3,000 MW of Wind Power to Be Built Near Los Angeles by Next Year

Author: EcoFriendly

Jul 23

3,000 MW of Wind Power to Be Built Near Los Angeles by Next Year
Wind power is the best there is right now in terms of reliability and ease of deployment, at least in some areas of the world. The Californian government, for example, has set an objective to have 33% of their energy coming from renewable resources by 2020.

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World’s First Commercial Solar-Powered EV Charging Station Unveiled by SunPods

Author: EcoFriendly

Jul 23

World’s First Commercial Solar-Powered EV Charging Station Unveiled by SunPods
California-based company SunPods Inc. has recently unveiled at the Cleantech Open event in San Jose this Thursday, world’s first factory-built, solar-powered electric-vehicle charging station. Dubbed “SP-300 Plug-N-Go,” this solar-powered EV charging station is able to charge two cars at the same time. The energy surplus can also be sold back to utility companies.

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Is Matt Simmons Credible?

Author: EcoFriendly

Jul 23

Is Matt Simmons Credible?

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Introduction

I am going to address a touchy subject in this essay, but I simply can’t ignore it any longer. I have noticed that a lot of people are finding my blog through keyword searches of “Debunking Matt Simmons.” About two and a half years ago, I did write an essay called Debunking Matt Simmons. Because of Matt’s recent claims about the disaster in the Gulf of Mexico, there has been a spike in interest over whether his claims related to the disaster are actually credible. So now seems like a good time to revisit the subject.

The topic is touchy because Matt Simmons has long been revered in the energy business, and some of his fans will be upset with me for writing this. But Simmons has lately been making what I feel are very irresponsible and sensational claims that don’t hold up to scrutiny. So I will review his history here to show a pattern of Simmons making sensational predictions based on meager and/or misinterpreted data; predictions that later proved to be grossly inaccurate.

Matt Simmons, Investment Banker and Author

Matt Simmons is an investment banker to the oil industry, probably most well-known for writing the book Twilight in the Desert. The book laid out the arguments that Saudi Arabia had overstated their oil reserves, that their oil production was on the cusp of decline, and that prices were set to soar. The book became very popular, especially when Saudi production began to decline shortly after the book came out. My view was that Saudi production fell not because of the arguments Simmons put forward in Twilight, but rather because the Saudis were holding production back to keep prices up. So my feeling was that the Saudi decline was unrelated to many of the arguments that Simmons put forth. And in fact a couple of years later as oil prices climbed, Saudi production climbed back into record territory.

But I thought the book was important for two reasons. One, it put a spotlight on Saudi Arabia and really highlighted the importance of that country to the rest of the world, especially once oil supplies began to shrink. Second, it called a lot of attention to the issue of peak oil. I have always said that Twilight and The Long Emergency were both influential in causing me to become more involved in writing and talking to people about energy.

That isn’t to say the books don’t have flaws. They do. In Simmons’ book, I felt he frequently came to conclusions that weren’t warranted by the arguments he presented. A famous example is his “fuzzy logic” argument. Fuzzy logic is the basis of many control systems, but Simmons incorrectly interpreted the phrase to mean “hunch.” So when the Saudis used fuzzy logic in their control systems, Simmons made an argument that they were really guessing about their oil reserves. In his own words, “if they can basically just keep turning on a tap, why does it take fuzzy logic?” The comment was nonsensical, but as later events would show not simply an isolated example of Simmons speaking out when he didn’t know what he was talking about.

Matt Simmons, Layman

Twilight in the Desert made Simmons famous, and he began to be called upon as an expert on all things oil-related. There were two very big problems there. First, Simmons is an investment banker, and is not remotely an expert on all things oil-related. In fact, I don’t know anyone who is. But the bigger problem is that he either thinks he is, or just can’t say no to requests to do interviews and presentations. And when he does those, he frequently makes sensational claims and predictions. I am on an e-mail list where I saw this recent comment about Matt from a long-time admirer of his work, which I think hits the nail squarely on the head:

I think something happens to the psyche when the media pay attention to you for so long. You stop all self criticism, believing that whatever thoughts come to your mind have validity and import. In truth, it doesn’t matter if you are eventually proven wrong, because by then you’re off on the next topic.

