I did some work with environmental groups in the early 2000s. In those days, many of us longed for energy independence and legal marijuana. As Tom Grunick said in Broadcast News, what do you do when your real life exceeds your dreams?
(Marijuana was legalized too late for me, but the rest of you should enjoy yourselves).
I thought I wanted marijuana to be legalized, but now that the stench is everywhere and so many students are coming to class stoned, I have changed my mind.
I'm coming around that marijuana legalization was mostly a failure. There's still just as many dudes illegally selling it on the corner and occasionally shooting each other as before, but now we get the added bonus of watching people smoke it while driving 4,000 lb vehicles and sketchy storefronts selling it in packaging clearly targeted at kids.
As someone who enjoys recreational marijuana ~twice a month, I view it as a big success. Are people really still shooting each other over illegal weed?
No idea if links work in these here comments, but this particular crew has terrorized my neighborhood for years before a recent massive bust by the local cops and feds. They're linked to dozens of shootings and their main enterprise was selling weed, despite there being something like half a dozen weed stores within a half mile of their turf.
My 12 year old son and I spent spring break in Chicago and it was a bit much. In every train station, other random places. We came in late one night and our hotel lobby smelled like a clam bake.
Gosh I remember those college days when we all were convinced that marijuana legalization would NEVER happen. I haven't smoked in a good decade probably now, and don't plan to unless there would be medicinal benefit. But can't help but admire the progress, even if it's come at the price of a ton of sketchy pot stores cropping up like fungal colonies. I firmly think its effects on society are less damaging then alcohol, so it's a small price to pay.
I volunteered with NORML in college and it really is amazing to see the progress we made in legalization. It felt dangerous and subversive to work with NORML in 2002 but now it feels like any other volunteer job.
IME there comes a time in people’s lives when they retire and the devil’s lettuce is back in the menu.
I remember eating dinner with my grandma’s friends in a small town in a red state and hearing all their stories about traveling to the nearby legal state... and then often eating too much of the edible (this was back when all the companies were seeing how much THC they could pack into food, and the answer was “way more than you should”).
People think being a teacher makes you feel old because you're around 8 year olds all day. But what really makes me feel old is being a 40 something being surrounded by 23 year olds.
Nothing has made me feel older than realizing the fresh out of college new hire I just made is closer in age to my daughter in elementary school than to me. I'm not that old!
Just one quick comment on "making it cheaper to heat homes in places like New England".
The Northeastern states have been very resistant to building out their pipeline infrastructure to take natural gas from Pennsylvania into their markets. So even though places like NY & Boston are very close to the gas fields, they pay a much much higher price for gas. Most of New England gets their gas shipped in LNG from from Trinidad.
It's an obvious example of the issues with permitting, unintended consequences, and how patchwork things can be on the local level. In most of the rest of the US, including here in Texas, we have seen greatly reduced natural gas prices.
Oh yes for sure, not to mention lower pollution! And we still have the fracking revolution to thank for lowering global LNG prices. But New England natural gas could be up to 90% cheaper if delivered via pipe not LNG (prices are super volatile so the Northeast Pennsylvania-LNG spread changes a ton, so not always that big an advantage, but still usually huge)
When I lived in MA, there was a gas line on my street. Right after I closed on my house (late August) I applied for the permit to get a gas line run from the (short cul-de-sac) street to my house. My town had a rule that they'd only allow National Grid to have a handful of digging permits outstanding at once, National Grid did digging jobs like that in roughly the order permits were granted, and they don't do them once the ground freezes. So I had to wait until May to get it done. My house's existing heating system died in late March. This was 2014-15, when we got 9 feet of snow. So I definitely agree that better permitting and better infrastructure are very valuable.
That 90% is just looking at regional price differences between in-basin Marcellus gas and New England prices. The cost of new pipeline infrastructure is usually borne by the "Midstream" company building the pipelines, who pass on the costs to the gas producers. So some of the value gets captured as arbitrage by the Midstream company but most of it is improved value for the consumers & producers.
Also on that line, I thought most of the country heated with gas, but New England is one of the few places where a significant fraction of people heat with oil of some sort.
I can see that. Heat pumps are great technology, they just don't quite yet have the oomph to combat the really deep cold you can get semi-regularly anywhere north of like Virginia. (At least, this is what Alec from Technology Connections says and I believe him because he seems to have really done his research.)
Heat pumps only really became viable in the NE in the last two years and they’re still pretty borderline TBH.
My grandparents had a *coal-fired* boiler when I was growing up, up in central PA, where there was no infrastructure for gas and coal was cheaper than propane or fuel oil for many years.
"Liked" for the second paragraph (because it's always been shocking to me that fuel oil is still a major thing in some places in the US and have wondered how it can possibly make sense for various levels of government to pay to subsidize fuel oil consumption rather than giving generous rebates for converting to gas).
I've read that the pipeline block is New York which will not permit any new construction. It's hard to imagine that politicians in the states forced by NYs actions would oppose lower prices for their constituents.
My dad, who knew his geology, would always tell me as a teenager that once someone found a cost effective way to harvest shale oil, it would be a game changer. Unfortunately he didn't live long enough to see it through, but he'd be very proud that he called that.
Just brought back memories of those times. What's fascinating is how the Fox hosts, dealing with the Obama clip, didn't seem to know the Cheney context either.
“Environmental organizations like to argue that fracking still poses risks to water supplies, but trade groups say that the process is safe and there doesn’t seem to be a clear scientific consensus on this.”
Most of the “evidence” used by the former is drawn from areas where well water has been laced with gas since before most of my ancestors had migrated to this country.
Lighting a glass of tap water ablaze was a party trick in places of Northern PA where my family has ties when I was a small child.
Most of the exceptions are not due to a flaw in the technology or technique but subpar materials for well linings as they pass the shaft through the aquifer layer, which are quite well-regulated and this rare.
