Dear President Trump – What Are You Doing About Energy?

By Terry Hallmark, Instructional Assistant Professor, Honors College

Dear President Trump,

I thought I’d drop you a line. They had a symposium at the University of Houston recently on “The Future of Energy Policy.” It was good. Even tempered. A Democrat and Republican Republican U.S. Rep. Pete Olson and Democrat Rep. Gene Greeneven got along, and no one had a bad word to say about you.

That was refreshing, because lately everywhere I go on campus someone is cracking a joke every time your name is mentioned. Guess it’s because it’s a university campus – you know, where lots of left-leaning college professors hang out. A fellow who ran a bar in Brooklyn laughingly used to call professors “the Intelligenski,” because they think they’re smarter than everybody else. They can’t believe anybody would be foolish enough to pick you over Hillary. Well, I think they’re the fools. Plenty of folks voted for you – after all, you won – they’re just afraid to admit it. Maybe there needs to be something like Alcoholic Anonymous, you know, like Trump Supporters Anonymous –TSA – although it might get confused with the gang that makes you take your shoes off at the airport.

Seriously, the numbskulls who don’t like you say you’re dumb as a shovel, but you don’t get as rich as you are by being dumb – and besides, shovels are useful, especially when you’re digging holes. Plus, you’ve got the support of some smart, conservative academic types. A few weeks ago, the Chronicle of Higher Education published an article about a bunch of political scientists at the Claremont Colleges in California you’re apparently leaning on for advice. That’s where I got my Ph.D., so I know nearly all of them. Charles Kessler, who got most of the coverage in the article, was the chairman of my dissertation committee. He’s an expert on American Political Thought (back when Americans were thinking) and on the U.S. Constitution and the Federalist Papers (the “go to” handbook on how the Constitution is supposed to work). He and his buddies will be handy.

And what about your cabinet appointees, especially those who know something about energy? Rex Tillerson was a bold pick as Secretary of State. I used to work in the oil industry for this outfit called IHS, and the firm has a week-long shindig every spring called CERAWeek, where all the energy execs hang out, network and give talks. It’s run by a member of your Strategic and Policy Forum, Dan Yergin. I spoke there once. Tillerson spoke there in 2015. He has a presence, as they say. He is an Eagle Scout, and he’s from Texas. That means he’s solid and will probably do a good job.

And since he used to run ExxonMobil, he knows energy and has experience with Vladimir Putin and other heavy-handed types. He also knows about oil exploration in garden spots like Chad and Equatorial Guinea – where the people don’t give a flip about their Size 3 carbon footprint and the leaders have names that are impossible to pronounce. (Try saying Teodoro Obiang Nguema Mbasogo three times fast.) I’m a little bit worried, though, because you’re both big time wheelers and dealers at the highest levels of Big Oil and Big Buildings. Hope you guys don’t have to have your egos shoehorned into the Oval Office just to have a chat.

I’m not quite as gung-ho about your pick for Secretary of Energy, Texas’ ex-Governor, Rick Perry (now a member of your National Security Council). Sure, he’s smarter than folks think, he’s won more races for governor than anybody in the state’s history, and Texas is a big energy state – but I still wonder why you picked him. I’m not sure he’s got what President George H.W. Bush used to call “the vision thing.” He’s run for your job twice, and you’ll remember he wanted to shut down the Energy Department. Now I guess he doesn’t. Kinky Friedman, this musician/comedian/writer from Austin, ran against Perry for governor a few years back and called him “Governor Good Hair.” Maybe that’s why you picked him. You clearly know a good ’do when you see one.

As far as the issues go, I think you’ve got some things right, including support for the Dakota Access and Keystone XL oil pipelines. You’re going to take some heat from environmentalists, but don’t let that bother you. Those pipelines mean jobs for Americans, and don’t worry about all those reports casting doubt on that. If the Canadian oil intended for the Keystone XL pipeline doesn’t come here, it’ll go someplace else – like China. That’s no good.

