DMN piece on the blackouts, Alex Epstein, Pacific Wrens

Aug 06, 2021

The Texas blackouts were due to an epic government failure, Epstein on the "brazenly irrational" opposition to hydrocarbons, Pacific Wrens

Last week, Lorin and I were in the Colorado mountains. This week, we are in California, attending the Breakthrough Dialogue. Both trips have been a joy. After the lockdowns, it’s been great to be traveling again, going to meetings, and seeing old friends. Coming back to the Dialogue has been particularly fun for several reasons. First, I have long admired the work done by Ted Nordhaus and Alex Trembath and their colleagues at the Breakthrough Institute. Second, I always meet new and interesting people at the meeting. And third, the connections I have made through the Breakthrough Institute changed the course of my life. Thanks to Breakthrough, I met several of the people who supported the making of Juice: How Electricity Explains the World. I also met many of the people who ended up being featured in the film, including Jessica Lovering, Michael Shellenberger, Joyashree Roy, Ben Heard, and Priscilla Atansah.

On Wednesday night at the Dialogue, I was pleased to meet Jennifer Hernandez, who I’ve long admired. (Jennifer recently joined the board at Breakthrough Institute.) In 2018, I wrote about her and the litigation she has filed against the state of California in this piece in National Review. I explained the “gist of the lawsuit is this: California’s high housing, transportation, and energy costs are discriminatory because they are a regressive tax on the poor.” I wrote another piece about her last November in this Forbes piece. And in January, I had Jennifer on the Power Hungry Podcast.

Okay, that’s a long introduction. Three items this week:

My Dallas Morning News piece on the Texas blackouts
Alex Epstein on the Power Hungry Podcast
Pacific Wrens near the Golden Gate

Note: I created the slide above with EIA data to show how renewables in Texas have grown at the expense of coal. I discuss the change in the generation mix, and how that change contributed to the Texas blackouts, in my August 1 piece for the Morning News.

My August 1 Dallas Morning News piece on the blackouts

About three weeks ago, Elizabeth Souder from the Dallas Morning News contacted me and asked me to write an oped to explain why Texas was hit by blackouts in February. We agreed on a piece of 1,200 to 1,500 words, but I ended up writing about 1,800 words. I have been pleased by the response to the piece. Here's how I started:

As the postmortem of the blackouts that slammed the state back in February continues, it’s apparent that Texans narrowly averted a catastrophe that could have resulted in what biologists call a mass mortality event. The February blackouts should have been a neon-bright wake-up sign for the state’s politicians and regulators that the structure of the Texas energy grid is deeply flawed and that fundamental changes are needed. Alas, the Legislature and Gov. Greg Abbott have largely kicked the electric can down the road. That’s a mistake. The electric grid is the Mother Network. Our most important networks, including food delivery and storage, communications and GPS, depend on the electric grid to deliver cheap, abundant and reliable flows of energy 24/7/365. A prolonged electricity outage due to extreme weather, or malicious actors, would have dire effects on Texas, and because the state provides much of the country’s food and fuel, it would also short-circuit much of the American economy.

I continued:

The blackouts were due to government failure of epic proportions. The most obvious example of government failure was the decision by the Public Utility Commission to set the clearing price of electricity in ERCOT at $9,000 per megawatt-hour — and to leave it at that extremely high level for several days despite the fact that it did not bring more generation into the market. The result of that blunder: Texas electricity consumers were overcharged by roughly $26.3 billion. The burden of paying for those costs will fall most heavily on regular Texans, who will see surcharges on their utility bills for years to come to pay down the bonds the state is issuing to spread out the cost of those overcharges. The deregulation of the Texas electricity sector opened up the utility sector — an industry that is at root, a power-plant-poles-and-wires business — to “retail electric providers.” In a flash, entrepreneurs could get into the electricity game, with no hard assets or knowledge of how the electric grid works required. One hundred and forty years ago we had Thomas Edison. Deregulation gave us Griddy.

In the wake of the blackouts, no one is being held responsible:

The deregulation of the electricity sector resulted in a market in which the buck doesn’t stop anywhere. Under the old regulated utility model, when big companies owned all of the components of the grid, there was accountability. After the blackouts, all we’ve seen is finger-pointing. That’s not a bug; it’s a feature of a market that’s so complex that no one understands how it really works. As Ed Hirs of the University of Houston has noted, “The 1,876 pages of regulations and rules contained in the ERCOT Nodal Protocols apparently mean nothing.” Deregulation distorted the type of generation that was added to the ERCOT grid. Over the past two decades, the generation capacity added to the grid wasn’t built for reliability or resilience, it was built to collect subsidies.

