By Jonathan Helton

Will New England have enough fuel this winter?

The region’s six governors have their doubts, and in July they wrote U.S. Energy Secretary Jennifer Granholm to ask for relief from a 1920 shipping law that has limited the region’s supply of fuel, particularly oil and natural gas.

The governors asked the Biden administration to “explore the conditions under which it might be appropriate to suspend the Jones Act for the delivery of LNG [liquid natural gas] for a portion or all of the winter of 2022-2023.”

They flagged the 102-year-old Jones Act because it requires that goods shipped between U.S. ports be carried on ships that are U.S. flagged, U.S. built, and mostly owned and crewed by Americans.

Since New England uses natural gas to meet nearly half of its electricity needs, this old law puts the region in a precarious position.

A shortage of natural gas pipeline capacity makes it challenging for New England to get enough fuel during periods of peak demand, such as the coldest days of winter and the hottest days of summer.

Importing domestic natural gas by tanker ship offers a possible solution. But the Jones Act gets in the way. Its requirement that New England energy companies hire domestic ships to transport fuel between American ports actually prevents New England from shipping fuel from Texas or Pennsylvania to Boston.

How?

There aren’t any American LNG tankers, despite America being the world’s largest LNG exporter, with major export terminals on the Gulf Coast.

No LNG tankers have been built in the U.S. since 1980. This is largely because U.S. shipyards do not construct competitively priced ships. In 2015, the U.S. Government Accountability Office estimated it would cost up to three times the world market price to buy an LNG tanker from a U.S. shipyard, assuming one could be built at all.

In general, most of New England’s LNG arrives via pipeline. Pipeline capacity, however, cannot be added quickly.

As New Hampshire Consumer Advocate Donald Kries wrote in August: “The interstate pipeline network does not have enough capacity to supply the region with all of the natural gas it needs to heat all the homes and businesses reliant on that fuel while supplying all of the [natural] gas generators that would need to fire up in an extended cold snap.”

The Jones Act leaves foreign imports as the best alternative. Unfortunately, imports from abroad often run counter to U.S. foreign policy. Before the war in Ukraine, for example, New England and Puerto Rico bought LNG from Russia on occasion. Similarly, Hawaii imported as much as a third of all its oil from Russia, mainly because the Jones Act made it too expensive to buy U.S. oil. But President Joe Biden’s ban on Russian fuel imports put an end to that.

Energy Secretary Granholm met with the New England governors on Sept. 15 to talk about their Jones Act waiver request, but according to Reuters, the outcome wasn’t great.

“In the event that there is an issue where additional supplies of heating fuels are needed, we would work with the states as appropriate to see what tools are needed,” a U.S. Department of Energy official told the news service.

Such obfuscation is unfortunate because a Jones Act waiver would be a win for everyone. New England residents could have a reliable supply of fuel, and probably would save on electricity costs, which already are extraordinarily high.

A Jones Act waiver also would unlock a new market for Gulf Coast LNG exports. And U.S. maritime interests should have no reason to complain, since there aren’t any LNG tankers that comply with the Jones Act anyway.

Beyond a waiver, Congress could reform the Jones Act in more substantial ways. The law has failed in its mission to ensure a healthy maritime industry in the name of national security, and an update is long overdue.

Today, only four U.S. shipyards build large oceangoing commercial ships, and only 93 such ships are Jones Act-compliant — down from 257 in 1980. Since 2020, those shipyards have produced only two large, oceangoing vessels, with one other large cargo ship set to be completed later this year — and it is not an LNG tanker.

Perhaps the best initial reform would be to repeal the law’s U.S.-built requirement, even if only for LNG tankers. This would put more LNG tankers into service for the American people, make it easier for U.S. carriers to expand their fleets and markets, provide more jobs for U.S. mariners, and help keep New England warm during the coming winter.

Everyone would win.

If we maintain the status quo, the odds of New Englanders running short of fuel this winter remain elevated. Why court such a disaster when a solution is as easy as reforming a single bad shipping regulation?

Jonathan Helton is a research associate at the Grassroot Institute of Hawaii.

