obama Administration and the EPA believe that the costs for improving the emissions to be less than $1 billion, and that it would save $120 to $280 billion a year based on fewer health-related issues downwind of the emitters (estimated at 34,000 premature deaths, 15,000 nonfatal heart attacks, hundreds of thousands of cases of asthma and other respiratory ailments every year.)

That's a 120-1 benefit to cost ratio using the most conservative savings figure. Even if the Administration overstated the savings by a factor of 10, and the savings would be $10 billion a year, it would be considerable for a limited expenditure of $1 billion. Heck, even if the costs were underestimated by a similar margin, we'd still see benefits outweighing the costs.

The main reason the opponents consider that power costs would rise is that the energy generated by coal-plants is typically cheaper than other sources. Those regions most heavily reliant on coal power would see those energy costs rise while those relying on alt-energy, hydropower, or nuclear power would see far less costs.

It would also affect the economy of states like West Virginia, which are home to significant coal industries. Needless to say, those states are likely to fight back against the rules and seek to have them watered down.

Instead of fighting to water down the rules, the states that rely on coal power should be using this as an opportunity to push alt-energy opportunities and to pitch their states as havens for manufacturing solar or wind power generators and their technologies. What we are seeing is these states are trying to hang on while jobs continue to hemorrhage from those industries.

Israeli Tech Company Figures Out Way To Harness Wasted Energy From Trains

An Israeli company has figured out a way to harness the power of moving locomotives by placing pads underneath the train rails to capture the power as the train glides by.

Israeli-based technology developer Innowattech specializes in the development of patented IPEG Piezo Electric Generators, which use the piezoelectric effect–the ability of a material to produce electricity when under mechanical stress–to retrieve the wasted energy vehicles create along roads, runways and rail.

This kind of technology would help build a generating capacity using energy lost from other sources - such as driving down roads or bridges.

Their proof of concept is an operational system on Israel's rail network. The piezoelectric system also can provide health data about the mode of transportation such as speed, weight, direction, and track condition among other things.

Cuomo Administration Seeks To Close Indian Point, But Lacks Suitable Energy Generating Alternatives

Governor Andrew Cuomo, fresh off his major win on the Marriage Equality Act, is setting his sights on closing the Indian Point nuclear power plant 35 miles north of New York City. The state recently adopted a new power plant siting law, which conceivably would make constructing new power generating facilities easier in the state, but the problem is multifold.

Mr. Cuomo is not the first politician or the first governor to take that position, but newly passed state legislation will make it easier for him to do so.

The meeting was the first high-level meeting between Entergy, the company that runs Indian Point, and the Cuomo administration, and it was convened at Entergy’s request.

Mr. Cuomo has repeatedly taken the position in speeches that he wants to close the plant. But his administration had not delivered the message so directly to the company, or in such strong words, and company officials left the meeting alarmed.

The encounter seemed to mark a heightened determination to close the plant, and recent events put considerable leverage in the governor’s hands to make his wish a reality.

On the day of the meeting, lawmakers were in the process of approving legislation to streamline the siting of new power plants in New York, a step that, for the first time in nearly a decade, makes replacing Indian Point and the huge amount of power it generates more feasible. The last siting law expired at the beginning of 2003.

At the same time, the licenses for Indian Point’s two reactors expire in 2013 and 2015. The state can derail the process by refusing to provide permits related to the plants’ use of water from the Hudson River as a coolant. Last year, the State Department of Environmental Conservation rejected a crucial permit application from Entergy; the company is challenging the move.

For the Cuomo administration, closing Indian Point would be a major step toward reshaping the state’s energy policy. Replacing the plant would take years and require a long-term energy strategy. The plant produces 2,000 megawatts and provides 25 percent of the power in New York City and Westchester.

Public worries about the plant, in Buchanan, about 35 miles north of Midtown, flared after the recent catastrophe at the Japanese nuclear plant in Fukushima, and after a report highlighting the Indian Point plant’s proximity to a fault line. But replacing it with natural gas plants or other more conventional options could bring its own environmental and emissions concerns.

It would take years before power plants are built that can replace the 2,000 megawatts produced by Indian Point. The plant produces 25% of New York City and Westchester's power needs. That can't be easily replaced and the alternatives are likely to worsen air quality in the region or cause other environmental issues.

Then, there's the issue of constructing new transmission lines that would bring power down from Canada and upstate New York. Those power lines are consistently opposed by NIMBY-types and further limit power producers and users from getting power - even if it's from hydropower or green-power sources like wind or solar.

The Big Draw

Forget about televisions, washing machines, dryers, or even refrigerators. The ubiquitous set-top boxes (standard, HD, or DVR) necessary to run cable/fiber television programming is turning into the top power draw in homes throughout the United States.

