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COVID, Carbon and Clean Energy

Since January, there’s been a lot of discussion, analysis and 151-proof worry about the COVID virus – understandably.  Viral impacts have produced (in less than six months) the biggest economic implosion since the 1930s, public health lockdowns spanning the planet, and a global death toll of (at this writing) 434,388, with nearly 116,000 of those confirmed deaths in the United States.

As you’d expect, there has also been a certain amount of silver-lining searching.  It’s only natural – as human beings, we look for the lesson, or what we could have done differently or what we might gain in times like these.  And with cars off the road and factories closing down, citizens of cities as remote from one another as Los Angeles, Beijing and New Delhi looked out the window and realized something truly strange was happening – the air was cleaner than it had been in years, even decades.  This four-minute clip from CBS has visuals that I won’t try to convey via keyboard.  For many, the spectacle of suddenly invisible (a.k.a. “normal”) air was startling.

With that kind of obvious impact, the next Big Question didn’t take long to surface:  if substantially shutting down Normal looks like this, what kind of impact is it having on the climate?  The early returns are in, and the answer is – not much.  NOAA reports globally averaged CO2 content of 417.07 ppm (parts per million) for May – up from 414.65 ppm in May 2019 and 411.24 ppm in May 2018.  There’s science behind this lack of change.  Earth, in effect, breathes – this was Charles Keeling’s great discovery in the late 1950s.  Atmospheric CO2 content rises and falls each year, bottoming out in October as most of Earth’s landmass hasn’t yet released carbon dioxide before the northern winter, and peaking in May before northern hemisphere forests have really begun to reabsorb it.  This means that COVID’s clean air aftereffects hit just as seasonal CO2 growth approached its peak.

Early estimates are that pandemic shutdowns led to an 8% drop in anthropogenic CO2 output, and that it would take 20-30% reductions for at least six months to put a dent in atmospheric readings.  As climatologist Katherine Hayhoe notes, imagine all the carbon we’ve put into the atmosphere as a pile of bricks.  We’ve been piling them up for about 250 years, more or less, and cutting a slice from latest brick dropped on top of the pile doesn’t make that much of a difference.  And we’re already seeing a rapid rebound in human CO2 output; “Things have happened very quickly”, in the words of one climatologist tracking current conditions as economic activity ramps back up again.

So if even something as disastrous as COVID can’t substantially alter the pace at which CO2 continues to pile up in the planet’s atmosphere, what will?  And if all the efforts made to clean up our energy act to date haven’t materially changed things, what can?  It would be easy to throw up our hands and assume that this spring’s lack of substantive results represents something permanent.

It doesn’t.

We are at an inflection point in how we produce and use energy and the pace of change is only accelerating.  Coal, the dirtiest source of electricity, is dying in multiple major economies.  June 10th marked 61 straight days that the United Kingdom didn’t generate one kilowatt from coal.  COVID has cut demand, so that and an unusually sunny May are part of the story, but the UK’s power grid has fundamentally changed.  A kilowatt of electricity cost as much as 600 grams of CO2 in 2012 – this spring, as little as 125.  And this took place even as the country’s population grew from 64.5 million in 2012 to 68.9 million this year.  In the US, electric output from all renewables surpassed electricity from coal for the first time since the 1880s, and coal has essentially collapsed as a utility fuel – from a peak in 2008 at around 23 quads (Quadrillion BTUs), it’s now producing around 12 quads, as the graph at the link above powerfully illustrates.

And it isn’t just a question of generating electricity.  Large-scale battery storage, a long-time dream of clean power advocates, is expanding rapidly.  15 small-scale 9.95 MWh systems will support peak generation while smoothing out price spikes in Texas, and the state symbolized by the oil rig is already the nation’s leading wind generator.  In California, PG&E is negotiating 1.7 GWh of storage with the state – more than ten times the power of the Texas sites mentioned above.  Perhaps the single most striking change is the cost of solar energy;  between 1980 and 2012, the cost of solar modules fell by a stunning 97%, and those costs keep dropping, just as solar cell efficiencies climb to as high as 47% in some experimental designs.  Underpinning all of this is a simple, unignorable fact – renewables are now less expensive than fossil energy sources.  Markets are responding – unevenly in some locations, swiftly in others but responding all the same.