Mutatis mutandis, this whole piece applies in reverse to the crass error of opposing fossil fuel production and transmission projects in the US. Joe Manchin was right about permitting reform.
This was a really good piece, lines up with the data and trends I see too (I'm a cleantech consultant). I'd just add a few points to push it further.
1) Energy storage prices are falling quickly too. We're getting close to the point where 1-4hr grid-scale Li-ion batteries are cost-competitive with having natural gas peaking plants, which will make the whole grid more efficient regardless of the mix of sources, but especially for increasing wind and solar penetration. The rise in EVs will ultimately represent us building out the equivalent of 1-2 days of storage relative to total current electricity use, and with California mandating V2G tech, and most people using only a fraction of their range, this will be very valuable for increasing renewables penetration to (but only if we build out enough charging stations to have people plugged in wherever they're parked during the day). (All of this also reduces the need for long-distance electricity transmission, which is expensive and just hard/slow to build and coordinate politically).
2) If wind and solar prices keep falling on-trend, then making green hydrogen, or synthetic methane/methanol/ammonia/fuels, becomes dramatically cheaper, and switches from energy-cost-dominant to capex-dominant, and the latter is the kind of thing we can improve with scale and iteration. Synthetic hydrocarbons are also easier to ship long distances than electricity, and can replace petrochemical feedstocks as well. Plus we're already seeing e.g. Australia working hard to become a clean fuels exporting hub over the next decade, and Korea working to convert coal plants to gas, and upgrading gas plants to be able to also use (some) hydrogen. Right now this is a deeply weird market, heavily distorted by subsidies and mandates such that everyone tries to ship green fuels to California and Europe no matter where they're made, but that will pass as supply increases.
3) Weather-wise, the Middle East is also well positioned to remain an energy exporter in a renewables-dominant world, with high solar potential and fairly low population density. So far the Saudi projects I've seen focus on blue hydrogen and CCS, which makes sense for them for now. This will be interesting to see how it all plays out.
4) A decent amount of natural gas infrastructure stays relevant in a renewables-dominant world in a way that coal infrastructure doesn't, because we're going to need CO2 utilization to make a lot of chemicals and materials, and converting it to gas is likely to be a big part of the set of pathways we'll use for that.
I'd be shocked if V2G actually passes. EV batteries are becoming more structurally integrated. Meaning replacement costs and even feasibility will be a long-term headwind. No EV owner would waste needless charging cycles on V2G.
EDIT -- Just for some clarity. Only the California Senate has approved the bill (SB-233). It still needs to go through the state Assembly. Again ... this only passes if California wants to go to war with Tesla.
Fair enough, at least to a point. But I think you're overestimating the amount of load V2G will put on batteries, at least once EVs form enough of the total vehicle mix. We're talking *maybe* using 5-10% of the battery capacity on a typical day, and even though vehicle batteries are warrantied for ~8 years they typically actually last 12+ on average, which is also the average lifespan of an ICE vehicle. Shallow cycling like that really has minimal impact on lifetime.
And, I expect it will only fly if there is net metering, with real-time pricing so that the vehicle owners are compensated by the utilities and grid management companies for both the cost of electricity and the wear on vehicles, otherwise there are going to be class-action lawsuits against the state about it's seizure of private property.
I would *not* be ok with V2G regularly consuming half or more of my battery, or anything similarly extreme. Doing that in the event where my other option is an extended power outage, maybe a few times a year at maximum, would be totally fine. It would be of direct use to me, and would also obviate the most-expensive grid scale long duration energy storage needs for high renewables penetration, which would lower electricity production costs in the long term.
Well ... another reason the bill isn't going to pass. It doesn't specify how any of this would actually work other than the commission should convene a group of stakeholders to evaluate all the challenges and also yes ... 100% bidirectional capable vehicles by 2030 MY. But my post was really just to point out that California hasn't actually mandated it yet -- and I'd be very surprised if they do.
Fair enough, no arguments there. I still think most electric vehicles will end up having it at some point within the next decade or so, and that it will on net reduce the cost of EV ownership.
The real problem with V2G is not the impact of the flow of electricity on the car's battery life. It's the cost of all that extra equipment outside the car to actually connect the car to the power grid in a bidirectional manner.
Even if agreeing to V2G saves you around $10/month in your home electricity bill, that's still a nonstarter if a V2G-compatible charger costs thousands of dollars more than a conventional charger - that's money you'll never be able to make back within a reasonable timeframe.
Depends on what you mean by V2G. My brother is interested in V2G because he would like his vehicle to function like a PowerWall in the event of power failure. So that's not really V2G (it never goes to the grid), but it goes to the same place the grid does (the house).
If you mean everyone using their own vehicles as battery storage to increase grid strength for intermittent power, then I'm inclined to agree with you on the charging cycles issue, unless that also makes it so batteries are designed to be more replaceable and you get credits to cover the loss of charging cycles.
That's V2H which is ~ the same system from the vehicle to the home but doesn't require the home to grid transfer. For emergencies -- sure, that's a fine back-up strategy. But adding the additional charging cycles of V2G is a terrible idea. The battery is > 50% of the vehicle value and to accelerate degradation of the battery is so dumb.
The charge cycle issue is only really a thing when you're fast charging or charging up all the way to 100% or all the way down to 0%. V2G is about slowly cycling the batter between 60% and 70% over a period of several hours. The impact of this on battery longevity is really negligible. Maybe if you intend the car to last over 100 years, even this would eventually start to add up. But, no car ever lasts anywhere near that long.
The real problem with V2G is not battery degradation but the cost of the extra equipment to make it possible.
As has been discussed here at SB and elsewhere, the simplest, most efficient way to address the externality of carbon emissions would be a carbon tax.
