A new report suggests three-quarters of US coal-fired generation could be replaced with local wind or solar power at cheaper cost to the consumer
By Jonny Bairstow, 26 March 2019
Local renewables in the US now make more financial sense than coal.
That’s according to a new report from renewable analysis firm Energy Innovation, which suggests in 2018, three-quarters of existing US coal-fired generation could have been replaced with wind or solar power within a 35-mile radius at an immediate saving to customers.
It predicts by 2025, this figure will grow to 86% of the coal fleet as fossil fuel generation becomes increasingly uneconomical and the cost of renewable power continues to fall.
The report suggests this is happening as the ‘all-in’ costs of new wind or solar projects become cheaper than the combined fuel, maintenance and other ongoing costs of coal-fired power.
In 2018, 94GW of existing US coal capacity was deemed ‘substantially at risk’ from new local wind and solar – by 2025, the study expects ‘substantially at risk’ coal to increase to 140GW, almost half the national fleet.
It recommends local decision-makers should consider plans for a smooth shut-down of these old plants, replacing them with technologies such as wind, solar, transmission, storage and demand response.
It notes replacement infrastructure must be reliable and affordable for communities dependent on existing coal plants.
The report reads: “The purpose of this report is to act as a conversation primer for stakeholders and policymakers where the math points to cheaper options that could replace coal plants at a savings to customers.
“Regardless, any coal plant failing the cost crossover test should be a wake-up call for policymakers and local stakeholders that an opportunity for productive change exists in the immediate vicinity of that plant.”
[Re-posting today in memory of Joel Fallon, who died on August 11, 2016 (obituary). Joel was Benicia’s first and most beloved Poet Laureate, an inspiration to all who knew him and a thoughtful, visionary activist. Originally reposted from The Benicia Herald and here on the Benicia Independent.]
April 25, 2014 by Joel Fallon
WHAT AM I MISSING HERE? Are Benicians just kittens in a burlap sack, down by the riverside, resigned to the inevitable?
Let’s see if I’ve got this right.
(a) We’re in earthquake country (see evidence of the Green Valley fault in terrain on the way to Cordelia);
(b) We’re next to fragile wetlands (for spectacular views, click Google Maps/Benicia, hybrid setting, find rail line and follow to Sacramento);
(c) We’re contiguous with an important commercial waterway;
(d) We host an outfit whose headquarters has fought attempts to safeguard our environment (see Valero Energy Corporation’s position and funding regarding Proposition 23);
(e) A local outfit, under direction from its far-off headquarters, plans to process a dangerous, toxic product;
(f) The outfit is served by a rail system with a recent history of tank car derailment;
(g) Parts of this railroad system (built by Central Pacific RR in 1877), running through marshland to the Carquinez Strait, repeatedly sank into unstable marshy terrain, requiring hundreds of thousands of tons of rock, gravel and other materials to stabilize it;
(h) Other parts of the antique rail infrastructure seem poorly maintained and may be unsafe, e.g., the Benicia-Martinez rail bridge, built between 1928 and 1930 for Southern Pacific RR to replace the train ferry to Port Costa;
(i) Old tank cars are a problem — an area newspaper reports that BNSF railway officials told federal regulators in March of concerns that older, less robust tank cars will end up transporting crude oil because of Canadian rail pricing policies;
(j) Emergency responders are unprepared to handle spills or fires in the event of derailment of cars headed to any of five Bay Area refineries. State Sen. Jerry Hill, D-San Mateo, after listening to testimony from emergency responders, said, “There is a potential for very serious problems and very disastrous problems.” Chief of the Contra Costa Fire District is quoted saying, “… with the sheer volume that will be coming in, we are going to see more accidents.” The 2007-08 Solano County Grand Jury, after investigating the county’s fire districts, reports a general need for more funding, heavy dependence on dedicated volunteers and the preponderance of old fire trucks, while noting the high cost of HAZMAT suits and problems with communications caused by incompatible equipment and radio frequencies.
