By Richard S. Courtney for SPPI

This paper reviews effects of large use of biofuels that I predicted in a paper published in August 2006 prior to the USA legislating to enforce displacement of crude oil products by biofuels. The review indicates that policies (such as that in the EU), subsidies and legislation (such as that in the USA) to promote use of biofuels should be reconsidered. The use of biofuels is causing significant problems but providing no benefits except to farmers. Biofuel usage is a hidden subsidy to farmers, and if this subsidy is the intended purpose of biofuel usage then more direct subsidies would be more efficient. But the problems of biofuel usage are serious. Biofuel usage is damaging energy security, reducing biodiversity, inducing excessively high food prices, and inducing excessively high fuel prices, while providing negligible reduction to greenhouse gas emissions.

To put the situation in words anybody can understand, they write that “filling the 25-gallon tank of an SUV with pure ethanol requires over 450 pounds of corn, which contains enough calories to feed one person
for a year.

All these effects were predicted in my paper on the use of biofuels that was published in August 2006 and can be seen here. My 2006 paper also predicted objections from environmentalists if large use of biofuels were adopted although this then seemed implausible because many environmentalists were campaigning for biofuels to displace fossil fuels. But this prediction has also proved to be correct. See full story here.

By Eric Kelderman, Stateline.org Staff Writer

Coal-producing states that supply nearly half of the nation’s electricity are feeling squeezed as efforts to combat global warming outpace technology needed to make the nation’s most abundant fossil fuel burn more cleanly. While coal is mined in 26 states, more than two-thirds of it comes from Wyoming, West Virginia, Kentucky and Pennsylvania. West Virginia employs the most miners, more than 20,000 in 2006. Nearly 18,000 coal miners worked in Kentucky that year and more than 5,800 in Wyoming.

Now, governors and other officials from major mining states are intensifying calls to expand technologies to reduce carbon-dioxide emissions from coal power, including a method that turns carbon dioxide into a synthetic natural gas, called gasification, or to store the emissions underground, through a process called sequestration. “Whether you believe in global warming or not, the political and economic realities have changed, and Wyoming needs to adapt to those changes,” said Gov. Dave Freudenthal (D), after signing two bills to establish new rules governing sequestration in his state, which produces more than 38 percent of the nation’s coal. Industry advocates and politicians in large mining states acknowledge that environmental concerns have made it tougher to build new power plants. But coal’s abundance and low cost ensure it will be needed to meet the nation’s growing demand for electricity, they argue.

Coal is now burned in more than 600 plants to generate 49 percent of the country’s current electricity, with the largest amounts of that fuel consumed in the upper Great Lakes and Southeastern states, according to the federal Energy Information Administration. The National Mining Association (NMA) projects that the amount of coal mined this year will approach the 2006 record of 1.16 billion tons. Although 150 new coal-fired power plants were proposed between 2000 and 2006, the bulk of those projects has been delayed or canceled, according to an October 2007 report by NETL. In 2007, proposals for 59 coal plants were scrapped in 24 states, either by state regulators concerned about the effects of carbon-dioxide emissions or by power companies worried about the future costs of pollution, according to data from the Sierra Club. More than 36,000 megawatts of electricity was scheduled to come from new coal-fired power in 2007 - enough to power roughly 36 million homes, just 4,500 megawatts was actually produced, NETL found. Read more here.

Icecap Note: With these delays or cancellations, we are more likely to increase our dependence on foreign oil imports as the newer alternative energy technologies are unlikely to be able to meet our needs anytime soon. Conservation can only take us so far and nuclear power is not in the environmentalists’ vocabulary.

Los Angeles Times

California deregulated its electricity industry in 1998, and shortly afterward the lights went out. Apparently, regulators hadn’t realized how easy it would be for unscrupulous traders such as Enron to manipulate the state’s power market once it was open to competition; the results were rolling blackouts and skyrocketing electricity charges. Californians are for all this—in many areas, power bills are inflated with extra fees to cover bonds and other expenses incurred during the disastrous experiment.

We bring up this painful history because the state is about to embark on a new program that will radically impact utility regulation. This time, it’s being driven by an environmental imperative: With the effects of global warming becoming more apparent daily, the state has committed to cut its greenhouse gases 25% by 2020, and electricity generation is the state’s second-biggest source of greenhouse emissions after the transportation sector. To spur the needed changes, regulators are designing a cap-and-trade program, in which carbon emissions are capped and power generators can trade carbon credits—permits to pollute—among themselves. This is a staggeringly complex undertaking that will once again create opportunities for dishonest traders to manipulate the market. In other words, unless the cap-and-trade program is designed extraordinarily well, we could be looking at deregulation deja vu. And the consequences won’t just be higher power bills. Read more here.