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UVA Study: 11 Major Flaws in Coal Center’s Energy Analysis Relied On by Gov....

 
In a study released last week, energy expert Dr. William Shobe of the University of Virginia dismantles the key, state-sanctioned analysis of how Virginia should meet the requirements of the federal Clean Power Plan to reduce carbon emissions.

That analysis, produced last fall by a team led by Dr. Michael Karmis, director of the Center for Coal and Energy Research at Virginia Tech, is part of the Virginia Energy Plan and is relied upon by Gov. Terry McAuliffe and the legislature as they make decisions about the state's energy future.

"In short, the report is almost certainly worse than no study at all because it misstates likely costs, analyzes irrelevant options, and gives short shrift to the cases that really matter," writes Shobe.

A professor of public policy and director of the Center for Economic and Policy Studies, Dr. Shobe's research focuses on climate change, greenhouse gas markets, and auction design. Shobe was part of the team that designed the Regional Greenhouse Gas Initiative for nine Northeast states, a cap-and-trade program to reduce carbon emissions that has generated $1.3 billion in economic benefits and 14,000 job-years over the past three years.

"Old Boy" Selection Process


Last fall, we questioned why Dr. Karmis - who is an international consultant to the coal industry - had been chosen by the McAuliffe Administration's Dept. of Mines, Minerals & Energy (DMME) to write a 199-page analysis of how Virginia should best meet the requirements of the federal Clean Power Plan.  By repeatedly evading my basic questions about how and why he was chosen, Karmis and DMME only heightened suspicions about what appears to be an "old boy" selection process heavily influenced by the fossil fuel industry.

But now it is clear that the process was more than unseemly: the sloppy, coal-friendly conclusions of Karmis' report are contributing to Virginia status as an also-ran in clean energy development.

Notable problems Shobe found with Karmis' analysis include:

  • Double counts compliance costs by about $400 million annually because the authors added together two different estimates of compliance costs.
  • Made a calculation mistake that cut the estimated benefits of emission reductions by more than 40%.
  • Used inappropriate and incomplete economic analysis in estimating total economic costs and associated job losses, inflating cost and job losses.
  • Misinterpreted, on at least two occasions, analysis provided by the EPA in the EPA's regulatory impact analysis of its proposed rule.

(For a full list of errors, click here.)

In addition to reviewing Karmis' analysis, Professor Shobe makes useful recommendations to ensure state agencies such as DMME, the Dept. of Environmental Quality, and the State Corporation Commission are able to properly assess studies presented to them.

An Impartial Coal Expert?


Virginia is having a critical conversation about Clean Power Plan compliance options and strategies. Citizens must ask themselves: should the Commonwealth's policymakers continue to rely upon an energy analysis produced by coal expert Michael Karmis that we now know is utterly flawed?

Last November, I concluded a post by asking whether Dr. Karmis was too conflicted to write a document the governor and legislature would depend upon as an unbiased, informed look at how the state can best respond to the Clean Power Plan. By submitting a report with flawed methodology, basic factual errors and biased conclusions in favor of the coal industry, it seems the answer regarding Dr. Karmis's conflicts is a resounding yes.

Scott Peterson is executive director of the  Checks and Balances Project, a national watchdog blog that seeks to hold government officials, lobbyists, and corporate management accountable to the public. Funding for C&BP comes from pro-clean energy philanthropies and donors.

UVA Study: 11 Major Flaws in Coal Center’s Energy Analysis Relied On by Gov....

University of Virginia Study Finds 11 Major Flaws in Coal Center's Energy Analysis Relied Upon by Gov. McAuliffe and LegislatureCross posted from the Checks and Balances Project

In a study released last week, energy expert Dr. William Shobe of the University of Virginia dismantles the key, state-sanctioned analysis of how Virginia should meet the requirements of the federal Clean Power Plan to reduce carbon emissions.

