Are businesses and people in our state ready to make the jump from an economy that is heavily dependent on fossil fuels to one that would “meet 100 percent of power demand in the United States through clean, renewable, and zero-emission energy” over the next ten years?

Let’s start with Missouri farmers. Are they ready to switch to electric tractors, trucks, and combines in order to reduce their carbon footprint to the vanishing point over the course of a single decade?

We can answer that question with an unequivocal “No.” Here’s why.

Begin with the fact that there are no—repeat, no—Tesla-like, battery-powered farm vehicles on the market today that could begin to replace most of today’s diesel-powered vehicles in doing the heavy-duty, energy-intensive work involved in ploughing fields and gathering harvests. The battery-powered substitutes for today’s machines don’t exist, and – even if they did – other problems would prevent their instant and widespread use.

Did any of the utopian thinkers who devised the Green New Deal stop to consider that most farms are wired in much the same way as most homes. That is to say, they are not wired for industrial use – which is what would be required to bring about the presumed greening of agriculture through electrification.

The problem here cannot be solved by putting up hundreds or even thousands of new wind turbines to supplement the 500 now in use in Missouri – which provide an average of two megawatts of power per turbine, and then only when the wind blows.

As Blake Hurst, the president of the Missouri Farm Bureau, points out, the electrification of Missouri agriculture would be an immensely expensive undertaking. It would require nothing less than “totally rebuilding the electrical grid” in order to deliver far greater quantities of electric power to farms in thinly populated areas around the state. The grid, along with charging stations and other supporting infrastructure, would have to treat every farm with a fleet of one truck, one tractor, and one combine or cotton-picker as if it were a town with 10,000 or more inhabitants.

To understand the physics, consider a conservative estimate of the electrical requirements posed by a hypothetical electric combine that replaces a typical grain combine. The latter weighs 15 tons, consumes approximately 15 gallons of diesel fuel per hour, and is often used about 16 hours a day during harvest. At 40-percent efficiency, its diesel engine delivers about 244 kW of power.

To do the same work, the electric combine would need to carry the equivalent of about 3.5 Tesla batteries (4,400 pounds) for each hour of continuous use. It would therefore need approximately 28 Tesla batteries to go eight hours without recharging. The combined weight of all of batteries would be 17 tons, making the electric combine significantly heavier than the piston-driven combine. While battery technologies are improving, it will be some time before any dramatic changes in energy to weight are likely to take place.

Since recharge time has to be short for economic reasons (a farmer racing against time to bring in a harvest can’t afford to spend several hours a day twiddling his thumbs), suppose that the electric combine “fast charges” in 20 minutes, an optimal time suggested for electric cars. The charging station and related infrastructure (i.e., generation and power distribution) would have to be capable of supplying in the vicinity of six megawatts of power during the recharge period! Let us pause to consider what that means.

Recharging a single combine requires the same power output as three of today’s wind turbines. According to government data, 1 megawatt of power capacity will supply 750 homes. Looked at in this way, the infrastructure necessary to recharge just one electric combine in 20 minutes would also be capable of supplying electrical power to the equivalent of 4,500 homes.

Suffice it to say: If you multiply that one combine by the total number of big combines and other heavy-duty vehicles used on Missouri farms today, you arrive at a very big number.

Even if we, as a state, were prepared to pay the huge costs of participating in a federal government-led crash effort to transition from diesel-powered to battery-powered farming, it is doubtful that our farmers would thank us. Apart from the inevitable adjustment problems in the introduction of new equipment, the electric combines, tractors, etc. would be more likely to bog down in muddy fields because of the extra weight of carrying a multitude of Tesla-like battery packs. And that’s not all. Barry Bean, a large cotton grower in the Bootheel in southeastern Missouri, shudders at the thought of the long lines of farmers with their tractors and cotton-pickers at charging stations at the end of a long day: “We all work the same hours and we’d all be coming in at the same time.”

*****

Let us turn then to freight transportation, another area important to Missouri as a crossroads between East and West, North and South. If, in the year 2030, all of the heavy trucks passing through Missouri were battery-powered, what would it take to charge them? We could not answer that question without a good deal more research. But we can say what it would take to open a single recharging station to handle a tiny fraction of the heavy-truck traffic that flows through the little village of Kingdom City, lying at the intersection of Interstate 70 and U.S. Route 54, on a daily basis.

Using the same analysis as above, to support a single service station at this site capable a) of recharging a Class 8 truck in 20 minutes that has been on the road for eight hours, and b) of handling 10 such trucks simultaneously, we have estimated that the supporting electric infrastructure must be capable of supplying close to 40 megawatts. That is the equivalent of about 20 2-megawatt windmills just to serve one refueling station. That same infrastructure would serve the needs of about 30,000 homes, or a decent-sized town.