Our current approach, an array of regulations and subsidies attempting to micromanage the way we produce and consume energy, puts politicians (and ultimately taxpayers) in the position of venture capitalists. There will be hits but also some expensive misses.
I predict one very expensive miss will be the mad rush to replace gasoline vehicles with EVs. A faster, more cost effective reduction in vehicle emissions would be achieved by a carbon or gasoline tax or at least a flexible set of incentives that encouraged the purchase of any high MPG vehicle regardless of technology (in other words, show me some love if I trade in my Suburban for a Prius).
Perhaps I should change my screen name to Don Quixote. What can I say? To use a trendy legalistic phrase, I have a “sincerely held belief” that these are good ideas, and I will pitch them to anyone who’ll listen (or even anyone who won’t).
If the US (or others) had set, say, a $10/MT carbon tax 20-30 years ago, indexed to rise at 5-10%/yr forever, and put all the revenue into something like a permanent sovereign wealth fund, then we probably wouldn't have needed any other climate policy or subsidy, ever, to get to full decarbonization by 2040-2050. And we'd have really good incentives for the market to find and exploit the low hanging fruit first, and invest in longer term projects due to a guaranteed ROI. You want permitting reform? Much easier to win that fight if you make it an arms race between towns and states to avoid subsidizing each other by decarbonizing slower.
On EVs, I really don't get why there's not more love for serial hybrids, with 20-50 miles of electric range. Cutting the first 80% of the average driver's emissions from gasoline use costs a tiny fraction of what it takes to cut the last 20%, eliminates much of the need for grid and charging infrastructure improvements, and destroys the whole concept of limited range. And it can shift gracefully, with range rising with each development cycle as batteries get cheaper, while giving the mining sector plenty of time to increase lithium production.
I've been wondering this since the 2000s, it's not like it was hard to see the (solvable, with enough time and investment) problems with EVs coming and how we could avoid them, we just... didn't. It especially baffles me that Ford released the F150 Lightning, which really can't be used for most of the tasks that actually need a truck, and yet there are only a handful of parallel hybrid pickup models (many optimized more for power than efficiency), no serial hybrid models I can find, and no hybrids at the 3/4 ton truck or higher range.
My understanding is one real advantage full EV cars have is a _much_ simpler engine/drivetrain/whatever. Having the gasoline engine at all adds a lot of hardware that you don't need if it is pure EV.
Totally agree with you. We have a PHEV and its the best of both worlds. We get 40 miles of range on a charge, which allows the daily commute and errands to be done on electric. But we have no range concerns on longer trips. Frankly the charging infrastructure leaves a lot to be desired still, and I would hate to be reliant on it for every trip we make. The only downside is that the batteries make the car extremely heavy, and the electric engine produces a lot of torque, so we go through tires much more quickly than we would on a gas only model.
PHEVs sound great from the perspective of an individual, but as soon as the government starts incentivizing them, you're going to end up with people buying them that never plug them in, meaning that virtually all of their driving is still done off gas.
PHEVs also don't create the demand to justify building out the charging network that is needed for full EVs. And, as the price of batteries continues to fall, we will quickly reach a period when full EV becomes cheaper to buy than PHEV because the cost difference between the big battery and the smaller battery will be outweighed by not needing all those gasoline-related components.
I like the idea of a carbon tax and re-distribution. Literally just pool the money collected by a carbon tax and divide it equally between every American.
It's a monument to the desire to buy pickup trucks and not use them as pickup trucks. Crew cab + 5.5' bed only. Impractical for towing due to range.
The dangerous tall, flat front is of course retained, even though it being an EV means that the Lightning's front could have easily been made much more angled and safer in terms of visibility and impact damage.
A carbon tax is a political impossibility. Even raising the basic motor vehicle fuel tax to keep up with inflation is beyond Congress's capabilities, as it has been stuck at a flat 18.5 cents/gallon for the past several decades.
Even ignoring politics, finding a way to institute a large enough carbon tax to meaningfully reduce actual carbon without creating financial hardship for people that already have big, inefficient cars, or people that need to drive big vehicles for their job, is far from easy.
Then, there's the problem that the American public has been indoctrinated with decades of advertising, getting them to think they need bigger and bigger vehicles, and government coming along and telling them that they actually need a smaller vehicle for the sake of the climate won't get them to buy the small vehicle - it will simply get them to hate the government and vote for Republicans to repeal the carbon tax.
Electrification pushes, on the other hand, by reducing pollution in a way that is agnostic to vehicle size or capabilities, at least avoids penalizing people whose existing car is a gas car, and also avoids the political perils of government telling people to buy smaller cars.
It's not perfect - I personally think the price caps for the $7500 tax credit eligibility are too high - but it's still way better than nothing.
The "mad rush" you describe won't happen out of a desire to reduce carbon, though. Yes, some early adopters are motivated by that, but the real reason there will be a mad rush is that EVs, over time, will simply become superior to gas vehicles across an ever-growing array of dimensions.
EVs will win because people want those benefits, not because people want to reduce emissions.
Carbon pricing and green-energy carrots (subsidies) can work together. China is now pricing carbon emissions from its coal-fired power plants, after scaling up renewables like solar via subsidies. “Build the new, before destroying the old”. Combing carbon sticks + green carrots increases the speed & scale of the global energy transition.
Yes, but it's much harder to make carrots in a way that people find broadly acceptable at scale. You're either playing favorites by supporting specific paths of development, or creating a bureaucracy that needs a lot of paperwork and legwork to prove that you're really reducing carbon emissions relative to what would happen otherwise. Carrots are gameable to a much greater degree than sticks.
Granted you could also go for fee-and-dividend, where the proceeds from a carbon tax are distributed to everyone evenly and you benefit to the degree you decarbonize faster than average. That's simple, and it works even if you can't initially measure CO2 emissions accurately in some sectors.
