{"id":9062,"date":"2014-05-25T10:32:05","date_gmt":"2014-05-25T14:32:05","guid":{"rendered":"http:\/\/www.l-a-k-e.org\/blog\/?p=9062"},"modified":"2014-05-25T10:48:26","modified_gmt":"2014-05-25T14:48:26","slug":"the-fragility-of-centralized-energy-systems","status":"publish","type":"post","link":"http:\/\/www.l-a-k-e.org\/blog\/2014\/05\/the-fragility-of-centralized-energy-systems.html","title":{"rendered":"The fragility of centralized energy systems"},"content":{"rendered":"

\r\nAll\r\n\r\nthermal power generation requires water for cooling<\/a>,\r\nwith nukes so vulnerable no private insurer will cover them anyway\r\nand failing frequently in recent heat waves.\r\n“Natural” gas is no better than coal or oil for water use;\r\nmaybe worse because all those pipelines vulnerable to backhoes\r\nor corrosion or attack.\r\nEven hydro is vulnerable to lack of rainfall.\r\nCarbon sequestration doesn’t get good marks, while\r\nconservation and efficiency get rave reviews from \r\na study of insurance perspectives on power generation.\r\nWhat’s the one power source this article about insurance risks does not<\/em> say\r\nis fragile in the face of climate change?\r\nHint: look up.\r\n

\r\n\r\nLimiting Liability in the Greenhouse: \r\nInsurance Risk-Management \r\nStrategies in the Context of \r\nGlobal Climate Change<\/a>,\r\nby\r\nChristina Ross, Evan Mills, and Sean B. Hecht,\r\nStanford Environmental Law Journal and the Stanford Journal of International Law,\r\nSymposium: on Climate Change Risk, Vol. 26A\/43A:251, 2007.\r\n

\r\n

\r\n\r\n<\/a>\r\nSupply-side energy choices that may be made to reduce the\r\ncarbon-intensity of energy services have their own distinctive\r\nliability characteristics. For example, switching to lower-carbon\r\nelectricity generation technology based on thermal power plant\r\ntechnology (e.g., by substituting natural gas for coal) results in\r\nsystems that are still heavily dependent on water resources for\r\ncooling. The Electric Power Research Institute has documented\r\nconsiderable risks to traditionally cooled power generation systems\r\nas a result of climate\r\nchange-induced droughts.242<\/sup><\/small> Similarly, “zero-emissions” hydroelectric\r\ngenerating systems are also sensitive to rainfall patterns.\r\n

242<\/sup><\/small>\r\nDenis Albrecht,\r\n\r\nElectric Power Research Institute<\/a>, Presentation:\r\nClimate Impact on Water Availability for Electricity Generation\r\n(April 11, 2006) (presentation slides associated with the Electric\r\nPower Research Institute).\r\n<\/p>\r\n

Centralization considered harmful<\/h3>\r\n

\r\nThe services provided by centralized energy systems are particularly\r\nvulnerable to disruptions because a single disruption to a power\r\nplant or refinery could affect a very large population of end users\r\nand because damage on the transmission or distribution side can\r\nisolate an otherwise functioning central facility from end users.\r\nThe European winter storms of 1999 caused 2.5 billion of\r\nequipment damages to the French electric utility.243<\/sup><\/small> Soil subsidence\r\ncaused by the melting of permafrost, a less dramatic but equally\r\nworrisome phenomenon, is a risk to gas and oil pipelines, rail lines\r\ncarrying fuels, electrical transmission towers, nuclear power\r\nplants,\r\nand natural gas processing plants throughout the Arctic.244<\/sup><\/small> Ice storms\r\ncan cause electrical system disruption, as occurred in the\r\nnortheastern United States in 1998, an El Niño year.245<\/sup><\/small> This event was\r\nalso the most costly in the history of the Canadian insurance\r\nsector,\r\nprimarily as a result of electric power disruptions.246<\/sup><\/small> Reduced water\r\navailability in certain regions, a likely effect of climate change,\r\ncould hamper hydroelectric as well as thermal power generation, as\r\noccurred in Brazil in 2001-2002 when the driest summer in seventy\r\nyears and prolonged drought threw the country’s hydroelectric power\r\nsector into acute shortage conditions.247<\/sup><\/small> Drought in Ghana in 1982\r\nled to reduced hydroelectric output, which, in turn resulted in the\r\nshutdown of an aluminum smelter. Economic costs were estimated at\r\n$557 million, a significant sum for such a poor country.248<\/sup><\/small> Elevated\r\ntemperatures also reduce the efficiency of power transmission, due\r\nto increased “I R” losses, resulting in lost revenues to\r\nutilities. Elevated water temperatures reduce the efficiency of\r\npower plants, and the discharge of cooling water can lead to\r\nunacceptable environmental\r\nimpacts and trigger plant closures.249<\/sup><\/small>\r\n

