Great Britain’s electric regulator takes performance-based regulation to a new, more complex level, weighing policy choices against attendant costs.
Letters to the Editor
Linden on Pickens and Gore
In July 2008, two pronouncements on energy policy were made by well-known and respected public figures. One by T. Boone Pickens, the BP Capital founder, and one by Al Gore, former U.S. Vice President now prominent in the effort to reduce anthropogenic climate change due to emission of greenhouse gases, primarily carbon dioxide (CO 2). The motivation of T. Boone Pickens’ campaign, which includes daily television spots, is to reduce U.S. oil imports which, according to him, have grown from 24 percent of U.S. consumption in 1970 to 42 percent in 1990 and to nearly 70 percent today at a cost of $700 billion/year, the largest transfer of wealth in human history. (The actual share of oil imports of U.S. consumption, including U.S. oil exports, is about 64 percent.) The objective of Al Gore’s initiative is to convert the U.S. power generation system to carbon-free sources over the next ten years.
First of all, the role of anthropogenic greenhouse gas emissions on global warming has been minor so far and will lead only to acceptable increases in average global surface temperatures of 1.6 degrees to 2.8 degrees Centigrade, if cumulative carbon emissions between 1991 and 2100 are limited to 1,000 billion metric tons (gigatonnes), which would roughly double pre-industrial atmospheric CO 2 concentrations from 280 parts per million by volume (ppmv) to 550 ppmv. This is according to the Intergovernmental Panel on Climate Change (IPCC), the group of scientists formed by the U.N. Framework Convention on Climate Change of about 160 nations in Rio de Janeiro in June 1992. This should give us a great deal more lead time than 10 years to develop emission-free and sustainable energy and power sources.
The T. Boone Pickens proposal to replace 38 percent of petroleum use of vehicles with compressed natural gas stored on board over the next 10 years suffers from the lack of refueling stations and the much higher cost of natural gas vehicles, and would largely also depend on costly home or fleet refueling stations. Similarly, the Pickens proposal to increase windpower from 2 percent to 22 percent over the next 10 years seems overly optimistic in view of the inherent problem of intermittency of windpower (and also solar power), the high cost of yet to be developed energy storage during periods of high wind velocity and insolation, and the remoteness of the U.S. areas favorable to windpower from the existing transmission grid.
There is also the problem of multiple demands for increased natural gas use for combined-cycle power generation to replace the existing 311 GW of coal-fired steam-electric capacity to reduce carbon emissions by two-thirds, which would require 11.7 trillion cubic feet (Tcf) of gas annually at 70 percent average load factor, plus the need for large additional amounts of gas for projected increases in combined-cycle capacity and for displacing very large increases in projected coal-fired steam-electric capacity. Even excluding the latter, the author has estimated increases in annual natural gas consumption to 44.6 Tcf in 2025, 41.8 Tcf in 2025 and 39.3 Tcf in