July 9 Colorado Energy Roundup: government won’t appeal in Colowyo case, true costs of wind energy revealed

Perhaps the most pressing energy and jobs-related issue in Colorado right now is the legal battle over the Colowyo Mine in the northwest part of the state:

The U.S. Department of the Interior has decided not to pursue an appeal of a federal court ruling that threatened to close Colowyo coal mine in Northwest Colorado.

According to a statement from Department of the Interior spokeswoman Jessica Kershaw, “We are not appealing the court’s decision, but are on track to address the deficiencies in the Colowyo permit within the 120-day period.”

“We are disappointed that the government did not appeal the federal district court’s decision. Colowyo Mine remains confident that the U.S. Department of Interior and Office of Surface Mining are making every effort to complete the required environmental review within the 120-day period ordered by the court,” Tri-State’s Senior Manager of Corporate Communications and Public Affiars Lee Boughey wrote in an email. “These efforts help ensure compliance with the judge’s order while supporting the 220 employees of Colowyo Mine and communities across northwest Colorado.”

The legal decision in May that tripped off the permitting kerfuffle that endangers the operation of the Colowyo Mine stemmed from a lawsuit brought by WildEarth Guardians that the mine’s 2007 permit did not follow the Office of Surface Mining Reclamation and Enforcement requirements as well as National Environmental Policy Act rules.

Bipartisan efforts have poured in from across Colorado, as politicians, the business community, and legal experts recognize the importance and high stakes involved in the threat to the mine from a procedural and regulatory environment standpoint:

Gov. John Hickenlooper, U.S. Senators Cory Gardner and Michael Bennet, and [Rep. Scott] Tipton all joined Craig City Council and Moffat County Commissioners in addressing Jewell regarding the situation at Colowyo.

On July 2, the Denver Metro Chamber of Commerce, the Metro Denver Economic Development Corporation, the Colorado Competitive Council and the Colorado Energy Coalition sent a co-authored letter to Jewell voicing their concerns.

According to the letter, “this precedent could pose a threat to any activity on federal lands that performed an environmental analysis under the National Environmental Policy Act in order to obtain federal leases and permits. That could stretch from energy development and mining, to agricultural grazing and ski resorts becoming vulnerable to retroactive legal challenges.”

Tri-State’s Boughey noted that the government’s appeal isn’t necessary, however:

The ColoWyo appeal isn’t dependent on any other party’s decision to appeal or not appeal Jackson’s decision, Boughey said.

“We believe the court made several significant errors, including misreading the Surface Mining Control and Reclamation Act. This prejudices not only Colowyo but other mining operations, and sets a precedent that should raise concerns for the U.S. energy industry and other activities on federal land,” he said.

In essence, Tri-State and ColoWyo officials don’t think the federal Office of Surface Mining should be looking at power plant operations.

“The court’s requirement that the agency analyze emissions from power plants inappropriately expands National Environmental Policy Act analyses for mining plans beyond what is prescribed under the law,” Boughey said.

The Independence Institute will continue to monitor the developments in the Colowyo legal battle.


Meanwhile, the WildEarth Guardians continue their crusade against all natural resource extraction, as the Denver Post’s Vincent Carroll recently illustrated:

Jeremy Nichols may not be the official stand-up comic of green activism, but he seems to be auditioning for the role. How else to explain his risible claim in a recent Denver Post report on the struggling economy in northwest Colorado that WildEarth Guardians isn’t trying to shut down the Colowyo coal mine and throw 220 people out of work?

“We want to have an honest discussion about the impact of coal and find a way to come together to figure out the next step,” Nichols, the group’s spokesman, maintained.

Why, of course. A group militantly opposed to fossil-fuel production files a lawsuit challenging the validity of a coal mine plan approved years ago — but does so only to provoke an “honest discussion.” Please.

WildEarth Guardians is opposed to all fossil-fuel extraction in the West, and makes no bones about it. In the winter 2013-14 edition of Wild Heart, Nichols outlined the group’s position on those other big fossil fuels, oil and natural gas.

“As communities in Colorado and elsewhere have learned well,” Nichols wrote, “it’s not enough to make oil and gas development cleaner or safer. For the sake of our health, our quality of life, and our future, it simply has to be stopped.”

“In some cases,” Nichols explained, “we can stop it cold … . In other cases, we can raise the cost of drilling to make it economically infeasible.”

The Colowyo Mine is still operating for now, but WildEarth’s apparent regulatory sabotage certainly seems consistent with its efforts to “stop it cold” when it comes to natural resources. Not to mention throwing 220 people out of work and disrupting the economy of an entire region.

Some “honest discussion.”


The price of a barrel of oil began to decline sharply in late 2014, prompting fears that the crashing crude market would tank the nation’s nascent energy resurgence, but despite falling numbers, 2015 still looks to be a year of production highs:

The amount of crude oil produced across the United States fell in May compared to April — but federal forecasters say 2015’s overall production is still “on track” to be the highest in 45 years.

The Energy Information Administration (EIA) on Tuesday released its monthly short-term energy outlook, noting that crude oil production fell in May by about 50,000 barrels of oil per day compared with April.

In Colorado, oil production from the Niobrara field north of Denver, part of the larger Denver-Julesburg Basin, is expected to drop about 17,000 barrels per day in July compared to June, the EIA said.

The number of drilling rigs running in the state has dropped from 72 at the start of 2015 to 39 at the end of June as oil and gas companies have cut back on spending.

But, as we know from basic economics about supply and demand, lower oil prices mean lower gas prices, and that is driving demand back up to pre-recession levels:

But the on the consumer side, a better economy and low gasoline prices are expected to boost the amount of gasoline used in the U.S. by an estimated 170,000 barrels per day over 2014, the report said.

“U.S. gasoline demand will likely top 9 million barrels per day this year for the first time since 2007, which reflects record highway travel,” Sieminski said.


There’s no doubt that readers of the Independence Institute’s Energy Policy Center blog and op-eds are familiar with the argument that electricity derived from wind energy is more costly than other forms of generation–namely coal and natural gas–when one accounts for the massive amount of Federal subsidies, incentives, and state and local renewable mandates and other handouts.

A new study from Utah State University once again confirms that conclusion–”when you take into account the true costs of wind, it’s around 48 per cent more expensive than the industry’s official estimates”:

“In this study, we refer to the ‘true cost’ of wind as the price tag consumers and society as a whole pay both to purchase wind-generated electricity and to subsidize the wind energy industry through taxes and government debt,” said Ryan Yonk Ph.D., one of the report’s authors and a founder of Strata Policy. “After examining all of these cost factors and carefully reviewing existing cost estimates, we were able to better understand how much higher the cost is for Americans.”

The peer-reviewed report accounted for the following factors:

The federal Production Tax Credit (PTC), a crucial subsidy for wind producers, has distorted the energy market by artificially lowering the cost of expensive technologies and directing taxpayer money to the wind industry.

States have enacted Renewable Portfolio Standards (RPS) that require utilities to purchase electricity produced from renewable sources, which drives up the cost of electricity for consumers.

Because wind resources are often located far from existing transmission lines, expanding the grid is expensive, and the costs are passed on to taxpayers and consumers.

Conventional generators must be kept on call as backup to meet demand when wind is unable to do so, driving up the cost of electricity for consumers.

“Innovation is a wonderful thing and renewable energy is no exception. Wind power has experienced tremendous growth since the 1990’s, but it has largely been a response to generous federal subsidies,” Yonk stated.

