Global carbon trade war looms
In this newsletter:
1) China targets rare earth export curbs to hobble US & EU industries
Financial Times, 16 February 2021
2) China’s threatened export ban on rare earths is an almighty own goal for the West
Harry De Quetteville, The Daily Telegraph, 16 February 2021
3) ‘New protectionism’: Australia to fight Boris Johnson’s carbon border tax
The Sydney Morning Herald, 11 February 2021
4) Global carbon trade war looms
Climate Home News, 16 February 2021
5) Boris Johnson's green policies are hitting the poor hardest
James Delingpole, Breitbart, 16 February 2021
6) Nobody knows why gas power plants went offline in Texas [but not in other states with similar winter conditions]
Washington Examiner, 16 February 2021
7) Power outages fuel Texans’ outrage, stir political leaders to ask how they came about
Dallas News, 17 February 2021
8) The political making of a Texan power outage
Editorial, The Wall Street Journal, 17 February 2021
Full details:
1) China targets rare earth export curbs to hobble US & EU industries
Financial Times, 16 February 2021
Beijing asks industry executives if proposed restrictions will harm western contractors
Financial Times, 16 February 2021
Beijing asks industry executives if proposed restrictions will harm western contractors
China controls 80 per cent of the global supply of rare earth minerals © David Gray/Reuters
China is exploring limiting the export of rare earth minerals that are crucial for the manufacture of American F-35 fighter jets and other sophisticated weaponry, according to people involved in a government consultation.
The Ministry of Industry and Information Technology last month proposed draft controls on the production and export of 17 rare earth minerals in China, which controls about 80 per cent of global supply.
Industry executives said government officials had asked them how badly companies in the US and Europe, including defence contractors, would be affected if China restricted rare earth exports during a bilateral dispute.
“The government wants to know if the US may have trouble making F-35 fighter jets if China imposes an export ban,” said a Chinese government adviser who asked not to be identified. Industry executives added that Beijing wanted to better understand how quickly the US could secure alternative sources of rare earths and increase its own production capacity.
Fighter jets such as the F-35, a Lockheed Martin aircraft, rely heavily on rare earths for critical components such as electrical power systems and magnets. A Congressional Research Service report said that each F-35 required 417kg of rare-earth materials
The Chinese move follows deteriorating Sino-US relations and an emerging technology war between the two countries. The Trump administration tried to make it harder for Chinese companies to import sensitive US technology, such as high-end semiconductors. The Biden administration has signalled that it would also restrict certain exports but would work more closely with allies.
Beijing’s control of rare earths threatens to become a new source of friction with Washington but some warn any aggressive moves by China could backfire by prompting rivals to develop their own production capacity.
In a November report, Zhang Rui, an analyst at Antaike, a government-backed consultancy in Beijing, said that US weapons makers could be among the first companies targeted by any export restriction.
China’s foreign ministry said last year it would sanction Lockheed Martin, Boeing and Raytheon for selling arms to Taiwan, the self-ruled island that Beijing claims as its sovereign territory.
The proposed guidelines would require rare earth producers to follow export control laws that regulate shipments of materials that “help safeguard state security”. China’s State Council and Central Military Commission will have the final say on whether the list should include rare earths.
Rare earth minerals are also central to the manufacture of products including smartphones, electric vehicles and wind turbines.
Full story (£)
2) China’s threatened export ban on rare earths is an almighty own goal for the West
Harry De Quetteville, The Daily Telegraph, 16 February 2021
With the US chips down, Beijing is hitting back.
The Ministry of Industry and Information Technology last month proposed draft controls on the production and export of 17 rare earth minerals in China, which controls about 80 per cent of global supply.
Industry executives said government officials had asked them how badly companies in the US and Europe, including defence contractors, would be affected if China restricted rare earth exports during a bilateral dispute.
“The government wants to know if the US may have trouble making F-35 fighter jets if China imposes an export ban,” said a Chinese government adviser who asked not to be identified. Industry executives added that Beijing wanted to better understand how quickly the US could secure alternative sources of rare earths and increase its own production capacity.
Fighter jets such as the F-35, a Lockheed Martin aircraft, rely heavily on rare earths for critical components such as electrical power systems and magnets. A Congressional Research Service report said that each F-35 required 417kg of rare-earth materials
The Chinese move follows deteriorating Sino-US relations and an emerging technology war between the two countries. The Trump administration tried to make it harder for Chinese companies to import sensitive US technology, such as high-end semiconductors. The Biden administration has signalled that it would also restrict certain exports but would work more closely with allies.
