U.S. CHAMBER OF COMMERCE

Energy Blog

Energy Blog

US Chamber of Commerce Blog

Sean Hackbarth Natural gas pipes in Bismarck, North Dakota.Natural gas pipes in Bismarck, North Dakota. Photographer: Daniel Acker/Bloomberg.

If fossil fuel opponents can’t “keep it in the ground” and stop oil, natural gas, and coal development, then the next best thing in their anti-energy march is ensuring that energy can't go to where it’s needed.

After President Barack Obama refused to permit the construction of the Keystone XL pipeline, fossil fuel opponents learned from their success by vigorously targeting other energy infrastructure projects and pressuring regulators to throw up roadblocks. The result, as The Wall Street Journal reports, is billions of dollars in missed opportunities that will hamper the economy:

Many major fossil-fuel projects across the U.S., from pipelines to export terminals, have been shelved or significantly delayed because of a confluence of new regulations, grass-roots opposition and a drop in energy prices.

Overall, more than a dozen projects, worth about $33 billion, have been either rejected by regulators or withdrawn by developers since 2012, with billions more tied up in projects still in regulatory limbo.

Take natural gas pipelines. America’s largest source of natural gas, the Marcellus Shale, is only a few hundred miles away from densely populated states in the Northeast, but it might as well be on another planet if pipelines can’t be built to get that energy to consumers. With electricity generation relying more on natural gas, this problem is already hitting households and businesses in their wallets:

Gordon van Welie, president and CEO of ISO-New England, the region’s power grid operator, said such projects are badly needed. Residential consumers in New York and New England paid between 5% and 41% more than the national average for natural gas in March, the latest month for which data were available. They also paid more for electricity, which itself is increasingly made with natural gas.

But finding ways to move gas into the Northeast has proven difficult. Matthew Piatek, an associate director at consulting firm IHS Energy, said some natural-gas pipeline projects have been delayed by more than a year-and-a-half.

Without new infrastructure, Mr. Piatek said, “certain areas will need to rely on higher-cost sources.”

Despite the Northeast having some of the highest electricity prices in the nation, pipeline projects are being blocked. In May, “New York regulators refused to issue a water quality permit for Constitution, a pipeline to move natural gas out of Pennsylvania to New York, as well other New England markets,” the Journal reports.

Listen to The Business Impact podcast on the value of energy diversity.

Across the country in the Pacific Northwest, coal exports projects are also running into trouble:

In May, the U.S. Army Corps of Engineers rejected a proposed $850 million coal-export terminal proposed for Cherry Point, Wash., a forested, coastal area two hours north of Seattle where two oil refineries and an aluminum facility operate.

Not mentioned in the story is another project proposed by Millennium Bulk Terminals. As Dan Byers of the U.S. Chamber’s Institute for 21st Century Energy explained, Washington State regulators made an unprecedented demand that the company buy carbon offset credits for the “carbon dioxide that will be emitted annually in Asia when the exported coal is used for electricity generation.”

This would set a dangerous precedent, Byers writes:

For decades, the scope of environmental permitting has rightly focused on the site itself, not the product being sold or what happens to it thousands of miles away from the facility under review. A growing push from “keep it in the ground” advocates threatens to impose global life-cycle carbon considerations into EIS reviews of all kinds—be they export facilities, pipelines, exploration and production activities, or even just roads. These requirements will often make projects economically infeasible. For example, at a modest carbon credit price of $20 per ton, Millennium’s 1.3 million tons of additional emissions would essentially cost port owners more than $25 million per year. That amounts to what is effectively an enormous export tariff! Worse, it is not far-fetched to envision environmental extremists working to impose similar requirements on an endless range of other exported products. The implications for oil and natural gas exports are obvious, but what about cars or airplanes? As with coal, their use also results in overseas emissions. What about heavy machinery? Medical equipment? Refrigerators? Computers and electronics? Even agriculture? The same logic applies—use of all these products requires significant amounts of energy, and that energy increases carbon emissions.

Now, there have been some wins--Kinder Morgan won approval to build a liquefied natural gas export facility in Georgia, and Iowa regulators are prepared to approved a pipeline that will transport oil from North Dakota—but activists continue to target necessary energy infrastructure in its extreme “keep it in the ground” campaign to stop American’s from using our energy abundance, and whether they realize it or not, regulators are helping them.

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Does America need an "All of the Above" energy strategy? Find out here. This Chamber Explainer will get you up to speed.