But Utah State University researchers aren’t the only ones pulling back the curtain on the true cost of wind. A new study from the Institute for Energy Research demonstrates that a real comparison between existing power plants and new power plant sources shows that wind power once again comes up short in the low cost department:

Today, the Institute for Energy Research released a first-of-its-kind study calculating the levelized cost of electricity from existing generation sources. Our study shows that on average, electricity from new wind resources is nearly four times more expensive than from existing nuclear and nearly three times more expensive than from existing coal. These are dramatic increases in the cost of generating electricity. This means that the premature closures of existing plants will unavoidably increase electricity rates for American families.

Almost all measures of the cost of electricity only assess building new plants–until now. Using data from the Energy Information Administration and the Federal Energy Regulatory Commission, we offer useful comparison between existing plants and new plants.

America’s electricity generation landscape is rapidly changing. Federal and state policies threaten to shutter more than 111 GW of existing coal and nuclear generation, while large amounts of renewables, such as wind, are forced on the grid. To understand the impacts of these policies, it is critical to understand the cost difference between existing and new sources of generation.


A link to the complete study can be found on the Institute’s release page.

Much Ado About Thumping: Denver Post one-sided story

March 26, 2013 by Amy · Comments Off
Filed under: Hydraulic Fracturing 

By Simon Lomax

Be afraid. Be very afraid…


That was the Denver Post’s front page article on March 16, which profiled a couple – Mieko and Charles Crumbley – who claim seismic surveying near Brighton, Colo. damaged a groundwater well on their property and put cracks in some of the walls in their home. But the oil and gas company that commissioned the survey says its contractors did not cause the damage, according to the story by the Post’s environmental writer Bruce Finley. Sounds like one of those classic “he said, she said” situations, right?

Well, no, actually. In reality, the claims by the Crumbleys are very unlikely, based on readily available facts on the way seismic surveying works. But the reporter failed to include those facts, and painted a misleading and frightening picture for his readers.

The type of seismic surveying in question is carried out by vibroseis trucks, which are informally known as “thumper trucks.” The use of these trucks has greatly reduced the use of small dynamite charges in seismic surveying. Here’s how the reporter describes the way these vehicles work:

“[T]he trucks, weighing up to 30 tons, drop heavy, metal vibrator plates from their undercarriages to thump and shake the ground. Analysis of pressure waves, similar to ultrasound, generates data that companies use to determine where to drill for oil and gas.”

Sounds pretty ominous. But take a look at this video of some vibroseis trucks in action:

In fact, while these vehicles are unquestionably big, the vibrations they create are very small. For that reason, scientists with state and federal agencies, experts in academia, the geologists and engineers of the oil and gas industry, and even other media outlets have reaffirmed the safety of vibroseis trucks many times. Here are a few examples:

In an urban environment, vibroseis-generated waves are less than background noise generated by buses, trucks, and trains … At its source you can feel a vibroseis shake the ground but as you move away your ears will hear the airborne sound waves much longer than your feet can feel those in the ground.

Utah Geological Survey

Residents standing near a vibroseis truck … may be able to detect it, but this process will not cause any interruptions of daily life or damage to structures.

U.S. National Energy Technology Laboratory

Despite their relatively benign operations, these big machines sometimes appear more daunting to the populace than the commonplace dynamite. To assuage any concerns in that regard, companies sometimes resort to public demonstrations prior to operations. … Two light bulbs and two raw eggs were buried eight inches under the vibrating pads. Following the demo, the eggs were retrieved unbroken and the light bulbs still worked – to the amazement of the crowd of onlookers…

American Association of Petroleum Geologists

“If you stand near the truck you’ll be able to feel slight shaking in the bottom of your feet, but the level of shaking is far below the levels required to cause damage to pavement or structures” said [USGS scientist Rob] Williams.

U.S. Geological Survey

The seismic imaging process does not damage the street or negatively impact the earth below ground.

Long Beach Post (Long Beach, Calif.)

[T]here is no reliable evidence of these trucks causing well problems or damage to buildings.

University of New Brunswick, Canada

Unfortunately, the Post story didn’t just leave out these expert opinions. The article went a step further and suggested the Crumbley claim was one of several structural damage complaints. From the news story:

“State records show that since 2000, residents have filed 16 formal complaints about seismic surveys.”

Given the statements by the USGS, NETL and others about the very low risk of structural damage from vibroseis truck, we asked the Colorado Oil and Gas Conservation Commission to identify those 16 complaints, which include the Crumbley case. Then we reviewed the case files on the COGCC’s online database.

It turns out just three of the complaints allege any structural damage from vibroseis truck operations. The rest of the complaints mostly deal with disputes over property access, noise and the potential impact of these heavy vehicles on soil and crops. Besides the Crumbley case, there are no other complaints of damage to a house, and only two allegations of damage to water wells.

In the first water well complaint, from 2000, the COGCC concluded there was “no indication that oil and gas activities in this area impacted the well.” It turned out the well was located next to the burned-out shell of an old house, hadn’t been used in two years, and there was trash both around and floating inside the well.  In the second water well complaint, from 2002, the COGCC found“no direct evidence of impact due to oil and gas operation” and concluded “[t]he most probable cause is corrosion in the casing from a shallow aquifer.”

So, instead of state records showing 15 other cases that support the Crumbley complaint, there appear to be none. Which makes sense, of course, because state and federal officials, industry experts and academics have repeatedly said that vibroseis trucks are very unlikely to cause structural damage.

However, let’s play the reporter’s game for a moment and assume the worst possible interpretation of those state records. Even when you group together all the 16 complaints to the COGCC that mention seismic surveying over the last 13 years – and include some more from residents in Aurora, Colo., as the Post’s story did – it’s hardly evidence of a commercial activity run amok. In fact, the Post’s own reporting suggests an average of between one and two complaints a year. That’s not bad when you consider Colorado’s oil and gas production has more than doubled since 2000. And it’s not scary either.

Of course, only time and further investigation will tell whether the Crumbley’s claims – however unlikely – are correct or mistaken. We’ll also have to wait and see if the alarmist tone of this particular news report scares some other residents into blaming seismic surveying for cracks in their drywall. But we can say two things now without equivocation: The oil and gas industry will cooperate fully with the state regulators investigating this matter, and the business of seismic surveying is nowhere near as scary as reporter Bruce Finley would have you believe.

This column appeared originally on Energy In Depth, a project of the Independent Petroleum Association of America as a research, education and public outreach program “focused on getting the facts out about the promise and potential of responsibly developing America’s onshore energy resource base.”

For a well-researched, easy-to-read, factual primer on hydraulic fracturing, check out our paper Frack Attack: Cracking the Case Against Hydraulic Fracturing.

Country can breathe sigh of relief. We’re still stuck with him…

March 4, 2013 by Amy · Comments Off
Filed under: Archive, HB 1365, New Energy Economy 

By William Yeatman and Amy Oliver Cooke

As Coloradans we thought we might have to apologize to the rest of the country if President Barack Obama nominated former one-term Colorado Governor Bill Ritter to head the Energy Department. If the President wanted to make electricity costs skyrocket and the eco-left community happy, Ritter was his guy, but the President didn’t pick him.

Today, the Denver Post’s Allison Sherry broke the news that MIT physicist Ernest Moniz got the nod and the environmental community is none too pleased according to Mother Nature Network:

Despite his dense résumé and desire to cut emissions, however, Moniz can be a polarizing figure in scientific and environmental circles. Few experts deny the value of a scientist as DOE chief, but many fans of renewable energy worry about Moniz’s gusto for natural gas and nuclear power — not to mention his financial ties to the energy industry.

‘We’re concerned that, as energy secretary, Ernest Moniz may take a politically expedient view of harmful fracking and divert resources from solar, geothermal and other renewable energy sources vital to avoiding climate disaster,’ Bill Snape of the Center for Biological Diversity said in a recent press release. ‘We’re also concerned that Moniz would be in a position to delay research into the dangers fracking poses to our air, water and climate.’