Beijing’s control of rare earths threatens to become a new source of friction with Washington but some warn any aggressive moves by China could backfire by prompting rivals to develop their own production capacity.
In a November report, Zhang Rui, an analyst at Antaike, a government-backed consultancy in Beijing, said that US weapons makers could be among the first companies targeted by any export restriction.
China’s foreign ministry said last year it would sanction Lockheed Martin, Boeing and Raytheon for selling arms to Taiwan, the self-ruled island that Beijing claims as its sovereign territory.
The proposed guidelines would require rare earth producers to follow export control laws that regulate shipments of materials that “help safeguard state security”. China’s State Council and Central Military Commission will have the final say on whether the list should include rare earths.
Rare earth minerals are also central to the manufacture of products including smartphones, electric vehicles and wind turbines.
Full story (£)
2) China’s threatened export ban on rare earths is an almighty own goal for the West
Harry De Quetteville, The Daily Telegraph, 16 February 2021
With the US chips down, Beijing is hitting back.
That’s one way of looking at news that, almost two years after the Trump administration began restricting supplies of advanced silicon chips to its rival superpower, China is considering export controls of the rare earth metals vital to two industries of global strategic importance – defence and renewable energy.
The metals are only needed in tiny quantities by comparison to other commodities – according to the US geological survey, the value of the rare earths America imported last year was just $110m (£79m). The problem is how important they are and who they are being imported from.
China controls 80pc of US supplies, with Estonia, Japan and Malaysia making up most of the rest. And though America does dig up some rare earth ores locally, it actually has to ship them to China, whose tolerance for the incredibly polluting process of refinement means it has an iron grip on the supply chain.
None of which makes for happy security chiefs at the Pentagon or the CIA, given that ballistic missiles and drones as well as fighter jets, including the fabulously expensive F-35, rely on rare earths.
Nor is it comfortable reading for those betting big on renewable energy, like the Biden administration, with its $2 trillion plan, or the UK, which is currently developing an offshore wind farm on the Dogger Bank reliant on the world’s biggest turbine – GE’s Haliade-X, which can power a house for two days with a single rotation of its blade and stands 260m tall – two-and-a-half times the size of Big Ben.
Such turbines also depend on the rare earths – tonnes of them in the giant magnets that sit atop each vast machine.
Such formidable magnetism makes rare earths central to all electric motors too. Ever driven an electric car and been impressed by the kick of its acceleration, despite the weight of its battery pack? That’s delivered by rare earth magnets, which are many multiples more powerful, by weight, than traditional counterparts.
The threatened export ban, then, sounds like an almighty own goal for the West, if an entirely foreseeable one following the US exploiting China’s own strategic weakness in the production of semiconductors.
Full post (£)
3) ‘New protectionism’: Australia to fight Boris Johnson’s carbon border tax
The Sydney Morning Herald, 11 February 2021
Australia will push back against Britain’s bid to use the world’s most exclusive leaders’ summit to establish climate tariffs, arguing the sanctions would be a new form of “protectionism” designed to shield local industries from free trade.
The issue could come to a head at the G7 summit in Britain in June, which Prime Minister Scott Morrison has been invited to attend, after British Prime Minister Boris Johnson indicated it would be a key priority at the meeting of the world’s leading economies.
Mr Johnson has directed British government departments to come up with options for carbon border levies ahead of several major international summits, which he believes could act as a global emissions trading scheme as the world strives to hit net-zero emissions by 2050.
The British Prime Minister, riding a new wave of environmental momentum following the election of US President Joe Biden, has told aides the United Nations climate change conference in Glasgow in November is his number one initiative and “passion project” for the year.
Carbon tariffs are a tax on energy-intensive imports that continue to trigger heated international debates. The European Union, frustrated by global inaction on emissions reduction, has advocated for them to be applied on imported goods – such as aluminium, steel and chemicals – that are produced in countries with weaker climate laws. It has already committed to a carbon border tax by 2023, which is likely to hit products made with Australian raw materials.
Mr Biden could also impose climate tariffs, with his “Buy American” economic plan endorsing a “carbon adjustment fee” at the border.
US President Joe Biden signed a raft of executive actions to combat climate change, including pausing new oil and gas leases on federal land and cutting fossil fuel subsidies, as he pursues clean energy policies he billed as a boon to the economy.
