The Transportation and Climate Initiative (TCI) was supposed to kill fossil fuels by raising gas prices. Instead, high gas prices killed the TCI. 

Cooked up by the Georgetown Climate Center and pitched as an innovative way to cut carbon emissions, TCI is an old-fashioned carbon-trading scheme. The intended signatories, 13 states from Maine to North Carolina, and the District of Columbia, were to agree to cap carbon emissions from transportation fuels, then sell carbon credits to fossil fuel suppliers. 

States would decide how to spend the billions of dollars TCI’s creators projected the carbon credits would raise. The initiative’s Memorandum of Understanding states that signatories would “seek to invest strategically in lower carbon transportation options and other investments to further the goals described in this MOU.” 

That commits states to no specific carbon-reduction investments. The money would go into state general funds, to be spent at will by politicians.

By design, the TCI would achieve its carbon reductions by making gas and diesel fuel more expensive. That would serve as an incentive for consumers to take mass transit, share rides, or buy electric vehicles. Any state investments in alternative transportation systems would be gravy. 

The TCI’s own model initially predicted that gas prices would rise by between 5-17 cents per gallon as a result of the scheme’s carbon caps. A Tufts University study last year estimated price increases between 3-38 cents per gallon absent a cap on such increases. The initiative anticipated capping price increases at 9 cents a gallon. 

But a funny thing happened on the way to the compact. Gas prices shot up on their own in response to surging demand and limited supplies. By October, gas prices had risen by more than a dollar during the year, hitting a seven-year high. 

With citizens already highly sensitive to gas price increases, governors who had initially backed the TCI’s plan to raise those prices further bailed.

Last Tuesday, Conn. Gov. Ned Lamont announced that high gas prices made it impossible for his state to join.

“Look, I couldn’t get that through when gas prices were at a historic low, so I think the legislature has been pretty clear that it’s going to be a pretty tough rock to push when gas prices are so high, so no,” he said. 

Mass. Gov. Charlie Baker pulled his state out on Thursday. Then Rhode Island Gov. Dan McKee followed on Friday, just a day after announcing his intention to remain in the pact. 

To sell the scheme, TCI backers had focused on the supposed carbon emission reductions the initiative would create. But as the Josiah Bartlett Center was the first organization to point out in December of 2019, the TCI’s own model showed that almost all of its projected carbon reductions would occur regardless of whether the initiative were adopted. The initiative itself was projected to cut emissions by between one and six percentage points, not the 25 percentage points boosters claimed. 

The small reductions the proposal might be able to achieve came at an enormous cost of tens of billions of dollars. And those costs would be borne by motorists. 

Consumers would pay higher fuel prices with no guarantee that those prices would result in meaningful investments in lower-emission alternatives. The only certainty in the whole plan was that fuel prices — and government spending — would go up. 

New Hampshire Gov. Chris Sununu was the first governor to recognize this, saying in a Dec. 17, 2019 statement that he would not commit New Hampshire to the TCI because the program “would institute a new gas tax by up to 17 cents per gallon while only achieving minimal results. This program is a financial boondoggle and the people of New Hampshire will never support it.”

Just shy of two years later, the rest of New England’s governors effectively ratified Sununu’s decision. Better late than never. 

Energy prices are spiking as 2021 comes to a close and winter creeps in. Rising prices for gasoline, natural gas, home heating oil and propane are going to make this an expensive winter in New Hampshire. 

The U.S. Energy Information Administration (EIA) has predicted that natural gas prices will be 27% higher this winter, home heating oil 33% higher, and propane 49% higher. 

The Consumer Energy Alliance projects that these higher prices will cause Americans to spend $13.6 billion more for energy this year. 

Why? Demand for energy is rising faster than the supply of fuel. The economic slowdown caused by the pandemic prompted oil and gas companies to scale back production. The surprising speed of the economic recovery has sent demand surging. 

“A lot less product is available to meet this now rapid growth we’re seeing,” Exxon Mobil Corp. Chief Executive Darren Woods said last month, The Wall Street Journal reported. 

The International Energy Agency reported in its World Energy Outlook last month that the world is underinvesting in energy production.

It reiterated that point in its October Oil Market Report, writing that “the world is not investing enough to meet its future energy needs. Transition-related spending is gradually picking up, but remains far short of what is required to meet the rising demand for energy services in a sustainable way. At the same time, the amount being spent on oil appears to be geared towards a world of stagnant or falling demand.”