*****

All this brings us to a final consideration. Where does Missouri’s electrical power come from? According to the U.S. Energy Information Administration, we get more than three-quarters of Missouri’s net electrical generation from burning coal, and another five percent from natural gas-fired plants. Oh, yes, our one nuclear power plant in Callaway County is good for another 10 percent, not that the Green New Deal manifesto is calling for more nuclear power.

Even in the act of saying “sayonara” to the use of fossil fuel in just two sectors of the state’s economy – agriculture and freight transportation – we would have to fall back on fossil fuels to provide additional electrical generating capacity.

The post Why the “Green New Deal” Will Not Fly in Missouri appeared first on Show-Me Institute.

The dirty little secret that the DED and the Callaway County EEZ proponents do not want you to know is that EEZ, Tax Increment Financing (TIF), Community Improvement Districts (CID), and other subsidies do not work. They do not succeed in growing the local economy. All this myriad of subsidies does is shrink the local tax base, encourage more government planning of the economy, and increase the chances of eminent domain abuse. As a famous Swedish economist once said, “It is not by planting trees or subsidizing tree planting in a desert created by politicians that the government can promote . . . industry, but by refraining from measures that create a desert environment.”

If you ask a DED official how effective EEZs are, they will tell you how much investment has occurred within EEZs over the past decade. Their hope is that you will assume all the investment is because of the EEZ. Their lie-by-omission is that they have no idea how much the EEZ aided that investment and how much would have occurred anyway. The consensus among economists is that special tax incentives such as EEZs matter little, and only a very small portion, if any, of investments within a zone can be credited to the subsidies. (This should not be a surprise unless you believe politicians have the ability to see the future and know exactly what business to invest taxpayer dollars in 25 years from now.) Yet the DED will happily let people assume the incentive makes all the difference while hoping nobody asks any follow-up questions.

Most people would claim to oppose corporate welfare, but that is exactly what is being hoisted upon us in Missouri; one special taxing district at a time. This is all being done under the cover of fixing blight, without any real definition of what that means. But the word “blight” is not empty talk. It means many things. One thing it means is that Callaway County is taking a major step toward much heavier use of taxpayer subsidies for all types of commercial activity. Once you have blighted a major portion of the county, it is but a short walk to the point where almost every development in Callaway has some type of subsidy. That is not a “maybe.” That is the current reality in Saint Louis and Kansas City.

The Callaway supporters of the EEZ say that other cities have used these tools with great success (see the KRCG Channel 13 news story on Nov. 29, 2012, for one example). In this, they are completely wrong. The can say it works elsewhere all they want, but they might as well be staring you in the face and telling you the sun rises in the north. The City of Saint Louis has been using urban redevelopment tools such as Enterprise Zones and many others for half a century. How has it worked out? “Mapping Decline,” by Colin Gordon, is a 2008 book that documents the decline of the city of Saint Louis. The book’s research is exhaustive. The dominant theme is the use of urban renewal tools and tax subsidies (including EEZ) — and their absolute, total failure. From the conclusion:

The overarching irony, in Saint Louis and elsewhere, is that efforts to save the city from such practices and patterns almost always made things worse. In setting after setting, both the diagnosis (blight) and its prescription (urban renewal) were shaped by — and compromised by — the same assumptions and expectations and prejudices that had created the condition in the first place.

I can already visualize Callaway residents saying, “But we’re not Saint Louis.” You are correct, you are not; so do not follow a path that will make your city repeat Saint Louis’ mistakes. It is one thing for Saint Louis to try these projects and have them fail. It would be even worse for a place such as Callaway to follow that example already knowing that the entire process has failed. At least the trailblazer who takes the wrong path has an excuse.
Tools such as EEZs fail because politicians cannot see the future better than markets can. Callaway County should focus on low taxes for all businesses, not special incentives for a few. It does not need an EEZ.

David Stokes is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.

The post Callaway County Does Not Need An EEZ appeared first on Show-Me Institute.

They range from large programs, such as the historic preservation tax credit and the Quality Jobs program, to the small, such as the state’s film tax credit. There are at least half a dozen more state-authorized local tax incentive programs, such as Tax Increment Financing (TIF). Missouri, like many states, aggressively uses these programs to encourage investments the government deems desirable.

But do these programs work? Do they accomplish their various goals, which have many different angles but all fall eventually into the categories of economic growth and job creation? These programs may not be as intense as a Soviet Five-Year Plan, but they are centralized economic planning nonetheless. Any time the government takes tax dollars and directs them to other areas of a market economy, it is engaged in central planning. Some planning is essential, but has this type of economic planning benefitted our state or our local communities?

