Things to add for future Impacts for addons Bio-d / Amazon rainforest impact 1ac Plan
Download 0.97 Mb.
|
- Navigate this page:
- Consumers can adapt to electricity price spikes
- Coal price spikes don’t go global- not an international commodity like oil
- No price shocks for non-oil energies
- Non-oil energy sources don’t have a cascade effect
- Natural gas production at an excess now- price increases only causes more usage
- Natural gas lowers energy costs
AT: Coal / Electricity AdvLock closures would not effect the energy industry- 6 reasonsC. James Kruse et al 2011, Director at Center for Ports & Waterways Annie Protopapas and the Associate Research Scientist, Zafarbek Ahmedov Graduate Research Assistant, Bruce McCarl Professor, Ximing Wu Associate Professor James Mjelde Professor, December 2011, “AMERICA’S LOCKS & DAMS: “A TICKING TIME BOMB FOR AGRICULTURE?””, http://www.unitedsoybean.org/wp-content/uploads/Americas_Locks_And_Dams.pdf) The review of previous studies of lock closures and ad hoc coal price percentage changes indicates that short-term closure of the Ohio River increases costs, but not dramatically. The energy sector has the ability to withstand short-term closures. Often, the closure of a lock is for only one chamber—either the main or the auxiliary chamber. The ability of traffic to continue even though a chamber is experiencing a closure mitigates some of the costs. Fortunately for commerce, but unfortunately for studying effects, longer-term closures and complete closures are not in the data sets. Although the response will be specific to each utility company and particular electricity generating plant, some responses can be generalized. These responses include: 1. Use of stocks. One of the first responses would be to rely on coal stocks at the plants. Figure 4.1 shows average coal stocks at electricity generating facilities over time. Plants have approximately two months of coal on hand. 2. Multifuel plants. The current wildcard in the energy industry is the development of shale natural gas. Plants are being built and retrofitted to be able to use dual fuels, usually coal and natural gas. For the PJM Interconnection region 34 for 2007, coal plants had capacity of approximately 78,000 megawatts. Of this capacity, approximately 63% is associated with coal plants that have backup fuel capacity. 35 3. Change suppliers. Coal moves both up and down the Ohio River, with a closure, plants upriver of the closure may be forced to change to only upriver suppliers, while plants downriver may have to use downriver suppliers. Two issues are 1) the availability of barges above and below the closure and 2) environmental regulations. Coal is partially moved on the Ohio River to meet environmental regulations through the mixing of low and high sulfur coal. Improved scrubbers and the possibility of relaxed environmental regulations in an emergency are unknowns. 4. Change mode of transportation. The most likely change is from barge to railroad transportation. One limiting factor is the availability of railcars in the affected region and the time necessary to increase the number of cars in the region. Many, if not most, plants that obtain coal by barges also have railroad spurs to the plant. 5. Purchase electricity off the grid. Additional purchases will cause an increase in both peak and off-peak wholesale electricity prices. Fluctuations in electricity prices cause by different shocks have been seen in PJM, which coordinates the movement of wholesale electricity in all or parts of the Eastern U.S. states of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia, is the world’s largest competitive wholesale electricity market. 36 6. Short-term plant closures, blackouts, and brownouts. This is the worst case scenario, but the likelihood of occurrence is small. Nothing in the previous closures or studies indicates this will happen. Energy substitution solves electricity prices CBO, 2012, May, Congressional Budget Office, “Energy Security in the United States,” http://www.cbo.gov/sites/default/files/cbofiles/attachments/05-09-EnergySecurity.pdf, JHaze The Ability of Energy Consumers to Adjust to Disruptions The U.S. electricity system is quite flexible and operates with significant spare capacity in most circumstances. That spare capacity means that when western coal is not available to electricity providers in the East, for example, they can shift generation to facilities that rely on coal from Illinois or Appalachia or increase generation from natural gas or renewable sources. In addition, some facilities are maintained in reserve and operated only during periods of peak electricity demand or during a disruption at another facility. Thus, when the price of one commodity used to generate electricity rises, another commodity can be substituted, keeping electricity prices relatively stable. Consumers can adapt to electricity price spikesCBO, 2012, May, Congressional Budget Office, “Energy Security in the United States,” http://www.cbo.gov/sites/default/files/cbofiles/attachments/05-09-EnergySecurity.pdf, JHaze Disruptions in the supply of energy impose both direct costs