 

Energy shortages in California and Europe have prompted a revival of interest in Nuclear power. And who gets the credit? Environmental activists, naturally. 

Why even environmental activists are supporting nuclear power today,” National Public Radio gushed last week. 

The few environmentalists highlighted in the story deserve credit for taking such an unpopular position within the movement. NPR even acknowledges their pariah status.

“We felt like we were on an island all by ourselves,” Mothers for Nuclear activist Kristin Zaitz said. “We had people wishing that we would die, wishing we would get cancer…making weird videos about us that made me feel like, am I unsafe, is my family unsafe?”

This aired on NPR, which is progress. Also progress: NPR accurately reported nuclear power’s superior record on safety and pollution:

“In terms of deaths from accidents or pollution, nuclear is far safer than coal or natural gas – the largest sources of electricity in the U.S.

“Diablo Canyon got a boost last year when researchers from MIT and Stanford said keeping the plant open until 2035 would cut carbon emissions from California’s power sector by more than 10% and save $2.6 billion in electricity costs.”

This is welcome, yet these assessments of nuclear power’s safety and environmental record aren’t exactly news. 

You might not know that, though, if you listened to most environmental activists, who’ve spent decades wrongly portraying nuclear power as more dangerous and worse for the environment than other options. 

Environmental activists were the ones who pushed for Germany to close its perfectly good nuclear power plants, making the country more reliant on Russian oil and gas. 

They pushed for California to close the Diablo Canyon nuclear power plant, without which California probably would be suffering blackouts right now.

They pushed for the closure of Vermont Yankee, which resulted in increased carbon emissions in New England.

And they worked tirelessly to close Maine Yankee, Connecticut Yankee, Yankee Rowe, Indian Point and other nuclear power plants in the Northeast and throughout the United States.

To the delight of environmental activists, the Northeast has lost more than a handful of nuclear plants in recent years, mostly because it became uneconomical to continue running them (something environmentalists tried hard to ensure).

  • From 1972-1996, the Maine Yankee nuclear power plant was the largest power generator in the state. But environmental activists opposed it from the start an harassed it with an ongoing series of ballot initiative and bills to shut it down. It closed for cost reasons. 
  • From 1972-2014, the Vermont Yankee nuclear power plant generated power in Vernon, Vt. Environmentalists worked the entire time to get it closed, and they succeeded even though the plant had been operating safely and had just had its license renewed through 2032. The plant’s closure resulted in an increase in New England carbon emissions as nuclear power was replaced with natural gas. 
  • From 1960-1992, the Yankee Rowe plant operated in Rowe, Mass. It was protested by environmental activists. Its owners shut it down rather than pay for federally mandated testing that was demanded by activists.
  • From 1972-2019, the Pilgrim nuclear power plant operated in Plymouth, Mass. Activists pressed for its closure all along, and the plant owner ultimately shut it down for economic reasons in 2019. Its power generation was replaced by natural gas. Afterwards, predictably, New England carbon emissions increased. 
  • From 1968-1996, the Connecticut Yankee nuclear power plant provided low-carbon power to Connecticut. Environmentalist sought its closure. This plant was cited for safety violations, though the Nuclear Energy Institute says the site of the decommissioned plant is safe enough to turn into farmland. It was closed for cost reasons.
  • From 1962-2021, the Indian Point nuclear power plant generated power in Buchanan, N.Y. Environmental activists challenged the plant’s continued operation, and the State of New York threw up numerous legal obstacles to the plant’s license renewal, making renewal too costly for the owner to pursue. New York carbon emissions increased after Indian Point’s closure, of course. 
  • And then there’s New Hampshire’s Seabrook Station, which was supposed to open in 1974. Environmental activists successfully delayed its opening until 1990. Since it was first proposed in the 1970s, it has been protested continuously by anti-nuclear activists, who still want to shut it down. They successfully prevented the plant’s second reactor from being built. By delaying and shrinking the plant, activists managed to increase New England carbon emissions and prolong the use of oil and coal in New Hampshire.

