Lost On The Shore

Some Nuclear Issues

'TJH' has added an excellent comment to my recent post on nuclear energy options and raised some issues which I think need to be explored a bit more.  Basically, he makes three points:

• The nuclear waste disposal problem is not being solved,
• the cost of new nuclear generation is not competitive with coal without massive government subsidies, and
• the comparison of deaths due to nuclear energy to deaths due to coal is not a valid measure of nuclear safety.

He also asserts that carbon sequestration is likely to be available before the solution to nuclear waste disposal problem.  Let's look at each of these.

Nuclear Waste It's true the nuclear waste disposal problem has not been solved - at least in the United States.  The problem seems to be as much a political problem as an engineering problem.  Currently the standard which the engineers are supposed to meet would limit radiation exposure to 350 millirem for ONE MILLION YEARS taking into account the effects of climate change, earthquakes, volcanos, asteroids falling from the sky and other, unknowable, factors.  It's worth noting in this context that the entire recorded history of the human race is about four thousand years.  If such a standard were applied to other kinds of industrial waste, including carbon dioxide, most modern industry would shut down immediately.

Other countries seem to have solved the problem.  Canada has developed a system for burying nuclear wastes in batholiths some 500 to 1000 meters beneath the surface within the Canadian Shield - one of the most geologically stable formations on Earth.  The batholiths were formed some one to two billion years ago and have been stable since then.  Sweden has developed a method called KBS-3 which, after some interim storage during which the radioactivity is sharply reduced, buries the waste in bentonite clay some 500 meters beneath the surface.  The Finnish government has begun building a similar site.  France, Japan, the United Kingdom, and Russia reprocess spent fuel.

Cost What will be the cost of electricity from a new generation of nuclear plants?  No one can say for certain.  The primary difficulty in estimating the cost is that a large part of the eventual costs are the up-front capital costs of the plant, and that depends largely on how long it takes the plant to be built.  The nuclear power industry does not have a good record in this regard.  They argue, however, that with standardized designs which are pre-approved, the time required to build new nuclear plants will be shorter and more predictable. 

The evidence is mixed.  A plant being built in Finland is significantly behind schedule and over budget.  Several others under construction in Japan, however, are both on time and under budget.  A study completed by MIT in 2003 found that nuclear power would be about 60 percent more costly than coal or natural gas power.  Another, by the Royal Acadamy of Engineering in 2005 put the cost of new nuclear energy at 2.26 pence per kilowatt-hour vs. 3.64 for natural gas power and 3.33 for coal.  This report has been disputed by many, though who argue it doesn't account for government subsidies to the nuclear industry and understimates disposal costs.  Nuclear power does receive some subsidy from the government.  Of course, coal, natural gas and renewables all receive signifianct government subsidies.

I believe that with experience, problems with the construction of nuclear plants will be resolved and the construction period will become shorter and more predictable leading to a cost per kilowatt that is competitive with coal.  Of course I have no data to back that up, but neither do those who say the cost will be much higher.  We won't know until we build a few plants.

Safety Of course, the number of deaths is only a rough indicator of the relative safety of nuclear power vs. coal.  And certainly, as TJH points out, the accident at Chernobyl devastated a significant amount of land.  But coal mining devastates a significant amount of land every year.  And coal is not only unsafe to mine, it's unsafe to burn.  Coal-fired power plants spew out an amazing amount of pollutants - 59% of total US sulfur dioxide pollution, 18% of total nitrogen oxides, 50% of total particulate pollution and 40% of total US carbon dioxide emissions.  These pollutants contribute to smog that threatens the health of tens of millions. According to the Sierra Club, particle pollution from power plants alone causes some 30,000 deaths a year in the US.  Coal-fired power plants are the largest single man-made source of mercury pollution.

There's lots else I could say about coal.  Sure, nuclear power has safety issues but they pale in comparison to what we're doing now.  We need to stop building new coal plants and get rid of the ones we have.  The only feasible alternative at the moment is nuclear.  Effective carbon sequestration from coal plants is making little progress- the Department of Energy recently pulled the plug on the FUTUREGEN demonstration project saying it did not make fiscal sense.