Senior Australian government sources, who are not authorised to speak publicly, confirmed it would resist Britain and the EU’s efforts to encourage countries to adopt new taxes to capture imports from carbon-price-free jurisdictions such as Australia. They see the attempts by Britain and the EU to impose carbon tariffs as undermining the free trade deals Australia is currently negotiating with them.
The Morrison government will argue carbon tariffs are not aimed at combating climate change, but rather at economic objectives including protecting local industries such as British and European meat, cheese and wine.
Full story
4) Global carbon trade war looms
Climate Home News, 16 February 2021
[...] The WTO is set to become a battleground for climate action. The European Union is drawing up plans to tax polluting products at its border, with the US and UK considering similar measures.
Russia and Australia argue such carbon border taxes are against the WTO’s anti-protectionism rules.
Any member of the WTO could challenge a carbon tariff in front of a dispute settlement panel and then an appeals panel.
Speaking to Climate Home, experts cast doubt on how much influence Okonjo-Iweala would be able to exert over these diplomatic and legal clashes.
Veena Jha, a Delhi-based economist and former UN trade official, said that, if done wrong, “a border tax on carbon will become a nightmare and a trade war”.
The director-general can be asked to mediate before a trade dispute goes to arbitration, said Jha, but this is not the norm.
Full story
5) Boris Johnson's green policies are hitting the poor hardest
James Delingpole, Breitbart, 16 February 2021
UK Prime Minister Boris Johnson’s Net Zero policies are driving up energy bills by £10 billion a year and hitting the poor hardest, according to the Global Warming Policy Forum (GWPF).
The government is clearly not unaware of the problem because Energy Secretary Kwasi Kwarteng recently published a policy document — Sustainable Warmth: Protecting Vulnerable Households in England — offering a range of subsidies including a ‘£140 warm home discount’ for those living in ‘vulnerable fuel poor homes.’
But as the GWPF’s energy editor Dr John Constable points out, this is just tinkering at the margins. The real problem is the government’s relentless pursuit of a Net Zero policy the country cannot afford.
"The fuel poverty problem as it affects electrically heated low-income households is largely the creation of government policies and in particular the £10 billion a year subsidy cost of renewables, one-third of which hits households through their electricity bills and the remainder through the general cost of living as businesses pass on their costs.
Mr Kwarteng’s measures are wholly inadequate, barely scratching the surface of the electricity bill issue, and leaving the cost of living problem caused by his climate policies quite untouched. As the UK shifts towards electric heating to reduce emissions this problem, already serious, will only get worse."
6) Nobody knows why gas power plants went offline in Texas [but not in other states with similar winter conditions]
Washington Examiner, 16 February 2021
The major U.S. natural gas trade group is cautioning that it is too soon to say why gas plants went offline in Texas, one of the major factors driving massive power outages in the state amid freezing temperatures.
“We don’t actually know why they went offline just yet,” said Richard Meyer, the American Gas Association’s managing director of energy markets, analysis, and standards. The American Gas Association represents energy companies that deliver natural gas.
Meyer noted there are a number of possible factors at play. That could include declines in gas supply flowing to those plants as gas is prioritized for heating demand, operational problems at the plants due to the cold weather, and issues with market incentives from the Texas grid operator.
“All we know is that these plants went offline” and the Electric Reliability Council of Texas, or ERCOT, Texas’s grid operator, asked utilities to curtail power to balance the grid, Meyer said. “I am still waiting for more insight as to why those thermal plants, and the natural gas power plants, in particular, went offline when they did.”
That insight could come over the next few days, as ERCOT, federal regulators, and state officials all examine events in a post-mortem. Right now, however, Texas is still trying to get a handle on the situation.
More than 3 million Texans were still without power Tuesday afternoon, according to online tracker poweroutage.us. ERCOT officials said late Tuesday as much as 30 gigawatts of natural gas, coal, and nuclear power remain offline.
Dan Woodfin, a senior director for ERCOT, told Bloomberg that the bitter cold temperatures have frozen fuel and instruments at natural gas, coal, and nuclear plants, forcing them offline. The cold weather has also put pressure on natural gas supply, Woodfin said.
According to a white paper from the Department of Energy, natural gas production in the U.S. south-central region, including Texas and other high-producing states, was around 6.3 billion cubic feet per day lower Tuesday due to freezes at wellheads and processing plant outages.
