White House Chronicle

News Analysis With a Sense of Humor

Electricity Can Help Africa’s Growing Population Crisis

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A population catastrophe is in the making in Africa that could engulf the world, Europe first. The United Nations predicts that between now and 2050 the populations of 26 African countries are expected to at least double their current size. Nigeria will overtake the United States to become the world’s third most populous country in 2050.

By the year 2050, according to the United Nations, annual increases will exceed 42 million people per year and total population will have doubled to 2.4 billion. “This comes to 3.5 million more people per month, or 80 additional people per minute. At that point, African population growth would be able to refill an empty London five times a year,” Britain’s Guardian newspaper calculates. Poor Africa, with so little to support a doubling population, is on its way to new horrors of food shortage, lack of jobs and misery.

This is not just crisis for Africa but very much one for Europe, and in time one for other countries.

African migrants, fleeing broken societies and imminent famine, have been crossing the Mediterranean in rickety craft, flooding Europe. This flood will grow and it will be joined by people seeking survival from deeper in Africa; not just from the north, but from the center and the south.

Desperate people move. Take the Royhinga refugees, walking with what they can carry from Myanmar to Bangladesh: a journey from unsafe to unwelcome. It is already happening in Africa and it will dominate in future.

India, which knows something about population explosions (the population there has grown from 400 million, when the British pulled out in 1947, to 1.3 billion), has looked for a way of improving expectations as a means of population stabilization. Their solution has not been droves of family planners with suitcases of condoms, but rather a bold, high-tech solution: electricity and lots of it.

In New Delhi, this strategy was explained to me by a professor at the University of Delhi. As an American, I was aghast at the poverty and the minimal lives lived by tens of millions. Almost verbatim, this is what I was told, “We have a solution to this misery: an electric grid. When we electrify a village, everything changes. Someone gets a television — maybe an old black-and-white one, but Indians are good at keeping things running — and then expectations go up, hygiene improves, and birth rates go down.”

He added, “It works.”

That, maybe, is why today India is one of the leaders in building electric capacity of all kinds, including an ambitious nuclear program.

Electricity provides a solution in Africa, but much of the installed electric capacity is old, serves only urban areas and dates back to the colonial era.

In Africa and South America, I have seen electricity transform lives. An electric supply leads to the ability of villages to move basically from the Iron Age to the Ion Age.

I saw this acutely in my childhood in Africa. An electrified village can keep its food supply from rotting, grind its grain instead of shipping it to a mill, allow local businesses to get a footing, and limit family size. But mostly the young, whether through television or radio, are inspired to greater expectations, to horizons beyond the squalor and poverty that has been their inheritance.

The European media have been covering the African population flood with intensity, particularly the BBC. Yet much of this has had a hand-wringing quality.

As we see the lethality of electricity failure in Florida, following Irma, we again get a sharp lesson in the value to human life of electricity, unique in service to human kind.

If Africa is not to become a huge and permanent humanitarian crisis, affecting the whole world, it needs to get in on the electric solution. Ideally, this should be first with the fuels available: sun and wind. These are peculiarly suited to Africa: poor, desperate Africa where people hurt so much, every day.

 

Photo: ACCRA, GHANA – MARCH 4, 2012: Unidentified Ghanaian people at the market in Ghana. People of Ghana suffer of poverty due to the unstable economic situation. Credit: Anton_Ivanov / Shutterstock.com

Electricity Is the Big Future Winner for Cars, Even Small Planes

electric car charging

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Electricity, the world’s silent workhorse for a century, is about to conquer new worlds.

While electric cars are coming on fast, their acceptance will speed up geometrically in the next decade, according to an extraordinary new study by RethinkX, a San Francisco-based research group and think tank. Indeed, the group is predicting a true revolution in electrified transportation.

In this revolution, futuristic companies with a lot of talent and a lot of money — like Uber, Google and Amazon — will be seminal players. Old-line car companies and the oil companies will have to deal with a new order in which their roles could be dramatically diminished.

The big winner in this transportation future is electricity. Even the electric airplane — an idea about as old as aviation — is surging forward.

While RethinkX raised the curtain on the future of ground transportation in its new study, Uber raised the curtain on the future of the electric airplane this month at its Elevate conference in Dallas. More than 500 aviation enthusiasts attended the conference: dreamers, designers, builders — and even venture capital investors, who have already signed their checks. Dozens of designs for small electric airplanes, using multiple rotors and batteries, were on display. Enthusiasm was incandescent.