Sure, nuclear power is dangerous.  The eventual costs are only rough estimates and the waste disposal problem has not been resolved.  But where are the alternatives to generating the reliable quantities of electricity we need to allow us to retire the coal plants that are killing us.

[The photo is of the Bruce Nuclear Plant in Canada - the second largest in the world]

Items of Interest

It's been a soggy couple of days on the Shore and we're looking at a few more before we finally break into our late spring and summer weather.  While I'm waiting I want to catch up on a few items of interest that caught my eye over the past week.

Energy prices continue to rise. Gasoline prices set a new record in Maryland this week.  Gasoline prices nationwide reached an average of $3.67 a gallon and oil reached $126 a barrel.  Gas prices here on the Shore ranged from about $3.55 to $3.65 while in the high priced areas of Montgomery County prices were in the $3.75 - $3.85 range with one station posting $3.97 and a station in DC was asking $4.05 for regular.  Diesel prices are higher everywhere. 

The tourism industry here on the Shore relies heavily on vacationers driving over the Bay Bridge from the DC/Baltimore area and down from the Philadelphia area.  With the peak summer driving season starting in a few weeks, the ability of consumers to absorb these increases could have a dramatic impact on the economy here.

On the electricity side, BG&E posted their new rates and PEPCO Holdings announced that their first-quarter profits doubled from last year.  It looks like a difficult summer on the electricity front, also.

Transportation  In a related development, the New York Times today reported that higher gas prices are driving record crowds to mass transit.  Mass transit systems are struggling to cope and equipment shortages are becoming apparent as is apparent both in Baltimore and Washington.  With a huge proportion of the state's transportation budget tied up in the InterCounty Connector, the state and local jurisdictions are going to have to look hard at their budgets to see where they can free up some funds to expand mass transit options.

Here on the Shore, there's little mass transit to speak of.  In Ocean City, though, the town is encouraging visitors to rely on its bus system while visiting there.  A crowded summer weekend can easily overtax the system there and they are going to have to be careful to ensure they have enough capacity.

On a brighter note, the state has announced that construction will begin next year on the MARC station in Edgewood.  With thousands of new jobs coming to the Aberdeen Proving Grounds, this station will be a critical part of the transportation infrastructure there. 

Health  A recent study in New England shows that teenagers in places with strict smoking bans in restaurants were forty percent less likely to become regular smokers.  Apparently, huddling outside restaurants and bars to take a puff isn't 'cool'.  Lower smoking rates among teens will help keep health care costs from growing so fast.  Every little bit helps.

Real Estate The number of home sales continues to decline in Maryland.  The National Association of Realtors, as they have every recent month, said that the turnaround is about to start, but almost no one else seems to think so.  Spring is normally the peak selling season, but it doesn't seem to be happening, at least here on the Shore.

In many states, local jurisdictions are facing severe budgetary problems as falling assessments lead to reductions in property taxes.  Here in Maryland, the problem is not quite so urgent as our three-year assessment system means that assessed values are still rising in most jurisdictions.  Some counties, though, like Montgomery and Prince George's, which have come to rely heavily on transfer taxes, are suffering as home sales decline sharply.  All local jurisdictions need to be very careful in committing to future costs, though, as the same three-year assessment cycle which is helping them now will be hurting them in the future as new assessments drop.

[The photo is of Thomas Point Shoal Light] 

Maryland Energy Update

There have been a couple of recent development relating to energy supplies and prices in Maryland.

Jay Hancock blogs in the Baltimore Sun that SEMPRA Energy has pulled the plug on its proposed new power plant in Frederick County.  The natural gas-fired plant would have provided badly-needed capacity to Central Maryland and may have enabled the EastAlco plant to reopen.  The EastAlco aluminum smelter, now owned by Alcoa, was forced to shut down a couple of years ago when their long-term contract with Allegheny Power expired and they couldn't afford the high cost of electricity off the grid in Maryland.  SEMPRA apparently gave up because the pricing structure wasn't right.  Hancock seems to think there's a possibility the plant can be revived if a long-term contract with BG&E materializes.  I'm wondering if it may just be posturing by SEMPRA to get an exemption from emission caps like that suggested for the plant in Charles County. 