The outages account for around 30% of the region’s production and roughly 7% of total U.S. gas production, the Energy Department added.
Meanwhile, demand for natural gas, especially for heating, has spiked. Sunday and Monday set a record for the highest two-day deliveries of natural gas, the American Gas Association said.
Natural gas flows to power generation, too, have been around “peak summer load,” levels Texas would expect to see in the middle of July or August when people are blasting their air conditioners, and not in the middle of winter, Meyer said.
Meyer stressed that while there have been power outages, especially in Texas, there haven’t been major natural gas heating system outages, even with the increased demand for heating.
Already, federal regulators and Texas officials have announced investigations into the power outage crisis in the state to look at electricity grid reliability and the system’s failure to handle the extreme winter weather.
Full story
7) Power outages fuel Texans’ outrage, stir political leaders to ask how they came about
Dallas News, 17 February 2021
AUSTIN — A political backlash over Texas’ electricity blackouts erupted on Tuesday, with the leader of the Texas House calling for hearings to review how and why the state’s electric grid lost so much power and left millions shivering amid record cold temperatures.
After Speaker Dade Phelan called for House hearings to look into what happened, Gov. Greg Abbott announced he’s adding the subject as an emergency item for lawmakers, which means they can move faster on it in this year’s session. Later Tuesday, Senate Business and Commerce Committee Chairman Kelly Hancock, R-North Richland Hills, announced he’ll have a blackouts hearing on March 3.
State officials, meanwhile, have offered no concrete timeline for when the more than 3 million customers without power across Texas will get it back. The state’s electric grid operator said Tuesday it had restored power to about 400,000 households, but did not identify where. Several lawmakers pressed for better information from the operator, the Electric Reliability Council of Texas, known as ERCOT.
Rep. Jeff Leach, R-Plano, on Tuesday called the lack of communication “maddeningly frustrating,” echoing similar comments he’s made on Twitter.
Blackouts began overnight Monday across Texas, as demand for power surged amid freezing temperatures and electricity generators went offline because of the extreme weather.
While initially billed as rolling outages that would last between 45 minutes and a few hours, many Texans have been without electricity for more than a day....
Officials knew bad weather was on the way. Late Friday afternoon, Abbott issued a disaster declaration in all 254 counties. On Sunday, President Joe Biden approved a Texas emergency declaration, activating federal disaster officials to coordinate and “alleviate the hardship and suffering.” Through the Presidents’ Day holiday weekend, Abbott on his political Twitter account conveyed some information about road safety, frozen electric generators and a plea for Texans to stay off roads and conserve energy. [...]
Anger over the blackouts began to build on social media Tuesday, with both Republicans and Democrats critical of the situation.
Leach, the Plano lawmaker, said he would file legislation to require ERCOT officers and directors to be Texas residents following criticism that board members, including chairwoman Sally Talberg, lived outside of the state and did not have to experience the blackouts.
Leach said it was “completely ridiculous and unacceptable” that Talberg lives in Michigan.
Some Democrats seized on how Abbott, U.S. Sen. Ted Cruz, U.S. Reps. Beth Van Duyne of Irving, state Attorney General Ken Paxton and other leading Texas Republicans have criticized California for rolling brownouts in recent months. They delighted in asking the free market-oriented Texas GOP leaders how to explain the mess in their own state.
State Democratic Chairman Gilberto Hinojosa deplored the developments, saying Texas already had too many people lacking food — and now, they don’t have the power needed to cook what food they have.
“All of this is dead wrong,” Hinojosa said in a written statement. “A failure to plan for this winter storm and years of deregulation of our power system has led to this moment. The people responsible for this must be held accountable. Greg Abbott must be held accountable for his lack of planning.”
Full story
8) The political making of a Texan power outage
Editorial, The Wall Street Journal, 17 February 2021
On present trend, this week’s Texas fiasco is coming soon to a cold winter or hot summer near you.
The metals are only needed in tiny quantities by comparison to other commodities – according to the US geological survey, the value of the rare earths America imported last year was just $110m (£79m). The problem is how important they are and who they are being imported from.
China controls 80pc of US supplies, with Estonia, Japan and Malaysia making up most of the rest. And though America does dig up some rare earth ores locally, it actually has to ship them to China, whose tolerance for the incredibly polluting process of refinement means it has an iron grip on the supply chain.