The task that remains is immense.  There is considerable doubt whether the goal of limiting further warming to 1.5 degrees C to avoid the worst of potential climate damage can be reached.  There isn’t all that much time left.  Lofty pledges of zero-emission goals by companies and countries by 2050 are fine, but we’ve already used up 1.5% of the time remaining between 2020 and 2050 to achieve those goals.  And yet, for the first time, there now appear to be enough tools on the bench – technological and economic – to let us get started on meaningful work.

Clean Energy: Employment and Economic Impact

So, when we talk about someone employed in “clean energy”, what does that cover?  Like “manufacturing”, many things. The Bureau of Labor Statistics (BLS) defines and tracks employment by sector, but it’s not the most user-friendly resource.  So, while BLS notes that there were nearly 6,000 wind turbine service techs employed in May of 2020, it divides them among five different industries, ranging from utility construction to consulting to local government.  Sadly, a BLS plan to categorize and track clean energy jobs begun in 2010 was abandoned in 2013 during a federal budget shutdown, and has never resumed.

More generally, clean energy jobs fall into four broad categories – energy efficiency (home upgrades or commercial building retrofits); renewables (solar, wind, biogas, or geothermal energy); grid and storage (electrical engineering, battery tech, and charging stations); and cleaner vehicles and fuels (hybrid and electric vehicle manufacturing or biofuel production).  Altogether, more than 3.3 million Americans work in one of these fields, and it’s worth noting that energy efficiency alone employed more than twice as many people as all fossil energy sectors combined.

Like nearly everybody else, clean energy workers have taken a hit in this economy.  About 147,000 jobs were eliminated in March, and April totals nearly tripled that.  More than 590,000 jobs in the sector evaporated by April 30th, two months ahead of projections by BW Research.  The same analysts now expect around ¼ of all green energy jobs to be gone by June 30th, some 850,000 in all.

Under the circumstances, this isn’t surprising.  Homeowners are unlikely to invite insulation crews into their homes in the midst of a pandemic.  Financial chaos means that banks are less likely to lend on large-scale clean energy deployments.  Cities facing budgets collapsing under tax shortfalls are going to emphasize essential services before clean energy buildouts.  And utilities are facing tumbling energy demand.  IEA estimates that from February through April, global demand for energy dropped 6%, the equivalent of all of India.  American energy demand is set to drop 9%, according to the same report.

Whatever the course of economic contraction and recovery, there are certain irreducible advantages to jobs in these industries.  To begin with, they tend to be site-specific.  Many renewable energy jobs are unlikely to be outsourced – those building and maintaining a thermal solar plant in Arizona, for example, are going to build and maintain it in that location for its useful life.  The same holds true for energy efficiency professionals – the homes and buildings in the United States aren’t going to offshore themselves.

Many skilled green energy jobs pay relatively well, can boost stressed economies and don’t require four-year degrees.  Wind turbine techs, for example, exemplify this beneficial clustering.  Wind turbines require regular service and maintenance, and wind farms are located largely in rural areas in the Midwest and southern Plains.  Technicians tend to live in smaller cities or towns near these sites, supporting the local tax base.  Median income for a turbine technician in 2019 was $52,910, which could go a long way in Russell County, Kansas or Alliance, Nebraska.  And training for the field takes one or two years, depending on program and specialization. Median income for solar installers was lower, but in 2019 stood at $44,890 per year, and for insulation crews, median income in 2019 was $44,180,

The issue, at least for now, is that the three specific categories mentioned above don’t employ very many Americans – about 75,000 in all in 2018 and 2019, according to BLS.  But broaden the focus, and green energy’s economic becomes clearer – and bigger.  Wind energy’s total economic footprint alone is already substantial.  In 2018, 530 plants in 43 states produced components – blades, nacelles, turbines, gearing and digital control systems. Outsourcing of some of this manufacturing is possible, but given the size and weight of components as turbines grow taller, is likely to remain largely here at home.  Moreover, the Department of Energy estimates as many as 600,000 jobs in all subsectors of wind energy in less than 30 years.

This kind of job generation potential is what makes remaking America’s energy system so important to inclusive economic recovery.  Utilities, states and cities are already beginning to implement plans to change how we generate and distribute energy in a carbon-constrained world.  These efforts have been patchy and slow, and to date unlikely to meet even minimal Paris Agreement standards.  But under the right circumstances, policy changes, like technological changes, can happen quickly.  Emphasizing the very real benefits of more clean energy jobs may help speed that vital process.