And the Washington Post reports:

But over the past couple of weeks, many environmentalists and some prominent renewable energy experts have tried to block the nomination of Moniz because of an MIT report supporting “fracking” — as hydraulic fracturing is commonly known — and because major oil and gas companies, including BP, Shell, ENI and Saudi Aramco, provided as much as $25 million each to the MIT Energy Initiative. Other research money came from a foundation bankrolled by shale gas giant Chesapeake Energy.

‘We would stress to Mr. Moniz that an ‘all of the above’ energy policy only means ‘more of the same,’ and we urge him to leave dangerous nuclear energy and toxic fracking behind while focusing on safe, clean energy sources like wind and solar,’ Sierra Club executive director Michael Brune said in a statement Monday.

The Sierra Club doesn’t have much credibility because financially it was sleeping with the enemy, having taken $26 million from Chesapeake Energy to destroy the market for coal.  One place they enjoyed great success was in Colorado with HB 1365, the fuel switching bill and cornerstone of Ritter’s “New Energy Economy.”

Governor Ritter coined the term New Energy Economy for his signature agenda. In practice, his New Energy Economy entails three policies: (1) a Soviet-style green energy production quota; (2) subsidies for green energy producers; and (3) a mandate for fuel switching from coal to natural gas. Renewable energy is more expensive than conventional energy, and natural gas is twice as expensive as coal in Colorado, so these policies inherently inflated the cost of electricity.

Last month, the Independence Institute published the first ever line item expensing of Ritter’s energy policies, and the results were shocking. In 2012, the New Energy Economy cost Xcel Energy (the state’s largest investor-owned utility) ratepayers $484 million, or 18 percent of retail electricity sales.

This princely sum purchased the equivalent of 402 megawatts of reliable capacity generation. By comparison, Xcel had a surplus generating capacity (beyond its reserve margin) in 2012 of 700 megawatts—almost 75 percent more than the New Energy Economy contribution. Thanks to Governor Ritter’s energy policies, Xcel ratepayers in Colorado last year paid almost half a billion dollars for energy they didn’t need.

In addition to implementing expensive energy policies, Governor Ritter also has experience picking losers in the energy industry. In May 2009, Governor Ritter hand-delivered to Secretary Chu a letter in support of a $300 million loan guarantee for Colorado-based Abound Solar, a thin-filmed solar panel manufacturer. In the letter Ritter claimed Abound would “triple production capacity within 12 months, develop a second manufacturing facility within 18 months and hire an additional 1,000 employees.”

Taxpayer money couldn’t keep Abound afloat, which never reached production capacity. After its solar panels suffered repeated failures, including catching fire, Abound declared bankruptcy in early 2012 leaving taxpayers on the hook for nearly $70 million and even more at the state and local level. A former employee explained, “our solar modules worked so long as you didn’t put them in the sun.”

Abound Solar wasn’t the only pound-foolish Stimulus spending associated with Governor Ritter. During his administration, the Colorado Energy Office’s coffers swelled with almost $33 million in stimulus subsidies for weatherization efforts. According to a recent report by the Colorado Office of State Audits, the Ritter administration failed to even maintain an annual budget for the program. As a result, the audit was unable to demonstrate whether the money had been spent in a cost effective manor. All told, the auditor found that the energy agency could not properly account for almost $127 million in spending during the Ritter administration.

Ritter told the Fort Collins Coloradoan that the scathing audit accusing the agency under his watch of shoddy management practices was not the reason the President passed over him for Energy Secretary.

The former Governor is especially proud of the job creation associated with the New Energy Economy. To be sure, throwing taxpayer money at any industry would create jobs. The problem occurs when the public money spigot runs dry. In this context, an October 22, 2012 top fold, front page headline in the Denver Post is illuminating: “New energy” loses power; A series of setbacks cost over 1,000 jobs and threatens the state’s status in the industry. To put it another way, in the two years since Ritter left office, his New Energy Economy has atrophied in lockstep with the reduction in public funding.

Ritter has taken to proselytizing for the gospel of expensive energy. He founded the Center for the New Energy Economy, the purpose of which is to, “provide policy makers, governors, planners and other decision makers with a road map that will accelerate the nationwide development of a New Energy Economy.” He even brought with him the former head of the beleaguered energy office Tom Plant to work for him as a “policy advisor.”

So far Ritter’s bad energy policy has remained largely within the Centennial State, and, for now, that’s where it will stay. With the choice of Moniz, the rest of the country can breathe a sigh of relief. For Coloradans, we’re still stuck with him.

William Yeatman is the Assistant Director of the Center for Energy and Environment at the Competitive Enterprise Institute and a policy analyst for the Independence Institute in Denver, Colorado. Amy Oliver Cooke is the Director of the Energy Policy Center for the Independence Institute

Salazar defends fracking; waiting for the “real facts.”

December 13, 2011 by Amy · Comments Off
Filed under: Archive 

While the Denver Post played the role of Rocky Mountain eco-Chicken Little of record, another news outlet — the Casper Star-Tribune — reported former Colorado Senator and current Interior Secretary Ken Salazar’s opinion of the EPA’s premature press release about a “draft finding” regarding a link that may or may not exist between hydraulic fracturing and groundwater pollution in Pavillion, Wyoming.

Secretary Salazar urged caution at a press conference with Wyoming Governor Matt Mead last Friday, explaining that ‘the jury’s still out’ on the validity of the EPA’s theory.

the EPA’s findings were only preliminary and haven’t yet been reviewed by other scientists.

‘We’ll see what happens with this Pavillion study,’ Salazar said. ‘And I think it’s important that the real facts finally get to the table with respect to the peer review and seeing whether there’s something specific with respect to that basin that is different from what we have across the country.’

Salazar said fracking ‘can be done and is being done safely’ in the United States.

This from a man who isn’t exactly a friend to the oil and gas industry, especially when it comes to domestic production.

Also, Encana, owner of a number of wells in the Pavillion area, issued a strong and justifiable response critical of the EPA’s shoddy methodology:

  • The EPA drilled two deep monitoring wells (depth range: 783 – 981 feet) into a natural gas reservoir and found components of natural gas, which is an entirely expected result. The results in the EPA deep wells are radically different than those in the domestic water wells (typically less than 300 feet deep), thereby showing no connection. Natural gas developers didn’t put the natural gas at the bottom of the EPA’s deep monitoring wells, nature did.
  • Several of the man-made chemicals detected in the EPA deep wells have never been detected in any of the other wells sampled. They were, however, detected in many of the quality control (blank) samples – which are ultra purified water samples commonly used in testing to ensure no contamination from field sampling procedures. These two observations suggest a more likely connection to what it found is due to the problems associated with EPA methodology in the drilling and sampling of these two wells.
  • The EPA’s reported results of all four phases of its domestic water well tests do not exceed federal or state drinking water quality standards for any constituent related to oil and gas development.
  • The EPA report ignores well-known historical realities with respect to the Pavillion field’s unique geology and hydrology.

Let’s get this straight, the EPA drills monitoring wells up to three times deeper than normal drinking water wells in a geologically complex area, finds different components in the water, and then claims pollution from fracking.  The man-made chemicals found in monitoring wells were also found in the “ultra-purified” control samples. Encana is being kind to call the EPA’s conclusions “irresponsible.”

The Denver Post did report on Encana’s response but didn’t provide much in the way of details. Instead the headline reads “Encana disputes fracking finding.” Of course Encana “disputes” the “draft finding.” The news story is in the details, such as those listed above.

