Vote NO On Prop 10
The California Natural Gas and Big Truck Addiction Scam
It is surely not often that reading a dry piece of legal verbiage causes one to take flights of fancy and think of Hollywood, of great movies, and of even greater skullduggery. But California Proposition 10 changes all that. On November 4th 2008, voters will be asked to back this disgraceful farrago of rebates for fake clean vehicles cooked up by T Boone Pickens and his gas-producing friends. So think of ‘Chinatown', ‘The Third Man' and ‘The Sting' all rolled into one. Here's how the story unfolds:
If Prop 10 - misleadingly called 'The California Renewable Energy and Clean Alternative Fuel Act' - passes, California taxpayers (of which I am one) get to shell out five billion dollars spent over a 10 year period to help Pickens and friends get America further hooked on a fast depleting non-renewable natural resource - natural gas, while brilliantly further dooming America's long distance freight transport system to early collapse and obsolescence and doing almost nothing to reduce the emission of greenhouse gases (GHGs) and other pollutants.
Leaving aside questions like "How is it that California allows such dreadful scams even to be put in front of the unsuspecting public?," voters need to know what Proposition 10 really means, how much it would really cost, and ideally what we should really do instead.
The heart of Prop 10, if such a cold and calculating document can be said to have one, is the offer of 2.875 billion dollars for vehicle rebates. For electric vehicles that might be powered by local renewable electricity? No, it's not that. Well, maybe it's to encourage people to switch to much smaller and more efficient cars or perhaps to buy some more buses or even build a new rail line to improve public transport? No, it's not that either.
In fact the real aim is to encourage the purchase of heavy trucks powered by non-renewable natural gas (CNG or compressed natural gas). There is a small handout to help a limited number of people buy hybrids like the Prius, but just under two billion dollars will go to big trucking companies to buy fleets of leviathan CNG semis and other large CNG trucks, which are designated as ‘clean alternative fuel vehicles'.
But surely natural gas (which is methane) is cleaner than gasoline or diesel? It is generally true that natural gas burns with less polluting gases and particulate matter than liquid fossil fuels, but it still produces carbon dioxide, and in practice probably in about the same quantities as diesel (though it is possible for methane to burn more efficiently than diesel in engines).
From a climate perspective there is mostly likely no gain, but there will be a negative consequence in the sense this will be yet more money spent on trucks to keep the wrong kind of freight system going, when America needs to be shortening its supply lines and building an electric rail based freight system instead.
There are also many practical difficulties with heavy trucks powered by natural gas. For instance they will need enormous and very expensive high pressure natural gas tanks. In buses the typical life of these is about 12 years and they cost about $100,000 to replace. The life of a truck may easily be 20 years or more - so that adds another $100,000 to the lifetime price of the vehicle. The range is also likely to be much less than a conventional diesel truck, necessitating extra refueling stations (which would suit Boone Pickens very well).
All of this might merely be classed as misguided, but it becomes much murkier when we consider that the chief backers of Prop 10, Boone Pickens and Aubrey McClendon of Chesapeake Energy, are deeply invested in the business of natural gas and building natural gas fueling stations. They have already spent over 4.5 million dollars backing this proposition and yet they are based in Texas and Oklahoma respectively. The reason they are doing this is not because it will help California, but because it will create a financial bonanza for them by dramatically increasing the market for natural gas at a time when natural gas production is likely to be in decline and will therefore get much more expensive.
In fact, we could be seeing a repeat of the last ten years when electrical utilities built billions of dollars worth of natural gas-fired power stations only to see the fuel supply fall and the price rocket causing mayhem and bankruptcies. It is true that natural gas prices have fallen from their recent peak and there has been a recovery in domestic gas production, but if the nation really were to start a large-scale shift to natural gas vehicles it could cause a natural gas crisis that would be impossible to fix, for the following reasons:
1) US natural gas production now depends heavily on unconventional gas, which is difficult and expensive to produce because it requires so much drilling and advanced technology. The production process therefore requires a higher price, which means that when natural gas prices fall, as they have done for some months now, less drilling happens. The effects on production often take up to a year to show up, and predicting gas production is difficult, but it looks increasingly likely that US natural gas production will start to fall again next year after a recent recovery from a peak in 2001. Chesapeake Energy itself, America's largest gas producer, recently announced that it was reducing its drilling, despite Sarah Palin's call to "Drill, Baby, Drill." All that drillin' costs a whole lot of dollars, baby.