In addition, reduced natural gas production has sent natural gas prices so high that industries around the world are switching to dirtier-burning oil and coal, the IEA reported. 

Every environmental activist group that successfully blocked a fracking project or a new natural gas pipeline, or successfully pressured a company or government to reduce natural gas production, can take partial credit for increased oil and coal emissions this year. Well done.

President Biden’s changing positions on energy production offer a nice illustration of how environmental rhetoric collides with economic reality. 

Caving to pressure from radical environmental groups, candidate Biden promised to ban new oil and gas drilling on federal land and to focus on rapidly transitioning away from fossil fuels. But the Biden Administration is actually approving new leases. And the president has responded to surging fossil fuel prices by urging G20 countries to boost production and calling on OPEC and Russia to produce more oil. 

This is in direct conflict with climate pledges. The IEA calculates that global oil and gas investment is down roughly 26% this year — and will need to stay there for years, before dropping further, to reach the goals of the Paris Accord, which Biden in January committed the United States to rejoining.

Major investments are being made in renewable energy production, which is great. But that sector still accounts for only 12% of U.S. energy production, according to the EIA. Petroleum accounts for 32% and natural gas for 36%. 

If energy demand were shrinking, then investments in additional oil, gas or nuclear production would be of questionable value. But demand is growing and is projected to continue growing both domestically and globally. Since neither renewable nor nuclear power is ready to fill the country’s immediate and short-term energy needs, it falls to fossil fuels to plug the gap.

Nuclear should be a bigger part of this mix. Again, we can thank environmental activists for playing a large role in limiting the growth of the nuclear power industry.

One day, humans might fill all of their energy needs without burning things. But it is not this day. And it won’t be a day that arrives anytime soon. 

As humans strive to achieve that laudable goal, civilization will continue to require power. Generating that power will require fuel that can be converted to reliable, affordable energy now, not 50 years from now. 

Pretending that this isn’t true will not help anyone. It will only hurt people as it causes either ongoing price increases or energy shortages, or both.  

Our era of extreme political polarization fuels contempt for anything labeled “compromise.” Neither side wants to give an inch to the other, on any issue, even though everyone compromises every day in countless ways. 

The economic term for compromise is “tradeoff.” In real life, no one is 100% ideologically pure. We make tradeoffs a gazillion times a day without giving them a single thought. 

Radical environmentalists don’t spread their messages via smoke signal or personal messenger. They don’t live off the grid, making all of their food, clothing, shelter and energy by hand. 

They live in homes heated by fossil fuels, drive cars made of mined metals in factories powered by fossil fuels, and use industrially manufactured computers to go onto the energy-guzzling internet to send instantaneous electronic messages denouncing billionaires, capitalism, Big Oil, etc. 

Anti-trade activists drive American cars, assembled with parts from all over the world, and daily enjoy low-cost conveniences made available and affordable by global trade, from bananas (Ecuador, Costa Rica, Guatemala) to eyeglasses (Italy, France). 

In the market, everyone accepts less than their own imagined ideal, every day. It’s usually only in politics that we insist on achieving 100% purity.  

Maine just got a lesson in how this can go wrong.

In 2017, Maine legislators passed what environmentalists gleefully called the toughest anti-mining law in the country. Among other restrictions, it bans any open-pit mine larger than three acres. 

Mining has a long history in Maine (granite from Maine can be found in the Brooklyn Bridge, the New York State House, the Boston Custom House, Fenway Park, and the Washington Monument), but the law effectively brought that history to an end. Small quarries are allowed, but larger mines are all but impossible to build now.

Then-Gov. Paul LePage vetoed the bill, saying it went too far, but legislators overrode the veto.  

Now, even some of the law’s proponents are grudgingly, kinda-sorta acknowledging that, well, maybe it did go too far. 

That’s because, four years after the law passed, one of the world’s largest lithium deposits has just been discovered in Maine. 

Lithium is a light metal used to make the lithium-ion batteries that power electric cars as well as laptops, cell phones and digital cameras. Those batteries make the transition from gas to electric cars possible. 

You can’t make the batteries without mining lithium. And Maine’s anti-mining law has trapped a gigantic deposit of lithium — worth an estimated $1.5 billion — in the ground forever. 

Oops. 

When the law passed, National Resources Council of Maine staff scientist Rick Bennett praised it for being the strictest in the nation and said it “will protect our clean water and taxpayers into the future.” 