Finally, the EPA announced a public comment period from December 14, 2011 to January 27, 2012. (The document says January 27, 2011, but we’re pretty sure the EPA means 2012):

EPA is announcing a 45-day public comment period for the external review of the draft research report titled, “Investigation of Ground Water Contamination near Pavillion, Wyoming.” The draft research report was prepared by the National Risk Management Research Laboratory (NRMRL), within the EPA Office of Research and Development (ORD), and EPA Region 8. EPA is releasing this draft research report solely for the purpose of pre-dissemination peer review. This draft research report has not been formally disseminated by EPA. It does not represent and should not be construed to represent any Agency policy or determination. Eastern Research Group, Inc. (ERG), an EPA contractor for external peer review, will convene an independent panel of experts for peer review of this draft research report. Public comments submitted during the public comment period will be made available to the peer review panel for consideration in their review. In preparing a final report, EPA will consider the recommendations of the peer review panel.

Maybe the EPA should have announced the public comment period before it issued a press release and “disseminated” information to news outlets.

Secretary Salazar is smart to wait for the “real facts” swirling around the groundwater in Pavillion, Wyoming.  We’ll wait for them too, even if anti-fossil fuel zealots and their accomplices in the media won’t.

Thank you to Energy In Depth for its coverage of the EPA’s Frack-gate, and to Chris Tucker of EID for appearing on the Amy Oliver Show and sharing this information with listeners. All of this information can be found on the EID Web site.

Media acts like eco Chicken Littles

December 9, 2011 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

Has any media outlet bothered to ask if the EPA’s theory on groundwater contamination in Wyoming and hydraulic fracturing is even right?

The Independence Institute’s Energy Policy Blog can’t be accused (at least not accurately) of being in the tank for the oil and gas industry. We’ve been on opposite sides of several of the industry’s key issues in Colorado. We opposed HB 1365, the fuel-switching bill, and HB 1291, the State Implementation Plan. We favored a repeal of Colorado’s carbon tax, while the oil and gas industry argued for the language to remain in statute.

Now, however, these pages are defending the oil and gas industry against attacks on the decades-old, proven process of hydraulic fracturing, which pumps a blended liquid into the ground (far below water tables) to increase the flow of natural gas and oil. Already heavily regulated, hydraulic fracturing is a safe, cost-effective way to expand production, lower the price of liquid fossil fuels, ensure an abundant domestic supply, create high paying jobs, and provide revenue to local and state governments.

The latest EPA announcement is just another battle in the war on fracking, which is an attempt by anti-fossil fuel activists to shut down domestic production and force consumers to use more expensive, less reliable wind and solar energy sources. And the media serves as a willing accomplice.

Today’s Denver Post jumped on the freaked out over hydraulic fracturing bandwagon following yesterday’s sensational EPA release that a “draft finding” MAY link hydraulic fracturing to groundwater contamination in Pavillion, Wyoming.

The front page, top of the fold print edition reads, “HYDRAULIC FRACTURING: Wells tied to fouled water. The Wyoming study could affect Colorado’s oil and gas industry.”

The online edition warns: “Hydraulic fracking linked for first time to groundwater pollution.”

With the exception of the last line in the first example, neither headline is accurate. Media around the world has reacted more like Chicken Little environmentalists rather than reporters of news, disseminators of information.

Energy In Depth (EID), a public outreach campaign supporting the development of America’s oil and gas resources, issued its own press release this morning about the media response:

Call it a sign of the ‘Times,’ let’s say, that less than 24 hours removed from the release of EPA Region 8’s report on groundwater sampling near Pavillion, Wyo., nearly a thousand different news stories have been generated — in 12 different countries, and best we can tell, four different languages. But set aside the breathless headlines for a moment and the triumphant quotes from a small segment of folks committed to ending the responsible development of natural gas, and one’s left with a pretty straightforward question: Is EPA right? And if so, what exactly does that mean moving forward?

It’s impossible to answer the second question without an answer to the first, but that hasn’t stopped the media from trying. In fact, they haven’t even considered whether or not the EPA is right.

The Denver Post’s first paragraph from both the online and print editions reads:

Hydraulic fracturing, a controversial oil-and-gas production technique used in Colorado and across the country, has been linked for the first time to groundwater pollution in a case near Pavillion, Wyo.

First, fracking isn’t “controversial.” The process of hydraulic fracturing has been used successfully since 1949 and is not “linked” to groundwater contamination. Colorado is proof that it can be done in an eco-friendly way. More than 90 percent of our nearly 40,000 wells produce using hydraulic fracturing, and not a single case of groundwater contamination. It is a highly regulated process within a highly regulated industry. The only reason it is “controversial” is because anti-fossil fuel activists say it is.

Second, it hasn’t been linked this time either. The EPA’s press release calls it a “draft finding,” meaning it hasn’t been through any kind of peer review process. Furthermore, even the EPA says fracking “may” be the cause, not “has been linked” to groundwater contamination.

The Denver Post continues to advance the story by assuming the EPA has correctly found a “link” and that this “link” is a game changer. Reporter Mark Jaffe quotes Wyoming Governor Matt Mead’s press release about how this could have a “critical impact” on the oil and gas industry and that more research must be done. But the paper leaves out the most important part of Mead’s release – the first line: “the Environmental Protection Agency’s draft study on Pavillion wells is scientifically questionable and more testing is needed.”

Mead is trying to answer the most important question first. Is the EPA right? Yet the Post and many other news organizations have jumped to the second question, of what does this mean, without any validation or curiosity about the first.

Anti-fossil fuel activists certainly won’t challenge the EPA’s theory. The Associated Press reported, “Environmentalists welcomed the news of the EPA report, calling it an important turning point in the fracking debate.”

EID actually provides several questions that should be answered first, but the mainstream media isn’t even bothering to ask:

  • Why the huge difference between what EPA found in its monitoring wells and what was detected in private wells from which people actually get their water?
  • After reviewing the data collected by Region 8, why did EPA administrator Lisa Jackson tell a reporter that, specific to Pavillion, “we have absolutely no indication now that drinking water is at risk”? (video available here)
  • Did all those chemicals that EPA used to drill its monitoring wells affect the results?

At least one member of Congress is calling for an answer to the most important question, “Is the EPA right?” Is its theory accurate? Senator James Inhofe (R-Okla.), Ranking Member of the Senate Committee on Environment and Public Works, made the following comments after speaking with EPA Administrator Lisa Jackson about her agency’s “irresponsible” announcement on fracking:

EPA’s conclusions are not based on sound science but rather on political science.  Its findings are premature, given that the Agency has not gone through the necessary peer-review process, and there are still serious outstanding questions regarding EPA’s data and methodology.

This announcement is part of President Obama’s war on fossil fuels and his determination to shut down natural gas production.   Unfortunately for Americans, his agenda destroys good paying jobs in one of the few industries that is thriving, and increases our dependence on foreign oil.

As recently as November 9, 2011 EPA Regional Administrator James Martin said that the results of the latest round of testing in Pavillion were not significantly different from the first two rounds of testing, which showed no link between hydraulic fracturing and contamination.  Yet only a few weeks later, EPA has decided the opposite.  EPA is clearly not prepared to be making conclusions.

There is a pattern emerging here.  Just a few months ago, the EPA Inspector General found that EPA cut corners on the endangerment finding to come to what appears to be a predetermined conclusion to regulate greenhouse gases.  This most recent study on hydraulic fracturing is apparently more of the same in the Obama Administration’s ongoing war on affordable energy.

It is irresponsible for EPA to release such an explosive announcement without objective peer review. Given the serious flaws in EPA’s process, I have asked EPA Administrator Lisa Jackson to release all the data, methodologies and protocols that have been used, and she has made a commitment to do so.