2) The USA already cannot produce enough gas to satisfy demand, and imports 16% of its gas from Canada. This is a long-standing arrangement with Canada typically sending more than half its gas production south. But this is very unlikely to continue for much longer because Canada's own production is in decline and despite much higher prices this year production is up to 10% lower than last year. Just as with oil from Mexico, it is hard to see how Canada will be able to go on exporting gas in the large volumes wanted by America for very much longer.
3) There has been much fuss in the business press about Barnett shale gas (in the region of Dallas) being a new gas knight in shining armor. How surprising that Chesapeake is a major player. However, this new supply may be peaking now, and some petroleum geologists suggest that the other shale gas basins will not be nearly as prolific. So this is likely to be a false dawn in what is otherwise the long sunset of American gas. This will be a confusing irony for the gas hungry public because there is little doubt there are large quantities of methane underground but extracting it will be ever harder and more expensive.
4) Oil prices will one day start to climb again as and when the world economy starts to open the throttle or when supply declines below demand. No-one can really say now what is going to happen, but when oil rises in price, natural gas nearly always rises too. All of this is very good for Pickens and McClendon, but very bad for Americans.
Americans are already reeling from heating bills that they cannot afford - over half heat with natural gas, and now the situation is compounded by the financial meltdown. In order to avoid yet another energy crisis, Americans should be trying to use less natural gas, not more.
Does all this start to remind you of "Chinatown"-a bizarre battle for water to feed an ever-growing Los Angeles? And "The Third Man," in which Harry Lime is prepared to do what it takes to make his medicine sales more profitable? And as a final twist to the cocktail, the elaborate con job in "The Sting"? But instead of half a million dollars at stake, we are talking about ten billion dollars, at a time when California is asking the federal government for a Wall Street style loan to help it out of its ballooning deficit.
Ten billion? Didn't we say earlier that Prop 10 only asks for five billion dollars (Only!)? Yes, but the five billion, though spent in the first ten years, will take the people of California thirty years to pay back and in that time, the state government expects it to cost another 4.8 billion dollars in interest on top of that. It's a great story, but unfortunately it could start to come true if Californians vote for it in November. And just think of this: it's really not fair to Hollywood to make real life more fictional than the boulevards of Beverly Hills.
And that's not the end of it. In an Orwellian move, the proposition defines a Clean Alternative Fuel Vehicle as one that is no worse a polluter than a petroleum-powered vehicle! How are they allowed to get away with this Alice-In-Wonderland nonsense? Humpty Dumpty would be rolling in the aisles. But there it is, written in Chapter 2, Section 26412, Sub-section (c), page 133. It means that there is no necessity for the vehicles getting these lovely rebates to improve the air or climate at all! So much for AB32, which mandates cleaner vehicles to reduce vehicle emissions to help human and climate health.
But wait! There is a wonderful twist, which could mean that after all, Californians won't have to breathe the fumes of these "clean as petroleum" vehicles at all. The reason is that there is nothing to stop a trucking company from buying these vehicles, collecting up to $50,000 in rebates and driving them across the state line and selling them the next day and pocketing the fifty grand. It's beautiful. And there is a billion dollars alone in rebates for the largest trucks, quite apart from more billions for every other kind of smaller truck. And it's totally legal as long as the California voter says yes.
So here is the message to California: this is the toxic mortgage to beat them all--we end up paying out ten billion dollars over the next thirty years for vehicles which are going to need a fuel we won't have enough of and need to keep Americans from freezing, ten billion dollars for vehicles which will be on the scrap heap before we finish paying for them, ten billion dollars for vehicles that won't even necessarily be used in California (which is good and bad), and ten billions dollars wasted that we won't be spending to build a decent rail system to help California, the largest engine of the American economy, prepare itself for fast approaching peak oil and gas.
This is one of the most monstrous items ever to be placed before the voter, and I only wish I could vote against it, but though I am a California taxpayer, I am not yet a citizen, so I have no representation here. But if you are a citizen, please vote NO, persuade everyone you know to vote NO, and do California, America and the planet a big favor.
PS: The whole text of Proposition 10 can be found buried on pages 132 through 137 at this location. You can also view my interview with T. Boone Pickens at the ASPO Conference in 2007.
California Proposition 10, which will appear on the ballot in November, is nothing but a scam to use taxes to subsidize a natural gas fueling system to profit T. Boone Pickens and crowd. The expense of building a NG fueling system has greatly limited the sales of NG vehicles. Even NG utilities only have a few show case vehicles.