Even when turned off, they draw power far in excess what anyone could possibly imagine.

Over the course of a year, each boxes can draw more power than a 21 cubic foot refrigerator. When homes have multiple boxes, the numbers add up quickly.

There are 160 million so-called set-top boxes in the United States, one for every two people, and that number is rising. Many homes now have one or more basic cable boxes as well as add-on DVRs, or digital video recorders, which use 40 percent more power than the set-top box.

One high-definition DVR and one high-definition cable box use an average of 446 kilowatt hours a year, about 10 percent more than a 21-cubic-foot energy-efficient refrigerator, a recent study found.

These set-top boxes are energy hogs mostly because their drives, tuners and other components are generally running full tilt, or nearly so, 24 hours a day, even when not in active use. The recent study, by the Natural Resources Defense Council, concluded that the boxes consumed $3 billion in electricity per year in the United States — and that 66 percent of that power is wasted when no one is watching and shows are not being recorded. That is more power than the state of Maryland uses over 12 months.

“People in the energy efficiency community worry a lot about these boxes, since they will make it more difficult to lower home energy use,” said John Wilson, a former member of the California Energy Commission who is now with the San Francisco-based Energy Foundation. “Companies say it can’t be done or it’s too expensive. But in my experience, neither one is true. It can be done, and it often doesn’t cost much, if anything.”

Reducing the power consumption for these devices is critical to reducing power consumption and need for additional power. There's no reason that these devices should draw as much power as they are. The cable providers claim it is necessary to provide programming and updates without interruption, but this would appear to be a software issue and if the boxes are designed to improve efficiency, the power consumption issue could be solved.

After all, boxes in Europe draw a fraction of the power.

It's past time for the cable companies and providers to get on the ball and reduce power consumption for their devices.

Energy Department To Release 30 Million Barrels Of Oil From Strategic Petroleum Reserve

The US Energy Department is set to release 30 million barrels from Strategic Petroleum Reserve. That sounds like a lot until you realize that 30 million barrels is equivalent to 3 1/3 days of transportation use.

The justification is that the ongoing situation in Libya has reduced production by 1.5 million bbl a day.

I see this as a measure to help Europe and specifically to continue the NATO mission against Mumar Khadafi. Europe gets imports from Libya and the lost production is affecting the economy in Europe with higher energy costs. So, while the SPR drawdown will not affect prices here in the US, it is meant to assist the Europeans deal with the ongoing fighting in Libya and ongoing unrest in the rest of the Middle East and oil-producing countries.

Prices at the pump in the US have moderated and even started to slide down despite the ongoing unrest overseas. Demand has moderated as people have adjusted to higher energy costs and people are shifting their spending to compensate for the higher costs.

NY Times Jumps On Solar Panel Eyesore Bandwagon

New Jersey papers like the Record and Star Ledger have been full of complaints about PSE&G's nearly $1 billion project to put solar panels on its power transmission poles in the largest distributed power generation project in the US. Each of the panels would generate 200 watts of power, and together the 200,000 panels would generate 40 megawatts of power. Now, the New York Times weighs in with its own piece about the project.

That's power that doesn't have to come from coal fired or gas burning power plants. It means that on high usage days, those coal and gas plants don't have to kick in to provide peak power. Instead, these panels are providing a steady stream of power into the grid on the days when power is most in demand.

Yet, all too many people are latching on to the fact that the panels are somehow ugly.

Sorry, but they are no more ugly than the transmission poles that deliver the power, and are far less ugly than the endless stream of particulates and emissions from power plants, or the unending stream of coal shipments by rail or barge to power plants.

It may be a harsh realization that these are new panels and installations, but they are going to settle into the background. In reality, this is little more than a rehash of longstanding NIMBY arguments that prevent an honest assessment of power generation and distribution in the US. In other words, these same people claim that they're all for solar power, except when it's in their own backyard so that it would be better if it was located somewhere else.

As for claims that they will somehow unduly influence real estate values, at a time when prices are steady or dropping (as in Fair Lawn where I live - and Bergen County generally), the installation of solar power isn't the driving factor but some homeowners may latch on to the belief that the solar power cells are driving prices down because they can't accept that the real estate market is soft.

An Energy Consumption Paradox and Tax Consequences

The New York Times has an interesting article today about how increased energy efficiency of a wide range of products can lead to increased consumption of energy and materials - a paradox.

But a growing number of economists say that the environmental benefits of energy efficiency have been oversold. Paradoxically, there could even be more emissions as a result of some improvements in energy efficiency, these economists say.