and indirect costs on households and businesses faced with higher energy prices. When supply disruptions cause energy prices to rise, U.S. households and businesses incur direct costs by paying more for goods and services (such as electricity, gasoline, and heat) produced by that energy. The magnitude of those costs—whether incurred on a temporary or persistent basis—hinges, in part, on the options available for consumers to lower their expenditures on energy. In the near term, consumers can respond to higher energy prices in a number of ways—for example, by changing the temperature on their thermostat, switching to energy-efficient light bulbs, driving less or more slowly, or vacationing away from home less frequently. Those responses limit the cost increases that consumers face. Over the long term, consumers have more options for reducing their exposure to disruptions in energy markets because they have more time to budget for and make energy-saving decisions. For example, they can decide where to live or locate a business, what type of vehicle or fleet to purchase, and whether to buy heating and air conditioning units that are more energy-efficient. The more near-term and longterm alternatives consumers have available for responding to disruptions in energy markets, the less exposure they have to those disruptions. The direct costs—greater spending on some goods and services—would cause U.S. households and businesses to reduce their consumption of other goods and services, particularly if there were limited near-term alternatives for consumers to use less energy. That reallocation of resources among sectors and to energy producers would impose indirect costs on the economy that many economists consider to be the primary channel through which disruptions in energy supply affect the economy. 2 Coal price spikes don’t go global- not an international commodity like oilCBO, 2012, May, Congressional Budget Office, “Energy Security in the United States,” http://www.cbo.gov/sites/default/files/cbofiles/attachments/05-09-EnergySecurity.pdf, JHaze Disruptions in the supply of any commodity tend to raise that commodity’s price; however, disruptions in the supply of oil have a much larger effect on prices than interruptions in the supply of other energy commodities. The extensive network of pipelines, shipping, and other options for transporting oil around the world means that a single world price for oil prevails, after accounting for the quality of that oil and the cost of transporting it to the marketplace. Except for countries where the price of oil is regulated or subsidized in certain ways, disruptions related to oil production that occur anywhere in the world raise the price of oil for every consumer of oil, regardless of the amount of oil imported or exported by that consumer’s country. In contrast, the high cost of moving natural gas, coal, nuclear power, and renewable energy limits their markets to geographically bounded regions, such as North America. Consequently, foreign disruptions have had little or no effect on the prices of those fuels in the United States. No price shocks for non-oil energiesCBO, 2012, May, Congressional Budget Office, “Energy Security in the United States,” http://www.cbo.gov/sites/default/files/cbofiles/attachments/05-09-EnergySecurity.pdf, JHaze The Likelihood of Disruptions and the Ability of Suppliers to Adjust to Them A substantial amount of oil is produced in countries that are vulnerable to disruptions resulting from geopolitical, military, or civil developments, and few countries other than Saudi Arabia have much spare production capacity in the near term to offset such disruptions. In contrast, the U.S. markets for natural gas, coal, nuclear power, and renewable energy either are less prone to long-term disruptions or have significant spare production and storage capacity. For example, U.S. producers and consumers of natural gas maintain a significant reserve in storage (30 percent of annual consumption in 2010). Similarly, stocks of coal in 2010 represented 9 weeks of U.S. consumption and, over the past decade, producers of coal in the United States maintained an average spare production capacity of 17 percent. Much of the limited potential for disruptions in the supply of those fuels involves their transport across the United States (via pipeline, railcar, river barge, or truck), for which redundancy and spare transport capacity exist. Non-oil energy sources don’t have a cascade effectCBO, 2012, May, Congressional Budget Office, “Energy Security in the United States,” http://www.cbo.gov/sites/default/files/cbofiles/attachments/05-09-EnergySecurity.pdf, JHaze Any disruption has the potential to raise prices unless producers of the affected commodity are able to offset the disruption by quickly boosting their own production or drawing down their own stores of the commodity. The price increase from any such disruption would be similar for all consumers in the same global, regional, or local market as that in which the disruption occurred. Because producers of oil have a limited ability to increase production to offset disruptions