Worldenergy Blog

Democrats and Energy, visionary or dangerous?

Tuesday, October 06, 2015

As we head into the first democratic debate there are some real questions we should be asking.  Will the candidates present a new direction or double down on Obama’s administration?  Where are they going to stand on immigration, on our foreign policy and most relevant, where on energy?

When Hillary Clinton professes a firm belief in Climate Change and proposes an energy policy to match, what should the average voter think? With her only rival being even further to the left, Bernie Sanders is convinced that the “science is settled” and we have the ability to control the weather; things are going to get weird. When a candidate opposes what most see as common sense, the XL pipeline, on the basis that it will encourage our use of oil a real question is presented.  What happens if they get elected?

As it turns out we don’t really have to wait to see what the effect would be.  In California they have all ready experienced the “energy leadership” of Climate Change under the leadership of Governor Brown.  Brown has focused on climate change, this year he even discussed it with the Pope at the Vatican in July and He is expected to attend the United Nations climate change conference in Paris in November. Worse he has put those beliefs into actual policy for the citizens of the state.

In California, the price of energy is very high and getting higher, due to scarcity of supply, complexity of delivery and increased taxes.

Gasoline costs more, power costs more, development is impossible and the energy to fix the issues is non-existent. The reasons are pretty simple, the gas tax which is nearly 60 cents a gallon is among the highest in the nation; the unique summer blend of fuel costs at least 10 to 20 cents more at the pump; and the so-called carbon tax has added an additional 10 cents to every gallon.

If you add to that the lack of infrastructure, there were 30 refineries in 1982; today there are 11, you begin to see a reoccurring problem.

California was already an expensive place to do business, add to that the state's cap-and-trade program that launched three years ago, which fines heavy polluters.  Among those “heavy polluters” the states utilities rank very high, well those costs are passed along to the population.

Brown and Senate President Pro Tem Kevin de Leon, a Los Angeles Democrat, had even pushed for a far-reaching proposal to cut petroleum use by half, boost renewable-electricity use to 50 percent and double energy efficiency in existing buildings. They were forced to drop the mandate to cut oil use from their proposal, SB350, amid fierce opposition from business groups and oil companies that viewed it as a direct attack to their bottom line.

With the passage of SB 350, the state’s Renewable Power Standard (RPS) will need to reach 40 percent by 2024, 45 percent by 2027 and 50 percent by 2030.  Looking at the history of the state it is conceivable that Governor Brown thought he could reach that goal utilizing hydropower. However, the drought conditions have made that vision impossible.

On average, hydropower accounted for 20% of California's in-state generation during the first six months of each year from 2004 to 2013. During the first half of 2014, however, hydropower accounted for only 10% of California's total generation. Monthly hydropower generation in 2014 has fallen well below the 10-year range for each individual month.

Overall, this leaves the state to use wind energy and expensive solar farms — some so high-priced that the scandal-ridden state Public Utilities Commission refuses to publish their actual costs — to reach that goal.  So far wind and solar energy produce about 12 percent of California’s total power usage. The cost of that energy comes to about $84 per megawatt hour, compared to the average $46 per megawatt hour wholesale cost of electricity. That is quite a premium for the privilege of using the power of the sun and voracity of the wind.

Compounding all of this is the overall lack of pipelines capable of bringing low cost natural gas from other states, or even from sources within the state.  Remember, California has all but banned the drilling of oil offshore, they have reduced onshore drilling in areas with rich reserves and are working hard to eliminate industry practises like Fracking.

At the end of the day, California is a resource rich land with offshore oil, natural gas reserves, and powerplants sitting idle and abundant resources.  If part of the goal in reaching the carbon reductions was to reduce the population, then that at least is working with the highest rate of exodus in the history of the state currently being achieved.


So back to the original question, what would a liberal candidate’s energy policy do to the United States?  If we look at California we get a very good picture.  Higher power rates, less energy and higher taxes with very little affect on climate but a big effect on your pocket book.  The only real difference is, we don’t have to live in California, and we do have to live in the United States.

Then again, the rich can afford the extra costs; it is just the “little people” who are going to suffer under this type of program.  

This is an important election; we need to be very cognisant of what is at stake and how we view the candidates.  Last time the country was swept away with the prospect of the first “black president” of “hope and change” and the very real opportunity to get free stuff.  That puts in 19 trillion dollar debt range.

The Obama administration brought us “cash for clunkers”, a renewable energy mess best depicted by Solyndra, and a Middle East which is on fire.  None of those things make for good energy policy.  Lets see where the next set of democrats are planning to take us.