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Climate Goals 2022

Ed Reid's picture
Ed Reid 9884
Vice President, Marketing (Retired) / Executive Director (Retired) / President (Retired) Columbia Gas Distribution Companies / American Gas Cooling Center / Fire to Ice, Inc.

Industry Participation: Natural Gas Industry Research, Development and Demonstration Initiative Chair, Cooling Committee (1996-1999)   American Gas Association Marketing Section...

  • Member since 2003
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  • Jan 4, 2022
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“A goal without a plan is just a wish.”, Antoine de St. Exupery

The Biden Administration has announced numerous climate goals over the past year. These goals are not accompanied by a documented, coherent, comprehensive plan for achieving these goals, so they remain merely wishes for desired outcomes. Each of the Administration’s wishes requires supportive participation by individuals and small and large businesses. However, the absence of a plan leaves those participants unsure of when and how they will be required to participate. This suggests that not much is likely to happen until these issues are clarified.

The Administration’s climate wishes include:

  • A 50% reduction in US CO2 emissions by 2030
  • Elimination of US coal consumption by 2030
  • Net Zero electric generation CO2 emissions by 2035
  • Cessation of production of ICE vehicles by 2035
  • Net Zero US CO2 emissions by 2050

The Administration has identified expansion of renewables, electrification of current non-generation fossil fuel end uses, electric vehicles, energy efficiency and conservation as the paths to achieving its climate wishes.

The 50% reduction in US CO2 emissions, combined with the elimination of US coal consumption, would require closure of all existing US coal electric generation plants, eliminating approximately 25% of US electric generation capacity over the next 8 years. This reduction would also require massive reductions in the annual operating hours of US natural gas combined-cycle generation facilities.

The 50% reduction in US CO2 emissions would also require significant shifting from ICE vehicles to electric vehicles and shifting from natural gas and propane residential and commercial appliances and industrial end uses to electric end uses. The progressive electrification of the vehicle fleet and residential, commercial and industrial end uses would significantly increase electric demand and consumption while conventional fossil fuel generating capacity was being reduced. This would require not only replacing the existing fossil fuel generation capacity being abandoned or constrained, but also adding additional non-fossil generating capacity to satisfy the increased demand and consumption of the newly electrified end uses.

The premature closure or forced generation reductions in the electric generation sector would raise legal and regulatory issues regarding utility recovery of rate base investments as the generating plants cease to be “used and useful”. The electrification of current gas end uses would raise legal and regulatory issues in the gas industry, as utilities and non-utility fuel suppliers would be required to recover their investments from declining sales volumes, thus requiring rate increases.

The greatest risk in these transitions would be the closure of conventional, dispatchable generating facilities before sufficient dispatchable renewable generation facilities were online. This is the most critical issue which must ultimately be resolved by an Administration transition plan.

Regrettably, the handwriting is already on the wall regarding the likely Administration approach to the inevitable rate increases and the inevitable loss of reliability of the US electric grid. The Administration will deny any responsibility for events as they unfold, as they have already done regarding gasoline price increases, and will blame the affected industries for the problems.

It well might be that the plan for the transition is not available because the existence of such a plan would make the Administration’s denials of responsibility for its effects implausible.

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