243<\/sup><\/small>\r\nMUNICH REINS. GROUP, supra note 127, at 13.\r\n<\/p>\r\n

244<\/sup><\/small>\r\nFrederick E. Nelson, Oleg A. Anisimov & Nikolay I. Shiklomanov,\r\nSubsidence Risk from\r\nThawing Permafrost, 410 NATURE 889 (2001).\r\n

245<\/sup><\/small>\r\nEugene L. Lecomte with Anna W. Pang & James W. Russell, Ice Storm ’98, 1-2 (Institute\r\nfor Catastrophic Loss Reduction Research Paper Series — No. 1,\r\n1998) available at\r\n\r\nhttp:\/\/www.iclr.org\/pdf\/icestorm98_english.pdf<\/a>.\r\n<\/p>\r\n

246<\/sup><\/small>\r\nMUNICH REINS. GROUP, supra note 127, at 5.\r\n<\/p>\r\n

247<\/sup><\/small>\r\nId. at 14.\r\n<\/p>\r\n

248<\/sup><\/small>\r\nId. at 31.\r\n<\/p>\r\n

249<\/sup><\/small>\r\nUnited Nations Environment Programme, Impacts of Summer 2003 Heat Wave in Europe,\r\n

2<\/sup><\/small> ENV’T ALERT BULL. 3 (2004), available at\r\n\r\nhttp:\/\/www.grid.unep.ch\/product\/publication\/download\/ew_heat_wave.en.pdf<\/a>.\r\n<\/p>\r\n<\/blockquote>\r\n

Nuclear<\/a><\/H3>\r\n

\r\nSome centralized power sources are worse than others,\r\nand nuclear gets the most condemnation.\r\n

\r\n

\r\nThere have been calls for a resurgence of nuclear power as\r\npart of a strategy for addressing climate change.250<\/sup><\/small> While it is\r\nconceivable that nuclear power could serve as one of many\r\n“wedges”251<\/sup><\/small> in a comprehensive strategy for reconstructing the energy\r\nsector, the question of liability remains unresolved (as do the\r\nunderlying technical issues such as safety and weapons\r\nproliferation). The private sector has historically found nuclear\r\npower to be largely uninsurable, forcing the government to step in\r\nas liability insurer of last resort under the Price Anderson Act,\r\nwhich limits nuclear plant\r\nowners’ liability.252<\/sup><\/small> There is no indication that a resurgence of\r\nnuclear power development would change this situation. Meanwhile,\r\nnuclear generating facilities are highly water dependent, as\r\ndemonstrated by the shutdown of reactors across in eight European\r\ncountries during the great heat wave of 2003.253<\/sup><\/small>\r\nIn France alone, an\r\nentire “reactor year” of capacity was lost due to\r\nexcessive heating of cooling water in local rivers, rendering the\r\nplants unable to\r\noperate.254<\/sup><\/small>\r\n

250<\/sup><\/small>\r\nSee Press Release, Department of Energy, Department of Energy\r\nReleases Global Nuclear Energy Partnership Strategic Plan (Jan. 10,\r\n2007), available at\r\n\r\nhttp:\/\/www.gnep.energy.gov\/gnepPRs\/gnepPR011007.html<\/a>.\r\n<\/p>\r\n

