Wednesday, May 23, 2012

Well, there's one promise kept...

Having written and posted this, based on the one article, I went looking for more coverage, or background.  What I found casts doubt on the tone of the article.

Here's the auction results document from PJM.  I haven't read every word, and I don't know all of the acronyms, but I know this - on the chart (page 15) where the value goes from $16 in 2012 to $136 in 2015, the value from 2010 was .. $174.99.  This is clearly not the base price for all electricity generated and sold in the region, because rates didn't drop by 90% between 2010 and 2012.  This is a marginal cost for power coming on line in those years, and may cause some rate increase, but certainly not the catastrophic increases that the article would lead one to believe.

So, while I still believe that raising energy costs is a bad thing, and that excessive regulatory hampering of coal mines and coal-fired plants is a bad thing, and that we are years and years and years away from efficient and economically sensible "green" energy, and that the end result of Obama's desired policies would, in fact, be a "skyrocketing" of energy costs and further economic damage (so I'm not deleting the post), I do not believe that the facts on the ground from the recent auction justify the apocalyptic tone of the linked article.


Jim Geraghty's fond of saying that "all statements from Barack Obama come with an expiration date. All of them." Well, apparently one of them didn't.

Fox News:
Last week the U.S. Energy Information Administration reported a shocking drop in power sector coal consumption in the first quarter of 2012. Coal-fired power plants are now generating just 36 percent of U.S. electricity, versus 44.6 percent just one year ago.

It’s the result of an unprecedented regulatory assault on coal that will leave us all much poorer.

Last week PJM Interconnection, the company that operates the electric grid for 13 states (Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia) held its 2015 capacity auction. These are the first real, market prices that take Obama’s most recent anti-coal regulations into accoun
t, and they prove that he is keeping his 2008 campaign promise to make electricity prices “necessarily skyrocket.”
The market-clearing price for new 2015 capacity – almost all natural gas – was $136 per megawatt. That’s eight times higher than the price for 2012, which was just $16 per megawatt. In the mid-Atlantic area covering New Jersey, Delaware, Pennsylvania, and DC the new price is $167 per megawatt. For the northern Ohio territory served by FirstEnergy, the price is a shocking $357 per megawatt.

Barack Obama, 2008:
Under my plan of a cap and trade system, electricity rates would necessarily skyrocket. Even regardless of what I say about whether coal is good or bad. Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it — whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.
OK, the cap-and-trade system hasn't passed. But there's certainly been an increased regulatory burden as the administration has done everything within its power to limit the amount of electricity that American companies can produce. So for consumers, "electricity rates [will] necessarily skyrocket."

But hey, that can't possibly have any effects on the economy, right? It's not like people would have used the money they'll now have to spend on "skyrocketing" electric costs for anything else. It can't possibly cost anyone a job. There's no way that America will get poorer instead of richer as we ratchet up the cost of the energy that we have while waiting for the "green" pipe dream to come true.

Or not.

Anyway, there's one Barack Obama statement that hasn't expired...

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