The Week That Was: October 17, 2020, Brought to You by www.SEPP.org
By Ken Haapala, President, Science and Environmental Policy Project
Quote of the Week: “It is well known that [scientific] reputation is hard to build and easy to lose; however, it is even harder to rebuild.”-– Professor Leonid Tsybeskov, New Jersey Institute of Technology (Physics Today, October 2020, page 10) [H/t George Hacken]
Number of the Week: 99%
Nobel Prize: Last week TWTW reviewed The Looming Energy Crisis: Are Blackouts Inevitable? by Donn Dears. Dears discussed how day-before auctions for electricity generation are distorting the market for electricity, in that the auctions favor non-dispatchable, unreliable, subsidized forms of energy generation over dispatchable, reliable forms. The primary forms of unreliable, subsidized forms emphasized are wind and solar (for brevity, wind will be used here). In the US, when daily weather forecasts show winds will be favorable industrial wind can bid as low as they wish, but they will be paid the highest successful bid amount – the market clearing price.
If the winds will be unfavorable, industrial wind need not bid. The responsibility for providing electricity will fall on others, usually at great expense to the consumer. In short, a reliable electrical grid is being undermined by flexibility of industrial wind to bid when winds are favorable with no consequences when winds are unfavorable. This undermining of a reliable grid is an unintended consequence of the auction system.
This week, the Nobel Prize of Economic Sciences was given to two Americans for their work on how auction designs have unintended consequences. The auction format influences both the available information and different bidding strategies. For example, if electricity auctions were held two weeks in advance of delivery date, industrial wind would be cautious in its bidding – weather forecasts are not that good.
The work of the economists is unrelated to the energy markets, but the concept applies. The unintended consequences of using day-ahead auctions for determining which electricity bids will be accepted may yield the lowest costs to the consumer for that day. But such an auction format may cost the consumer dearly over time. Writing in Master Resource, Bill Peacock expresses concerns that Texas may experience blackouts similar to those in California. He labels the system of pricing wind as “Predatory Pricing.” See Article #1, Subsidies and Mandates Forever and https://www.nobelprize.org/prizes/economic-sciences/2020/press-release/
No Wind Today: Thanks to the “feel-good” 2008 Climate Change Act, the UK is far further along to an electricity crisis than the US. The Act mandates an overall 80% cut in greenhouse gas emissions by 2050 as defined by the UN Kyoto Protocol.
“The Kyoto basket encompasses the following six greenhouse gases: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and the so-called F-gases (hydrofluorocarbons and perfluorocarbons) and sulfur hexafluoride (SF6). Each gas is weighted by its global warming potential and aggregated to give total greenhouse gas emissions in CO2 equivalents.”
Note that water vapor, the most abundant greenhouse gas, is missing from the Kyoto list. This is one reason why UN climate science is highly questionable, and all subsequent calculations of global warming potential are misleading.
Last week, UK Prime Minister Boris Johnson proclaimed that every home in the UK, will be powered by offshore wind by 2030, a quadrupling of wind capacity in ten years. Initial estimates by Gordon Hughes, who has studied the economics of wind power, show this task could cost consumers £27 Billion A Year. There appears to be no costs too great for citizens to suffer when self-righteous politicians go green. Hughes has promised a more complete study in the near future. A September 2020 report by Hughes and John Constable stated:
“The dramatically falling costs of renewables are now a political, a media, and conversational cliché. However, the claim is demonstrably false. Audited accounts show that far from getting cheaper, wind power is actually becoming more expensive. The failure of the British civil service to detect this fact and, hence, to protect the consumer and taxpayer from the consequences of the looming failure of the renewables sector raises important questions about the analytic competence of the Whitehall machine.”
Although the UK pricing system is different than the US system, the failure to account for needed backup is a common problem with those claiming wind costs are going down. Further, since the costs of offshore wind are mostly capital costs, the so-called green jobs will go mostly to the countries that manufacture wind turbines and firms that use the concrete and steel needed for massive foundations.