The problem is known as the energy rebound effect. While there’s no doubt that fuel-efficient cars burn less gasoline per mile, the lower cost at the pump tends to encourage extra driving. There’s also an indirect rebound effect as drivers use the money they save on gasoline to buy other things that produce greenhouse emissions, like new electronic gadgets or vacation trips on fuel-burning planes.

Some of the biggest rebound effects occur when new economic activity results from energy-efficient technologies that reduce the cost of making products like steel or generating electricity. In some cases, the overall result can be what’s called “backfire”: more energy use than would have occurred without the improved efficiency.

Another term for backfire is the Jevons Paradox, named after a 19th-century British economist who observed that while the steam engine extracted energy more efficiently from coal, it also stimulated so much economic growth that coal consumption increased. That paradox was mostly ignored by modern environmentalists, who have argued that rebound effects are much smaller today.

But economists keep finding contrary evidence. When Britain’s UK Energy Research Center reviewed more than 500 studies on the subject, it rejected the assumption that rebound effects were small enough to be disregarded. The author of the 2007 report, Steve Sorrell, noted that these effects could, in some circumstances, “potentially increase energy consumption in the long term.”

What does this have to do with tax policy?

Everything. Think about how many products are taxed, whether it is motor fuels or energy consumption or tobacco products and alcoholic beverages (sin taxes). Sometimes the taxes are imposed to change behaviors (sin taxes) and other times they're imposed to generate revenues for specific purposes - think motor fuel taxes for funding infrastructure.

Well, now that vehicles are more efficient, the fuel taxes do not generate the revenues they once did. To maintain the same level of revenues, taxing authorities and budget officials have to hope that either drivers drive more or taxes have to be raised to fill the gap. As the price of oil has increased, pressure is exerted on reducing the consumption even further so the revenue generated declines - leaving a gap in budgets.

The same phenomenon occurs with home heating and electricity - increased efficiency of HVAC, appliances, and lighting systems means that tax revenues decline. The only way to offset the declines is to either increase the taxes or hope that users find other ways to expend energy (home theater systems, computers and more gadgets that require electricity).

Some states and even some in Congress are looking at shifting from these forms consumption taxes - although that too is going to cause great consternation. Imposing per-mile driving taxes rather than fuel taxes (such that a driver is taxed based on the miles driven in a given period rather than on the motor fuel consumed - which would greatly decline if electric or near electric vehicles are widely adopted) has led to pushback over how such a system would be managed and how it would lead to greater governmental control.

A curious finding when examining motor fuel tax revenues for the nation over the past 30 years is that New Jersey took in more tax revenue than New York despite having a far lower tax rate. That's pretty much been the case since 2002 - so that would tend to discount the claim that the tax rate is the issue but rather that when users have an option to purchase motor fuel at a lower price, they'll do so at a greater quantity. It's a matter of economics. If you have the option of filling up your tank for 15-20 cents less per gallon by driving a couple of miles into New Jersey, you'll do so since you'll save a couple of bucks per tank filled. That's revenue New York (and Pennsylvania) loses to New Jersey where those states have higher fuel taxes.

The current tax structure highlights the problems with consumption taxes, and how greater efficiencies can lead to lower revenues. Yet, alternatives are themselves a form of consumption tax that may lead to unintended consequences.

Such are the perils of an out-of-date tax policy.

Oil Shock: Saudis Overstating Reserves and Capability To Pump Oil By 40%?

According to a report in the Guardian, the Saudis may have been overstating their reserves and capability to pump oil by 40%. That would sorely undermine the Saudis' ability to keep oil prices relatively stable at around the $100 price point.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.

However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco's 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.

According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as "peak oil".

Husseini said that at that point Aramco would not be able to stop the rise of global oil prices because the Saudi energy industry had overstated its recoverable reserves to spur foreign investment. He argued that Aramco had badly underestimated the time needed to bring new oil on tap.

If this can be confirmed, it would likely send prices much higher in the short and long term, and hamper the global economy, which still relies heavily on oil supplies for transportation, food production, and the petrochemical industry.

This development would necessitate US and foreign countries to develop alternative energy resources as quickly as possible to minimize the disruption of energy supplies and to keep the fragile global economy from sliding back into a recession or dropping into a depression. Thus far, the one saving grace has been that the recession in the US and the slow pace of growth have kept the energy prices somewhat contained by reducing demand in the US. When US demand picks up, the oil prices will once again move upwards.

Wind and Solar Power Projects Thwarted By Red Tape; NIMBY Preventing Transmission Line Projects

Accelerating the construction of wind power and/or solar power projects around the country requires having not only the proper sites to take advantage of the wind or sun, but access to transmission lines to deliver the power to where it is needed.

Texas is a huge market for wind power, but much of that capacity is untapped because of opposition to building new transmission lines.

