Midwest Moderate

Solar’s Place in the US Energy Balance is Uncertain

I subscribe to a variety of publications, some quite pricey including an investment newsletter that monitors the global energy sector, called Oil & Energy Investor by former CIA analyst Dr. Kent Moors.

While I will not be passing on stock tips, I find his insights into the global energy picture to be illuminating. And a good way to monitor the practical implications of policy decisions.

He is an advocate for a balance of energy sources, and more recently has stressed the need for what he calls, “interchangeable energy resources.” We will explore that topic more in the future.

But today, I wish to focus on his current observations about solar.

He points out that nobody associated with the incoming administration has said anything negative about solar.

He points out that solar has made significant gains in the past number of years and has reached what he calls, “Grid Parity.” Meaning that the solar is now on an even footing with most other energy sources when it comes to production and distribution costs. He notes that most of that progress has occurred in the private sector without governmental subsidies.

That said, where subsidies do exist has been on the local level, by state and federal tax credits designed to stimulate installation of solar on homes and businesses. The end users.

These subsidies have been largely motivated by the desire to lessen the adverse effects of climate change. And that is clearly an item taht appears to be on the Trump admins chopping block.

When compounded by congressional budget cutters eager to eliminate subsidies to ordinary people, a new set of challenges occur.

While it seems as though the new admin is more than willing to cut taxes and loosen regulations on the fossil fuel industry, they are less willing to share the wealth with individual homeowners and businesses seeking to do the right thing by the climate.

The strange thing about all this, as Dr Moors points out, is that the largest oil producers, Saudi Arabia and the United Arab Emirates have developed some of the world’s largest solar generating complexes. They are diversifying their energy resources, recognizing their long term sustainability.

While renewable may have an immediate challenge in the next few years, their ultimate role seems to be inevitable.

As such we can and should be doing everything we can to assert the role of solar as part of an interconnected multi faceted energy strategy.

A strategy that also offers the promise of genuine NEW job creation in both the manufacturing and construction sectors throughout the entire United States and not just energy rich communities.

And such a strategy would certainly be a viable asset to a long term policy of true energy self sufficiency for the nation.

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Cartoon via: http://theweek.com/?utm_campaign=newsletter&utm_source=cartoon&utm_medium=11_17_16-tw_banner

What Will Trump Mean to Climate Change Agreement – John Kerry Speaks

John Kerry warns of climate threat at talks overshadowed by Trump – video | US news | The Guardian

theguardian.com

US secretary of state John Kerry urges countries to treat the earth’s changing climate as an urgent threat as he addresses the uncertainty created by the election of Donald Trump. ‘Obviously an election took place in my country, and I know it’s left some here and elsewhere feeling uncertain about the future,’ he told the audience, before reiterating that a majority of citizens in the US believe climate change is a real threat

The White House is still in Obama’s hands released a report yesterday in compliance with the Climate Control Agreement.

and as such released a detailed 111 page report suggesting a strategy for the US to follow in the coming Mid-Century years.

… a detailed 111-page document outlining a “mid century strategy” to massively slash U.S. carbon emissions by the year 2050, reducing them 80 percent “or more” below their 2005 levels. Just to give some sense of scale, the long-term impact of the plan would be larger than the effect of instantly taking all cars off U.S. roads.

…

Even as the report was released, Secretary of State John Kerry, freshly back from a trip to Antarctica to survey the ravages of climate change firsthand, spoke at the Marrakesh meeting. There, he told nervous negotiators that “no one should doubt the overwhelming majority of the citizens of the United States who know climate change is happening, and who are determined to keep our commitments that were made in Paris.”Via washingtonpost.com

That said, can the world trust that Donald Trump will do anything other than scuttle the now ratified treaty involving so many different nations in the world?

“Ironically, Trump’s threats to withdraw from the Paris agreement has created new resolve among nations here to make the Paris process succeed, with or without U.S. help,” said Paul Bledsoe, a former Clinton White House climate official who was attending the talks, by email.

Several climate policy experts in Marrakech nonetheless argued Wednesday that an ambitious goal for 2050, like the one unveiled by the administration, is not necessarily lost simply because of Trump’s election and professed policies.

Still, in his speech Wednesday, Secretary of State Kerry did acknowledge the “uncertainty” the U.S. election had created for the delegates and the international community that had assembled.

“While I can’t stand here and speculate about what policies our president-elect will pursue, I will tell you this: In the time that I have spent in public life, one of the things I have learned is that some issues look a little bit different when you’re actually in office compared to when you’re on the campaign trail,” said Kerry. read more at washingtonpost.com

washingtonpost.com U.S. President-elect Donald Trump has called global warming a “hoax” and pledged during the campaign to “cancel” the Paris deal aimed at fighting climate change.

Kerry, however, says he doesn’t think U.S. emissions reduction pledges “can or will be reversed” because of the market mechanisms in play.

A European Union official says he believes the U.S. will continue to engage in international climate talks, even under President-elect Donald Trump.

Asked about Trump’s campaign pledge to “cancel” U.S. involvement in the Paris Agreement on fighting climate change, Solymos was philosophical. He says “should something like that happen, then we shall address this issue, but we won’t be alone in it. I’m sure we will be able to deal with it.”