After the discovery of the lithium mine, Bennett acknowledged to The Maine Monitor that the law wasn’t written with lithium or manganese (used to make solar panels more efficient) in mind and said those metals ”very likely present a whole bunch of different issues. If those became something someone wanted to mine and process in Maine, I think we’d have to look at best available practices.”

Maine’s law was written to achieve an extreme goal: the elimination of large open-pit mining. Because it didn’t take into account tradeoffs, it likely prevents making a compromise on one environmental priority (reducing mining) to achieve another, higher priority (reducing greenhouse gas emissions).

Maine’s mining law is similar to state laws that ban fracking or pipeline construction. In a misguided effort to achieve some vague ideal of environmental purity, they prevent reaching a compromise that reduces emissions (by replacing coal and oil with natural gas) while we wait for the technology that would allow a larger-scale green alternative to be developed.

In life, people make these tradeoffs all the time, and for the most sensible of reasons. Given the limited array of choices in the real world, a less-than-ideal option usually is the most cost-effective, most convenient, or safest option available. 

That’s usually the case in politics too. But in politics, saturated as it is with aspirational, idealistic rhetoric, we often become blinded to the need for tradeoffs.

Note: The lithium mine story was broken by The Maine Monitor. Our original post cited the Bangor Daily News, which had reprinted the Monitor story with permission. 

A recent New Hampshire Public Radio story about New Hampshire’s last remaining coal-fired power plant offers a great example of how left-wing activists enjoy an unwarranted ability to frame journalistic narratives, particularly on energy issues.

“New Hampshire’s coal-fired power plant, the last of its kind in New England not set to retire, will now remain online through at least 2025, despite calls from climate change activists for it to close,” NHPR reported.

To see how this framing elevates the activists’ position, just apply it to other stories involving non-leftist protesters.  Imagine public radio stories written this way…

  • “New Hampshire’s remaining abortion clinics remain open despite calls from anti-abortion activists for them to close.”
  • “Democrats raise taxes despite calls from anti-tax activists for tax cuts.”
  • Schools remain closed for in-person instruction despite calls from parents, pediatricians, and epidemiologists that they open.”

Activists on the political left are treated by the media as morally and factually correct by default. Their complaints, protests and demands are accepted as morally serious and intellectually rigorous without question.

Because of this, a handful of radical activists have their publicity stunts and press releases covered with tones of gravity and seriousness, as if their positions represent basic common sense, while the same courtesy is not given to businesses or non-leftist activists.

In this framing, the activists are treated as morally superior, or at least as representing the reasonable, generally accepted point of view.

But are they?

The real story regarding Merrimack Station’s continued existence is that New Hampshire’s last coal-fired power plant will remain available as a backup source of power for another two years to provide a hedge against the risk of blackouts during periods of peak demand — because coal has qualities essential for a backup fuel source. It is reliable, storable, cheap and available.

It’s reasonable to say that coal shouldn’t be needed in New England anymore. Cleaner alternatives could have replaced it as a source of backup power it by now.

But the availability of those alternatives has been restricted by the very activists who demand that Merrimack Station be closed immediately.

By fighting natural gas pipeline expansion proposals, environmentalist have ensured that higher-CO2 emitting coal- and oil- fired generators will continue to be needed to ensure reliability of New England’s electricity grid.

New England’s electricity market is only partially deregulated. The grid operator, ISO New England, is charged with ensuring that electricity is delivered 24/7, 365 days a year. The provision of that power is not left entirely to the market. The grid operator pays some power generators to keep generation facilities on standby in case their power is needed in an emergency.

That’s the case with the coal-fired Merrimack Station. It receives capacity payments to ensure its availability to run on (mostly) cold days when natural gas is being used to heat homes, limiting its availability to generators.

Because power is needed when all other generation is at or near max capacity and when fuel (whether that be natural gas, sun and/or wind) is restricted or unavailable power has to come from a source that can be “dispatched”—coal, oil or pumped storage (hydro) .

Nuclear Power is emissions free and is a highly reliable workhouse that operates at very high capacity factors. But nuclear plants have been expensive to build, in part because of regulations and court cases brought by activists. Environmental activists have successfully restricted the supply of nuclear power in New England by using activism and legal challenges to prevent the creation of new reactors and to get existing ones shut down.

Natural gas, which burns cleaner than coal, might be able to fill the gap on peak demand days. But as ISO New England has pointed out for years, supply and storage constraints make this risky.