Natural gas is indeed a convenient hedge against the non-dispatchable nature of wind and solar (i.e., those renewables cannot simply be turned on and off according to demand). It is nevertheless worthy of note that over the longer term continued reliance on natural gas for electricity generation may not be compatible with emissions-reduction goals. The NREL “Earthshot” target for 2050, for instance, allows for substantial replacement of natural gas not only through increased wind and solar, but also through progressive implementation of geothermal. (That same projection does not see much of a future for nuclear, but if the nuclear cost dilemma could be resolved that might change.)
Augustine, Chad, Sarah Fisher, Jonathan Ho, Ian Warren, and Erik Witter. 2023. Enhanced Geothermal Shot Analysis for the Geothermal Technologies Office. Golden, CO: National Renewable Energy Laboratory. NREL/TP-5700-84822.
Due to the shale boom and Saudi raising production, the oil price crashed between 2014-2016 which hurt the economic growth of many complacent petro states. You can tell who the winners and losers of economic growth from 2012-2022 based on which petrostates were damaged by the 2014-2016 commodity slump:
I agree that fracking has been a game changer for oil and natural gas production. However, I have to take issue with Matt's statement that "fracking made America a net oil exporter." This is only true if you define "oil" as all petroleum products, which includes many products other than crude oil. In fact, according to the USEIA, the US remains a net importer of crude oil. In 2022, the US imported 6.28 million barrels per day of crude oil and exported 3.6 million barrels per day of crude. It is a crucial distinction that shows that the US is not yet energy independent when it comes to crude oil.
The media narrative on fracking hasn’t changed much since. It’s unlocking a lot of economic and energy potential but it’s also got some unsavory risks that (even if low probability) would be catastrophic for the rural communities where a lot of this work happens. That seems mostly true? A big potential upside with a lower risk but big potential downside. Seems this is a relative no brainer in the trade off wars though.
Basically all extractive industries have large but localized potential failure modes, have since the Romans were mining tin and casting lead, if not before.
'These days, renewables like wind and solar are cost-competitive with fossil fuels in many places.'
Does this take into account the fact that fossil fuels can be stored and consumed when needed, whereas renewables have to be consumed when the energy is obtained (barring very limited battery storage)? Also, how efficient is wind power in Wyoming given hardly anybody lives there?
The idea is that you take advantage of Wyoming’s favorable landscape & environment to generate wind power, and then send the excess to more populated places via transmission lines.
That's sort of my point. Aside from the cost and pollution from building power lines hundreds of miles, there has to be an efficiency loss from long cables. Though as Thomas notes below, there could be utility in using the electricity to do activities requiring a lot of electricity within Wyoming. Aluminium smelting?
And, hypothetically, run carbon capture machines + sequestration at low enough cost that you can continue to use fossil fuels in some places/activities where it would be very costly to replace them. This may be more important for solar than for wind depending on where the combination of solar radiation days and geology converge or don't.
Yes, the statement is still true without storage. The grid can operate with a lot more intermittent sources than most people intuitively expect, by making more existing assets load following.
Also, energy storage prices are falling enough that we should be able to gradually push penetration higher without too much total cost increase. And some of the places where renewable power is getting *really* cheap are starting to plan on overbuilding production while using it to make hydrogen and synthetic fuels (which is a form of storage, even if it won't be cost competitive for another 10-30 years), which are easier to ship than electricity itself and will still be in demand for a long time.
I could not be better targeted than I am by Slow Boring’s combination of obsessively pro growth politics and open Democratic partisanship
Republicans are cringe, energy is based
I did some work with environmental groups in the early 2000s. In those days, many of us longed for energy independence and legal marijuana. As Tom Grunick said in Broadcast News, what do you do when your real life exceeds your dreams?
(Marijuana was legalized too late for me, but the rest of you should enjoy yourselves).
I thought I wanted marijuana to be legalized, but now that the stench is everywhere and so many students are coming to class stoned, I have changed my mind.
I'm coming around that marijuana legalization was mostly a failure. There's still just as many dudes illegally selling it on the corner and occasionally shooting each other as before, but now we get the added bonus of watching people smoke it while driving 4,000 lb vehicles and sketchy storefronts selling it in packaging clearly targeted at kids.
As someone who enjoys recreational marijuana ~twice a month, I view it as a big success. Are people really still shooting each other over illegal weed?
At least in my neck of the woods, yes.
No idea if links work in these here comments, but this particular crew has terrorized my neighborhood for years before a recent massive bust by the local cops and feds. They're linked to dozens of shootings and their main enterprise was selling weed, despite there being something like half a dozen weed stores within a half mile of their turf.
https://www.washingtonpost.com/dc-md-va/2023/07/01/kennedy-street-crew-crackdown/
My 12 year old son and I spent spring break in Chicago and it was a bit much. In every train station, other random places. We came in late one night and our hotel lobby smelled like a clam bake.
I'm curious if in 25 years, there isn't a realization that marijuana is the tobacco of yesteryear.
- “what do you do when your real life exceeds your dreams?”
- “Keep it to yourself”
LOL that’s my favorite line from Broadcast News
Gosh I remember those college days when we all were convinced that marijuana legalization would NEVER happen. I haven't smoked in a good decade probably now, and don't plan to unless there would be medicinal benefit. But can't help but admire the progress, even if it's come at the price of a ton of sketchy pot stores cropping up like fungal colonies. I firmly think its effects on society are less damaging then alcohol, so it's a small price to pay.
I volunteered with NORML in college and it really is amazing to see the progress we made in legalization. It felt dangerous and subversive to work with NORML in 2002 but now it feels like any other volunteer job.
Back then, I imagined anyone who worked for them getting harassed by the cops a lot. You’d have to stop smoking to go to work for them.