He said EU nations “are determined to implement the Paris Agreement fully.”

Over 300 U.S. businesses have signed a statement calling on President-elect Donald Trump to support the Paris Agreement on climate change — including General Mills, eBay, Intel, Unilever, and dozens of other Fortune 500 companies. See more…

Kerry seems to believe that there is already enough forward momentum and market action to continue progress toward US compliance with the Paris accord, even in the face of Trump’s apparent opposition. There is also hope, that once in office, he may take his job seriously enough to not just pander for votes, but listen to voices of reason, such as the corporate multi nationals cited above.

We can certainly hope that to be the case. But it is obviously essential that we the people remain vigilant on the matter.

At the Midwest Moderate, this will be one of our ongoing topics of concern.

Will the End of the War on Coal be Paid for At the Gas Pump?

It is probably premature to discuss any Trump policies at this point in the game. Much of what was said one day was during the campaign was changed the next to the point it is any body’s guess as what final policies will be pursued.

Instead we need to pay attention to the tea leaves, and in particular watch who gets appointed to what and then, see what they have to say.

What we do know is that he played up the idea of being opposed to the so called “War on Coal.”

The cynic in me senses this was merely a phony campaign gambit to win votes.

Barges loaded with coal outside Pittsburgh, Pennsylvania -Bloomberg

It is clear the majority of lost coal jobs are due to automation according to Bloomberg news. in an article: The EPA Doesn’t Kill Coal Jobs. Better Mining Does

The near term great promise of American energy lies not with coal but with fracking and shale innovations. And it is here that the most likely progress toward energy independence exists. In the long run, I still believe in solar, wind and other alternatives.

The bad news for coal lies in the historically low costs of oil and natural gas.

The abundance of such new energy has destroyed the cartel price of oil, and in the process resulted in prices that undercut coal’s chief advantage, price. Any increase in domestic production only serves to further undercut coal’s competitiveness.

If Trump was able to increase oil and gas exploration, which is in my mind doubtful. It would only serve to further increase the glut that is now causing many existing producers into bankruptcy.

This fact is why I think the talk of new oil and gas production is pure fiction. Should increased oil and gas supplies be developed in the US, it could only decrease coal’s role.

There is one option Trump could pursue. That would be to restrict imports of oil from outside the US via tariffs or other restraints.

That would exclude the world supply of energy from US markets, raising prices for energy here at home, and incidentally at the corner gas station.

It would make it possible for oil companies now going bankrupt to get more per barrel for their production, and possibly revive and justify expansion of new exploration and exploitation of reserves on public land previously unavailable under Obama.

But there are many drawbacks to that scenario. Too many to pursue at the moment. But let’s touch on one.

There actually has been a growth of manufacturing during Obama’s admin. Some of that was due to unanticipated costs manufactures encountered managing their offshore efforts, international currency issues and notably the availability of low cost energy in the US>

The lower energy costs during that decade, especially in energy-dependent industries such as iron and steel and chemicals, made reshoring a money-saving option for some manufacturers. Large-scale production of shale gas in North America helped cut natural gas prices by 25% to 35% over those 10 years. But overall energy costs in many countries outside of North America are anywhere from 50% to 200% higher than they were in 2004. For the U.S., less expensive natural gas translates into more affordable electricity and lower prices on the raw materials used to make ammonia, hydrogen, methanol, and other materials used in the petrochemical sector. This is a significant cost factor because petrochemicals serve as the base for thousands of industrial and consumer products, including plastics, rubber, paints, fertilizers, detergents, textiles, dyes, and solvents.

See: 4 Reasons Companies are Bringing Manufacturing Back to the U.S.

Will Trump’s pronouncements in favor of growing our domestic energy resource end up costing us the manufacturing growth he would like?

Time will tell, but I suspect he may become dismayed at the complexity of energy economics.

Right now the oil lobby and coal lobby have his ear. Perhaps he will prove immune to their persuasion and run a course independent of lobbyists influence. Perhaps not.

Should he pursue a balkanized energy policy that builds a tariff wall around the US, the result may well be a boost in domestic oil prices. The cost may be some of the recent manufacturing growth spurred by lower domestic energy costs. But even more potent may be the anger that will ensue at the gas pumps across America.

That gas price increase would become in essence a tax on ordinary Americans to pay for the tariff wall.

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The Curse of Moderation – Sitting on the Fence?

On the day before my 25th birthday, I managed to get myself elected to the Minneapolis City Council. Our campaign had rented a room at the Leamington Hotel for our victory party.

One of the attendees, was clearly more radical than I, and while he had no problem drinking our beer, he accused me it the hallway of being a “fence sitter.” A term hens_fence_sitting that was not meant as a compliment.

At the time I was upset at him and his comment. I had no idea where and why he arrived at that opinion and it does not matter, today.

But I reject the idea of being moderate as a “chicken” play. In fact my actual experience as an elected official demonstrated to me that being in the middle was by far the more dangerous ground.

