Amateur Earthling

Now We’re Hedging With Wind

Price is not the only economic variable to consider in deciding what kind of generation a utility should build. Different kinds of power have different risks associated with them. This is important even if we set aside for the moment the climate risk associated with fossil fuels (e.g. the risk that Miami is going to sink beneath the waves forever within the lifetime of some people now reading this). It’s true even if we ignore the public health consequences of extracting and burning coal and natural gas. As former Colorado PUC chair Ron Binz has pointed out, risk should be an important variable in our planning decisions even within a purely financial, capitalistic framing of the utility resource planning process.

Utility financial risk comes largely from future fuel price uncertainty. Most utility resource planning decisions are made on the basis of expected future prices, without too much thought given to how well constrained those prices are. This is problematic, because building a new power plant is a long-term commitment to buying fuel, and while the guaranteed profits from building the plant go to the utility, the fuel bill goes to the customers. There’s a split incentive between a utility making a long-term commitment to buying fuel, and the customers that end up actually paying for it. Most PUCs also seem to assume that utility customers are pretty risk-tolerant — that we don’t have much desire to insulate ourselves from future fuel price fluctuations. It’s not clear to me how they justify this assumption.

What would happen if we forced the utilities to internalize fuel price risks? The textbook approach to managing financial risk from variable commodity prices is hedging, often with futures contracts (for an intro to futures check out this series on Khan Academy), but they only work as long as there are parties willing to take both sides of the bet. In theory producers want to protect themselves from falling prices, and consumers want to protect themselves from rising prices. Mark Bolinger at Lawrence Berkeley National Labs took a look at all this in a paper I just came across, entitled Wind Power as a Cost-effective Long-term Hedge Against Natural Gas Prices. He found that more than a couple of years into the future and the liquidity of the natural gas futures market dries up. In theory you could hedge 10 years out on the NYMEX exchange, but basically nobody does. Even at 2 years it’s slim!

Continue reading Now We’re Hedging With Wind

Hassalo on 8th: A Bicycle Superblock in Portland

I have some urban envy: a development under construction in the Lloyd neighborhood of Portland called Hassalo on 8th (almost like you’d buy it at Ikea…) has 657 apartments, 1,200 bike parking spaces, and 328 (underground) car parking spaces on 4 city blocks with car-free streets between them. They hope to land a grocer for one of the ground floors. Special attention to parking for families (cargo bikes and trailers). Bike Portland has more details.

One of the new buildings is 20 stories tall, but if everything on the superblock were built to 7 stories, I think overall it would have a similar FAR or probably close enough anyway.

And why is it we can’t we build something like this in Boulder?

Kevin Anderson and Getting to 2°C

Reading the the Copenhagen accords of 2009, it would seem that virtually the entire world has signed up to stabilize greenhouse gas concentrations in the atmosphere at levels that will keep warming below 2°C, consistent with the scientific understanding of the climate system, and on an equitable basis globally. Unfortunately, virtually nobody is considering policies that actually lead to that outcome. Among others, the International Energy Agency (IEA) notes that our current emissions trajectory is consistent with 6°C of warming by the end of the century, which is considered by many to be inconsistent with an organized global civilization. In fact, even if we implemented all the “reasonable” policies we’ve talked about so far (which we’re not doing) the outcome looks a lot more like 4°C than 2°C.

Yet almost nobody is willing to either give up on 2°C publicly, or — maybe more constructively — start a serious discussion about what scientifically grounded, equitable policies that are actually likely to result in less than 2°C of warming look like. Almost nobody, but not quite.

For the last several years Kevin Anderson and Alice Bows of the Tyndall Center for Climate Research in the UK have been trying to publicize this massive disconnect, and get policymakers and the public to acknowledge that in reality there are only radical futures to choose from — either a radical alteration of the climate, or the radical emissions reductions required to avoid it. There is no status quo option. Anderson and Bows are critical of both the scientific establishment for playing down this disconnect, and leaders for refusing to acknowledge in public what some of them understand very well in private.