Even with the most stringent regulations, no energy source is completely without risk. But the EPA’s premature release of its theory on groundwater contamination, along with the anti-fossil fuel crowd’s cheers, and the media’s lack of critical reporting indicates more of an agenda to damage the oil and gas industry rather than assure safety in hydraulic fracturing.

Dispelling the Myth of “Clean” Green Energy

December 9, 2011 by admin · Comments Off
Filed under: Archive, New Energy Economy 

By Michael Sandoval

Clean Water Action’s Gary Wockner plays the card in his Denver Post guest editorial that is usually intended to end any debate between advocates of renewable energy technology and those in favor of continuing the exploration of fossil fuel resources–”What are the environmental impacts?”

Typically, readers are treated to some sort of facile environmental comparison between say, coal power and wind turbines:

Screen shot 2011-12-09 at 1.05.24 AM

Casual readers are expected to deduce that in comparison to coal power, wind power generation is nearly neutral environmentally–aside from being “20-story high Cuisinarts” for flying animals like birds and bats.

Just a bad website oversimplifying. Ok. The American Wind Energy Association has this to say in its teaching materials intended for K-2:

“As long as the sun shines there will be wind moving across the earth. Wind is called a renewable energy source because solar energy makes wind all of the time. We will never run out of wind.

Wind turbines do not burn fuel, so they do not pollute the air. Wind is a safe, clean energy source for making electricity.”

Ok, we’re talking 7 year olds. What about high school seniors?


“Wind is energy in motion—kinetic energy—and it is a renewable energy source. Along with wind, renewable energy sources include biomass, geothermal energy, hydropower, and solar energy. They are called renewable because they are replenished in a short time. Day after day, the sun shines, the wind blows, and the rivers flow. Renewable sources only make up seven-percent of the United States’ energy portfolio. We mainly use nonrenewable energy sources to make electricity.”

The education materials provided by the AWEA ignore completely the production of the permanent magnet (labelled “generator”) that converts wind, rather inefficiently, into electricity. While the mechanics of the conversion are explained, the manufacturing process of the magnetic generator has been elided.

Conveniently, these renewable energy industry lobbyists have carefully omitted the one very glaring portion of wind energy production that is most environmentally unfriendly: the creation of the wind turbines themselves. It’s as if they sprout up, pre-fabricated and ready to generate power, from a Dutch wind turbine bulb farm.

Aside from the rather obvious environmental cost of transporting the various large windmill components to their often remote final destination (wherever wind is deemed sufficiently consistent), it is in the actual creative portion of the wind turbine–the parts that convert the rotation of the turbine’s blades into energy–that the true environmental impact can be found.

In a few words? Rare earth elements. Simply put, without REEs, many of the most crucial components of most renewable energy platforms do not exist. REEs are the sine qua non of the “New Energy Economy,” and their production has been obfuscated by the most ardent green proponents.

The Environmental Protection Agency, in the report “Investigating Rare Earth Element Mine Development in EPA Region 8 and Potential Environmental Impact” (PDF) dated August 15, 2011, outlines a few of the specific uses of REEs over a range of “renewable” products, including wind turbines, hybrid vehicle batteries, lighting, and other electronics:

“Permanent magnets represent the staple clean energy technology of future green economies. They constitute main components of lightweight, high powered motors and generators due to their production of a stable magnetic field without the need for an external power source. Permanent magnet motors power contemporary electric, hybrid electric, and plug-in hybrid electric vehicles, while permanent magnet generators produce electricity from wind turbines (USDOE, 2010). The key element derived samarium-cobalt permanent magnets dominate rare earth technology because they produce a magnetic field in a much smaller size. The samarium-cobalt permanent magnet also retains its magnetic strength at high temperatures making it ideal for clean energy and even military applications, including precision guided munitions and aircrafts (IAGS, 2010).

Permanent magnets work in conjunction with high efficiency rare earth based batteries to store energy in electric, hybrid electric, and plug-in hybrid electric vehicles (USDOE, 2010). Current generation hybrid electric vehicles use a battery with a cathode containing a host of rare earths including lanthanum, cerium, neodymium, praseodymium, and cobalt (Kopera, 2004). Each hybrid electric battery may contain several kilograms of rare earth materials (USDOE, 2010). Plug-in hybrid and electric vehicles require even greater storage capacity and higher power ratings than typical hybrid vehicles. In light of this, automakers will likely use the lithium ion battery, increasing demand for yet another key element. Scientists at the Argonne National Laboratory estimated one lithium ion battery contains 3.4-12.7 kilograms of lithium depending on proprietary design (USDOE, 2010).

Perhaps the fastest growing consumer of rare earth material is the phosphor production industry. In 2008, phosphors alone accounted for 7% of all rare earth usage by volume and 32% of total rare earth value. Phosphor materials produce luminescence essential to today’s lighting technologies. Older generation fluorescent lighting used no rare earths, but rare earths make current fluorescent lighting phosphors more efficient and visually pleasing. Specific rare earths responsible for this include lanthanum, cerium, europium, terbium, and yttrium. Fluorescent lighting phosphor usage is expected to rise by 230% over current levels due to USDOE mandating increased efficiency ratings. Mass quantities of similar phosphor materials are produced for application in television screens, computer monitors, and electronic instrumentation, increasing demand for rare earth based phosphors (USDOE, 2010).”

Just as wind turbines don’t magically sprout from the ground, rare earth elements require extensive mining and refining processes pose significant environmental impacts–significant enough for the EPA to stipulate the each step of the destructive extraction, chemical processing, toxic tailing and contaminant disposal, and transportation. REEs are often derived as byproducts of other mining operations, as most REE deposits are not economically viable on their own, due to their, erm, rarity.

The EPA details the specific byproducts of the production of REEs, and they’re not very “green”:

“According to the Chinese Society of Rare Earths, every ton of rare earth elements produced generates approximately 8.5 kilograms of fluorine and 13 kilograms of flue dust. Additionally, sulfuric acid refining techniques used to produce one ton of rare earth elements generates 9,600 to 12,000 cubic meters of gas laden with flue dust concentrate, hydrofluoric acid, sulfur dioxide, and sulfuric acid. Not only are large quantities of harmful gas produced, alarming amounts of liquid and solid waste also resulted from Chinese refining processes. They estimate at the completion of refining one ton of rare earth elements, approximately 75 cubic meters of acidic waste water and about one ton of radioactive waste residue are produced. The IAGS reports China produced over 130,000 metric tons of rare earth elements in 2008 alone (IAGS, 2010). Extrapolation of the waste generation estimates over total production yields extreme amounts of waste. With little environmental regulation, stories of environmental pollution and human sickness remain frequent in areas near Chinese rare earth element production facilities (Figure 21). United States government agencies, including EPA, can learn a lot from China’s environmental issues related to rare earth element production.

As discussed, mining and refining processes can introduce radionuclides, rare earth elements, metals, and other potential contaminants into the environment at unnaturally high rates. Once introduced into the environment, the potential contaminants can be redistributed through the three “environmental mediums.” These three mediums include air, soil, and water. Living organisms depend on environmental mediums with stable chemical properties for their survival. The release of the possible contaminants from rare earth element production could alter the properties of the three environmental mediums.”

“Extreme amounts of waste.” These are not the words of a report from a think tank in the pockets of “big oil,” Mr. Wockner. Apparently the proponents of wind power that produced the earlier images somehow missed this report.

There are no “green” mulligans for renewable energy, it seems. But if pictures are worth a thousand words, then video is even better (including a cameo from Vestas, which coincidentally has four wind turbine factories and an estimated $1 billion investment in Colorado at the moment):

“Green campaigners love wind turbines, but the permanent magnets used to manufacture a 3 MW turbine contains some two tons of rare earth,” says the reporter.

