Author Archives: CareyKing

The stay on the Clean Power Plan: A mountain out of a molehill

Much of the hyperbole over the Supreme Court’s stay of the EPA’s Clean Power Plan (CPP) is making a mountain out of a molehill. The CPP is very significant politically, legally, but its CO2 goals are trivial in the grand scheme of sustainable consumption patterns, technological capability, stated goals (not commitments) at Conference of Parties global climate talks.  The CPP targets are a piece of cake. And I say this as someone that is not a techno-optimist in the sense that technology alone will not solve all socioeconomic problems.

Contemporary discussions of energy resources and technologies are full of conflicting news, views, and opinions from extreme sides of arguments.  The discussions regarding the recent Supreme Court decision to stay the Clean Power Plan (CPP) fall right in line with this narrative.  While the recent 5-4 Supreme Court ruling centers on the legality of the CPP, the responses in the corporate and public arena largely focus on social and economic arguments. This is a good thing. Deciding on broad social goals should not hinge on legal technicalities because our social perspectives should shape and rewrite laws as needed. When the law is just plain morally wrong, we need to change it. We’ve done this several times via Constitutional Amendments when we abolished slavery and gave women the right to vote.

The hyperbolic discussion regarding the Supreme Court decision is an example of how trivial environmental and technology changes translate to gargantuan policy and legal arguments.  I briefly discuss arguments by the “right” and “left” and point out important aspects that caveat those arguments.

The anti low-carbon “right” (stereotypically conservatives, Republicans, and many pro-business groups such as the U.S. Chamber of Commerce) claim that taking proactive measures to reduce greenhouse gas (GHG) emissions will hurt jobs and the poor, kill the economy, and not be as effective as “the market” in reducing emissions but without extra prodding.  There is some truth in these statements. Internalizing GHG into energy costs will make fossil energy more expensive (e.g., does not make low-carbon energy cheaper), and expensive energy (mostly due to oil) has been associated with past recessions.

The pro low-carbon “left” (stereotypically liberals, Democrats, and environmental organizations) point out how renewable (low-carbon) electricity is now cost-competitive with coal and natural gas generation and that some countries, states, and regions already have functioning carbon policies and/or markets without economic downturn, much less ruin. Thus, the claim is that we have the technologies we need, and we can grow the economy while we transition to near 100% renewable and low-carbon energy.  There is some truth in these statements.  Today, utilities and cooperatives can obtain a contract for wind and solar power dirt cheap. Europe, California, New England, and British Columbia have carbon markets or taxes that have not destroyed their economies.

However, both sides of the low-carbon argument neglect important points that prevent us from having a holistic discussion.

The “right” avoids discussing that current market structures have caused the same feared effects they fear from GHG mitigation, such as loss of high-paying jobs for low/mid-skilled workers.  They also usually avoid the obvious point that markets are defined by people to achieve social goals, not the other way around. If the right argued for allocating half of the anticipated low-carbon investments to shore pensions and enhance education of displaced workers, then I could at least listen without cringing.

The “left” avoids mentioning the absurdity of economic assumptions in models that estimate long-term climate change costs and economic growth.  For example, the 2100 economic outcomes in the (latest) Fifth Assessment Report from the Intergovernmental Panel on Climate Change indicate that even if the world shifts to zero net GHG emissions or not, we’ll be somewhere between 3-8 multiples richer than we are today.  If there is no climate change mitigation, we’ll still be pretty much within the same multiples richer than we are today. Really? Human activity can emit from zero to over twice as much net CO2 per year in 2100, and we can’t tell the difference in the economic outcome within the noise of the models? This doesn’t pass my smell test, and the assumptions for increased technological change are not even dependent upon the descriptions of a low-carbon energy system that is being modeled.  See my recent Energies paper (Section 4.2 specifically) that describes how we need much better efforts in macroeconomic modeling of a transition to a low-carbon economy.  We know that economies depend upon energy and technology as an input, it’s time all macroeconomic models include energy as an input.

To be fair, creating markets and trade agreements to effectively and fairly guide global commerce is a large and evolving problem.  Also, modeling future outcomes (for almost anything, much less the economy) 80 years out is difficult to impossible.

But the Clean Power Plan is about electricity generation, in the United States, in 15 years.  Part of the economy. Part of the world. Not too far out.  The tools exist to address the minor targets of the CPP.

Sure we can expect some owners of electricity assets to lose money as those assets become economic and/or are retired before they earn a positive return on investment.  Maybe they are already whole, but will just lose profits they expected. That’s what happens when you change the energy system by law or by market (see this recent article in Bloomberg discussing Nevada’s NV Energy rate hike in response to distributed solar: Who Owns the Sun?).  But again, the targets of the Clean Power Plan are so small relative to our technology capability, and economic growth is so uncertain, if we meet the CPP targets it will probably not even be clear whether or not the CPP was even partially responsible.