With this in mind, let's look at the other big basic metal production plant in Maryland - Sparrows Point.  Yesterday OAO Severstal completed its acquisition of the plant.  Severstal has said it wants to increase production at the plant and make significant investments in expanding and modernizing the plant.  Of course, a lot depends on energy costs - steelmaking is an energy-intensive business.  More directly, the manufacture of iron from iron ore releases lots of carbon dioxide into the atmosphere.  If Maryland's new cap and trade system increases the cost of iron-making, it may not be economical to continue basic smelting there.

Tom Pelton at the Sun's Bay and Environment blog has put up this post on greenhouse gas trading scams.  He writes about a letter that two EPA scientists have sent to Congress pointing out how cap and trade schemes are vulnerable to abuse and are difficult to enforce and verify.  Of course, Maryland is well on the way to implementing its own cap and trade scheme.  There's already talk of exempting favored companies - exactly what we don't need at this point.  As I've said before, a carbon tax fee would be a much more effective and transparent solution, but we seem to be committed to this other system.  We'll have to keep a close eye on implementation plan which still seems to be evolving.

There are some predictions that it will be a hotter than normal summer in the mid-Atlantic region.  It's going to be an expensive summer for energy.

[note: the photo shows tipple boys and drivers at a Maryland Coal Company mine in 1908] 

And The Hits Just Keep On Coming

Pilgrim's Pride is the latest chicken producer to report a loss.  The report by this company, the largest chicken producer in the country, follows the loss reported by Tyson Foods, the world's largest meat producer, of a loss for the third quarter.  Purdue Farms, the largest poultry producer on the Shore, is privately held and doesn't report profit and loss, but I would be surprised if they were not struggling also.

The primary culprit in each case is high grain prices with some contribution from high energy prices and transportation costs.  The companies have been unanimous in blaming flawed government ethanol policies for contributing to the higher cost of grain.  To a significant extent, they are right.  The huge subsidies for ethanol production has led to an explosion in the number of ethanol plants that now suck up about a quarter of our total corn production.  Further, the demand for corn has led many farmers to shift production out of wheat and other grains into corn.

This demand, coupled with crop failures overseas and increased demand from rapidly developing countries like India and China has sent grain prices up substantially and has affected the price of many other foodstuffs.  But anyone who shops for food already knows that. 

On top of all this, of course, the congress is prepared to pass a wasteful and grossly inflated farm bill which will increase subsidies to farmers and significantly increase consumer prices for many things.  But I digress.

It seems that a cutback in poultry production may be coming and that will be just another hit for the Eastern Shore, where the economy is already hurting due to the sharp decline in residential housing construction.  With the cost of gasoline more than $3.50 a gallon, it's likely we will see a reduction in tourism too.  We already know the crabbing industry is taking a hit. 

So it could be a difficult year here on the Shore.  We'll have to see what comes next.

Stimulating Someone's Economy

Well, I received my 'economic stimulus' yesterday.  I'm not sure what we'll do with it.  Probably it will go into a money market account for the time being.  The total tab for all of these economic stimulus checks (actually, wire transfers in most cases) is about $150 billion. 

Of course, the government doesn't have that kind of money.  In case you've been asleep somewhere, the US Government is running a huge deficit thanks to President Bush.  So the government is borrowing the money to pay us all the tax rebates which are supposed to stimulate the economy.  I presume the cost of this will fall on my children or grandchildren, so thanks kids!

From what I read, a lot of the money will be used for one-time purchases - that high definition TV people have been wanting, or or to pay down credit card debt - I'm sure Citicorp will appreciate that - they could use the money. 

I guess the sad thing about this is that there are so many useful things the congress and the president could have done with the $150 billion that would not only stimulate the economy but would address some of our problems too.