Natural gas plants rely on just-in-time delivery of gas. As mentioned above, environmental activists have successfully blocked the pipelines, import terminals and storage facilities that would make natural gas a viable replacement for coal for emergency power. This shortage makes it too risky to rely solely on natural gas as a backup source during periods of peak winter demand.

In general, natural gas is cheaper than coal as an everyday fuel source, thanks to fracking (which environmental activists also oppose). But on very cold winter days and in late summer heat, when natural gas is in high demand, prices rise, and coal becomes competitive on the market.

Wind and solar power operate approximately 30% and 15% of the time because they require favorable weather conditions which are often unpredictable. Without massive storage capacity, which is very expensive and not practicable for large-scale deployment, wind and solar aren’t capable of being dispatched to respond when the grid is stressed.

Coal can be stored on site in large quantities cheaply. With a shortage of other storable, reliable backup fuels, coal can be used in a pinch. That’s exactly how the Merrimack Station plant is being used.

The grid operator is charged with ensuring both reliability and market efficiency. That makes coal a go-to source of backup power for the few days a year in which natural gas supplies are being diverted from electricity generators to home heating. The grid operator essentially accepts higher carbon emissions for a few days a year for the purpose of ensuring that power is available.

That tradeoff is at the heart of the issue. The activists prioritize emissions over all else. They don’t accept the tradeoff. But their position is extremely risky and costly.

The power grid operator prioritizes reliability over emissions for good reason. It saves lives.

If New Englanders were asked whether they’d be willing to trade a few days’ a year worth of higher carbon emissions for a guarantee that they don’t run out of power on the coldest winter and hottest summer days, most would probably say yes without hesitation.

Radical environmental activists already have made clear that they don’t accept this tradeoff. They might not care that the tradeoff actually involves a higher risk of blackouts. But the grid operator does and is committed to hedging against that risk.

Given the alternatives, isn’t hedging against the risk of blackouts the more morally serious and responsible position?

That brings us back to the question at the beginning.

Do radical green activists really have the morally superior position here?

The answer is pretty clearly no.

It’s not an ideal tradeoff, but given the limited options available, keeping the state’s last coal plant open to ensure that people don’t freeze in winter or overheat in summer is not the unreasonable or radical position.

Those who would risk winter and summer power outages to achieve an insignificant reduction in carbon emissions should be treated with at least the same skepticism as those who want to keep power readily available.

Even heading into an expectedly mild winter, New Englanders are being reminded that the region has a dangerous shortage of natural gas transportation infrastructure. 

ISO New England, the region’s independent electric grid operator, warned on Tuesday that a lack of natural gas pipelines puts the region at risk of a winter power shortage in a period of extreme, prolonged cold.

The North American Electric Reliability Corporation issued a similar warning in its Winter Reliability Assessment released last month. 

And in an interview with the Josiah Bartlett Center this week, the executive director of the Harvard Energy Policy Group at Harvard University said New England had avoided a winter power shortage purely by luck. 

“New England has had good luck. I don’t know how else to describe it,” Harvard’s Ashley Brown said. “One year, Venezuela dumped a bunch of gas. This year it’s a warm winter. It’s a matter of time until it catches up.”

The issue, Brown said, is a shortage of natural gas pipelines. 

“The fuel is there. The problem is moving it. It’s pipeline capacity, that’s what it is,” he said.

“The problem is two difficulties in building pipelines. One is the opposition, whether it’s environmental, whether it’s NIMBY. Then, after all that, you still have the problem of who’s going to finance it.”

ISO New England predicted that the region should have enough power to get through the coming winter. That comforting reassurance is what got the news headlines.

In part thanks to a winter temperatures that are expected to be warmer than usual, ISO New England projects electricity demand to fall 1.5 percent below last winter’s peak for normal weather conditions and 1.7 percent below its peak for extreme cold.

And yet the grid operator pointed out that New England remains at risk of running out of power during periods of peak demand caused by extreme cold.

Peter Brandien, vice president of System Operations & Market Administration, said in a statement that “if the region experiences an extended period of extreme cold weather, fuel supplies into the region could become constrained resulting in challenging system operation.”

The agency noted that a shortage of natural gas pipelines is cause for concern.

“Consecutive days of extremely cold weather can reduce fuel availability for generating power due to regional natural gas pipeline capacity constraints,” its announcement stated.

The North American Energy Reliability Corporation (NERC) report also predicted that the region would have sufficient energy to make it through the winter. But like ISO New England, it warned about insufficient gas pipeline capacity.

