Sunday, November 10, 2019

Some notes on Economic Policy Innovations to Combat Climate Change

I attended this a few weeks ago (below is the opening, click here for the whole thing):

My impressions:

Mary Nichols, Cal. Air Resources Board – 
  • Seemed to somewhat deemphasize regulatory approach as opposed to cap and trade
  • CARB future efforts: 
            *Technology to facilitate carbon sequestration (might have been talking about direct capture)
            *Better ag/soils standard to retain/sequester carbon

Larry Goulder –
  • China moving to nationwide cap and trade by end of year, doubling the amount of carbon subject ot market regulation. Doing it as much for local pollution issues as for climate change itself.
  • Both Larry and one other (Christy Goldfuss?) emphasized tradeable performance standards as a bridge to a carbon price. Christy(?) mentioned that in Canada, one option for a performance standard is to pay a tax.
  • Larry also cautioned that tps might lock in and make carbon pricing less likely

Chris Field – 
  • We’re assuming geoengineering is technically simple and cheap, but we don’t really know, and it would be very difficult to uniformly cool things down, let alone not change other weather patterns.
  • Particularly concerned about BECCS and how it would consume as much land area as all of current agriculture

Lucas Davis – 
  • What keeps me up at night is potential air conditioning in low and middle income countries

Roberton Williams – 
  • Remember regulations can also be regressive. Paying rich people to drive Teslas has regressive effects.

My thoughts: what Chris said about BECCS is especially important and depressing. I've been counting on it to save our bacon. Maybe there's still a way to do it that doesn't consume as much land (algae plots floating over the ocean?).

We in California like to think we're ahead of everyone. I wonder if Mary Nichols' comments reflect that - negative emissions is great IMO but we've also got a lot to do just to knock down our emissions.

In case it's not obvious, the forum had something of a free-market slant. Not all the speakers of course, and there's nothing wrong with discussing those solutions, but just acknowledging the slant here.

Lucas' comments on air conditioning is unsettling. Add to that the effect of increased meat consumption as countries develop and then we have a real problem.

See also, this Twitter thread from John Mashey on a recent forum including Chris Field and Katherine Hayhoe.

Tuesday, October 29, 2019

Renewables finally getting credit they deserve for driving out coal

Murray Energy filed for bankruptcy yesterday, and Robert Murray is out of a job. Couldn't happen to a nicer fellow or company. I do regret what will happen to retiree pensions and to employees, although Democrats want to help them while Republicans refuse. The lesson to any current coal worker under the age of 55 should be clear though - get out, get out, get out.

With luck, this will throw a monkey wrench into Murray's efforts to throw a monkey wrench into policies addressing climate change, as money spent on lobbying would be viewed skeptically by a bankruptcy judge. OTOH, Murray has a deal with major creditors (but not unions) so emerging from court supervision could happen quickly. We'll see how much the court protects employees and other creditors.

Some excerpts from the bankruptcy filing, and my commentary and emphasis added:

The thermal coal markets that Murray traditionally serves have been meaningfully
challenged over the past three to four years, and deteriorated significantly in the last several
months. This sector-wide decline has been driven largely by (a) the closure of approximately
93,000 megawatts of coal-fired electric generating capacity in the United States, (b) a record
production of inexpensive natural gas, and (c) the growth of wind and solar energy, with gas and
renewables, displacing coal used by U.S. power plants.

For years, lukewarmers have given all credit to reduced emissions to natural gas, now even coal producers are admitting the truth. Murray had to cast a little shade though by not expressly admitting renewables are cheaper, implying that government policies are the problem.

At the same time, demand for U.S. coal from international utilities has been subject to its own perfect storm of negative forces, and the European benchmark price for thermal coal has halved in the last year

Trump gets his share of the shade for trade wars (pay attention, workers). European renewable efforts should get their share of the credit for reducing coal demand.

At the same time, Murray has had to rebate cash to certain customers under price sharing arrangements as a result of low pricing in the PJM Interconnection

I didn't know about this. Murray scored deals with utilities by (theoretically) taking on the risk that its product could get undercut by gas or renewables. So here's a question - did the utilities pay in advance and now won't get their rebates because of bankruptcy? If so, then the public is stuck with subsidizing coal when cheaper and lower emission supplies are available. This practice should be regulated, and maybe regulators should make the utility companies eat the costs, instead of ratepayers. Even if utilities didn't pay in advance, the best they can do now is walk away and see what short term pricing they can get, which is a gamble.

Competitors have used bankruptcy to reduce debt and lower their cost structures by eliminating cash interest obligations and pension and benefit obligations, leaving them better positioned to compete for volume and pricing in the current market, 

Pretty clear what Murray intends to do in bankruptcy. Pay attention, coal workers.