And yet, despite this unbelievably horrific backdrop, certain elements in town warn us to hush lest Valero be forced out of the competitive (i.e., tar sands crude) market, destroying its “desire to remain in Benicia.”
Clearly, Valero Benicia Refinery cannot be faulted for all of the foregoing. Good workers deserve good jobs; they should be able to tell their grandkids they helped, rather than harmed, the environment. Valero Benicia is just one of many links in a chain of factors that could lead to the disaster so many in this community fear.
Am I “agenda driven” as charged? Bet your raggedy backside I am. My agenda involves doing homework to find threats to my home, my town, my state and my nation, and advising others of my findings (just in case they might care). If you detect it, yell “GAS” to alert the rest of the platoon; then put on your mask, while you can still breathe.
For a glimmer of the scope of Big Oil’s operations from sea to shining sea and beyond, see the astounding number of outfits similar to Valero Energy Corp. in the U.S and Canada. Find ’em in Wikipedia (“independent oil companies — Americas”). Select a company to see its history of oil spills. Wonder why the Keystone XL pipeline is planned to extend to Texas? Check out which corporations own the pipeline and the benefits associated with Foreign Trade Zones (32 FTZ in Texas compared to 17 in California, and 15 in New York).
If folks look around a bit they may discover that Big Oil, like Big Coal and other corporate behemoths, extends powerful influence throughout the land of the free and the home of the brave. Many were hoodwinked by Operation Iraqi Liberation, in which Big Oil colluded with Big Government to achieve absolute power of life and death over us and our enemy — the one with phantom WMDs and a vast, very real amount of oil.
Is this really adios, Pilgrim? — or just “I double-dog dare you”? I don’t believe it’s Valero’s style to leave town. It’s not in the corporation’s best interests and shouldn’t be its preferred option.
What are those options? They include:
Option 1. Stay put, but back away from risky tar sands crude and focus on products involving minimum environmental risk. Backing away for good business reasons is not the same as “backing down.” CVS decided to stop selling cigarettes. The firm considered it “the right thing to do for the good of our customers and our company. The sale of tobacco products is inconsistent with our purpose — helping people on their path to better health.” Barrons online says, “We think that CVS — like anyone who quits smoking — is making a good long-term decision, even if it makes things rough short-term.” Others consider it a PR coup! CVS gained the respect of millions of customers for what is perceived as a moral and ethical decision. I shop CVS more often since they made that brilliant call; so do my friends.
Backing away from tar sands crude would take similar corporate guts; but the public would be pleased with the image of a moral, ethical, highly principled corporation — a Valero that gives a damn. Sales at Valero service stations might even increase.
Option 2. Continue to pursue tar sands crude; seeking high profitability despite increased environmental risk. The downside: prices at the pump are too high. Californians are already angry; they may avoid Valero service stations and products. I’ll urge my friends to do so. Word of mouth is powerful and spreads quickly. Contempt for an outfit that doesn’t respect its customers or our environment could lead to loss of sales in the country’s most populous state. Cesar Chavez showed us boycotts work. Most folks I know didn’t buy grapes.
Option 3. “Re-purpose” Valero’s operations in Benicia (and elsewhere) to enhance instead of degrade the environment while remaining profitable. Valero is an energy outfit. Turning to alternate sources of energy is ultimately inevitable. Valero should expand its vision and not limit itself to fossil fuels. Farmers in Ireland who grew only potatoes learned about diversification too late.
(a) Pursue wind farming if feasible and profitable. A recent Mother Earth News article about mountaintop removal coal mining in Appalachia cites a 2007 study that determined placing wind turbines on Coal River Mountain would provide power to 70,000 West Virginia homes while generating $1.7 million in local taxes each year. Better than ripping off the tops of mountains and dumping enormous amounts of debris into streams and rivers.
