The Climate Leadership and Community Protection Act (Climate Act) has a legal mandate for New York State greenhouse gas emissions to meet the ambitious net-zero goal by 2050. On April 1, 2022 the Department of Environmental Conservation’s Strategic Communications Director for Climate sent an email to the mailing list of people who have signed up to learn about climate news and developments. On the same day I ran across a superb summary entitled Inconvenient Truths About Energy. This post summarizes the Denver Gazette perspective piece by Chris Wright in the context of the Climate Act.
I have written extensively on implementation of the Climate Act because I believe the ambitions for a zero-emissions economy outstrip available renewable technology such that it will adversely affect reliability and affordability, risk safety, affect lifestyles, and will have worse impacts on the environment than the purported effects of climate change in New York. New York’s Greenhouse Gas (GHG) emissions are less than one half one percent of global emissions and since 1990 global GHG emissions have increased by more than one half a percent per year. Moreover, the reductions cannot measurably affect global warming when implemented. The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.
Climate Act Background
The Climate Act establishes a “Net Zero” target by 2050. The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”. They were assisted by Advisory Panels who developed and presented strategies to the meet the goals to the Council. Those strategies were used to develop the integration analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants that quantified the impact of the strategies. That analysis was used to develop the Draft Scoping Plan that was released for public comment on December 30, 2021.
Climate Action Council Draft Scoping Plan Comments and Toolkit
In 2022, the Climate Action Council is required to finalize the Scoping Plan. At the first Climate Action Council meeting on March 3, 2022 (recording here) the activity plan overview shown below mentioned a plan to rollout communications and educational materials. The email sent on April 1 under the title “Climate Action Council Draft Scoping Plan Comments and Toolkit” is part of the rollout of those materials.
I agree with the letter’s point that encouraging all New Yorkers to review the Draft Scoping Plan and share comments by June 10, 2022 is important and necessary. According to the text:
This email serves as a resource and toolkit on how you can comment and be involved in the process, and to help the Council spread the word and encourage others to weigh in on the Draft Scoping Plan. An overview of the plan for your review and use can be found here. Additional overview slide decks specific to each sector are forthcoming. There are several ways to provide public comments, with oral and written comments receiving equal weight.
1. The Council will be holding 10 public hearings, eight in-person and two virtual, in April and May. Additional information on the public hearings and the option to pre-register for hearings can be found here.
3. Comments can also be sent via U.S. Mail to Attention: Draft Scoping Plan Comments, NYSERDA, 17 Columbia Circle, Albany, NY 12203-6399.
I believe that one of the problems with the Climate Action Council is that they do not recognize the complexity, uncertainty, and ambiguity of the existing knowledge about climate change and naively believe that transitioning to zero-emissions solutions will be simple. In no small part that has been reinforced by the ignoring anyone who does not subscribe to that narrative. I think that the rollout of these communications and educational materials will continue to disregard any inconvenient issues.
The email also notes:
If you would like to request a presentation on the Draft Scoping Plan for your group or organization, please email ClimateAct@dec.ny.gov. Requests will be accommodated based on staffing and scheduling.
If you would like to be more involved in the process and help in our efforts to increase awareness about the Scoping Plan and the state’s overall climate efforts, please see the social media toolkit below, or email email@example.com with additional opportunities and/or questions. Spreading the word about this opportunity and increasing awareness of the Climate Act is crucial to the successful implementation of the law.
Unfortunately, there is every indication that the public comment process is intended to simply fulfill the requirement to have a public comment period and not develop information to improve the transition plan. Soliciting help to increase awareness and “spreading the word about this opportunity” suggests that a primary purpose for the communications rollout is propaganda. I doubt very much that the Strategic Communications Director for Climate intends this public awareness campaign to address risks to reliability and affordability.
My Citizens Guide to the Climate Act is intended to be a layman summary of the net-zero transition. I developed it to try to highlight transition risks. I have posted articles recommending books that do a much better job than I have done to explain the problems here and here. Unfortunately reading a book is a big commitment and I have been looking for a more concise description problems with the net-zero transition. I am happy to point out that Inconvenient Truths About Energy describes most of the issues that worry me.
Chris Wright is chairman and CEO of Liberty Energy, a Denver-based hydraulic fracturing company. Much of the material in this is also included in his company’s 2020 ESG report. If the article described here interests you then I recommend that report as well. There is a wealth of more detailed information supporting his assertions there.
Inconvenient Truths About Energy
The following sections reproduce the Inconvenient Truths About Energy article with my indented and italicized comments.
The energy transition is not happening. Or not nearly at the pace that everyone believes or wishes. At current rates the “transition” is set to finish in the mid-2600s. The U.N. Rio Convention and subsequent Kyoto Protocol launched the energy transition drive in 1992. Global energy consumption from hydrocarbons has grown massively since then, with market share only declining by four percentage points over the last 30 years from 87% in 1992 to 83% today. I am not celebrating this fact as I have spent years working on energy transition technologies.