COVID-19 Impacts: Ethanol and Its Discontents

Carnage in the conventional energy sector has drawn a lot of attention in the past few weeks.  But the collapse of recent months was presaged by mediocre performance stretching back literally years.  Total returns for the Standard & Poor Energy Sector for 2019, including dividends, were a paltry 6%.  And for the entire decade of 2010-2019, the same sector was up 34%, by far the worst performance of the 11 sectors S&P tracks.  The fracking revolution, it turns out, created a world awash in oil and gas, but didn’t do much to help the industry that created it.

Which brings us to a related question – if oil & gas are in trouble from COVID-19 and from a decade of overproduction and low prices, what has the ongoing turmoil done to alternative fuels?  In particular, since KC Clean Cities operates in the biofueled, beating heart of the Midwest, what’s happened to biodiesel and (particularly) ethanol?

A bit of backstory:   more than 95% of vehicle gasoline sold in the US is a 10% ethanol blend.  There are several reasons for this.  Until about 15 years ago, a compound known as MTBE (methyl tertiary-butyl ether) was blended with gasoline to add oxygen.  As a result, gasoline burned cleaner, and cut smog-forming chemicals and toxins like benzene in exhaust.  But there were problems – MTBE leaked into groundwater from gas station tanks, creating water quality problems.  Moreover, it’s listed as a potential carcinogen.  Enter ethanol, exit MTBE with the Energy Policy Act of 2005.

Like MTBE, ethanol adds oxygen to gasoline and cuts smog-forming emissions.  Unlike MTBE, it’s also a way for America to deal with its massive agricultural surpluses by distilling a value-added product from corn. (It’s worth noting that ethanol now accounts for 40% of all the corn we grow.)

With the Energy Independence & Security Act of 2007, Congress created a mandate that steadily increasing amounts of renewables would be blended into America’s fuel supply – 36 billion gallons by 2022.  This is the Renewable Fuels Standard, which has been hotly debated over the last few years in Washington and elsewhere.

So far so good.  Refineries and fuel importers had a choice – they could blend steadily increasing amounts of renewable fuels.  Or, if they didn’t want to, they could use RINs – Renewable Inventory Numbers – attached to each gallon of renewable fuel produced.  Pecos Pete’s refinery has already hit their required volume of ethanol blended with gasoline for the year, but they keep on blending.  Why?  Because Brownsville Bob’s refinery hasn’t blended any ethanol into their gasoline.  However, Bob can stay in compliance by buying RINs from Pecos Pete, with the price set by the RIN market.

There’s also been a safety valve built into the system, called the Small Refinery Exemption or SRE.  “Small” is relative, but refineries with less than 75,000 barrels per day as of 2006 qualify, and can petition EPA to be excused from renewable fuel blending.  And this is where the fur begins to fly.  Between 2016 and 2018, the EPA granted a total of 85 small refinery exemptions, a big jump that removed a total of 4 billion gallons of mandated demand from the market.  This has been a sore spot with farmers, but hardly the only one.  The ongoing trade war with China has dried up what was a major market for ethanol, corn and distiller’s grain, a byproduct of the ethanol production process used as animal feed.  Allowing year-round sales of E-15 – that is, gasoline that is 15% ethanol by volume hasn’t made much of a dent, since relatively few gas stations sell it even though all light-duty gasoline vehicles 2001 or newer are approved to use E15.

And now, COVID.  Just as Texas and Oklahoma oil producers and refineries don’t have any place left to store their crude and refined products as consumer demand collapses, ethanol producers are running out of storage.  Federal Reserve research shows US ethanol production down nearly 50% since the beginning of 2020.  73 out of 200 total plants nationwide are shut down, while another 71 are on reduced production schedules.  At least two dozen ethanol plants are now producing alcohol for hand sanitizer, but at low volume, much of which will be donated anyway.

For the time being, the sector seems to be shaking its way into stasis.  Whatever shape the ethanol industry takes in 2021 and beyond will depend for now on what the virus does– and how we respond – in 2020.

