Cap and Trade / Smoke & Mirrors

Who determines the value of the trade? Who limits the cap for all the potential plants involved?

Those are the people who will make the money in this new world of energy production. Money will be shifted from production efforts to a card game at a table controlled by people who can manage the game to their benefit. Does this sound a little like gambling? It is! Remember derivatives and credit default swaps and short sales? Some variation on the same themes will have to be used to manage the system or should I say they will be used to take advantage of the system.

The new term being promoted is ‘regulated allowance derivative’ meaning an instrument that is or includes an instrument—which- is of the character of, or is commonly known to the trade as, a ‘put option’, ‘call option’, ‘privilege’, ‘indemnity’, ‘advance guaranty’, ‘decline guaranty’, or ‘swap agreement’; or is a contract of sale for future delivery; and (B) the value of which, in whole or in part, is expressly linked to the price of a regulated allowance or another regulated allowance derivative. In this case they are talking carbon credits! Not just domestic but even international trades! Who can keep up with all of the potential violations? Is there anyone capable of overseeing the rules and regulations of such a market much less the individual agreements involved? Garbage in Garbage Out!
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Why not have energy policies that address the current needs of the nation and plans for the future 30-50 years from now?

Energy A Revolution In Process

There are two aspects to electrical energy requirements: First, electrical power generation second distribution. What are the issues that are affecting each?

Electrical Power Generation

1. The world has established CO2 and other GHG, greenhouse gas, emissions as the number one problem in electrical power generation. Is this correct or incorrect? What is the best way to resolve the problem with CO2? Should the focus of all our efforts be to limit GHG regardless of the cost?
2. Power transmission over outdated and limited or non existent distribution grids present safety, security and supply issues both in the US and nations around the world.
3. Fuel supply is artificially controlled as the rules and regulations push power generation toward more and more natural gas the fuel of choice for short term peak power plants and reduced GHG. This also overcomes the issue with grid capacity as the gas turbines are or can be located in areas of high and fluctuating demand. The transportation problem is converted from the power grid to gas pipelines and high risk LNG (Liquefied Natural Gas) transportation and production facilities. Are gas turbines the best way to produce electrical power? Is power generation the best use of natural gas? How will rapid changes in supply and demand of natural gas affect the market place? What happened in Europe when the supply of natural gas was interrupted by Russia in the fall of 2009? What happens when the first LNG tanker is blown up?

High-tech societies face a cruel paradox: New Technologies may deliver wealth and prosperity, but they also leave rich nations vulnerable to crippling attacks. By relying on intricate networks and small clusters of vital assets,- advanced economies only amplify the psychological and financial destruction terrorists can inflict.

As industrialized nations seek to shore-up safety, supply and environment issues in the present system of power generation and distribution, should we be creating more potential dependence on petroleum products with limited supply and risky transportation issues? Who will control our electrical power supply?

The trend in electrical power should be away from large scale intricate production and distribution networks especially those based on petroleum products which are not under our control and thus vulnerable to the destructive power of a few terrorists, lax safety plans and unknown weak links in the supply chain.

The most economical, efficient and consistent way to produce base load electrical power is with Nuclear and CFB, circulating fluidized bed, powered facilities. Nuclear has the least environment impact. CFB offers fuel flexibility as it can use many varieties of coal, coal wastes, bio-mass and even waste from other fuel production processes- like pet-coke. These technologies have low environmental impact and GHG emissions.

The two biggest weaknesses of the large scale base load power systems are fuel supply and the distribution grid; limited capacity and power disruption caused by natural or terrorists’ acts can take down the entire basis of our society in a matter of minutes as we have seen in the past.

Onsite Power Generation / Smart Grid

Can we provide a third way to generate power and supply critical production of food water and emergency resources? Yes, the most immediate way is with onsite generation of gas and bio-fuels in self contained cross linked industrial complexes.

In order to reduce the potential for a major loss of electrical power which could totally cripple our country we should establish peak load generation units at locations other than the main large scale base load systems. Gas turbine and small scale CFG bio-mass capacity can provide power for food, beverage and emergency systems independent of the grid but serving as peak power supply to the grid. This would now offer three alternate transportation networks for emergency power production, the electrical grid, the gas production distribution system and bio-mass system. Bio-mass fired units can even be used to dispose of the waste generated by many natural disasters.