 

Thomas J. Donohue Chamber President and CEO Thomas J. Donohue greets Ulrich Grillo, president of the Federation of German Industries (BDI). Photo credit: Christian Kruppa

I recently returned from a trip to Germany where the Chamber took part in the 2016 Hannover Messe, the world’s largest industrial technology fair, and later met with the business community in Munich. The United States was this year’s “Partner Country,” and President Barack Obama was the first sitting U.S. president to attend the fair in its seven-decade history. The U.S. delegation also included Secretary of Commerce Penny Pritzker, U.S. Trade Representative Michael Froman, and Secretary of Transportation Anthony Foxx, among others. 

I participated in the Hannover Messe in 2014 as a keynote speaker.  Following that trip the Chamber worked hard to convince the administration of the value for the United States to partner with Germany on the Messe this year, as such a partnership would offer U.S. officials – and the Chamber – with an ideal venue to promote the transatlantic relationship and the positive outcomes of expanded trade. We’re pleased that such efforts came to fruition.

Our objective was to demonstrate the Chamber’s enduring commitment to a robust transatlantic relationship at a time when bilateral tensions persist and the global security and geopolitical situation appear increasingly tenuous. My op-ed “Renewing the Transatlantic Alliance” speaks to the three issues on which I focused during the visit:

The imperative of securing a robust Transatlantic Trade and Investment Partnership (TTIP), with the understanding that getting the agreement’s substance right is more important than concluding the negotiations within any particular timeframe. The vital importance of uninterrupted cross-border data flows for U.S. and European businesses of every size and sector. A pro-growth European energy strategy that promotes responsible development of Europe’s own resources, enhances the continent’s diversity of supply, and emphasizes efficiency.
 

After the opening ceremony, I joined two dozen CEOs at a dinner with German Chancellor Angela Merkel and President Obama. We had an in-depth and thought-provoking conversation on a range of topics, including the need to stimulate economic growth via investments in digital and physical infrastructure; the world’s energy challenges; the role of the private sector in addressing the migration crisis; and, of course, TTIP.  I also had the chance to catch up with executives of a half dozen American Chambers of Commerce in Europe. As you can imagine, TTIP and the need to promote growth on both sides of the Atlantic were topics of significant discussion.

The Chamber and the Federation of German Industries (BDI) also organized a bilateral business summit on “The Future of Transatlantic Relations.”

During the summit, BDI President Ulrich Grillo and I presented a joint TTIP declaration to the participating U.S. and European officials. The message was straightforward: We seek a substantive and commercially meaningful accord, and the substance of the agreement matters more than its timing.

Public worries about trade and globalization were much discussed in Hannover and Munich, including the need to improve government programs to assist workers displaced by technological change, trade, or other factors — and to coordinate these programs more effectively with the business community.

The trip was a strong reminder that America has no partner in the world like Europe. Our shared values and shared interests are without peer. The Chamber is committed to keeping this unique alliance for prosperity and security strong.

Sean Hackbarth Power transmission lines are suspended from an electricity pylon in Clifton, New Jersey.Photo credit: Steve Hockstein/Bloomberg.

Everyone love lists. We’re fascinated discovering what are the biggest, the fastest, the most-popular, the greatest.

In 2015 Forbes contributor James Conca put together a list of the biggest power plants in the United States. Instead of listing the plants that could produce the most electricity, he gathered a list of the plants that did produce the most electricity.

I haven’t seen him update the list, so I went ahead on my own using Energy Information Administration 2015 data. It shows how important nuclear and fossil fuels are to producing the baseload power that keeps the lights on and keeps our economy moving.

Some observations:

First, eight of the top ten power plants are nuclear. Nuclear plants dominate the list because they run almost 24/7 over long periods of time. As Conca noted nuclear power plants have high average capacity factors (90%) and get closer to their full generating capacity than other types of power plants. Compare nuclear power to more-intermittent, less-reliable renewable electricity sources like hydropower (40%), wind (30%), solar thermal (24%), and solar photovoltaic (20%). Because of nuclear's importance, the federal government must fulfill its legal responsibility by building a permanent nuclear waste storage facility at Nevada’s Yucca Mountain.

Second, the largest power plant in the United States, and the seventh largest in the world—Grand Coulee Damn—didn’t generate the most electricity in 2015. This could be due to factors like the amount of rainfall in the Pacific Northwest last year. It shows that being the biggest doesn’t mean you generate the most. It’s more important to run at a consistently high capacity for long periods of time.

Third, two fossil fuel power plants made the list. Despite this, don’t underestimate coal and natural gas’ importance to the power grid. According to the Energy Information Administration, in 2015, coal fueled about one-third of all our electricity. (Nuclear generates about one-fifth.) It’s unwise for the federal government to be attacking this critical energy source with regulations like EPA’s Clean Power Plan.