None of which makes for happy security chiefs at the Pentagon or the CIA, given that ballistic missiles and drones as well as fighter jets, including the fabulously expensive F-35, rely on rare earths.
Nor is it comfortable reading for those betting big on renewable energy, like the Biden administration, with its $2 trillion plan, or the UK, which is currently developing an offshore wind farm on the Dogger Bank reliant on the world’s biggest turbine – GE’s Haliade-X, which can power a house for two days with a single rotation of its blade and stands 260m tall – two-and-a-half times the size of Big Ben.
Such turbines also depend on the rare earths – tonnes of them in the giant magnets that sit atop each vast machine.
Such formidable magnetism makes rare earths central to all electric motors too. Ever driven an electric car and been impressed by the kick of its acceleration, despite the weight of its battery pack? That’s delivered by rare earth magnets, which are many multiples more powerful, by weight, than traditional counterparts.
The threatened export ban, then, sounds like an almighty own goal for the West, if an entirely foreseeable one following the US exploiting China’s own strategic weakness in the production of semiconductors.
Full post (£)
3) ‘New protectionism’: Australia to fight Boris Johnson’s carbon border tax
The Sydney Morning Herald, 11 February 2021
Australia will push back against Britain’s bid to use the world’s most exclusive leaders’ summit to establish climate tariffs, arguing the sanctions would be a new form of “protectionism” designed to shield local industries from free trade.
The issue could come to a head at the G7 summit in Britain in June, which Prime Minister Scott Morrison has been invited to attend, after British Prime Minister Boris Johnson indicated it would be a key priority at the meeting of the world’s leading economies.
Mr Johnson has directed British government departments to come up with options for carbon border levies ahead of several major international summits, which he believes could act as a global emissions trading scheme as the world strives to hit net-zero emissions by 2050.
The British Prime Minister, riding a new wave of environmental momentum following the election of US President Joe Biden, has told aides the United Nations climate change conference in Glasgow in November is his number one initiative and “passion project” for the year.
Carbon tariffs are a tax on energy-intensive imports that continue to trigger heated international debates. The European Union, frustrated by global inaction on emissions reduction, has advocated for them to be applied on imported goods – such as aluminium, steel and chemicals – that are produced in countries with weaker climate laws. It has already committed to a carbon border tax by 2023, which is likely to hit products made with Australian raw materials.
Mr Biden could also impose climate tariffs, with his “Buy American” economic plan endorsing a “carbon adjustment fee” at the border.
US President Joe Biden signed a raft of executive actions to combat climate change, including pausing new oil and gas leases on federal land and cutting fossil fuel subsidies, as he pursues clean energy policies he billed as a boon to the economy.
Senior Australian government sources, who are not authorised to speak publicly, confirmed it would resist Britain and the EU’s efforts to encourage countries to adopt new taxes to capture imports from carbon-price-free jurisdictions such as Australia. They see the attempts by Britain and the EU to impose carbon tariffs as undermining the free trade deals Australia is currently negotiating with them.
The Morrison government will argue carbon tariffs are not aimed at combating climate change, but rather at economic objectives including protecting local industries such as British and European meat, cheese and wine.
Full story
4) Global carbon trade war looms
Climate Home News, 16 February 2021
[...] The WTO is set to become a battleground for climate action. The European Union is drawing up plans to tax polluting products at its border, with the US and UK considering similar measures.
Russia and Australia argue such carbon border taxes are against the WTO’s anti-protectionism rules.
Any member of the WTO could challenge a carbon tariff in front of a dispute settlement panel and then an appeals panel.
Speaking to Climate Home, experts cast doubt on how much influence Okonjo-Iweala would be able to exert over these diplomatic and legal clashes.
Veena Jha, a Delhi-based economist and former UN trade official, said that, if done wrong, “a border tax on carbon will become a nightmare and a trade war”.
The director-general can be asked to mediate before a trade dispute goes to arbitration, said Jha, but this is not the norm.
Full story
5) Boris Johnson's green policies are hitting the poor hardest
James Delingpole, Breitbart, 16 February 2021
UK Prime Minister Boris Johnson’s Net Zero policies are driving up energy bills by £10 billion a year and hitting the poor hardest, according to the Global Warming Policy Forum (GWPF).
The government is clearly not unaware of the problem because Energy Secretary Kwasi Kwarteng recently published a policy document — Sustainable Warmth: Protecting Vulnerable Households in England — offering a range of subsidies including a ‘£140 warm home discount’ for those living in ‘vulnerable fuel poor homes.’