For additional details on why this matters, please check out our guest blog posting by David VanderGriend of the Urban Air Institute.  Fuel blending standards can sound arcane, and the details of ethanol and corn and agriculture seem like something taking place in distant, rural counties.  They’re not.  They impact the lives of residents of metro Kansas City every day, and at the fundamental level of our own health.

Federal Highway Administration Guidance for Increased Natural Gas Weight Allowance

Section 127(s) of Title 23 of the United States Code, as amended by the Consolidated Appropriations Act of 2019 (PL 116-6), increases the weight limit for natural gas vehicles operating on the interstate Highway System by an extra 2,000 lbs. This increases the limit from 80,000 lbs to 82,000 lbs.

Federal Highway Administration issued a departmental memorandum providing further guidance for this weight allowance.

FHWA Guidance includes the following:

  1. State authorities must allow the additional weight on the Interstate Highway System.
  2. State authorities must provide reasonable access to the Interstate.
  3. Weight allowance applies beyond the Gross Vehicle Weight (extends to single axel, tandem axel and bridge weight formulas limits).
  4. Weight allowance must be taken in addition to other weight allowances.

Follow this link below to access the full PDF provided by NVGAmerica. https://www.ngvamerica.org/wp-content/uploads/2020/01/NGV-Weight-Allowance-Guidance.pdf

Case Study: School District’s Propane Buses Go Beyond Cost Savings

District: Grain Valley School District
Industry: Education
Location: Grain Valley, Missouri
Vehicles: (14) 2018 IC Bus CE Series propane autogas-fueled buses
Fueling: On-site propane autogas station

Challenge
With aging diesel buses to replace, a Missouri school district looked to alternative fuel options that would save money on fuel and maintenance.

Result
The Grain Valley School District purchased 14 propane school buses. The new buses joined a 49-bus fleet that transports 2,800 students to school from suburban and exurban neighborhoods.

Focus on Cost-Cutting
Over the years Missouri state reimbursements for school transportation have dropped from 75 percent to 16 to 20 percent. School districts in the state have had to tap their own general school funds to make up the shortfall.

To help save money, the Grain Valley district considered alternative fuels for its new school buses and comparing compressed natural gas (CNG) and propane autogas. District representatives attended an alternative fuels workshop hosted by Kansas City Regional Clean Cities, a Metropolitan Energy Center program. The district considered various fuels but “the vehicle costs and fueling station costs for CNG were much higher versus propane,” said Shawn Brady, director of transportation.

The district decided to purchase 14 propane buses in 2018 to replace diesel buses of 2001 and 2002 model years. Brady researched and applied for a grant from the U.S. Department of Energy through Kansas City Regional Clean Cities to assist with the purchase costs of the buses.

Preparing for Propane Autogas
To fuel the new buses, the district entered into a contract with their local propane provider, Ferrellgas. A fueling station with two 1,000-gallon tanks was built in the school district’s bus parking lot in April 2018. “It saves time not to have to travel to refuel,” Brady noted.

Infrastructure costs for propane are the lowest of any fuel; alternative or conventional. For Grain Valley schools, the start-up cost for the fueling station totaled $16,500. “We received a 45 percent grant from Metropolitan Energy Center for the installation of our propane fueling station,” Brady said. The center’s grant amounted to $7,425. “The fueling station cost us only $9,075 after the grant.”

Before putting the new buses on the district’s routes, drivers received training in propane bus operation. “Our bus vendor provided training on how to properly operate the buses and maximize fuel efficiency,” Brady said. The district’s technicians traveled to the bus manufacturer’s factory in Tulsa, Oklahoma, for a complimentary week-long training course on maintenance. The district didn’t need to make changes to its bus repair facility. Requirements for a propane vehicle service facility are generally the same as those for conventionally fueled vehicles.

Financial Benefits
After tapping grants for purchase assistance, each new bus cost about $250 more than a comparable diesel bus. District officials say that the higher initial cost can be quickly recouped in fuel savings.

In fact, by adding propane buses to its fleet, Grain Valley School District has noted savings on both fuel and maintenance. On average, propane autogas costs up to 50 percent less than diesel. As part of its Grain Valley Schools propane bus and fueling setupnegotiated contract, Grain Valley paid a locked-in rate of $1.20 per gallon of propane in 2018-1019. For the 2019-2020 school year, the district pays $1.15 per gallon. For comparison, the district pays $2.31 per gallon on average for diesel.