IME there comes a time in people’s lives when they retire and the devil’s lettuce is back in the menu.
I remember eating dinner with my grandma’s friends in a small town in a red state and hearing all their stories about traveling to the nearby legal state... and then often eating too much of the edible (this was back when all the companies were seeing how much THC they could pack into food, and the answer was “way more than you should”).
Same.
Amen brother
"This piece is written by Milan the Researcher, not the usual Matt-post."
CPI needs to track title inflation, how did intern become Researcher.
Because it sounds better on my business cards
Seeing you mentioned in The Economist was quite something. Curious about the backstory there, is there a thread of people chatting about it somewhere?
I reached out to offer our services; one of the people I emailed said they couldn’t offer a project but was interested in talking.
Wait, Milan was mentioned in the Economist? Where?
There was a piece about college consulting clubs. Milan was interviewed in his capacity as a member of Yale’s.
Wait a minute, there are Slow Boring business cards?
Yeah but the graphic design is dull and they take ages to arrive.
The number on the cards is just the number you call to report fake license plates : )
Still trying to get over someone who was in first grade in 2009 having a job title at all. Feeling old this morning.
I feel like Milan sneaked that one in, just to needle us older folks :-)
People think being a teacher makes you feel old because you're around 8 year olds all day. But what really makes me feel old is being a 40 something being surrounded by 23 year olds.
Nothing has made me feel older than realizing the fresh out of college new hire I just made is closer in age to my daughter in elementary school than to me. I'm not that old!
The supply of interns has doubled so of course there’s some inflation.
Waitaminute, a positive supply shock is supposed to result in _dis_-inflation, or potentially even falling prices.
I guess it depends on whether researcher prices track intern prices, or whether they are complementary.
Just one quick comment on "making it cheaper to heat homes in places like New England".
The Northeastern states have been very resistant to building out their pipeline infrastructure to take natural gas from Pennsylvania into their markets. So even though places like NY & Boston are very close to the gas fields, they pay a much much higher price for gas. Most of New England gets their gas shipped in LNG from from Trinidad.
It's an obvious example of the issues with permitting, unintended consequences, and how patchwork things can be on the local level. In most of the rest of the US, including here in Texas, we have seen greatly reduced natural gas prices.
Yes, but gas is still dramatically cheaper than oil, which is otherwise the default heating fuel in MA.
Oh yes for sure, not to mention lower pollution! And we still have the fracking revolution to thank for lowering global LNG prices. But New England natural gas could be up to 90% cheaper if delivered via pipe not LNG (prices are super volatile so the Northeast Pennsylvania-LNG spread changes a ton, so not always that big an advantage, but still usually huge)
When I lived in MA, there was a gas line on my street. Right after I closed on my house (late August) I applied for the permit to get a gas line run from the (short cul-de-sac) street to my house. My town had a rule that they'd only allow National Grid to have a handful of digging permits outstanding at once, National Grid did digging jobs like that in roughly the order permits were granted, and they don't do them once the ground freezes. So I had to wait until May to get it done. My house's existing heating system died in late March. This was 2014-15, when we got 9 feet of snow. So I definitely agree that better permitting and better infrastructure are very valuable.
Does the 90% cheaper include amortizing the cost of new pipeline infrastructure?
That 90% is just looking at regional price differences between in-basin Marcellus gas and New England prices. The cost of new pipeline infrastructure is usually borne by the "Midstream" company building the pipelines, who pass on the costs to the gas producers. So some of the value gets captured as arbitrage by the Midstream company but most of it is improved value for the consumers & producers.
Some rough numbers:
In-basin Marcellus gas is often $0.50-$2.50/mcf.
New England LNG import pricing: $4-40/mcf
Also on that line, I thought most of the country heated with gas, but New England is one of the few places where a significant fraction of people heat with oil of some sort.
Im in Alabama and I assumed everyone had heat pumps.
When I first learned that some places in the USA still used oil, it seemed very...retro. To put it charitably.
I can see that. Heat pumps are great technology, they just don't quite yet have the oomph to combat the really deep cold you can get semi-regularly anywhere north of like Virginia. (At least, this is what Alec from Technology Connections says and I believe him because he seems to have really done his research.)
Heat pumps only really became viable in the NE in the last two years and they’re still pretty borderline TBH.
My grandparents had a *coal-fired* boiler when I was growing up, up in central PA, where there was no infrastructure for gas and coal was cheaper than propane or fuel oil for many years.
"Liked" for the second paragraph (because it's always been shocking to me that fuel oil is still a major thing in some places in the US and have wondered how it can possibly make sense for various levels of government to pay to subsidize fuel oil consumption rather than giving generous rebates for converting to gas).
In rural areas where gas transmission infrastructure would be ruinously expensive?
Yep, it's kind of crazy given they are a couple hundred miles from perhaps the world's greatest natural gas field outside of the Middle East.
I've read that the pipeline block is New York which will not permit any new construction. It's hard to imagine that politicians in the states forced by NYs actions would oppose lower prices for their constituents.
My dad, who knew his geology, would always tell me as a teenager that once someone found a cost effective way to harvest shale oil, it would be a game changer. Unfortunately he didn't live long enough to see it through, but he'd be very proud that he called that.
A great SlowBoring summary of fracking's significance. But it really should have gone back to the Bush/Cheney administration to fully capture why the fracking boom happened. Cheney's energy task force, convened in 2001, recommended a host of regulatory changes that greatly abetted expansion of this method for extracting hydrocarbons . https://insideclimatenews.org/documents/epa-administrator-christine-todd-whitman-fracking-memo-vice-president-dick-cheney-2001/ I was reporting on the climate moves of the administration at the time: https://www.nytimes.com/2001/04/28/us/after-rejecting-climate-treaty-bush-calls-tutors-give-courses-help-set-one.html
Wasn't aware of this; thanks for the pointer.