The real flaw with Pickens Plain is that it would remove NG electric power plants from the grid and try to replace them with wind turbans. NG plats are also called “peaker plants” since they are able to ramp up quickly to accommodate sudden surges in the power grid load. Other power source as nuclear, coal and hydro operate economically as “baseload” sources near their capacity. Operating in this manner they cannot be “dispatched” to handle sudden demand such as large numbers of people turning on their air conditioners in response to a heat wave.
Wind energy can work well with ele3ctric cars. Wind is an “intermittent” source. It often produces surges when there is little demand. By using a “smart grid” – a computer controlled power distribution system, signals can be sent down lines to switch car battery chargers on when surplus power is available. This technology is here. Smart grids are now used by industry.
In his ads, Pickens points to a hydrogen fuel cell and says, “…the technology is not here yet.” The electric car is here. Customers are queuing up in groves to buy them. These cars run on rechargeable batteries. This technology is here and booming.
It is obvious to this engineer that Julien Darley does NOT understand natural gas and electric vehicle technology let alone economic reality. Her statements about natural gas motor fuels are simply wrong.
T Boone Pickens is no saint, but he understands economics and he understands how government policy MUST shape markets to facilitate the use of low-carbon motor fuels and electricity.
Prop 10 is an effort to begin the widespread transition towards low-carbon electricity and motor fuels; to oppose Prop 10 is to oppose change; to oppose transition to low-carbon economy. For a group that claims to be post-carbon, I find this article to be a grossly misleading and hysterical diatribe devoid of logic and reason.
The widespread commercial use of compressed (CNG) and liquefied natural gas (LNG)will help an igorant, i.e. uninformed, general public and business community, understand that there are cleaner, safer, more efficient alternatives to liquid motor fuels. It will help prepare the public for the eventual widespread use of hydrogen motor fuels, both in fuel cells and blended with natural gas. It will also bring the current electric vehicle fad back to reality; lithium ion batteries are simply not capable of providing the power and energy needed to operate medium and heavy-duty trucks in a reliable manner. I must also make the point that chemical fuels are needed to power trucks and automobiles. It is a fantasy to advocate replacement of trucks with electric trains; it is simply not economically feasible nor environmentally desirable to electrify our highways; this is reality.
To oppose Prop 10 because natural gas fuels are not "perfect" and are being propmoted by the natural gas industry is irrational.
Our current practice of using natural gas to make electricity in inefficient peaking units is immoral; these plants must be made more efficient or they must be shut down. Wasting natural gas is immoral; even if it is cheap, it is a clean, high value fuel. Moving aggresively to wind and solar electricity is essential; wind and solar electricity are technically feasible and can be economic IF supported by progressive policy that captures and monitizes the external costs of fossil fuels; this must happen on the federal level, if not globally.
Until that policy shift happens Prop 10 is an attempt to reduce greenhouse gas emissions from BOTH electric power production and motor vehicles by jump-starting two industries -- renewable electricity and low-carbon motor fuels. It is a happy coincidence that when fully implemented wind electricity, solar electricity, natural gas motor fuels and hydrogen motor fuels and fuel cell engines will be much cleaner, safer, more efficient and less expensive than our current fossil fuel addictions. But to get from here to there requires enlightened political action and policy that properly shapes the market forces needed to motivate both consumers and investors to start making this transition.
Inaccurate, misleading and semi-hysterical polemics, like the Darley article, may make sense to the lay reader, but the arguments are false and highly misleading.
California’s Proposition 10 is wrong on all levels. This is the typical political response we are seeing across the nation. We look for alternative ways (read fuels) to continue the same insanity that reinforces unencumbered transportation. Proposition 10 is the methadone program for happy motoring. California's trucking industry will no longer be addicted to oil, but will transfer its addiction to another resource that will, like methadone, make its teeth rot and fall out. California needs to look to solutions that provide lasting benefits by investing in well thought electrified rail infrastructures. By doing so they can ensure that they are able to transition to clean renewable energies for transportation, such as wind, hydro, and solar, as they become increasingly available.
Everyone seems to be drinking the kool-aid that T “Boone” Pickens is serving. America will be surprised when he rips off his mask and tada, its Jim Jones. You might be familiar with the energy now ads that have recently been running nationwide. An attractive blonde, in a soft white room crosses toward us to announce that we have enough natural gas to power 60 million cars and a 160 million homes for the next 60 years. That would be great if America didn’t have 260 million cars and light trucks congesting our deteriorating roads and highways. I have not been able to find an accurate statistic on the number of houses in the US, but with a population that has exceeded 300 million I suspect that it is higher than 160 million. This begs the question, what about all the businesses, schools, fire and police stations, hospitals, public buildings, why are they not part of this delightful blonde’s equation? Because, there just simply is not enough domestic natural gas to power our Disneyland fantasy for the next 60 years. They’re just selling the dream. Don’t worry America. Go shopping…
David M. Edwards
Producer/Director
Sprawling From Grace; Driven To Madness
www.sprawlingfromgrace.com
Clean Energy built itself on millions of dollars in Federal and State Grants and millions and millions of T Boone's money. T. Boone got his money back when his company went public but he needs more so he can build a waterway from his ranch to Dallas and sell his water. Wait till Prop H20 hits Texas!