251<\/sup><\/small>\r\nSteven Pacala & Robert Socolow, Stabilization Wedges: Solving the\r\nClimate Problem for the\r\nNext 50 Years with Current Technologies, 305 SCIENCE 968, 969 (2004).\r\n

252<\/sup><\/small>\r\nAtomic Energy Act of 1954, 42 U.S.C. sect;2011.23 (2006), as amended by Price-Anderson\r\nAct, 42 U.S.C. §2210 (2006). For more information, see U.S. GOV’T ACCOUNTABILITY OFFICE,\r\nNUCLEAR REGULATION: NRC’S LIABILITY INSURANCE REQUIREMENTS FOR\r\nNUCLEAR POWER PLANTS OWNED BY LIMITED LIABILITY COMPANIES (2004),\r\navailable at\r\n\r\nhttp:\/\/www.gao.gov\/new.items\/d04654.pdf<\/a>.\r\n<\/p>\r\n

253<\/sup><\/small>\r\nMUNICH REINS. GROUP, TOPICS GEO: ANNUAL REVIEW: NATURAL CATASTROPHES\r\n2003,\r\n23 (2004), available at\r\n\r\nhttp:\/\/www.munichre.com\/publications\/302-03971_en.pdf?rdm=6512<\/a>.\r\n

254<\/sup><\/small>\r\nAmelia Gentleman, France Faces Nuclear Power Crises, GUARDIAN, Aug.\r\n13, 2003, available at\r\n\r\nhttp:\/\/www.guardian.co.uk\/international\/story\/0,3604,1017262,00.html<\/a>.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\n\r\n<\/a>\r\nAnd nukes haven’t stopped being down due to heat, for example\r\n\r\nMillstone 2 down for two weeks in Connecticut<\/a> in August 2012,\r\n\r\nfour nukes in New York, Pennsylvania, Maryland, and South Carolina<\/a>\r\nin July 2012,\r\nand of course there’s\r\nPilgrim in Massachusetts<\/a>,\r\ndown repeatedly for cold, heat, and leaks.\r\nIn Europe in August 2013, \r\nnukes in France, Germany, and Spain were down due to heat<\/a>.\r\n

\r\nNow\r\n\r\nGeorgia Power wants more new water for Vogtle nukes than Savannah uses<\/a>.\r\n

\r\nAs\r\n\r\nJeremy Rifkin spelled out in September 2012<\/a>,\r\nthere’s no business future in nuclear power.\r\nLet’s stop\r\n\r\nburning $20 bills to generate electricity<\/a>.\r\n

Carbon Sequestration<\/a><\/H3>\r\n

\r\nBad news for\r\n\r\nSouthern Company’s Kemper Coal<\/a>:\r\n

\r\n

\r\n\r\n<\/a>\r\nThere has also been a recent wave of interest in capturing carbon\r\ndioxide at the point of production and storing it, hopefully safely\r\nand permanently, via injection into the earth or seabed. The risks\r\nare many, as illustrated in Exhibit 8: Risks of geologic storage of\r\ncarbon dioxide,255<\/sup><\/small> but the liabilities of this largely untested\r\nsequestration technology remain essentially unquantified.256<\/sup><\/small> There is\r\nevidence that leakage, for example, can pose a serious threat to\r\npublic health and the environment: for example, a natural carbon\r\ndioxide leak at Lake Nyos in Cameroon in 1986 killed at least 1,700\r\npeople and 3,000 cows.257<\/sup><\/small> Politicians have already taken steps to\r\nshield providers of these services from liability, raising serious\r\npublic\r\npolicy concerns.258<\/sup><\/small>\r\nSequestration could pose potential risks particularly in the\r\ndeveloping world, where it will be most needed due to the relatively\r\nhigh growth in coal-based power generation, and may generate\r\nsignificant liabilities, including hazards to public health, if\r\nquality control is relaxed during construction or operation of these\r\ncomplex facilities.\r\n<\/p>\r\n