Nature quickly showed that Johnson is only fooling is himself and those who believe him. On October 14, the National Grid, which operates the UK Grid, reported that due to a lack of wind there may be a shortage of electrical power for the next several days. As John Constable has written, the UK’s grid is fragile and is becoming increasingly so.
See links under Questioning European Green, Alternative, Green (“Clean”) Solar and Wind
UN’s Weaponization of Weather: Last week TWTW linked to a review by Anthony Sadar of Joe Bastardi’s new book, The Weaponization of Weather in the Phony Climate War: Maybe ‘extreme weather’ is just weather. As if to promote Bastardi’s new book, the UN Office for Disaster Risk Reduction has declared that climate disasters have doubled over the past 20 years (2000-2019). The report claims:
“In the period 2000 to 2019, there were 7,348 major recorded disaster events claiming 1.23 million lives, affecting 4.2 billion people (many on more than one occasion) resulting in approximately US$2.97 trillion in global economic losses.
“This is a sharp increase over the previous twenty years. Between 1980 and 1999, 4,212 disasters were linked to natural hazards worldwide claiming approximately 1.19 million lives and affecting 3.25 billion people resulting in approximately US$1.63 trillion in economic losses.”
It goes on to say:
“Asia suffered the highest number of disaster events. In total, between 2000 and 2019, there were 3,068 disaster events in Asia, followed by the 1,756 events in the Americas and 1,192 events in Africa.
“In terms of affected countries globally, China (577 events) and the USA (467 events) reported the highest number of disaster events, followed by India (321 events), Philippines (304 events), and Indonesia (278 events). These countries all have large and heterogenous landmasses and relatively high population densities in at-risk areas.
“Overall, eight of the top 10 countries by disaster events are in Asia.”
Economic improvements will increase the costs of disasters, but not deaths. Apparently, the authors have no knowledge of the massive deaths from famine, droughts, and floods that repeatedly hit China, India, and other countries before 1980. The worst drought the USA suffered was in the 1930s.
As stated in the December 28, 2019 TWTW, Our World In Data reported massive declines in the numbers of people living in extreme poverty. Prior to COVID-19, deaths from extreme poverty were declining rapidly. Use of fossil fuels were providing sanitary conditions, safe drinking water, access to electricity and other clean fuels for cooking, increases in health, education, and living standards, greatly improved nutrition, better health care, etc.
The current claims are among the worst of UN reports that have been released recently. One can assert that the UN is so focused on establishing its $100 Billion per year Green Climate Fund, that it will report anything, no matter how poorly substantiated. See links under Defending the Orthodoxy, Questioning the Orthodoxy Communicating Better to the Public – Make things up, December 28, 2019 TWTW, and https://ourworldindata.org/
Changing Objectives: The International Energy Agency is a Paris-based autonomous intergovernmental organization established in the framework of the Organization for Economic Co-operation and Development in 1974 in the wake of the 1973 oil crisis. At one time it was needed to counter OPEC and the fear that the world would soon run out of oil. IEA was a useful reporting agency on international energy issues.
Now, it is obvious that the fear of running out of oil was, at best, premature. Unfortunately, IEA has gone into advocacy of wind and solar power and its reports are less than stellar. For example, it has reported that solar is or about to become the cheapest source of electricity. The claim is pure nonsense. Civilization does not stop when the sun fades and disappears. The question becomes what is the cost of solar power at midnight? IEA’s work has been heavily slanted by the political leanings of its leaders, as such the work must be approached with caution, like the work of the UN. See links under Communicating Better to the Public – Make things up.
Another Methane? At room temperature, Nitrous oxide (N2O), also known as laughing gas, is a colorless non-flammable gas, with a pleasant, slightly sweet odor and taste. It is used in surgery and dentistry as an anesthetic. Also, it is produced in agriculture and from fertilizer. Based on a study in the journal Nature, it is claimed to be 300 times more powerful as a greenhouse gas than carbon dioxide. The “science” referenced in the abstract of the paper is the UN Intergovernmental Panel for Climate Change (IPCC) Assessment Report 5 (AR 5, 2013). Herein lies a major problem with the work.