For example, the money could have been used for school construction - distributed to the states and then used to fix up existing schools or build desperately-needed new schools.  Or the money could have been used for highway and mass transit construction - a way to reduce the amount of gas we use either by reducing congestion or getting us out of our cars altogether.  Or to make long-deferred repairs to facilities in our national parks. 

These are just some examples, but they have something in common.  They are construction-oriented to provide jobs for the many displaced from the home construction business and they leave something of lasting value for our children, who are going to pay the bill anyway. 

Of course, all of these would take a bit longer to get started than just shoveling money at the voters, but virtually all of the jobs created would be here in the United States, not in China, Taiwan or South Korea where they make those great TVs and the Wiis. 

There was a time when our leaders, in times of economic downturn would look to solutions that would not only stimulate the economy but would provide employment for Americans and use the money to provide a lasting benefit for the future.  Look at the Tennessee Valley Authority, the Bonneville Power Authority, the Hoover Dam, the Civilian Conservation Corps and the Works Progress Administration.  What we're doing now is pretty dismal by comparison.

And it's easy to blame our leaders for this, but the problem is really with us.  We demand instant gratification.  We want everything now and don't want to pay for it.  Let our kids do that.  And President Bush has learned this perfectly.  If he had his way, he and his Republican cohorts would eliminate every tax and push government spending and borrowing to a new high.  As another famous leader said a few years ago: 'Après moi le Deluge', and he was right. 

I guess I'll just wait; the bread and circuses can't be far off.   

Those Pesky Nukes

This is the second part of my two-part post examining energy options for reducing Maryland's greenhouse gas emissions.  In my previous post we looked at a variety of energy alternatives available to replace the large, base-load coal plants that generate so much greenhouse gas (and other pollution) in Maryland.  We looked at 'clean coal' natural gas and fuel oil generation.  In addition, we looked at renewable technologies such as wind, photovoltaic, solar thermal, hydro and biomass.  Today we're going to look at nuclear energy.

The map above shows the location of nuclear generating facilities in France, which generates about 80 percent of its electricity at nuclear facilities.  France is also the world's largest exporter of electricity, due, in part, to it's relatively low cost.  Japan is another country with a large nuclear generating capacity with some 55 units generating around 30 percent of Japan's electricity.  Five new plants are under construction in Japan.  Nuclear power accounts for about 19 percent of the electricity generation in the United States.  In Maryland, the Calvert Cliffs nuclear plant in Lusby accounts for about 14 percent of the state's generating capacity (but a higher percentage of the total electricity generated because it operates for a higher percentage of the time.)

Like every other source of power, nuclear energy has its problems and concerns.  Let's take a look at them.

Many people believe nuclear energy is inherently dangerous, that is an accurate assessment.  There are a number of things that can go wrong and lead to release of radiation or much worse. Since commercial generation of nuclear power began in the 1950's there have been twenty or so significant accidents.  Three of those are well known.

1. In March of 1979 near Middletown, Pennsylvania, equipment failures and worker mistakes contributed to a loss of coolant accident (LOCA) and partial core meltdown at the Three Mile Island nuclear power plant.  The reactor was extensively damaged, but on-site radiation exposure was under 100 millirems (about one year's natural exposure) and some two million people in the vicinity received about 1 millrem.  There were no reported fatalities although statistical estimates indicate that there may be one fatality due to the excess radiation.
2. In April of 1986 near Pripiat, Ukraine, worker error led to an uncontrolled power excursion, a steam explosion, partial core meltdown and release of radioactive material at the Chernobyl nuclear power plant.  There were approximately 50 fatalities during and immediately after the disaster.  The explosion and subsequent burning of the graphite core reactor spread radioactive material over much of Europe.  Hundreds of thousands were evacuated from the immediate vicinity and downwind.  While estimates vary widely, the UN has estimated that some 4,000 additional premature deaths will result from radiation exposure.
3. In September of 1999 at Ibaraki prefecture in Japan, workers at a reprocessing facility accidentally added enough uranium solution to a precipitation tank to achieve a critical mass.  The resulting radiation killed two workers and exposed more than 100 others to higher than normal radiation.

