Top 8 energy news of 2017

* This is my article in BusinessWorld last January 2.

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This should have been a “Top 10” list but due to space constraints, I limited it to only eight, divided into four news stories each for global and national.

GLOBAL

1 “Non-news” to many media outlets but good and big news to me: NO major energy catastrophes in 2017. No major oil spill, no gas blowouts, no reactor meltdowns, no major infrastructure destroyed by natural disasters, and energy prices did not rebound to their 2014-2015 levels.

2 In June 2017, the British Petroleum (BP) Statistical Review of World Energy 2017 was released and among the highlights of that report are: (a) China and US remain the planet’s biggest energy consumers, (b) increases in oil, natural gas, nuclear and renewable energies (REs) but decline in coal use, (c) for big Asian economies, coal use remain very high especially in China, India, Japan, South Korea and Indonesia (see chart).

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3 In September 2017, the US Energy Information Administration (EIA) released its “International Energy Outlook 2017” and among its projections are (a) In 2040, fossil fuels (oil, natural gas and coal) and nuclear will supply about 83% of global total energy consumption; 8% from hydro and 9% combined from wind, solar, geothermal, other REs, and (b) coal use is projected to be stable until 2040 and declines in China to be offset by increased use in India.

4 In November 2017, the “America First Energy Conference” was organized by the Heartland Institute in Houston Texas to analyze US President Trump’s pronouncement of US global “energy dominance”. “Energy dominance” is defined on two key goals: (a) meet all US domestic demand and (b) export to markets around the world at a level where they can “influence the market.” The important lessons from the papers presented are that (i) the US can have energy dominance in oil, natural gas and coal, but (ii) US cannot and should not aspire to have dominance in nuclear and REs. It was a very educational conference and I was the only Asian in the conference hall.

NATIONAL

5 Hike in excise tax for oil products and coal under TRAIN but zero excise tax for natural gas even if it is also a fossil fuel. Diesel tax will increase from zero in 2017 to P2.50/liter in 2018, P4.50 in 2019, and P6.00 in 2020. Gasoline tax will increase from P4.35/liter in 2017 to P7 in 2018, P9 in 2019, and P10 in 2020. Coal tax will increase from P10/ton in 2017 to P50 in 2018, P100 in 2019, P150 in 2020. There was successful maneuver by some senators, a known economist and some leftist organizations to spare natural gas from higher taxation, benefitting a big energy gas firm.

6 The feed-in-tariff (FiT) or guaranteed high price for 20 years for wind-solar and other renewables keeps rising, from only 4 centavos/kWh in 2015, became 12.40 centavos in 2016, 18 centavos in mid-2017 and petition for 22 centavos by late 2017 not granted. A pending 29 to 32 centavos/kWh by early 2018 is awaiting approval by the Energy Regulatory Commission (ERC).

7 Continued exemptions from VAT of the energy output of intermittent wind-solar and other renewables but stable fossil fuel sources were still slapped with 12% VAT under TRAIN. Government continues its multiple treatment of energy pricing: High favoritism for wind-solar, medium-favoritism for natgas, and zero favor for oil and coal.

8 Supreme Court issuance of TRO in the implementation of Retail Competition and Open Access (RCOA) provision of the Electric Power Industry Reform Act (EPIRA) of 2001. In particular, the SC TRO covered five ERC Resolutions from June 2015 to November 2016, affecting the voluntary participation of contestable customers (CCs) for 750-999 kW and many Retail Electricity Suppliers (RES) with expiring licenses cannot get new ones yet, reducing potential competition. Data from the Philippine Electricity Market Corporation (PEMC) show that as of Nov. 26, 2017, there were 28 RES, 12 local RES, 862 CCs for 1 MW and higher, and only 78 CCs for 750-999 KW. There should be thousands of CCs in the lower threshold, there should be several dozens of RES nationwide to spur tight competition in electricity supply and distribution.

