 |
Smart Grid MarketsObama vs. Romney: Sizing up the electric industry's winners and losers
|
Aug 14, 2012
|
|
| |
|
|
Continues on page 2 >>
By Doug Houseman
Having looked at the Energy Policy Guidelines on both President Barack Obama’s website and that of former Massachusetts Governor Mitt Romney, the one thing that is for sure is that they lack details. But that said, it's still worthwhile to sort out the winners and losers in the electric industry under each person as president (assuming that they could get all of their energy policy in place).
The results are pretty stark. The positions of both candidates, while light in detail, point to very different winners and losers. It is slightly surprising to see how different the policies really are when you look at them in a winners/losers context as I have done below. (In all cases, the winners and losers described here focus on U.S. based companies. What will happen to foreign companies and their exports to the U.S. is not part of this analysis.)
Overall analysis (regardless of who wins the November election)
.
Overall winners:
· Gas-fired generation – It will likely fare better under Romney than Obama, because the priority to build pipelines and transmission lines will be higher under Romney’s policy.
· Security providers – Any company that works on any aspect of infrastructure security can expect to win under either administration. DHS and its contractors will probably fare better under Obama than Romney. Private companies will probably do better under Romney.
Overall losers:
· Coal-fired generation – The phase out will likely be slower under Romney, but the owners see the writing on the wall
· Transmission and distribution – With the focus on generation, most utilities and infrastructure owners are going to have little money left over to spend on transmission and distribution improvements. The federal government has encouraged leaving transmission projects to the states because they need to decide if they are willing to increase the rate base to cover improvements.
Surprise Winner:
· Great Lakes shipping – With the West Coast refusing to open a coal terminal, look for one of the Great Lakes iron ore docks to be repurposed for coal shipment. With the larger locks being completed in Panama, expect that shippers will think hard about moving coal from the Midwest via ship to China and other Asian markets. This situation has a higher chance of succeeding under Romney than under Obama.
Next page: Winners and losers under Obama and under Romney >>
| Romney a clear winner |
| Looks to me like Romney is a clear winner here... We have known for along time that wind and solar are not prime time energy producers.. Do do we want to put money into research or wind and solar knowing they can't provide the necessary support moving forward? Vote Romney to support the energy solution. |
| mike trust - 08/14/2012 - 06:41 |
| winner vs loser |
| Making news rather than reporting. We the people ate losers with Romney, even a fool recognizes that. |
| pi boson - 08/14/2012 - 06:50 |
| pi boson comment |
| Only an idiot who refuses to face facts can refuse to conclude that Houseman's article is unbiased reporting and only such a fool can continue to believe that the policies of the current administration are winners for the people. |
| Jerry - 08/14/2012 - 07:07 |
| Real names |
| Doug - good analysis with limited information. Please report if you get an update from either candidate. The moderator requires a REAL NAME to submit comment on this site. Is there actually someone named Pi Boson registered here? If there is, he might want to check his spelling and grammar before posting. "...ate losers with Romney"? |
| Ray Hayes - 08/14/2012 - 07:12 |
| Do you work for Murdock ? Fox ? |
| I expected a reasonable amount of thoughtful detail with balanced information. Look at the number of times a candidate's name is mentioned. Look at how the winner's list is not filled out on the author's report for one candidate's evaluation vs the others and how on the loser side regulation is mentioned on both the winner and loser side of another. In an industry that uses mathematics, requires precision and prides itself on reliability, allowing something can be easily seen as an opinion, where any metric could be used to show what type of fairness and balance of facts is presented and supposedly passed off as "complete" information is disappointing. I'm sure that the people, er corporations don't mind. This real person does. |
| Daniel Letterman - 08/14/2012 - 07:42 |
| RTOs/ISOs |
| Thank you for the analysis, not sure if I agree with the fact that RTOs/ISOs will be losers under an Obama administration. Recent FERC Orders have expanded the role of RTOs/ISOs in regional planning and worked to bolster existing electricity markets, and I would expect this to continue under a second Obama term. Thoughts? |
| Steve Dahlke - 08/14/2012 - 07:45 |
| Nuclear Interpretation |
| We'd really like some more definition about the nuclear power plant interpretation - RE: the first glance versus the in-depth evaluation. What in the in-depth evaluation results in a hostile environment for new / replacement nuclear power under Obama? |