As of December 31, 2018, Murray owns and operates 26 harbor boats and towboats, 478 barges, 15 locomotives, 748 railcars, and 25 coal hauling tractor trailers (exclusive of non-debtor Foresight operations).

I wonder if this adds to the reason why railroad companies fight efforts to address climate change. Not only do they haul a lot of coal, coal companies are also their direct customers.

In June 2015, Murray Global Commodities, Inc. entered into a joint partnership agreement for a 34 percent interest in non-debtor Javelin Global Commodities Holdings LLP (together with its direct and indirect subsidiaries, “Javelin”).

Elsewhere it says that Javelin is one of their major international customers, which they apparently partly own. I wonder if it's a stalking horse for Murray to interfere in foreign politics to promote coal usage.

As of the Petition Date, Robert E. Murray holds all of the issued and outstanding voting Class A common shares

All other shares are non-voting, so Robert has (had?) full control of Murray. He's a serious bad guy, so whether he emerges with full control or any control is an important issue.

On June 29, 2018, Murray entered into the Superpriority Credit and Guaranty Agreement (as amended, restated, amended and restated, supplemented, or otherwise modified from time to time, the “Superpriority Term Loan Agreement”)

This involves some of the senior creditors who are going to do the best at the other end of bankruptcy. The question in my mind is the date. At such a recent date, the risk of bankruptcy should have been clear and the possibility of a sweetheart deal at the expense of employees, retirees, and other creditors should be investigated. Does Robert Murray or family have any ownership of the senior creditors? Some other recent debt listed in the doc raises similar issues.

Following the large wave of chapter 11 filings in 2015 and 2016, more than half a
dozen large U.S. coal companies collapsed into bankruptcy over the last several years and
withdrew from the 1974 Pension Plan. When an employer withdraws, its vested beneficiaries
remain in the 1974 Pension Plan and are referred to as “orphan” beneficiaries. The remaining
contributing employers become responsible for the benefits of these orphaned participants who
were never their employees. As a result, approximately 95 percent of beneficiaries who currently
receive benefits from the 1974 Pension Plan last worked for employers that no longer contribute
to the Plan. As of January 2019, 11 employers contribute to the 1974 Pension Plan, compared to
over 2,800 in 1984. This has placed significant stress on the 1974 Pension Plan and the small
number of contributing employers—Murray most of all.

Pretty good summary of how effed up coal worker pensions are.

remaining coal-fired power plants are running at capacity factors of just 42 percent versus 48 percent in 2013.

It's not just plant closures, the still-open plants are running at lower rates.

Murray maintains its belief that longer term demand for coal is underpinned in the
United States by a practical requirement that approximately 25 percent of the power supplied to
the electrical grid come from coal power
generation to ensure reliable electricity during cold snaps
and heat waves, when other parts of the grid will be less reliable or overly expensive. This belief
has guided Murray’s decisions to make value-accretive acquisitions during general market distress,

That 25% figure is debatable to say the least, and not to mention that it could come from nuclear, large hydro, natural gas and eventually from power storage. Also, their acquisition strategy has been to double down on coal. How's that worked out?


That's it for the main bankruptcy filing. Definitely worth it for someone to look at the restructuring agreement.

Wednesday, October 09, 2019

White nationalists, please go ahead and actually study climate change

Over the summer, there was a smattering of concern over white nationalists who depart from the usual right-wing, conspiratorial denial of climate change. Instead they incorporate the threat of climate immigration as part of their "Great Replacement" theory of white suicide.

This is no joking matter when it comes to mass murderers like the El Paso Walmart killer. The racists' relationship to climate change can't become particularly deep, however. Anything more than the shallowest understanding of climate that still accepts the science will clearly affix blame, and that blame doesn't belong to Syrian, African, and Latin American refugees. Any real understanding would put pressure, at least somewhat, on their racist ideology. Short of actual understanding, they could still seize upon climate change as yet another poorly-thought-out excuse for hatred, but that misuse is possible for any headline. Racists should study the issue itself and take the chance to reconsider their ideology.

The broader issue of environmentalism overlapping with racism is trickier though because population growth is a real-if-secondary factor in environmental harm, with the environmental footprint of each individual being the primary driving factor. Immigration doesn't increase population globally but does increase it in the receiving nation. The problem, ironically, is the opposite of what racists normally think: immigrants don't fail to assimilate but rather assimilate just fine, leaving behind the small individual footprint of the country they left and taking on the massive footprint of the rich country they joined.

