Re: The Cost of Natural Gas [was Re: The Cost of California Liberalism]
Tim May [EMAIL PROTECTED] I said "at certain times of the year." British Columbia is tied by treaty arrangements (Columbia River Treaty, 1961) to the Bonneville Power Administration (BPA), and is, VERY SIGNIFICANTLY, now part of same grid that is the ISO, the Independent System Operator, mostly based in California. Read the following and weep for your beloved Canadian independence: http://dailynews.yahoo.com/h/nm/20001208/ts/california_power_dc_3.html The independence is not an issue to most Western Canadians. We are a subservient bunch to Eastern Canada as it is now. Central Canada is where the money and power is seated and the way Canada is setup it will always be that way. Being independent or joining the USA is a subject which is often mentioned in Western Canada. Another purpose served by your Electoral College is that it gives each senator in a state a vote. This helps even out the power between major population centers and those states with low populations. Couple this with your senate and you have a system which balances geographical related issues against that of major population centers. Most Western Canadians would prefer such a system. Back to the main subject, what are your numbers for exports of power from the American Northwest to the Canadian Southwest? I am told by the powers that be that the number is negative. Again you would have to travel this area to understand how the environment has been altered in the name of energy production. Virtually Raymond D. Mereniuk [EMAIL PROTECTED] "Need Someone To Tell You What To Do?" FBN - The Consultants http://www.fbn.bc.ca/consultg.html
Re: The Cost of Natural Gas [was Re: The Cost of California Liberalism]
For those who care, take a look at http://www.nytimes.com/2000/12/10/opinion/10KRUG.html which is an op-ed piece by an MIT Economics prof. describing the California situation in the same terms I have. He cites a paper which in turn cites evidence that artificial shortages were previously created in the UK (1996) and California (1998 1999). Unfortunately no detail, but it is more than just random conspiracy theory. While no doubt a good number of the readers of this list will consider him to be a Communist from the People's Republic of Cambridge, perhaps most will at least admit he knows more than basic economics 101. Even if you don't care about natural gas or California's deregulation brownout, it is a good example of why "free" markets, economies, societies, etc. don't really work.
Re: The Cost of Natural Gas [was Re: The Cost of California Liberalism]
-- For those who care, take a look at http://www.nytimes.com/2000/12/10/opinion/10KRUG.html which is an op-ed piece by an MIT Economics prof. describing the California situation in the same terms I have. He cites a paper which in turn cites evidence that artificial shortages were previously created in the UK (1996) and California (1998 1999). unfortunately no detail, but it is more than just random conspiracy theory. He describes the california system as "deregulated", but the fact that it takes many years to get permission to build a power plant -- that it takes longer to get permits than to actually build one, is undoubtedly a contributing factor to the crisis. --digsig James A. Donald 6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG JXy269kdEdLHKEQ2b/5GVMHAZPjYHXf7xg8R1IyY 44A7PM67XbbrgFVYUWSF3uYbJ6dBoiZ6gwM+yy4xp
Re: The Cost of Natural Gas [was Re: The Cost of California Liberalism]
At 2:37 PM -1000 12/29/00, Reese wrote: At 03:33 PM 12/29/00 -0500, [EMAIL PROTECTED] wrote: Looking at the queue of plant requests within California they also seem to be obsessed with building them in highly populated areas. Easy commute for the workers, and a large pool to draw workers from? Most of the proposed new plants are very, very small. Nearly all in populated areas are natural gas-fired plants, with minimal-to-zero burden on the local environment. For example, a couple of such small plants have been built in the San Jose area in recent years. Environmentalists even favor building such a plant over letting Cisco expand, to name a recent newspaper issue. What these new plants ARE NOT is the kind of large nuclear plant comparable in size to the highly successful Diablo Canyon Nuclear Power Station. That plant was completed more than 15 years ago. It is in an unpopulated area, between Half Moon Bay and Pismo Beach, and west of San Luis Obispo. A similar plant was once planned for Bodega Bay, northwest of San Francisco, but it was blocked by tree huggers in the early 70s. Another consideration, for building closer to where the demand is. These are self-evident considerations. Especially for the "micro plants" described above. Economies of scale, etc. --Tim May -- Timothy C. May [EMAIL PROTECTED]Corralitos, California Political: Co-founder Cypherpunks/crypto anarchy/Cyphernomicon Technical: physics/soft errors/Smalltalk/Squeak/agents/games/Go Personal: b.1951/UCSB/Intel '74-'86/retired/investor/motorcycles/guns
Re: The Cost of Natural Gas [was Re: The Cost of California Liberalism]
