Monday, December 2, 2013

This is the best Michael Skelly Clean Line Energy Video. Must See!

Wow!  This is the must see video of Michael Skelly!  Back in October 2009 Michael Skelly gave this presentation at Harvard University Center for the Environment.

 It’s a one hour video but it is by far the most interesting thing I’ve seen come out of Clean Line Energy.  There is so much information worthy of debating or just plain filleting Skelly here, I don’t know where to begin.  Perhaps I’ll have to revisit this video again in a couple of weeks.

Iowa and Missouri residence, you really need to watch this video.  I cannot encourage it too much.

Here’s some bullet points.

Wind receives the most government support on a per unit basis….like we didn’t know that.

Wind is competitive with natural gas at about $7 per mmbtu.  What’s the price of natural gas today?  About half the $7 figure.

“If natural gas is about $10, wind is uhm very much in the hunt and wind is in the money”  Mr. Skelly, uhm…natural gas is far far below $10 per mmbtu.  To his credit, he did admit he was bearish on natural gas prices.

“In hind sight markets aren’t quite as smart as they appeared at a given point in time.”  Perhaps the smartest thing Mr. Skelly has yet to say.  One interesting comment he made about this point is when natural gas peaks, electric prices go up.  The price of wind energy climbs with it.  If I understood Skelly correctly, it is typically at this moment of high energy prices that states will panic and seek out 20 year Power Purchasing Agreements.  States sign these 20 year agreements at the peak in energy pricing and think they are locking in a great deal.  This sound like a classic Governor Pat Quinn move. 

“Now if you’re looking at the upper Midwest, Illinois Kansas, very often you’ll have coal in the margin and when coal is in the margin it (electricity) will move with the price of gas but not nearly as much”  In the Q&A at the end, Skelly was asked if coal energy would be on Clean Line transmission.  His comment was there isn’t a lot of coal fired generation in Oklahoma.  Plains & Eastern was the only powerline acknowledged by Clean Line at this point.  In 2009, they hadn’t yet applied to the Illinois Commerce Commission the FIRST TIME for RICL.   

Texas lead in wind installation with the perfect storm of gas volatility, RPS, and FEW PERMIT OBSTACLES.  He went into depth how important it is for wind energy to have few permitting and stte overview.  This is true for any industry.  The few state regulations, the easier it is to push a project through. 

You have to order turbines 1-2 years in advance.  If permitting in Illinois or Indiana falls through, you can always find a place to dump them in Texas.  Now this isn’t a direct quote.  He probably didn’t used the term “dump” but that’s what he meant.  I had no idea Texas was the dumping ground for wind turbines.  Key bullet points at this point included;
·         Infrastructure requires huge amounts of money
·         Infrastructure requires tough decisions about siting – everybody wants infrastructure but nobody wants to look at it
·         National infrastructure requires national leadership and Federal power
·         But the good question is we know how to do this   -the question remains is do we really want to?

And then there is the Wyoming grouse.  Michael Skelly is very candid about the fact that wind energy might kill a few birds.  He talks about Wyoming and the Governor declaring over a quarter of the state off limits for wind turbines because it might harm the grouse.  He mildly makes reference to Wyoming coal possibly having something to do with this play.  Skelly’s opinion is a few sacrifices have to be made if we really want “CLEAN” wind energy.  WOW!  So a few bird species might have to die off….kind of like some Iowa farms.  He takes a rather frank “poop happens” view here.

Later Skelly declares “Does anybody know what the SmartGrid is anyway?” and “What we need is a whole lot of dump grids!”  And why are we spending 300 some odd million on smartmeters in Illinois????  Maybe while Skelly is in Springfield he can explain that one to law makers who pushed for the smartmeter expansion. 

Best of all is the Question & Answer at the end.  Over the last year and a half I read from a lot of college students whose mind are full of mushhead fantasies about wind energy being “clean” with little knowledge how the world and big wind energy businesses operate.  Clean Line Energy bused in 3 loads of these students to the Mendota Illinois forum.  They really had no clue what this business is about.

I also know Harvard has a reputation for being liberal.  It’s not known for being a conservative think tank by no means, but the questions that came from these students were outstanding.  Maybe comparing Harvard students to Roosevelt University is like comparing Chicago Public Schools to the Aurora Math & Science Academy. 

The questions asked by at Harvard were largely the key questions Clean Line Energy refuses to answer from us, the ratepayers in Kansas, Iowa, Missouri, and Illinois.  There are only about 5 questions, but these guys keyed in on some of the key problems with RICL and the Clean Line model, such as “What is going to be on these HVDC transmission lines on days the wind doesn’t blow?”

Skelly concedes their projection is the powerline will operate at best on a 50% capacity on an annual basis.  Back when Clean Line made their application at the Illinois Commerce Commission I did the math on their annual expectation and it was about 44% or so.  I have to ask the question “Who builds a 2 billion dollar powerline and operates it at less than 50% capacity?”

Perhaps Skelly answers this question earlier in the video.  After he concedes the east coast governors do not want wind power and transmission from the Midwest, he talks about the need for these powerlines for wind energy must be built using a cost allocation model.  At no time in this video does he mention “Merchant Transmission Line”.

I guess when consumers and ratepayers are paying for a transmission project, annual capacity output is irrelevant and not discussed.  It makes me wonder just how many other transmission projects are overbuilt and underutilized.  How much of a NEED is really there when its operating efficiency is under 50%?

I know I’m jumping around here a bit, but this deserves an answer for those who do not watch the video and are wondering about Skelly’s response to the letter signed by Eastern Governors who do not want projects like RICL and GBE.  In his classic myopic view where he refuses to recognize there might be other options more economical or just make more common sense than projects like RICL, characterizes these governors as men who are willing to pay more for energy and not take advantage of market efficiencies because they are selfish and only looking out for their own state’s business interests.

What Skelly fails to admit is Iowa wind energy can only be competitive to eastern states IF transmission is paid through cost allocation where consumers not directly affected are forced to pay for it.  Like the Wall Street Journal once described it this argument amounts to Minnesota residents being forced to pay to repair potholes in New York City.  The true cost of transmission isn’t recognized if the bill is spread over millions of unaffected ratepayers.

The key argument for Clean Line appears to refuse to admit there are other options.  Big transmission projects are a dying industry.  Clean Line’s best defense is to make people think this is the only option available and anybody who opposes them are a bunch of NIMBY’s.

And yes, Mr. Skelly does state 20% wind energy for America will require approximately 150,000 new wind turbines.  I use the ration 1 wind turbine for every 65 acres.  This does come out to 9,750,000 acres covered with new wind turbines. 

Seriously, if you want to learn more about Clean Line Energy and Michael Skelly, watch is video from the Harvard University Center for the Environment.  Until the Marketing to Mayberry video comes out, this is Michael Skelly being the most honest I’ve seen.  Having said that, yes, Matt you are correct.  Skelly is an …(I can’t print the word here) hat.  This video need to be properly dissected minute by minute and properly filleted. 

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