Using the latest available data for New York, hydrocarbon market share has decreased from 82% to 71% over the last 30 years.
The energy transition isn’t failing for lack of earnest effort. It is failing because energy is hard, and 3 billion people living in energy poverty are desperate for reliable and scalable energy sources. Meanwhile, 1 billion energy-rich people are resistant to diminishing their standard of living with higher cost and an increasingly unreliable energy diet.
That the energy transition is hard is not recognized by most members of the Climate Action Council.
There is no “climate crisis” either. If there is a term more at odds with the exhaustive literature surveys of the Intergovernmental Panel on Climate Change (IPCC) than “climate crisis,” I have not heard it.
Climate change is a real global challenge that is extensively studied. Unfortunately, the facts and rational dialogue about the myriad tradeoffs aren’t reaching policy makers, the media, or activist groups. Or are they are simply ignoring these inconvenient truths?
For example, we hear endlessly about the rise in frequency and intensity of extreme weather. This narrative is highly effective at scaring people and driving political action. It is also false. The reality is detailed in countless publications and summarized in the IPCC reports. Deaths from extreme weather have plunged over the last century, reaching new all-time lows last year, an outcome to be celebrated. This is not because extreme weather has declined. In fact, extreme weather shows no meaningful trend at all. Deaths from extreme weather events have declined because highly energized, wealthier societies are much better prepared to survive nature’s wrath.
I completely endorse this summary. The 2020 ESG report documents these facts.
You are not supposed to say out loud that there is no climate crisis or that the energy transition is proceeding at a glacial pace. These are unfashionable and, to many, offensive facts. But let’s be honest. Energy transition ambitions must recognize reality. Otherwise, poor investment decisions and regulatory frameworks will lead to surging global-energy and food prices. This is exactly what is happening. We are here today in large part because energy transition efforts that previously encompassed solely aggressive support of alternative energy policies, economics be damned, have recently supplemented this strategy with growing efforts to obstruct fossil fuel development. Fossil fuels make the modern world possible.
The real crisis today is an energy crisis. It began to reveal itself last fall with a severe shortage in globally traded Liquified Natural Gas (LNG). The LNG crisis has not abated and it gives Russia’s Vladimir Putin tremendous leverage over Europe. Without Russian gas, the lights in Europe go out. Amid war, public outrage, and intense sanctions, Russian gas flows to Europe remain unchanged. Russian oil exports have continued with minimal interruption. The world can talk tough about sanctioning Russian energy exports, but those exports are vitally needed; hence they continue. Energy security equals national security.
The world energy system, critical to human wellbeing, requires meaningful spare capacity to handle inevitable bumps in the road. In the electricity sector, which represents only 20% of global energy but 40% in wealthy countries, this is called reserve capacity. In the oil market, spare production capacity today is shrinking and concentrated in OPEC nations like Saudi Arabia and the United Arab Emirates. Also, there is a massive global storage network in both surface tanks and underground caverns. In natural gas markets, there are both extensive underground storage reservoirs and typically spare export capacity through pipelines and large industrial LNG export and import facilities.
The last several years have seen this spare capacity whittled away due partly to lower commodity prices and poor corporate returns shrinking the appetite to invest. Excess capacity has also shrunk due to regulatory blockage of critical energy infrastructure like pipelines and export terminals. Roadblocks for well permitting and leasing on federal lands, together with a mass public miseducation campaign on energy and climate alarmism, are also stymieing hydrocarbon development. Investment capital is further constrained by a corporate Environment, Social and Governance (ESG) movement, and divestment campaigns. These factors are shrinking hydrocarbon investment below what it otherwise would be in response to price signals and outlook for supply and demand. The net result is a constrained supply of oil, natural gas, and coal, which means higher prices and greater risk of market dislocations like the one unfolding today.
High energy and food price inflation is the cruelest form of tax on the poor. After a few specific examples, I’ll return to what we should do now to reverse these damaging and deeply inequitable trends.
The Scoping Plan strategies will inevitably impact affordability and reliability and those least able to respond will be affected the most.
In denial about demand
Why does the world today suffer from a severe shortage of LNG? Demand for natural gas has been growing strongly for decades. It provides a much cleaner substitute for coal in electricity production, home heating, and a myriad of industrial and petrochemical uses. Rising displacement of coal by natural gas has been the largest source of GHG emission reductions. Unfortunately, the aforementioned factors have prevented supply from keeping pace with rising demand. Energy shortages drive rapid prices rises and have cascading impacts on everything else. Energy is foundational to everything humans do. Everything.