Simmons’ Blunders at ASPO 2008

In my previous essay on debunking Simmons, I provided some examples of Simmons making factually incorrect statements. These statements were based on him not having enough information (or bad information), yet still speaking authoritatively on a topic. There were two later examples from his talk at the 2008 ASPO conference — where I also presented. (See his presentation here). He claimed in his presentation that we don’t have a good idea of our gasoline inventories, and because of Hurricane Ike we were just beginning a gasoline crisis that could bring the entire country to a halt. He spun quite a frightening tale, and I could see the shock on some people’s faces.

Contrary to Matt’s argument, the evidence was just the opposite. Even as he was speaking, refineries were coming back online from the hurricane outages and inventories were recovering. I caught up with Simmons later and told him that I used to work in a group in a refinery that provided inventory data to the Department of Energy, and we do indeed have very good data on gasoline inventories. So his fundamental premise was wrong. I was asked about Matt’s comments on a later panel session, and I said that gasoline inventories were beginning to recover and that I predicted they would be higher in a month. They were. Matt’s frightening scenario based on Hurricane Ike didn’t come to pass.

Another example is his argument about the $100 trillion corrosion issue in the oil industry. The gist is that he argues that the oil industry is full of rusting infrastructure, and he questions whether we have the money or even the iron resources to fix the problem. Further, he questions aloud how it is that he – Matt Simmons, investment banker – has ‘discovered’ this problem that the oil industry has missed. I won’t go into all of the reasons that Matt is way off the mark on this, as that would be an essay in itself. A corrosion engineer at The Oil Drum once weighed in on this issue, and explained that corrosion is well-understood, and not something that Simmons discovered. Oil companies are full of corrosion engineers who work to replace corroded equipment as needed. But it was another oil-related “crisis” Simmons “discovered” and he ran with it.

And that brings us to his recent interviews over the spill in the gulf.

Sometimes Silence is Golden

Personally, I have a rule about presentations and interviews: If the topic is outside of my area of expertise, I decline. If CNN calls up and says “Can we interview you on the future of the solar industry?” I will tell them no and give them the names of some experts in the field. Lately I have been asked a lot to comment on specifics on the disaster in the Gulf of Mexico. I always decline, again because there are plenty of people who know more about the specifics than I do.

Simmons doesn’t seem to have a filter that tells him to pass up an interview if he might not know what he is talking about. Here is a sampling of some recent interviews in which he makes numerous extraordinary claims. I have included some of the more extraordinary claims below, but there are plenty more out there that I didn’t list.

On Bloomberg: Simmons Says Government Should Take Over BP Oil Clean Up

On CNN: The Gulf Coast oil spill’s Dr. Doom

With Dylan Ratigan on MSNBC:

Simmons’ Sensational Claims on the Gulf Spill

In these and various other interviews, Simmons claims:

1. Use of a small bore nuclear device is the “only option” to stop the flow of oil.

I don’t want a banker who doesn’t know what fuzzy logic is being taken seriously on the issue of using nukes in the Gulf of Mexico.

2. BP would be insolvent by July 8, 2010. He has also stated several times that the stock is going to zero.

While I have said that I don’t think the BP brand can continue in the long run, I wouldn’t call them insolvent and it will certainly take some time for the legal issues to play out. A prediction of insolvency by July 8th was ridiculous. Simmons has also shorted BP stock, so some of this may be wishful thinking on his part.

3. The “real, untold story” is another leak that is 5-7 miles away spewing 120,000 bbls/day.

I haven’t the faintest idea where he came up with this, but I have spoken to several experts who say the chance of that is zero.

4. That there is an underground lake of oil that is 500 feet thick, 100 miles wide, and may be covering 40% of the Gulf of Mexico.

As one person calculated, that would equate to 500 trillion barrels of oil; total global reserves are estimated in the region of 2 trillion barrels.

5. The leak could last 24 years.

He believes this, because short of the nuclear weapon idea he sees no other way to stop the leak and thinks we may have to wait for all of the oil to come out of the reservoir. Meanwhile, the news is that BP is starting to get the leak under control.

6. The gulf states need to be evacuated.

Simmons says “We’re going to have to evacuate the gulf states. Can you imagine evacuating 20 million people? . . . This story is 80 times worse than I thought.”