Kudos to you, too, for being bullish on fracking. The country’s awash with shale oil and gas, and oil exports are back for the first time in years. Just when it looked like oil prices might put the kibosh on several fracking projects, low oil prices have allowed them to move forward. Voila, “Permania”! The giant shale play in the Permian Basin could have 20 billion barrels of oil and 16 trillion cubic feet of natural gas. That means more oil on the market and lower crude oil prices, which give our friends in OPEC and the Russians a bad case of nerves. Good.

All the shale oil and natural gas showing up to the Energy Prom brings me to my last point. A decade ago everyone was babbling about “peak oil” and the evils of those God-forsaken, gas-guzzling Hummers. Now the issue is “peak demand,” and GM doesn’t even make Hummers anymore (they were ugly). In 2006, the US ranked 11th in the world in proven oil reserves. Now, thanks to the fracking boom and shale oil, the U.S. is Numero Uno. Check it out. America is great again.

A speaker at the UH symposium said oil and natural gas are cheap, reliable and plentiful sources of energy. He’s right, but that’s just for now. A decade’s nothing – just two years past the end of your next term in office. If nothing else, the last 10 years have shown us just how quickly things can change, and change is certainly in the air when it comes to energy. So, go long – take the blinders off and think about energy out 30 or 40 years. Don’t be afraid to cozy up to new sources of energy, including renewables like solar and wind. Not many people know it, but Texas produces more energy from wind than any other state (plenty of hot air). I’m afraid you’re going to have to finalize a split with coal, though. That miner’s daughter’s not coming back.

Well, that’s it for now. I’ve got to go fill up my car and then wade through as much of Alexis de Tocqueville’s Democracy in America as I can manage before noon (it’s a beast – be glad you don’t need to read it). Maybe I’ll write again sometime. Until then, I remain,

Yours in oil (crude, that is – with associated gas),

Politicus Maximus Texanus


Terry Hallmark is an Instructional Assistant Professor in the Honors College. He teaches the Human Situation sequence, along with courses in ancient, medieval and early modern political philosophy, American political thought, American foreign policy and energy studies. His current research is focused on the political rhetoric and writings of Will Rogers. Prior to his appointment in the Honors College, Dr. Hallmark worked in the international oil and gas industry, where he had a 30-year career as a political risk analyst. He has been an advisor to international oil exploration and service companies, financial institutions and governmental agencies, including the World Bank, U.S. Department of Defense and members of the intelligence community. He is the Honors College coordinator for the minor in Energy and Sustainability Studies.

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How Bad Will Donald Trump Be For Renewable Energy?

By Earl J. Ritchie, Lecturer, Department of Construction Management

Donald Trump’s rhetoric on climate change and other regulations sounds like bad news for renewables. But subsidies and abundant natural gas will also be factors in how quickly renewable energy grows.

There are varying opinions of Donald Trump’s likely effect on the growth of renewable energy in the U.S.: He’s bad for it; he’s not bad for it. Trump has called climate change a hoax and said he would abolish the Environmental Protection Agency, abandon the EPA’s Clean Power Plan, pull out of the Paris Agreement and boost coal and natural gas, positions which he has since largely moderated.

Certainly, Trump’s pre-election statements on fossil fuels and renewable energy were worlds apart from Hillary Clinton’s. A pre-election estimate of their comparative effects can be seen in this Platts analysis.

 ritchie-1_113016

So, Clinton would have been great for renewable energy, Trump not so great. Everybody knows that. But, how bad would Trump be?

The pace of renewables growth will be affected by numerous separate policy decisions. These include the Clean Power Plan, the Investment Tax Credit and Production Tax Credit for renewables and the addition or reduction of restrictions on fossil fuel production and consumption.

Let’s look at the analysis in the EIA’s 2016 Annual Energy Outlook of the Clean Power Plan (CPP), which Trump said he would eliminate. In the base case, the impact of the CPP on renewables is actually relatively small. By 2030, the amount of electricity generated by wind and solar are 683 billion kWh; without it they are 571. These are annual growth rates of about 7.5% and 6%, respectively. The big impact is on coal, which declines by 28% under the CPP but grows by 5% without it.