Just brought back memories of those times. What's fascinating is how the Fox hosts, dealing with the Obama clip, didn't seem to know the Cheney context either.
“Environmental organizations like to argue that fracking still poses risks to water supplies, but trade groups say that the process is safe and there doesn’t seem to be a clear scientific consensus on this.”
Most of the “evidence” used by the former is drawn from areas where well water has been laced with gas since before most of my ancestors had migrated to this country.
Lighting a glass of tap water ablaze was a party trick in places of Northern PA where my family has ties when I was a small child.
Most of the exceptions are not due to a flaw in the technology or technique but subpar materials for well linings as they pass the shaft through the aquifer layer, which are quite well-regulated and this rare.
Mutatis mutandis, this whole piece applies in reverse to the crass error of opposing fossil fuel production and transmission projects in the US. Joe Manchin was right about permitting reform.
This was a really good piece, lines up with the data and trends I see too (I'm a cleantech consultant). I'd just add a few points to push it further.
1) Energy storage prices are falling quickly too. We're getting close to the point where 1-4hr grid-scale Li-ion batteries are cost-competitive with having natural gas peaking plants, which will make the whole grid more efficient regardless of the mix of sources, but especially for increasing wind and solar penetration. The rise in EVs will ultimately represent us building out the equivalent of 1-2 days of storage relative to total current electricity use, and with California mandating V2G tech, and most people using only a fraction of their range, this will be very valuable for increasing renewables penetration to (but only if we build out enough charging stations to have people plugged in wherever they're parked during the day). (All of this also reduces the need for long-distance electricity transmission, which is expensive and just hard/slow to build and coordinate politically).
2) If wind and solar prices keep falling on-trend, then making green hydrogen, or synthetic methane/methanol/ammonia/fuels, becomes dramatically cheaper, and switches from energy-cost-dominant to capex-dominant, and the latter is the kind of thing we can improve with scale and iteration. Synthetic hydrocarbons are also easier to ship long distances than electricity, and can replace petrochemical feedstocks as well. Plus we're already seeing e.g. Australia working hard to become a clean fuels exporting hub over the next decade, and Korea working to convert coal plants to gas, and upgrading gas plants to be able to also use (some) hydrogen. Right now this is a deeply weird market, heavily distorted by subsidies and mandates such that everyone tries to ship green fuels to California and Europe no matter where they're made, but that will pass as supply increases.
3) Weather-wise, the Middle East is also well positioned to remain an energy exporter in a renewables-dominant world, with high solar potential and fairly low population density. So far the Saudi projects I've seen focus on blue hydrogen and CCS, which makes sense for them for now. This will be interesting to see how it all plays out.
4) A decent amount of natural gas infrastructure stays relevant in a renewables-dominant world in a way that coal infrastructure doesn't, because we're going to need CO2 utilization to make a lot of chemicals and materials, and converting it to gas is likely to be a big part of the set of pathways we'll use for that.
I'd be shocked if V2G actually passes. EV batteries are becoming more structurally integrated. Meaning replacement costs and even feasibility will be a long-term headwind. No EV owner would waste needless charging cycles on V2G.
EDIT -- Just for some clarity. Only the California Senate has approved the bill (SB-233). It still needs to go through the state Assembly. Again ... this only passes if California wants to go to war with Tesla.
https://sd09.senate.ca.gov/news/20230531-ca-senate-greenlights-sen-skinner%E2%80%99s-sb-233-using-evs-power-homes
Fair enough, at least to a point. But I think you're overestimating the amount of load V2G will put on batteries, at least once EVs form enough of the total vehicle mix. We're talking *maybe* using 5-10% of the battery capacity on a typical day, and even though vehicle batteries are warrantied for ~8 years they typically actually last 12+ on average, which is also the average lifespan of an ICE vehicle. Shallow cycling like that really has minimal impact on lifetime.
And, I expect it will only fly if there is net metering, with real-time pricing so that the vehicle owners are compensated by the utilities and grid management companies for both the cost of electricity and the wear on vehicles, otherwise there are going to be class-action lawsuits against the state about it's seizure of private property.
I would *not* be ok with V2G regularly consuming half or more of my battery, or anything similarly extreme. Doing that in the event where my other option is an extended power outage, maybe a few times a year at maximum, would be totally fine. It would be of direct use to me, and would also obviate the most-expensive grid scale long duration energy storage needs for high renewables penetration, which would lower electricity production costs in the long term.
Well ... another reason the bill isn't going to pass. It doesn't specify how any of this would actually work other than the commission should convene a group of stakeholders to evaluate all the challenges and also yes ... 100% bidirectional capable vehicles by 2030 MY. But my post was really just to point out that California hasn't actually mandated it yet -- and I'd be very surprised if they do.
Fair enough, no arguments there. I still think most electric vehicles will end up having it at some point within the next decade or so, and that it will on net reduce the cost of EV ownership.
The real problem with V2G is not the impact of the flow of electricity on the car's battery life. It's the cost of all that extra equipment outside the car to actually connect the car to the power grid in a bidirectional manner.
Even if agreeing to V2G saves you around $10/month in your home electricity bill, that's still a nonstarter if a V2G-compatible charger costs thousands of dollars more than a conventional charger - that's money you'll never be able to make back within a reasonable timeframe.
Depends on what you mean by V2G. My brother is interested in V2G because he would like his vehicle to function like a PowerWall in the event of power failure. So that's not really V2G (it never goes to the grid), but it goes to the same place the grid does (the house).
If you mean everyone using their own vehicles as battery storage to increase grid strength for intermittent power, then I'm inclined to agree with you on the charging cycles issue, unless that also makes it so batteries are designed to be more replaceable and you get credits to cover the loss of charging cycles.