State subsidies for renewables, which artificially suppress wholesale energy market prices, coupled inexpensive natural gas helped make nuclear power plants less economically viable.

Environmental activists gleefully contributed to nuclear power’s negative economic and regulatory environment by misleading the public and elected officials about nuclear power’s safety and environmental record, pushing to tilt the playing field in favor of renewables, and harassing plant owners with lawsuits and protests. 

It’s nice to see the small group of pro-nuclear environmental activists get credit for being right when the rest of the green movement has been shamefully, dangerously wrong about nuclear power from the start. 

But that’s only a small part of the story. The bigger story is how the environmental movement put itself on the wrong end of one of the biggest fights of its existence and wound up hurting the environment as a result.

And all the while, they sought to delegitimize the activists, policy wonks, industry experts, academics and researchers who told the truth. That’s the story that needs to be told. 

Government energy plans too often focus on replacing consumers’ choices with those of government planners, regardless of the impact on consumers. New Hampshire’s 10 Year Energy Strategy goes in the other direction. It puts consumers first. 

The new strategy is little changed from the 2018 version. Its top priorities are shrunk from 11 to 10, with “cost-effective energy policies” the primary goal, followed by securing “a reliable, and resilient energy system.”

The difference really is more of emphasis. The new version articulates a clearer free-market vision for state energy policy. 

The strategy rejects government mandates and subsidies except in limited, temporary circumstances. Instead, it articulates a strong rationale for creating an open and competitive energy marketplace in which competition generates technological advances while driving down prices.

It’s an unapologetically pro-market, pro-consumer plan. 

Noting the state’s extremely high energy costs, the strategy makes addressing those costs “a critical goal for New Hampshire.”

“Expensive energy–or pursuing policies that raise the cost of energy–directly and negatively impacts New Hampshire families and businesses and the quality of life in our state. As such, the primary goal of this Strategy is to pursue cost-effective energy policies which is even more important in this time of record energy prices and high inflation.”

The strategy rejects the idea that politicians should manipulate energy markets to benefit technologies they prefer.   

“Policy makers should not enact any new mandates that place additional burdens on ratepayers or taxpayers,” it states.

The state and consumers would be made worse off if politicians tried to second-guess the market, it goes on to explain.

“While some states may attempt to drive innovation through mandates and subsidization, New Hampshire will never win a battle of subsidies,” the strategy asserts. “Instead, our state should enable creativity and entrepreneurial endeavors by refraining from picking winners and losers among energy technologies. New Hampshire can foster a sustainable and dynamic energy economy by ensuring a favorable regulatory environment for new technologies to flourish, not a regulatory and statutory environment based on favoritism.”

Consistent with that philosophy, the strategy removes an item from the previous plan’s top goals. Gone is the goal to:

“Maximize the economic lifespan of existing resources while integrating new entrants on a levelized basis.”

That old goal is inconsistent with the new plan’s vision that “a status quo that uses preferential policy to allow incumbents—of any technology type—to freeze out competition should be unacceptable.”

The strategy’s top ten priorities are:

1. Prioritize cost-effective energy policies.

2. Ensure a secure, reliable, and resilient energy system.

3. Adopt all-resource energy strategies and minimize government barriers to innovation. 

4. Achieve cost-effective energy savings.

5. Achieve environmental protection that is cost-effective and enables economic growth. 

6. Government intervention in energy markets should be limited, justifiable, and technology-neutral.

7. Support a robust, market-selection of cost-effective energy resources.

8. Generate in-state economic activity without reliance on permanent subsidization of energy.

9. Protect New Hampshire’s interests in regional energy matters.

10. Ensure that appropriate energy infrastructure is able to be sited while incorporating input and guidance from stakeholders.

The additional, more forceful emphasis on market competition is a welcome addition to this version of the state’s energy strategy. But as with the previous version, the question is how much influence it will have with legislators. 

These policy frameworks can help to guide administrations, but legislators tend to do what they want. If constituents demand subsidies for the timber industry, the timber industry will probably get subsidies. Still, it’s encouraging to see the state make so strong a statement in favor of markets, competition, and consumer choice.  