This July, small, electric pilotless aircraft — crosses between drones and helicopters — are scheduled to go into service in Dubai. They are supposed to ferry single passengers from their hotels and other gathering points to airports and recreation centers in the largest and most populous city in the United Arab Emirates.

These small aircraft, with electric motors and batteries, have an endurance time of about 30 minutes. EHang, a Chinese company, developed them.

If Uber, and more than a dozen other U.S. companies have their way, similar aircraft will one day take their place in the skies of America and other advanced nations. Uber hopes to test-fly an electric airplane in 2020.

According to RethinkX, the private car is about to disappear, or to be rapidly reduced in importance. The report — which might boost the stock of futuristic companies and electric utilities, and depress the stock of oil companies and old-line car makers and oil companies — is making waves in the far reaches of corporate thinking.

Tony Seba, co-founder of RethinkX and co-author of the report, told me that mainstream analysts are not yet on board with the changes, which will rock the automobile, oil and electric industries. They have not understood the impact of technological convergence, he said.

He sees a future, about to happen, in which driverless electric cars, owned not by individuals, but rather by transportation companies like Uber, flood the streets, to be summoned by phone and directed by voice: “Take me out to the ballgame.”

Seba, an MIT-trained engineer and student of what he calls “disruption,” told me he expects a convergence between electric vehicles, automated driving and ride-sharing will come soon, reducing the number of vehicles on U.S. roads from 247 million in 2020 to 44 million in 2030.

“The average family will save $5,600 in transportation costs,” Seba says.

Apart from the transport companies, the big winner will be the utilities that will see a demand growth of 18 percent, Seba predicts. He believes present infrastructure can accommodate this growth surge because demand will be mostly off-peak.

There are similar expectations of a golden future for small, electric, vertical takeoff airplanes, incorporating drone and other technologies. The limit for the aircraft, which use lithium batteries, is the batteries. But the enthusiasts gathered at Uber’s conference say flight is possible now with present-day batteries and these will only get better.

Richard Whittle, a leading aviation journalist and author who chaired an Elevate session, told me, “It was a pretty impressive event.”

While the arguments by Seba and his co-author James Arbib, a Silicon Valley entrepreneur and philanthropist, point to an electrified transportation future, I have one question: Will people give up the personal, primal pleasure of owning a car?

Seba and Arbib think so, pointing out that people used to take pride in their LP and CD collections, but now they access their music electronically.

The future is pulling up on a highway near you; it may also be flying overhead.

 

Photo: Håkan Dahlström, “Electric car charging station” 2013. Used under the Creative Commons Attributions 2.0 Generic License.

Electricity Is the Gift That Can Keep on Giving in Africa

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Photo: South Africa – August 24, 2014: African woman with child collecting water from the river on the road leading to local Game Reserve.

He is generic Africa Man. You can see him everywhere, walking barefoot across the Savannah and desert landscapes. He is on a mission that gets harder as time goes on.

His mission is to find enough wood — a few dry sticks here, some roots there — to make a fire for a hot meal and to bathe. He walks and walks, adding a stick and a piece of scrub wood to the bundle carried, in the traditional way, on his head.

Generic Africa Woman is busy, too. Her mission is to draw water. She carries a container on her head, filled with water from a distant well, to make dinner — a meal of maize (corn) porridge with maybe a stew of some meat or even caterpillar — and to bathe.

African life is picturesque, but it is not pretty. Hardship is in daily attendance in much of Africa, blighted from deforestation and polluted water.

Yet Western aid has not been easily delivered. Much of it has been stolen, some of it has been misapplied and some of it has led to aid dependency.

So, as an old Africa hand (I was born in what is now Zimbabwe, and left when I was 20 years old), I was elated to learn of a new and critical partnership just announced between the Edison Electric Institute (EEI) and the U.S. Department of State’s Power Africa initiative. Electricity anywhere is the gift that gives and gives, but especially when it begins to transform lives of hard struggle to ones that are less so.

When I was a boy, the opening of a power station or the building of a power line were events that brought forth celebration. Electricity signaled a better tomorrow.