Tim May [EMAIL PROTECTED] wrote Lost on your typically smug Canadian analysis has been any objective analysis of markets for power. Do you know, for example, that California as a state is a _net exporter_ of power to the Northwest and especially to Western Canada at certain times of the year? In the fall and winter, in fact, when hydroelectric generation rates in BC and Washington are reduced. I don't know where you get your information but I doubt your statements. California is a net exporter of power is suspect, lets see the details here. BC never imports power! You must travel around this place and then you will understand, every major water way is blocked and producing power. Couple this with the low population and you have low demand. The Bonneville Power Authority (BPA) is required to return downstream benefits to BC but this has nothing to do with our requirements. It is payment for the water management services supplied to their power generation system. Any power returned to BC is probably promptly exported. On this angle you are wrong, BC is a net power exporter in both electrical and natural gas realms. In your kind of lingo, "British Columbia failed to build enough new plants." BC has not built new power plants in a long time. There is so much supply here that it was official policy to discourage any co- generation or alternative electrical supply development. Markets are not simple. Prices rise, prices fall. To claim that California is now the primary cause of your higher heating costs, boo-hoo, is childishly naive. Yes markets are not simple which is probably the reason you fail to see the California component in the current situation. The energy market doesn't lend itself to Economics 101. If a power generating utility had built new power plants and commited to a fuel supply (and the accompanying infrastructure) the likelihood of unexpected prices increases would be much lower. See above. Childishly naive. Sorry, this is where you are showing your Childishly naive understanding of the energy business. In the energy business (natural gas wise) if you commit to the supply and build infrastructure you get lower prices. I re-state my initial premise, Californians have a lot to learm about energy economics! If you don't commit, you pay more! Raymond D. Mereniuk [EMAIL PROTECTED] History of a Telco, A Fairy Tale http://www.fbn.bc.ca/telcohis.html
Re: The Cost of Natural Gas [was Re: The Cost of California Liberalism]
At Sun, 24 Dec 2000 23:50:01 -0800, "Raymond D. Mereniuk" [EMAIL PROTECTED] wrote: In my initial message I stated the current rise in natural gas prices are caused by multiple factors. [blah blah blah] That's outright bullshit. You wrote: "The bad decisions of the citizens of California have produced an energy crisis in what is called the Northwest for which all citizens in what is called the Northwest must pay the price." You said nothing about other factors. Nothing at all. You also ignore that your subject was "The Cost of California Liberalism." That was your point, wasn't it? To blame California Liberalism for your home heating bills? On top of these factors I stated the greater portion of the increase was created by un-expected demand in California. Greater portion in what terms? Land area? Population? IQ? Ralph Nader voters? It's an easy game to play when your claims are based on things like a whole bunch of Californians using more power than relatively few Vancouverites. And how much of this unexpected California demand was caused by California Liberalism? Have Sierra Club members been baking lots of extra cookies lately? Or is it all the electric cars that are selling like hotcakes? No, I got it, all those people living in trees to keep them from getting cut down to be used for firewood are forcing people to use their electric heaters, that's it, right? Or are you just going back to blaming Californian Liberals for preferring natural gas for electric power generation and saying it's their fault that you use the same fuel source to heat your home? Coupled with the low water situation, and the resulting decrease in hydro generated power, the increased use of natural gas powered generating capacity would be expected to cause an increase in the price of a commodity in which the increase in demand was unexpected or exceeded supply. No shit, but what does this have to do with California Liberalism? If a power generating utility had built new power plants and commited to a fuel supply (and the accompanying infrastructure) the likelihood of unexpected prices increases would be much lower. So? As you now admit, the demand was unexpected. Why would a utility build a new plant and commit to a fuel supply for unexpected demand? You say they're using reserve natural gas fueled plants to meet unexpected demand. Isn't this what they're supposed to do? Do you actually expect power utilities to build plants and commit to fuel they don't expect a need for just to provide a buffer for natural gas prices? That's not what happens in a deregulated environment and I don't think California's electric utility deregulation is considered a result of California Liberalism. Is it?