Overall, EPIRA of 2001 was a good law that introduced competition, broke government monopoly in power generation, broke private geographical monopolies in power distribution. The RE law of 2008, SC TRO 2017 and TRAIN 2017 are partly reversing the gains of EPIRA.

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When both world oil prices and domestic oil taxes are rising

Dutertenomics’ tax-tax-tax implementation is off to bad timing. Raising oil taxes on already high and rising global oil prices — $64 a barrel for WTI, nearly $70 for Brent — is insensitive. But then again, even if the tax hike is P20 or P50/liter, the “money will go to the poor” naman daw is always a convenient, hollow, cavalier and opportunistic alibi.

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“Diesel tax will increase from zero in 2017 to P2.50/liter in 2018, P4.50 in 2019, and P6.00 in 2020. Gasoline tax will increase from P4.35/liter in 2017 to P7 in 2018, P9 in 2019, and P10 in 2020. Coal tax will increase from P10/ton in 2017 to P50 in 2018, P100 in 2019, P150 in 2020.” http://bworldonline.com/top-eight-energy-news-2017/

“the DoF is often quoted as saying that “two million richest Filipino families consume 50% of oil products in the country.” This is one of the reasons why they pushed for high tax hike for oil products.

There are about 25 million Filipino families now. The DoF refers to the richest 2 million families, so the other 23 million middle class and poorer class Filipinos consume the other 50% of oil products…. I think the DoF displayed dishonesty and deception in making that claim to further justify the high oil tax hikes.” http://bworldonline.com/energy-favoritism-train/

Among the lousy supporters of “more taxes for oil please” and among the chief rah-rah cheerleaders of tax-tax-tax is the Action for Economic Reforms (AER). See for instance,

“Excise taxes on fuel products will be justifiably raised after 20 years of non-adjustment to inflation except for fuel that is primarily used for air travel, which can only be maximized by those who have more disposable income.”http://bworldonline.com/public-interest-vested-interest/

Yes, poor farmers moving away from cow de carabao and using oil-guzzling tractors, moving away from manual harvest to oil-guzzling harvester-thresher combine machines should be penalized with higher oil taxes. Fisherfolks moving away from banka de sagwan and using motorboats to increase their fish harvest should be penalized with higher oil taxes. Great NGOs.

In one Senate comm. Hearing by Sen. Sonny Angara where I was also invited, the domestic shipping lines, airlines, bus lines, truckers, etc were saying the same thing — if govt will push the high oil taxes, they will follow and obey the law but they will pass any price hike to the public. So even vegetables, fish, chicken, rice, etc consumed by the poor will experience price hikes. And DOF, AER, etc think this is fine and pro-poor daw.

LPG, from zero to P3/kilo. So the 11 kg LPG tank will experience P33/tank increase. The original DOF proposal was increase to P10/kilo or P110/tank. Even carinderias will also increase their food prices, or the less visible option — serve smaller viand for the same price.

Energy favoritism under TRAIN

* This is my column in BusinessWorld last December 19, 2017.

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The recently approved tax reform for acceleration and inclusion (TRAIN) by the Congressional Bicameral Committee exhibits a number of favoritism for some energy products and players while penalizing others. In particular, among the three fossil fuels, only petroleum products and coal received tax hike while natural gas was not mentioned and hence, not taxed.

In the VAT base expansion, expensive, unstable and intermittent renewable energy (RE) like wind-solar is again exempted (see table).

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Here are the possible implications:

  1. Since petroleum products are a public good, many goods and services will experience price hikes. Not only fares for jeepneys, buses, taxi, boats, and airplanes but also for agricultural products because most farmers now no longer use carabaos in tilling their farms, they use tractors, big and small; more farmers now also do not use human labor for harvesting rice, they use harvest + threshing combiner machines. Fishermen hardly use manual paddle boats, they use motorboats. Traders no longer use animals in transporting cargo, they use trucks.
  1. Since coal power contributes 48% of total electricity production nationwide (2016 data) despite having only 34% of total installed power capacity, electricity prices will further go up, slowly but surely. Most apologists of raising coal taxes cite the “minimal impact” on households consuming 200 kWh/month. This may be true but those households work in factories, malls and hotels, schools and universities, hospitals and residential condos, airports and seaports. These establishments consume hundreds or thousands of MWh per month, not kWh of electricity. The additional cost will be passed on to the consumers.
  1. Natural gas is also fossil fuel but it was never slapped with excise taxes. The Malampaya gas royalty is a tax on exploitation of a natural resource, the same way that the price of our imported petroleum and coal already include royalties. There is favoritism in exempting natural gas from excise tax. And there are some connections between some legislators and a known economist who pushed for high coal tax but silent on natural gas tax, with a big energy company whose main product is natural gas power generation.
  1. Exempting RE from VAT but retaining VAT for fossil fuels. These REs are enjoying favoritism three times. First, this exemption from a high 12% VAT. Second, they are given guaranteed high prices for 20 years via feed-in-tariff (FiT). Third, they are given priority or mandatory dispatch to the grid even if they are expensive. For instance, FiT for solar1 is P10+/kWh, FiT for wind1 is P9+/kWh, average coal price is P4/kWh, can go down to P1.50/kWh on off-demand hours like midnight.

Oplas-121917-768x402Soon, REs will be given a fourth privilege via the renewable portfolio standards (RPS), or minimum percentage of REs that electric cooperatives (ECs) and private distribution utilities (DUs) must purchase and distribute to households. REs then can price their electricity output high because these ECs and DUs have no choice, they will be penalized if they will not buy those expensive and intermittent REs.

Meanwhile, the DoF is often quoted as saying that “two million richest Filipino families consume 50% of oil products in the country.” This is one of the reasons why they pushed for high tax hike for oil products.

I have been intrigued by that repeated statement since last year and I am wondering what papers or studies justify this?

There are about 25 million Filipino families now. The DoF refers to the richest 2 million families, so the other 23 million middle class and poorer class Filipinos consume the other 50% of oil products.

The DoF is saying then that anytime in EDSA, NLEx, SLEx, roads in Visayas and Mindanao, etc. on average, about 50% of the cars, buses and trucks there transport the two million rich families and their goods? And that about half of domestic flights and the inter-island boat rides transport the richest two million families? This is absurd.

I think the DoF displayed dishonesty and deception in making that claim to further justify the high oil tax hikes. If such DoF claim has indeed objective basis, I am willing to apologize for this remark. For now, that statement is not backed up by solid numbers and hence, deceptive and opportunist.

The Habito carbon tax distortion

* This is my column in BusinessWorld on December 7, 2017.

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Very often, the purpose of government is to make cheap things become more expensive. It does this via high and multiple taxes, regulatory fees, mandatory contributions, and multiple permits and bureaucracies that raise the cost of compliance. Many governments display hypocrisy when they say that they want to control inflation yet create those multiple taxes and bureaucracies that create inflationary pressure.

In the energy sector, the most recent proposed tax hikes are in the excise tax of oil products of up to P6/liter, and a big jump in excise tax of coal also known as “carbon tax” from the current P10/ton to P300/ton. The original bill by Sen. Sonny Angara proposed a hike from P10 to P20/ton but last week, an amendment by Sen. Joel Villanueva and followed up by Sen. Loren Legarda changed this to P300/ton.

Romeo Bernardo in his BusinessWorld column last Monday “The Gravy TRAIN is leaving and common sense isn’t in it” estimated that “The P300 per metric ton tax on coal will add P0.14 per kWh to our cost of generating electricity. This is on top of… feed-in-tariffs (FiT), a fancy term for what are just subsidies from the taxpayer. Combined, they will add P0.43 per KWh to our electricity bills or, at current consumption levels, a total of P40 billion for 2018.”

That is huge, a big government-instigated expensive electricity measure via legislation. In 2016, coal power constituted only 34% of total installed capacity in the country but contributed 48% of total electricity production. If the distortion created by priority and mandatory dispatch to the grid of solar-wind even if they are expensive (feed-in-tariff or FiT of up to P10+/kWh for solar and P9+/kWh for wind, more than 2x the price of coal and natgas) and intermittent, the share of coal electricity production can easily reach 50%.