That analysis, produced last fall by a team led by Dr. Michael Karmis, director of the Center for Coal and Energy Research at Virginia Tech, is part of the Virginia Energy Plan and is relied upon by Gov. Terry McAuliffe and the legislature as they make decisions about the state's energy future.

"In short, the report is almost certainly worse than no study at all because it misstates likely costs, analyzes irrelevant options, and gives short shrift to the cases that really matter," writes Shobe.

A professor of public policy and director of the Center for Economic and Policy Studies, Dr. Shobe's research focuses on climate change, greenhouse gas markets, and auction design. Shobe was part of the team that designed the Regional Greenhouse Gas Initiative for nine Northeast states, a cap-and-trade program to reduce carbon emissions that has generated $1.3 billion in economic benefits and 14,000 job-years over the past three years.

Checks and Balances Project Launches Captured Regulators Initiative

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Checks and Balances Project Launches Captured Regulators InitiativeInfluence pedaling in America is a $9 billion a year industry. It's as big as Major League Baseball or NASA's Mars spacecraft program, changing from direct meetings with lawmakers to a vertically integrated set of businesses that work every stage of government decision making - including the shaping of public opinion.

Checks and Balances Project Launches Captured Regulators InitiativeMany have charted the size, scope, and growth of the influence peddling industry. There's the definitive, 25-part Washington Post series on the emergence of modern mega-lobbying firms. Ross and Amter's definitive history of the chemical lobby The Polluters. Merchants of Doubt, by Oreskes and Conway, that laid bare the growth of the lobbyist-funded think tank industry. There are also definitive books by then-reporter Jeff Birnbaum's, including The Money Men: The Real Story of Fund-raising’s Influence on Political Power in America - though Birnbaum later joined the influence business himself.

The point is that as a growth industry, influence peddling needs to find new ways to grow to accommodate the ever-expanding ranks for former staff and public officials who want to make big money after their public "service."

So it was only a matter of time before previously sleepy public offices, such state assembly offices, state public utility commissions, and writers of obscure cost-benefit analyses became part of the influence peddling playbook. That's particularly true now that the big shifts in the energy industry are under way. Rooftop solar on people's homes has been declared a "mortal threat" by the lobbying arm of the utility industry, which has launched a very concerted effort to penalize their customers for buying less of their product.

Regulatory Capture in State Agencies
In many states, commissioners have been lured to ally themselves with the industries they are charged with regulating. There is a term for this, created by Nobel Prize winner Economist George J. Stigler over 50 years ago: "Regulatory capture."

Dominion Power/Tobacco Commission Scandal Highlights Need for Much Stronger Virginia Ethics Laws

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For years, Virginians had confidence that their state government was run efficiently and well - at least compared to other states. "The Virginia Way" set us apart from other states with seemingly incorrigible corruption in their capitols.

All that has changed recently with a series of events that is deeply shaking public confidence.

It is not just the dramatic corruption conviction of once-popular former Gov. Bob McDonnell, but a series of ugly disclosures that have changed how we think business is done in Richmond.

There was the CONSOL Energy scandal in which an assistant attorney general provided legal advice to help an out-of-state energy company to fight Virginia landowners who were owed millions for gas extraction. There was the federal probe into offers of jobs to then-Sen. Phil Puckett and his daughter if the senator resigned his seat - thus changing partisan control of the Senate.

The State Integrity Investigation ranked Virginia 47th out of 50 states on its Corruption Risk Report Card.

This month's scandal is news that the Virginia Tobacco Commission gave $30 million to a partner of Dominion Resources Inc., to construct a natural gas pipeline to a new $1.3 billion natural gas-fired power plant Dominion is building in Brunswick County. The commission's staff recommended $6.5 million. Dominion is listed as a beneficiary on the Tobacco Commission grant application and is co-signer of the contract.

How was the grant increased by $23.5 million to benefit Dominion - one of the richest and most politically well-connected corporations in Richmond?

- Blue Virginia Sponsor -








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