Re: The Cost of Natural Gas [was Re: The Cost of California Liberalism]
On Sun, 24 Dec 2000, Raymond D. Mereniuk wrote: In my initial message I stated the current rise in natural gas prices are caused by multiple factors. Natural gas prices were too low in recent years and this caused a shortage in supply. MASSIVE SNIP Just an observation, but most of the specific causes of this crisis point strongly to one general cause -- ie, there are too many people in California. More than the local water supply can handle. More than power can be generated for locally (unless someone builds a nuke powerplant, and you can already hear the Nimby's screaming...). More than food can be grown for without exhausting water tables to irrigate the central valley. Another general cause is that most of the current houses are built stupid. In the 1940's and 1950's houses were built that were quite habitable without constant airconditioning. They had basement windows where air could be drawn in and air was cooled in the basement with scads of thermal contact with the cool earth. There were open airways that circulated air drawn up from the basement through the first and second floor, and windows in the second floor where heated air was allowed to escape. Many of them were made of adobe or other materials with great thermal inertia, which mediated the extremes of temperature. All of these are perfectly sound thermodynamic principles, which have been abandoned because wood-frame concrete slab houses are cheaper to build and home buyers haven't been thinking about the cost of cooling the damn things as part of the purchase price. If building codes were modified, or if contractors and developers had to bear the first ten years of utility costs out of house prices, we'd probably see a substantial reduction in the so-called "need" for power. Bear
Re: The Cost of Natural Gas [was Re: The Cost of California Liberalism]
[EMAIL PROTECTED] wrote Tue, 19 Dec 2000 13:15:09 -0500 (EST) Raymond's pointed out that some gas plants normally idle are now running full-time to meet demand. To me this reads the same as using idle plants instead of building new ones. Perhaps not a bright move in terms of safety, efficiency and reserve capacity, but nothing that should have changed natural gas commitments. In my initial message I stated the current rise in natural gas prices are caused by multiple factors. Natural gas prices were too low in recent years and this caused a shortage in supply. Narural gas has gained in popularity with utility companies in recent years because it is clean (relatively) and it is cheaper and easier to implement natural gas burning technologies than other fuel source technologies, ie - coal which would be cheaper but more difficult to meet current emission standards and "current" public expectations. On top of these factors I stated the greater portion of the increase was created by un-expected demand in California. Another issue in this problem, as in this month and next, is low water levels in the northwest causing lower than expected power generating capacity. In the past natural gas power plants were viewed as temporay or part-time solutions as they are relatively cheap to construct. If you have a power plant you don't expect to use you don't commit to much of a supply as you don't expect to use the plant. At this time many auxiliary power plants in California and surrounding states are being utilitized to generate power for the California market. There was recently a federal mandate that power suppliers in neighbouring markets not refuse to provide power to California utilities. Coupled with the low water situation, and the resulting decrease in hydro generated power, the increased use of natural gas powered generating capacity would be expected to cause an increase in the price of a commodity in which the increase in demand was unexpected or exceeded supply. If a power generating utility had built new power plants and commited to a fuel supply (and the accompanying infrastructure) the likelihood of unexpected prices increases would be much lower.