The CPP mandates targets, not methods, so other scenarios are possible, some of which are shown in the EIA report.

ritchie-2_113016

The Clean Power Plan is only one factor in potential growth of renewables. As I pointed out in earlier blogs, subsidies have a big impact. The two important ones at the federal level are the Investment Tax Credit and the Production Tax Credit. The estimate in the graph below, modified from a National Energy Renewable Laboratory report which modeled the effects of the five-year extension passed in 2015, shows the difference that the extension of these credits makes. Added renewable generation capacity due to the credits is about 50 gigawatts in just five years, or about 25% of currently installed capacity. The growth rate with the credits is about twice the rate without.

Continued differences could be expected if subsidies are extended beyond 2020. Trump has not specifically threatened these credits, although he has promised to “cancel billions in climate change spending.”

Installed Renewable Capacity

Assuming the credits for renewables are not extended beyond 2020, natural gas prices, which will also be affected by Trump’s policies, will be a more significant factor. In the National Energy Laboratory’s analysis, both the extension and no extension scenarios show slower renewables growth when gas prices are low. In the extension scenario, renewable capacity in 2030 is about 100 gigawatts lower in the Low Gas Price case than in the Base Gas Price case; in the no extension scenario it is about 125 gigawatts lower.

The 2020 gas price in the low price scenario was about $3 per thousand cubic feet, significantly higher than the current price. If government policies favoring the industry result in continued low natural gas prices, it would further suppress renewables growth.

Arguments for the continued rapid growth of renewables include the possibility that the Clean Power Plan, Investment Tax Credit and Production Tax Credit will not be repealed, that state mandates and subsidies will continue and that the continuing cost decrease of renewables will make them more competitive. The latter two factors will almost certainly continue, so the important differences will be in the federal credits and fossil fuel policies.

It is impossible to tell which policies will be implemented at the national level. The Investment Tax Credit and Production Tax Credit may stay in force because they are favored by many Republicans in states that benefit from these credits. Policies favoring the oil industry and weakening or abandoning the Clean Power Plan seem likely.

It looks virtually certain that renewables growth will continue, but at a much-reduced pace.


Earl J. Ritchie is a retired energy executive and teaches a course on the oil and gas industry at the University of Houston. He has 35 years’ experience in the industry. He started as a geophysicist with Mobil Oil and subsequently worked in a variety of management and technical positions with several independent exploration and production companies. Ritchie retired as Vice President and General Manager of the offshore division of EOG Resources in 2007. Prior to his experience in the oil industry, he served at the US Air Force Special Weapons Center, providing geologic and geophysical support to nuclear research activities.

The Shift To Renewables: How Far, How Fast?

By Earl J. Ritchie, Lecturer, Department of Construction Management

Powering the United States or the world with 100% renewable energy is the stated goal of many individuals and organizations. What they are really talking about is 100% renewables to generate electricity, because it’s not feasible in the near-term to replace motor fuels with renewables. Views of how quickly this can be done are highly polarized – some predict less than two decades, while others see fossil fuels as the dominant source at least through 2050.

The primary argument for renewable energy is to avoid anthropogenic, or human-caused, climate change by reducing CO2 emissions. Progress toward that goal has fallen well short of reductions believed by the Intergovernmental Panel on Climate Control (IPCC) to be necessary to avoid catastrophic climate change. In fact, the only year in the past 40 in which CO2 emissions decreased was the first full year of the 2008 recession. The rate of growth of carbon emissions has slowed over the past five years, however, giving proponents of carbon reduction some encouragement.

Let’s look at some of the claims of the feasibility of going to 100% renewables.

How quickly can it be done?

In a 2008 speech, former Vice President Al Gore said it was “achievable, affordable and transformative” to generate all electricity in in the United States using wind, solar and other renewable sources within 10 years. One might dismiss this as political hyperbole, and it has not happened.

A claim that arguably has a better technical basis appeared in a widely publicized November 2009Scientific American article by Mark Jacobson and Mark Delucchi, professors at Stanford University and the University of California respectively. They suggested all electrical generation and ground transportation internationally could be supplied by wind, water and solar resources as early as 2030. Even that is wildly optimistic, since the median of the most optimistic of the projections in the latest IPCC assessment has low carbon sources (which include nuclear, hydro, geothermal and fossil fuels with carbon capture and storage) generating only 60% of world energy supplies by 2050; wind, water and solar are less than 15%.