This discussion reminds me of the parable of the God-fearing man that died during a flood. He had a vision for how God would save him and had faith that God would do so.  This vision caused the man to refuse help to ride away in a truck before the waters rose, in a boat when water came into his house, and in a helicopter when he was forced to flee to his roof.  After dying from the flood and going to Heaven, the man asked God why He did not save him. God replied “I tried. I sent you a truck, a boat, and a helicopter.”

Usually the right believes that the almighty Market alone will enable us to solve our environmental problems, including a reduction in CO2 emissions from power generation. Well, the Market (with help from intelligent human designers: policymakers, engineers, and scientists) hath provided photovoltaic panels, wind turbines, nuclear power, batteries, conservation technologies, and yes, even hydraulic fracturing to produce more natural gas.

What should Texas do About Integrated Water-Energy Policy Decisions?

This blog was originally posted by the Cynthia and George Mitchell Foundation.

When considering linkages and tradeoffs of water and energy objectives, the usual discussion among colleagues, industry, and government agencies is that we should search for holistic “win-win” situations—a simultaneous beneficial outcome for both energy and water goals.

That is, we should first invest in new technologies and enact new policies that promote use of energy and water resources that are low-cost, clean, and good for the environment.

But “win-win” situations are not always possible, especially when there are myriad of objectives emerging about this subject coupled with water becoming fully allocated in some basins. In fact, by definition, it is impossible to produce a single optimal outcome from multiple objectives.

This opinion piece is meant to provide context of the ongoing dispute—with focus on the Brazos River basin—that concerns surface water rights, farmers (Texas Farm Bureau), electric power, and the Texas Commission on Environmental Quality (TCEQ).

Brazos River and Electric Power Generation

The Brazos River basin in Texas presents an interesting, ongoing case study regarding the allocation of water and the right of the State of Texas, via the TCEQ, to have discretion in interpreting state surface water law.

From late 2010 through most of 2011, Texas received the lowest 12-month rainfall on instrument record. Further, that year was also the hottest on record with many parts of the state experiencing a record number of 100F+ days.

Eventually, water flows in some rivers became low enough that there was not enough flow for all water users to receive their legally allocated surface water.  In the case of drought, senior water rights holders can ask TCEQ to “call” younger water rights, effectively cutting off junior water rights holders from withdrawing water.

In the case of the Brazos River basin in 2011, one senior water right holder at the end of the Brazos River (the Dow Chemical facility located in Freeport, Texas) asked TCEQ to call other water rights, effectively cutting off junior water rights holders from withdrawing water.

As the TCEQ went down the prioritized list it eventually came to some cities and thermoelectric power plants. These power plants are designed to consume and withdraw water for cooling their operations (note: only two thermal power plants in Texas use air cooling). TCEQ did not want to alienate elected officials and their constituents by cutting off water access to power plants (and cities) thus reducing the electricity supply that would, in turn, increase electricity pricing during peak months.

So, the TCEQ didn’t, and cited public health, safety and welfare concerns for its decision.

The only other type of water rights to call? If you guessed farmers, you win the prize.

Heck, farmers have both a large quantity of water rights and demand (over 50% of Texas water consumption is for irrigation), and they represent a low fraction of voters relative to the number of people that want, say, air conditioning.

Legally this practice is allowed in an emergency, but the Texas Farm Bureau has sued TCEQ claiming its new doctrine cannot replace the prior appropriation doctrine for long-term governance.

Over the past couple of years, the Farm Bureau has won an initial legal ruling along with two appeals. At the moment, the TCEQ is appealing, again—this time to the Texas Supreme Court.

Let’s consider the Brazos river situation from a social rather than legal lens.

TCEQ claims that in order to be “healthy” and “safe,” we can’t cut off water supply to thermal power generators. How much water and electricity do we need to be healthy and safe?

First, consider water.

According to the United Nations every human should have access to at least 50 liters/day of water that is safe (clean for washing, cooking, and drinking), affordable (< 3% of household income), and accessible (< 1 km and < 30 minutes away from home).

In the Texas State Water Plan, TWDB estimates that 2010 municipal water demand in Texas was approximately 650 liters/person/day. One important safety issue is the maintenance of proper pressure in municipal water supplies for fighting fires.  However, even including this critical requirement, Texans can be safe and healthy at 25% of normal municipal water consumption.

Some cities have conserved about as much as they can, and have moved to full municipal water recycling (e.g., toilet to tap). Since 2012, there is also talk in Texas of brackish (and seawater) desalination.  I, however, do not want to pay for a desalination facility as long as people are still watering their lawns.

Desalination is financially viable only if the facility is operated full-time at or near capacity.  Given facility capital costs and labor-related expenses, desalination, as a solution for drought, would be cost-prohibitive for most municipalities.  If Texans conserved via 100 percent xeriscaping, and demand for reliable municipal water continued to increase, then I’d consider voting for desalination (as well as considering moving to a wetter location).