The earlier proposal by former NEDA secretary Ciel Habito to impose a carbon tax of P600/ton has something to do with this. It is a lousy proposal yet it emboldened the legislators to make cheap and stable energy from coal become more expensive.

When Dr. Habito wrote his article at the Inquirer last September 2017, coal prices were around $60/ton, not $80 as he claimed. So $60 x P51/$ = P3,060/ton. His distorted proposal of a tax of P600/ton would be equivalent to 19.6% tax, not 15%. So the legislators may perhaps claim that at least they did not follow the distorted logic of P600/ton Habito proposal and they proposed only P300/ton.

I was wondering about Dr. Habito’s inconsistencies. One, he frequently advocates expensive electricity via high coal and carbon tax with about four articles at the Inquirer since June 2017. Two, no advocacy for high carbon tax of natural gas/LNG which are also fossil fuels. And three, silence in expensive electricity via guaranteed high price for 20 years also known as FiT for wind-solar. To say that the impact of the coal tax on electricity prices will be small is a cavalier attitude on price increases when he’s not the only one paying for it.

Romeo Bernardo has a point when he further wrote in his article, “why single out coal for a carbon tax? Why not a carbon tax on every fuel based on its impact on the ozone layer (which incidentally should also include LNG)?”

oplas-768x402Our electricity prices are already heavily distorted with about 10 different items and charges in our monthly electricity bill. Generation charge, transmission charge, distribution charge, supply charge, system loss charge, universal charge, metering charge, lifeline rate subsidy, taxes, FiT. For consumers such as households with about 600+ kWh consumption, industrial users, there are 2 other charges (total 12), like environmental tax.

The FiT keeps rising from 4 centavos/kWh in 2015 and now 18 centavos with a pending hike to 29 centavos/kWh late this year. Very likely it will no longer be granted so Transco will likely ask for 32 centavos/kWh or higher early next year. Add 32 centavos subsidy for expensive and intermittent renewables + 14 centavos coal tax and soon we shall have 56 centavos/kWh of unnecessary and distortionary extra cost in expensive electricity.

The continued favoritism of renewables while penalization and demonization of coal and fossil fuels is triggered by continued climate alarmism. Whether we have less rain, no rain or lots of rain; whether we have no flood or lots of flood; whether there are few storms or lots of storms, whatever weather and climate, the alarmism movement suggests that we should pay more expensive electricity, we should send more money to the UN, WB, ADB, CCC, WWF, etc. We should get more climate loans, more renewables loans, and cronyism. It is a lousy movement.

Coal power and fossil fuels are responsible for higher productivity of the poor and cheaper electricity for households and industries. We have a rising life expectancy, rising per capita GDP despite rising population because of the rise in overall human productivity, thanks to coal and fossil fuels.

The House of Representatives should counter the high coal tax proposal of the Habito-inspired Senate bill. The various tax-tax-tax under TRAIN should not add more distortions and inflationary pressure in our daily electricity consumption.

Bienvenido S. Oplas, Jr. is President of Minimal Government Thinkers, a member-institute of Economic Freedom Network (EFN) Asia.

Ric Barcelona on energy investment and subsidies

I am reposting an article by a friend, Ricardo “Ric” Barcelona, published in the Inquirer last November 27, 2017. I attended the book launching of Ric’s book, “Energy Investment: An Adaptive Approach to Profiting from Uncertainties” last November 22, 2017 at Shangrila Hotel Makati. Good work and congrats again, Ric.
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Why do subsidies often fail?

In writing my new book, I came face to face with three energy investment paradoxes. All trace their roots to generous subsidies.

Counter-intuitively, generous subsidies did not result in wide scale deployment of renewables, more so with solar as subsidies’ poster kid.

Innovation is the second paradox. Advocates argue that as increasing renewables capacity is installed, their costs would fall.