Re: The Cost of Natural Gas [was Re: The Cost of California Liberalism]
Tim May [EMAIL PROTECTED] wrote Size of a market is a shifting concept. British Columbia and Vancouver are certainly large markets. Compared to California markets this is a small market. Two million folks in the metro area and 3 million total in the province (state). If there were a nuclear power plant in western Canada, much of its output would likely go to Vancouver. Guess what? No nuke plants in western Canada. The size of the market makes nuclear power impractical. BC is a net exporter of energy. Lots of electricity, some oil and some natural gas. They have dammed a bunch of waterways. tanker. I believe I would rather have nuclear power plant in my neighbourhood than a liquidified natural gas facility. Perhaps you can lobby your politicians to allow nuclear power plants to be built in your region, then. Everyone gets excited about the dangers of nuclear power plants. In areas where sour natural gas is produced there is a lot of environmental damage. The original reason for settling Canada was to trap animals, skin them and sell the furs to Europe. Fur trappers didn't care if you dammed the rivers and poisoned the air and ground with hydrogen sulphate. If you work around sour gas you are advised that if your co-worker suddenly collapses you don't attempt to help him as he is probably already dead. You are advised to run upwind as fast as possible. They find cattle raised near sour gas wells and production facilities suffer from a significant increase in birth defects and still borns. There is some evidence appearing that man suffers the same problems as the animals. tanker. I believe I would rather have nuclear power plant in my neighbourhood than a liquidified natural gas facility. Perhaps you can lobby your politicians to allow nuclear power plants to be built in your region, then. I have lived and worked around gas plants and sour gas production facilities. I have done my hazardous duty. Again, until you witness the environmental damage associated with the energy business you have no idea... This whole post shows a shaky understanding of economics. You are bitching and moaning that someone else's bids on power exceed what you would like to pay. This is my second go around on the energy boom cycle. The only reason you are paying more is because of bad planning or producers not being allowed to build capacity when they wanted. There is no shortage, just some distribution problems. "I would like to have a Ferrari Testarossa, but there are so many people around the world willing to pay such outrageous prices that the prices have simply gotten out of control. If Californian would take responsibility for their outrageous lifestyles, there would not be so many Californians buying Ferraris and we people in British Columbia would have a chance to afford them." Being that BC and Alberta are big energy exporters there are lots of folks, and organizations, making big money on the current problems. I don't believe "around the world" is factual. There is lots of natural gas in the distribution system which is not connected to California. As for your own energy needs, install propane. This is what I have. And fill the tank well in advance of when spot market fluctuations drive the price up. Problem with propane is that it stinks so bad and it puts out a lot of moisture when burnt. Propane is a commodity and it has seen some wild fluctuation in recent years. Or move to a warmer clime. Living in the far north _does_ carry a price. I lived in the tropics for 8 years. I prefer the temperate rain forest where I currently reside. I like cool and rainy. One of my complaints about Vancouver is that it doesn't rain enough, too many nice sunny days. The problem with hot places is you can only take off so much clothing and you will still be hot. In cold climates you can put on more clothes and eat red meat to keep warm. Also, bear in mind that a lot of off-peak power is shipped into Canada from the Bonneville Power Administration. It seems we Yanks had the foresight to dam the Columbia River back in the 1930s. It's a reason the Hanford Nuclear Reservation was located in the Tri-Cities area--cheap and plentiful power--and it's a reason several aluminum smelters, including a Canadian one, located there. The Bonneville Power Administration (BPA) paid for a series of dams whose main purpose was to hold water for their power generation system. This series of dams were completed in the late 60s and they paid a set fee for the first 30 years of water rights or downstream benefits. After 30 years the downstream benefits were to be returned to BC or BPA had the option to purchase those benefits. The downstream benefits were to be returned to BC as power. Initially BPA promised $250 million for some set term and BC agreed to take the money. At the last minute BPA decided the benefits
Re: The Cost of Natural Gas [was Re: The Cost of California Liberalism]
On Mon, 18 Dec 2000 [EMAIL PROTECTED] wrote: Huh? Let's make this simple. How is California's lack of power plants causing natural gas prices to rise? Plants that don't exist don't use gas and don't contribute to shortages. What the fella said was the lack of power plants indicates a lack of long-term, fixed price gas contracts, which he assumes, without evidence, would be inplace had said power plants been built. it's not an unsafe assumption, btw, but can't be proved. California's importing power from elsewhere, so why didn't these other generators commit to natural gas suppliers? Perhaps because they don't burn gas at their stations. Duh. Hint: transmission losses aren't a recent discovery. No shit. That's why line loss is taken into account in prices. So, er, what? Either you're confused or you're trying to use the cold winter as an excuse to create a strawman for your anti-Californian views. There are other possibilities. I certainly don't see any strawmwn here, anti-Cal or otherwise. Tim, Jim and Bill have already given good responses to the economic side of things, so I won't comment further in that vein. What those guys know about economics you can put into a byte. Get real or read some econ. MacN
Re: The Cost of Natural Gas [was Re: The Cost of California Liberalism]
