Blockchain technology has upended traditional finance. To outsiders, take your pick of cryptocurrency and it appears you are doing nothing more than pulling the handle on a slot machine. The payouts are just as large too if you pick the right token and pay as little as possible. This is the reason why a couple of provisions in the Infrastructure Spending Bill were so fraught with danger to this new industry. The first was aprovision requiring crypto-miners, developers, wallet companies and others who deal with tokens to register and send 1099’s to those who bought, used or sold them. This directly impacts the anonymity of using currency rather than say, a check, to purchase goods or services. The second is more egregious and when combined with the first provision spells out why and how Uncle Sam will end the panoply of tokens and possibly institute a virtual dollar as the preferred cryptocurrency in the US.

The recent infrastructure bill that passed the House this week contained a provision requiring “Brokers” in cryptocurrency to be knowledgeable about their customers.They would be required to obtain their customer’s name, address, phone numbers and Social Security numbers. Resulting transactions that the broker performs would result in a 1099 being sent to the account owner at the end of the year, much like a stock. Owners of cypto had to know this was coming after much debate during the Trump administration. Recently,SEC chair Gary Gensler stipulated that nearly all cryptocurrencies are a security and should subject to reporting of initial purchase date and price, quantities and sale date and price.The market has had time to digest this and, well frankly, expected it given the large bull market that has hit tokens. If there is income, you can be sure that Uncle Sam wants his cut. There was a second provision waiting in the wings that makes things far worse.

A recently added piece of text now makes electronic assets including NFTs and cryptocurrency subject to 26 USC Section 6050i. This section of the Internal Revenue Code governs cash transactions of over $10,000. This means that that should an asset or collection of assets used in a transaction be valued at over $10,000, it must be treated as cash. If a person in the transaction were to conceal or be unable to provide the buyer/seller information associated with this transaction, they are guilty of a felony punishable up to 5 years per offense. Not only that, no person may assist in an effort to make a transaction fall under the $10,000 limit, have omission or misstatement about the assets or block a person in the transaction from filing with the IRS. If they do, that’s the same 5-year felony. If this sounds like a provision to prevent money laundering, it is!

Once President Biden signs the bill, the Treasury will have until 2024 to implement these rules. Typically, this is a very public process where a Notice of Potential Rulemaking (NOPR) is posted. Industry stakeholders and the general public are allowed to provide comment on the rules, regulators are supposed to take them under advisement and then provide the actual rule. Two years is a very accelerated timeline for many administrative regulations. Treasury Secretary Janet Yellen has already stated that she wants to tax unrealized gains. Now that NFTs and cryptocurrency are now deemed “cash”, it would be a very small stretch to implement a provision that any increase in a virtual asset’s value is not an unrealized gain but rather akin to a dividend or interest payment. Dividends and interest are subject to taxation even when the initial asset is never sold. It is my belief that Secretary Yellen will deem any increase in value in any token or cryptocoin as such and taxable at year end.

Should the US Treasury or Federal Reserve create the virtual dollar, how do they get everyone to convert to it? There are several stable coins already in existence and how does one go about seizing them without the lengthy battle over private property. Also, the developers of the winning stable coin get a nice payout from Uncle Sam. Enter President Biden’s nominee for Comptroller of the Currency Saule Omerova. Ms. Omerova has proposed a shadow unelected Congress called the National Investment Authority as well as a virtual currency system. In a recent white paper titled “The People’s Ledger: How to Democratize Money and Finance the Economy”, she details that the Fed should hold the actual bank accounts of people while community banks are merely pass-through organizations accepting physical deposits. She also advocated for the virtual dollar as a means of commerce and controlling the population’s spending habits.

“The core idea here is simply to allow all U.S. citizens and lawful residents, local governments, nonbanking firms and nonbusiness entities to open transactional accounts directly with the Federal Reserve, thus bypassing private depository institutions. In this sense, it is a variation on the familiar FedAccounts – or FedCoin or “digital dollar wallets” etc. – theme.”The People’s Ledger

Should a virtual dollar be created with bank accounts at the Federal Reserve, Treasury Secretary Yellen may simply write a letter stating that virtual dollars are exempt from 6050i as the Fed already has the person’s information on file. This is explicitly allowed in the statute. This gives the virtual dollar an enormous market advantage while reducing other electronic assets to transactions conducted entirely outside the United States. These transactions are exempted from 6050i per statute. No vote from Congress or action by the President required. The American Public will have been bypassed and robbed at the same time.

