PACE Weighs in on Mobile Petroleum Storage Tank Issue

In a public meeting later today, PACE will offer official remarks on a matter involving above ground petroleum storage tanks in Mobile, Alabama. The meeting is being convened by the Planning Commission Subcommittee on Above Ground Petroleum Storage Tanks.

At issue is whether the city will allow the construction of the tanks near certain waterfront areas. Mobile is a major energy port with a host of above ground petroleum storage tanks that have operated safely for decades. Although some local residents and activist groups want to place cumbersome new restrictions on the construction of new tanks, PACE agrees with local economic development leaders that new energy infrastructure is key to Mobile’s future.

“While local leaders should always keep the concerns of the port’s neighbors in mind, maintaining the vitality of the above ground petroleum storage tank industry is key to keeping Mobile’s port competitive and growing,” PACE writes. “Investors will spend nearly a trillion dollars updating our nation’s oil and gas infrastructure in the next ten years. Keeping Mobile and this region competitive means freeing vital industries from overly burdensome restrictions, and local leaders have an opportunity to do just that.”

Read PACE’s Full Statement Here

In June of this past year, PACE together with its partner, the Consumer Energy Alliance, held the first-ever Gulf Coast Energy Forum right here in Mobile. The purpose was to bring together energy leaders and stakeholders from Mississippi, Alabama, and Florida to discuss common opportunities and challenges in the energy sector. Our speakers and panelists included Mayor Stimpson, Rep. Bradley Byrne, Florida Energy Director Patrick Sheehan, and five executives from the region’s largest power providers. A key takeaway was that the growth of the region depends heavily on what happens in Mobile.

“More energy infrastructure is good for Mobile. It is good for consumers. It is good for the economy of the region,” the statement reads. “That is true for an above ground petroleum storage tank or any other project that improves energy supply.”


All Eyes on California

In his 2015 inaugural address, California Governor Jerry Brown turned more than a few heads when he called on lawmakers to pass a 50% mandate for renewable power by 2030. The state already has one of the most aggressive mandates in the world, requiring its utilities to obtain a third of their power from a select group of renewable sources.


“The governor has presented a policy for California to be a leader in carbon reduction and this is the focus of his broad plan,” a spokesman for Southern California Edison told UtilityDrive in a recently published report.

If the response of one of the state’s largest utilities sounds less than enthusiastic about Brown’s proposal, that’s because ramping up renewables to half of California’s energy mix represents uncharted territory. Aside from Hawaii, which is an energy outlier in most important ways, no other U.S. state has a renewable mandate greater than 30%. California’s plan is ambitious, to say the least, but it also might push the envelope on what is technically possible for integrating renewables into the grid.

Of particular concern is the widespread use of solar rooftops owned by residential and commercial buildings to meet the mandate. Ironically, what troubles grid operators the most at such high levels of solar integration is not a failure of the solar panels to produce electricity, but over-generation. Because solar power cannot be dispatched at will by a central power provider, too much solar power can exceed customer demand and endanger the stability of the grid.

“Over-generation is pervasive at Renewable Portfolio Standard (RPS) levels above 33%, particularly when the renewable portfolio is dominated by solar resources,” says a study of a higher renewable mandate in California. (It is worth noting that the study is pro-mandate.)

Faced with over-generation, the only proven way for policy makers and grid operators to manage renewable supply is to curtail solar production. In a 50% renewable case, the study found, a tenth of the state’s solar supply would need to be curtailed. Those in the solar industry, and particularly those who invest in the solar industry, are understandably not excited about the prospect of being told to hit the off-switch on production. Industry insiders say curtailment disrupts the solar market and suppresses potential renewable investment. And with an expected boom in the solar market in 2015 and 2016 due to changes in federal subsidies for renewable generation, curtailing solar power as a grid solution is the last thing the industry wants to hear.

“Curtailment is one of the biggest challenges in making the economic case for more renewables,” says Union of Concerned Scientists Senior Energy Analyst Laura Wisland. “This is not a reliability problem. This is an economic problem.”

“This is about how solar can get the revenue streams it needs so that we don’t have what looks like an epic fail on our doorstep,” adds Bingham McCutchen Senior Counsel Arthur Haubenstock. “Severe curtailment could produce more emissions and the renewables would not survive economically.”

Any way you slice it, the large-scale integration of solar power due to a 50% mandate is easier said than done. It poses looming problems for the solar industry itself and will likely force the state’s utilities to “build a bunch of gas plants to balance the load,” as one industry observer notes. Ultimately, because of increased use of natural gas to stabilize the grid, some speculate the higher mandate might not result in any decrease in California’s greenhouse gas emissions. As an alternative, some believe a solution could be for California to install as much as 10 gigawatts of new wind power capacity. That’s a whole lot of turbines for a state that values its pristine beauty.

For now, not even California experts, armed with a wealth of experience integrating renewables, have the answers. Governor Brown and those who support the 50% mandate are simply optimistic that tools like energy storage will leap forward in the next fifteen years and provide a silver bullet for the Golden State’s renewable integration challenge. They could be right. Or, they could be terribly mistaken.

The rest of the world, for its part, will mostly watch with curiosity. Worldwide, the combination of solar, wind, and geothermal is expected to contribute just 4% of global electricity production by 2040. Most states and nations are taking a more cautious approach than California, which is understandable. Much is at stake for power customers. Let’s hope policy makers keep a close eye as California tries to navigate uncharted territory. Knowing the dangers and pitfalls is vital for everyone’s future.


Meeting Energy Demand Critical for Future

Despite increased efforts in energy efficiency and conservation, energy demand around the world will continue to rise. That is the conclusion of two recent reports on the state of global energy.


According to a report from OPEC, for example, global energy demand is set to increase 60% in the next thirty years, placing tremendous pressure on energy supplies. Fossil fuels will continue to bear the majority of the world’s energy burden, with oil output set to climb from 81.8 million barrels of oil equivalent per day to 99.6.

“It is fossil fuels that will continue to play the leading role in satisfying world energy needs in the future,” states the report.

Data also shows that renewables like hydro, wind, solar, and biomass will constitute a larger part of global energy production by 2040, growing from 12.7% to 15.8%. According to OPEC’s report, renewables like solar and wind “are expected to continue to grow at a fast pace, partly as a result of government support. However, given their low initial base, their share of the global energy mix is expected to remain modest by 2040.”

Much work remains, however, to ensure that global energy supplies satisfy demand. According to the International Energy Agency (IEA), 40% of the world’s power fleet will need to be replaced by 2040. Replacing that tremendous amount of capacity – about 7,200 gigawatts – will challenge the world’s power providers.

Read IEA’s World Energy Outlook 2014 Here

While natural gas is expected to become the leading fuel among developed nations by 2030, the use of other energy sources is expected to grow as well. Global coal use is expected to see a 15% increase through 2040. Nuclear capacity will grow by nearly 60% over that time frame, adding 228 gigawatts of capacity to the world’s power grids.

“It is a mistake for policy makers anywhere, even in the United States, to assume that adequate power supplies will always be available,” explains PACE Executive Director Lance Brown. “As these reports show, replacing considerable power capacity is among the central challenges of the next thirty years.”