That last claim was in the Washington Post, leading one critic to ask of the story’s author:

Did he consider that Simmons is a financial analyst and may have an agenda in creating heightened hysteria surrounding the spill?

Did he consider the effect printing this claim could have on the people of the Gulf Coast?

When Appealing to Authority, Make Sure the Authority is an Authority

Here are some comments I recently read from an actual petroleum expert (geologist) on some of Matt’s arguments:

He doesn’t seem to understand that the rig was connected to the well by the riser before it sank, and it was spewing oil and gas into the rig from the blow out. He also doesn’t seem to understand that most old blow outs occurred when drilling – and the drill string would get blown out of the hole – not the casing. And he doesn’t seem to know that blow outs are more common than we are currently aware and that relief wells are tried and tested means of stopping this. And he is the foremost oil expert in the World!

This is the problem in a nutshell. He is making authoritative, alarming, and far-fetched claims, but the real experts aren’t backing him up. His claims are quite consistent with his claims of recent years where he goes out on a limb, finds himself all alone, and eventually just jumps to another limb. I can’t figure out if he is simply after publicity to sell his book, or whether he is really as deluded as his comments seem to indicate.

Yet one thing interviewers almost always do is play up Matt’s experience. The danger in this sort of appeal to authority comes about when the supposed authority isn’t really an expert, and yet has the potential to cause mass hysteria and/or influence public policy. Simmons thinks it would be a good idea to set off a nuclear explosion in the Gulf of Mexico. He thinks we should evacuate 20 million people in the Gulf Coast. He has influence. But I think the media needs to start doing a better job here and stop facilitating this nonsense.

Conclusions

The purpose of this essay was not simply to dump on Simmons. But he is involved in sensationalistic fear-mongering, enabled by the media’s mistaken belief that he is an expert in all things oil-related. I want to make sure people know that they should take his claims with the grain of salt they deserve. As I have documented here, that grain of salt is warranted based on his history of sensational claims that never materialized.

Sadly, I believe he is in the process of destroying his credibility, and I ultimately do not think history is going to judge him kindly when it looks back on these events. This is very unfortunate, because despite the sensational claims, I still believe he is correct on a lot of the big picture questions of peak oil, long-term prices, and the need to take action. But if he loses his credibility, he will diminish his ability to convince people of the importance of the big picture issues.

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Time to Bury Cap and Trade and Plan Anew

Author: EcoFriendly

Jul 23

Time to Bury Cap and Trade and Plan Anew
By Jesse Jenkins and Devon Swezey

Cap and trade is dead. Again. For real this time.

Reports put the time of death at 1 P.M. EST, July 22nd, 2010. That is when Senate Majority Leader Harry Reid emerged from a meeting of the Democratic Caucus without enough support for even a severely weakened and scaled-back emissions cap on the utility sector.

With that, recognition has finally set in everywhere: the United States Senate is not going to enact any form of cap and trade. Not this year. And probably not any time in the foreseeable future.

Worse yet, clean energy progress this year has gone down with the long-sinking cap and trade ship.

Democrats in the Senate have now successfuly wasted what little time they had left on the Congressional calendar wrangling over a utility-only cap–already compromised beyond recognition and destined for political failure–instead of working to advance a package of measures that would have started to make real progress on clean energy.

Reid has made it clear he’ll bring only an extremely narrow bill to the floor before the August recess, one pairing measures responding to the Gulf oil spill with some incentives for home efficiency retrofits and natural gas vehicles. That’s it. After a full two-year Congressional cycle, Democratic super-majorities, and Barack Obama in the White House: home retrofits and natural gas vehicles are all the Senate will deliver. We should let that sink in for a moment…

Blame Game or Moment of Reflection?

After making his decision to drop cap and trade (and any meaningful clean energy measures with it), Reid wasted no time in pinning the blame on those recalcitrant Republicans, declaring in a statement:

“Many of us want…a comprehensive bill that creates jobs, breaks our addiction to oil and curbs pollution. Unfortunately, at this time not one Republican wants to join us in achieving this goal. That isn’t just disappointing. It’s dangerous.”