If Ms. Omerova is confirmed, and it thankfully doesn’t look good, she could certainly create the provisions and developer documents necessary to create the virtual dollar. The Comptroller of the Currency was actually created to supervise banks and implement a uniform bank note. It is up in the air if the Comptroller could unilaterally require the Fed to create bank accounts for individuals or implement other ideas from “People’s Ledger”. Most of this would have to be passed in Congress which is looking wearily at the 2022 midterms. Even if Ms. Omerova’s nomination is withdrawn or voted down, Secretary Yellen certainly now has what she needs to tax all cryptocurrency accounts on an annual basis as they are now fungible “cash”. Much like the Sales and Local Taxes (SALT) cap, once these revenue generators are created, they are very difficult to get rid of.

So how can the crypto community fix this or prevent it from coming to fruition? There are two alternatives left. One is to flood the NOPR process with comments and possibly cause enough rancor to slow the rule implementation. Second, and more importantly, help elect Libertarian Party members to Congress. Please hear me out on this.

The Republican Party is rather clueless when it comes to crypto and has a similar outlook on the industry. They may tax it less but they still want to tax it. Only the Libertarian Party understands that your cryptocurrency, and certainly your NFTs, have value and you are entitled to keep it! It’s the value the community or market places on it and it shouldn’t be devalued or cancelled by our Federal Government. They had no part in creating it.

Think of it this way, if I trade a rare football card for some rare baseball cards, there’s no taxable event and no records. Trading these assets should be no different. The Democratic Party has now instituted a system where I must pay taxes both on the gain in value of the card from when I bought it AND when I exchange it for something else. I must now also tell the government what other cards I own tell the government who I traded with. If I don’t, I face 5 years in prison. Libertarian Party candidates run on issues like these and they need this community’s help to get elected. Republicans will assuredly do nothing or make it even worse.

Enjoy the crypto-boom while it lasts. Help where and when you can. If things don’t change, please don’t be stuck in 2024 holding crypto-coins that will be subject to heavy reporting requirements the next time you make a trade or purchase.

The post Making Blockchain Infrastructure appeared first on Larry Sharpe, Libertarian.

USA Today columnist Hemal Jhaveri began the call with an article calling for the ban because ORU follows “an archaic religion” and that “the university’s deeply bigoted anti-LGBTQ+ policies can’t and shouldn’t be ignored.” Jhaveri then calls for any university with such language to be banned from all NCAA activities. Jhaveri didn’t call out #1 seeded Baylor for having similar language or Creighton, Gonzaga, or Loyola Chicago for being Catholic institutions which do not support LGBTQ+ policies either. Just ORU so why? I’ll circle back to it.

ORU’s student handbooks specifically ban homosexual behavior in 2 locations. It also bans alcohol, drugs, gambling, dancing, skateboards, roller skates and water balloons. ORU never had a football team because Dr. Roberts found it to bring unsavory elements on campus. As a former Tulsan and having known people who were in Oral Roberts’ inner circle, this may be shocking to you but it isn’t a surprise to any of us. Dr. Roberts’ brand of Christianity was very fundamentalist. His ministry carried over into much of Tulsa’s political and social life during the 1970’s and 1980’s. I can tell you it had an impact on economic development. Tulsa lost many oil and gas company headquarters to Houston and Dallas during this time and they cited a lack of ability to attract talent as one of the reasons to leave. When the first ministry scandal occurred in the 1980’s, it broke the spell of the ministry’s hold on the city. The city council was reformed, economic development wasn’t subject to a moral veto and Tulsan’s began to plan for a future without Dr. Roberts. The Roberts family’s continued malfeasance with ORU funds in the subsequent years hasn’t been much of a surprise to many Tulsans.