That's V2H which is ~ the same system from the vehicle to the home but doesn't require the home to grid transfer. For emergencies -- sure, that's a fine back-up strategy. But adding the additional charging cycles of V2G is a terrible idea. The battery is > 50% of the vehicle value and to accelerate degradation of the battery is so dumb.
The charge cycle issue is only really a thing when you're fast charging or charging up all the way to 100% or all the way down to 0%. V2G is about slowly cycling the batter between 60% and 70% over a period of several hours. The impact of this on battery longevity is really negligible. Maybe if you intend the car to last over 100 years, even this would eventually start to add up. But, no car ever lasts anywhere near that long.
The real problem with V2G is not battery degradation but the cost of the extra equipment to make it possible.
As has been discussed here at SB and elsewhere, the simplest, most efficient way to address the externality of carbon emissions would be a carbon tax.
Our current approach, an array of regulations and subsidies attempting to micromanage the way we produce and consume energy, puts politicians (and ultimately taxpayers) in the position of venture capitalists. There will be hits but also some expensive misses.
I predict one very expensive miss will be the mad rush to replace gasoline vehicles with EVs. A faster, more cost effective reduction in vehicle emissions would be achieved by a carbon or gasoline tax or at least a flexible set of incentives that encouraged the purchase of any high MPG vehicle regardless of technology (in other words, show me some love if I trade in my Suburban for a Prius).
You can’t take the politics out of politics.
Ah, carbon and land value taxes. Where would comment sections be without the endless munching of these two impossibilities.
Perhaps I should change my screen name to Don Quixote. What can I say? To use a trendy legalistic phrase, I have a “sincerely held belief” that these are good ideas, and I will pitch them to anyone who’ll listen (or even anyone who won’t).
If the US (or others) had set, say, a $10/MT carbon tax 20-30 years ago, indexed to rise at 5-10%/yr forever, and put all the revenue into something like a permanent sovereign wealth fund, then we probably wouldn't have needed any other climate policy or subsidy, ever, to get to full decarbonization by 2040-2050. And we'd have really good incentives for the market to find and exploit the low hanging fruit first, and invest in longer term projects due to a guaranteed ROI. You want permitting reform? Much easier to win that fight if you make it an arms race between towns and states to avoid subsidizing each other by decarbonizing slower.
On EVs, I really don't get why there's not more love for serial hybrids, with 20-50 miles of electric range. Cutting the first 80% of the average driver's emissions from gasoline use costs a tiny fraction of what it takes to cut the last 20%, eliminates much of the need for grid and charging infrastructure improvements, and destroys the whole concept of limited range. And it can shift gracefully, with range rising with each development cycle as batteries get cheaper, while giving the mining sector plenty of time to increase lithium production.
I've been wondering this since the 2000s, it's not like it was hard to see the (solvable, with enough time and investment) problems with EVs coming and how we could avoid them, we just... didn't. It especially baffles me that Ford released the F150 Lightning, which really can't be used for most of the tasks that actually need a truck, and yet there are only a handful of parallel hybrid pickup models (many optimized more for power than efficiency), no serial hybrid models I can find, and no hybrids at the 3/4 ton truck or higher range.
My understanding is one real advantage full EV cars have is a _much_ simpler engine/drivetrain/whatever. Having the gasoline engine at all adds a lot of hardware that you don't need if it is pure EV.
Simpler for sure, but not so much simpler that it outweighs the cost advantage (yet).
Totally agree with you. We have a PHEV and its the best of both worlds. We get 40 miles of range on a charge, which allows the daily commute and errands to be done on electric. But we have no range concerns on longer trips. Frankly the charging infrastructure leaves a lot to be desired still, and I would hate to be reliant on it for every trip we make. The only downside is that the batteries make the car extremely heavy, and the electric engine produces a lot of torque, so we go through tires much more quickly than we would on a gas only model.
PHEVs sound great from the perspective of an individual, but as soon as the government starts incentivizing them, you're going to end up with people buying them that never plug them in, meaning that virtually all of their driving is still done off gas.
PHEVs also don't create the demand to justify building out the charging network that is needed for full EVs. And, as the price of batteries continues to fall, we will quickly reach a period when full EV becomes cheaper to buy than PHEV because the cost difference between the big battery and the smaller battery will be outweighed by not needing all those gasoline-related components.
I like the idea of a carbon tax and re-distribution. Literally just pool the money collected by a carbon tax and divide it equally between every American.
I hate that the F-150 Lighting exists.
It's a monument to the desire to buy pickup trucks and not use them as pickup trucks. Crew cab + 5.5' bed only. Impractical for towing due to range.
The dangerous tall, flat front is of course retained, even though it being an EV means that the Lightning's front could have easily been made much more angled and safer in terms of visibility and impact damage.
I’ll agree with you except that I think the carbon tax should be offset by raising the income tax “zero” bracket.
A carbon tax is a political impossibility. Even raising the basic motor vehicle fuel tax to keep up with inflation is beyond Congress's capabilities, as it has been stuck at a flat 18.5 cents/gallon for the past several decades.
Even ignoring politics, finding a way to institute a large enough carbon tax to meaningfully reduce actual carbon without creating financial hardship for people that already have big, inefficient cars, or people that need to drive big vehicles for their job, is far from easy.
Then, there's the problem that the American public has been indoctrinated with decades of advertising, getting them to think they need bigger and bigger vehicles, and government coming along and telling them that they actually need a smaller vehicle for the sake of the climate won't get them to buy the small vehicle - it will simply get them to hate the government and vote for Republicans to repeal the carbon tax.
Electrification pushes, on the other hand, by reducing pollution in a way that is agnostic to vehicle size or capabilities, at least avoids penalizing people whose existing car is a gas car, and also avoids the political perils of government telling people to buy smaller cars.