These are the only civilian nuclear power accidents I've been able to find which led to fatalities.  Let's contrast this briefly with the safety of coal power.  Since the 1950's when commercial nuclear generation of electricity began, there have been several thousand fatalities in coal mines.  In addition, around twenty thousand miners are injured each year.  Further, tens of thousands have been crippled and or had their lives markedly shortened by black lung disease.  Worldwide, the number of deaths and injuries is staggering.  In China alone, more than 4,000 were killed in 2006.  Thousands more fatalities can reliably be attributed to the environmental effects of buring coal to produce electricity.

Critics of nuclear power point rightly to the fact that our country has been unable to come up with a method for the long term disposal of high level nuclear wastes.  High level nuclear wastes amount to 5 percent or less of the total radioactive wastes produced by commercial nuclear reactors.  Low level and mid level nuclear wastes have been disposed of safely without a problem.  High level nuclear wastes are the products of the fission of uranium which include radioisotopes which can emit ionizing radiation.  Some of the fission products can remain dangerously radioactive for thousands or millions of years.

In the United States geologic disposal is the disposal method which has gained the most favor.  This involves sealing the wastes into very strong casks and burying it deep underground.  The Department of Energy has been developing a waste disposal site at Yucca Mountain in Nevada.  It is not operational yet, however due to a variety of engineering and political issues. 

Geological disposal, however, is not the only option for disposal.  It is worth noting that other countries have made much more progress on the issue.  Sweden and Finland, for example are well advanced with geologic disposal and Canada is seriously considering a similar options.  Other countries such as France, UK, Japan, Russia and, recently, India, have nuclear fuel reprocessing plants which reprocess the spent fuel into new nuclear fuel.  Another option, which has not been used involves mixing the nuclear waste with tailings from uranium mines down to the level of radioactivity of the original uranium and then reburying it in the mines.

Disposal of waste from nuclear power plants is a problem that is being solved.  Disposal of waste from coal power plants, on the other hand, remains problematic.  The biggest waste product - carbon dioxide - is accumulating in our atmosphere and has the potential to create a global disaster in time on a scale unprecendented.

So, yes.  Nuclear power has its problems, but, to me at least, it looks like the least bad of all the options for electric power generation.  Governor O'Malley seems to have recognized this with his recent support for the additional plant that Constellation Energy proposes for Lusby.  The 4,000 megawatts of power that will be generated by this plant could replace all the electricity generated by the Chalk Point and Brandon Shores coal plants.  Together these two plants emit more than 14 million tons of carbon dioxide a year.  Another nuclear plant, perhaps located in Central Maryland, would allow the closure of all coal-fired plants in Maryland.

Nuclear power is already competitive with coal power on a cost basis.  With a modest carbon tax, nuclear power could easily displace the dirty coal plants that are polluting our air and water.  There would be no cost to Maryland consumers since all the proceeds from the carbon tax could be distributed to Maryland consumers on a regular basis.  Clean air, clean water, no cost...what more could we want? 

The right path for Maryland to reduce greenhouse gases

I've been taken to task for not being sufficiently supportive of the state's greenhouse gas reduction program and expressing only lukewarm enthusiasm for the 640 mw gas-fired power plant proposed for Charles County.  I guess I should explain.

The state is so excited they have talked about giving the new plant an exemption from the cap-and-trade system that will provide tradable permits for carbon dioxide emissions in Maryland.  Environment Maryland has praised the new plant as being 'less polluting' than coal plants.  So how much will the new plant reduce greenhouse gas emissions in Maryland?  The short answer is - none.

The reason it will have no effect is that it will not displace any existing plant.  The half dozen or so large coal plants that pump out the majority of greenhouse gases in Maryland will continue to operate full throttle because they have a substantial economic advantage in terms of fuel costs and the demand for electricity substantially exceeds the supply.  Certainly, when the emission cap goes into place, their costs will increase a bit, but they will pass all of that cost onto the consumer without any problem because they are relatively low cost (and highly profitable) producers.