255<\/sup><\/small>\r\nSee Exhibit 8: Risks of Geologic Storage of Carbon Dioxide (CO2).\r\n<\/p>\r\n

256<\/sup><\/small>\r\nElizabeth J. Wilson & Mark A. de Figueiredo, Geologic Carbon Dioxide\r\nSequestration: An Analysis of Subsurface Property Law, 36 ENVTL. L.\r\nREP. 10114 (2006); Elizabeth J. Wilson, Timothy L. Johnson, & David\r\nW. Keith, Regulating the Ultimate Sink: Managing the Risks of\r\nGeologic CO2 Storage, 37 ENVTL. SCI. & TECH. 3476 (2004).\r\n<\/p>\r\n

257<\/sup><\/small>\r\nGeorge W. Kling et al., The 1986 Lake Nyos Gas Disaster in Cameroon,\r\nWest Africa. 236 SCIENCE 169 (1987).\r\n<\/p>\r\n

258<\/sup><\/small>\r\nObey, supra note 31.\r\n<\/p>\r\n<\/blockquote>\r\n

Hydrogen<\/a><\/H3>\r\n
\r\n

\r\nHydrogen energy systems also have unknown liabilities. Over\r\ntwenty-two percent of hydrogen accidents associated in industrial\r\nsettings have been caused by undetected leaks. These accidents\r\noccurred in spite of occupational safety and health measures in\r\nplace, including standard operating procedures, special training,\r\npersonal protective equipment, and provision of electronic flame and\r\ngas\r\ndetectors to a limited number of hydrogen workers.259<\/sup><\/small>\r\nThe liability insurance lines that may be affected by new\r\ntechnologies include those discussed above in Section III.B. In\r\nparticular, new technologies are likely to spawn claims either in\r\nnegligence, or in strict liability for product defects, depending on\r\nthe type of technology.\r\n<\/p>\r\n

259<\/sup><\/small>\r\nRussell Moy, Letter to the Editor, Liability and the Hydrogen\r\nEconomy, 301 SCIENCE 47 (2003).\r\n<\/p>\r\n<\/blockquote>\r\n

Wind<\/a><\/h3>\r\n

\r\nPraised with faint damns, wind gets off easy:\r\n

\r\n

\r\nWhile arguably not as “brittle” as centralized thermal\r\npower systems, even renewable energy systems can have their own\r\nvulnerabilities. Windstorm is a hazard for most renewable systems\r\n(whether centralized or distributed), particularly wind-power\r\nsystems,\r\nwhich are intentionally placed in the greatest wind corridors.260<\/sup><\/small>\r\nConversely, wind resources could shift geographically, thereby\r\nstranding prior investments. Hydroelectric power systems are clearly\r\ndependent on precipitation, runoff conditions, and limited siltation\r\nrates, and may thus be impacted by changing climatic conditions,\r\nsuch as flooding. Biomass-based systems are vulnerable to loss or\r\ninterruptions of fuel supply due to drought, wildfire, flooding,\r\ninfestations or disease, and other hazards impacting fuel\r\ndistribution or growing areas. Nonetheless, while these new\r\ntechnologies will pose risks to the insurance sector, the risks are\r\nless than those from continuing past practices.\r\n<\/p>\r\n

260<\/sup><\/small>\r\nUNITED KINGDOM CLIMATE IMPACTS PROGRAM, BUILDING KNOWLEDGE FOR A\r\nCHANGING CLIMATE: THE IMPACTS OF CLIMATE CHANGE ON THE BUILT\r\nENVIRONMENT (2003).\r\n<\/p>\r\n<\/blockquote>\r\n

\r\n<\/a>\r\nWind off the Atlantic Coast in the Georgia Bight\r\nwould have to weather hurricanes.\r\nBut\r\nTEPCO, owner of the failed Fukushima nuclear plant,\r\n\r\nis already deploying floating windmills designed to weather typhoons<\/a>.\r\n