Whether it was Republicans, the filibuster, oil and coal industry lobbyists or President Obama himself, blame has already been cast far and wide.

But if anything is deserving of blame, it is the cap and trade strategy itself.

Cap and trade has now died four times in the last seven years (this time, we can hope, for good). There is little evidence that Senate Democrats had substantially more votes for cap and trade this year than they did in 2003 (when it failed with 43 votes), 2005 (failed again with 38 votes) or 2008, when Reid also pulled the bill before it could go down in embarrassing defeat and insiders put the final tally at only 35-40 votes in support of the bill.

At this dark moment, the important question is whether any greens or Democrats in Congress are willing to seriously re-think a policy framework that was structurally flawed from the beginning and has consistently failed politically.

(Early indications are that they aren’t, with Nancy Pelosi saying of the House-passed Waxman-Markey bill, “we’re very proud of it and excited to take it to conference.”)

The Serial Failure of Cap and Trade

Cap and trade has repeatedly failed because it doesn’t address the main barrier to the widespread deployment of clean energy technologies: the technology-based price gap between new clean energy and mature fossil fuels.

Many renewables, like wind and solar power, are expensive, intermittent, and difficult to scale for example, while nuclear power is extremely capital intensive and faces substantial local opposition.

Because of higher costs and technical barriers to widespread clean energy adoption, efforts to move the U.S. energy system away from fossil fuels towards clean energy alternatives inevitably comes with a significant price tag.

The result: every country in the world has been unwilling to raise the price of fossil fuels–either through a carbon tax or a cap and trade system–high enough to close this gap for the majority of clean energy technologies.

The United States is a clear case in point, where the proposed cap and trade bill was riddled with so many loopholes and cost containment mechanisms–most notably the availability of up to 2 billion dubious carbon offsets–that the effective price on carbon was too low to effectively spur clean energy innovation and adoption and the “cap” on carbon was rendered effectively non-binding.

But there’s another rub. For all the talk about the urgency of a “cap” on emissions in the United States, China has become the world’s largest emitter of greenhouse gases and its voracious appetite for energy threatens to wipe out any gains we achieve here in the United States.

China has moved aggressively in recent years to become a leader in the clean energy industry; with timing so perfectly ironic it seems almost planned, China announced today that the national government would level a staggering $74 billion in annual investments over the next ten years (5 trillion yuan) to adopt clean fuels and build the nation’s clean energy industries. But even while establishing itself as the dominant global clean energy power, China’s insatiable energy demand is so large that the nation’s demand for fossil fuels continues to rise almost unabated.

In the end, until we make clean energy cheap enough to be widely available and affordable throughout the world, countries like China will continue to satisfy the majority of their increasing energy demand with fossil fuels.

Planning Anew for Clean Energy Progress

Given the stakes for both the global climate and the nation’s economic outlook, we can’t afford yet another episode in the serial failure of the cap and trade strategy.

This moment demands a fundamentally new strategy designed to overcome the inherent political obstacles to carbon pricing and simultaneously achieve the primary objective upon which our climate future hinges: making clean energy cheap in real, unsubsidized terms.

History shows that such technological transformations do not occur through modest shifts in market price signals. We didn’t tax the telegraph to get telephones or put a cap on typewriters to see the birth of the personal computer, as Breakthrough’s Michael Shellenberger and Ted Nordhaus often note.

Instead, time-and-time again, the most reliably successful driver of new innovation and transformative technology changes has been an active partnership between private-sector entrepreneurs and innovators and a public sector acting as both an initial funder and demanding customer of new, cutting-edge technologies.

This will demand an unprecedented level of public investment in clean energy innovation and the accelerated adoption, scale-up, and improvement of a full suite of clean energy technologies.

Such a strategy can begin to cut U.S. emissions in the near-term, but most importantly it will be absolutely essential to establish the technological and economic foundations for deep emissions cuts in the long term.

As the International Energy Agency has been clear, a global clean energy technology revolution is urgently required, and we have not a moment left to lose.

Without clean, cheap energy, emissions both at home and abroad will continue their inexorable rise, while China and other economic competitors solidify their dominance of new global clean technology markets. With this latest death of cap and trade, will we finally bury a fundamentally flawed strategy and dare to plan (and act!) anew?

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