Thursday, January 08, 2009

Killing Coal And Killing Our Economy - Part 3



A bit of related news from the Detroit Free Press online:

LANSING -- A coalition of environmental activists used a public hearing Tuesday on a proposed coal-fired power plant in Rogers City to renew their call for Gov. Jennifer Granholm to block construction of all such plants and hasten Michigan's transition to so-called green energy.


The 600-megawatt plant, to be built by the Wolverine Power Supply Cooperative, is one of several proposals for new coal-fired generators to meet future energy demands and replace older power plants.

Some of the permit decisions by the Michigan Department of Environmental Quality are expected to come in the next few months.

The environmentalists urged Granholm to reject coal in favor of alternative energy, with an emphasis on wind and solar power, as a way to protect public health, stem global warming and create green energy jobs.

"This is her opportunity to slam the brakes on Michigan's one-of-a-kind coal rush," said the Sierra Club's Anne Woiwode.

Granholm has said that emissions from coal-fired plants "are a growing concern," and financial institutions are increasingly reluctant to invest in carbon-based utilities. But her spokeswoman, Liz Boyd, said Tuesday that the administration doesn't rule out the possibility of permit approval for one or more of the pending coal-fired proposals.

Jeff Holyfield, spokesman for Consumers Energy, which has applied for approval of an 800-megawatt plant in Bay City, said the new plants are needed.

Consumers supplies 58% of customers' energy needs with coal now, he said, and a transition to alternative sources would take several decades. Alternative-energy technology is improving, Holyfield said, but green energy remains more expensive to produce and less reliable than energy produced from traditional sources.

Au contraire, mon frère‼ Our President-elect is dedicated to the proposition that new coal plants will be severely penalized... even to the extent of bankrupting companies daring to build them. You must do as the automobile manufacturers must do: accept the mandate regardless of the market... or the facts.

The Sierra Club has our best interests in mind... even if we can't afford it. Don't worry Anne, we'll just cut down more trees. They are renewable... even if there is a bit of smoke from burning them in our homes.

The point of these three posts related to coal-powered electricity and plans to move to alternative energy sources is ... or should be ... obvious. Don't be stupid about the conversion process and timeline. Just because someone has been elected to Congress or state legislatures does not make that person an engineering or logistical or economic expert. Just because someone has a commitment to environmental causes does not make that person an engineering or logistical or economic expert. Wishing something to be so and demanding it regardless of the facts is one thing: stupid.
And... stupidity has its own rewards.

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There is always an easy solution to every human problem—neat, plausible, and wrong.
Henry Louis Mencken (1880–1956)
“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
It was beautiful and simple, as truly great swindles are.
- O. Henry
... The Government is on course for an embarrassing showdown with the European Union, business groups and environmental charities after refusing to guarantee that billions of pounds of revenue it stands to earn from carbon-permit trading will be spent on combating climate change.
The Independent (UK)

Tracking Interest Rates

Tracking Interest Rates


SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

February 3, 2006
Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."

December 11, 2007 Somehow the Fed misses the obvious.
[Image from:]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

About Me

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)