My recommendations:

First and foremost, the state must step up its oversight and regulation of the energy sector. The electric grid and natural gas grids have merged. The February blackouts proved, again, that the electric and gas grids are deeply intertwined and interdependent. Since 2001, when Enron went bankrupt, the amount of natural gas consumed by the U.S. electric sector has more than doubled. Despite that fact, the two grids are not being regulated to assure that they are singing from the same hymnal.
Second, the lavish federal tax incentives for wind and solar energy production — the production tax credit and the investment tax credit — should be eliminated immediately. Between 2010 and 2029, those tax credits will cost the federal treasury about $140 billion. Designed to stimulate nascent industries, the production tax credits and income tax credits have become blatant examples of the crony corporatism that is undermining the integrity of the electric grid.
Third, the Texas Legislature will have to pass measures that incentivize companies to build and maintain plants that can be dispatched during times of peak demand.

I concluded:

In summary, the mistake made by Texas regulators was to treat electricity as a commodity. That’s wrong. Electricity isn’t like sneakers or hot dogs. Electricity is a critical service. The grid is the backbone of modern society, a complex and delicate machine that connects all of our homes and businesses to each other. Without reliable power, modern society falls apart. The February blackouts were the result of a government failure to properly manage our most important network. If Texas’ elected officials don’t fix the problems in ERCOT, more blackouts, and even cost burdens for low- and middle-income Texans, are certain.

I'm proud of the piece. Read it here and please pass it around.

Alex Epstein on hydrocarbons and his upcoming book, Fossil Future

This week on the Power Hungry Podcast (episode number 64), I talk with Alex Epstein, the author of The Moral Case For Fossil Fuels, the founder of the Center for Industrial Progress, and an unabashed advocate for the increased use of hydrocarbons. I've known Alex Epstein for more than decade. Over that time, he has helped change the discussion about climate change and energy policy by focusing on the positive aspects of hydrocarbons. In this episode, Alex talked about the “brazenly irrational” stance of many climate activists, why the costs of using hydrocarbons are “dwarfed by the benefits,” the rise of the energy humanist movement, and his upcoming book, Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas – Not Less, which will be published in February 2022 by Penguin Random House.

In the podcast, I asked Alex to discuss what he calls the “three irrefutable principles for evaluating fossil fuels' CO2 emissions.” As he states:
1. We must factor in the benefits that come with them.
2. We must factor in the climate mastery abilities that come with them.
3. We must look for negative AND positive impacts.

That last point is key as it speaks to the full accounting issue, that is, looking at the entire range of issues around a particular energy source. Full accounting includes land use, an issue I’ve been covering for years. Full accounting has become particularly important lately as we learn more about the full cost of producing solar panels including the use of Chinese slave labor in Xinjiang Province.

Alex told me that he is always looking for the most succinct way to make his points. That inclination is why he does much of his publishing on Twitter, where he has nearly 60,000 followers. In looking back at the interview, this is one of his best summaries:

Energy is essential for human flourishing, particularly cost-effective energy. Billions of people lack it. The negative side effects of the most cost-effective energy source, fossil fuels, are completely dwarfed by the benefits.

It was another fun conversation. Tune in here.

Troglodytes pacificus: a very small wren

I didn’t bring my binoculars to California, but in walking around the beautiful grounds at Cavallo Point, I spotted a new bird for me: the Pacific Wren (Troglodytes pacificus). I only got a short glimpse – there were actually two Wrens moving through the low shrubs -- but there was no doubt that it was a Wren. The angle of the bird’s tail, along with its nervous movement, made me immediately think “Wren,” and a search on the iBird app on my phone confirmed that it was a Pacific Wren.

Here’s a description from Allaboutbirds.org of the Pacific Wren:

tiny brown wrens with a song much larger than themselves. One researcher deemed them a “pinnacle of song complexity.” This tinkling, bubbly songster is more often heard than seen within the dark understory of old-growth evergreen forests where they live. When Pacific Wrens sing they hold their tail upright and their entire body shakes with sound. They move like mice through the forest understory, hopping along logs and upturned roots.

Wikipedia says this about the species name, Troglodytes pacificus:

The scientific name is taken from the Greek word "troglodytes" (from "trogle" a hole, and "dyein" to creep), meaning "cave-dweller", and refers to its habit of disappearing into cavities or crevices whilst hunting arthropods or to roost.

When it comes to lists, some birders are rather fanatical. Some keep “life lists” and tally every species that they have seen. I am not much of a list keeper. Yes, I noted the siting of the Pacific Wren on my iBird Journal app, but I don’t add every siting of every bird I see to the list. For instance, yesterday, we went to Rodeo Beach in the Marin Headlands. We saw lots of Brown Pelicans there, but since I’ve seen those birds many times before, I didn’t add them to my list. All that is a longish way of saying that finding and identifying new birds is always a thrill. It gives more meaning to the places we have visited. Whenever I see the Pacific Wren in the future, I will remember first seeing it at Cavallo Point.

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I have been pleased with the response to my recent report about land-use conflicts and renewables. "Not In Our Backyard," was published on April 21 by the Center of the American Experiment. The center is also the home of the Renewable Energy Rejection Database, which includes details on the more than 300 local or regional governments that have rejected or restricted wind-energy projects since 2015. The only way to bring sanity to the decisions being made by policymakers is to relentlessly pound the facts. Here's a link to the full report. Please share it.

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