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No April fools, Gov Brown ramps up water restrictions due to drought

Yesterday was no April Fools, Governor Brown is finally starting to get serious about regulations in the midst of California's dire water situation.  The flurry of press activity yesterday, including this detailed article in the NY Times outlines the now mandatory restrictions against excessive water use in California.  The question now becomes, is this action too little too late?

OCR has long been critical of water policy in CA, with limited / no restrictions on ground water usage and lax enforcement of existing water use policies in a state where 70% of water usage is for landscaping.  Yes, you heard it right, LANDSCAPING!  This older OCR blog post from last year explores this issue deeper.  

For residents of Orange County, you should be on the look out for several things.  First, the local government is going to want to pay you to take out your lawn.  Riverside already has "cash for grass" programs in place, and I would expect this model to go statewide.

Second, I would expect water wasting enforcement to go up.  This means citations for those who refuse to learn how their sprinkler systems work and let them go off in the late morning / early afternoon hours when most of the water then just evaporates (and when local government workers are on the beat).  Ignorance will no longer be bliss in the "how to operate your sprinkler system" department.  

Last, since the main mode of communication to the public about their water usage is their monthly water bill, I would expect the rhetoric about the state's water situation to get ramped up in your monthly mailer.  You may start to see more charts comparing your usage to your neighbors in an attempt to shame you into a more conservative water user.  If that doesn't work, the we may start seeing tiered pricing for water to penalize overuse.  Some cities, like Santa Monica, are already talking about personal water restrictions, as reflected in this recent YouTube video.  Outright price increase will likely be a last resort, as increasing the price of water can have a disproportionate class effect, with the poorer water users suffering disproportionately to the richer water users. 

It will certainly be interesting to see how this situation develops as we get into the dry months, and certainly if the upcoming winter is another dry one.


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How to talk to a global warming skeptic, Chapter 1

 We've all know one (especially in Orange County).  They are our friends, our family, our coworkers and especially our politicians (we're talking about you Dana).  I'm talking about the climate change skeptic.  Now, I don't fault a skeptic for being skeptical.  I myself am very skeptical of very many things, like CASH-FOR-GOLD, OxiClean or the Forever stamp.

But I've seen far too many renewable energy enthusiasts become far too frustrated with the global warming skeptic and often blow a perfectly good opportunity to have a discussion and really get to the depths of what makes a global warming skeptic skeptical.  So, as a kick off to a multi-chapter post, I'd like to share a few of my own strategies for "how to talk to a global warming skeptic" it a way that does not insult, alienate or enrage anyone involved.

Since this is the first chapter, I want to start with what is by far the easiest conversational technique, which is taking all opportunities to put and end to the term "global warming".  Global warming is indeed one of the most popular phrases to reference what is more correctly known as climate change, and is correct in its composition, that the world climate is trending warmer.

However, it really irks me to hear anyone (skeptic or otherwise) talk about weather, such as the brutal 2014 / 2015 east coast winter and say something to the effect of, "Global warming?? Yeah right!  Look at all this snow!"  It is mistakenly interpreted that the world "warming" means milder winters.  It doesn't.  I know its confusing, but it doesn't.  This Feb 10 article from the Washington Post takes many words to explain as much.  Simply put, the term global warming allows for a "cheap shot" from anyone against the phenomenon of climate change whenever a cold stretch of weather comes through their neighborhood.

A far more apropos term was originally coined by Hunter Lovins is "global weirding".  This is far more descriptive of what is actually happening with the planet's weather.  It is getting weirder.  Much weirder.  This is because the features of the planet used the regulate the climate, namely the ice sheets at the North and South poles, and greenhouse gases in the atmosphere, are changing.

So when your at that cocktail party and here someone explain, "Global warming is crap, my uncle in Boston is still shoveling snow!", find a polite way to talk about "global weirding" instead.  Even the skeptic can agree that the recent weather extremes (on both coasts) have been pretty pretty weird.

Stay tuned for other talking tips!

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UCI Professor & JPL water scientist Jay Famiglietti recently on Bill Maher & 60 Minutes talking about water

From our own OC backyard, UCI professor and JPL's senior water scientist Jay Famiglietti has recently been making the rounds to some of the most influential TV shows out there.  He is specifically talking about an issue we have posted on before, which is California's dire water situation.  As we move from this (very) dry winter back into another summer cycle it will be interesting to see how this issue develops and what measures are taken to keep usage in check...

Overtime with Bill Maher, aired 3/27/2015



60 Minutes, aired 11/16/2014

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Utilities ramp up fight against solar. BRING IT ON!

In case you haven't noticed, there has been a significant ramp up recently in new stories with a common theme:  "Utilities are working to limit the growth of solar."  Here are a few excerpts from several news channels along the theme.

On March 25, 2015, former Representative Barry Goldwater Jr. (a republican?!) wrote this piece for the website The Hill in which he calls a spade a spade.  The piece is titled, "Slandering solar is not about protecting taxpayers, but protecting the utility's monopoly status."  He references recent actions in Arizon at SRP and APS to slander and charge customers utilizing solar with additional fees.

On March 27, 2015, the site ecowatch.com released a piece detailing recent activity by the notorious Koch brothers on moving to limit the growth of solar energy in at least four states.  The Koch brothers are also notorious for political spending and many have surmised their solar smear campaign  has deeper roots into the upcoming presidential election cycle.

Last is an interactive piece released today on green tech blog GreenTechMedia.com which asks the question if utilitiy companies should even be allowed to own rate-based (meaning the price of electricity can change) residential solar (meaning the panels on your roof).