When a village — whether it is in Bolivia, India or Uganda — is electrified, good things flow. A simple hotplate replaces days of firewood collection and those who can read can do so after the sun sets: hygiene improves, education is facilitated and expectations soar.

When the shantytowns that surround Johannesburg, South Africa, were electrified, the productivity of workers who flood into the city every day went up. Simply, they were saved from the drudgery of collecting animal droppings, wood scraps and other combustible stuff to burn.

The colonizers of Africa realized the need for electricity. Hence, in my part of the continent, two great dams were built on the Zambezi River: the Kariba, between Zimbabwe and Zambia, and the Cahora Bassa in Mozambique.

As a very young reporter, I covered the construction of the Kariba Dam, and its near destruction by unusually heavy flooding, in 1957. It has been the backbone of electricity supply for Zimbabwe and Zambia for more than 50 years.

But in recent years the dam, holding back the world’s largest, man-made impoundment of water, has begun to show deterioration in the concave wall, but especially behind the wall. The outflow has been eroding the plunge pool and threatening the wall. Hundreds of millions of dollars have had to be raised internationally for remediation, which is yet to begin in earnest. If the dam should fail, about 4 million people would die downstream.

The dam also has been producing much less electricity than it had been previously due to multi-year drought in the region. Copper production in Zambia, a vital industry, has had to be curtailed because of severe electric shortages. Blackouts are routine throughout the region.

Electricity is also a problem in South Africa, the industrial and commercial giant of Africa. Delay in ordering new generation, political interference in the decision processes and other problems, stemming from the end of apartheid, have damaged the system. Blackouts are affecting South Africa’s competitive posture.

Now the government is being romanced by Russia, hoping to sell it a new nuclear plant on favorable terms. It would join the two-unit, 1,860-MW Koeberg Nuclear Power Station, which has been operating since 1984. Unfortunately emerging countries have a fascination with big, showy projects, like the national airlines and steel mills that have cost them so dearly in their post-colonial phase.

EEI and the State Department need to guide the countries of Africa to today’s energy solutions, not yesterday’s. Africa needs to turn to its most abundant resource: sunshine. In North Africa, Morocco is building the world’s largest solar installation. Way to go.

The Efficient, Stupid Market for Nuclear Electricity

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By Llewellyn King

The market is a wondrous place. It ensures you can drink Scotch whisky in Cape Town and Moscow, or Washington and Tokyo, if you prefer. It distributes goods and services superbly, and it cannot be improved upon in seeking efficiency.

But it can’t think and it can’t plan; and it’s a cruel exterminator of the weak, the unready or, for that matter, the future.

Yet there are those who believe that the market has wisdom as well as efficiency. Not so.

If it were wise, or forward-looking, or sensitive, Mozart wouldn’t have died a pauper, and one of the greatest — if not the greatest architecturally — railway station ever built, Penn Station, wouldn’t have been demolished in 1963 to make way for the profit that could be squeezed out of the architectural deformity that replaced it: the Madison Square Garden/Penn Station horror in New York City.

End of the line

End of the line

Around Washington, Los Angeles and other cities are the traces of the tracks of the railroads and streetcar lines of yore. These were torn up when the market anointed the automobile as the uber-urban transport of the future. As Washington and Los Angeles drown in traffic, many wish the tracks — now mostly bike paths — were still there to carry the commuter trains and streetcars that are so badly needed in the most traffic-clogged cities.

Now the market, with its concentration on the present tense, is about to do another great mischief to the future. An abundance of natural gas is sending the market signals which threaten carbon-free nuclear plants before their life is run out, and before a time when nuclear electricity will again be cheaper than gas-generated electricity. World commodity prices are depressed at present, and no one believes that gas will always be the bargain it is today.

Two nuclear plants, Vermont Yankee in Vernon, Vt. and Kewaunee in Carlton, Wisc., have already been shuttered, and three plants on the Exelon Corp. system in the Midwest are in jeopardy. They’ve won a temporary reprieve because the Federal Energy Regulatory Commission (FERC) says the fact that they have round-the-clock reliability has to be taken into account against wind and solar, which don’t. In a twist, solar and wind have saved some nuclear for the while.

Natural gas, the market distorting fuel of the moment, is a greenhouse gas producer, although less so than coal. However gas, in the final analysis, could be as bad, or worse, than coal when you take into account the habitual losses of the stuff during extraction. Natural gas is almost pure methane. When this gets into the atmosphere, it’s a serious climate pollutant, maybe more so than carbon dioxide, which results when it is burned.