“New England [power] generation continues to be limited by the availability of natural gas,” the NERC report stated.

The report noted that gas supplies are adequate to meet demand even in abnormally cold conditions, however periods of severe and prolonged cold similar to 2018 “can lead to the eventual loss of generation.”

The report more than once referenced the nasty New England winter of 2017-18, which included a blizzard in January of 2018 that dropped up to two feet of snow across the Mid-Atlantic and New England states.

By not building enough natural gas pipelines, New England is taking a risky gamble, Brown said. And the longer the region gambles, the better the odds that the worst-case scenario happens, Brown said.

“The question is, how long will we be lucky in New England?”

Energy policy is often described in moral terms, with “green energy” representing the forces of good and fossil fuels representing the forces of darkness. But really it’s about math. California politicians have spent decades fighting a losing battle against math. In August, math finally won. 

The rolling blackouts that cut off power during an August heat wave were the entirely predictable — and often predicted — result of a series of energy policy decisions designed to impose politicians’ energy preferences on a market that wasn’t ready for them. 

Renewable energy advocates were quick to claim that green energy policy wasn’t to blame because wind and solar power did not fail. But that’s not accurate. 

The first outages in August were caused in the evening when the state needed to switch from solar to natural gas. One 470 megawatt gas plant tripped offline and 1,000 megawatts of wind power were lost when winds died down, the state’s electricity grid operator reported. 

“All available resources are needed to meet the growing demand,” the California Independent System Operator explained when describing the situation. 

There’s a reason for that — a political one. 

California energy policy has created an artificial shortage of reliable base load energy. 

And those same policies are being pursued by activists in New Hampshire and throughout New England. 

Since at least the late 1990s, California has sought to force the energy market away from fossil fuels and toward renewables. The policy has “worked,” if its stated goal is the only metric. California set a goal to have a third of its electricity generated by renewable sources by 2020, and it reached that goal in 2018. 

But the cost was huge. The state didn’t just encourage electricity producers to hit the politicians’ arbitrarily chosen target. It rigged the market to prevent producers from providing consumers the most reliable energy at the cheapest price. 

As early as 2002, the U.S. Energy Information Agency pointed out that California had not built enough power plants. “Investment in new power generation capacity has not kept pace with the increasing demand for electricity,” concluded an EIA report on the causes of California’s energy crisis. “California’s generation capability decreased 2 percent from 1990 through 1999, while retail sales increased by 11 percent. Further, no new generation capacity has been constructed in California for over a decade.”

California politicians made it extremely hard to build anything but renewable power generation facilities. As wholesale electricity prices rose, the state capped retail prices and even, amazingly, prohibited utility companies from signing long-term contracts for the purchase of electricity. 

The cumulative effect of these and other green energy policies, including net metering, was to create an unnecessarily limited supply of extremely expensive energy. 

California utilities have been left with no choice but to buy base load power on the spot market from out-of-state providers. Instead of having an abundance of reliable natural gas plants in-state, California relies on out-of-state generators whose transmission lines run for hundreds of miles. 

California has among the nation’s highest electricity prices (close to those in New England), despite having huge fossil fuel reserves, because politicians wouldn’t let the market work. An economist who recently moved to California wrote that his monthly electricity bill of $1,000 would be just $250 in neighboring Texas. 

By 2020, the state was meeting its renewable energy targets and setting even more ambitious ones. But the supply of reliable base load power that could be tapped when the sun wasn’t shining and the wind wasn’t blowing had become dangerously low. 

When a regional heat wave spiked demand thought the West and fewer than 1,500 mw of power went offline one evening, suddenly there wasn’t enough available electricity to meet the state’s needs. 

This can happen in New Hampshire, which already has high electricity rates, some market-distorting energy policies, and vocal activists who insist that math can be ignored if the state’s motives are pure enough. 

The lesson from California is not that states shouldn’t find ways to move toward more renewable energy. It’s that deliberately preventing the market from working has the result of… preventing the market from working. When the market doesn’t work, supply doesn’t rise to meet demand. In energy markets, that can lead to rolling blackouts. 

ISO New England has warned about this possibility for years. New Hampshire lawmakers ignore the warnings at their — and our — peril. 

The two candidates seeking the Democratic nomination for governor are engaged in a heated dispute over natural gas. Though both support transitioning to 100% “clean energy,” state Sen. Dan Feltes would use natural gas in the transition; Executive Councilor Volinsky would not.

