Destroying California’s Economy, One Energy Sector at a Time

by Andy Caldwell

California has made a complete and costly mess of our energy sectors. Please consider sharing this three-part overview because too few people understand the magnitude of the incompetence that is serving to cripple our state’s economy. Today, we will consider the energy sectors that would otherwise serve us well if they were not being regulated to death.

Nuclear Power

The Diablo Nuclear Power Plant generates some 10% of California’s electricity supply without generating any greenhouse gases. It represents $1 billion in annual economic contributions to our region including a $226 million payroll. Nevertheless, it was slated to close prematurely for three reasons, that is, before it got a temporary five-year extension, and that was because Newsom didn’t want to be running for president while California was in the throes of routine rolling blackouts.

First, regulators in California wanted PG&E to build enough tank capacity to cool some 2.5 billion gallons of water used to cool the reactor before returning the water to the ocean. That is, Diablo takes in cold water from the ocean and returns it at above ambient temperature. Building the tanks to satisfy the state’s “once-through-cooling” reg would have cost a minimum of $10 billion, and worse, it would have been nearly impossible to construct without making space by moving a mountain.

Second, California long ago promulgated what is known as its Renewable Portfolio Standard. This standard requires that our utility providers create a portfolio of energy sources that are 60% renewable by 2030. The problem here is that nuclear power is not considered “renewable” and because it comprises so large a component of PG&E’s portfolio, the utility could not comply with the mandate. Too much of a good thing, in my opinion, as nuclear power supplies base-load power meaning it produces constantly without interruption 24/7/365. Solar and wind, on the other hand, are completely intermittent and thereby unreliable for continuous power generation.

Moreover, it is ridiculous to pretend wind and solar are “renewable” and nuclear is not. How so? Because uranium must be mined, the powers-that-be claim it doesn’t qualify as renewable. Yet, where and how do we get the raw materials to build wind turbines, batteries, and solar panels? They are mined just like uranium. Moreover, the lifespan of wind turbines and solar panels is extremely limited compared to a nuclear power plant.

Reason number three: Diablo’s premature closure had to do with a scheme known as community choice energy. Because California, in some people’s opinion, was not moving fast enough toward 100% renewable energy, the state legislature allowed cities and counties to form their own energy co-ops. The largest one serving the Central Coast is called 3CE, which stands for Central Coast Community Energy. You were automatically opted in by local politicians who were promised freebies, e.g., electric buses, in return.

In essence, the legislation deconstructed the utility franchise model by separating generation and transmission of power, and it also created uncertainty for the western state’s co-op that shares electricity between states. That is, these community choice aggregators are allowed to buy and/or create their own sources of electricity and force the utilities (PG&E and Edison) to use their transmission lines to deliver the power per their direction. For instance, the power generated by the wind turbines in Lompoc is credited to the community choice program that serves Marin County.

How does this relate to the closure of Diablo? The community choice aggregators would not buy nuclear-generated electricity, meaning the plant would lose market share as these associations multiplied throughout the state.

Oil and Gas

California has been attacking the oil and gas industry by way of a strategy of triangulation including drilling, refining, and consumption of the same, and the dominoes are falling. Less production means refiners don’t have enough oil to create finished products. That is, as production falters, the refineries will be forced to close. This, plus the pressure that California has put on the oil industry and refineries by way of the California Air Resources Board and local air pollution control districts, makes for an untenable future. Two refineries closing this year means CA will lose over 20% of refinery capacity. There was, at one time, over 40 refineries in our state. Next year, only seven will remain. What about importing gasoline from other states? We can’t because our laws require a special blend that can only be made by our remaining refineries.

The good news? Just as somebody in Sacramento figured they had to throw Diablo a lifeline less we suffer from regular blackouts, some state Dems are beginning to panic about the closure of refineries. As the Daily Caller reported, California’s Committee on Utilities and Energy grilled several state regulators about a possible gas price spike as two major refineries prepare to close. In the greatest understatement ever, Democratic Assemblyman David Alvarez of San Diego stated, “We have a crisis on our hands that may have been self-created by the actions perhaps taken by the state, by regulators.”

May have been self-created?

You think?

Another Democrat Assembly representative, Cottie Petrie-Norris from Irvine, declared, “I know what climate leadership does not look like, and that is $10 gas”!

Not to be deterred, county supervisors Capps, Hartmann and Lee have decided to do their part to make things worse by banning new oil and gas drilling and preparing to shut down those already in operation.

Why is that?

Because zealots such as these three county sups want gasoline to be so unaffordable that consumers will be forced into EVs.

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