(b) Pursue solar energy if feasible and profitable. Produce solar products for sale and/or operate a solar power facility to resell power. See an article by Don Hofmann, president of RegenEn Solar LLC, looking at mountaintop removal mining and suggesting solar power instead. He recognizes there are challenges but is optimistic about lower-cost solar cells and technology in the future. He notes that the U.S. fossil fuel industry received $72 billion in subsidies from 2002 to 2006 and asks us to imagine that kind of money put into solar development.
(c) Pursue other approaches (geothermal, tidal, et al.) if appropriate and profitable.
Option 4. Determine feasibility of combining 3a, 3b and/or 3c. If appropriate and profitable, pursue the combination.
Option 1 would be the easiest and would be enthusiastically supported by most folks in Benicia, applauded by most Californians and recognized as a principled business decision.
Option 2 is the least desirable from an environmental standpoint. While profitability is high, it may incur the contempt and wrath of the public, possibly leading to damaging boycotts and a decline in profitability.
Option 3a thru 3c may seem starry-eyed, wild and outside the box. They would require imagination, foresight and courage. It can be done. CVS is showing the way and TESLA is succeeding with electrically powered cars. Examine pluses and minuses — Valero could take a quantum leap and be regarded as an industry trailblazer. Its reputation would be enhanced. Envious competitors might scoff and want Valero to take a pratfall but ultimately they would have to follow suit.
In conclusion the priority order of Valero’s options should be:
Option 1 — Most desirable (preferred)
Option 3/4 — Most “outside the box” (defer initially, but plan for the future)
Option 2 — Least desirable (avoid).
If Valero is really in the long-term energy game, it should choose Option 1 and start thinking seriously about Option 3. If, instead, its focus is on short term — high profits while risking irreparable harm to the environment — then Option 2 is their ticket.
If Valero wants to be recognized as rich, principled, brave and famous instead of rich, unscrupulous and infamous, then it should open door No. 3 as soon as possible.
Finally: I don’t believe it is “adios” for Valero Benicia Refinery. Unfortunately, I think Valero will not choose a clean path. They will probably press on with dirty tar sands crude. After that, “¿Quien sabe?”
I don’t intend to “go gentle into that good night.” Instead I prefer to “rage against the dying of the light.”
This whole thing could be like a colonoscopy, but a lot less fun.
Joel Fallon is a Benicia resident.
The Benicia Herald’s Poetry Corner was recently dedicated to Joel Fallon…
You called them “dead Mother poems”
and scorned their cloying sentiment, easy forgiveness.
Your poem about your Mother named her Kali.
You hungered for life – anger, difficulty, competition, sex.
You insisted that wringing a tear from a stone
was superior to opening well oiled floodgates.
Now you are dead and my tears come unbidden
looking at the bookshelf, pulling a stubborn weed,
eating a pastry.
“Keep smiling” you’d instruct,
but I don’t want to brush these tears away,
each glistens with memory, swells with loss.
You are in them, like it or not.Ronna Leon was Benicia’s third poet laureate from 2010 to 2012
“Hope is the Thing with Feathers (Dedicated to Joel Fallon)” by Johanna Ely
“Hope is the thing with feathers
that perches in the soul
and sings the tune without the words
and never stops-at all”
If such a tiny bird,
perhaps left for dead,
or suffering from an injured wing,
its feathers matted and torn,
finds refuge in your broken heart,
then reach inside yourself
and touch this living thing called Hope,
gently bind its limp and useless wing
with Love’s tattered cloth,
and press it to your shattered heart
until it heals,
until this lovely creature sings again,
then let it fly,
and nest in someone else’s heart,
the old friend,
the one who just like you,
needs to hear its song.
“So, I may have been wrong after all – this damn cancer may indeed be the death of me.”
-Joel Fallon, in an email of June 30, 2016
He died on the morning of August 11.
That night, meteor showers dazzled the skies:
The Perseids, at their peak.
No reason to doubt that Joel hitched a ride
On that celestial glory train,
Meeting up with all the other streaming luminaries,
Fireball to fireball.