Ironically, when subsidies are too generous, the costs decline more slowly than in markets without subsidies.

The third paradox blasted the notion that growth and profitability go hand in hand.

With solar installation’s “frenzied” growth, albeit from a low base, I struggled to find beneficiaries of this boom that profited financially, much less achieving value-creating returns.

Perhaps, not surprisingly, we come across contradictory reports on renewables’ progress from the business press.

One sunny morning in 2013, leading journalists herald the dawn of renewables’ new era. Solar is sold at a price lower than coal, so the headline says. As analysts scramble to validate their financial models, most could only scratch their heads and were at a loss for answers. The next batch of headlines came to their rescue. Investors and advocates of “competitive” solar power were up in arms. The cause? Governments in Europe cut renewables’ subsidies drastically. Within weeks, “high growth” solar companies filed for bankruptcies, with wind struggling to make ends meet while barely remaining afloat albeit financially moribund.

In The Atlantic’s November 2015 issue, which I quoted William Gates, Microsoft’s founder, provided an answer as to where the problem lies.

By succinctly arguing how costs comparisons become a disservice to the environmental cause, Gates observed: “Photovoltaic solar is not economical. Its intermittency is a major problem. When environmental enthusiasts point to photovoltaic solar as having a similar cost to hydrocarbons, what they mean is that at noon in Arizona that may be the case. However, solar does not come at night. So the fact that at one moment you reach parity, so what? Distinguishing a real solution from a false one is actually very complicated”.

Economics of subsidies

The economic cost of energy equates to their life cycle cost of energy. This is a simple addition of the recovery of its normalized fixed assets costs, variable operating expenses, and fuel costs. Embedded within the fixed costs are its implied return on assets and a depreciation expense, while variable and fuel costs are inflation adjusted, with fuel prices accounting for most of the volatilities. Renewables tend to have stable costs.

Philippine coal-fired power’s economic costs would be about P7.29/kWh, while PV Solar would be about P9.09/kWh. Financial costs based on acquisition prices would be about P3.00/kWh to P4.50/kWh. This compares with PV Solar’s feed-in tariff (FiT) of P8.50/kWh. With PV Solar equipment costs having fallen sharply, its economic cost is below the feed-in tariffs. While the learning curves effects favor PV Solar’s improved costs competitiveness, fuel and power prices from coal-fired and gas-fired power fell from peak of P8.00/kWh to its present levels of P2.00 to P3.00/kWh. The FiT subsidies actually widened to P5.50 to P6.50/kWh, or up to two thirds of revenues.

The lessons are stark. When subsidies are set as the costs differences, the “correct” level is indeterminate. As power prices increase, renewables need lesser subsidies but nevertheless continue to collect. When this happens, consumers would coax regulators to claw back the subsidies because renewables are raking it in at consumers’ expense.

Paradox One: Generous subsidies do not result in wide scale renewables deployment. Highly dependent on subsidies, changing government priorities that cut subsidies turn secure revenues, into the very source of uncertainty that bankrupt the venture.

Innovation paradox

Learning curves suggest that with each doubling of renewables’ capacity, its costs would decline by about 20 percent. Enthusiasts present this as evidence that success is a fait accompli.

PV Solar exceeded what the theory prescribes. The learning curves, however, could stall or even reverse its decline. For example, US wind turbines costs declined from about $4,500/kW in 1997 to $1,200/kW in 2001. When subsidies were made more generous in 2004, the rush to build wind farms clogged the production lines that saw wind turbine prices spiked to $2,400/kW in 2010 before settling at $1,500/kW in 2015.

Rapid declines in renewables’ costs impact producers’ revenues, where exponential volume expansion is subdued by accelerated price declines. In effect, innovations that lead to rapid costs decline may be curtailed when subsidies buffer the need for aggressive costs competition.

Project proponents act as mechanisms to channel subsidies from the state to producers. A quick mental calculation would convince proponents that the cost of postponing investments has its value.