Feltes would rely on natural gas as a bridge fuel between dirtier-burning fossil fuels (coal and oil) and energy sources that emit no greenhouse gasses.

Volinsky opposes the use of natural gas in any circumstances. He portrays any use of natural gas as a win for fossil fuel companies and a loss for the environment. 

The historical record shows the opposite to be true. 

Last year, the International Energy Agency released a report on the environmental benefits of replacing coal with natural gas, showing that the switch has produced enormous environmental benefits. 

“Since 2010, coal-to-gas switching has saved around 500 million tonnes of CO2 – an effect equivalent to putting an extra 200 million EVs running on zero-carbon electricity on the road over the same period.” (EV = electric vehicle.)

Continued replacement of coal with natural gas would produce further emission reductions, the IEA report concluded. 

“Given the time it takes to build up new renewables and to implement energy efficiency improvements, this also represents a potential quick win for emissions reductions. There is potential in today’s power sector to reduce up to 1.2 gigatonnes of CO2 emissions by switching from coal to existing gas-fired plants, if relative prices and regulation support this potential. The vast majority of this potential lies in the United States and in Europe. Doing so would bring down global power sector emissions by 10% and total energy-related CO2 emissions by 4%.”

The IEA report found that “on average, coal-to-gas switching reduces emissions by 50% when producing electricity and by 33% when providing heat.”

In New Hampshire, coal is still used to produce electricity during periods of peak demand in summer and winter. The state has two of the only three remaining coal-fired plants in New England. Relying on natural gas instead of coal for those peak-use plant firings would bring a quick 50% drop in emissions during those periods. 

This emissions reduction would not require waiting for green energy production to scale up. It can be had just by increasing the use of natural gas, which emits almost 100 pounds less carbon dioxide per BTU than the cleanest-burning coal. 

Aside from electricity generation, more natural gas would help New Hampshire reduce its reliance on heating oil, which emits 44 pounds more carbon dioxide per BTU than natural gas. Two-fifths of New Hampshire homes are heated with oil, the second-highest portion in the nation (Maine is first.) 

More natural gas distribution lines would provide more homes with the ability to switch from oil to gas, which is both cheaper and cleaner. Consumers would save money and reduce emissions. But these distribution lines are routinely opposed by environmental activists.

Natural gas was made cheap and plentiful by the fracking revolution, which was a private-sector innovation no government regulator had thought to prevent. Yet the cleaner fuel often can’t get to consumers because of regulations and political activism, forcing New Hampshire to rely on dirtier coal and gas. 

Sen. Feltes is right that using more gas now would reduce both emissions and consumer costs. This is not theoretical. Government data show that it’s already happened.

From 1990-2017, New Hampshire’s energy-generated carbon emissions fell by 8.4% and the carbon intensity of the state’s energy supply fell by 29%, U.S. Energy Information Administration data show. 

The market-based transition to natural gas explains the bulk of that reduction, with a slower growth in renewable generation explaining a smaller portion. 

As regional power grid operator ISO New England states in its most recent report on New England’s energy mix:

“When the wholesale markets opened to competition, private companies invested billions of dollars in the development of natural-gas-fired power plants because they used advanced technology that made them run efficiently; were relatively inexpensive to build, site, and interconnect; and their lower carbon emissions compared to coal and oil helped the region meet state environmental policies. As nearby shale gas emerged as an inexpensive and plentiful fuel resource in the 2008 timeframe, natural gas generators became the go-to resource for New England, clearing as the largest resource type in the market year after year. Nearly half of the region’s electric generating capacity uses natural gas as its primary fuel (about 15,000 MW), and natural-gas-fired power plants produce about 40% of the grid electricity consumed in a year.”

The chart below, from ISO New England’s report, shows how natural gas grew into the region’s dominant energy source, pushing out dirtier-burning coal and oil. 

Aspiring to end the use of fossil fuels is fine. A realistic approach will get us there faster than one based on green fantasies. 

Innovation is making alternative energy sources cheaper and is improving battery technology. Some day, we might have the ability to generate large amounts of wind and solar power and store it for use in cloudy and windless periods. But tomorrow won’t be that day. 

In the meantime, natural gas is reliable, storable, affordable, and cleaner than other fossil fuels. There is a lot to dislike about Feltes’ energy plan, but to his credit he recognizes the practical environmental gains that can be made by relying on natural gas for now. 