No, if we are serious about reducing greenhouse gas emissions in Maryland - and we should be, we need to first have an alternate means of generating the electricity now produced by the big coal plants.  That means base load plants that can run efficiently 24 hours a day to provide stable, reliable energy to Marylanders.  And they have to operate at a cost competitive with current electricity providers.  Most Marylanders have already experienced sharp increases in the cost of electricity over the past two years.

Now some might say that we don't need to build new plants, we can just force our own coal plants to close and bring in electricity from somewhere else instead of generating it in Maryland.  But we already know that there is insufficient transmission capacity to substantially increase the amount of electricity bought into Maryland from other states.  And besides, generating the electricity in Pennsylvania or West Virginia really does nothing to reduce greenhouse gases, does it? 

So let's look at the options.  There are a variety of fossil fuel types of plants - coal, fuel oil and natural gas.  On the renewable energy side there are wind, photovoltaic, solar thermal, wave energy, hydro and biomass.  And finally, there's nuclear.  Let's take a look at each.

Big coal companies and politicians fro coal-producing states promote something called 'clean coal'.  It doesn't exist.  The technologies necessary to mine, transport and burn coal for energy without producing harmful pollution or greenhouse gases either don't exist or exist only in the laboratory.  The Federal Government, after spending billions of dollars on clean coal technology has essentially given up - terminating all projects.

Several power plants in Maryland use oil as a fuel.  Oil is unsuitable for base load plants, however, due to its cost.  These plants are mostly used to provide electricity during periods of peak demand.  Further, these plants produce significant amounts of greenhouse gases (less than coal, though) and can generate other pollutants.

Natural gas has become a more popular fuel for electricity generation due to it's relative cleanliness (compared to coal and fuel oil) and it's ease of supply.  A large gas transmission line runs through Maryland and the LNG terminal at Cove Point feeds additional supplies into the region.  Advanced combined-cycle gas turbine installations can reach efficiency levels in excess of 60 percent (i.e. 60 percent of the energy in the fuel is converted into useful output).  Natural gas, when used to generate electricity, creates only about half the carbon dioxide per kilowatt compared to coal.  The prinicple problem with natural gas is cost - it costs about five times as much as coal per unit of energy (and about half what fuel oil costs).  Natural gas prices have been increasing steadily over the past several years, too. 

Renewable energy is very popular and for good reason.  It doesn't rely on a diminishing source of fuel and it's generally pretty safe.  There are limits to each of the technologies, though.

Wind power is one of the more cost effective of the renewable technologies.  Substantial improvements have been made in the technology in recent years and it can, in some cases, be quite competitive on a cost basis.  The big problem with wind power is, of course, the wind which is notoriously variable.  The amount of energy available in wind varies with the cube of the velocity.  Studies at the Lee Ranch wind power facility in Colorado have shown that half of all the available energy arrived in just 15% of the time.  Thus, for wind energy to be suitable for base load generation, substantial backup generating plants would have to be built.  A further problem is that in Maryland, the strongest sustained winds are in the winter while our highest electricity demand is in the summer.

Much has been said and written about photovoltaic energy.  The fact is, though, that it is still very costly as a source of base load electricity.  Until the technology improves substantially, this isn't an option.

Solar thermal - a technology where sunlight is used to heat a fluid which is then used to drive a turbine or energy to generate electricity.  This is an interesting technology which can be quite competitive where conditions are favorable - generally in low latitude deserts - not in Maryland.

Biomass, which includes the use of landfill methane, can efficiently generate electricity and can make a contribution to Maryland's electricity supply.  Unfortunately I don't believe there's suffient biomass available in Maryland to make a big dent in our electricity needs.

There's not a lot of available hydropower in Maryland that hasn't already been tapped, although there could be some small-scale hydro installations at some water reservoirs with little cost.  The additional amount of electricity would be small.  Ocean waves contain considerable energy, but the technology to harness that energy hasn't been perfected.

That leaves nuclear.  In my next post, I'll discuss the pros and cons of that.

    

Gas Tax Fantasy

State Senator Andy Harris, concerned about rising gas prices, has suggested that Governor O'Malley call a special session of the General Assembly for the sole purpose of repealing the state gas tax from Memorial Day to Labor Day.