But as the GWPF’s energy editor Dr John Constable points out, this is just tinkering at the margins. The real problem is the government’s relentless pursuit of a Net Zero policy the country cannot afford.
"The fuel poverty problem as it affects electrically heated low-income households is largely the creation of government policies and in particular the £10 billion a year subsidy cost of renewables, one-third of which hits households through their electricity bills and the remainder through the general cost of living as businesses pass on their costs.
Mr Kwarteng’s measures are wholly inadequate, barely scratching the surface of the electricity bill issue, and leaving the cost of living problem caused by his climate policies quite untouched. As the UK shifts towards electric heating to reduce emissions this problem, already serious, will only get worse."
6) Nobody knows why gas power plants went offline in Texas [but not in other states with similar winter conditions]
Washington Examiner, 16 February 2021
The major U.S. natural gas trade group is cautioning that it is too soon to say why gas plants went offline in Texas, one of the major factors driving massive power outages in the state amid freezing temperatures.
“We don’t actually know why they went offline just yet,” said Richard Meyer, the American Gas Association’s managing director of energy markets, analysis, and standards. The American Gas Association represents energy companies that deliver natural gas.
Meyer noted there are a number of possible factors at play. That could include declines in gas supply flowing to those plants as gas is prioritized for heating demand, operational problems at the plants due to the cold weather, and issues with market incentives from the Texas grid operator.
“All we know is that these plants went offline” and the Electric Reliability Council of Texas, or ERCOT, Texas’s grid operator, asked utilities to curtail power to balance the grid, Meyer said. “I am still waiting for more insight as to why those thermal plants, and the natural gas power plants, in particular, went offline when they did.”
That insight could come over the next few days, as ERCOT, federal regulators, and state officials all examine events in a post-mortem. Right now, however, Texas is still trying to get a handle on the situation.
More than 3 million Texans were still without power Tuesday afternoon, according to online tracker poweroutage.us. ERCOT officials said late Tuesday as much as 30 gigawatts of natural gas, coal, and nuclear power remain offline.
Dan Woodfin, a senior director for ERCOT, told Bloomberg that the bitter cold temperatures have frozen fuel and instruments at natural gas, coal, and nuclear plants, forcing them offline. The cold weather has also put pressure on natural gas supply, Woodfin said.
According to a white paper from the Department of Energy, natural gas production in the U.S. south-central region, including Texas and other high-producing states, was around 6.3 billion cubic feet per day lower Tuesday due to freezes at wellheads and processing plant outages.
The outages account for around 30% of the region’s production and roughly 7% of total U.S. gas production, the Energy Department added.
Meanwhile, demand for natural gas, especially for heating, has spiked. Sunday and Monday set a record for the highest two-day deliveries of natural gas, the American Gas Association said.
Natural gas flows to power generation, too, have been around “peak summer load,” levels Texas would expect to see in the middle of July or August when people are blasting their air conditioners, and not in the middle of winter, Meyer said.
Meyer stressed that while there have been power outages, especially in Texas, there haven’t been major natural gas heating system outages, even with the increased demand for heating.
Already, federal regulators and Texas officials have announced investigations into the power outage crisis in the state to look at electricity grid reliability and the system’s failure to handle the extreme winter weather.
Full story
7) Power outages fuel Texans’ outrage, stir political leaders to ask how they came about
Dallas News, 17 February 2021
AUSTIN — A political backlash over Texas’ electricity blackouts erupted on Tuesday, with the leader of the Texas House calling for hearings to review how and why the state’s electric grid lost so much power and left millions shivering amid record cold temperatures.
After Speaker Dade Phelan called for House hearings to look into what happened, Gov. Greg Abbott announced he’s adding the subject as an emergency item for lawmakers, which means they can move faster on it in this year’s session. Later Tuesday, Senate Business and Commerce Committee Chairman Kelly Hancock, R-North Richland Hills, announced he’ll have a blackouts hearing on March 3.
State officials, meanwhile, have offered no concrete timeline for when the more than 3 million customers without power across Texas will get it back. The state’s electric grid operator said Tuesday it had restored power to about 400,000 households, but did not identify where. Several lawmakers pressed for better information from the operator, the Electric Reliability Council of Texas, known as ERCOT.
Rep. Jeff Leach, R-Plano, on Tuesday called the lack of communication “maddeningly frustrating,” echoing similar comments he’s made on Twitter.