As for natural gas, its share of electricity production was also about one-third in 2015. An advantage of natural gas plants is an abundance of cheap fuel—thanks, fracking. But on the flip-side, these power plants need pipelines to get that fuel. Regulators and anti-fossil fuel activists are blocking needed pipelines and energy infrastructure to turn cheap fuel into electricity.

Fourth, could wind or solar power ever make this list? Anything is possible, but wind and solar have to scale a lot. The Alta Wind Energy Center in California, the largest onshore wind farm in the United States, generates 2,600 GWh of electricity. The output of the 3,200 acre facility would have to multiply by seven to make it on the list. The mountain for solar is steeper. The world's largest solar thermal power station, California's Ivanpah Solar Electric Generating System, stretching over 3,500 acres, is expected to generate 940 GWh of electricity annually. To make the list, it would need to increase electricity generation by 1900%.

Renewable power has a place in America’s diverse energy mix—see the Grand Coulee Dam--but as this list shows, wind and solar aren’t capable of replacing the big nuclear and fossil fuel power plants that make up the backbone of our power grid.

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Does America need an "All of the Above" energy strategy? Find out here. This Chamber Explainer will get you up to speed.

 

Below is the list of the top ten producing power plants in the United States.

1. Palo Verde Nuclear Station

State: Arizona
Fuel source: Nuclear
Electricity generated in 2015: 32,525,595 mWhs

palo_verde_site_aerial_photo_02-22-13.jpg Palo Verde Nuclear Generating StationPalo Verde Nuclear Generating StationPalo Verde Nuclear Generating Station. Photo credit: Arizona Public Service.
  2. Browns Ferry Nuclear Station

State: Alabama
Fuel source: Nuclear
Electricity generated in 2015: 27,669,694 mWhs

wikimediacommons_browns_ferry.jpg Browns Ferry Nuclear Station in AlabamaBrowns Ferry Nuclear Station in AlabamaBrowns Ferry Nuclear Station.
  3. Oconee Nuclear Generating Station

State: South Carolina
Fuel source: Nuclear
Electricity generated in 2015: 21,939,740 mWhs

oconee-aerial-2010_duke_energy.jpg Oconee Nuclear Generating StationOconee Nuclear Generating StationOconee Nuclear Generating Station. Photo credit: Duke Energy.
  4. West County Energy Center

State: Florida
Fuel source: Natural gas
Electricity generated in 2015: 20,428,360 mWhs

west-county_fpl.jpg West County Energy Center in FloridaWest County Energy Center in FloridaWest County Energy Center. Photo credit: FPL.
  5. Braidwood Nuclear Station

State: Illinois
Fuel source: Nuclear
Electricity generated in 2015: 19,740,011 mWhs

bloomberg_braidwood_il_nuclear.jpg Braidwood Nuclear Station in Illinois.Braidwood Nuclear Station in Illinois.Braidwood Nuclear Station. Photo credit: Daniel Acker/Bloomberg.
  6. Byron Nuclear Generating Station

State: Illinois
Fuel source: Nuclear
Electricity generated in 2015: 19,478,139 mWhs

wikimediacommons_byron_nuclear_power_plant_il.jpg Byron Nuclear Generating Station in IllinoisByron Nuclear Generating Station in IllinoisByron Nuclear Generating Station. Photo credit: Ben Jacobson. Licensed under a Creative Commons Attribution 2.5 Generic license.
  7. South Texas Project Nuclear Station

State: Texas
Fuel source: Nuclear
Electricity generated in 2015: 19,400,553 mWhs

bloomberg_southtexasprojectnuclear.jpg South Texas Project Nuclear StationSouth Texas Project Nuclear StationSouth Texas Project Nuclear Station. Photo credit: F. Carter Smith/Bloomberg.
  8. Limerick Nuclear Generating Station

State: Pennsylvania
Fuel source: Nuclear
Electricity generated in 2015: 18,904,377 mWhs

bloomberg_limerick_nuclear.jpg Limerick Nuclear Power Station in PennsylvaniaLimerick Nuclear Power Station in PennsylvaniaLimerick Nuclear Power Station. Photo credit: Bradley C. Bower/Bloomberg.
  9. Grand Coulee Hydroelectric Station

State: Washington
Fuel source: Hydroelectric
Electricity generated in 2015: 18,838,602 mWhs

wikimediacommons_grand_coulee_dam_in_the_evening.jpg Grand Coulee Dam in Washington State.Grand Coulee Dam in Washington State.Grand Coulee Dam. Photo credit: Steven Pavlov. Licensed under a Creative Commons Attribution-Share Alike 3.0 Unported license.
  10. James H. Miller, Jr. Electrical Generating Plant

State: Alabama
Fuel source: Coal
Electricity generated in 2015: 17,815,891 mWhs

Alabama Power's Plant Miller How Electricity Is Generated 3D Animated Tour