This study relates closely to the current debate over Enhanced Enterprise Zones (EEZs) in Missouri.

Note: The data source for Personal Income, Per-Capita Income, and Total Employment is the U.S. Bureau of Economic Analysis. The source for Labor Force is the Economic & Policy Analysis Research Center at the University of Missouri-Columbia. The source for Assessed Valuation is the Missouri State Tax Commission.

Related Links

Commentary: Why Enhanced Enterprise Zones Are A Bad Deal For Missouri Cities

Commentary: EEZs Are An EZ Path To Corporate Welfare

Commentary: Callaway County Does Not Need An EEZ

The post The Effectiveness of Enterprise Zones in Missouri appeared first on Show-Me Institute.

However, Ameren Missouri officials may have found a solution to the dilemma: the U.S. Department of Energy’s competitive federal cost-share investment funds. Ameren Missouri and Westinghouse Electric Company recently announced that they are seeking competitive federal cost-share investment funds from the Department of Energy, which would be used to manufacture Small Modular Nuclear Reactors. If Ameren receives the funds, Ameren would then expand the nuclear power plant in Callaway County without the need for reforms to Missouri’s CWIP law. This would help Missouri generate more alternative energy without unnecessary mandates. Making this deal even sweeter is the potential for the partnership between Ameren Missouri and Westinghouse Electric Company to create thousands of jobs for the engineering, manufacturing, and operation of the Small Modular Nuclear Reactors. Finally, because portions of the electricity produced in Missouri will be shared around the nation via the electric grid, some level of federal investment is legitimate here. It makes sense that Missouri customers will not pay every penny for something that benefits more than just Missouri.

This is an exciting project that has potentially great benefits for Missourians.

The post Ameren: A Boost For Nuclear Energy? appeared first on Show-Me Institute.

The state of Missouri, like many governments around the world, has decided that utilities are to be treated differently than other industries. For the most part, Missouri long ago granted monopoly powers to utilities, along with price regulations. Private, investor-owned utilities are granted monopoly jurisdiction within certain areas of the state, and their prices and fiscal structure are subject to strict regulation by state law and the Public Service Commission (PSC). This system works fine in some capacities, but current regulations are preventing the development of increased nuclear capacity — something that could greatly benefit the citizens and economy of Missouri. It is time for the General Assembly to relax the restrictions on utility financing that prevent a second nuclear reactor from being constructed in Callaway.

Ideally, we would have less regulation, more competition, and more choice in all aspects of utility provision in Missouri, but it is necessary to deal with current realities. The state’s laws and regulations make it prohibitively difficult for Ameren to construct an expanded nuclear power facility. The primary obstacle is the construction-work-in-progress (CWIP) law that prohibits utilities from charging current energy customers for expenses incurred during a construction phase. Even if such construction would bring more electrical power, environmentally cleaner power, and potentially lower rates over the long run, the law prevents the project from moving forward unless Ameren can fund the entire project itself without passing on any charges to customers until after the operation is completed and running. This requirement is so restrictive that it has succeeded in preventing any nuclear power expansion in Missouri since it was passed in 1976 — which is exactly what its backers intended.

Thankfully, utilities do experience some degree of competition. Regulated gas, cable, and water companies still compete with propane, satellite television, and well or septic systems. But consider the regulatory obstacles that face one of these monopolies when it plans to begin a major capital project. Companies that compete in a free market, on the other hand, have the option of raising their prices to help pay for such projects. That type of funding strategy may or may not be a smart move, depending on numerous factors, but at least they have the option. Ameren does not, because the interests of anti-nuclear activists in the 1970s still dominate our discussions in 2011.

The citizens of Missouri now know a great deal more about the risks of nuclear power in Missouri then they did when CWIP was passed. Nationwide, support for the increased use of nuclear power is strong. A March 2010 Gallop poll found that 62 percent of Americans favored the use of nuclear power, with only 33 percent opposed.

If completed, an expanded nuclear power plant in Callaway County would benefit all of Missouri, not only Ameren customers or shareholders. Because of the way the electrical grid is maintained, the increased baseload power generated at Callaway would be put to safe, efficient, and clean usage throughout the state and country. For that reason, it is fair that other regulated power utilities participate in financing the plant and that their customers pay a portion of the costs.

A pending bill, S.B. 50, would exempt the second Callaway plant from some of the CWIP regulations, and has received early bipartisan support. Unlike the failed proposal to amend CWIP two years ago, this bill addresses the use of CWIP only for nuclear power plant expansion. The bill’s sponsors deserve credit for that. Support for or opposition to this bill should now be based on the merits of nuclear power, rather than on tangential issues.