It's not perfect - I personally think the price caps for the $7500 tax credit eligibility are too high - but it's still way better than nothing.
The "mad rush" you describe won't happen out of a desire to reduce carbon, though. Yes, some early adopters are motivated by that, but the real reason there will be a mad rush is that EVs, over time, will simply become superior to gas vehicles across an ever-growing array of dimensions.
EVs will win because people want those benefits, not because people want to reduce emissions.
Carbon pricing and green-energy carrots (subsidies) can work together. China is now pricing carbon emissions from its coal-fired power plants, after scaling up renewables like solar via subsidies. “Build the new, before destroying the old”. Combing carbon sticks + green carrots increases the speed & scale of the global energy transition.
Yes, but it's much harder to make carrots in a way that people find broadly acceptable at scale. You're either playing favorites by supporting specific paths of development, or creating a bureaucracy that needs a lot of paperwork and legwork to prove that you're really reducing carbon emissions relative to what would happen otherwise. Carrots are gameable to a much greater degree than sticks.
Granted you could also go for fee-and-dividend, where the proceeds from a carbon tax are distributed to everyone evenly and you benefit to the degree you decarbonize faster than average. That's simple, and it works even if you can't initially measure CO2 emissions accurately in some sectors.
Excellent post! But admit it, Milan, you wrote this -- "[w]ay back in my first-grade days in 2009" -- with a smirk. Or maybe a rueful smile.
Natural gas is indeed a convenient hedge against the non-dispatchable nature of wind and solar (i.e., those renewables cannot simply be turned on and off according to demand). It is nevertheless worthy of note that over the longer term continued reliance on natural gas for electricity generation may not be compatible with emissions-reduction goals. The NREL “Earthshot” target for 2050, for instance, allows for substantial replacement of natural gas not only through increased wind and solar, but also through progressive implementation of geothermal. (That same projection does not see much of a future for nuclear, but if the nuclear cost dilemma could be resolved that might change.)
Augustine, Chad, Sarah Fisher, Jonathan Ho, Ian Warren, and Erik Witter. 2023. Enhanced Geothermal Shot Analysis for the Geothermal Technologies Office. Golden, CO: National Renewable Energy Laboratory. NREL/TP-5700-84822.
Due to the shale boom and Saudi raising production, the oil price crashed between 2014-2016 which hurt the economic growth of many complacent petro states. You can tell who the winners and losers of economic growth from 2012-2022 based on which petrostates were damaged by the 2014-2016 commodity slump:
https://open.substack.com/pub/yawboadu/p/world-bank-data-2022-update?r=garki&utm_campaign=post&utm_medium=web
That’s a great article, but I wish it’s charts were actually fully listed!
I added a chart for the oil and listed each oil price phase :)
I agree that fracking has been a game changer for oil and natural gas production. However, I have to take issue with Matt's statement that "fracking made America a net oil exporter." This is only true if you define "oil" as all petroleum products, which includes many products other than crude oil. In fact, according to the USEIA, the US remains a net importer of crude oil. In 2022, the US imported 6.28 million barrels per day of crude oil and exported 3.6 million barrels per day of crude. It is a crucial distinction that shows that the US is not yet energy independent when it comes to crude oil.
How much of that crude oil importation is for refinement for the export market?
Y’all remember the movie “Promised Land”? That was at the peak of the anti fracking panic.
https://www.rottentomatoes.com/m/1016837-promised_land
The media narrative on fracking hasn’t changed much since. It’s unlocking a lot of economic and energy potential but it’s also got some unsavory risks that (even if low probability) would be catastrophic for the rural communities where a lot of this work happens. That seems mostly true? A big potential upside with a lower risk but big potential downside. Seems this is a relative no brainer in the trade off wars though.
Basically all extractive industries have large but localized potential failure modes, have since the Romans were mining tin and casting lead, if not before.
The oil price crash from 2014 to 2016 also damaged growth in petrostates like Nigeria and Venezuela. You missed a great chance to talk about that!
'These days, renewables like wind and solar are cost-competitive with fossil fuels in many places.'
Does this take into account the fact that fossil fuels can be stored and consumed when needed, whereas renewables have to be consumed when the energy is obtained (barring very limited battery storage)? Also, how efficient is wind power in Wyoming given hardly anybody lives there?
The idea is that you take advantage of Wyoming’s favorable landscape & environment to generate wind power, and then send the excess to more populated places via transmission lines.
There is a huge Wyoming wind farm and transmission line project that has been working through the regulatory morass: https://energynews.us/2022/06/03/greenlit-powerlines-forecast-wyoming-wind-energy-boom/ It recently obtained Bureau of Land Management approval and will be really important to California as it will provide evening renewable energy to balance the ample supply of daytime solar energy. https://www.latimes.com/environment/story/2022-08-23/wyoming-clean-energy-california
That's sort of my point. Aside from the cost and pollution from building power lines hundreds of miles, there has to be an efficiency loss from long cables. Though as Thomas notes below, there could be utility in using the electricity to do activities requiring a lot of electricity within Wyoming. Aluminium smelting?
And, hypothetically, run carbon capture machines + sequestration at low enough cost that you can continue to use fossil fuels in some places/activities where it would be very costly to replace them. This may be more important for solar than for wind depending on where the combination of solar radiation days and geology converge or don't.
Yes, the statement is still true without storage. The grid can operate with a lot more intermittent sources than most people intuitively expect, by making more existing assets load following.
Also, energy storage prices are falling enough that we should be able to gradually push penetration higher without too much total cost increase. And some of the places where renewable power is getting *really* cheap are starting to plan on overbuilding production while using it to make hydrogen and synthetic fuels (which is a form of storage, even if it won't be cost competitive for another 10-30 years), which are easier to ship than electricity itself and will still be in demand for a long time.