Not all the time, of course. When I was campaigning for a water district election during California's drought, I came across an older Indian woman in a wealthier neighborhood, carefully handwashing her car from a bucket. She said nobody had to educate her about water conservation, she immigrated here with that knowledge. Good on her, but I don't know that her kids or grandkids would have the same habits.

Racists are going to misuse the overpopulation issue. They have to be fought when they do that, while still acknowledging overpopulation is an issue. Reducing population growth in the richest countries, along with reducing the individual footprints, should be a priority. Reducing that footprint could even make it easier to accommodate more immigration, rather than fighting immigration.

Monday, September 30, 2019

Greta Thunberg and Ponder the Maunder

This was cute:

The point I just want to add is that I don't recall anything like the same vitriol, and none of the expressed desire to slap her or spank her, against that Ponder the Maunder girl from years back, a teenager whose father convinced her that she had refuted all of climate science. My recollection is that girl eventually reached the point in college where Greta is right now, telling people to listen to scientists (can't seem to find a link tho).

Just another indication of who's arguing based on reason and who's relying on emotion.

Saturday, September 07, 2019

The long-awaited Bay Area gas station count is here - more hints of an EV effect making ICE vehicles less convenient

Don't get too excited now. Updated figures on gas stations and gasoline consumption in the Bay Area are out:

Gas stations continue to decrease despite a strong economy and an increased population. San Francisco in particular lost 14% of its gas stations in a year, and now has one station for every 11,000 people. While many other factors could influence gas station counts, there's also gas consumption:

Consumption is down 7% from the high in 2016, mirroring the decrease in gas stations since 2016.

It takes a while for the increasing market share of new EV purchases to be reflected by the total vehicle fleet. OTOH, EVs get driven more than ICE vehicles so their share of vehicle miles will be greater than the share of the total fleet. It seems likely that EV market penetration is a big part of the reason gas consumption is decreasing and part of the reason why stations are disappearing. As EVs become more convenient, ICE vehicles are becoming less convenient to fill up.

Thursday, September 05, 2019

Eli Explains It All: Amazon and Oxygen Edition

Eli, as readers of this blog know, often explains it all,  often belatedly, but allow the Bunny to put to rest your fears that burning in the Amazon will deplete oxygen in the atmosphere.

The concentration of CO2 in the atmosphere is ~400 ppm.  Oxygen is approximately 20%.  That translates out to 200,000 ppm. If CO2 doubles to 800 ppm that would at worst put O2 at 199,600 ppm. 

It's as simple as that, but if you insist on long reads, have at it.

Saturday, August 17, 2019

The Republican Judicial War Against Science

Washington Post:

An exchange about a climate change seminar for judges set off the controversy, after a two-sentence heads-up message about the session — co-sponsored by the research and education agency of the judiciary, the Federal Judicial Center — was sent.

One judge’s share about the event provoked a pushback email from a colleague, who questioned the judge’s ethics and climate change science, and urged the judge to stick to his lane on what “you are being paid to do” — adding that “the jurisdiction assigned to you does not include saving the planet.”

.....The controversy began the evening of July 3, when Sullivan forwarded the invitation as “just FYI.”

Less than an hour later, Randolph, who serves on the U.S. Court of Appeals for the D.C. Circuit, replied all. He chided Sullivan for “subjecting our colleagues to this nonsense” and suggested he had crossed an ethical line. He asked: “Should I report you? I don’t know.”

....More than two weeks after his initial note, Randolph again addressed the email list. After learning more about the Environmental Law Institute’s program and the judiciary’s co-sponsorship, he wrote: “While I continue to disagree with their conclusion about the propriety of the program, I think their position is fairly held.”

....Experts on judicial ethics said the appeals court judge should have issued a direct apology to Sullivan and suggested Randolph should recuse himself from cases involving climate change.

As of Tuesday morning, Randolph was listed as one of three-judges to hear arguments Sept. 6 in a case brought by California and more than a dozen other states challenging an Environmental Protection Agency decision to scrap some vehicle emissions standards.

Just before 5 p.m. Tuesday, the court calendar was updated and Randolph’s name was replaced. The clerk’s office and Randolph declined to comment on the change.

Gillers and Arthur D. Hellman of the University of Pittsburgh law school said in interviews that the strong views Randolph expressed suggest he should not sit on cases related to global warming. 

Imagine for a minute that the invitation had been to a briefing on forensic science. I somehow doubt it would have received the same reaction. Yet Randolph was on the edge of reporting the invitation as unethical.

The outcome was okay in the end, with Randolph booted off a very important case. But it's a signal of the type of damage that Trump's appointees will be doing for decades.