This conversation isn’t going to go away any time soon. Some selections:

Here’s an hour-long invited talk by Anderson at the Cabot Institute from 2012:

Continue reading Kevin Anderson and Getting to 2°C

Why Your Big Move to the Big City May Be Your Last

Moving to the city seems to be a one-way trip, and a couple of new studies sheds some light on why.

People re-normalize risks that they are exposed to on a regular basis, while often over-estimating novel risks. Driving is vastly more dangerous than flying, but it’s much more common for people who drive regularly to fear flying. In the same way, “crime” is often cited as a risk associated with city living, but once you’ve been exposed to the risk for a long time, and it is familiar, the perceived severity of that risk decreases significantly.

At the same time, it turns out your mode of transportation — the way you pass through the world around you — affects your snap judgements about the people you encounter. Driving makes it much more likely that you will assume the worst about others, while walking predisposes you toward relating to them as human beings.

So once you’ve moved to the city, and begun to live an urban, walking life, it feels like a safer, homier, more human place to you.

Exploring a Carbon Price for Colorado

In May of 2013 I gave a talk at Clean Energy Action’s Global Warming Solutions Speaker Series in Boulder, on how we might structure a carbon pricing scheme in Colorado. You can also download a PDF of the slides and watch an edited version of that presentation via YouTube:

The short policy overview:

We should begin levying a modest carbon tax, in the range of $5 to $25/ton of CO2e.
The tax must be applied to the fossil fuels used in electricity generation (coal and natural gas). Ideally it should also be applied to gasoline, diesel, natural gas used outside the power sector, and fugitive methane emissions from the oil and gas industry, but those are less important for the moment.
New electricity generation resources must be allowed to compete economically with the operation of existing carbon-intensive facilities, and fuel costs must not be blindly passed through to consumers without either rigorous regulatory oversight, or utilities sharing fuel price risk.
Carbon tax revenues should be spent on emissions mitigation, providing reliable, low-cost financing for energy efficiency measures and a standard-offer contract with modest performance-based returns for new renewable generation.
Over time the carbon price should be increased and applied uniformly across all segments of the economy, with the eventual integration of consumption based emissions footprinting for imported goods.

But wait… I can hear you saying, I thought James Hansen and others were rallying support for a revenue neutral carbon tax proposal? Even the arch-conservative American Enterprise Institute was looking into it, weren’t they?

A carbon price alone is not enough to get the job done — there are other pieces of our energy markets that also have to be fixed to get us to carbon zero.

Continue reading Exploring a Carbon Price for Colorado

New Walkscore and Location Affordability Tools

A couple of already pretty awesome publicly available tools for looking at transportation, land-use, and affordability have just gotten big upgrades, which is wonderful as Boulder heads into updating its Transportation Master Plan and the comprehensive housing strategy discussion over the next year.

First, WalkScore has done a big overhaul of their data and algorithms, and now they’re using real-world routes to determine the time of travel — it’s a great interactive tool for getting a quick idea of how accessible various locations are by mode — also interesting to see visually how something like the Foothills Parkway or US 36 acts as an impenetrable wall, increasing travel times because you have to go out of your way to cross them. All of the BHC Co-ops are in highly walkable locations, with at least decent access to transit and great (by US standards) access to bike facilities. Chrysalis is a “Walker’s Paradise”, just a couple of blocks from Pearl downtown.

I looked up the WalkScore ratings for both the Long’s Garden and Hogan-Pancost properties, which I’ve talked about recently in connection with human scale development (or rather, the lack thereof in Boulder…). Right now they’re both car-dependent — especially Hogan Pancost — but the area around Broadway and Iris could, if it were re-developed well, extend the largest contiguous walkable area within the city — rather than creating an isolated island of human scale urbanism, which is all you can ever get with a development at the margin, like Hogan Pancost, or even the Table Mesa shopping center — which on its own it’s fine, but it’s disconnected from the rest of the city from the pedestrian’s point of view. In Alex Steffen’s vocabulary, both NoBo and Table Mesa lack “deep walkability“, while the Long’s Garden area could potentially tap into the deepest pool we’ve got.