Nuclear power still has significant shortcomings that need to be settled, such as long-term waste storage. France has demonstrated that reprocessing of nuclear waste can work, and that might be one answer for the United States. A few powerful federal politicians have been able to prevent the installation of one workable storage idea: Yucca Mountain. But even though technological solutions are being temporarily held hostage to narrow political interests, that is hardly a reason for Missouri to halt the power expansion it requires for economic growth. History has shown that technological progress will win out in the end, to the benefit of its pioneers.

Missouri needs increased generation of environmentally friendly energy, and nuclear power is currently the most effective way to provide it. Removing CWIP restrictions from this project is a necessary maneuver. It’s important to remember that end-consumers of energy will pay the final costs either way, whether by financing construction or by purchasing less-efficient energy. A second Callaway plant is one instance in which the benefits of an increased supply of clean, efficient energy in the future are worth the costs of higher consumer prices in the present.

David Stokes is a policy analyst for the Show-Me Institute, an independent think tank promoting free-market solutions for Missouri public policy.

The post Changes to Utility Financing Regulations Necessary for Cleaner, More Efficient Energy appeared first on Show-Me Institute.

On a closely related point, I recently found one reason why AmerenUE was so intent on expanding within Callaway County — a project that hopefully will succeed eventually. Callaway County has a commercial property tax surcharge of just 11 cents per hundred dollars of assessed valuation, one of the lowest surcharge rates in Missouri. (Only two counties are lower: Reynolds and Camden.)

The post What to Do With Nuclear Waste in Callaway County? appeared first on Show-Me Institute.

Callaway County is the home to one Ameren nuclear plant, and could possibly be the home of a second. If Ameren gets its way, the current law that prohibiting it from charging for CWIPs would be repealed, and current customers would have to finance the second Callaway County nuclear plant. Already, Ameren is trying to pass the $46 million filing fee price tag onto customers. That’s right: $46 million. For a filing fee.

Now, this isn’t the first time these shenanigans have popped up. Ameren tried to get rid of this law back in ’82, but was unsuccessful. Isn’t this the type of law that keeps Ameren a nice, friendly monopoly rather than the scary, bags-o-money, monocle-wearing Mr. Monopoly?

Ameren claims that unless it is allowed to charge customers for construction as it goes, it will not be able to afford the plant and meet the demand for electricity.

What really bugs me is this: If Ameren is claiming it will have to charge us for plants not even in operation, how is it going to finance 15-percent renewable energy by 2021 if Proposition C passes? Perhaps in this current volatile economy, a multibillion dollar nuclear plant — or, for that matter, a massive renewable energy standard — isn’t in the state’s best interest.

The post No, I Will Not Pay for Your Nuclear Plant appeared first on Show-Me Institute.

A short time ago I half-jokingly wrote about how the disaster movies of the 1970s helped fuel the safety-obsessed society we now live in. Smarter people than I have already constructed this equation: One overrated movie + one poorly timed, frightening, but ultimately minor accident + an enormous amount of activism from certain types opposed to nuclear power = a halt on expanded nuclear power in America + more dependence on the exact thing (oil) that environmentalists don’t like in the first place + higher energy costs for everyone.

What is the point of all this? AmerenUE wants to expand its nuclear plant in Cab Callaway County. The Fulton Sun has the story here, about a recent public hearing on the proposal. One of my neighbors showed up to oppose it:

Drey claimed that a natural disaster such as an earthquake or a terrorist attack would cause massive ecological and health problems for a very large area.

“Someone could get in with a plastic explosive through a metal detector and drop it into the plant and that would be the end of Callaway County and the rest of us,” she said.

Where to begin? First of all, the plant is already there (thankfully). It’s not like a terrorist is going to say, “Well, now they have two reactors instead of just one, so let’s target it. Why would we have wasted our time trying to detonate just one nuclear reactor? But now that there are two, it is worth our efforts!” The same goes for earthquakes, but I trust that the engineers who built it — and will build it — have, you know, considered that.

Everything has a cost and a risk. The extensive use of nuclear power has shown that it is safe — except, perhaps, when you let it be run by communists. Congressman Todd Akin (definitely not a communist, but an engineer) has proposed major revisions to American’s energy policy that include expanding the use the nuclear power:

“I have always been a supporter of nuclear energy,” Akin said. “The rewards are substantive as far as its low cost energy and its cleaner.” He noted that nuclear power becomes a more attractive energy source in the context of global warming.

I could not agree with him more.

The post Ameren’s Answer to Our Energy Needs appeared first on Show-Me Institute.