Hi Michael, I thoroughly enjoyed this. From your previous excerpts and other writings I was aware of much, but the efficiency of combined cycle gas turbines, and the use of deep groundwater rather than surface water is new to me.
A couple questions:
1) What is the advantage to specifying a coal tax, rather than a carbon tax? I imagine a more general tax would have the greatest long-term market effect, unless you think the ease of implementation of a coal tax is hugely advantageous.
2) It seems obvious that natural gas must replace all primary energy sources where possible, but will incoming battery technology not eventually replace any carbon-emitting sources of electricity?
1) I will write a future post about this topic, but essentially a carbon tax disadvantages natural gas. I do not think our energy policy should be based exclusively on reducing carbon emissions. Natural gas offers so many advantages that no other fuel source does. Especially where it is cheap like in North America, we should not be discouraging increased usage.
2) I will also write a future post on this topic, but here are a few points.
Battery prices are declining rapidly, but they are still very expensive. The cost of storing electricity in batteries is something on the order of 100x the storage costs of fossil fuels. Where natural gas is affordable, it is more cost-effective to burn it rather than storing intermittent renewables in batteries.
Supporters of batteries seriously underestimate the length of time electricity would need to be stored for 24/7/365 stability of the electricity grid. It is on the order of weeks and months, not hours, to get through the winter. I think they know that, but do not want to admit it publicly.
I hope that helps, and thanks again for the comment.
I understand transitioning away from fossil fuels before 2050 for most primary energy uses is simply a pipe dream. However, given that (unless I’m misinformed) hydrogen fuels will someday make sense for industrial use, would a general carbon tax not incentivize natural gas usage today, when alternatives are worse polluters, and then later incentivize lower carbon alternatives like hydrogen fuels when they are economically viable?
My primary goal is abundant, affordable and secure energy. The carbon tax makes energy more expensive, so it undermines my primary objective. I should have stated that in my original reply. I believe coal is unusually bad for environment and health, so it is fair to phase it out if there are cost-effective alternatives.
Whether a carbon tax will incentivize natural gas rather than solar and wind is unclear to me. There are so many hidden costs in renewables, that are not measured in carbon emissions.
Let me give just one example. Solar and wind generally require peaker natural gas plants to load-balance when it is not sunny or windy. But peaker gas plants are less efficient than CCGT (roughly 40% vs 65%) so peakers create more carbon emissions. A carbon tax might create more solar and wind, and then punish natural gas even though the reason for less efficient gas was because of the solar and wind in the first place.
It is even worse when coal is used to load balance, as is often the case in Europe. It takes over 24 hours to ramp up coal plants. During that time there is little to no electricity being generated and it is belching out even more carbon because the burners are not up to efficient temperature.
In that situation, coal emitted the carbon, even though it was solar and wind that made it more inefficient. So which pays the tax?
I am not sure that a carbon taxes will properly tax solar and wind for imposing inefficiencies on the rest of the system.
As for hydrogen, I am skeptical that it will ever become a major source of energy storage, but I am willing to admit that I am wrong if it happens. The distant future is very hard to predict.
I too want abundant and secure energy that reduces the future harm from the accumulation of CO2 in the atmosphere at the lowest cost. To say that a tax on net CO2 emissions raises the cost of energy is a) a short-term perspective as we expect regulatory reform and R&D will continue to reduce the costs of zero CO2 emitting energy sources and costs of carbon capture and storage and b) less costly than the incentives that are currently being used and advocated.
I'm not sure I understand the question about coal and load balancing. The tax that the coal emissions pay influences what source is used for load balancing. Until battery storage is much better, I suppose that natural gas will be the primary way that the grid will deal with intermittency.
I share your skepticism about hydrogen except as it might become a means of "storage," using peak near zero MC solar and wind to break the H2-0 bond and burning the hydrogen instead of natural gas when solar/wind output is low.
And who knows if nuclear or geothermal might become even cheaper than solar/wind + battery/natural gas/hydrogen "storage."
I have no tolerance for people who leave extensive comments after having stated that they did not even listen to the podcast. I have been very patient in replying to your comments over the past few weeks.
I cannot believe that you are seriously arguing that a tax will not increase prices. Of course, it will.
And your reply on the load-balancing makes my point. Solar and wind create the problem, but coal pays the tax. It would be the same if the load-balancing is done with gas.
I have no idea what you mean by the "who knows" comment. I am focused on now, not on what something could be decades in the future.
I'll also push back slightly on the "Left" part of the comment. There are no voices on the "Right" that I'm aware of that are advocating for taxation of net CO2 emissions, either.
Both extremes (and most of those in the middle, too :) are wrong.
Virtually all the anti-natural gas rhetoric and policies are coming from the Left. Very little from the Right, although they have not grasped that they should be pro-natural gas.
Well, it is an example of not focusing on the real objective: policies (Why be coy, a tax on net CO2 emissions :)) to slow the increase and eventually to reduce the CO2 concentration in the atmosphere. Perhaps I could agree that it may one of the best examples of this error.
Hi Michael, I thoroughly enjoyed this. From your previous excerpts and other writings I was aware of much, but the efficiency of combined cycle gas turbines, and the use of deep groundwater rather than surface water is new to me.