Two weeks after a supporter of the Green New Deal won the New Hampshire primary, a new study finds that paying for only a few of the Green New Deal’s largest mandates would cost the median New Hampshire household more than its entire annual income in the first year of implementation.

“The Green New Deal is a politically motivated policy that will saddle households with exorbitant costs and wreck our economy, said Kent Lassman, president of the Competitive Enterprise Institute (CEI) and co-author of the study. “Our analysis shows that, if implemented, the Green New Deal would cost New Hampshire households more than $74,000 in just the first year alone. Perhaps that’s why exactly zero Senate Democrats, including Senators Jeanne Shaheen and Maggie Hassan, voted for the Green New Deal when they had the chance.”

The study, by CEI and Power the Future, analyzed the cost of just a portion of the Green New Deal’s energy mandates. It estimated New Hampshire’s costs at $74,723 per household in the first year. That’s slightly ($666) higher than New Hampshire’s median household income.

The Green New Deal sets extraordinarily ambitious goals for combatting climate change. It would mandate that all power come from zero-emission energy sources, the electric grid be converted to a “smart grid,” every building in the United States be retrofitted “to achieve maximal energy efficiency,” the government “eliminate pollution and greenhouse gas emissions from the transportation sector as much as is technologically feasible,” the government remove greenhouse gases from the atmosphere through “low-tech” solutions (planting trees, potentially), and the government eliminate greenhouse gases from the agricultural sector as much as is technologically possible.

Those are just the environmental goals. The legislation also guarantees, among many other things, a job with high pay and paid family leave, strengthened labor laws, a halt to “the transfer of jobs and pollution overseas” and high-quality health care, affordable housing, economic security and affordable food for every American.

The study leaves out all of the non-environmental goals and examines only a portion of the environmental mandates. It estimates costs for converting residential housing to Green New Deal efficiency standards (leaving out all commercial and industrial buildings, which are covered in the law), replacing non-compliant household vehicles with electric vehicles, making ground shipping compliant with the Green New Deal, and switching to green power. 

This extremely conservative estimate that excludes most Green New Deal mandates comes up with a per-household cost for New Hampshire of $74,723 in the first year, $47,310 in years 2-5, and $39,821 per year after year five. 

After reaching these figures, the authors conclude that “the Green New Deal is an unserious proposal that is at best negligent in its anticipation of transition costs and at worst a politically motivated policy whose creativity is outweighed by its enormous potential for economic destruction.”

You can read the study here.

The regional cap-and-tax scheme called the Transportation and Climate Initiative (TCI) is a bad deal for New Hampshire, the initiative organizers’ own projections show.

Modeled on the Regional Greenhouse Gas Initiative, the TCI would cap carbon emissions from transportation sources (vehicles) and force fuel distributors to buy carbon allowances. A declining cap would force distributors to buy more allowances annually. The hope is to compel a switch to non-fossil fuels or to discourage driving by making it uncomfortably expensive.

Naturally, the costs of buying the allowances would be passed on to consumers. In effect, the TCI imposes an additional fossil fuel tax on top of the state and federal gas taxes consumers already pay.

The cost to consumers would be enormous. On December 17th, the TCI organizers released the results of their own analysis of the program’s impact. They project that the carbon allowances would generate revenue of between $1.4 billion and $5.6 billion annually in the 12-state TCI region (plus the District of Columbia), which covers Mid-Atlantic and Northeastern states, including New Hampshire.

That would be a cost of between $14 billion and $56 billion over the decade spanning from 2022-2032.

But the TCI organizers’ own projections show that almost all of the carbon emissions reduction projected during that decade can be attributed to existing trends and not to the TCI scheme.

In August, they projected a baseline reduction in carbon emissions of “roughly 20 percent” without the TCI.

“Total gasoline and diesel consumption and CO2 emissions both fall by roughly 20% from 2022 through 2032 as a result of increased fuel economy in light and heavy-duty vehicles and increased LDV EV shares,” according to the organizers’ own analysis. (LDV EV = light duty vehicle electric vehicle.)

In a presentation released on December 17th, TCI organizers projected that the TCI would cause carbon emissions to fall by approximately 1-5 percentage points above the roughly 20 percent that will occur under existing policies.

The worst-case scenario projection was a 20 percent drop in carbon emissions from 2022-2032, which could be as little as a fraction of a percentage point above the baseline projection. The best-case scenario projection was a 25 percentage point reduction, which would be, at best, 6 percentage points above the baseline.