Taken together — methane leaks with the carbon dioxide emissions — and natural gas looks less and less friendly to the environment.

Whatever is said about nuclear, it’s the “Big Green” when it comes to the air. Unlike solar and wind, it’s available 24 hours a day, which is why three Midwest plants got their temporary reprieve by the FERC in August.

When President Obama goes to Paris to plead with the world for action on climate change in December, the market will be undercutting him at home, as more and more electricity is being generated by natural gas for no better reason than it’s cheap.

As with buying clothes or building with lumber, the cost of cheap is very high. The market says, “gas, gas, gas” because it’s cheap – now. The market isn’t responsible for the price tomorrow, or for the non-economic costs like climate change. 

But if you want a lot of electricity that disturbs very little of the world’s surface, and doesn’t put any carbon or methane into the air, the answer is nuclear: big, green nuclear. — For InsideSources.com

The Uber Effect on Electricity

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Leon Trotsky said, “You may not be interested in war, but war is interested in you.” The same thing might be said about disruptive technologies.
The U.S.. electric system, for example, may not be interested in disruptive technology, but disruptive technology is interested in it. What Uber and Lyft have done to the taxi industry worldwide is just beginning to happen to the electricity industry; and it could shock consumers – particularly the less affluent – as surely as though they had stuck their finger in an electrical outlet.
The disruptive revolution is not only happening here, but also in Europe, as Marc Boillot, senior vice president at Electricite de France (EDF), the giant French utility, writes in a new book.
Ironically, here in the United States, disruption of the otherwise peaceful world of electric generation and sale last year was a bumper one for electric stocks because of their tradition of paying dividends at a time when bond yields were low.
The first wave of disruption to electric generation has been a technology as benign as solar power units on rooftops, much favored by governments and by environmentalists as a green source of electricity. For the utilities, these rooftop generators are a threat to the integrity of the electrical grid. To counter this, utilities would like to see the self-generators pay more for the upkeep of the grid and the convenience it affords them.
Think of the grid as a series of spider webs built around utility companies serving particular population centers, and joined to each other so they can share electricity, depending on need and price.
Enter the self-generating homeowner, who by law is entitled to sell excess production back to the grid, or to buy on the grid when it is very cold or the sun isn’t shining, as at night. The system of selling back to the electric company is known as net metering.
Good deal? Yes, for the homeowner who can afford to install a unit or lease one from one of a growing number of companies that provide that service. Lousy deal for the full-time electricity customer who rents or lives in an apartment building.
There’s the rub: Who pays the cost of maintaining the grid while the rooftop entrepreneur uses it at will? Short answer: everyone else.
In reality, the poor get socked. Take Avenue A with big houses at one end and apartments and tenements at the other. The big houses — with their solar panels and owners' morally superior smiles — are being subsidized by the apartments and tenements. They have to pay to keep the grid viable, while the free-standing house – it doesn't have to be a mansion — gets a subsidy.
It's a thorny issue, akin to the person who can't use Uber or Lyft because he doesn't have a credit card or a smartphone, and has to hope that traditional taxi service will survive.
The electric utilities, from the behemoths to the smallest municipal distributor, see the solution in an equity fee for the self-generating customer's right to come on and off the grid, and for an appreciable difference between his selling and buying price. Solar proponents say, not fair: Solve your own problems. We are generating clean electricity and our presence is a national asset.
EDF's Boillot sees the solution in the utilities’ own technological leap forward: the so-called smart grid. This is the computerization of the grid so that it is more finely managed, waste is eliminated, and pricing structures for homes reflect the exact cost at the time of service. His advice was eagerly sought when he was in Washington recently, promoting his book.
While today’s solar may be a problem for the utilities, tomorrow’s may be more so. Homeowners who can afford it may be able to get off the grid altogether by using the battery in an all-electric car to tide them over during the sunless hours.
The industry is not taking this lying down: It's talking to the big solar firms, the regulators and, yes, to Elon Musk, founder of electric-car maker Tesla Motors. He may be the threat and he may be the savior; those all-electric cars will need a lot of charging, and stations for that are cropping up. There’s a ray of sunshine for the utilities, but it's quite a way off. Meanwhile, the rooftop disruption is here and now. — For the Hearst-New York Times Syndicate

Nuclear Teetering on the Economic Precipice

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This will be a bleak Christmas for the small Vermont community of Vernon. It is losing its economic mainstay. The owner of its proud, midsize nuclear plant, which has sustained the community for 42 years, Entergy, is closing the plant. Next year the only people working at the plant will be those shuttering it, taking out its fuel, securing it and beginning the process of turning it into a kind of tomb, a burial place for the hopes of a small town.