So, why pick on ORU and make them the example? For one, their conservative philosophy and prior scandals make them an easy target. Second, they are small. The school’s enrollment has always been between 3,000 and 6,000 students at any particular time. This means the institution carries outsized influence within the NCAA.The NCAA rules are promulgated with every member having equal weight. The Ohio State with an enrollment of nearly 70,000 has just as much say on the rules of the tournament as ORU with 4,100. While the larger members certainly decide what rules are voted on, the votes themselves require many of the smaller schools to agree with them since they can, and do, out vote them. The third is likely more likely. It’s the attention the school gets from upset wins in the tournament. People learn the school exists and may see a university founded by a Native American and actively pursues students from impoverished communities as being diverse and tolerant. The media wants to dispel that belief as quickly as possible and serve as a reminder to other people of color that the “new” tolerance is the only tolerance for them.

What is a surprise is to what lengths the “new” tolerance is intolerant of any policy or institution that doesn’t kowtow to it. For example, a recent bill passed the House called the Equality Act. The Bill’s synopsis:

This bill prohibits discrimination based on sex, sexual orientation, and gender identity in areas including public accommodations and facilities, education, federal funding, employment, housing, credit, and the jury system. Specifically, the bill defines and includes sex, sexual orientation, and gender identity among the prohibited categories of discrimination or segregation.

The bill expands the definition of public accommodations to include places or establishments that provide (1) exhibitions, recreation, exercise, amusement, gatherings, or displays; (2) goods, services, or programs; and (3) transportation services.

The bill allows the Department of Justice to intervene in equal protection actions in federal court on account of sexual orientation or gender identity.

The bill prohibits an individual from being denied access to a shared facility, including a restroom, a locker room, and a dressing room, that is in accordance with the individual’s gender identity.

While this all sounds well and good, there is no exclusion for religious facilities or institutions. By holding assemblies and gatherings, every church and religious facility will be determined to be a public accommodation and subject to the bill’s ban on discrimination. Remember the LGBTQ+ event last year where Elizabeth Warren and a number of other Democratic presidential candidates promised to punish churches for not being on the LGBTQ+ bandwagon? Well, here’s the effort to do so under the guise of making it so the trans community can use a bathroom.

This is a bona-fide case to eliminate the First Amendment prohibition on the establishment of a government religion. Religion being that all churches in the United States answer to the Government, not a higher power. Churches, synagogues, mosques, and other religious buildings will be required to follow government rules and implement the government’s priorities. It reminds me of Cromwell’s confiscation of churches in the 1649 or the dissolution of churches during the French Revolution.Cromwell may be more apt as religious activity was allowed as long as it was the Government’s version (Protestant) and ministers were government approved. This was specifically what our Founders sought to avoid when they banned a government church.

If you have never called your senator or written them a letter, now is the time.The Equality Act is one of the bills being cited as a reason to remove the filibuster and make the Senate operate just like the House. The Equality Act will actually take us to the brink rather than promote harmony. What observant Catholic wants any President to dictate who can receive communion? Why should an Orthodox synagogue be forced to house those who are not Jewish? Why should a conservative masque be forced to have co-ed services? Religious bodies have always been held in separate regard in our society as being able to deem who is fit or unfit to use their facilities. The closely held beliefs of deeply religious people should be allowed in church, where they are most dear to them. It is wrong and cruel to force beliefs on others and call it “Equality.” There is a competing bill called the Fairness For All Act and is supported by many church leaders of all different faiths. I would encourage you all to contact your senator and have them support this legislation rather than an “Equality” bill that is creates more inequality than ever before.

The post The New Tolerance appeared first on Larry Sharpe, Libertarian.

The mess in ERCOT is best described as a five-failure event with a single cause: a massive polar vortex creating temperatures far below freezing across the grid.  What are the five failures?