Perhaps the most critical use of natural gas is nitrogen fertilizer production. Roughly a century ago, two German chemists, both subsequently awarded Nobel Prizes, developed a process to produce nitrogen fertilizer on an industrial scale. Before the Haber-Bosch process innovation, nitrogen content in soil was a major constraint on crop productivity. Existing nitrogen sources from bird guano, manure, and rotating cultivation of pea crops were limited. Today, elimination of natural gas-synthesized nitrogen fertilizer would cut global food production in half.
The now six-months-long LNG crisis translates into a worldwide food crisis as skyrocketing fertilizer prices are cascading into much higher food prices. Wheat prices are already at a record high and will likely head higher as spring plantings suffer from under fertilization.
Global LNG markets are tight because rising demand has outrun the growth in LNG export capacity in the United States, now the largest LNG exporter. We have an abundance of natural gas in the United States. Unfortunately, we have a shortage of pipelines to transport this gas and LNG export terminals, preventing us from relieving the energy crisis in Europe and around the world. These pipeline and export terminal shortages are due in large part to regulatory blockage. The result is that natural gas prices in the United States and Canada are five to ten times lower than in Asia and Europe. This deeply disadvantages consumers and factories (like fertilizer factories) in Europe and Asia that rely on LNG imports to fulfill their needs.
Failed energy policies
Russia’s invasion of Ukraine did not cause today’s energy crisis. Quite the reverse. Today’s energy crisis is likely an important factor in why Russia chose to invade Ukraine now. Europe’s energy situation is both tenuous and highly dependent on Russian imports. Russia is the second-largest oil and natural gas producer after the United States. Russia is the largest exporter of natural gas, supplying over 40% of Europe’s total demand. Additionally, Russia is the largest source of imported oil and coal to Europe. Europe put itself in this unenviable position by pursuing unrealistic, politically-driven policies attempting to rapidly transition its energy sources to combat climate change. Europe’s energy pivot has been a massive failure on all fronts: higher energy costs, grave energy insecurity, and negligible climate impacts.
New York’s unrealistic, politically-driven Climate Act policies attempting to rapidly transition our energy sources to combat climate change will inevitably follow Europe’s massive failure on all fronts: higher energy costs, grave energy insecurity, and negligible climate impacts
Germany is the poster child of this failure. In 2000, Germany set out to decarbonize its energy system, spending hundreds of billions of dollars on this effort over the last 20 years. Germany only marginally reduced its dependence on hydrocarbons from 84% in 2000 to 78% today. The United States matched this 6% decline in hydrocarbon market share from 86% in 2000 to 80% today. Unlike in the US, Germany more than doubled its electricity prices — before the recent massive additional price increases — by creating a second electric grid. This second grid is comprised of massive wind and solar electric generating sources that only deliver 20% of nameplate capacity on average, and often less than 5% for days at a time. The sun doesn’t always shine and the wind doesn’t always blow. Hence, Germany could only shrink legacy coal, gas and nuclear capacity by 15%. It now must pay to maintain both grids. The legacy grid must always be flexing up and down in a wildly inefficient manner to keep the lights on, hospitals functioning, homes heated, and factories powered. Outside of the electricity sector, Germany’s energy system is largely unchanged. It has long had high taxes on gasoline and diesel for transportation, and lower energy taxes on industry. Germany subsidizes industrial energy prices attempting to avoid the near-complete deindustrialization that the UK has suffered due to expensive energy policies across the board.
If the Climate Action Council ignores the requirements for reliable and affordable in Public Service Chapter 48, Article 4 § 66-p. Establishment of a renewable energy program then the result will be same here.
Over the last 20 years, the United States has seen two shale revolutions, first in natural gas and then in oil. The net result has been the U.S. producing greater total energy than consumed in 2019 and 2020 for the first time since the 1950s. The U.S. went from the largest importer of natural gas to the second-largest exporter in less than fifteen years, all with private capital and innovation. The shale revolution lowered domestic and global energy prices due to surging growth in U.S. production. Surging US propane exports are reducing the cost and raising the availability of clean cooking and heating fuels for those in dire energy poverty still burning wood, dung, and agricultural waste to cook their daily meals. U.S. GHG emissions also plunged to the lowest level on a per capita basis since 1960. Imagine the world’s energy situation today with the American shale revolution.
We are starting to hamstring and squander the enormous benefits of the shale revolution. The same misinformed anti-hydrocarbon crusade that impoverished Europe and made it heavily dependent on Russia is now sweeping the US. California and New England had already adopted European-style energy policies driving up electricity prices, reducing grid reliability, and driving manufacturing and other energy-intensive, blue-collar jobs out of their states. Colorado is not far behind.
This article ignores New York but the Liberty ESG 2020 report calls out New York’s irrational war on hydrocarbons.