Blackouts began overnight Monday across Texas, as demand for power surged amid freezing temperatures and electricity generators went offline because of the extreme weather.
While initially billed as rolling outages that would last between 45 minutes and a few hours, many Texans have been without electricity for more than a day....
Officials knew bad weather was on the way. Late Friday afternoon, Abbott issued a disaster declaration in all 254 counties. On Sunday, President Joe Biden approved a Texas emergency declaration, activating federal disaster officials to coordinate and “alleviate the hardship and suffering.” Through the Presidents’ Day holiday weekend, Abbott on his political Twitter account conveyed some information about road safety, frozen electric generators and a plea for Texans to stay off roads and conserve energy. [...]
Anger over the blackouts began to build on social media Tuesday, with both Republicans and Democrats critical of the situation.
Leach, the Plano lawmaker, said he would file legislation to require ERCOT officers and directors to be Texas residents following criticism that board members, including chairwoman Sally Talberg, lived outside of the state and did not have to experience the blackouts.
Leach said it was “completely ridiculous and unacceptable” that Talberg lives in Michigan.
Some Democrats seized on how Abbott, U.S. Sen. Ted Cruz, U.S. Reps. Beth Van Duyne of Irving, state Attorney General Ken Paxton and other leading Texas Republicans have criticized California for rolling brownouts in recent months. They delighted in asking the free market-oriented Texas GOP leaders how to explain the mess in their own state.
State Democratic Chairman Gilberto Hinojosa deplored the developments, saying Texas already had too many people lacking food — and now, they don’t have the power needed to cook what food they have.
“All of this is dead wrong,” Hinojosa said in a written statement. “A failure to plan for this winter storm and years of deregulation of our power system has led to this moment. The people responsible for this must be held accountable. Greg Abbott must be held accountable for his lack of planning.”
Full story
8) The political making of a Texan power outage
Editorial, The Wall Street Journal, 17 February 2021
On present trend, this week’s Texas fiasco is coming soon to a cold winter or hot summer near you.
Why are millions of Americans in the nation’s most energy-rich state without power and heat for days amid extreme winter weather? “The people who have fallen short with regard to the power are the private power generation companies,” Texas Gov. Greg Abbott explained. Ah, yes, blame private power companies . . . that are regulated by government.
The Republican sounds like California’s Democratic Governor Gavin Newsom, who lambasted private utilities for rolling blackouts during a heat wave last summer. Power grids should be able to withstand extreme weather. But in both these bellwether states, state and federal energy policies have created market distortions and reduced grid reliability.
Mr. Abbott blamed his state’s extensive power outages on generators freezing early Monday morning, noting “this includes the natural gas & coal generators.” But frigid temperatures and icy conditions have descended on most of the country. Why couldn’t Texas handle them while other states did?
The problem is Texas’s overreliance on wind power that has left the grid more vulnerable to bad weather. Half of wind turbines froze last week, causing wind’s share of electricity to plunge to 8% from 42%. Power prices in the wholesale market spiked, and grid regulators on Friday warned of rolling blackouts. Natural gas and coal generators ramped up to cover the supply gap but couldn’t meet the surging demand for electricity—which half of households rely on for heating—even as many families powered up their gas furnaces. Then some gas wells and pipelines froze.
In short, there wasn’t sufficient baseload power from coal and nuclear to support the grid. Baseload power is needed to stabilize grid frequency amid changes in demand and supply. When there’s not enough baseload power, the grid gets unbalanced and power sources can fail. The more the grid relies on intermittent renewables like wind and solar, the more baseload power is needed to back them up.
But politicians don’t care about grid reliability until the power goes out. And for three decades politicians from both parties have pushed subsidies for renewables that have made the grid less stable.
Start with the 1992 Energy Policy Act signed by George H.W. Bush, which created a production tax credit to boost the infant wind industry. Generators collect up to $25 per megawatt hour of power they produce regardless of market demand. The credit was supposed to expire in 1999, but nothing lasts longer than a temporary government program, as Ronald Reagan once quipped.
The renewables lobby found GOP allies in windy states like Texas, Oklahoma and Iowa. Former Enron CEO Ken Lay, who had made a big bet on wind, begged then Texas Gov. George W. Bush in 1998 to lobby Congress to extend the credit for five years. Congress has since extended it more than a dozen times, most recently in December.