At the surface, this all looks pretty scary for those who look towards a solar future.  For years the utilities have dismissed solar as nothing more than an annoying feature for some hobbyists, but with the continued strong growth in the industry and the momentum that federal incentives for solar are likely here to stay, utilities are now starting to sweat.  They know more than anyone that they are not ready for a solar future.  They are waaay to fat, dumb and happy to have to actually compete in business.

Unfortunately for utilities the powers of economics do not appear to be on their side.  If they move to "penalize" solar adopters with fees, whether substantiated or not, they are simply adding value to that most mythical of energy consumer:  The Grid Defector

Here is the conundrum for utilities. They have a massive infrastructure set they have to maintain through revenue from rate payers.  As infrastructure ages and inflation increase, the cost of maintaining such large physical infrastructure will only go up.  It ages, needs to be serviced, replaced, all the while the cost of labor in the US increases.  So, expenses are pretty much always going up, year over year.  Meanwhile, some of their customers have decided to start generating their own power through solar.  This means they are sending less money to the power company and the end of every month.  Therefore, if electricity prices were to stay the same, the amount of revenue headed to the power company is going down.  So, expenses are going up, revenue is going down.  That is not good for business.

So, to counter the rise in expenses and fall in revenue, utilities have to raise the price for electricity.  But, this further increases the value of having solar to manage some of your generation, so even more people are encouraged to go solar.  Revenue continues to fall, prices have to go up, so forth and so on.

Right now solar is very affordable, with solar panels costing about $1/W, inverters about $0.5/W and installation from $1-$2/W.  So, for a 2kW system on a house, you are looking at $4k-6k, of which many companies are willing to finance for the life of the system.  However, there is another part of the solar future which is also getting very affordable, very fast.  This is the storage component.  Many manufacturing companies are racing to develop storage which can work directly with solar to provide a total power solution.  As this gets cheaper, the mythical Grid Defector is more and more empowered to defect and go 100% solar for their needs.  Partner this with increasing fees from a utility company and the Grid Defector only becomes more powerful!

Overall, the battle over residential electricity primarily will likely end in a mix of storage, micro-grids, electric cars but most certainly solar.  What is interesting today is that utilities have many choices in front of them.  If they choose to try and stop the economics of solar, they will undoubtedly lose much like land lines lost to cellphones.  If they wise up and look for ways to include (or even reward) solar adoption while shifting their business plans, they will be rewarded.

The choice is theirs, and it seems to be starting right now.
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Price of Oil has collapsed along with the US domestic production fantasy

A Saudi Oil Minister is widely credited for saying, "The stone age did not end for lack of stone.  The Oil Age will end long before the world runs out of oil."  Now, no one is sure that the recent turbulence in oil markets is the "beginning of the end" for black gold, but there are some very interesting things happening right now that are worth tying together.  First and foremost, the oil market is very much getting a crash course in Economics 101: Supply and Demand.

It is news to nobody that new oil extraction techniques such as hydraulic fracturing have expanded oil production volumes in areas and countries once thought to forever be minority producers.  The clearest example of this is domestic US production in areas such as the Bakken formation.  But, as is with any "new" technology, it is generally more expensive than traditional technology, at least to start, meaning it only makes business sense when the market for oil is high (say ~$100/barrel).  But have you seen the pumps recently?  The price of oil at the end of the trading day today was $43/barrel. Well, that is quite a deep hole (pun intended) in the business plan.

So whats happening?  Well, first, lets talk about demand.  In a world driven by constant stable growth for goods and services, a strong, steady demand for any product is more then desired, it is necessary.  Oil is no different, and unfortunately for oil producers the global demand for oil has not been all that great.  There are a few reasons for this, but one I feel is worth mentioning is the relationship between emissions and economic growth.  Historically, the level of global emissions from fossil fuels and amount of economic growth have been closely correlated.  Cheap energy is used as fuel for industry which produces more goods and services, raising more revenue and thereby increasing total economic output.

But in 2014 there was a blip.  In a recent report from the International Energy Agency states,"Data from the International Energy Agency (IEA) indicate that global emissions of carbon dioxide from the energy sector stalled in 2014, marking the first time in 40 years in which there was a halt or reduction in emissions of the greenhouse gas that was not tied to an economic downturn."  Well, that's kind of a big deal, because a "halt or reduction" in emissions implies less fossil fuel is being burned, which implies lower demand for fossil fuel.

Now on to supply.  Usually when demand for a product wains, the supply must also slow down as not to collapse the market for the product.  But, this is really not possible for oil, partly because it is not just businesses who are producing and selling the product.  Governments produce oil too.  Like Saudi Arabia.  And what is the primary goal of a Government?  To stay in power.  Therefore, a government who is also an oil producer does not act with the same motivations as a business, but with the motivations of a government.  Case in point is Saudi Arabia, the biggest power player in OPEC, has decided that even with the wain in oil demand, they will not be cutting production.  Supply will stay ample.  Therefore, supply trumps demand.... and prices fall.

And now we get to explore the effect of this situation on various oil business.  Here are a variety of links on the various effects.  First, oil companies are now trying to inventory their oil in hopes of a stronger market (relatively soon) where they are not losing as much money (or maybe even making money).  This has caused a boom in storage companies.  It has also caused a recent "rally" (or what you could call a dead cat bounce) to fizzle leading to even lower prices.

Oil Price as of March 19, 2015

So what does all this mean?  Simple, if your oil production business plan is built around $100/barrel oil, then your business plan is currently ruined and it makes no sense for you to operate.  The enhanced recovery techniques that once promised a resurgence of domestic energy independence are currently very very noncompetitive.  There is no way a consumer of oil would pay top dollar for American production with international oil at these price levels.

I hope your 401k is devoid of fracking companies.  If not then you better sell, right NOW.



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