What may be a tragedy for Vernon may also be a harbinger of a larger, multilayered tragedy for the United States.

Nuclear – Big Green – is one of the most potent tools we have in our battle to clean the air and arrest or ameliorate climate change over time. I've named it Big Green because that is what it is: Nuclear power plants produce huge quantities of absolutely carbon-free electricity.

But many nuclear plants are in danger of being closed. Next year, for the first time in decades, there will be fewer than 100 making electricity. The principal culprit: cheap natural gas.

In today’s market, nuclear is not always the lowest-cost producer. Electricity was deregulated in much of the country in the 1990s, and today electricity is sold at the lowest cost, unless it is designated as “renewable” — effectively wind and solar, whose use is often mandated by a “renewable portfolio standard,” which varies from state to state.

Nuclear falls into the crevasse, which bedevils so much planning in markets, that favors the short term over the long term.

Today’s nuclear power plants operate with extraordinary efficiency, day in day out for decades, for 60 or more years with license extensions and with outages only for refueling. They were built for a market where long-lived, fixed-cost supplies were rolled in with those of variable cost. Social utility was a factor.

For 20 years nuclear might be the cheapest electricity. Then for another 20 years, coal or some other fuel might win the price war. But that old paradigm is shattered and nuclear, in some markets, is no longer the cheapest fuel — and it may be quite few years before it is again.

Markets are great equalizers, but they're also cruel exterminators. Nuclear power plants need to run full-out all the time. They can’t be revved up for peak load in the afternoon and idled in the night. Nuclear plants make power 24/7.

Nowadays, solar makes power at given times of day and wind, by its very nature, varies in its ability to make power. Natural gas is cheap and for now abundant, and its turbines can follow electric demand. It will probably have a price edge for 20 years until supply tightens. The American Petroleum Institute won't give a calculation of future supply, saying that the supply depends on future technology and government regulation.

Natural gas burns cleaner than coal, and is favored over coal for that reason. But it still pumps greenhouse gases into the atmosphere, though just about half of the assault on the atmosphere of coal.

The fate of nuclear depends on whether the supporters of Big Green can convince politicians that it has enough social value to mitigate its temporary price disadvantage against gas.

China and India are very mindful of the environmental superiority of nuclear. China has 22 power plants operating, 26 under construction, and more about to start construction. If there is validity to the recent agreement between Chinese President Xi Jinping and President Barack Obama, it is because China is worried about its own choking pollution and a fear of climate change on its long coastline, as well as its ever-increasing need for electricity.

Five nuclear power plants, if you count Vermont Yankee, will have closed this year, and five more are under construction in Tennessee, South Carolina and Georgia. After that the new plant pipeline is empty, but the number of plants in danger is growing. Even the mighty Exelon, the largest nuclear operator, is talking about closing three plants, and pessimists say as many as 15 plants could go in the next few years.

I'd note that the decisions now being made on nuclear closures are being made on economic grounds, not any of the controversies that have attended nuclear over the years. 

Current and temporary market conditions are dictating environmental and energy policy. Money is more important than climate, for now. — For the Hearst-New York Times Syndicate