Wind producers persuaded former Gov. Rick Perry to back a $5 billion network of transmission lines to connect turbines in western Texas to cities. This enabled them to build more turbines—and collect more tax credits. Because the Texas grid is often oversupplied, wind producers sometimes pay to off-load their power, though they still turn a profit with the tax credits.
Coal and nuclear are more strictly regulated and can’t compete, and many coal plants have shut down in Texas and elsewhere. Over the last decade about 100 gigawatts of coal power nationwide has been retired—enough to power 60 million homes. Many nuclear plants are scheduled to shut down, including large reactors in New York and Illinois this year.
Renewables and natural gas are expected to substitute, but Texas is showing their limitations. In the Lone Star State, bad weather has constrained the supply of gas, but government policies do the same in other states. New York Gov. Andrew Cuomo and New Jersey’s Phil Murphy have blocked pipelines to deliver shale gas from Pennsylvania to the Northeast.
Their pipeline blockade has driven up the cost of electricity. The average retail price of power is about 50% higher in New Jersey and New York than in Pennsylvania. They and other governors have also poured subsidies into wind and solar, though neither can provide reliable power in frosty weather.
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The Republican sounds like California’s Democratic Governor Gavin Newsom, who lambasted private utilities for rolling blackouts during a heat wave last summer. Power grids should be able to withstand extreme weather. But in both these bellwether states, state and federal energy policies have created market distortions and reduced grid reliability.
Mr. Abbott blamed his state’s extensive power outages on generators freezing early Monday morning, noting “this includes the natural gas & coal generators.” But frigid temperatures and icy conditions have descended on most of the country. Why couldn’t Texas handle them while other states did?
The problem is Texas’s overreliance on wind power that has left the grid more vulnerable to bad weather. Half of wind turbines froze last week, causing wind’s share of electricity to plunge to 8% from 42%. Power prices in the wholesale market spiked, and grid regulators on Friday warned of rolling blackouts. Natural gas and coal generators ramped up to cover the supply gap but couldn’t meet the surging demand for electricity—which half of households rely on for heating—even as many families powered up their gas furnaces. Then some gas wells and pipelines froze.
In short, there wasn’t sufficient baseload power from coal and nuclear to support the grid. Baseload power is needed to stabilize grid frequency amid changes in demand and supply. When there’s not enough baseload power, the grid gets unbalanced and power sources can fail. The more the grid relies on intermittent renewables like wind and solar, the more baseload power is needed to back them up.
But politicians don’t care about grid reliability until the power goes out. And for three decades politicians from both parties have pushed subsidies for renewables that have made the grid less stable.
Start with the 1992 Energy Policy Act signed by George H.W. Bush, which created a production tax credit to boost the infant wind industry. Generators collect up to $25 per megawatt hour of power they produce regardless of market demand. The credit was supposed to expire in 1999, but nothing lasts longer than a temporary government program, as Ronald Reagan once quipped.
The renewables lobby found GOP allies in windy states like Texas, Oklahoma and Iowa. Former Enron CEO Ken Lay, who had made a big bet on wind, begged then Texas Gov. George W. Bush in 1998 to lobby Congress to extend the credit for five years. Congress has since extended it more than a dozen times, most recently in December.
Wind producers persuaded former Gov. Rick Perry to back a $5 billion network of transmission lines to connect turbines in western Texas to cities. This enabled them to build more turbines—and collect more tax credits. Because the Texas grid is often oversupplied, wind producers sometimes pay to off-load their power, though they still turn a profit with the tax credits.
Coal and nuclear are more strictly regulated and can’t compete, and many coal plants have shut down in Texas and elsewhere. Over the last decade about 100 gigawatts of coal power nationwide has been retired—enough to power 60 million homes. Many nuclear plants are scheduled to shut down, including large reactors in New York and Illinois this year.
Renewables and natural gas are expected to substitute, but Texas is showing their limitations. In the Lone Star State, bad weather has constrained the supply of gas, but government policies do the same in other states. New York Gov. Andrew Cuomo and New Jersey’s Phil Murphy have blocked pipelines to deliver shale gas from Pennsylvania to the Northeast.
Their pipeline blockade has driven up the cost of electricity. The average retail price of power is about 50% higher in New Jersey and New York than in Pennsylvania. They and other governors have also poured subsidies into wind and solar, though neither can provide reliable power in frosty weather.
Full post ($)
The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.
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