Mary Susan Gast served as Conference Minister of the Northern California Conference United Church of Christ, now retired, and is a member of Benicia’s First Tuesday Poetry Group
Would Saving A Livable Climate Destroy Buffett’s Fossil Fuel Empire?
By Joe Romm, March 11, 2016 8:00 AM
Billionaire Warren Buffett has bet the future of his company Berkshire Hathaway on dirty energy. In recent years he has been building a vertically-integrated fossil fuel empire — one that develops, delivers, processes, and burns the most climate-destroying fuels.
The final part of this series on Buffett looks at how BNSF Railways is the engine of his carbon-intensive conglomerate, creating a massive risk for shareholders in this increasingly carbon-constrained world — a risk the “Oracle of Omaha” needs to be far more upfront about.
Is Warren Buffett “The Profiteer” of “Climate Killers”?
When Rolling Stone named Warren Buffett one of its 17 “Climate Killers” in 2010, they called him “The Profiteer.” They zeroed in on his recent purchase of “Burlington Northern Santa Fe railroad for $26 billion — the largest acquisition of Buffett’s storied career.”
Why? BNSF is “the nation’s top hauler of coal, shipping some 300 million tons a year.” That is especially convenient for Buffett because, as noted in Part 2, Berkshire Hathaway Energy has four major utilities that still rely on coal for over half their electricity generation.
2015 “has already been the costliest by far for crude train explosions,” BloombergBusiness reported in December. A “BNSF train that derailed and exploded in Illinois” last March “carrying highly explosive crude from North Dakota” created some $5.5 million in damage.
From 2010 through mid-2014, oil shipped by rail in the United States increased from about one million barrels of oil every month to 25 million! At the same time, Canadian imports increased 50-fold, as we’ve reported. BNSF was a driving force behind that explosion.
Also, last October we learned about “what is believed to be the largest frac sand unit train to date in North America.” You guessed it: “The 150-car unit train, operated by BNSF, carried 16,500 tons of frac sand used in hydraulic fracturing.”
Warren Buffett Bets Big On The Tar Sands
But wait, there’s more. You may recall from Part 1 that last year, the billionaire spent $240 million buying another chunk of Canadian tar sands giant Suncor, upping his overall bet on the climate-destroying liquid fuel to $1.1 billion — a fact Buffett does not share with shareholders in his list of Berkshire Hathaway’s climate risks.
On top of that, as BNSF’s website also proudly attests, the railroad “is positioned to act as a gateway to the Canadian oil sands.” Seriously.
Indeed several years ago, a BNSF employee magazine explained how invested the railway was in all aspects of tar sands (aka bitumen) development. The key point is that “Before bitumen can move through a pipeline to its destination, it must be blended with diluents (diluting agents),” lighter weight hydrocarbons like natural gasoline or butane:
BNSF has been moving single carloads of diluents from U.S. refineries to the Canadian border…. The inbounds are then interchanged with Canadian railroads, then moved to Edmonton, with the final move to the oil sands’ processing center via pipeline.
Last year, BNSF moved about 9,000 carloads of diluents for the project, with the majority of loads originating from the Gulf Coast, California, and Kansas. This year, about 12,000 carloads are anticipated to move.
There’s more: Beyond shipping diluents, “BNSF has also transported turbines, other large machinery and pipes for use at the drilling sites.”
There’s still more to this empire. In 2015, Buffett “nearly doubled Berkshire’s position in Phillips 66,” one of the country’s leading oil (and gas) refiners and processors. The company has 15 refineries which can refine a total of 2.2 million barrels of crude per day.
In January of this year alone, Buffett spent a staggering $832 million to buy yet more Phillips 66 stock. At more than $5 billion, it is his sixth-largest holding. He now owns 14 percent of the “Number 7” company on the Fortune 500 list.