| Tom Campbell - 08/14/2012 - 07:49 |
| Romney not supporting PTC is bad |
| For me, the fact that Romney came out in opposition to renewing the PTC for Renewable Energy is a deal-breaker. We need a level playing field to compete with the big Oil and Coal boys. We need as many energy sources as we can get! |
| Vic Thompson - 08/14/2012 - 08:04 |
| Will Romney support smart grid investment? |
| Doug, given that this analysis is posted on SmartGridNews.com, I would have expected to see a reference to the work that ties all of together. I didn't find smart grid mentioned on Romney's site but since he seems to be opposed to everything that Obama and the Democratic Party support, it does not bode well for our continued collective efforts. If one doesn't believe in distributed generation and storage and favors gasoline-powered vehicles over EVs, that weakens the argument for SG. With respect to nuclear energy, it would seem that the Fukushima accident is having a far more profound effect on that industry, than your interpretation of the President's stated position. |
| Judith Schwartz - 08/14/2012 - 09:00 |
| community organizer vs. businessman |
| I have rarely seen so many comments in such short a period of time proving politics creates auto response faster than an Akuacom DRAS. Obama certainly has pumped a lot of cash into the "Think Tank" of Smart Grids, as EnerNex is benefiting, but it does seem that utility business is business, and needs a businessman to oversee its success. My vote goes to "the curtain is closed," for a reason. |
| Gary Sorkin - 08/14/2012 - 09:12 |
| Daniel Letterman Comment |
| Mr Letterman - In the original draft of the article, every statement started with President Obama or Governor Romney. In the editing, some of this was changed. Regulation is a complex topic and while one change to how regulation is done may be a win for one party and a loss for another party should be clear if you work around regulation at all. If this offends you, I am sorry. I worked hard to review the website material and provide a careful analysis of what was posted in mid-July. I emailed that analysis to both campaigns for comments and recieved none from either campaign. My apologies if the final article seems to offend you. Mr Steve Dahlke - You and I might disagree on whether the RTO/ISO role has been expanded or better explained in the last 3 years. II would probably enjoy a face to face discussion on the topic over lunch with you. |
| Doug Houseman - 08/14/2012 - 09:26 |
| SUre Romney will increase Gov. ARPA-E spending! |
| Do you really believe that Romney will increase Government spending under ARPA-E for research? He has made it clear that there will be no government money available for anything. No subsidies, no nothing. You are on your own for everything. DOE will be gutted as wil the NSF. Look to the Republicans in Congress and you will see what laws Romney will be approving. States rights will take over for the Feds as the FERC is gutted so your transmission issues will be pushed down to the NIMBYS at the local level. As for appliances Whirlpool just closed their mexican factories and opened US ones on the recent win against dumping by foreign manufacturers. Romney probably won't fund agencies to catch such things. BTW Obama just approved the construction of a gas pipeline so your analysis of that is a little skewed. Will Romney buck the Republican congress or will he approve everything they pass? So its really down to how well off you will be under Congress. Why not analyze that? Good luck. |
| Jamie Patterson - 08/14/2012 - 09:49 |
| Thanks for this thoughtful article |
| Given the paucity of realistic information on the candidates' web pages, I thought Doug did an admirable job of following the impacts on producers, implementers, manufacturers and regulators - given the starkly divergent economic visions. As for statistical accuracy - that's an engineer's pipedream given that we're talking about policies, not structural designs. As for bias, I thought the article refrained from taking sides and simply projected out the most likely outcomes. What may have been missing is some discussion of the time frame within which the impacts are felt. As I understand Ryan's economic philosophy - he relies largely on market mechanisms to solve the demand for a smarter delivery system and a wider selection of energy sources. In the "long run" the market will respond with a smorgasbord of competing solutions (e.g., Blue Ray vs. HDTV). Of course, a more state-directed approach (e.g., DARPA investments in the Internet precursor) may impact the markets more quickly...but possibly produce a sub-optimal solution. The two approaches (Dem's versus GOP)have dramatically different consequences when you consider the time frame in which they play out. Personally, I'm on the side of investing public monies into critical infrastructure that will make us more competitive tomorrow - like functional bridges, 21st century rail solutions, and the Smart Grid. But the GOP is also committed to competitiveness - the difference is that the market-driven approach is influenced by shareholders - not the general public. Shareholders may be more results and success oriented (less distracted by social values), but they are also more impervious to the needs of society as a whole. If the state guided efforts turn out to be misguided we can influence those policies through our votes. But we can't influence shareholders decisions - whether good or bad. To me those are the real differences: the timing of investment in innovation and our options if the initial plans turn out to be ineffective or wasteful. |
