Articles by Sean Casten

Legislature approves 'Clean Coal Portfolio Standards,' green-lights new coal plant

OK, we've got Obama in the plus column for the state of Illinois. But in addition to the gubernatorial craziness going on in my home state, we've now got this: Tenaska, an independent power company, has been seeking to build a coal plant in Illinois. The problem being of course, that new, coal-fired power plants are really, really, really, really lousy investments. Tenaska tried to change government rules to ensure they made money.

That in and of itself isn't inherently bad. Every company has a vested interest in tweaking laws to benefit their shareholders. But to ask is nobler than to receive. I wouldn't be a bad person if I asked the state to give me $1 million a year to support my crack habit, but if the state gave me that money and I accepted, we would both be complicit.

So how did the Illinois legislature respond? "Clean Coal Portfolio Standards." Seriously.

Parsing Section 451 of the House stimulus package

Here are some thoughts on the American Recovery and Reinvestment Act recently unveiled by House leaders -- specifically, the appropriation of Section 451 (aka "Subtitle E") from the 2007 Energy Bill.

For obvious reasons, we've been following this bill very closely, which not only provides $10 per MWh to waste heat recovery and high-efficiency cogeneration projects, but it also provides a nice suite of carrots to induce the states to reform their paleolithic electricity regulatory laws. Often these laws have long been perhaps the biggest barrier to reducing the carbon footprint of U.S. electricity generation and distribution.

For less obvious reasons, it's hard to get programs like this through the Congress. This is the result of some peculiarities of the way the federal government makes decisions to spend money:

1. Tax bills require one vote to enact (OK, technically three, since they have to be approved by both houses and then signed by the President, but it is a single vote on a single decision throughout). All other fiscal bills require two votes: the first authorizes the funding, and the second appropriates the money through the budget process. Since no vote is certain, this makes it much easier for regulators to get things done by tinkering with tax policy than through any other measure. In no small part, this is why the tax code is so full of complexity, loopholes, and social-engineering run amok. But I digress.


2. Any appropriation process must be "scored." This is the process by which the Congressional Budget Office estimates the cost of the legislation to the Treasury for the purpose of figuring out whether we can afford it. That's quite reasonable, but the nature of the process is such that it tends to ignore most of the upside because it does not readily differentiate between good and bad investments. (It is as if you made a decision to buy a stock based on the price per share without any consideration of whether it was likely to rise or sink in the future.) This becomes especially problematic when the economy sours, as the stimulative effects of investments are not readily quantified or evaluated precisely at the time when they are most needed.

Frustrating as this may be, the good news is that the limitations are well-understood by those inside the Beltway. Setting aside what the scoring rules say, here is what Section 451 will actually do for the U.S. economy ... with lessons broadly applicable to investments in all flavors of enhanced resource efficiency.

Coal group wants climate bill to build more coal plants

News from the Super-Shoddy Climate Change Reporting desk: The Bemidji Pioneer broke this story on Tuesday:

Partners for Affordable Energy, which describes itself as "a broad-based coalition of organizations and businesses that support coal-based electricity as a low-cost, reliable, and increasingly clean energy source for consumers, farms and businesses in the Upper Midwest," is lamenting the fact that Minnesota's Next Generation Energy Act, particularly its standards for CO2 emissions, would put a stop to coal-fired power plant construction.

Setting any moral judgments aside, that's what you would expect them to say. It's not especially noteworthy, but check out how the group justifies their argument:

Even renewable energy should be used and produced efficiently

There's an old saying in biology that poison is dose-dependent, recognizing that everything is poisonous at the right dosage. Drinking a glass of crude oil will make you sick ... but so will drinking 50 gallons of water. Atmospheric CO2 concentrations of 600 ppm would radically change life as we know it on the earth ... but so would atmospheric oxygen concentrations of 500,000 ppm O2.

This isn't meant to suggest that all poisons are equal, but simply to recognize that there is nothing so good that it won't kill you at a high enough concentration. And what is true for chemicals we may ingest is no less true for public policies we may embrace. From police budgets to formal education, what's good in moderation is problematic in abundance.

And yet when it comes to energy and environmental policy, we continue to presume that our generation is smart enough to know the silver bullets, even while we lambaste our predecessors for failing to comprehend the full scope of the silver bullets of their day.