Efficiency<\/a><\/H3>\r\n
\r\n

\r\nFrom a risk and liability perspective, the most “inherently\r\nsafe” strategy for reducing greenhouse gas emissions is to\r\nincrease energy end-use efficiency, which almost universally serves\r\nto maintain or even reduce baseline levels of liability. For\r\nexample, so-called “green building” strategies are\r\nwidely documented to have a beneficial effect on indoor\r\nenvironmental conditions, thus reducing the likelihood of\r\nsick-building syndrome, absenteeism, or other events that could\r\ntrigger liability insurance claims or business interruptions.261<\/sup><\/small> In rare\r\ncases, such strategies can inadvertently introduce new risks and\r\nliabilities, e.g., through creating moisture problems by\r\ninappropriately tightening buildings.262<\/sup><\/small>\r\nThese problems can be almost universally avoided through proper\r\ndesign, engineering, and monitoring. For example, despite the\r\nconventional wisdom that automobile safety is correlated with\r\nweight, light cars exist that are as\r\nsafe as or safer than much heavier SUVs.263<\/sup><\/small> Improved inflation of\r\nvehicle tires saves energy while enhancing road safety. A remarkable\r\nassessment by the U.S. Government Accountability Office concluded\r\nthat about 1% of U.S. automobile fuel use (1.2 billion gallons per\r\nyear) could be saved simply by properly inflating tires. In 1999,\r\nunder inflated tires contributed to 247, or 0.8%, of 32,061\r\nfatalities\r\nand 23,100, or 0.8%, of almost 3 million injuries, plus 41 vehicular\r\ndeaths each year.264<\/sup><\/small>\r\n

261<\/sup><\/small>\r\nEvan Mills, The Insurance and Risk Management Industries: New\r\nPlayers in the Delivery of Energy-Efficient Products and Services,\r\n31 ENERGY POL’Y 1257 (2003).\r\n

262<\/sup><\/small>\r\nSee EVAN MILLS & IVO KNOEPFEL, ENERGY-EFFICIENCY OPTIONS FOR\r\nINSURANCE LOSS— PREVENTION, at 9, 12 (1997), available at\r\nhttp:\/\/eetd.lbl.gov\/emills\/PUBS\/no-regrets.html.<\/a>\r\nhttp:\/\/energy.lbl.gov\/ea\/emills\/pubs\/pdf\/mills-knoepfel.pdf<\/a>.\r\n

263<\/sup><\/small>\r\nMARC ROSS & TOM WENZEL, AN ANALYSIS OF TRAFFIC DEATHS BY VEHICLE\r\nTYPE AND MODEL, U.S. Dep’t of Energy, LBNL Report No 49675 (2002),\r\navailable at http:\/\/eande.lbl.gov\/EA\/teepa\/pdf\/LBNL-49675.pdf.<\/a>\r\n

264<\/sup><\/small>\r\nSee Letter from Katherine A. Siggerud, Director, Physical\r\nInfrastructure Issues, U.S. Government Accountability Office,\r\nUnderinflated Tires in the United States (Feb. 9, 2007), available\r\nat http:\/\/www.gao.gov\/new.items\/d07246r.pdf.<\/a>\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nThe article goes on to criticize carbon trading.\r\nBut guess which energy source gets no<\/em> criticisms?\r\n

Solar<\/a><\/h3>\r\n

\r\n\r\n<\/a>\r\nThat’s right: solar power wasn’t criticized at all.\r\nIt’s not centralized, it uses no water, and it’s not especially\r\nsusceptible to wind or storms.\r\nSure, solar panels don’t generate much during a thunderstorm,\r\nbut other panels elsewhere keep generating, and after the storm\r\npasses the ones it covered start generating again.\r\n\r\nUtilities can’t take the solar heat<\/a>.\r\nLet’s get on with solar power, which weathers everything better\r\nthan any other power source.\r\nAdd mostly wind and some water power, and\r\n\r\nwe can power the country<\/a> and the world entirely with renewable power.\r\n

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