Second, the US DoT has worked with HUD and Chicago’s Center for Neighborhood Technology to develop a tool that allows you to explore the cost of living by location, including both housing and transportation costs — either typical for the region, or customized by your own travel preferences and rent/mortgage. You’d think this would be standard practice, but alas, it’s not. CNT has been doing this for a long time, but the Feds are only now picking up on it. And a lot of the mortgages that went belly up in 2008/2009 and which continue to under perform are the ones stranded in utterly auto-dependent exurban disaster areas. The tool takes the form of an interactive Location Affordability Index map. I love that it lets you build your own particular household, instead of having to go with the regional averages. I saw the story over at The Atlantic Cities first.

It’s really interesting to look at the location affordability of central Boulder vs. Longmont or Louisville — they’re actually not that different, especially if living in central Boulder means your household can ditch a car. Some of the rents I saw estimated in their tool for Boulder were pretty low though — I adjusted them up significantly, and central Boulder was still competitive if it meant one fewer vehicles or one fewer commuters.

A Carbon Price for Colorado

What follows is a more structured written exploration of the same ideas.

Continue reading A Carbon Price for Colorado

Warning: Faulty Reporting on US Coal Supplies

PEAK COAL REPORT: U.S. COAL “RESERVES” ARE INCORRECTLY CALCULATED, SUPPOSED 200-YEAR SUPPLY COULD RUN OUT IN 20 YEARS OR LESS

Federal Estimates Overstate Reserves by Including Coal That Cannot Be Mined Profitably; Production Already Down in All Major Coal Mining States… And Utility Consumers Are Facing Rising Energy Bill Prices.

Listen to Streaming Audio of the October 30 Hastings Group Media Teleconference

Download our newest reports in PDF form:

Warning: Faulty Reporting of US Coal Reserves

US Coal Costs 2004-2012

Coal Production Top 16 States

WASHINGTON, D.C. – October 30, 2013 – America does not have 200 years in coal “reserves” since much of the coal that is now left in the ground cannot be mined profitably, according to a major new report from the Boulder, CO-based nonprofit Clean Energy Action (CEA). The CEA analysis shows that the U.S. appears to have reached its “peak coal” point in 2008 and now faces a rocky future over the next 10-20 years of rising coal production costs, potentially more bankruptcies among coal mining companies, and higher fuel bills for utility consumers.

Continue reading Warning: Faulty Reporting on US Coal Supplies

The 2013 Rad-ish Council Candidate Forum

Last night seven Boulder city council candidates visited the Rad-ish Collective, an activist co-op that does a lot of volunteering behind the scenes of Boulder Food Rescue.

The candidates had some motley seating, including one stool made out of the back half of an old bike frame (Andrew Shoemaker) and a chair upholstered in what appeared to be a faux Yeti pelt (Sam Weaver). Half the walls were covered with murals, and the other half with event flyers, political literature, and all the daily household bookkeeping that goes into making a co-op run smoothly.

The crowd’s median age was probably under 25, and most of us sat on the floor. As the event progressed, more and more people filtered in, and those sitting shoulder to shoulder in the front slowly scooted forward until we were within reach of the candidates’ feet. Sam Weaver remarked at some point that it was probably the largest or second largest audience of any forum they’d attended, even though it was being held in a living room!

Continue reading The 2013 Rad-ish Council Candidate Forum

Groningen: The World’s Cycling City

Streetfilms shows us what a real cycling city looks like, in the Dutch university town of Groningen:

I can’t help but laugh and sigh whenever someone touts Boulder as a “world class cycling city”. We are so, so far from that. But hey, it’s good to have aspirational goals… like 50% of all trips done by bike. Maybe we just need to elect some young leftists to city council, like Groningen did in the 70s!

http://www.vimeo.com/moogaloop.swf?clip_id=76207227#at=0&server=www.vimeo.com&show_title=1&show_byline=1&show_portrait=0&color=&fullscreen=1