For example, the Alberta government plans to phase out all coal fired power plants in the province by 2030. Two thirds of the power lost through closure of these plants is to be replaced with renewable energy, primarily wind. An independent estimate from a leading wind energy consultant places the cost of these wind turbines conservatively at $13 billion. Is that the best use for such a huge pile of taxpayer supported money?
$13 billion would buy, at $70,000 apiece, 185,000 Teslas (plus I think you’d get a volume discount). If similar gas-engined cars average 30 miles per gallon and are driven an average of 13,000 miles per year (reasonable averages), replacing 185,000 of them with Teslas would save over 80 million gallons of fuel from being burned annually. That’s just one (admittedly weird) scenario. The point though is that on a global scale, Alberta’s (or even Canada’s) coal consumption is a pittance relative to the big culprits.
What’s more, the technology behind wind power generation has historically been inefficient compared to coal and natural gas. That is not to say though that improvements are not being made, and fairly quickly. New wind technology can now achieve a 42 percent capacity factor in certain environments. This, compared to the what the Alberta Utilities Commission reported for Alberta’s 2014 wind capacity factor: 27.2 percent (compared to 81.1 percent for coal and 45.4 percent for natural gas).
But meandering in those statistics can be disorienting, like the proverbial trees vs. forest parallax-type problem. Before committing vast resources, let’s go up to 35,000 feet and look at the big picture. here are some statistics to demonstrate where Canada is positioned relative to other countries with respect to coal consumption and C02 emissions. In the below chart , coal consumption statistics have been provided by the US Energy Information Administration from the year 2013.
As for C02 emissions, the 2013 annual national CO2 emissions levels are shown below, as provided by the Union of Concerned Scientists (the Union of Unconcerned Scientists having nothing to contribute):
The madness of reflexive and bandwagon-jumping CO2 reduction plans is dismally obvious. Reducing Canada’s coal consumption to zero is irrelevant when China is burning 100 times more. And it’s getting worse – Greenpeace themselves note that 155 coal-fired power plants are currently under construction in China and will generate an incremental 560 million tonnes of CO2 per year. Again, context helps, because that number exceeds Canada’s (or the UK’s) national total. With that in mind, it seems almost pointless to go out of the way to shut down Alberta’s coal-burning power plants, but since coal burning does create a lot of pollution, let’s assume it’s a good idea. Having settled that debate though, next comes a bigger mental puzzle – then what?
Reducing CO2 emissions and greenhouse gases is a flat out priority around the world. But resources to pay for all the schemes don’t really exist; almost all is being done on credit – most schemes involve either outright government ownership or large subsidies. The very most important question that pops up next is – who’s picking up the tab?
As can be seen in the behaviour of governments and consumers everywhere, we’ve lost our minds with respect to debt. Our entire system is kept afloat by low borrowing costs, and governments are playing with fire by letting it accumulate. In addition to Alberta’s mind-boggling $10 billion deficit, the Canadian government is planning to throw another $25 billion on the debt pile this year. King of all debt of course is the US government, whose debt now totals about $19 trillion, up from a measly $7 trillion in 2000. Somehow even Greece still borrows money, five years after first being bailed out like a trust fund piglet.
The trajectory of debt accumulation is unsustainable, and all the economists in the world can’t rationalize the growing problem in a credible way, try though they might. If all government debt was incurred to build infrastructure and schools and particle accelerators, that would be one thing, but most of it is used just to keep the big ship afloat for another day. And piling more taxes on, like Obama’s proposed $10/barrel oil tax, creates a whole other set of problems, like seriously damaging the wealth generating segments of the economy that do not need that burden at all.
And more pointedly for Alberta, why not utilize the vast amount of cheap, clean burning natural gas that underlies the whole province to replace that power, rather than borrowing vast sums for wind turbines? Natural gas facilities are needed anyway for wind power because it is naturally intermittent. Until the debt situation is under control, the province should be using resources already on hand and already economic. In an ideal world, or a debt-free one anyway, all options are on the table, but sometimes reality has unavoidable consequences that require tough choices. It’s like in the medical world – would you spend $2 million on a medical procedure to save the life of a 3 year old? A 50 year old? How about a 90 year old? Or should the $2 million go into research or prevention? The energy world is no different; not every investment that reduces CO2 is a good one, and some represent such a dead weight loss to society that they just aren’t sensible to pursue. Spending $13 billion to remove a dozen coal plants in Alberta while China simultaneously adds 155 is a good example. Well, technically, a good example of a bad example.
All the talk about reducing greenhouse gases has become embedded in our public discourse, and to argue against it is to look like a Neanderthal. It’s not a bad thing that we think about our environmental footprint in everything we do; that consideration is long overdue. But what is bad is to assume that we need to pursue those alternatives at any cost. We simply can’t afford every good idea, no matter how cheap it is to borrow money. Debt financing isn’t unlimited, and we need to spend every dollar wisely.
Read more insightful analysis from Terry Etam here