and because oil is traded in a global market, disruptions anywhere in the world would be expected to raise oil prices for all consumers. In contrast, producers of coal, natural gas, nuclear power, and renewable energy maintain excess production capacity or storage to offset disruptions. Also, because those commodities are traded in regional or local markets, disruptions outside the United States, Canada, and a few other nearby trading partners would probably not affect their price in the United States. Natural gas production at an excess now- price increases only causes more usageCBO, 2012, May, Congressional Budget Office, “Energy Security in the United States,” http://www.cbo.gov/sites/default/files/cbofiles/attachments/05-09-EnergySecurity.pdf, JHaze Most importantly, U.S. producers and consumers of natural gas maintain a significant reserve of natural gas in storage (30 percent of annual domestic consumption in 2010), which is drawn down or added to fairly regularly; in contrast, oil storage in the United States represents a much smaller supply of annual world consumption (less than 4 percent in 2010). 14 That storage provides firms that use natural gas a significant cushion against temporary disruptions in supply. In addition, in some parts of the United States, more natural gas is produced than can be sold profitably, causing producers to dispose of the excess. 15 A persistent disruption that put upward pressure on natural gas prices could create sufficient incentives for firms to build additional infrastructure to enable them to sell their excess natural gas. Natural gas lowers energy costsGreenstone, 6-1-12, Michael, Director, Economic Studies, The Hamilton Project Michael Greenstone is the 3M Professor of Environmental Economics in the Department of Economics at the Massachusetts Institute of Technology. From 2009-10 he served as the chief economist at the White House’s Council of Economic Advisers. Adam Looney is a senior fellow in Economic Studies and policy director of The Hamilton Project. His research focuses on tax policy, labor economics, inequality and social policy. Previously, Looney was the senior economist for public finance and tax policy with the President’s Council of Economic Advisers and has been an economist at the Federal Reserve Board. “The Role of Oil and Gas in Driving Job Growth ,” http://www.brookings.edu/up-front/posts/2012/06/01-jobs-greenstone-looney?rssid=LatestFromBrookings&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BrookingsRSS%2Ftopfeeds%2FLatestFromBrookings+%28Latest+From+Brookings%29&utm_content=Google+Reader, KHaze Increased Natural Gas Supplies and Lower Prices In recent years, hydraulic fracturing and horizontal drilling techniques have enabled the recovery of natural gas reserves that were previously thought to be too difficult or costly to access. These new techniques led domestic shale gas production to increase by nearly 50 percent between 2008 and 2009 alone. Largely as a result of this shale revolution, total U.S. natural gas production jumped from 18.5 trillion cubic feet in 2006 to 23 trillion cubic feet in 2011 (Energy Information Agency 2012). This increased production has had a major impact on the price of natural gas. The figure below shows historical average residential prices of natural gas in the United States—that is, natural gas mainly used for home heating and water heating—as well as the future natural gas prices that were expected in 2008 (in blue) and in 2012 (in red). Between 2009 and 2011, natural gas prices were, on average, approximately $2.08 per million Btu lower than they had been projected to be in 2008. The average U.S. household saved roughly $75 in 2009, $91 in 2010, and $107 in 2011 on its heating bills. From 2012 to 2020, the average American household is expected to save approximately $73 per year. In total, the lower natural gas prices are projected to save households $109.5 billion between 2009 and 2020. And these savings are just part of the benefits to the overall economy. In particular, they do not account for households’ savings resulting from lower electricity prices; natural gas comprises approximately 20 percent of electricity consumption—a share which is projected to increase. Furthermore, they do not account for the savings that accrue to businesses, especially heavy industries and manufacturers that rely on energy to power their operations. Lower natural gas prices present an opportunity for households and businesses to decrease their energy costs considerably. Directory: files files -> Answer True False 2 points Question 2 files -> Integer programming and game theory files -> 4 Integer Programming files -> Bpa vehicle Window Repair Scenario #1 task: Procure vehicle window relacement. Objective files -> Pop Warner History files -> North Carolina Inclusion Initiative Mapping Where Children with ieps are Being Served Purpose files -> Fall 2013 Spring 2014 Program Data: Standard 1 Exhibit 4d files -> Hanban – asia society confucius classrooms network 2010 request for proposal files -> Northern England’s set-jetting locations Download 0.97 Mb. Share with your friends:
|