If it becomes certain that tomorrow’s equipment costs would be substantially lower, and the technological cycle is shortened significantly, the cost of waiting in terms of foregone revenues could be lower than the equipment costs savings.

This is where PV Solar’s fate is sealed. Unlike hydro or geothermal power’s utilization rate of up to 95 percent, PV Solar at best is 22 percent. The foregone revenues are a fifth of those lost from alternative technologies. Worse, after five years of operation, PV Solar’s utilization rates could fall to 12 percent to 15 percent. This comparison makes developers more inclined to wait rather than to rush in to invest—unless of course the subsidies are generous.

What happened to the early movers—an advantage that strategy would suggest they reap the benefits for being decisive? Ironically, as future equipment costs fall farther, the early movers are stuck with obsolescing assets that are stranded as they lose competitiveness. Worse, their valor and decisiveness to be the first to invest leaves them to do the heavy lifting to lower costs that ultimately benefit the latecomers to profit from their labor.

Paradox Two: Subsidies blunt the need to accelerate costs reduction. Waiting to invest could prove lucrative where the latecomers profit from “early movers” follies.

High growth, expanding losses

Simple arithmetic tells us that for as long as revenues falls lag the rate of costs reductions, firms could expand cash operating margins. Solar equipment and panel producers are trapped in vicious cycles.

To remain competitive, they continually innovate that costs money while reducing costs (and prices). Competitors push the technology frontier that renders obsolete any incumbents’ offerings. As competition intensifies, rising costs and falling revenues or market shares could only lead to bankruptcies.

Within the PV Solar waiting game, in bypassing one generation of technology, and wait the more cost effective innovation, the shorter waiting period could prove lucrative for developers. However, for PV Solar producers, the waiting game could only exacerbate the pressure on operating margins.

Paradox Three: Accelerated volume expansion and rapidly declining prices erode cash operating margins, where the firm loses more the more it grows.

In my academic sojourn, what was presented as simple and readily understood formulation for calculating the “correct” subsidies turns out to be nuanced and complex. Under dynamic markets, where energy prices vary daily, fixing the subsidies becomes an indeterminate exercise. There are many possible answers for a given time that does not hold true once the prices change.

When PV Solar rely on up to 67 percent of revenues from subsidies, the state becomes a counter-party that is critical to sustaining the firm’s financial viability.

Vagaries of politics imply constantly changing priorities, making for a fickle advocate.

Contrary to popular belief, subsidies are far from a source of secure income. As governments renege, subsidies (or its loss) become a major credit risk.

My short prescription: Treat renewables, coal and gas as one supply portfolio. Their different costs structures provide physical hedges against rising energy prices, potentially increasing portfolio returns.

We may take William “Bill” Gates’ advice to heart: “Distinguishing a real solution from a false one is actually very complicated.” Understanding how business work, and applying the same rigor to renewables and our energy supply portfolios may just lead us to offering a real solution to meeting our future energy needs.

US energy trading and implications for Asia and Philippines

* This is my article in BusinessWorld last November 16, 2017.

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Among the global leaders who attended the ASEAN Summit 2017 this week in Manila were the leaders of the US, China, Russia, Australia, and India. These five countries are also the top five in having the world’s biggest coal reserves and top five biggest coal producers.

US President Trump in particular emphasized his desire for “reciprocal trade” with Asian countries. Energy trading is a growing sector in the US as it is now the world’s biggest oil and natural gas producer (overtaking Saudi Arabia and Russia in oil and gas output, respectively, since 2014) but not yet the world’s biggest exporter of these two commodities.

The subject of Trump’s energy policies was well-discussed by many scholars, researchers, and some players during the “America First Energy Conference” in JW Marriott Houston, Texas last Nov. 9, organized by the Heartland Institute and co-sponsored by many other US-based independent think tanks and research institutes.

I attended that meeting and it seems I was the only Asian in the big conference hall. I went there from a different perspective compared to American participants — to further understand how the evolving US climate and energy policies would impact Asia in the short to long-term, the Philippines in particular.