High energy prices are a major concern of voters, so naturally the political party that controls Congress and the White House has offered a set of serious policy proposals to lower prices as quickly as possible. 

Hey, we can dream, can’t we?

In reality, voters are being sold a container ship full of malarky about energy prices.

On June 15th, President Biden bizarrely blamed both Vladimir Putin and oil refiners for high gas prices and urged refiners to increase production. It was bizarre because the claims had been debunked just days before by the federal government’s own Energy Information Administration. 

The EIA published an analysis on June 10th, five days before Biden’s letter to oil refiners, that dated the surge in oil and gas prices to 2020, not to the war in Ukraine that started four months ago. And the analysis estimated that refinery capacity would hover between 94% and 96% all summer. 

Sen. Ron Wyden, D-Ore., has proposed doubling the taxes of any oil company that manages to enjoy profits of 10% or more. 

That’s slightly lower than the average profit margin of all industrial sectors in the S&P 500, and just 1.7 percentage points higher than the average for the energy sector, Yahoo Finance columnist Rick Newman reported in April. 

The tech, pharmaceutical, real estate and financial sectors all posted average profit margins last year of more than double the level Sen. Wyden has set for triggering oil company punishments. 

In New Hampshire, Democratic politicians are blaming the Legislature and the governor for high energy prices, claiming that Republicans failed to pass a slate of renewable energy bills to reduce the state’s reliance on fossil fuels. 

But they haven’t cited a single bill that would have lowered gas, oil or electricity prices this summer. 

A story about supposed “legislative inaction” on clean energy published in the New Hampshire Bulletin listed eight bills that were supposed to help deliver us from our current reliance on fossil fuels. Five of the featured bills have passed, which is not something customarily associated with “inaction.”

Not one of the five would have had any effect on current energy prices. One actually delays the reduction of Eversource electricity rates for a year and keeps the ratepayer-subsidized Burgess Biomass plant open. The plant buys wood pulp at above-market rates and has already cost Eversource ratepayers an extra $150 million for electricity.

The three other cited bills were to buy electric buses and electric state vehicles, and to accept federal money for electric vehicle infrastructure. They would have had zero effect on prices this summer.

Voters are being asked to believe that our “reliance on fossil fuels” has caused the recent energy price increases, and therefore anything that begins to shift the energy mix away from fossil fuels will help lower prices.

That is nonsense. The price increases have all been caused by a shortage in the supply of fuels relative to demand. 

Simply put, demand for energy surged in 2020 as the economy roared back to life earlier than expected, and supply has remained far short of demand ever since. 

What about renewables? In New England, gas comprises 53% of the energy mix, and nuclear another 27%, according to regional grid operator ISO New England. Renewables are up to 12%.

State subsidies for wind and solar power would have made no noticeable dent in the region’s reliance on fossil fuels for two primary reasons.

  1. Even if we could build renewable generation capacity on a massive scale in just a few years, wind and solar still rely on wind and sunshine. They aren’t yet capable of replacing gas or nuclear as a reliable source of baseload power.
  2. Renewable energy is not inherently cheaper or more reliable than natural gas. It’s become more competitive, and soon it might become a significantly cheaper source of energy. And if that happens, it won’t need subsidies or government “investments,” because the market will respond on its own.

What could have made a difference? Fewer government interventions to direct investments to satisfy the interests of politicians rather than consumers. 

When the government intervened to block pipelines, prohibit fracking, subsidize U.S. shipbuilders, divert resources to more costly “green” energy, and decommission functional, nuclear power plants, consumers suffered. 

“Under wholesale markets, private companies have carried the risks of uneconomic investments, not utilities and their customers, ISO New England concluded. “Consumers have benefited from this least-cost resource mix created through competitive markets.” 

A competitive market focuses on providing energy at the lowest cost. It will do this absent government interventions, just as markets for food, clothing, power tools and doughnuts do.

Government interventions that prevented investors from pursuing lower costs, and instead attempted to steer money to higher-cost alternatives, made energy markets less efficient, raised costs, and crimped supplies.