Understanding the baseline is critical because groups that support the TCI are already claiming it will produce up to a 25 percent reduction in carbon emissions in the region. That is false. Roughly 4/5ths of that reduction will happen anyway, the TCI organizers’ own projections show.

At best, the TCI would reduce carbon emissions of a little more than 5 percent in 10 years — at a cost of $56 billion in that best-case scenario. Without the TCI, carbon emissions are projected to fall by roughy four times that amount. If the TCI’s worst-case scenario occurs, the cost would be $14 billion to achieve an emissions reduction roughly 1/20th the size of what would happen anyway.

The TCI organizers projected that their initiative would cause gas taxes to rise by 5-17 cents per gallon if distributors passed the costs on to consumers (which they would). That seemingly small figure would extract billions of dollars from the economy, giving it to governments to distribute to projects that they favor but that consumers might not. In fact, the whole point is to replace consumer and investor choices with those made by government officials.

The program’s assumed effectiveness relies heavily on the premise that government officials will spend billions of dollars in ways proven to be effective at generating additional carbon reductions. Not only would those projects have to be effective on their own, they would have to be more effective than the choices that otherwise would have been made by business, entrepreneurs and consumers in the absence of the TCI.

Rather than forcibly extract billions of dollars from consumers in yet another heavy-handed attempt to control people’s behavior, governments should scrap this carbon tax scheme and let the market continue to generate solutions.

A handful of Democratic politicians on Wednesday stood in the snow outside an obsolete power plant and reversed their party’s customary line of attack when an industrial facility closes. Instead of blaming greed or billionaires or out-of-state corporations or winged monkeys for the recent closure of two N.H. biomass power plants, they blamed the government.

Wait, what?

Yes.

Well, not the government in general, just Republican Gov. Chris Sununu. They objected to his having vetoed bills that would have forcibly taken money from average people and given it to large, out-of-state corporations.

Wait, what?

Yes.

These Democratic politicians were attacking a Republican for opposing corporate welfare.

Specifically, the vetoed legislation would have created new ratepayer subsidies for biomass power plants. The vetoes caused two of the six plants (ones owned by a private New Jersey corporation) to close, they alleged.

Never mind the plants that didn’t close (one of which did get new state subsidies).

Never mind that the governor doesn’t run the shuttered power plants, didn’t make the decision to close them, and didn’t prevent their parent company from investing in them more heavily.

Also ignore a 2018 study published by none other than the State of New Hampshire, which showed the state’s biomass power plants to be expensive and inefficient compared to rival power producers.

The Office of Strategic Initiatives study showed two unmistakable trends, both driven by consumer demand for lower energy prices:

The removal or reduction of artificial price supports over many years.
The innovation-driven drop in the cost of other fuel sources.

Supposedly, the state has to force all Granite State residents and businesses to subsidize biomass power plants because they buy and burn wood pulp, thus keeping New Hampshire’s tiny timber industry alive.

But the state doesn’t have similar subsidies for paper companies or home construction, which are more important for the timber industry. Biomass accounts for only 3 percent of the value of a timber harvest, but sawlogs account for 90 percent, according to New Hampshire Business Review.

The state’s report showed that biomass plants might not have become so reliant on subsidies if they had invested more cost-savings initiatives or experimented with new business models. To conclude that the governor alone, rather than company officers and directors, was responsible for the fate of 1/3 of New Hampshire’s biomass plants (just the ones that closed) is a rather interesting position to take.

The state’s report concluded that biomass plants would continue to struggle because they inefficiently produce expensive electricity while most competitors, even other renewable power generators, more efficiently produce cheaper electricity.

“As new projects are connected to the grid, predominantly wind and solar, biomass will cede its market share to other forms of generation. These more flexible resources will contribute to more volatile, but lower market prices, leaving biomass generation at a steeper competitive disadvantage. New Hampshire ratepayers would likely need to provide continuous subsidies at above market prices to sustain Class III biomass generation.”

In short, burning wood (at least with existing technologies) is not the way to power a 21st century economy. A March U.S. Energy Information Agency report on the future of U.S. power generation didn’t even mention biomass, concluding that “most of the electricity generating capacity additions installed in the United States through 2050 will be natural gas combined-cycle and solar photovoltaic (PV).”

Biomass power generation is dying a natural death. That’s why companies that own biomass plants are reluctant to sink any more money into them. Forcing ratepayers to make up the difference between what people are willing to pay for power and what biomass power costs is neither compassionate nor morally defensible. It is massively wasteful — of other people’s money.