In a 2015 report addressing only the U.S., Jacobson, Delucchi, and co-authors revised the schedule to 80-85% renewables by 2030 and 100% by 2050. As with nearly all low carbon scenarios, their plan depends heavily on reducing energy demand through efficiency improvements.

Other forecasts are considerably less optimistic. Two examples: the 2015 MIT Energy and Climate Outlook has low carbon sources worldwide as only 25% of primary energy by 2050, and renewables only 16%; the International Energy Agency’s two-degree scenario has renewables, including biomass, as less than 50%. Even the pledges of the widely praised Paris Agreement of the parties to the United Nations Framework Convention on Climate Change (UNFCCC) leave fossil fuels near 75% of energy supply in 2030, when the commitments end.

How are we doing?

Growth of renewables as a fraction of the overall energy supply has been slow, although recent growth of wind and solar is impressive. This graph shows the annual growth rate of renewables in the U.S. since 1980 as less than 2%.

Primary Energy Production, 1980-2015

Since 2007, wind and solar have grown over 20% per year in absolute terms, and about 15% as a percent of supply. There was no growth in other renewables during that period. The international numbers are similar.

What is possible?

Proponents of renewable energy are fond of saying that 100% renewable is technically feasible; it only requires political will. With some caveats, this is true. There is theoretically enough sunlight and wind, and a growth rate of 20% means a doubling every four years. If sustained, this would mean we could have 500 times the existing amount of wind and solar by 2050. However, there are both economic and technical barriers.

The rapid growth of renewables in both the United States and Europe has been due in large part to subsidies that make investment in renewables highly profitable. As installed capacity has increased, both state and national governments have tended to cut subsidies, resulting in substantial decreases in renewable investments.

Investment in Renewable Power and Fuels

Per the United Nations Environment Programme, worldwide new investment in renewable energyhas been basically flat for the past five years. This overall view masks substantial local and regional differences. Investment in the developed countries has declined about 30% since the 2011 peak, while investment in the developing countries has almost doubled.

Technical barriers to wind and solar are largely the result of intermittency and the location of favorable areas. Intermittency is not a problem as long as the proportion of renewable energy is small and excess capacity exists in conventional generating plants. It begins to become a problem when intermittent sources reach 30% of capacity and is very significant when it reaches 50%. The numbers are somewhat variable depending upon the makeup of existing plants. A 2008 report of the House of Lords estimated that reaching 34% of renewable energy in the United Kingdom, largely with wind power, would raise electricity costs 38%. The cost goes up as the share of variable renewables increases due to storage and grid flexibility requirements.

Intermittency can theoretically be handled by diversification of sources, load shifting, overbuilding capacity, and storage. All add cost. Diversification on a broad scale would require substantial changes to the energy grid. Storage on a utility scale is in an early stage of development, so costs remain uncertain. A large number of technologies exist, with varying estimated costs and applicability.

A 2012 Deutsche Bank report estimated that renewables plus storage could be competitive in Germany by 2025, however, the calculation included a carbon tax, effectively a subsidy for renewables. Any such comparisons of future costs depend upon assumptions of technological improvements and fossil fuel costs.

100% renewable electricity generation is technically feasible. However, even if you assume cost competitiveness, money has to be spent in the near-term to not only add capacity but to replace existing plants. In the industrialized countries, this is not an insurmountable problem but it does require allocation of funds that have competing demands. In some developing countries, there is just not money available.

Some proponents of accelerating the replacement of fossil fuels advocate a massive effort, which they call a “moon shot” or compare to World War II. But this transition requires a great deal more effort than the moon shot, and there is serious question whether there is political motivation comparable to World War II. I’ll talk about that in a future post.


Earl J. Ritchie is a retired energy executive and teaches a course on the oil and gas industry at the University of Houston. He has 35 years’ experience in the industry. He started as a geophysicist with Mobil Oil and subsequently worked in a variety of management and technical positions with several independent exploration and production companies. Ritchie retired as Vice President and General Manager of the offshore division of EOG Resources in 2007. Prior to his experience in the oil industry, he served at the US Air Force Special Weapons Center, providing geologic and geophysical support to nuclear research activities.