Repeal of the protectionist Jones Act alone would drop gas prices by 10 cents a gallon, according to a JP Morgan analysis.

To assert that the solution for high energy prices is more government interventions to further hamstring oil and gas companies would be like saying that the solution for the Boston Celtics’ scoring woes is to put more Golden State Warriors on the court. 

The answer is not more government manipulation of the market. The answer is to lift restrictions that interfere with the market’s natural pursuit of a “least-cost resource mix.” 

If the Burgess Biopower plant in Berlin closes, New Hampshire electricity customers will save money. The state’s shrinking timber industry (and the City of Berlin) will lose money. 

The Legislature is again faced with the prospect of choosing sides. And again a proposed bill would side with the timber industry, not ratepayers. 

It’s a long and complicated story. Let us explain. No, that is too much. Let us sum up. 

The plant burns wood pulp, largely but not entirely from New Hampshire. Eversource buys power from the plant at above-market rates mandated by the state. 

These higher payments are not to support “green energy.” The plant is just a conduit for funneling money to the timber industry. It exists to create a market for New Hampshire wood pulp. It’s a jobs program, not an environmental program.

But it’s a jobs program funded by a mandatory rate increase on Eversource customers. That’s highly regressive and economically harmful. Low-income families pay more for electricity, as do employers.

To reassure the public that this wealth transfer scheme wouldn’t get too out of hand, the state capped total above-market customer payments to the plant at $100 million. Whenever the customer overpayments pass the $100 million mark, the plant has to reduce its prices so that ratepayers recover the difference within the next 12 months.

Thanks to falling natural gas prices, the cap was hit several years ago. So the Legislature intervened again and suspended the cap for three years. That suspension ends this November, at which point the plant will have to lower its rates to let customers recoup the last three years’ worth of overpayments.

Uh oh.

Eversource estimates the three year total to be $58.8 million by the end of November. If the plant must repay that within 12 months, it will have to close, its officials have testified.

The state has a few options. 

It could amend the agreement to let the plant repay the money over a longer period of time. This might not save the plant in the long run, but it could buy time (assuming the plant can afford to rebate the money at all). 

It could directly subsidize the plant with payments from the General Fund. 

It could let the plant close. That would save ratepayers an estimated $2.50 to $3 a month, according to the Department of Energy. Large customers (employers) would save much more.

Or it could pass a law to basically forgive the $58.8 million in customer overpayments. That’s what Burgess Biopower says Senate Bill 271 would do. 

The bill might do more, though. It states that “any and all legislative relief provided to the Burgess BioPower plant shall be deemed to be reasonable, legitimate, and in the public interest….”

Any? 

Through the end of 2021, Eversource customers have already paid more than $150 million in above-market rates for electricity generated by the Burgess Biopower plant. The plant cost a reported $275 million to build. But ratepayers don’t own 54% of a power plant. They just threw their money away. Well, the state threw it away on their behalf.

It’s likely that by the end of the 20-year contract, the overpayments will total more than the plant cost to build. And that doesn’t include the above-market payments for Renewable Energy Credits that are mandated by the agreement.

Burgess representatives say the plant supports 240 industry jobs. If we accept that number for argument’s sake, ratepayers have already spent more than $640,000 per “job saved,” with years left in the contract. 

This is a huge transfer of wealth from Eversource customers to a few hundred people (at most) in an industry that is economically declining but politically well-connected.

Burgess Biopower officials say the plant won’t need any more handouts if the $58.8 million in overpayments is forgiven. But the contract that forces customers to pay above-market rates continues. That’s a handout. 

The state’s scheme to subsidize the plant will continue to cost ratepayers more than $20 million a year through the life of the 20-year contract, according to the Department of Energy. The plant began operations in 2014.

And when all of these subsidies are done, what will the ratepayers have to show for it? Probably nothing. If these above-market payments were actually “investments,” they would have purchased shares in the plant’s parent company. Then, at least the ratepayers might have gotten something in return.

Squirrels don’t understand Thanksgiving. 

