1 A Rational Look at Climate Change Concerns Remarks by Kimball Rasmussen Deseret Power President & CEO for the Colorado Farm Bureau November 20, 2009 2 Todays Presentation Is global warming for real? What can we do about it? How much is this going to cost? Is global warming for real? What can we do about it? How much is this going to cost? 3 Mainstream Science sounding the climate change alarm World Meteorological Organization United Nations Environment Programme United Nations 4 Mainstream Science sounding the climate change alarm World Meteorological Organization United Nations Environment Programme Intergovernmental Panel on Climate Change (IPCC), 1988 Intergovernmental Panel on Climate Change (IPCC), 1988 United Nations 5 IPPC 4 th Assessment Report "Anthropogenic warming could lead to some impacts that are abrupt or irreversible, depending upon the rate and magnitude of the climate change." 6 Al Gore and the UN IPCC 7 United Nations IPCC Base year for all calculations is 1750 Roughly coincides with the Little Ice Age General warming recovery of 0.75C since Little Ice Age Warming peaked in 1998 Cooling trend this decade Base year for all calculations is 1750 Roughly coincides with the Little Ice Age General warming recovery of 0.75C since Little Ice Age Warming peaked in 1998 Cooling trend this decade 8 21 st Century Trend IPCC Models 9 many States in the central and eastern part of the country set new records for the coolest July ever in 115 years of record. Accordingly, cooling degree days were 8.4 percent below the average for the month of July and 12.0 percent below a warmer July 2008. Energy Information Administration (EIA), September, 2009 10 How much CO 2 is in the atmosphere? 11 Atmospheric Carbon Dioxide 1750: 275 PPM Today: 385 PPM 2099: 550 PPM 12 CO 2 in the atmosphere 13 US electric CO 2 person 90,338 attendance 35 people equal all atmospheric CO 2 10 equal all human- caused CO 2 (non- USA) 3 equal equal USA- caused CO 2 1 equals all U.S.A. electric-power CO 2 Ben Hill Griffin Stadium CO2 in the atmosphere 14 Greenhouse Theory 15 Watts/m 2 92 CO 2 s natural warming effect 16 Additional human-caused warming Watts/m 17 What is the theoretical global temperature change from USA Coal emissions? 18 IPCC Simple Climate Model Temperature Response Carbon dioxide forcing x Climate sensitivity Temperature response Carbon dioxide forcing x Climate sensitivity Temperature response 19 CO 2 Comparisons 36 billion tons of CO2 equivalent World 2 billion tons of CO2 U.S. coal sector 34 billion tons of CO2 World w/out USA coal 36 billion tons of CO2 equivalent World 2 billion tons of CO2 U.S. coal sector 34 billion tons of CO2 World w/out USA coal ( ( ) ) ( () = 541 ppm 385 + 20 U.S. Electric CO 2 Contribution T = 5.35 x ln ( ( ) ) 0.07 C x.81 = 21 U.S. Electric CO 2 Contribution 7/100 th of 1 C = 100% Curtailment But Federal Legislation calls for: 17% reductions by % reductions by 2050 But Federal Legislation calls for: 17% reductions by % reductions by 2050 Yields 3/100 th of 1 C 22 Potential effect of carbon legislation 3/100th of 1C 3/100th of 1C Changes to be felt in 100 years! 23 What is the Pain for zero Gain? 24 What is the Pain for zero Gain? 25 Average U.S. household burdened with energy tax of approximately $700 2,200/yr* Utah rural households expect a power tax of approximately $780 - $4,000/yr** Average U.S. household burdened with energy tax of approximately $700 2,200/yr* Utah rural households expect a power tax of approximately $780 - $4,000/yr** Energy Price Impacts **$49/ton mid-range estimate for CO 2 emissions 0 to 40% allowances *Congressional Budget Testimony to the U.S. Senate, May 7, 2009 26 Cap-and-trade Cap-and-TAX In reality we wont have winners and losers We will have losers and bigger losers! Every segment of the economy will take a hit! Cap-and-trade Cap-and-TAX In reality we wont have winners and losers We will have losers and bigger losers! Every segment of the economy will take a hit! Wealth Transfers 27 Cap and trade winners and losers Wealth Transfers 28 Unintended Consequences of Climate Legislation Developing countries have higher CO 2 emissions per GDP USA emits 516 tons CO 2 /mm$GDP China emits 2, 222 tons CO 2 /mm$GDP USA CO 2 reductions = Global CO 2 Increases Developing countries have higher CO 2 emissions per GDP USA emits 516 tons CO 2 /mm$GDP China emits 2, 222 tons CO 2 /mm$GDP USA CO 2 reductions = Global CO 2 Increases 29 China vs. U.S. Example 516 tons CO 2 /mm$GDP 2,222 tons CO 2 /mm$GDP 30 Source: National Energy Technology Laboratory, U.S. Department of Energy Source: National Energy Technology Laboratory, U.S. Department of Energy 31 Industry Outmigration Trends 32 What about the promise of renewable energy? 