By grouping food production plants which have a high biological laden waste water stream, water and waste water treatment plants with anaerobic reactors, and emergency resources - medical, police etc together: self sustaining systems can be created to address most potential disaster causing events.

The result of the above strategy; Onsite generation of power, water production and reuse will make the most critical manufacturing, food processing and emergency resource facilities self-contained!

The smart grid is the key to sustainability as all forms of energy are plugged into the grid to provide maximum italicization of the best available fuel supply and at the same time provide the maximum ability to adapt to rapidly changing safety and emergency situations. With decentralized generation and by directional metering the market will control what happens with electrical generation and provide CO2 reduction.

Hospitals, governments and all power generation companies need to embrace the idea of systems integration for safety reasons. Optimal performance and waste minimization offer savings to payback the cost in minimal time. Integrated systems using the Best Available Technologies will provide the maximum use of resources, best safety, and least environmental impact.

Conclusion:

This program not only isolates and addresses the issue of GHG, greenhouse gases; it provides a means of transporting electrical power and food production into developing third world countries. The two biggest problems the Kyoto treaty has yet to resolve. It works equally well for any country in the world. Large scale base load units are long lead time. Gas turbines and small scale CFB units for self-contained power generation can create immediate and long lasting safety and a means of improving our image and presence internationally. Funds committed for international Kyoto efforts can now be used to address generation and safety issues as well as adding production requirements to our manufacturing facilities.

Even though transformational change is underway around the world the USA is still in position to lead the world in creating a secure environmentally sound electrical generation system. A CO2 cap and trade system is not the way of leadership it is only smoke and mirrors. Each facility or country must stand on its own when it comes to carbon reduction. Either it has a carbon reduction plan or it does not. That makes evaluation of the company or country easy. The objective then becomes to help them create a plan of action to reduce emissions.

All societies are now interlinked with instant communication and trade. Profound changes are under way in the Production of heat and power. In the USA and around the world distributed generation technologies like micro-turbines and fuel cells are growing rapidly. Having a system in place to make use of those technologies could provide many advantages and save billions of dollars per year in wasted energy and millions of gallons of fresh potable water.

We should spend the Stimulus money creating a comprehensive electrical power generation plan which addresses all of the issues at hand.

Our objective should be to actively bring together the resources to address multiple issues at the same time safety, energy, water, and environmental.

Step One:

Identify emergency zones both domestic and international for distributed power development and create partnerships to use CFB-circulating fluidized bed, fuel cell and other distributed power technologies in combination with waste minimization, CO2 reduction and water reuse to spread the cost over the complete project.

Some industries and emergency control centers can tolerate a higher capital cost for the advantages offered. Others can achieve momentum by combining technologies to reduce operating expenses or improve process design.

Example.

Food grade plants have a high demand for water and consistent power supply. They also produce a high organic volume post-process water stream for the production of bio-gas. The United States government has identified food processing as a high priority Safety issue if problems arise with the existing electric grid or water supply.

In Florida where good quality water is available from the aquifer, onsite wells can provide all the fresh water requirements. Onsite post-process water treatment can provide a high purity reuse stream for boiler feed( Pinnelas County Example) and a concentrate stream laden with organics for raw gas production as a byproduct.

Combining our biotechnological skills in screening microorganisms from post process water with biogas generation and manipulation techniques, we can construct a complete hydrogen production system that will provide a high percentage of onsite fuel requirements.

Heat from the power generation equipment can be used in many ways including humidity control for comfort or process optimization providing a natural pathway to the discussion of makeup air and other environmental issues.

Step Two:

Identify domestic and international suppliers offering the best available technologies at the present. There are lots of available options.

Develop grant programs to stimulate the commercialization of new technologies.

Step Three:

Contract programs for design, build, operate for both domestic and international projects.


The USA has listened to the needs of the world and our nation when it comes to GHG and waste minimization we are and will continue to be the leader for designing programs to help the peoples of the world. We are prepared to lead the way out of both the financial crisis and the energy crisis.
With a unified world energy program we can make a difference in the everyday life of people around the world. We have the opportunity to spur the global economy both for the industrialized nations and the so called third world and developing nations.
The question is will we come together on a key issue driving the needs of the world today and into the future?
If we do not plan for the world energy needs we are going to experience more turmoil as disputes erupt over ever diminishing supplies of petroleum products.


By: Rick Story, April 7, 2009
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FP January/February 2002, The Rise of Complex Terrorism, By Thomas Homer-Dixon