While his proposal has obvious political appeal, particularly to those short-sighted enough not to be able to see past Labor Day, there are a number of problems with the idea.

• The gasoline tax is the primary source of transportation funding in the state.  Reducing the gasoline tax will necessarily reduce the funding available for transportation improvements.  Roads in Maryland, particularly in the Baltimore/Washington area, are already heavily congested, which means a lot of gasoline is wasted waiting in traffic jams.  We need to reduce congestion, not increase it.
• Reducing the price of gasoline to the consumer will increase demand which will eventually increase the price not only of gasoline, but also of the oil from which it is derived.  Reducing or suspending the tax therefore puts more money into the hands of the oil-producing countries rather than keeping it here where it can be invested in improvements to our infrastructure.
• Suspending the tax merely postpones the inevitable.  Saving a few cents on a tank of gas does nothing to address the urgent need to find alternative sources of energy and use our existing sources more efficiently.

Andy Harris has proved he's as clueless about the economy as John McCain, who made a similar proposal on a national level which was panned by the a wide variety of economists and energy analysts for the same reasons I outline above. 

And why did Andy Harris wait until just a few days after the regular session ended to make this proposal?  Is it possible that this is just cheap political pandering?  Looks that way to me.

Some Energy Developments

There have been a few items in the news in the past week or so about Maryland energy issues.  I thought I'd go over them quickly.

First, the Southern Maryland Electric Cooperative (SMECO) has signed a contract with Comverge to provide 75 megwatts of 'Virtual Peaking Capacity'.  Basically, this is a demand response system which Comverge will install and maintain for SMECO and it's customers.  By signing up customers and installing equipment which allows certain equipment to be cycled on and off during peak load periods, the system effectively provides the utility with additional peak load capacity. 

Many Maryland utilities already have similar programs and all will certainly implement such programs in the near future in response both the the new legislation requiring a 15 percent reduction in both peak demand and per-capita energy use by 2015 (15x15) and the limitations on peak power availability in Maryland. 

Of course, these programs do almost nothing to reduce overall power consumption, simply shifting it from one period to another.  Nevertheless, they have the potential to reduce overall electricity cost because the cost of electricity is far higher at times of peak demand than at other times.

Separately, state officials announced that they are considering exempting a proposed new power plant in Charles County from the Regional Greenhouse Gas Initiative which includes the auction of carbon credits.  The Maryland Energy Administration, which apparently discovered only recently that the state has a critical electricity reliability problem, said that the new natural gas-fired plant, proposed by Competitive Power Ventures (a Silver Spring company), would help provide additional capacity for the state.

I've written several times here in the past about the need to provide additional generating and transmission capacity in Maryland and the fact that NOTHING in the states strategic energy plan addressed those shortages, so I guess it's a good thing that the Maryland Energy Administration is now realizing there's a problem.  But it's not good public policy to create a 'rule by exception' where the state establishes rules for everyone and then starts making exceptions for those who are 'in favor'.  It's better to have clear rules that apply to all without favoritism.

Environment Maryland, which seems to be becoming the lapdog of the Maryland Energy Administration supports the exemption saying 'as long as cleaner fossil fuel plants are replacing dirty fossil fuel plants it's a good thing for the environment.'  But, of course, this new generating facility would not replace anything, it simply would add to the supply of electricity...and greenhouse gases...generated in Maryland.  As I've said before, a carbon tax, rather than a cap and trade system, would eliminate this problem since a natural gas-fueled plant produces considerably less carbon dioxide than a coal-fueled plant.

The third item is the decision by the Federal Energy Regulatory Commission to recommend approval of the liquified natural gas (LNG) terminal proposed by AES corporation at Sparrows Point.  Under the proposal a terminal would be built at the old Bethlehem Steel shipyard where natural gas, chilled to its liquid state would be bought in by ships from overseas, returned to its gaseous state and then fed back in to existing natural gas pipelines.