Each bus in the district runs about 9,000 miles per year. For the 2018-2019 school year, fuel savings amounted to about $14,500. “The district’s increased savings year after year will allow the transportation department to serve as a better steward of taxpayer money,” said Brady.

Additional savings come from the reduced maintenance. With propane autogas, no exhaust after-treatment or diesel emissions fluids are required like with diesel to meet today’s strict emissions regulations. Propane vehicles don’t need particulate trap systems, turbochargers and intercoolers. Plus, propane uses less engine oil. All these factors contribute to the overall savings of time and money. The district’s technicians like the propane buses, Brady reports. “There are fewer parts and systems to have to maintain.”

However, Brady explained that “warranty work is challenging with no established shop in Kansas City.” He noted that IC does provide a traveling technician who assists his staff when they encounter maintenance issues. Kansas City Regional Clean Cities recommends fleet managers ensure that there is a local service shop to do warranty and continuing work on buses before purchasing.

Even more saving shows up for the district in the winter. Due to the chemical properties of propane autogas, the propane buses warm up faster and have no cold start issues. Unlike diesel vehicles, these buses can start up in temperatures as low as -40 degrees Fahrenheit. School districts report lower electric costs because the propane buses don’t rely on block heaters. “Our propane buses warmed up faster this past winter than the diesel buses,” Brady said.

Beyond the Bottom Line 

Grain Valley’s propane buses are helping the community’s air quality. Unlike diesel buses, propane vehicles emit virtually no particulate matter and, with substantially less nitrogen oxides (NOx). Buses fueled by propane also emit fewer greenhouse gases and total hydrocarbon emissions when compared to diesel buses. Propane’s quiet operation makes riding the bus more pleasant for passengers and safer for drivers, who are less distracted by engine noise. “We’ve benefitted from much cleaner air and much quieter buses running through neighborhoods,” said Brady.

Drivers also report that the propane dispenser pumps are just as fast or faster than the diesel fuel pump when it’s time to fill the tank. The district notes that it will be sure to order buses with 100-gallon fuel tanks going forward. “These were not available from IC when we placed our first order,” Brady said.

The district’s leadership in adopting an alternative fuel earned it a 2018 Agent of Change Award from the Metropolitan Energy Center, a Kansas City nonprofit catalyst for energy efficiency, economic development and environmental vitality.

The district’s plan to purchase seven more propane buses this year, and eventually move to an all-propane fleet, speaks to the administration’s belief in the benefits of this alternative fuel for their students, drivers and overall community.

“Our district made the decision on propane buses to save money. The environmental impact is an added benefit. There’s no reason to not make the move into propane now,” Brady said.

 

About MOPERC: The Missouri Propane Education & Research Council is a not-for-profit organization authorized by the Missouri Legislature. Dedicated to propane education and public awareness, MOPERC provides industry training, consumer safety, appliance rebates and market development programs. The council is composed of 15 volunteer directors and adm inistered by an executive staff. Visit PropaneMissouri.com.

GRAND OPENING for Mid-Kansas CNG Station

On Friday, November 10, Mid-Kansas CNG celebrated the Grand Opening of a new compressed natural gas (CNG) fueling station at 636 Thompson Street in Kingman, with a ribbon cutting by the Kingman Area Chamber of Commerce and a luncheon. Owners, Mark Molitor and Mattie Giefer, hosted the event, along with representatives from Central Kansas Clean Cities (CKCC) and KGS, which featured demonstrations of CNG refueling and a tour of the station’s compressor system. The station is open to the public 24 hours daily for refueling of CNG vehicles from autos to tractor-trailers.

Mattie Giefer was looking for a cheaper fuel option for his fleet of vehicles with GCI Construction and turned to Mark Molitor, who is in the oil & gas business, for a solution. Together they formed Mid-Kansas CNG to fulfill the need for natural gas fueling in the Kingman area. After consultation with area trucking companies, a location on the US-54/US-400 corridor was selected. The station will fill a CNG fueling gap between Wichita, 50 miles to the east, and Garden City and Liberal, both about 175 miles west. Molitor and Giefer believe that CNG is a more economical and better environmental choice for transportation. They are open to inquiries about fleet fueling on the site.

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