Failure 1: Immobility of Power

Texas started to segregate itself from the larger electrical grids in 1935 when the Congress passed the National Power Act. This act stated that transmission of power over state lines was to be regulated by the Federal government and created the Federal Power Board. The FPB is the predecessor agency of the Federal Energy Regulatory Commission (FERC) that provides regulatory oversight of pipelines, electrical lines and other energy systems today. A total of 7 Texas electric utilities did not want Federal oversight and agreed to not send power over state lines, but did set up a system of interconnects between themselves. This system of interconnects is what morphed into the Independent System Operator, Electric Reliability Council of Texas (ERCOT). ERCOT’s mission is to balance the smaller regional grids for electrical generation and electrical demand.

Since ERCOT was dealing with legacy systems and a method of operation that no power be sent out of the state, there are only four interconnect sites. There are two connections with the Eastern Grid, one with Mexico and another with the Western Grid. These sites simply do not have enough capacity to carry the majority of the load for large areas of Texas. It is also difficult to transmit energy across the grids as each electrical grid operates on a different alternating current wavelength. Variable Frequency Transformers (VFTs) must be used to isolate and sync the wavelengths. The transformers are expensive and cause large energy losses through resistance and heat. So, the electrical grid of Texas is best thought of as an island with a couple of boats. Texans and Texas operators also have preferred it historically.

When massive interruptions like the 2021 polar vortex hit, they cannot rely on others for large supplies.

Failure 2: Natural Gas Freeze-Offs

ERCOT is now more reliant on large abundant supplies of natural gas to supply its grid with power. Most of these plants are supplied from large intrastate and interstate natural gas transmission lines crossing the state, as well as supplies from its many oil fields and gas fields. During prior cold weather events, ERCOT was more reliant on coal fired power plants. While Texas has a very pro-fossil fuels stance, the population in Texas has grown substantially today. Thanks to shale fracturing, the supply of natural gas has grown to feed the system but these wells are relatively new. What has not increased is the natural gas storage capacity to feed these new homes and power plants.

When natural gas is produced at the production oil or gas well, it is processed through a plant to remove impurities like H2S and separate out heavier hydrocarbons like propane (C3H8) and butane (C4H10). The heavier hydrocarbons are then processed or shipped off to be processed. The remaining mixture of methane (CH4) and a small amount of ethane (C2H6) is then compressed and put into a large interstate transmission pipeline that is connected to other pipelines and eventually delivered to a user to be used to make plastics, burned for heat or stored by a utility for use during the winter. This storage is typically an underground formation that is geologically stable and capable of storing large amounts of natural gas.

When natural gas comes out of storage, it is saturated with water as these underground formations do get some amount of groundwater in them. The wellhead gas must be processed just like when it was produced from the production well but its just less intensive as there’s usually no propane or butane to remove. In both cases, production and storage, the gas is water saturated and must go through a choke valve to move to the processing plant. This is where the majority of freezing occurs. When gas or liquids move through a small orifice or valve, the venturi effect cools it. If the external temperature is low enough, the gas mixture going through the valve will begin to form liquid droplets and eventually ice will form. The ice clogs up the orifice making it smaller and smaller until the well ceases to flow.

Oil and gas operating areas in the northern part of the county take this into account when they build their wellheads. They purchase heat trace electrical wires to provide heat to the choke valve and small diameter gathering lines to keep them flowing. Some operators also put their wellheads in temporary shelters for the winter to eliminate wind shear from robbing the heat from the valve. If the gas isn’t flowing, the operator isn’t being paid. In much of Texas, it is rare that any operator would put heat trace on a valve as the ambient temperature rarely gets cold enough for the well to be frozen. Unfortunately, this polar vortex impacted most production and storage wells in the state and the natural gas system was in short supply of physical gas to supply to anyone. Supplies had to be brought in from other states to try and serve existing customers on the spot market.

Local Distribution Companies (LDCs) are responsible for delivering natural gas to homes and small commercial businesses. They are responsible for procuring natural gas storage so that supplies of natural gas are available to meet winter demand. Some LDCs own and operate their own storage while others contract it with other large midstream companies. Surveying the EIA information for the past 5 years, Texas has not increased its natural gas storage to accommodate additional demand during winter.