Energy Experts Predict Crisis-Free Winter

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There is something extraordinary happening on Main Street, in the suburban strips, and at country stores: workers are lowering the prices on the signs for gasoline.
Veterans of the energy crisis that began in 1973 and has continued, with perturbations, ever since, are trying to get their heads around this enormous reversal of fortune: there is no energy crisis for any fuel in the United States as winter approaches. That was the message delivered loud and clear at the annual Energy Supply Forum of the United States Energy Association (USEA).
Indeed the main problem, if there is one, is that oversupply is driving down some fuel prices, like for oil and natural gas, which could result in higher prices later as producers curb production.
"Who would have believed it?" asked Barry Worthington, president of USEA.
This year the forum, which has been known to be filled with alarm and foreboding predictions, was full of robust confidence that the nation will breeze through the coming winter, and that consumers will pay less to stay cozy than they have for several winters — but especially the last one. Stocks of gas and oil are plentiful. It is not just that heating oil will be cheaper, nature will also play a part: the National Oceanic and Atmospheric Administration predicts a mild winter.
No one is expecting a repeat of last winter's "Polar Vortex," which brought some big utilities close to being unable to meet customer demand in the extreme cold. Mark McCullough, executive vice president for generating at American Electric Power (AEP), which serves customers in 11 states, described how the giant utility came close to the edge.
This winter, McCullough thinks, things will be fine. But he is less sanguine about the future of AEP and its ability to deliver electricity in 2016 and beyond, if the Environmental Protection Agency holds firm on its proposed rule to curb carbon emissions from coal-fired plants.
AEP, which straddles the Midwest, has the largest coal-fired fleet in the country. McCullough said that his company had just come off extensive efforts with the so-called mercury rule and now was plunged into a very difficult situation.
McCullough was joined by oil producers and refiners in worrying about another proposed rule from the EPA on ozone. Neither the utilities nor the oil producers and refiners feel that the EPA's proposed ozone regulation can be met.
In short, in a buoyant energy world, there are clouds forming. But unlike the last 41 years, these clouds are regulatory rather than resource generated; public policy in their origin, rather than in the scheming of foreign oil cartels. Indeed Robert Strout of BP confidently predicted that in a little more than 20 years, the United States could be energy self-sufficient.
The other problem going forward, in the new time of bounty, is energy infrastructure. The industry needs more pipelines to facilitate the shift from coal to gas; better infrastructure to get the new oil to the right refiners. (Refiners actually favor moving oil by train as well as by pipeline.)
USEA's Worthington, a veteran of energy crises of the past, said ruefully the other thing that might happen is that excessive domestic production and falling prices will lead to a period when producers will stall new production and prices will rise. "Markets do work," he said, commenting on the cycles of the hydrocarbon market.
For now, with international economic activity waning, and hydraulic fracking unlocking oil and gas at an astounding rate, this is a bonus time for the American consumer.
For people like myself, who have spent more than 40 years commenting and reporting on the bleak energy future, this is indeed a time of astonishment. We had heard predictions of doom if China industrialized, expectations of steadily declining U.S. production, and more and more of our wealth being exported to buy energy. Now, if Congress acts, we will be a serious exporter.
This winter of our discontent is made glorious summer by fracking, as Richard III did not quite say. Astonishing! –— For the Hearst-New York Times Syndicate

Sorry, but There Are Areas Where We Need More Government

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Who is going to finance advanced drugs? Who is going to guarantee the electric supply in 30 years? Whisper this: It will be the government.
 
In these two areas and others, the risks are now so large that private enterprise — so beloved in so many quarters — can't shoulder the risk alone. When development risks run into the billions of dollars, the market won't sanction private companies taking those risks.
 
Drug companies, among the richest of corporations, are running up against the the realities of risk. To develop a new drug, the pharmaceutical industry — known collectively as Big Pharma — has to commit well over a billion dollars.
 
It is a long and risky road. A need for the drug has to be established; a compound developed, after maybe thousands of failed efforts. Tests have to be conducted on animals, then in controlled human trials. If the drug works, the developers have to get it certified by the Food and Drug Administration. Then they have to market it and buy hugely expensive insurance — if they can get it — because it is almost a rite of passage that they will be sued.
 
Under this regime complex diseases, that may require multiple drugs, get short shrift not because the developers of drugs are greedy, but because they honestly cannot afford that kind of research.
 
The result is that the pharmaceutical companies increasingly look to universities and individual researchers — sometimes in teaching hospitals — to find new therapies; research that is paid for by the government through grants from the National Institutes of Health (NIH), the Centers for Disease Control, even from the Department of Defense. Even so, drug research is lagging and NIH is turning down eight out of 10 grant requests.
 
In electricity supply, too, there is trouble ahead.
 
The electric utilities, since deregulation, have become risk averse. Only two utilities, the Southern Company of Georgia and Scana Corporation of South Carolina are building new base-load nuclear power plants. These may be the last of the large nuclear power plants to be built in the United States. They are both located in states where electric utilities are regulated and where they can anticipate their costs being recovered in the rates, even during construction. The states are taking some of the risk.
 