Phillips 66 is a major co-owner of the Wood River Refinery in Illinois, which in recent years made investments “to expand the capacity to handle the bitumen from the Alberta oil sands by nearly 700%.” Also not coincidentally, for the last year, Phillips 66 has been trying to get California planning commissioners to let it build a 1.3-mile rail spur to its Santa Maria refinery. Why? As the Sierra Club explained last month, “The oil giant seeks to transport tar sands crude from Canada in mile-long trains — each laden with over 2 million gallons of dirty crude.”
Both A Livable Climate And Buffett’s Empire Cannot Thrive
Yes, the Oracle of Omaha has a thing for the Canadian tar sands. But more than that, over the last several years he has built a vertically-integrated fossil fuel empire — one that develops, delivers, processes, and even burns the most carbon-intensive fossil fuels. It would be a brilliant strategy except for two small details.
First, climate science makes clear we have to leave most fossil fuels — and virtually all of the most carbon-intensive — in the ground to avoid global catastrophic warming. Second, over the past 18 months, the leading nations of the world unanimously agreed on a plan whose goal is to do just that, and the overwhelming majority of them made detailed pledges to slow or reverse carbon-intensive growth and replace it with carbon-free growth.
The domestic and international coal market has already collapsed as a result of growing environmental concerns and low-cost alternatives including renewables. If the world follows through on its plans to keep total warming below 2°C — a big “if,” for sure — then coal is going to continue to be squeezed out of the market in the coming decades and oil will almost certainly follow the same fate, peaking in demand by 2030, as I discussed last month.
Now whether or not you believe the world is going to achieve the plan it unanimously embraced in Paris in December, surely Buffett ought to at least mention to his shareholders the risks to Berkshire Hathaway if the world does. Yet, his latest annual letter to shareholders dismisses the risk of climate change.
Here is all Buffett says about the coal risk: “To begin with an obvious threat, BNSF, along with other railroads, is certain to lose significant coal volume over the next decade.” But he quickly dismisses this as a problem that is not “crucial to Berkshire’s long-term well-being.”
Last summer, BNSF executive chairman Matthew K. Rose noted the decline in U.S. coal transport and consumption. He said of his company’s major investment to upgrade its rail service to and from the coal-rich Powder River Basin, “That leaves us with millions of dollars in investment in what will eventually be stranded assets.”
Certainly, from a short-term business perspective, investing in oil-by-rail and tar-sands-by-rail to replace coal-by-rail appears to make sense. But what are the risks those investments will eventually become stranded assets, too? Low oil prices aren’t good for crude-by-rail, as BloombergBusiness explained in December. And aggressive climate action, which could well give us peak demand within 15 years, is not bullish for oil prices.
Rather than informing shareholders about any of these risks, Buffett asserts the reverse: “Both BHE [Berkshire Hathaway energy] and BNSF have been leaders in pursuing planet-friendly technology.” Seriously?
I discussed in Part 2 how, despite BHE’s own investments in renewables, BHE is working to crush solar energy in Nevada and around the western United States. And it remains a huge user of coal. And as we’ve seen BNSF is a major deliverer of coal….
But here is how Buffett defends the fairly ludicrous claim that BNSF is somehow one of the “leaders in pursuing planet-friendly technology”:
BNSF, like other Class I railroads, uses only a single gallon of diesel fuel to move a ton of freight almost 500 miles. That makes the railroads four times as fuel-efficient as trucks!
Yes, BNSF is a very fuel-efficient way of delivering vast amounts of climate-destroying fuels to market.
Finally, is it only a coincidence that after outperforming the market for decades, the stock of Berkshire Hathaway has actually underperformed the S&P 500 over the last five years?
Again, if serious global climate action ultimately keeps oil prices low and renders much of the tar sands uneconomic, then Buffett’s carefully constructed fossil fuel empire is going to keep suffering — and deservedly so. After all, leading climate activists have been urging major investors to disinvest in fossil fuels for years. Buffett is doing the exact reverse!
BOTTOM LINE: Between Berkshire Hathaway and a livable climate, only one can thrive. That’s not a tough choice, is it?