| Jim Thayer - 08/14/2012 - 10:46 |
| Disagree with some of the Analysis |
| The Saint Lawrence Seaway will bottleneck any coal exports from the Midwest. Maximum depth is 27 ft from the upstream side of the Welland Canal on Lake Erie of the Niagara Falls complex to Montreal. Existing PanaMax ships can navigate only as far as Quebec City. Super Panamax would be limited to Medford Terminal in Nova Scotia. You also have a 32 ft dept limitation at the Soo Locks between Lake Superior and Lake Huron. On the ISO/RTO the results are going to vary depending on the quality of management of the ISO/RTO and the quality of the state regulators. For example, SPP is going to have a far easier time of getting approvals than ERCOT. State regulators are going to get a second look at what they propose. There is no better example of state regulators needing to be supervised than the Texas PUC. Some of the PJM regulators are nearly as bad. I worked for 15 years as an attorney dealing with the state regulators and FEERC on pipeline regulation. Give me FERC regulation any time as it is one stop shopping. I seldom had had any serious issues with staff and the saw the position of intervenors for what they were. Certificates got issued quickly unless the proposals were foolhardy as the Tennessee LNG terminal was, FERC saved TGP from financial disaster. I don't think that either administration is going to be able to save nuclear. I qualified as a nuclear weapons officer in 1971 and 1he safety record of uranium piles has not been good. Since 1950 we have averaged at least 1 INES Class 5 incident or greater every decade with two Clsss 7 events Chernobyl and Fukashima. One Class 6 event Kyshtym, and 3 class 5(major damage to the pile closing the reactor) Three Mile Island, Chalk River and Windscale. There are another 5 class 4 incidents that caused major damage to reactors but did not result in closure. A Thorium based reactor is feasible due to the fact it is not self sustaining and therefore can't runaway. But it means junking all existing designs and starting from scratch. I don't thing the economics are there. |
| edward hinders - 08/14/2012 - 10:54 |
| Where is the analysis? |
| Hi, Thanks for the important premise of the article; we certainly need some in-depth analysis of the potential impact of the two candidates' positions and agendas. However I don't see any real analysis here. Where are the policy/statement citations and where is the analysis that lends support to your conclusions about who will be the winners and losers under each? This article hasn't provided enough information for me to make any decisions about who to vote for on the basis of potential outcomes for the energy/smart grid industry. Thanks. |
| Liz Stuart - 08/20/2012 - 12:17 |
| Today Politics App |
| For all news related to politics, Politics Today News App http://itunes.apple.com/us/app/politics-today-hand-picked/id469563500?mt=8 This App is top rated on the AppStore and is a great one-stop App for real-time news and analysis on U.S. Politics. PT pulls breaking news and content articles from publications, journalists, columnists, think tank, and beltway bloggers who publish across the Web. The App continuously monitors and adjusts online source lists to include new analysts and publications as well as opinion leaders of note.The App's user interface is beautiful and makes it easy to read articles and research on the iPad, simple and efficient. This is a great App for collecting and reading all this content into one place. It is the most useful politics related App on the iTunes Store. Its part of a series, all their Apps are on http://www.algoryt.hm |
| Nancy Nelson - 09/04/2012 - 05:22 |
| an uneconomic |
| This "analysis" makes no reference to fundamental economics under each set of policies. Nor does it seem to even bother to state the most obvious risks. Exporting coal and other high-carbon fuels from any G7 country in large amounts means the end of any chance of a global carbon control agreement. That has profound diplomatic and ecological implications that deserve at least a mention. Romney would be helping Canada export dirty oil via the Gulf of Mexico and helping coal get out of North America via the St. Lawrence Seaway, if the above is true. That amounts to sabotage of any binding global carbon controls and some would say a world war between climate and ocean acidification victims, and those rich countries who profit from export. Sneer if you want, but the backlash from this kind of policy is likely similar to 9/11 or worse - whole civilizations believe (regardless of what you personally believe) they are at risk and see it as an attack. By contrast, Russia leaves Siberian coal in the ground; it exports natural gas; it signed Kyoto. That adds