Market Aside:

Natural gas is sold on a firm or interruptible basis and this is important for the rest of the paper. Firm means that a buyer wants a specific volume of gas delivered at a specific meter on a specific day and time. Interruptible service means that the buyer wants a specific volume of gas delivered at a specific meter but it can be delivered at the leisure of the shipper, the pipeline company. Both types of sales have their use. If power is expensive, a natural gas turbine electric generator will want gas and want it delivered specifically. They need it to make money right now. If a public electric or gas utility is purchasing the gas for storage, they may not care what time the gas is delivered since they are just going to put it away for later use. In some instances, they may shift the delivery to another gas storage field to accommodate their own operations. ERCOT does not have rules for natural gas fired generation suppliers to have firm or interruptible service for natural gas, only that there are interconnect agreements (i.e. Suppliers) that can provide the gas to be burned.

Failure 3: Renewables Don’t Operate During Freezing or Snow Events

Now it is time to blame those “evil” renewables. ERCOT has roughly 20% of its power supplied by renewables. The vast majority of this supply is from wind turbines but Texas does have some significant solar and hydroelectric power supply as well. Both solar cells and wind turbines do not operate during freezing and snow events and that is the crux of the reliability issue.

Covering solar cells first, during most ice and snow storms, there is little to no sunlight available to power the solar cells. It is also a little-known fact that solar cells are actually more efficient during colder temperature events. The issue is winter output is lower because the sun is at a less than optimal angle for the panel and there’s less sunlight available to produce energy. The polar vortex event also started at night with snow and ice so there was no solar generation during the storm. This was known and forecasted.

Wind turbines are a bit different. Wind farms do operate during some rain storms but not all the time. This is due to the fact that as the wind moves across the surface of the blade, the temperature drops just like it drops in a choke valve. Wind blades as well as airplane wings experience a venturi-like effect as air moves around them. Just like that choke valve, if there is moisture, ice can form on wind blade and begin to add weigh down the blade. This additional weight will do two things. It can cause internal stress to the wing and cause it to deform. It will also add additional sheer forces on the gearbox which turns the turbine. This gearbox must be able to handle the additional stress from the weight of the ice on the blade. As the blade continues to turn, more and more ice develops on the blade. Hopefully, a sensor in the gearbox will trip and cause the wind blades to stop spinning. If it doesn’t, the blade will eventually break and fly apart, possibly injuring people or causing property damage.

Wind turbines in Texas are not rated or constructed for cold weather conditions. Basically, it is cheaper to not operate them during freezing conditions which does happen in across the state every year. Operators then restart the wind farm after the cold weather has passed one or two days later. What made this storm different is that there were wind farms that chose to operate as the storm came in. This is evidenced by one photo where ice had formed on much of the leading edge of the blades in a perpendicular manner to the wind flow. This would indicate the blade was operating with that additional weight. The blades, at least on this particular turbine, will need to be inspected and possibly replaced. Some wind turbines are operating now that the storm has passed but it is slow, and is therefore slowing the full recovery of the electrical supply for ERCOT.

Failure 4: Power Generators and Electrical Equipment in Texas Isn’t Often Rated for Deep Cold Conditions

What also made this storm different is that prolonged cold conditions existed after the power outage. Most storms in Texas last for a day or two around freezing and then followed by warmer weather. This storm came with below freezing temperatures that were forecasted for 6 to 7 days. In events like this, electrical equipment must be insulated and rated to operate in those conditions. Most gas equipment such as compressors and turbines, are not sheltered from the elements in a building. They may have a roof to prevent the sun from heating surfaces during the summer but cold temperatures are an afterthought or even viewed as advantageous as compressors operate more efficiently in colder weather. There is a limit to this since more viscous (i.e. cold) compressor oil or gas turbine oil will cause the machine to shut down unexpectedly.

All of this insulation costs money and housing gas equipment in buildings ads a lot of expense as there are safety features that become necessary when this equipment operates in a building. It also makes the environment uncomfortable for workers during hot Texas summers. For wind turbines that are not damaged, the turbine housing and other components are also not rated or insulated to operate in colder conditions. Typically, these components would have electric space heaters nearby to keep them warm so they could function properly. These space heaters cost extra and have to be purchased with the unit. Since most operators don’t purchase them, wind generation must wait for temperatures above freezing to try and start back up again.