Now consider how much electricity a person needs to be healthy and safe.  A minimal amount of electricity (< 2% of Texas’ total of over 430 terawatt-hours per year) is required to run water and wastewater services.  Hospitals, police stations, traffic lights, and other city services also require electricity.  Texas’ 2014 retail sales of electricity were 379 TWh: 37% residential, 36% commercial, and 26% industrial.

Would it be unsafe or unhealthy to consume less commercial or industrial electricity during a drought if it were required due to water right priority?  Certainly that action would not be the most economical option (e.g., curbing industrial production or commercial activity)—but the Texas Farm Bureau isn’t suing the TCEQ over an argument related to economics.

The economic argument is obvious but fallacious to use for an ultimate conclusion.  Consider the following simple back-of-the-envelope example:

Let’s compare dollars of revenue for every acre-foot of water consumption for Texas agriculture, wholesale electric power, and industrial production from the Freeport Dow Chemical facility. These are approximately 2,000, 30,000, and 130,000 $/ac-ft., respectively.  A moredetailed analysis found that if you charge power plants for water consumption, then the cost of water consumption savings for electric power in Texas would be higher than each option in the State Water Plan.

If our water issues were only contingent upon the most economical use of water, we’d not irrigate crops, right? However, we don’t eat petrochemicals or electricity.  Thus economic analyses only take us so far in understanding how we should allocate water amongst competing demands including agriculture.

Practical solutions

So, what should Texas do?

First, the good news: progress has been made on some fronts. The state water planning process was established to continue discussions, although it needs more input in terms of prioritization of options.  Senate Bill 3 (2007) established the process that has now set environmental flow standards for most of Texas’s major rivers, helping allocate water to nature. These flow standards can be updated over time and as new information becomes available.

But there is still a regulatory need to link surface and groundwater legally. Even baby steps would be useful since Hydrology 101 tells us that a single water molecule can start as rain, flow on the ground, and penetrate into groundwater before later coming back to the surface.

Water following this pathway is called a spring, and springs are the reason why people settled along the Hill Country and associated outcrops to begin with.

Investments that recharge groundwater resources when Texas experiences high rainfall events are a good start.  We must help replenish groundwater during wet times since we turn to groundwater during dry times.  Aquifer storage and recovery projects also become more feasible because of the rise in Texas’s population. Plus, we’ve built about as many reservoirs as make sense (note: more water evaporates from lakes than for all municipal consumption).

Each river basin needs a tractable plan for water allocation during drought to avoid the current situation (i.e., lawsuits such as occurring now in the Brazos basin).  Here are some options:

  • Establish a water allocation protocol, such as done by the Lower Colorado River Authority, with clear decision points and actions based upon water storage.
  • Open the process for farmers, or others with interruptible surface water rights, to temporarily lease water for other users (e.g., electric power). This can help compensate those with senior rights and who are willing to forgo some of their water withdrawal. Texas water rights holders can already lease and sell water rights but there is no open forum for this information. The open forum is not technically or legally necessary, but helpful for political and public acceptance and accountability.
  • Finally, a resolution to the Texas Farm Bureau vs. TCEQ will hopefully resolve (temporarily at least) a question of whether power plants are guaranteed by TCEQ to have access to water.  This is important for future power plant installations.

If the TCEQ guarantees that a developer will have access to water, then developers will be motivated to install wet cooling towers.  If developers aren’t afforded this guarantee, they may install dry cooling or other technologies that don’t operate via steam cycles with high need for cooling (wind, PV, and natural gas turbines).

The good news? Increases are unlikely in water demand for “steam electric power” (for use by coal, nuclear, and natural gas power plants) as projected by the Texas Water Development Board. And, almost all foreseeable power generation for Texas will be of the low-water variety (natural gas combined cycle, wind, and solar photovoltaic), and electricity demand is not growing as quickly as it has historically.

For more information see:

  • Texas Water Development Board demand from 2012 State Water plan on their website (~733,000 ac-ft in 2010, see listed estimate and projections for “STEAM ELECTRIC”)
  • Water demand estimate for power generation in 2006 (~ 482,000 ac-ft. in 2006) (King et al., 2008)
  • Water demand estimate for power generation from 1970-2010 (~ 400,000 ac-ft in 2010) (Scanlon et al., 2013).

Dr. Carey King is Assistant Director at the Energy Institute at The University of Texas at Austin, and Research Associate with the Center for International Energy and Environmental Policy within the Jackson School of Geosciences.  For additional information, visit www.careyking.com or write Carey at careyking@mail.utexas.edu.   

The views expressed by contributors to the Cynthia and George Mitchell Foundation’s blogging initiative, “Achieving a Sustainable Texas,” are those of the authors and do not necessarily represent the views of the foundation.