The lack of transmission lines — and the relatively low price of natural gas — has thwarted the ambitions of wind-power advocates to expand the use of this alternative energy source in Texas. The oilman T. Boone Pickens, for example, bet heavily on wind a couple of years ago, ordering hundreds of turbines and announcing plans to build the world’s largest wind farm in the Panhandle at a cost of up to $12 billion. He later scaled back, canceling some of the turbine orders, giving up his land lease and saying he was looking elsewhere to build.

To encourage others, the state is moving forward on a contentious project to erect $5 billion worth of transmission wires to connect the turbines to the cities that need power. On Thursday, state regulators met in Austin and approved the route of a controversial line that will run about 140 miles through the Hill Country, one of the state’s most scenic regions.

Construction of the line — a project of the Lower Colorado River Authority that will run from Schleicher County to a substation near Comfort — should start next year. Last year, vigorous opposition, by landowners, wealthy newcomers and old-time families, succeeded in derailing plans for another line that the state had wanted to build through the area. Instead, the existing electric infrastructure will be upgraded to carry a greater load. The Public Utility Commission, which is overseeing the process, has also canceled plans for an additional segment of the Hill Country line discussed at the meeting Thursday.

“All Texans love their land,” Barry T. Smitherman, the commission chairman, said in an interview a few days ago. During the process of planning the routes for transmission lines, Mr. Smitherman said, “we didn’t please everyone, but I think with each of these we really tried to work hard to make it as acceptable as possible for the landowners.”

Texas embarked on the transmission line project, known as Competitive Renewable Energy Zones, several years ago. The need was clear: in West Texas, home to the vast majority of the state’s wind farms, so many turbines have been built over the past decade that some must be shut down during windy periods because there are not enough wires to transport the power. Texas is the leading wind-power state by far, with nearly three times as much capacity as the next-closest state, Iowa. Once built, the new lines are expected to span more than 2,300 miles.

The Hill Country is not the only part of Texas where resistance to new power lines has been fierce. Landowners near Palo Duro Canyon State Park in the Panhandle also put up vigorous opposition. Their arguments against one of the proposed lines prevailed, so it will be built elsewhere and not cross the dramatic canyon landscape. Nonetheless, another line could still go across the canyon. Residents of Denton County, north of Fort Worth, worry that a proposed line could cross landmarks like a park area called the Greenbelt or a Girl Scout camp.

The arguments against the transmission lines mirror those of the wind turbines or solar collectors - that their presence mars the landscape.

Then, there's the issue of red tape in getting permits and approvals to build solar power projects. The amount of bureaucracy and red tape to build solar power projects - including retrofits on existing buildings, is curbing wider acceptance and implementation because of the added costs.

Toyota Developing Hybrid Motors That Don't Rely On Rare Earth Elements

Rare earth elements are considered critical to a wide range of super efficient motors, transformers and environmentally friendly applications including hybrid motors and wind turbines.

There are scattered deposits of rare earth elements around the world, but China has done quite a bit to corner the market in recent years.

Toyota, which is a worldwide leader in hybrid motor applications, is developing a new hybrid motor that doesn't rely on those rare earth elements. That could lead to significantly cheaper hybrid power sources and reduced costs for wind turbines and other energy generating applications.

The largest seller of Hybrid vehicles is developing an alternative motor for the upcoming electric and hybrid cars that would not require the rare earth metals. The inductive motors to be introduced by Toyota Motor Corporation (NYSE:TM) will be lighter and more efficient that the present magnet-type used in Prius.

Hanson, who is based at Toyota Motor Corporation (NYSE:TM)’s U.S. unit in Torrance, California, said, “It’s a long-term approach. When you’re looking at a geopolitical issue like rare-earth supply, that can lead to developments that create very good solutions.”

It would appear that Toyota doesn't want to deal with a tight and restrictive supply of rare earth elements coming out of China and wants to find a cheaper source of materials with which to build its hybrid engines on what will be a growing class of hybrid vehicles under the Prius badge.

The company believes that it is on the verge of a breakthrough although several other companies are working on similar products.

China produces about 95% of the world's supply of neodymium and last summer the country began restricting exports. In December, China announced a 67% increase in export tariffs on the metal and has declared new limits on exports this year.

Neodymium prices have quadrupled in the past year, according to Lynas Corp., an Australian company developing a giant mine and refinery for the material.

Rare earth minerals are a grouping of 17 chemically similar elements that are usually found together in ore and are refined and split apart. They are used in magnets and semiconductors and a host of other technologies. The U.S. and Australia have deposits of them but lack the expertise in extracting and refining the minerals.

For Toyota, getting around this barrier is crucial. The auto maker at this week's Detroit car show announced the expansion of its hybrid-electric lineup by adding two new Prius variants and plans to spread the technology to all of its models in the next decade.