California, a state with a plentitude of blessings, managed to create the highest adjusted poverty rate in the nation with an expensive, unstable power grid increasingly reliant on coal-powered electricity imports from Nevada and Utah.
New England’s proximity to Pennsylvania’s clean low-cost natural gas resources was a stroke of luck. But it refused to expand the natural gas pipelines running from Pennsylvania, leaving it chronically short of natural gas, its largest source of electricity and cleanest option for home heating. Instead, it remains heavily reliant on fuel oil for home heating and occasionally imports LNG from Russia to keep the lights on. Last winter New England burned copious amounts of fuel oil to produce electricity which went out of fashion in the 1970s elsewhere in the US.
New York’s pipeline policies have also contributed to this absurd situation.
Texas has not been immune from energy illiteracy and collateral damage. Texas’ poorly designed electric grid, structured to encourage investment in renewables, led to hundreds dying last year in the Uri cold spell. No one would pay the same price for an Uber that showed up whenever convenient for the driver and dropped you off wherever they desired. But that is what Texas does with electricity: paying the same price for reliable electricity that balances the grid as they do for unreliable, unpredictable electricity. No wonder the reliability of the Texas grid has declined and is headed for more trouble.
The common thread in these cases is unrealistic beliefs in how rapidly new energy systems can replace demand for hydrocarbons, currently at all-time highs. Political intervention and miscalculation have led to over-investment in unreliable energy sources and, far worse, under-investment in reliable energy sources and infrastructure. The full costs of this colossal malinvestment have been somewhat hidden from view as spare capacity in the global energy network has mostly kept the train on the tracks. Now that excess capacity has shrunk to a critically low level, more impacts are hitting home.
New York’s environmental community fully subscribes to the naïve belief that today’s wind, solar, and energy storage technologies are capable of rapidly replacing hydrocarbons and are advocating for legislation to accelerate the transition requirements in the Climate Act.
Like the disease itself, the cure takes years to run its course. But that longer time frame is no excuse not to act now in a thoughtful fashion to begin rectifying historical blunders. Steel, cement, plastics and fertilizer are the four building blocks of the modern world and all are highly reliant on hydrocarbons.
Most critically this means removing the growing myriad obstacles to hydrocarbon development, justified in the name of fighting climate change. This is nonsense. Overly cumbersome hurdles to hydrocarbon development in the U.S. do nothing to change oil and gas demand. They simply displace U.S. production overseas where production practices are less stringent and less ethical. Resulting in increased GHG emissions and other air pollutants, reduced economic opportunities for Americans, and increased geopolitical leverage of Russia and OPEC — see the invasion of Ukraine.
Climate change is a long-term problem best addressed with technologies cost-effective today like natural gas, energy efficiency, and nuclear. The solution requires combining today’s commercial low-carbon energy sources with research and technology development in carbon sequestration, next-generation geothermal, and economical energy storage to make solar and wind more viable.
New York’s policies that prematurely eliminate nuclear and natural gas technologies that have markedly reduced air pollution and environmental impacts for unproven solar, wind, and energy storage technologies is analogous to jumping out of a perfectly good airplane without a parachute hoping that the concept of a parachute will be developed, proven technically and economically feasible, and then delivered in time to provide a soft landing.
Today the price mechanism must destroy energy demand to bring it in line with short-term supply. This reduces the quality of living, especially for low-income families. The price mechanism will also incent new supply to the extent possible in the face of growing regulatory hurdles, infrastructure shortages, and capital starvation. A revaluation of all three of these factors is urgently needed. Is the overarching goal “energy transition” at all costs? Or is it humane policies that better human lives and expand opportunities for all? We need to replace the former mindset with the latter.
New York has the lowest per capita energy usage in the US so the low-hanging fruit for energy demand reductions are gone. New York’s ban on hydraulic fracking ensures that we cannot control the price of new supply. The inevitable result will be higher costs for low-income families.
Unfortunately, the belief that climate change is an existential threat has become a matter of religious dogma for many and no rational arguments can dissuade them from that belief. I fear that the unrelenting propaganda that we can ban hydrocarbons and get an energy system that is greener and cheaper is leading to a similar dogmatic position. Those emotional beliefs have brought us to the precipice of the Climate Act where costs will skyrocket and dangerous impacts to reliability are likely. However, all the evidence suggests that the supporters of net-zero transition programs haven’t thought they would have to pay much for it, or alter their own lifestyles. An honest communications rollout would explain that lifestyle changes are needed and that there are affordability and reliability risks. It would also quantify the expected effect of the Climate Act on climate change so that New York’s citizens could have the opportunity to provide comments based on all information.
I am not optimistic that will happen. Stay tuned to this space because I am working on my own overview presentation of the Climate Act’s risks to reliability and affordability. Needless to say it will very likely differ in tone and content from the State’s version.