A couple questions:
1) What is the advantage to specifying a coal tax, rather than a carbon tax? I imagine a more general tax would have the greatest long-term market effect, unless you think the ease of implementation of a coal tax is hugely advantageous.
2) It seems obvious that natural gas must replace all primary energy sources where possible, but will incoming battery technology not eventually replace any carbon-emitting sources of electricity?
Thanks for your work!
Hi Ian. I am glad that you enjoyed the podcast.
1) I will write a future post about this topic, but essentially a carbon tax disadvantages natural gas. I do not think our energy policy should be based exclusively on reducing carbon emissions. Natural gas offers so many advantages that no other fuel source does. Especially where it is cheap like in North America, we should not be discouraging increased usage.
2) I will also write a future post on this topic, but here are a few points.
Battery prices are declining rapidly, but they are still very expensive. The cost of storing electricity in batteries is something on the order of 100x the storage costs of fossil fuels. Where natural gas is affordable, it is more cost-effective to burn it rather than storing intermittent renewables in batteries.
Supporters of batteries seriously underestimate the length of time electricity would need to be stored for 24/7/365 stability of the electricity grid. It is on the order of weeks and months, not hours, to get through the winter. I think they know that, but do not want to admit it publicly.
I hope that helps, and thanks again for the comment.
Thanks for your response!
I understand transitioning away from fossil fuels before 2050 for most primary energy uses is simply a pipe dream. However, given that (unless I’m misinformed) hydrogen fuels will someday make sense for industrial use, would a general carbon tax not incentivize natural gas usage today, when alternatives are worse polluters, and then later incentivize lower carbon alternatives like hydrogen fuels when they are economically viable?
RE: Battery storage, makes perfect sense. Thanks.
My primary goal is abundant, affordable and secure energy. The carbon tax makes energy more expensive, so it undermines my primary objective. I should have stated that in my original reply. I believe coal is unusually bad for environment and health, so it is fair to phase it out if there are cost-effective alternatives.
Whether a carbon tax will incentivize natural gas rather than solar and wind is unclear to me. There are so many hidden costs in renewables, that are not measured in carbon emissions.
Let me give just one example. Solar and wind generally require peaker natural gas plants to load-balance when it is not sunny or windy. But peaker gas plants are less efficient than CCGT (roughly 40% vs 65%) so peakers create more carbon emissions. A carbon tax might create more solar and wind, and then punish natural gas even though the reason for less efficient gas was because of the solar and wind in the first place.
It is even worse when coal is used to load balance, as is often the case in Europe. It takes over 24 hours to ramp up coal plants. During that time there is little to no electricity being generated and it is belching out even more carbon because the burners are not up to efficient temperature.
In that situation, coal emitted the carbon, even though it was solar and wind that made it more inefficient. So which pays the tax?
I am not sure that a carbon taxes will properly tax solar and wind for imposing inefficiencies on the rest of the system.
As for hydrogen, I am skeptical that it will ever become a major source of energy storage, but I am willing to admit that I am wrong if it happens. The distant future is very hard to predict.
Thank you, I appreciate you taking the time to reply!
I too want abundant and secure energy that reduces the future harm from the accumulation of CO2 in the atmosphere at the lowest cost. To say that a tax on net CO2 emissions raises the cost of energy is a) a short-term perspective as we expect regulatory reform and R&D will continue to reduce the costs of zero CO2 emitting energy sources and costs of carbon capture and storage and b) less costly than the incentives that are currently being used and advocated.
I'm not sure I understand the question about coal and load balancing. The tax that the coal emissions pay influences what source is used for load balancing. Until battery storage is much better, I suppose that natural gas will be the primary way that the grid will deal with intermittency.
I share your skepticism about hydrogen except as it might become a means of "storage," using peak near zero MC solar and wind to break the H2-0 bond and burning the hydrogen instead of natural gas when solar/wind output is low.
And who knows if nuclear or geothermal might become even cheaper than solar/wind + battery/natural gas/hydrogen "storage."
I have no tolerance for people who leave extensive comments after having stated that they did not even listen to the podcast. I have been very patient in replying to your comments over the past few weeks.
No more.
I cannot believe that you are seriously arguing that a tax will not increase prices. Of course, it will.
And your reply on the load-balancing makes my point. Solar and wind create the problem, but coal pays the tax. It would be the same if the load-balancing is done with gas.
I have no idea what you mean by the "who knows" comment. I am focused on now, not on what something could be decades in the future.
I'll also push back slightly on the "Left" part of the comment. There are no voices on the "Right" that I'm aware of that are advocating for taxation of net CO2 emissions, either.
Both extremes (and most of those in the middle, too :) are wrong.
Virtually all the anti-natural gas rhetoric and policies are coming from the Left. Very little from the Right, although they have not grasped that they should be pro-natural gas.
Well, it is an example of not focusing on the real objective: policies (Why be coy, a tax on net CO2 emissions :)) to slow the increase and eventually to reduce the CO2 concentration in the atmosphere. Perhaps I could agree that it may one of the best examples of this error.
Did you listen to the entire podcast?
I hate listening! Sorry.
Please do not post in the comments for this column unless you have actually read the article or listened to the podcast.