There is also the issue of electrical switchgear and other electrical components of the operating grid. Most of this equipment does not have the space heaters inside to keep the components running properly. Water may condense or even freeze inside these components and cause electrical damage since high voltage and water don’t mix. This adds to the time delays and expense of restarting the grid since some gear may be rendered inoperable by ice and may have to be dried out before it can be restarted.

Downtown Building Aside:

There are some quite famous complaints made about large empty high rise office buildings in the downtowns of Texas having their lights on and having heat. The reason these buildings have light and heat is because it is common for these buildings to have back-up generators powered by natural gas or diesel. The local electric providers are not “stealing” power to keep these buildings on. There are very clear guidelines for critical electric and gas services in Texas. Hospitals and government buildings are on this list, not high-rise office buildings. Hospitals typically have these resources as well but that’s a function of their business managers.

Failure 5: Not Appropriately Planning for the Increased Population and Demand in Natural Gas

The backbone the natural gas supply has not been upgraded to keep up with demand from a growing population. Texas has led the nation on net inflows of people from other states and the majority of this growth is in the top 20 population counties and rural counties have suffered a population drain. So, the system is faced with high demand periods in concentrated areas while much of the renewable energy and natural gas is brought in from rural areas. Much of the new natural gas production in the state has been constrained as there was not enough pipeline capacity to take it out of the Permian Basin where it is produced and deliver it to large population centers in the east.

Texas gas utilities have not increased their natural gas storage to accommodate the increase in population. This is in part because it was cheaper to simply buy additional supply from the large diameter pipelines crossing the state. The massive market imbalances of the past few years lulled LDC’s into a false premise that additional supplies would always be available on the larger transmission pipelines to meet periods of high demand. They also did not account for their own storage field wells would freeze off and prevent gas from getting to market when it was needed most.

So Why is NY ISO Next?

NYISO, the New York Independent System Operator, has some of the same big issues that Texas has. Right now, New York imports roughly 30% of its electricity from various sources. It is also becoming natural gas constrained as Gov. Cuomo continues to fight any expansion of natural gas resources or supplies from coming into the state. Should a major demand event occur in New York after the closure of Indian Point, its possible the system could go down. I will cover how New York fairs against ERCOT’s 5 failures.

Failure 1: Immobility of Power

NYISO does not have issues here. NYISO is fully integrated into the Eastern power grid and has several connection points between PJM in Pennsylvania, NEISO in Vermont and Connecticut as well as importation interconnects with Canada in Buffalo, Cedars and Chateauguay. The issue is that during peak demand times, power is crossing these interconnects at over $100 MWh. The grid is being balanced but at a high cost relative to what is costs to generate power inside of New York State.

The shutdown of Indian Point is a large risk event as there is no generation coming online to replace it. This is a 1,040 megawatt/hour facility that is responsible for a quarter of the nuclear generation in New York or 1/16^th of all electric power generated in the state. This leaves a large gap of dispatchable (ie. On-demand) power that will need to be replaced by other sources from Canada or the US. NYISO has not installed additional interconnect capacity to accommodate for this lost generation. This is also significant as the majority of grid power supplied to New England is routed through NYISO first. If the New England grid becomes unstable, power at Indian Point is now unavailable to be dispatched to areas to shore up supply on the NYISO grid. In other words, New England’s instability could cascade into New York and take down its grid as well.

Failure 2: Natural Gas Freeze Offs

New York does have some significant underground natural gas storage facilities (229,238 million cu ft) but it has become increasingly reliant on pipeline supplies and some Liquified Natural Gas storage to meet additional demand. This additional demand arose when New York replaced its coal fired power plants with natural gas. New York hasn’t added additional underground storage capacity since 2009. This means during a period of high demand; it is reliant on suppliers in Pennsylvania having wells that don’t freeze off. Fortunately, the wells in closest to New York are “dry” gas meaning there are few hydrocarbons other than methane. This reduces the likelihood of freeze offs but they can and will do so if demand is high enough and temperatures are near or below freezing. This means that additional pipeline supplies will be at risk of not being able to meet demand IF a large system were to hit New York.