up to a geopolitical edge for Russia over Canada and the US when the climate and ocean harms become a major driver of political events. Some would say they already are (source of droughts, famines and extreme storms). Likely US withdrawal of support for global monetary reforms intended to discourage the worst ecological harms would amplify the "race to the bottom" world wide and slow energy change. Nuclear power has been an economic loser for decades and will be more of a drain on the public purse if it's allowed to reboot. It's the most expensive form of generation and it's inherently unreliable, uninsurable and prone to large failures. It makes no sense in dollars per watt, especially not when compared to demand response and conservation which pay off immediately for a small investment. Nuclear power plant = malinvestments in continued dumb appliances, dumb grids and waste. Their fundamental economics is all wrong. Finally, "cleantech" deserves much more than a line or two. Lighting draws far less power today than it did twenty years ago. So does the average TV or computer (increasingly a laptop or smartphone). Cooling breakthroughs are in labs and will be in homes soon. Cleantech (which means mostly "energy efficient") high-tech exports can renew the entire US economy. Letting dirty energy loose just slows that down to the detriment of the strategic sectors Obama has broadly supported |
| Craig Hubley - 09/13/2012 - 08:18 |
| who would support |
| Another open question, not answered just by referring to ARPA-E, is who would more strongly support current US military efforts to pioneer "green" technologies? As the military itself stresses, they are trying to reduce their dependence and vulnerability to fossil fuel supply chains and preserve operational tactical ability in case such chains are cut. Also, reducing casualties in fuel and battery supply lines which were a major loss in Iraq as these can never be adequately protected. Newt Gingrich actively mocked and attacked US Navy pioneering use of biologically derived fuels from algae for combat flight. Romney didn't respond, to my knowledge, perhaps to avoid angering Newt's fossilized base to whom efficiency itself is evil or "socialist". Advances in methanol fuel cells, self-configuring AC powerline and (DC) power-over-ethernet field networks, fuel cells, rapid charging ultracapacitors and low-power flexible translucent displays are likely if this research continues. As with the space program, the results could keep US industries in the lead in smart building and vehicle control. Electric drive vehicles, one should note, are far less vulnerable to being stranded in the field as they are generally mechanically simpler and easier to field repair. Also, it's possible to creep along on power from any working power grid, or generated from any available fossil or biological source, or just toss up a windmill or solar panel to recharge. I would not want to be a Navy Seal out of gas in my fossil-fueled attack boat in hostile territory and have to find a military-grade fuel station or wait for an air drop. Worst case a healthy human being can generate a kilowatt with a pair of bike pedals for a few minutes at a time, I've done it myself at the gym. Any applicant for US (and NATO) Commander in Chief will have to state some support for these tactical technologies and acknowledge that, even more than in the civilian economy, fossil fuel dependence is a fatal weakness that can and is exploited easily. I guess, like the Joint Chiefs, I am (in the words of the sneering GOP backers posting above) "only a fool" who believes that these "not prime time" technologies serve to make military operations more resilient, and that, like the 1960s space program, that the economic spinoffs will more than pay for the cost of their development (NASA paid for itself 7x over by some estimates - Velcro, communications, Tang...) I'd rather be a fool than a liar. |
| Craig Hubley - 09/13/2012 - 11:36 |
| Dear Mr Hubley |
| What I set out to do was to provide an unbiased look at what was on each candidate's website. None of the issues you raise are covered by either candidate on that written document. Since the analysis was done, Governor Romney came out with his "energy policy" which is primarily an Oil and Gas policy. It answers none of the questions you ask either. The debate last week also did not stray into the area of electricity or natural gas for end customers. So from a written position standpoint - we still only have the websites to review. Neither has changed much since I wrote the piece. Thank you for taking the time to post. |
| Doug Houseman - 10/08/2012 - 05:47 |
| Dear Mr. Hinders |
| While 27 feet is the limit in the seaway, many ports globally have shallower draft limits than the seaway. A survey of break bulk ships that would be available to carry coal shows that about 60 percent are shallower draft than the seaway limits at full load. Now that 60 percent represents only about 25 percent of the tonnage, and most are older ships, which presents other issues. I would not because of a single factor rule out an export port on the great lakes. |
| Doug Houseman - 10/08/2012 - 05:51 |
|
|
|
|
Talk Back
