Wednesday, August 13, 2008

Up in Smoke - Austin's BioFuel Boondoggle

Austin City Council is considering funding a biofuels power plant that will burn up wood chips and wood byproducts from the East Texas lumber industry. There is sticker shock:

The city-run utility is on the verge of going forward with a $2.3 billion, 20-year contract for the power that includes paying for the construction of the plant, which will be fueled by wood waste. ... Austin Energy would buy power from Nacogdoches Power at a rate high enough to pay for construction, operation and maintenance of the facility but would not participate directly in the business. ... The contract would also be a hedge on traditional fuel prices, officials said: They say the price of biomass fuel, once transportation to the plant is factored in, is comparable to that of natural gas.
That is a large amount of money for a 100 MW plant. Is this $23,000 / KWh cost for the plant, or does it include the fuel costs? Based on the comments that this sticker price is like a 20-year lease, it seems the latter. Austin Energy estimates are that it could cut or add to costs - they provide no estimates past 2012. But the numbers are still a high price. The economics don't add up for this plant, at least not without the prospect of further carbon-bashing legislation or Government subsidies, as hinted at in the article:
Future grants or legislation that promote the use of renewable fuels could make the contract even more compelling financially, he [Smith of Public Citizen] said.
Some of the environmentalists are starting to notice that biofuels means burning, is not any cleaner than a natural gas plant and has other impacts. And then there is this:
In a letter to Mayor Will Wynn, the Texas Forest Industries Council, which represents Temple-Inland and other paper and wood product companies, said there is not enough wood waste in East Texas to fuel the plant.

And increased demand for that waste would increase prices and possibly harm the environment, the letter said.
So a plant that is more expensive than natural gas, has environmental issues as severe, and relies on a fuel source that is severely limited is a 'great idea'? It's a great idea like expensive purchases of solar and wind are 'great ideas', shakedowns to raise our cost of energy. Meanwhile 95% of our actual energy (over 2.5GW) comes from nuclear and coal.

Who are the sawdust-for-brains proponents of this biofuels idea? Mayor Wynn and Lee Leffingwell. The same council that turned down expansion of nuclear power recently. Nuclear power is safe, economical, clean and reliable, and is CO2 emissions free. Because nuclear power is so practical, the Austin city council just had to turn it down. Austin Energy supplements the city general fund to the tune of $100M a year. All the city council can do is find ways to squander the surplus and raises costs for taxpayers and ratepayers alike. It's a real pity we do't simply tell Austin Energy - find lowest cost sources of energy and sign contracts to obtain them. It's not the City of Austin council's place to put onerous burdens on ratepayers as the cost of living in Austin.

As a comment on the Statesman online board puts it:
This really feels like one of those things about which Austinians will be writing in 2012, decrying the exorbitant cost and short-sightedness of our political leaders. But what the heck, as long as our intentions are good, this should be OK! Right?
Indeed. I have feeling a lot of money will go up in smoke in this effort to make Austin 'greener'. Boondoggle is just another word for "The Cost of Good Intentions".

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