Keep our priorities clear and the lights on
Regulations and markets are made for people, not regulations and markets.
Meanwhile, temperatures have risen and the immediate Texas crisis is over. Five members of the state Electric Reliability Council (ERCOT) resign. You don’t even live in Texas. Ted Cruz is on vacation, maybe at least a lesson in optics. But until the cascade of incidents and decisions that have left millions of Texans in the cold without electricity or water is examined and learned from, the real crisis remains. Despite the name of ERCOT or the name of boards like this across the country, our infrastructure is not reliable. The American post-war network, which was not designed for resilience, was misunderstood in the constant tension between efficiency and regulation for its own sake.
They both had a great Valentine’s Day. ERCOT sent the Biden Department of Energy on February 14th requesting permission to lift certain environmental permit limits for power generation facilities in anticipation of the increased electricity demand and decreased power efficiency that the winter weather event would cause. “This request is closely tailored to only allow the exceedances that are necessary to ensure reliability in the next few days,” assures the DOE and explains in detail how excess emissions standards are monitored and reported.
The DOE granted the allowance, but its letter also underscores the tension between reliability, regulations, and market forces. The DOE ordered that if sufficient emergency conditions were reached, as assessed by ERCOT, certain generators could be operated above the regulated capacity: “This additional amount of restricted capacity would be offered at a price of no less than 1,500 USD / MWh.”
All companies must comply with the environmental requirements as much as possible in order to meet the emergency conditions. This regulation does not release a company from the obligation to purchase allowances for emissions that occur during the emergency or to use other geographical or temporal flexibility that are available to generators.
The closely coordinated application to ease the licensing restrictions was approved as a last resort. In some ways I’m sure it worked and some level of excess emissions was minimized given the situation, with lots of offsets and even electricity purchased from outside the state. However, it’s hard to imagine that from a Houston or Austin resident’s perspective, with ongoing power outages and the possibility of huge utility bills, the situation felt like a great success. The fact that five members of the ERCOT board resign does not seem to be a confirmation of how things have developed.
“And he said to them,” The Sabbath was made for man, and not man for the Sabbath. “We should want our energy grids to be reliable, the environment protected and the markets efficient because of the people. Indeed, reliability is one way of describing the limiting factor at these two second ends: we prevent emissions to the point where regulation prevents people from heating their home when the temperature is below zero. We let market forces shape the electricity supply up to the same point. In this case, of course, it looks like huge price increases in response to demand are more likely to exceed the Green standards written in the contract than were linked to the actual limited supply. This will present the permit system to the citizens on whose behalf the emissions will be regulated. Five days of a power plant with a capacity of 100 percent will emit more pollutants than thousands of unused chimneys and Basement generators suddenly lit? I dont know. But I know the air quality in America has never been so good in living memory, and I wonder what the good of cleaning up the air when you can’t fumble it for a few days – so people can get the light can stop! – without making it too complicated?
Part of the problem is that at some point a place like the DOE or the EPA necessarily has to pretend that a national regulator setting national standards is pretty much the same. It’s the American environment, American air, American energy. However, reliability lies in the fail-safety of a system. The larger the system you are looking at or working with, the weaker the threads that bind everything together, the more complex the interaction and the less predictable the ripple effects. Large machines with many moving parts are fragile. Do you remember any early interruptions in the COVID supply chain? Do you remember the lack of fuel at OPEC’s whim? The local, on the other hand, can be understood and directed, can react quickly with less conflicting interests and a clearer hierarchy of priorities. This is a tension at the heart of American energy and environmental policy: local versus national, reliable versus clean.
If we want to protect the environment and thus regulate human behavior for this purpose, we want to prevent a change for the worse or enable change for the better. So we let ourselves be guided by an idea of better and worse, and thus by a good that we aim at. Politics is the conflict about this good, the attitude of opinions about it in competition with one another. It is a regulatory matter, limited and contextual. But people generally agree that it is aimed at what we might call human prosperity. The great danger in today’s debate on environmental and energy policy is that, as Protagoras said, we forget that “man is the measure of all things: of the things that are what they are, of the things that are not, who they are are not. “The weather is cold because we are cold. The lights are out because we cannot see them.
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