Using the EPA’s numbers, each turbine in a windmill farm produces approximately 20,000 cubic meters of toxic gases, 150 cubic meters of acidic waste water, two tons of radioactive waste residue, plus a variety of other harmful dusts and chemical byproducts. Perhaps the largest wind farm in the world, the Roscoe Wind Farm in Texas, houses more than 600 wind turbines stretched out over 400 square kilometers. Quick mathematical calculations reveal that the environmental impact of these wind turbines is somewhat greater than just a bird blender. The American Wind Energy Association estimates the output of wind power in the U.S. at more than 43,000 MW through the 3rd quarter of 2011.

Roscoe Wind Farm as seen from Google Maps:
Screen shot 2011-12-09 at 2.03.22 AM
Screen shot 2011-12-09 at 2.03.40 AM

In the embedded video, Zhao Zengqi of the Baotou Research Institute of Rare Earth acknowledges the environmental impact of the production of the permanent magnets that comprise the “green” wind turbine technology. “The environmental problems include air emissions with harmful elements such as fluoride and sulfur, waste water that contains excessive acid, and radioactive materials too. China meets 95 percent of the world’s demand for rare earth, and most of the separation and extraction is done here, so the pollution stays in China too,” said Zhao.

China’s monopoly (which they threaten to enforce through decreased production of REEs) has forced the most damaging aspects of wind power out of sight and mind. But the planned reductions have pushed the U.S. to consider its own strategic defense implications–hence the EPA report–and push more homegrown REE mining projects, including the possibility of opening mines in Colorado.

As Jim Burnell, a senior geologist for the Colorado Department of Natural Resources told the Post in January, “There’s no such thing as no-impact mining. You can’t promise that.”

Not even when you’re “green,” Mr. Wockner.

Like their renewable cousins, solar modules, wind turbines are anything but “clean” and “green.” The EPA report examined the potential risks to air and soil quality, and particularly to water contamination:

“Water represents the environmental medium of overall greatest concern at Bear Lodge. Not only can the possible contaminants go into solution, a great deal of water is consumed during rare earth element mining and processing. Such issues generate both water quality and quantity concerns that will heavily depend on what management practices are put into place.”

The EPA strongly urges appropriate environmental mitigation efforts, pointing to the harmful effects of REE production that include cancer:

“The possible contaminants cause negative effects towards aquatic and terrestrial organisms in addition to humans. Some of the radionuclides and metals contaminants are even classified as human carcinogens by international and federal health agencies. Others possible contaminants increase the mortality rates of aquatic and terrestrial organisms. Cooperation between all government agencies designed to protect the environment and companies responsible for rare earth element production will prove invaluable in ensuring these operations do not pose a threat to human health and the environment in the United States . . . Areas of China have suffered the consequences of haphazard rare earth element production.”

Given the combination of China’s stranglehold on REE extraction and delivery, and the gross environmental negligence it allows such production to operate under, wind turbines for the foreseeable future will continue to be manufactured at less than “green” standards.

Environmental advocates like Mr. Wockner will quickly point to Vestas as an outstanding local alternative to the new exploration in Northern Colorado. Given the precarious nature of the wind energy sector sans FTCs and the turbines’ established environmental cost, a more proper evaluation comparing energy “futures” can be undertaken. The EPA’s report, combined with the realities of REE production, indict nearly every renewable energy platform due to the centrality of REEs as part of the actual energy generation or storage mechanism in each, respectively (magnets and batteries). These impacts can only be projected to increase given government pushes to expand renewables as part of state or national portfolio standards.

Wind power is only reliable 32 percent to 42 percent of the time. Fully diversified energy portfolios requiring significant amounts of renewables, therefore, necessitate significant backup capacity to bridge wind power’s production shortfalls. Furthermore, subsidizing failure is bad enough; subsidizing environmentally degrading platforms that could virtually disappear overnight without lucrative federal tax credits coveted by crony capitalist players is even worse.

Let us return now to the question posed by Mr. Wockner: “What are the environmental impacts?” As demonstrated here using the EPA’s own report, the environmental impact of wind alone is nowhere near “neutral” as some in the renewable energy cheerleading camp would like consumers and taxpayers to believe. Through rhetorical kabuki, they dress up or eliminate the actual manufacturing steps in the process of wind or solar production, skipping straight to the energy generation portion of the renewable unit’s life cycle and then conduct their comparison.

Dispelling the myth that “clean” and “green” energy is produced without environmental impact is critical for establishing a level playing field for comparison between renewables and fossil fuels.

Michael Sandoval is the Managing Editor of People’s Press Collective and a former political reporter for National Review Online.

Are you “addicted” to civilization?

December 5, 2011 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

The Denver Post gave Gary Wockner of Clean Water Action prime newspaper real estate in Sunday’s perspective section. Wockner’s guest editorial “Is Colorado Addicted to Oil?” was nothing more than a list of typical anti-fossil fuel questions that he tried to associate to Colorado’s and Weld County’s economic struggles as a result of the Great Recession.

Clean Water has a clear mission of advancing global warming hysteria to scare voters and policy makers away from reliable, affordable, and abundant fossil fuels and towards the economically unsustainable and environmentally unfriendly world of renewable energy.

Wolkner used 20 question marks in his column. For that reason, I cannot answer every question in one post. Over the next few days, I’ll answer most. Some, such as whether or not Governor Hickenlooper and the rest of Colorado are “thrilled” about the discovery of additional BOE (barrels of oil equivalent) in Weld County, are subjective and will be ignored.

The first question, contained in the headline, is Colorado addicted to oil? The answer is only to the extent that Colorado is addicted to a modern, civilized lifestyle and the economy needed to maintain it. Rankin Energy Corporation, an energy exploration and production company out of Oklahoma, provides a partial list of the products made with petroleum. One 42-gallon barrel of oil produces 19.4 gallons of gasoline. The rest, which is more than half the barrel, is used to make more than 6000 different products including:

Solvents Diesel fuel Motor Oil Bearing Grease
Ink Floor Wax Ballpoint Pens Football Cleats
Upholstery Sweaters Boats Insecticides
Bicycle Tires Sports Car Bodies Nail Polish Fishing lures
Dresses Tires Golf Bags Perfumes
Cassettes Dishwasher parts Tool Boxes Shoe Polish
Motorcycle Helmet Caulking Petroleum Jelly Transparent Tape
CD Player Faucet Washers Antiseptics Clothesline
Curtains Food Preservatives Basketballs Soap
Vitamin Capsules Antihistamines Purses Shoes
Dashboards Cortisone Deodorant Footballs
Putty Dyes Panty Hose Refrigerant
Percolators Life Jackets Rubbing Alcohol Linings
Skis TV Cabinets Shag Rugs Electrician’s Tape
Tool Racks Car Battery Cases Epoxy Paint
Mops Slacks Insect Repellent Oil Filters
Umbrellas Yarn Fertilizers Hair Coloring
Roofing Toilet Seats Fishing Rods Lipstick
Denture Adhesive Linoleum Ice Cube Trays Synthetic Rubber
Speakers Plastic Wood Electric Blankets Glycerin
Tennis Rackets Rubber Cement Fishing Boots Dice
Nylon Rope Candles Trash Bags House Paint
Water Pipes Hand Lotion Roller Skates Surf Boards
Shampoo Wheels Paint Rollers Shower Curtains
Guitar Strings Luggage Aspirin Safety Glasses
Antifreeze Football Helmets Awnings Eyeglasses
Clothes Toothbrushes Ice Chests Footballs
Combs CD’s & DVD’s Paint Brushes Detergents
Vaporizers Balloons Sun Glasses Tents
Heart Valves Crayons Parachutes Telephones
Enamel Pillows Dishes Cameras
Anesthetics Artificial Turf Artificial limbs Bandages
Dentures Model Cars Folding Doors Hair Curlers
Cold cream Movie film Soft Contact lenses Drinking Cups
Fan Belts Car Enamel Shaving Cream Ammonia
Refrigerators Golf Balls Toothpaste Gasoline

Also, petroleum is needed to make solar panels and wind turbines. A little factoid from Rankin, “Americans consume petroleum products at a rate of three-and-a-half gallons of oil and more than 
250 cubic feet of natural gas per day each! But, as shown here petroleum is not just used for fuel.”