33 Studied the wind output during the BPA system peak period of November 23 rd through January 24 th Compared to actual BPA system load each of these weeks Bonneville Power Administration The Peak Load Weeks 34 Bonneville Power Administration Actuals Week Nov. 23, 08 Megawatts Data: Bonneville Power Administration Sun.Mon.Tues.Wed.Thur.Fri.Sat. 35 Bonneville Power Administration Actuals Week Nov. 30, 08 Megawatts Data: Bonneville Power Administration Sun.Mon.Tues.Wed.Thur.Fri.Sat. 36 Bonneville Power Administration Actuals Week Dec. 7, 08 Megawatts Data: Bonneville Power Administration Sun.Mon.Tues.Wed.Thur.Fri.Sat. 37 Bonneville Power Administration Actuals Week Dec. 14, 08 Megawatts Data: Bonneville Power Administration Sun.Mon.Tues.Wed.Thur.Fri.Sat BPA Peak Load 38 Bonneville Power Administration Actuals Week Dec. 21, 08 Megawatts Data: Bonneville Power Administration Sun.Mon.Tues.Wed.Thur.Fri.Sat. 39 Bonneville Power Administration Actuals Week Dec. 28, 08 Megawatts Data: Bonneville Power Administration Sun.Mon.Tues.Wed.Thur.Fri.Sat. 12/29 9:50 AM: wind generation increased 818 MW (1/2 of total wind capacity) in 30 minutes, and 1,068 MW (2/3 of total wind capacity) in 60 minutes. 40 Bonneville Power Administration Actuals Week Jan. 4, 09 Megawatts Data: Bonneville Power Administration Sun.Mon.Tues.Wed.Thur.Fri.Sat. 41 Bonneville Power Administration Actuals Week Jan. 11, 09 Megawatts Data: Bonneville Power Administration Sun.Mon.Tues.Wed.Thur.Fri.Sat. Beginning of eleven continuous days with nearly zero wind generation 42 Bonneville Power Administration Actuals Week Jan. 18, 09 Megawatts Data: Bonneville Power Administration Sun.Mon.Tues.Wed.Thur.Fri.Sat. Poor wind conditions continue 43 What about the promise of green jobs? 44 Jobs, jobs, jobs and jobs! Just remember these four words for what this legislation means: jobs, jobs, jobs, and jobs. Nancy Pelosi, Speaker of the House of Representatives Just remember these four words for what this legislation means: jobs, jobs, jobs, and jobs. Nancy Pelosi, Speaker of the House of Representatives 45 U.S. Department of Energy 20% by 2030 jobs forecast based on Jobs and Economic Development Impact Model JEDI U.S. Department of Energy 20% by 2030 jobs forecast based on Jobs and Economic Development Impact Model JEDI 46 What is a Green Job Three green job categories: DirectProject specific construction, turbine manufacturing, staff, etc 28% IndirectSupport activities such as cement quarry and trucking operations 72% InducedResults from worker spending, such as patronizing a restaurant 47 What is a Green Job Three green job categories: Manufacturing Construction Operations 48 We lost more jobs in one month than JEDI says we might gain in ten years through the retooled green policy! What is a Green Job 49 Static model no feedbacks for increased power rates in general economy Gross (not net) jobs counting no recognition of offsetting effects on employment in other energy sectors Static model no feedbacks for increased power rates in general economy Gross (not net) jobs counting no recognition of offsetting effects on employment in other energy sectors JEDI Model Caveats 50 Wind Vs. Coal Equivalent Apples to Apples Case Capital investment for coal $105 billion less than wind Coal operating costs 40% below wind Each new green job removes 1.5 to 2.7 coal jobs Apples to Apples Case Capital investment for coal $105 billion less than wind Coal operating costs 40% below wind Each new green job removes 1.5 to 2.7 coal jobs 51 The 0.03 C degree change from U.S. electric sector is negligible The outmigration of industry will result in net global increases of CO 2 Carbon policy creates winners and losers and will have devastating economic effects Summary 52 Summary Claims of green jobs is grossly overstated The impacts of carbon legislation will have devastating effects on families and the economy There is no rush we have time to get energy policy right Claims of green jobs is grossly overstated The impacts of carbon legislation will have devastating effects on families and the economy There is no rush we have time to get energy policy right 53 When a people do not know what to do they should take great care that they Summary do not do they know not what! Abigail Adams to Thomas Jefferson 54 We agree with the Farm Bureau! 55 56 A Rational Look at Climate Change Concerns Remarks by Kimball Rasmussen Deseret Power President & CEO for the Colorado Farm Bureau November 20, 2009