He also said he wouldn't put a windmill on his own property because "they were ugly". Does he expect us to support and fund his ideas while he collects all the money!!
The fact of the matter is, California, and the world, needs to find new and sustainable forms of energy for transportation.
The biggest shortfall of natural gas for transportation is the need for it to be compressed to very high pressures in large, heavy steel cylinders. The energy equivalency, when compared to gasoline, is a step backwards at a time when we need to improve fuel economy and emissions, not add weight and suffer the inefficiencies of this inconvenient fuel. Even refueling these cars is dangerous. But first, you have to find a station. By the way, for those of us who think Hydrogen is the Silver Bullet. Think again. Hydrogen can never be self serve! Therefore, it's not going to happen. What needs to happen has not been found... or dare I say... unburied. We are going to have to think outside the box on this one.
Meanwhile back at T. Boone's Ranch...
Clean Energy's Long Beach LNG Port Project is why they want this money. They are trying to force all the trucks that operate in and out of the port to switch to Liquefied Natural Gas(LNG). The trucks are diesels converted to run on LNG by a company called Westport Innovations and they need to do this now because in 2010 Diesel engine emissions will be as clean or cleaner than LNG.
This is thier window!
Note: Wesport Innovations is on the Board at Clean Energy.
Hmmm, I think I'm beginning to see something here...
By mandating the use of their fuel and subsidizing the truck cost Clean Energy will make an absolute killing! They already collect a dollar a gallon from the last brilliant energy act in the form of rebates!
Logistically, LNG is not going to work at the Ports for too many reasons.
So why is Clean Energy so concerned with LNG?
Clean Energy is building a very large and very expensive plant in the high desert of California and they are going to need all the customers they can BUY to pay for it.
Please don't be fooled!
Global warming is real, on this planet, as well as all the others!
David E. Brunderly posted an interesting and challenging commentary supporting California’s Proposition 10 – Pickens Plan. Neither Brunderly nor Pickens, however, addressed the need for natural gas peaking plants that are essential to maintain grid balance. Pickens Plan would use the natural gas now used to fuel peakers to fuel vehicles. According to Brunderly, “Our current practice of using natural gas to make electricity in inefficient peaking units is immoral; these plants must be made more efficient or they must be shut down. Wasting natural gas is immoral; even if it is cheap, it is a clean, high value fuel.”
It is true that peaker plants have a thermal efficiency of about 30 to 40% compared to about 50% for the steady service of base-load coil plants. Their efficiency is higher than fuel vehicles – about 25%. Peaker plants are necessary in the current power grid since they manage load transients. Without peakers we would experience frequent power outages.
Wind generators as proposed by Pickens Plan cannot replace peakers. Intermittent sources, such as wind and solar, produce power irrespective of demand. They cannot ramp up on demand to supply sudden load pecks. NG fueled peakers are currently the primary sources for such peak loads.
As intermittent sources are added to the grid, their capacity factor – the fraction of their output energy to their total energy capacity – decreases, since these sources are often competing to satisfy little or no demand not supplied by conventional plants. Eventually, the amount of energy from intermittent sources will reach a limit or maximum “penetration.” Wind energy’s maximum penetration is about 20%. While we are nowhere near that point, it does set a limit for the current grid.
The problem is that there is little storage on the grid. Connecting charging electric cars to the grid could add such storage.
Millions of plug-in cars charging as they are parked in garages or parking lots could provide a large interruptible load – one that the grid can shed briefly without significant consequence to customers. The power taken briefly from these plug-ins could be used for peaking thus reducing or eliminating the need for NG powered peakers.
Since most peak load occur during the daytime, solar might eventually provide the greatest peaking power. More cars would probably be charging at night and provide a large load for wind. Such an interruptible load would dramatically increase the penetration of both wind and solar.
The Electric car is here. People are clamoring for them. Rechargeable battery technology is escalating. If you vote in California, please vote NO on Proposition 10.
This is the problem with environmental movements. It gives the opportunity to hooligans to take advantage of the hype. Clearly, a wolf hiding in sheep's skin.
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