Are we addicted oil? Only if you enjoy and are “addicted” to a modern lifestyle made possible by the discovery of fossil fuels. I’ll revisit this question at the end of this series of blog posts.

Next up, the role of oil and gas in Colorado’s and Weld County’s economy. I’ll address the following questions from Wockner, “What is the actual role that oil and gas plays in our economy? Where do all the billions of dollars go?”

The mystical problem with wind

December 2, 2011 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

Yesterday Complete Colorado headlined a Denver Post story about wind power “Another Bubble Bursting?” The reason for the headline is that in 2012 federal tax credits for wind power are set to expire and, as we revealed several months ago in a post about Xcel Energy’s latest compliance plan, wind power is not economically viable with out those tax credits.

The real problem with wind from the perspective of a physicist is that it is not a viable large scale energy resource — period. Dr. Kelvin Kemm writes:

Wind power paranoia has bypassed science logic and is well and truly in the realm of mysticism.

Let me state categorically that, as a physicist, I am in favour of wind power that is genuinely economically viable. The problem is that large-scale wind power fed into a national grid is just not viable – either economically or practically – from an engineering stand point.

The dream of some enthusiasts that there is some major technological leap just waiting in the wings that will make wind power viable is extremely unlikely to take place. The total energy in any wind stream is measurable, and there is no known quantum leap waiting for a solution that could produce considerably more wind energy than at present.

The extreme language and wild claims concerning the potential glories of wind power are becoming more and more exotic and are rapidly being blown further away from reality by the wind of reason. We really need a wind of change to blow now to bring debate back to sound logical discourse on the real strengths and weaknesses of wind power.

He provides an example:

A spokesperson of the South African Wind Energy Association was quoted in the media as saying: “Contrary to what most believe, a 30 000 MW wind energy plant would have an average daily minimum power output of 7 000 MW and would displace 6 000 MW of conventional coal or nuclear power baseload.”

This statement is significant for a few reasons. Firstly, it is irresponsible fantasy. Secondly, it does admit that a ‘plant’ of 30 000 MW does not produce 30 000 MW but only an ‘average’ of 7 000 MW. Take careful note of the word ‘average’. This word means that, in practice, the ‘plant’ could produce any output from zero to 30 000 MW, depending on if and when the wind blows. On ‘average’, they say, one should get 7 000 MW ‘daily’.

But what does that mean? How can one use the terms ‘average’ and ‘daily’ together. Think about it. The most common error committed unknowingly by the media, and knowingly by the wind proponents, is that a quoted figure for installed capacity for wind power is not the amount you get. Wind power systems are fundamentally designed to produce about 25% of their installed capacity, so one designs to get about 7 000 MW out of 30 000 MW of installed capacity. Frequently, the operating wind systems do not even deliver the designed 25% – at times half of this or less. In contrast, with nuclear power, one would get more than 25 000 MW out of an installed capacity of 30 000 MW and one would get it all the time, not only ‘on average’ when the wind blows.

It does make one wonder why we continue to throw taxpayer money into an energy source that is neither economically nor practically viable.

Solar Power: economically and environmentally unsound

October 24, 2011 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

This column appeared originally in Townhall Finance.

Solar energy is neither economically nor environmentally sound

By Amy Oliver Cooke and Michael Sandoval

We live in the state that is ground zero for absurd energy policy, also known as the New Energy Economy.

In a recent Denver Post house editorial, Colorado’s self-described “newspaper of record” was downright giddy about General Electric’s announcement that it will manufacture thin-filmed photovoltaic (PV) solar panels in Aurora and employ 355 people.

GE, which could have financed the whole project itself, came to Colorado because of government provided taxpayer-funded “incentives.” Ironically, the industrial behemoth just announced $3.2 billion in net earnings for the third quarter, a 57 percent increase over last year.

The new solar panel manufacturer fits perfectly with Colorado’s economically unrealistic New Energy Economy and its fantasies of clean, domestic energy sources.

Solar panel manufacturer profiles

So far, Colorado companies have been unable to meet the promises made by proponents of the New Energy Economy.

Ascent Solar, a Colorado company and maker of copper-indium-gallium-selenide (CIGS) thin-film PV cells, had qualified for the due diligence phase of the Department of Energy loan guarantee program like the one awarded to Abound (they were applying for $275 million). But continued losses—$85 million in the first half of 2011 alone—provoked a business model adjustment switch to portable solar solutions that saw the company reduce its staff by half and withdraw its loan application, only finding refuge in Asian investors in August to prevent collapse.

In 2009, Ascent’s projected growth included hundreds of additional jobs, with then-Governor Bill Ritter (D) and both of Colorado’s U.S. Senators attending the opening of its reconfigured plant just outside Denver.

“Thanks to companies such as Ascent Solar, all across Colorado, we’re creating a sustainable energy future, sustainable opportunities for new businesses, and sustainable jobs,” said Ritter at the time.

Abound Solar is Colorado’s homegrown Cadmium Telluride (CdTe) solar panel manufacturer. With more than $400 million in taxpayer-funded loan guarantees and tax incentives, Abound employs roughly 350 people with plans for another 850 to 1000 employees in an Indiana facility sometime in 2012 or 2013.

GE’s entry into the Colorado market comes on the heels of its acquisition of Colorado-based PrimeStar Solar, culminating in plans to develop a $300 million project that promises those 355 jobs—at a cost of $28 million in municipal and state-based incentives.

What kind of solar panels will GE’s Colorado plant manufacture? Cadmium telluride, the same as Abound Solar, which the New York Times declared would put the loan guaranteed Abound—and by extension, taxpayers—“at risk.”

As we wrote previously, “Abound has a manufacturing capacity of 65 megawatts expanding to 850 megawatts – at some point. However, in 2010 it manufactured only 30 megawatts.” If it has the ability to produce more, then why doesn’t it? Perhaps it’s because the solar panel market is over-saturated, while demand and price have dropped dramatically.

Put aside the absurd economics for a moment, would all the taxpayer “investment” be money well spent if we could become “energy independent” while enjoying the benefits of “clean” renewable energy?

The myth of “energy independence”

All of these solar panel producers have something in common; they need raw materials, specifically rare earth minerals, to manufacture their products. The U.S. currently does little mining or processing of rare earths.

When the Denver Post fawned over the taxpayer-subsidized GE solar manufacturing plant coming to Colorado, it concluded with the typical appeal to “energy independence.”

But solar energy does not equate to “energy independence” because it relies upon other countries, namely China, for the necessary supply of rare earths. Late last year, the Department of Energy (DOE) acknowledged the problem and published a report titled “Critical Materials Strategies” which focused on rare earths used in the production of various “clean” technologies.

Current global materials markets pose several challenges to the growing clean energy economy. Lead times with respect to new mining operations are long (from 2–10 years). Thus, the supply response to scarcity may be slow, limiting production of technologies that depend on such mining operations or causing sharp price increases. In addition, production of some materials is at present heavily concentrated in one or a small number of countries. (More than 95% of current production capacity for rare earth metals is currently in China.) Concentration of production in any supplier creates risks for global markets and creates geopolitical dynamics with the potential to affect other strategic interests of the United States.

So the country that is challenging the U.S. economically and is the largest foreign holder of U.S. debt also controls the very materials needed to ensure our “energy independence.”