The IPCC modelers do not include the effect of water vapor on the total effect of greenhouse gases until after calculations are complete. Then, water vapor is added in. Thus, the calculated greenhouse potential of various gases is distorted because water vapor is present in the earth’s atmosphere. This is similar to the problem of calculating the greenhouse potential of methane in the absence of water vapor. As described in the September 12 & 19 TWTWs, the existence of water vapor eliminates the greenhouse potential of methane. For Nitrous oxide, water vapor virtually eliminates its greenhouse potential. See links under Communicating Better to the Public – Make things up.
Number of the Week: 99%. In criticizing California governor Gavin Newson’s executive order to eliminate the sale of cars powered by the internal combustion engine, Frank Macchiarola, the Senior Vice President of Policy, Economics and Regulatory Affairs at the American Petroleum Institute, states:
“In fact, according to the U.S. Environmental Protection Agency, over the last 30 years, research and development propelled manufacturers to reduce internal combustion engine emissions of criteria pollutants by 99% to comply with EPA emissions standards. The U.S. Department of Energy also found that research and development have led to improvements in engine performance and efficiency.”
If 99% is close to accurate, then the progress made by automobile engineers and oil companies on the internal combustion engine is remarkable. See links under California Dreaming.
1. Nobel Prize in Economic Sciences Is Awarded to U.S. Academics
The prize was shared by two Americans for invention of new auction formats
By Paul Hannon, WSJ, Oct 12, 2020
TWTW Summary: the reporter writes:
“U.S. academics Paul R. Milgrom and Robert B. Wilson have been awarded the Nobel Prize in Economic Sciences for new insights into how auctions work, and how different auction designs can help buyers and sellers meet their goals.
“The announcement Monday gave the U.S. a clean sweep of this year’s Nobel Prizes, with at least one American citizen winning in each of the five categories for which individuals were selected.
“‘There has been an enormous investment in research in the U.S., and that has paid off,’ said Göran K. Hansson, secretary-general of the Royal Swedish Academy of Sciences, which awards the prize in economics.
“Auctions play a big part in setting the price of many of the goods and services people use every day, although their reach isn’t always appreciated, even by those who have spent decades studying them.”
After discussing a personal statement, the article continues:
“The application of the insights and new designs developed by Drs. Milgrom and Wilson have been particularly significant for allocating public goods, such as radio spectrum, fishing quotas and airport landing slots.
“While governments and taxpayers want to maximize their revenues from selling those goods, the danger is that they will be too successful, and force the winner to pay so much that delivery of the associated service—such as mobile phone connections or flights—is impaired. Understanding how auction formats match complex objectives helps avoid such outcomes.
“Their insights could also help hospitals and governments trying to secure protective equipment during a pandemic from competing against each other and bidding up the price, as happened this year when a shortage of personal protective equipment and ventilators led to high prices, said Dr. Milgrom in a press conference arranged by Stanford University, where both winners are professors.
“Their theory has benefited ‘buyers, sellers, taxpayers, end users and society as a whole,’ said Tommy Andersson, a member of the Nobel Economics Committee.
“Dr. Wilson, who was born in Geneva, Neb., got his first taste of auctions as a boy when he would attend cattle auctions Saturday mornings, watching the cows being sold one by one.
“The auctions he later developed, however, are much more complicated. For instance, a bidder in a radio-spectrum auction might want two licenses, covering separate areas. If the licenses are sold one at a time, the bidder could end up buying the first license at too high a price, leaving him unable to afford the second and then having no use for the first.
“‘Our auction was intended to enable the assembly of efficient packages,’ said Dr. Wilson. ‘This isn’t the kind of problem you run into with cattle being paraded one by one in the local ring. These are not single-item things that don’t have complementarities.’
“Thanks in part to the work of the two economists, auctions now play a big part in setting the price of many everyday goods and services.”