For the rest of the country, and particularly the Northern and Western states, deregulation has had an unintended result: It has increased the risk of new construction and in so doing has set the utilities down the path of least resistance. They have turned to natural gas and — because of subsidies and tax breaks — to wind power, which has meant more gas power has to be installed to compensate for variance in the wind.
 
Coal is being edged out of the market for environmental reasons. So the electric utility industry is being pushed into a strategic position it has always said it wanted avoid: over-reliance on too few sources of power.
 
A kind of gas euphoria has gripped the nation as supplies from horizontal drilling and hydraulic fracturing have shot up. When the 99 reactors now operating go out of service, as they get to the end of their lives, there will be nothing comparable to replace them.
 
Many companies, some of them small, are working on new reactor designs that would put the United States back into world leadership in nuclear, while answering criticism of the big light water plants of today. Most of them would even burn nuclear waste.
 
In a time of deficits, the government tends, both with new electrical generating systems and in medical research, to scatter money in the hope that this will lead to the huge private commitments that are needed.
 
Sadly, this creates a dynamic in which companies rush in to consume the seed money without being able to bring the product to to fruition. It is a push rather than a pull dynamic.
 
Government works well, even efficiently, when it establishes a pull dynamic, as in the space program and in supercomputers, or most military procurement. The Pentagon does not issue funds for companies to experiment with weapons systems: It commissions them.
 
The government may have to commission new drugs and new power technologies in the high-risk future. — For the Hearst-New York Times Syndicate



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Power Africa: The Grass Is Singing

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It is a lasting memory of Africa: men walking dozens of miles searching for firewood. No stick is dismissed and is added to a bundle, mostly carried on the head.
 
In most of Africa, all 54 countries lying south of the Sahara Desert, food is a problem and so is something to cook it with. As populations have grown, so has destructive deforestation.
 
The problem is not confined to rural areas. It spreads out from the shanty towns that surround the cities. There is no electricity, so something must be burned. Of course, it means dismal living conditions. Life without electricity fits Hobbes' description of life after war: “solitary, poor, nasty, brutish, and short.”
 
Against this background, President Barack Obama has proposed a $7 billion electrification initiative. To use an expression adopted from T.S. Eliot but popular in Africa, the grass must be singing.
 
It is the right proposal at the right time, but it is also fraught with huge difficulties of implementation.
 
The administration is quick to admit that to bring electricity to the 70 percent of Africans who do not have it will cost $300 billion, more to maintain the deteriorating electric systems that already exist in and around the cities.
 
Barry Worthington, executive director of the United States Energy Association, part of the World Energy Council (WEC), and an expert on African energy, says the president is to be commended “at least for raising the issue of the people who have no electricity and what that does to economies as well as the lives of the people.”
 
For years, Worthington says, the WEC and organizations like the World Bank have been trying to draw attention to the pitiable electric supply situation in Africa.
 
But he also says the fix will not be quick. The 54 countries that make up Africa south of Sahara Desert are among the most difficult in which to do business.
 
To start, there is something a little dreamy about Obama's belief that the task will be undertaken by public-private partnerships. This is a concept more alluring in theory than in practice.
 
Obama will find that before they invest, corporations need to know what their chances of making money commensurate with the risks will be be. To do this they need political stability, respect for property rights, and a legal system where they can seek redress if things go wrong. These basics are in short supply in nearly all over Sub-Saharan Africa, with the possible exception of South Africa.
 
But looming above all is the destructive force of corruption. Corruption in Africa is interpreted as capitalism in practice. It has no shame; it is the way of the world.
 
In Zambia, for example, western mining companies that had operated copper mines there before and after a period of nationalization pulled out a decade ago abandoning hundreds of millions in new investment because corruption — sometimes operating as a kind of political protection money – became so severe that the mines could not operate and needed investment was wasted. The Chinese became major players.
 
Two years ago, it appeared the Chinese had found new ways of dealing with the corruption issue but that seems to be faltering. Ghana is awash with Chinese freelance gold prospectors, who were initially encouraged to come and pan for alluvial gold; now they are being driven from the mining claims by corrupt licensing officials and gangs of thugs. China is not exempt.
 