[EMAIL PROTECTED] wrote Huh? Let's make this simple. How is California's lack of power plants causing natural gas prices to rise? Plants that don't exist don't use gas and don't contribute to shortages. California's importing power from elsewhere, so why didn't these other generators commit to natural gas suppliers? In the energy business it is commonly assumed there is lots of natural gas in Alberta and BC. So much that most exploration companies do not bother looking for it until they has a market. In the business it is often jokingly stated that natural gas will be obsolete before we release it all from the reservoirs. If you decide to build a natural gas powered electrical generation facility to provide full-time capacity you are looking at a lead-time of at least a couple of years. With a lead time of two years the supply would be available. The delivery system may be a problem as in this day and age it can take more than two years to get approval to build pipelines in populated areas. Put your power plant in the boonies and you solve part of the problem. Basically there are two natural gas delivery systems coming out of Canada. The main system starts in northeast British Columbia on the east side of the continental divide, runs through Alberta collecting more capacity and then heads east. There is a branch going to Toronto and Montreal, the main population centres in Canada. There is another branch which heads to the Chicago area. If you check your commodity prices you will note buyers attached to this system pay much lower prices than those offered to California buyers. There is no shortage of supply in this system, you can tell by the prices. California is not directly connected to this supply system and can not benefit from this abundant supply. On this side of the continental divide there is no longer an abundant supply. One of the local gas transmission companies wanted Canadian consumers to pay CAN$500 million to increase supply through increased residential and industrial rates. We the consumers refused as we didn't need the capacity for our own use. The transmission company wanted the consumers to assume their risk with our dollars. The transmission company invested some of their own capital to do part of the connection. If you want to give them CAN$325 million they will finish finish the link between the two systems and there will be a glut of natural gas on this side of the continental divide. They know if they invest the money themselves they will loose their current price premium so they ain't doin it with their money. Commit to some long-term supply contracts at today's prices and it would completed within a year. I live out in the burbs in what was once a rural area. No one ever thought the city would grow this big. Many years ago they built a coal fired power plant less than a couple of miles away. It was down wind from the city and no one cared about the pollution back then... Around about 10 years ago they changed from coal to natural gas fired boilers. This power plant sits there mainly unused. The local tree hugger types whine too much about the pollution. The facility is not small, probably enough capacity for a city of 250K. It is used only at peak times and in emergency situations. When there are low reservior levels (which is part of your problem) it is used more often. In a properly planned electrical system this type of extra capacity is considered essential. These plants were never intended to be used fulltime so they tend to have low natural gas storage capacity and smaller inbound pipelines. In your system you are using facilities such as these for full-time power generation. In your state these plants has a quota of pollution they are allowed to produce on an annual basis. A number of these facilities had reached their annual quota of emissions so they shut down for maintenance. Since they were never intended to be used full-time they require some down time. Within the last two weeks your state government lifted the pollution quotas and pressured the operators to bring these plants back on stream. Hint: transmission losses aren't a recent discovery. You caught me by surprise on this one. I assume you are talking about electricity as if a gas delivery system has losses you tend to very quickly become aware of it. Either you're confused or you're trying to use the cold winter as an excuse to create a strawman for your anti-Californian views. I don't believe my view is anything other than an accurate description of what is plainly stated between the lines. In this part of the world there are very detailed analysis printed in the local media describing the mechanics of what is happening in the energy market. Just from your reaction you can see why this view would not be popular in your neighbourhood. Energy production is big business
The Cost of Natural Gas [was Re: The Cost of California Liberalism]
"Raymond D. Mereniuk" wrote: Here I sit in Vancouver BC Canada paying outrageous prices for natural gas because of the demand in California for natural gas for heating and electrical generation purposes. I feel California should pay for their previous decisions themselves, if you don't want power plants don't use power or pay the complete premium for your decision. Sorry, such is the nature of free (and shared) markets. If anything you should thank California; if they had been building more power plants, they'd be buying more natural gas and driving up your prices even more. Besides, have your prices gone up beyond your acceptable level because of California, because of cold weather, because your neighbor replaced his oil burner with a gas furnace, or because Williams Company has been spending its money laying fiber optics instead of more gas pipelines? Natural gas is a great fuel source. You, lots of Californians, and I made a good choice in deciding to use it. Perhaps we need to reevaluate our decisions given the current situation, but blaming others for making the same decision we did doesn't make much sense. Of course the system can never be made to work in this way so here I sit in Canada paying for bad decisions in California. Sure it can, you can just take yourself out of California's market. Buy yourself a wood stove and petition your government to build/encourage more nuclear power plants. (Hey, the bottom's fallen out of the nuclear fuel rod market and I doubt California's going to be responsible for price increases in that market any time soon.)