Personally, I like the concept of LNG.  Thousands of tons of natural gas, produced as a byproduct of oil production, are flared off daily in the middle east, africa and other places because there is little or no local demand.  Bringing the gas here instead of flaring it off allows the gas to be used productively, supplements our own diminishing supplies and helps stabilize our domestic price. 

The proposed terminal has attracted a lot of local opposition, primarily on safety grounds.  While the commission is required to consult with state and local governments on the location of LNG terminals, its decisions are final. 

Personally, I don't think this terminal is a good idea.  While I believe many of the safety concerns about the terminal itself and the associated pipeline are overblown, I'm concerned about additional shipping congestion on the Upper Bay.  When completed the terminal would be served by two to three very large LNG tankers a week.  In addition to the tankers, there would be armed escorts, air and shore patrols.  The existing LNG terminal at Cove Point in Calvert County is located in a much wider section of the Bay considerably closer to the mouth and with much less water traffic.  While the additional gas supply would be welcome, there are better places for this terminal.

[The photo is of a modern, membrane-type LNG tanker in Tokyo Bay owned by Nihon Gas] 

   

The Other Energy Problem

I've written a lot about the electricity supply problems in Maryland (and I'll write more) but there's a problem with another kind of energy that is affecting us all.

The photo above was taken in June of 1941, a few months before Pearl Harbor and the entrance of the United States into World War II.  But diesel at six and half cents a gallon and gasoline at fourteen and a half cents a gallon are distant memories for us now.  As I write this, regular gasoline is $3.45 a gallon and diesel is $4.29 a gallon in my area.  The gasoline price is a bit less than the national average and the diesel price is a bit above the national average.

Despite the huge runup in gasoline prices over the past couple of years, it doesn't seem to have affected demand; according to the Energy Information Administration's weekly report gasoline demand last week was 9.215 million barrels a day - up from 9.163 million barrels a day one year ago.  Of course, in the long term, the high price will reduce demand as people buy more fuel efficient vehicles, but that doesn't help us now.  The reality is that many people have already cut their gasoline consumption as far as they can. 

I believe higher petroleum prices are here to stay, too.  Growing demand in the expanding economies of China and India is going to continue.  The New York Times carries an interesting article today about the demand for new cars in those two countries.  New vehicle sales in China are expected to exceed six million this year (up from under a million in 2000) and two million in India.  The huge populations of those countries are going to drive an increased demand for cars and other forms of energy-related consumption.

So the question is how do we live with it?  Here in Maryland, there seem to be few alternatives to driving to your destination and the high levels of road congestion lead to more gasoline consumption, not less.  Here on the Shore, there are very limited alternatives to driving.  The nearest department store for me is a 60 mile round trip from my house.  For many others, it's even further.  On the Western Shore, with the suburbs of Washington now reaching Frederick and beyond, many face hours-long commutes to their jobs over inadequate roads.

We have oriented our economy toward driving everywhere.  There is some concern over in Ocean City about what the gas prices will mean for the summer season.  Realistically, there is no way to get to the resort except to drive and, with gasoline prices, food prices and electricity prices all weighing on us, how many will be able or willing to drive the distance and pay the prices for a week at the beach?

And what to do when you get here?  The Worcester County Times (I know, everyone's favorite newspaper) carries an article today on the effect of the high prices on boating and fishing community.  Some of the large headboats and charter fishing boats are looking at costs of up to $20,000 to fill up their tanks!

It would be nice to see the state exercising some leadership here.  We need to move our development strategy away from sprawl and toward more transit-oriented development.  I know our leadership keeps talking about 'smart growth', but in reality, they're just cheerleading.  Because responsibility for zoning and regulation of development are so fragmented in the state, there is no real coherent policy with any any teeth.

And it would be nice to see the state do more to develop alternatives to us having to drive everywhere.  Of course, with the bulk of the state's transportation budget being spent on the Intercounty Connector, money for mass transit is scarce, despite the fact that existing mass transit facilities are being overwhelmed by demand.

Our governor and our legislature can't do anything about the fuel prices - that's something beyond their control.  What they can do is to exercise some leadership to reduce Maryland's dependence on cars and gasoline to meet our transportation needs.  We need to start now.