In his breakfast plenary lecture, Joe Leimkuhler, VP for drilling of LLOG, a deepwater exploration company, discussed whether the US can dominate energy as articulated by President Trump.

“Energy dominance” is defined as being able to meet all US domestic demand and export to markets around the world at a level where they can “influence the market.”

He showed lots of very interesting tables and charts including the usual Strengths-Weaknesses-Opportunities-Threats (SWOT) analysis of current US energy environment. Among his conclusions are the following:

  1. Oil, natural gas — The US can have energy dominance in the short-term but to make it long-term, the shale revolution should be sustained and supported, and if more gas reserves are discovered.
  1. Coal — Supplies can meet domestic demand but may be unable to provide for short-term exports. There are no coal exporting facilities on the West Coast to cater to the biggest coal customers in the world, Asia. The states of Washington, Oregon, and California have passed laws preventing the construction of such facilities or delaying the permits. US coal is cheaper to produce and its quality is higher than other suppliers can give.

Many sessions in the conference provided extra information about the current weaknesses of the US coal industry despite its huge reserves.

In the session on “Peace Dividend: Benefits of Ending the War on Fossil Fuels,” Dr. Paul Driessen, Senior Fellow at the Committee For A Constructive Tomorrow (CFACT), showed these data on electricity prices, 2017, in US cents/kWh: (a) Germany: residential 35, business and industry 18; (b) California: residential 19, business/commercial 18, industry 14.5; (c) Indiana-Kentucky-Virginia average: residential 11.7, commercial 9.5, industry 6.5. Germany, Denmark, South Australia and California have the highest concentration of wind-solar farms and they have the most expensive electricity prices in the planet.

The US has the largest coal reserves in the world estimated at 381-year supply, shown in the Reserves/Production (R/P) ratio. Russia has the highest R/P ratio because its production and consumption is smaller compared to the US. China has the second biggest reserves but its R/P ratio is small because of its huge production and consumption in million tons oil equivalent (MTOE). In 2016, half of global coal consumption was made in China alone (see table).

Coaltable_111617

Once the US can build those coal export facilities in the West Coast and various anti-coal policies in the Clean Power Plan (CPP) and CO2 Endangerment Findings are finally reversed, Asia will have more options of cheaper and higher-quality coal, aside from what they currently get from Australia, Russia, Indonesia, South Africa, and others.

The Philippines is a small player in the global coal market — very small reserves, negligible production (mostly from Semirara), and meager consumption. Yet many environmentalists seek to further restrict, if not actually prohibit Philippine coal power plants and force us to depend on undependable, unstable, unreliable, erratic, intermittent, and expensive wind-solar energy.

Governments should not pick winners and losers via legislation and multiple regulations, taxation, and selected subsidies. They should allow consumers to realize higher consumer surplus via competition and more choices in energy sources that are cheaper, stable, predictable, and dispatchable.

The search for huge climate money in COP 23

Many if not all politicians and “planet saviours” from developed countries during the UN COP meeting in 2009 or so were dishonest when they pledged that their countries will give $100B/year to developing countries starting 2020. Now the latter are asking, “where’s our money? Oodles of money?” And they demand further this week, “More money on top of $100B/year.”

“In 2013, the World Economic Forum estimated US$5.7 trillion will be needed annually by 2020 for green infrastructure. The report suggests that public funds would need to increase to US$130 billion, an increase over the Green Climate Fund target of US$100 billion, to leverage US$570 billion of private capital.” https://www.nature.com/articles/nclimate3343

No wonder Al Gore, the UN, WWF, etc. are so passionate to “save the planet”. $100B/year is not enough, $5.7 trillion/year is the high target.

“needed to achieve the United Nations Sustainable Development Goals (SDGs): an additional $1 trillion annually in clean energy investments to limit global warming to below 2 degrees…” https://www.weforum.org/…/the-money-is-there-to-fight…/

$100B/year or $1 trillion/year or $5.7 trillion/year….

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