Africa is rich in energy with coal, gas, oil, rivers suitable for hydroelectrical development, sunshine and uranium. Yet global non-governmental organizations (NGOs) have a proprietorial attitude to Africa, and they subscribe to a kind of environmental imperialism in which only “renewable” technologies that get their seal of approval should be pursued.
 
Hardly had Obama finished his speech than Emira Woods of the Institute for Policy Studies was on the PBS NewsHour denouncing coal, gas and hydro as environmentally unacceptable African power systems. One assumes that leaves wind and solar; not enough heft there to lift up a continent.
 
There have been electric power successes in countries like Botswana, Cameroon and Tanzania. Worthington says: “At least the president has shone a light on the crisis. The need is great.”
 
The grass may indeed be singing, but softly. — For the Hearst-New York Times Syndicate

 

Obama and Energy: What He Can and Can’t Do

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When the Obama administration seeks to explain its oil policy, it changes the subject mid-sentence.
 
The most frequent practitioner of this verbal contortion is the president's press secretary, Jay Carney. It is as though he's a magician who has promised to pull a live rabbit from his top hat. This conjurer stands before his audience, recites some incantations and, poof, retrieves not a live rabbit, but a dead chicken.
 
Carney, like others in the administration, starts talking about oil and switches to talking about "alternatives." The alternatives, with the exception of the nettlesome subject of biofuels (nettlesome because they produce little or no energy above what's invested in producing them), are ways of making electricity.
 
The administration is adept at confusing these almost unrelated subjects.
 
Oil is the stubborn problem. It affects every aspect of life and prosperity, from the balance of payments to war planning, from economic growth to our relationship with China. Worse, it may be in constrained supply for the rest of time, as the BRIC countries – Brazil, Russia, India, and China – continue to suck up the precious commodity.
 
New finds and technology relieve the gloom for a while, but as demand rises and supply struggles to adjust, the problem remains – even though conservative think tanks and trade groups fight the notion of structural shortage.
 
But the United States isn't short of electricity and has no need ever to be. The electricity problem, if there is one, is environmental. Do we continue to burn coal on a massive scale while we search for an environmental fix? Or do we go wholeheartedly for nuclear – even though the Obama administration has abandoned the Yucca Mountain nuclear-waste repository in Nevada?
 
Solar, wind, geothermal, wave, and even biomass energy come under the rubric of "alternatives" – and they're all electricity technologies.
Then there's natural gas, thought to be exhausted in the United States, but now in abundance as a result of sophisticated technologies. That's another electricity fuel.
 
It's enthusiasm for alternatives (a longtime love affair on the left) that has encouraged the confusing White House utterances about a policy of "all of the above." It's this that has spread the public perception that the president can do something about the price of gasoline. And it's this that makes him vulnerable to scorn over debacles like the loan guarantees to the solar-array manufacturer Solyndra.
 
If Obama's reelection hopes aren't to be extinguished at the gas pump this November, he needs to separate oil from electricity – and the future from the present. He can't affect world oil prices, and he can't drill enough holes in the United States to change the world oil market.
 
But he can change the debate, and push down the price somewhat, by taking up arms not against the oil producers, but rather against the oil traders, who are the market movers. They are concentrated in the New York Mercantile Exchange, where they daily bid up the price in a spiral that is unrelated to cost. The price of oil is set by traders, who use rumor, fear, and the knowledge that producers will be silent partners to jack it up.
 
They aren't phantoms. They are real, flesh-and-blood people who manipulate the markets daily. What's happening to oil in the New York Mercantile Exchange is what happened to electricity prices in California when Enron's traders were running wild.
 
There have even been shenanigans at the Cushing tank farm in Oklahoma, the installation that President Obama toured on Thursday. He might do well to read Leah McGrath Goodman's Fortune magazine article this month, on how ConocoPhillips warehoused oil at Cushing. That oil came in by the same pipeline that the new owners have now reversed, she writes, and it's now flowing to refineries by the very route it came in, but at higher prices.
 
Goodman knows what she's talking about. The former Wall Street Journal reporter wrote The Asylum, the definitive book about the New York Mercantile Exchange and the madness of oil trading.
 
Obama could jawbone the traders while providing more resources and moral support to the Commodity Futures Trading Commission – the poodle trying to do a pit bull's work.