What’s funny is that the DOE suggests that the private market will respond, but it does not imply that an American-based market will respond. Rather the DOE suggests achieving “globally-diverse supplies” of rare earths. That hardly sounds like “energy independence.”

The Denver Post didn’t craft the argument that green energy will make us energy independent.  The newspaper is simply guilty of parroting what the leftist environmentalists have been trumpeting for years without challenge: we must break our dependence on “foreign oil” and embrace renewable energy.

Colorado State University’s Center for the New Energy Economy Director Bill Ritter advanced the argument last year as he was closing out his one term as Colorado Governor.

Over the past few years, we’ve established a clean-energy template that is creating thousands of new jobs, reducing our dependence on foreign oil, and generating innovative technologies for the future…The New Energy Economy in Colorado can serve as a pathway for all of America that will lead to greater economic, energy, and environmental security.

Which seems odd because Canada, our largest oil supplier, isn’t a hostile trading partner but China has proven it can be.  The global demand for rare earth minerals is projected to grow at eight percent annually, while China has kept the growth in supply near zero. Even worse, at times China has imposed embargoes on them to the West.

Popular Mechanics describes the danger of the Chinese monopoly on rare earths:

Mines in China supply nearly all of the world’s rare-earths metal, and the Chinese government uses its near monopoly as political leverage: It was accused of halting rare-earth exports to Japan during a territorial dispute last year, and also announced a restriction of worldwide rare-earth exports, which sent chills through markets and tech companies.

The same article explains that the U.S., Canada, Brazil and other countries have reserves and “used to produce a sizeable percentage of the world supply before shutting many mines because of environmental concerns.”

Some minerals such as Tellurium, one of the elements about which the DOE is concerned, are just plain rare. In fact, Tellurium is one of the rarest minerals found in the earth’s crust.

Rare earths are needed for more than just solar panels.  They are used for wind turbines and hybrid car batteries. And if our “energy independence” comes from renewables such as solar, they will have to compete with iPods, cell phones, computers, batteries, and more.

Popular Mechanics also explores the possibility of deep-sea mining for rare earths but ultimately concluded, “if you’re wondering where rare-earth components in computer chips and solar cells will come from for the next decade, the answer is clear—China.”

The myth that green energy is “clean” energy.

Manufacturing solar panels isn’t clean.

Two of the three solar companies profiled earlier, GE and Abound, already produce or plan to make Cadmium Telluride (CdTe) thin film photovoltaics (PV). CdTe is a compound formed from Cadmium and Tellurium. While Tellurium is rare, Cadmium is a highly toxic human carcinogen.  According to the Occupational Safety and Health Administration (OSHA), the compound CdTe is also a carcinogen.  Depending on the level of exposure, health effects range from kidney damage, fragile bones, lung damage, and death.

Because the U.S. doesn’t mine much of these elements here, U.S. manufacturers look elsewhere. Sadly, individual tragedy in China’s “cancer villages” reveals the dirty secret of “clean energy.

Yun Yaoshun’s two granddaughters died at the ages of 12 and 18, succumbing to kidney and stomach cancer even though these types of cancers rarely affect children. The World Health Organization has suggested that the high rate of such digestive cancers are due to the ingestion of polluted water.

The river where the children played stretches from the bottom of the Daboshan mine…Its waters are contaminated by cadmium, lead, indium and zinc and other metals.

Lake near the girls’ home that appeared in Intellasia.

Lake near the girls’ home that appeared in Intellasia.

Mining in China has turned towns and hamlets into “cancer villages.” Rivers run murky white to shades of orange. Fish and ducks are dead. And villagers bury friends and neighbors who die of cancer in their 30s and 40s reports Intellasia.

Another eye-opening news report on rare earth mining and processing from the Channel 4 in the United Kingdom claims, “it doesn’t look very green, rare earth processing in China is a messy, dangerous, polluting business. It uses toxic chemicals…workers have little or no protection.”

We still don’t know how large solar installations covering thousands of acres in the desert over long periods of time will affect the ecosystem.

To answer our earlier question, is the taxpayer “investment” in solar power worth the cost to achieve “energy independence” with “clean” power sources? It’s a trick question because solar is neither a domestic product nor a clean one.

The bottom line is that all energy sources come with some type of risk and to assume that solar panels are an economic and environmental panacea is wrong, despite what the Denver Post and other New Energy Economy cheerleaders would like us to believe.

If we are going to continue on the path of alternative energy, we should do so with out eyes wide open.

Amy Oliver Cooke is the founder of Mothers Against Debt (www. Mothersagainstdebt.com). She is also the director of the Colorado Transparency Project for the Independence Institute and writes on energy policy.  She can be reached at amy@i2i.org. Michael Sandoval is the Managing Editor of People’s Press Collective and a former political reporter for National Review Online.

Skeptical of the Big Green Empire

October 3, 2011 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

Headline: “Golden’s NREL to shed more than 10 percent of workforce”

Denver Post, October 3, 2011

Well maybe. Read my take on the rest of the story.

Golden’s National Renewable Energy Laboratory’s (NREL) dreams of a global green empire may have to be scaled back but just a wee bit.  According to the Denver Post’s Chuck Plunkett, the “crown jewel” of the green empire is looking for $8 million in savings and may have to lay off 10 percent or more (100-150 people) of its work force of 1,350 through “voluntary buy-outs.”  Plunkett writes:

In both a symbolic and real-world blow to green energy development and the jobs renewable industries are meant to create, the National Renewable Energy Lab in Golden announced significant job cuts today.

NREL spokesman Bob Noun told the DP that “gridlock” in Congress is to blame, forcing the lab to be “proactive” in dealing with budget forecasts.

To put the $8 million into perspective, it is a mere 1.5 percent of NREL’s 2010 funding, which was $536.5 million. Compare that to $328.3 million in 2008, and it’s obvious that $8 million in “savings” hardly throws the lab into poverty. The real story is that after hundreds of millions of stimulus dollars, NREL and the big green dream just aren’t viable. The math doesn’t work. Plus the stimulus money was meant to be temporary anyway.

It’s likely that the “savings” will have little impact on the lab overall other than for PR purposes. Consider this response from democrat Congressman Ed Perlmutter’s office,whose district includes NREL. Perlmutter’s spokesperson Leslie Oliver lamented:

cuts at the “crown jewel” in the nation’s green energy development represented a setback “that is a concern.”

“What about next year?” Oliver said. “Where does this stop?”

Wondering where you’ve read the “crown jewel” comment before? Back in June 2011, when republican Congressman Doug Lamborn had the nerve to question NREL funding, the Denver Post had this quote from Oliver in response:

‘NREL is a crown jewel in the world of renewable energy,’ said Leslie Oliver, a spokeswoman for Perlmutter. ‘It’s providing a lot of jobs; those are things we need to be fostering.’

That same story also reported Perlmutter’s claim that NREL “generates 5,500 jobs.”

It seems that NREL and Perlmutter like playing with numbers. The workforce is 1,350 when the percentage laid off needs to make an impact such as “more than 10 percent.” Suppose the story read, NREL may consider a voluntary buy out of up to 150 employees, less than 2.8 percent of the number of jobs “generated,” in a proactive move to address possible 2012 budget “savings.” That 2.8 percentage doesn’t have quite the same chicken little, sky is falling appeal to it.

Significant layoffs. Crown jewel. Blame Congress (no one likes them anyway, ask Brandon Shaffer). Where does this stop?

This story seems a little too convenient.  It’s seems too much of an attempt by NREL to gin up public support for funding and for an industry that has been rocked by mismanagement of taxpayer money and outlandish employment promises.

Color me skeptical of Big Green.

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