They see us loading our homes full of food for days, and they feel a sense of tribal solidarity. They get that. Then, suddenly, we sit down and EAT IT ALL IN ONE DAY. 

What are we thinking?!!

This really confuses squirrels. How will those tall, furless bipeds survive the winter?!! They just ate all their food! It hasn’t even snowed yet! THEY’RE ALL GOING TO DIE!!

Chipmunks, by the way, just hope we all die soon so they can move into the basement. 

Squirrels and chipmunks, not to mention bears, think we’re idiots because they know nothing of markets. If they wandered into a supermarket, they’d think it was a place where humans stored locally gathered food for the winter. The idea of a place where creatures trade money for food, and then more food appears the next day, brought from all over the world, would blow their little minds. 

Although bears are pretty smart, so they might figure this out one day. They can already open car doors. The inevitable next step is driving to the corner store for salmon jerky and a six-pack of honey wheat ale.  

But bears don’t do this yet. Instead, they store fat for a long winter’s nap. Sounds awesome. Unfortunately, humans can’t get through winter by lowering our metabolism and reducing our energy consumption. We increase our energy consumption to stay warm. 

We can hoard food. We could salt meats and store corn like our ancestors did, or fill our garages with canned goods, bottled water and ammo (you know who you are).

But thanks to global trade, we don’t have to do this. We can get bananas from Ecuador, bacon from North Carolina, coffee from Brazil, and crazy snack foods from Japan whenever we want.

What about the other thing that keeps us alive all winter: warmth?

Humans survive long, cold winters by building, then powering and heating, shelters. Mostly we power and heat them by burning things (oil and gas, a tiny bit of coal) or splitting atoms.

Now, New England does not supply its own oil or gas. Like those crazy Japanese snacks, our winter fuels come from far away places where people speak different languages — places like Texas and Louisiana.

One might understand that in a region reliant on importing the fuel that keeps us warm, it’s not a terribly good idea to try to hurt the people who bring us these fuels. 

And yet… 

In Boston, the new mayor has signed an ordinance requiring the city to divest from fossil fuel companies, as if the people who keep Boston habitable during the winter are evildoers. 

U.S. Sen. Elizabeth Warren, D-Harvard Faculty Lounge, portrays oil and gas companies as sinister malefactors who prey on Americans for fun and profit. Harvard also has divested from fossil fuels, by the way. 

You wouldn’t know from talk like this that natural gas generated more than 50% of New England’s electricity last year, or that Northeastern states consume 86% of the nation’s home heating oil. 

Wind and solar power, as nice as they are, generated 6% of New England’s electricity last year. They won’t replace oil and gas anytime soon. 

This winter is projected to be mild. ISO New England, the region’s power grid operator, expects energy use to be lower this winter than last, and our power supply to be adequate. 

Still, that prediction came with what is now an annual warning. The winter of 2017-18 brought a cold streak so long that the region came within two days of rolling blackouts. Why? Because we have put unnecessary constraints on our energy supply by blocking new pipelines and scaling back nuclear plants. 

ISO New England has a whole page of its website devoted to explaining how the region is in a dangerous position because of constraints on its natural gas supply.

A study by Carnegie Melon’s Tepper School of Business earlier this year found that New England’s artificial constraints on natural gas have caused routine power plant outages and cost the region $1.8 billion during the cold winter of 2014 alone.

“Gas supply issues have affected the ability to generate electricity during times of high demand,” professor and study co-author Jay Apt said at the time. 

They recommended building natural gas storage facilities (with battery storage being another possible option). They didn’t ask the squirrels, but the squirrels would approve.

ISO New England points out that a mild winter is a time to plan for the future — because a cold winter is coming eventually. And if our economy to grows, energy demand will grow with it, increasing the need for more reliable supplies. 

Building more base load energy capacity is the way to prepare for the cold winter that we all know is coming eventually. 

Some mammals, though, seem oblivious to the tremendous amount of planning, preparation and investment it takes for their species to survive New England winters. They say we can do without more base load power and without more reliable access to the fuels that generate the lion’s share of our electricity and heat most of our homes.

The squirrels think they’re nuts.   

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.