The people who really cared about any issue tended to be adamant in their positions. More than once I discovered that my effort to find common ground between opposing forces only lead to both sides condemning the effort. The term appeasement is often used, with all its negative ramifications.

This blog is not about reliving the various issues I faced as a young office holder. But rather the lessons I have learned as a result, combined with the decades of practical experience in electoral politics since.

I have coffee weekly with Hal, who rightly argues that from a political perspective you need to push the limits in an effort to negotiate a middle that is more acceptable. That may be true in say, a labor negotiation. Ask for the moon and settle for 2% and an extra coffee break.

It fails in the real estate metaphor, when you ask a lot for a house and then not only do not get it, but much less when it become shopworn due to being overpriced. Realtors will understand the difference.

My approach is a bit different. And I suspect it arises from my youthful experience as an elected official. While I did get grief for compromises from both sides, I also discovered that compromise lead to getting things done.

I also learned from the time spent genuinely trying to understand the multiple points of view on most topics that there was usually merit to multiple points of view.

mw-moderate The challenge was to get past the passion. A passion that was often two sided. Passion in favor of a point of view and passion made up of fear of the motivations and after effects of the other side.

Today, there is a lot of fear in our political discourse. Fear of the outsider was actively and it turns out effectively used as an electoral tool. I will use Hillary’s word and call that fact deplorable.

And it is also true that Hillary was perhaps a bit weak on generating the passion on the positive end. Beyond a general passion for liberal principles and the breaking of the glass ceiling, the positive passion was overcome by the force of the dark side.

But even that is putting too much of a negative spin. For while crudely presented, the Trump campaign did offer a positive passion of its own. Portraying a swamp and then calling for its draining worked as an election ploy. Only time will tell if it was any more than that.

A Call to Arms!

Welcome to the first post on the Midwest Moderate.

This is a call to arms, and a response to the tragedy of our most recent national election.

The milk is spilled, wipe away the tears, prepare to respond.

But let’s respond wisely.

Yes, it appears that bad conduct was rewarded this year. But no, that doesn’t mean we need to respond in kind.

It appears that foul language, prurient actions and demagoguery have been rewarded with the presidency.

It appears that while abject opposition by Republicans in Congress to Obama demeaned the institution, they ended up winning this most recent battle.

We cannot just imitate their style and actions.

We must use our personal abilities. (yes, yours as well as mine) to begin the new battle. We must become the Somewhat Disloyal Opposition.

First, we must stand up to the abjectly evil aspects of the presumptive policies of the new regime. Religious intolerance cannot be tolerated, for example.

That said, we must work to ameliorate the policies of the new administration, wherever possible.

To do so, we must each step forward to take action. Small but meaningful action.

But we must be wise about this.

There are so many things we disagree with Trump on, we must avoid being too diffuse, lest our impact be diluted.

Instead, I call upon you to find a single cause that motivates you and become a local expert on that topic.

In my case, I plan on using this vehicle to primarily deal with climate change. You may want to focus on health care, or immigration rights, or the economy, or education, or, and, and, and… Your choice.

The key is to develop expertise in at least one area, while not necessarily abandoning all others.

You can become your neighborhood’s expert in Mideast policy, or what ever you choose. An expert is merely someone who knows more than 95% of the people in their sphere. Within your social group(s), you can do that.

And now the important part, in my opinion.

We need to think like Republicans, and/or one or more of the “groups” that voted Trump.

We need to find the common area of agreement they may have to our arguments and then we need to make that case.

For example.

My sense of righteousness about climate change is not going to change a deniers opinion. But within the Republican (and others) sense of proper investment policy is the need for diversification in the stock market.

So, my approach to coal, is not just to bemoan it, but to advocate for a diversified energy policy that still invests in wind and solar.

I do not expect to convince Trump to abandon his pledge to Coal, as wrong headed as I think it was. Instead, I will promote something he could conceivably buy into.

Another example.

Gun policy is not likely to change the way Hillary would have proposed. The issue remains, and I do not think Trump’s tenure will be without the tragedy’s we have seen in recent years.

This is a rural urban divide issue – although there are also many urban gun enthusiasts as well.

An approach to rural voters that will ring true is the need for some sort of urban gun restrictions that exempts them. I confess that I am not sure what form that might take. But an effort to find something that makes sense along the urban rural divide would permit communication on the issue that would be less threatening to the rural element. Could we prohibit guns in the metro area. Maybe not, but such a proposal would make more sense outstate and could be used as a bridge to a more meaningful discussion.

Bottom Line

The time is now to evolve our angst to action.

Individually we can and should take action.

We cannot do it all, or deal with all the myriad issues.

So we need to focus on one (or a few at most) and become expert.

We need to find leverage, we are on the outside looking in. Thus our arguments need to be those of constructive engagement on terms that resonate with those who opposed us.

Final thought

In my past, I monitored SIC Codes and employment numbers during a recession. I noticed that when the economy sank, the number of employees in the construction industries dropped. There was no work.

At the same time the number of individual businesses in the construction SIC codes grew. Laid off workers, started their own businesses.

We are all effectively laid off workers, active or not in the Democratic party, and it is time for us to start our own little policy construction companies.

I look forward to hearing about yours.