Weekend Digest #14
A Curated Assortment of Scrolls
Rise and shine, Barbarians.
Let’s get into it.
Housekeeping
Save Pickering! ft. Edgardo Sepulveda. Pickering NPP in Ontario needs refurbishment. Of course, there are malefactors trying to prevent that. How did we get here? Edgardo joined me to talk about the history of nuclear power and public utilities in Ontario. There’s so much great information from Edgardo in this one I’m going to have to relisten to it.
West Virginia: Based and Nukepilled??? This week West Virginia divested from BlackRock over its ESG commitments and made progress on a bill to repeal its nuclear moratorium. I think this is the way forward. Read this piece to learn more.
News
Below zero blackouts? Mitch and Isaac over at the Center for the American Experiment published a report this week about the potential for blackouts in the MISO area. The causes? Overinvestment in unreliable power like wind and solar, dwindling coal supplies, and a tight natural gas supply. Oh and the fact that it gets cold in the Midwest.
War between energy titans could shape New England climate. Avangrid, owned by Spanish energy giant Iberdrola, and NextEra are duking it out in Robert Frost country over transmission. Avangrid wants transmission from Quebec Hydro, NextEra’s defending its nuclear plant in New Hampshire. The fight has converged on a 146-mile transmission project Maine voters just rejected. Read the piece for the details of the fight—it’s fascinating. But I want to mention one thing: potentially displacing domestic nuclear for imported hydro is, on its face, a bad deal. Imports aren’t inherently bad, of course, but making yourself reliant on another country when things get bad makes you more vulnerable than you otherwise would be. People concerned only with “fair market entry” don’t or won’t understand that. When it comes to running the grid what and where are elements you can’t bulldoze with cute models. Also: Sierra Club threw in with the ballot against the transmission line with NextEra. Go figure.
Food for Thought Part I: From an Energy Crisis to a Food Crisis? I can’t remember how I came across this piece, but I find out helpful. This fits the Black Cascade theme. Here’s the gist of the piece: “I believe food and agricultural commodities, and specifically staple crops are the next phase of the energy/natural gas/fertiliser dislocation. By staple crops here I’m referring to soybeans, corn and wheat which are essential to the global food supply. Why these crops in particular? Fertiliser is required to grow these crops at a scale sufficient to feed populations. Furthermore, corn and soybeans are the main feed grains used in the production of animal feed for cattle, pigs, sheep, etc, while wheat is the main ingredient for bread. So it should be very obvious how the rise natural gas prices will inevitably ripple (or whip) through the global food supply chain.” Conor Maguire, the author, provides some thoughtful caveats and additions to this situation. Worth reading.
It's time for Larry Fink to come clean about fossil fuels. Since the piece I wrote on WV this week features the one and only Larry Fink, the CEO behind BlackRock’s reckless ESG/net-zero by 2050 posture, I thought I’d include some of his double dealing. Alex Epstein published a letter from Fink to Texas lawmakers assuring them he’s not walking away from investments in oil and gas. It seems Mr. Fink is trying have it both ways. Good on Alex for exposing this two-faced cynicism.
Kathryn Huff, Nominee for Assistant Secretary for Nuclear Energy, Department of Energy. Kathryn Huff just won a nomination from the Biden administration. Congrats to her! I remember her being supportive of keeping Byron and Dresden open, an attitude I hope she spreads through the Department of Energy.
Commentary
I write you this missive from the Lone Star state. I’m out here to handle a family matter. What I’ve learned is that Texans keep a close eye on the weather forecast after Uri came through last year. No one knows how the Electricity Reliability Council of Texas (ERCOT) operates. Hard to blame them. It seems to be in a state of constant turmoil since the blackouts last year. Last week, I mentioned ERCOT’s short-staffed. This week, a pipeline company is threatening to cut off access to some of Vistra Corp’s power plants, Texas’s biggest power generator which serves around 400,000 Texas homes, over a financial dispute that began after Uri. And the Public Utilities Commission of Texas (PUCT) confessed their post-Uri market reforms are going to take longer than expected.
I wasn’t always like this. The old regulated-monopoly consensus around electricity made for a reliable network. Utilities plunged money into newer, bigger power plants and raised consumers’ base rate to pay for them. This worked so long as these investments drove down the price of electricity. And it did. Then the 70s happened and a confluence of bungled nuclear plants, environmental regulation, rising inflation, and two energy crises delegitimized both the consensus and the growth ideology that the utility industry self-servingly promoted. Sometimes history rhymes.
After 1978, when PURPA was passed, it allowed smaller generators to enter into the fray. The 1992 Energy Act made it so utilities had to provide them with transmission. It wasn’t so hard to make the move into wholesale electricity markets, like Texas’s, from there. The hope was that market efficiencies could realize, via competition and decentralization, greater freedom and lower rates with little downside. Well, that didn’t really pan out as we’re seeing. And my guess is that the 2020s will be to the RTO experiment what the 1970s were to regulated monopolies. Because Russell Gold is right, last year’s blackouts in Texas were just a warm-up.