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Nevada Today

Nevada Today is a nonpartisan, independently owned and operated site dedicated to providing up-to-date news and smart analysis on the issues that impact Nevada's communities and businesses.

Editorials

No To Natural Gas: Yes To Alternative Energy

The largest photovoltaic solar power plant in the United States. The solar arrays will produce 15 megawatts of power

Mesquite, NV, April 24, 2018

In a previous article, I argued, among other things, that the drive by The Mayor, Mesquite City Council, and the Mesquite Regional Business Inc., (MRB) towards Natural Gas was a bad idea.

In that article, I pointed out that support of Natural gas is the major signal that the Mayor, Council, and Mesquite Regional Business Inc., (MRBI) want to industrialize the community. Natural gas has a multitude of industrial uses, including providing the base ingredients for such varied products as plastic, fertilizer, anti-freeze, and fabrics. In fact, the industry is the largest consumer of natural gas, accounting for 43 percent of natural gas use across all sectors. Natural gas is the second most used energy source in the industry, trailing only electricity.

However, while this shift may be better than coal and have some economic benefits, it also brings on risks associated with persistent price volatility and rising global warming emissions.

Union of Concerned Scientists

The Mayor and council gave taxpayer dollars to lobbyist Warren Hardy, to lobby for natural gas and to turn over federal land to Nevada for speculative development. Warren Hardy is a “cousin,” to local U.S. Congressman Warren Hardy.You might remember Warren Hardy. The former state senator from Las Vegas, until Las Vegas Unions, alleged that his association with Associated Builders and Contractors represented a conflict of interest. Hardy resigned choosing to lobby over the elected office. Eventually, Joe Hardy, R-Boulder City replaced Warren Hardy in the state legislature. Warren and Joe Hardy have yet to find a common ancestor. However, they share the same Mormon religion with Mesquites own Crescent Hardy, who is trying to take back his U.S. Congressional seat he lost two years ago.

With Mesquite taxpayer dollars in his pocket, Warren Hardy, marched to the crazy 2015 legislative to tell former senators that Mesquite wants natural gas and supports the return of public land to the state for potential development.

Hardy told his former legislative colleagues “The city of Mesquite is a prime area for economic development with the land, water, a workforce and access to Interstate 15. Nevertheless, because there is no natural gas, the community has lost at least 12 major projects that would have come to the community. Otherwise, he said. “Unless we get natural gas to Mesquite, we might as well just stop our economic development efforts,” Hardy said.

First, the statement about losing 12 major projects comes from George Gault, along with Dave Ballweg were founders of the MRBI. To date, the city has given away $732,615.83 in tax payer dollars to the MRBI for virtually no return. Ballweg now sites on the city council but is up for reelection this year.  In a twist of fate, Gault wants to take his seat.

Second, Mesquite is primarily a retirement community. In 2010 about 39% of the population was between 20 and 55 years of age, and 47 % were above 55. That age disparity is consistent with Mesquite as a retirement community. Further, the community lacks the work force. To economists, full employment means that unemployment has fallen to the lowest possible level that won’t cause inflation. In the U.S., that is about 5 percent. [i]

According to Sperling’s Best Places, the unemployment rate in Mesquite is 6.90%, with job growth of 3.53%. If growth were met with those unemployed, it would drop the unemployment rate to 3.37 % and signal job wage competition and inflation.

Water. Are you kidding!  No one, including the Virgin Valley Water Board of Directors, know how much water remains available in this drought stricken part of the state.

When Mayor Al Litman heard, Hardy’s brief the council on the subject, he proudly said: “This is another good thing for Mesquite.”

Most of the nonsense one hears from the pro-gassers relates to its alleged lower costs. The cost of providing electricity from wind and solar power plants has plummeted over the last five years, so much so that in some sun and wind markets renewable generation is now cheaper than coal or natural gas.[ii]

Utility executives say the trend has accelerated, with several companies signing contracts, known as power purchase agreements, for solar or wind at prices below that of natural gas, especially in the Great Plains and Southwest, where wind and sunlight are abundant.

Those prices were made possible by generous subsidies that could soon diminish or expire, but recent analyses show that even without those subsidies, alternative energies can often compete with traditional sources.

In Texas, Austin Energy signed a deal for 20 years of output from a solar farm at less than 5 cents a kilowatt-hour. The Grand River Dam Authority in Oklahoma announced its approval of a new agreement to buy power from a new wind farm expected to be completed next year. Grand River estimated the deal would save its customers roughly $50 million from the project.

And, also in Oklahoma, American Electric Power ended up tripling the amount of wind power it had originally sought after seeing how low the bids came in last year.

“Wind was on sale — it was a Blue Light Special,” said Jay Godfrey, managing director of renewable energy for the company. He noted that Oklahoma, unlike many states, did not require utilities to buy power from renewable sources. “We were doing it because it made sense for our ratepayers,” he said.

According to a study by the investment banking firm Lazard, the cost of utility-scale solar energy is as low as 5.6 cents a kilowatt-hour, and the wind is as low as 1.4 cents. In comparison, natural gas comes at 6.1 cents a kilowatt-hour on the low-end and coal at 6.6 cents. Without subsidies, the firm’s analysis shows solar costs about 7.2 cents a kilowatt-hour at the low end, with the wind at 3.7 cents.

“It is really quite notable when compared to where we were just five years ago, to see the decline in the cost of these technologies,” said Jonathan Mir, a managing director at Lazard, which has compared the economics of power generation technologies since 2008.

Mir noted there were hidden costs that needed to be considered for both renewable energy and fossil fuels. Solar and wind farms, for example, produce power intermittently — when the sun is shining or the wind is blowing — and that requires utilities to have power available on call from other sources that can respond to fluctuations in demand. Alternately, conventional power sources produce pollution, like carbon emissions, which face increasing restrictions and costs.

But in a straight comparison of the costs of generating power, Mir said that the amount solar and wind developers needed to earn from each kilowatt-hour they sell from new projects was often “essentially competitive with what would otherwise be had from newly constructed conventional generation.”

Despite flawed reports to the contrary, renewable energy is becoming increasingly price competitive compared to fossil fuels. Regardless of the metrics used, wind and photovoltaic (PV) solar are growing fast due in large part to declining costs and improving productivity.[iii]

Whether comparisons are made based on the leveled cost of energy, saved carbon, cash flow profile, financial return, annual and cumulative installed capacity or global investment renewable energy (wind & PV) fare very well and are improving all the time.

Endnotes:

[i] Crook, Clive, Bloomberg QuickTime, April 018 at: https://www.bloomberg.com/quicktake/full-employment

[ii] Cardwell, Diane, Solar and Wind Energy Start to Win on Price vs. Conventional Fuels,” The New York Times, November 23, 2014

[iii] Renewables Gaining on Fossil Fuels Despite Reports to the Contrary at: http://www.thegreenmarketoracle.com/2014/08/renewables-gaining-on-fossil-fuels.html

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About Author

Michael McGreer Mesquite, Nevada
Dr. Michael Manford McGreer is managing editor of Nevada-today.com and writes on issues that impact public policy.

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