Failure 3: Renewables Don’t Operate During Cold Weather

Renewables in New York are rated for cold weather however, they may not be operating during high demand. I have not found significant indications that the blades of wind farms in New York are heat traced. Heat tracing is built into the fiberglass blades would allow some operation during snow and freezing events. This is common in Scandinavia but is not anywhere else, including the far northern parts of Scotland which get very cold. If a storm were to hit, those windfarms would not operate as the blades would be damaged due to a build up of ice on the blade. Solar panels also would not produce electricity as there would be little or no sunlight available. New York does have significant hydroelectric power resources and these will operate during times of in climate weather.

Failure 4: Electrical Generation and Equipment is Not Rated For Cold Weather Conditions

This is not an issue for NYISO. Generators and electrical equipment are rated for cold weather.

Failure 5: Not Planning for Increased Demand of Natural Gas and Electricity

Governor Cuomo has thwarted increases in the supply of natural gas to New York during his terms as governor. He has banned hydraulic fracturing and additional pipeline capacity projects. He then complained that natural gas suppliers cannot serve the needs of New Yorkers. The pipelines feeding New York and New England are at capacity and cannot serve additional customers. FERC has stated that without additional natural gas capacity, New England will face rolling winter time blackouts as early as 2024 due to the increases in population on its grid and service territory. This is a failure to plan at the very top level and Governor Cuomo is largely to blame.

What Can New York Operators and NYISO Do Now to Prevent this Once Indian Point Closes in April?

There are actions that can be taken now to begin the process to ensure the NYISO grid has dispatchable power for a storm event. However, they are not easy solutions to deploy due to regulations and environmental permitting issues.

Upgrade Existing Interconnections and Construct New Ones

New York currently imports roughly 20 to 30% of its energy from surrounding grids. There is a need for additional capacity to meet peak demand if a major weather event occurred as renewable energy would likely be curtailed or unavailable. The Champain Hudson Power Express was one such project. It would deliver hydro-electric and wind energy to New York City but was fraught with many fights over labor and construction of voltage lines along the route. A better option would be to expand existing interconnects or build new ones near those existing ones. There are currently 2 other projects, one in Buffalo and one in the Eastern Hudson Valley, that NYISO would like to perform. The Governor’s office should support these projects.

Increase Natural Gas Storage and Delivery Capacity to New York

New York has not increased the delivery and storage of natural gas in years. This has been a very top-down rejection of the fuel by the Governor’s office in favor of a 100% renewable strategy with battery backup. Today, the world’s largest battery center is located in Otay Mesa, CA. It is at 250 MW rating for 1 hour. This is not feasible for implementation in the near term. Also, as more of the vehicle market shifts to electric vehicles, the grid will be required to deliver more energy over larger periods of time. This solution is not viable as 250 MW for one hour is a drop in the bucket for New York’s winter and summer demands.

New York’s best option in the medium and long germ is to increase the delivery capacity and storage capacity of natural gas. There are two natural gas pipeline projects that are being halted by the Cuomo administration. The administration has also been hostile to increasing natural gas storage outside of the 20% onsite storage mandate for energy producers. This is a bad policy as this onsite storage is either LNG or diesel fuel. The plants that burn diesel for additional energy actually increase New York’s carbon footprint during the peak cold weather demand. The governor’s office should support increasing natural gas supplies and reduce New York’s carbon footprint.

Welcome the New Nuclear

New nuclear designs like thorium salt reactors offer new promise for clean energy without some of the large faults of water reactor designs. While they are not fully tested, New York should be open to these new forms of energy when they become commercially available. They are likely to be safer and cheaper as well. Currently, New York’s laws do not recognize nuclear as a viable “renewable” or “no carbon emission” option. Given that energy demand is still growing and if electrification of vehicles does occur, New York can’t afford to turn its back on this particular energy option.

In conclusion, I hope that the next New York Governor will consider energy stabilization and supplies to be of high importance. The ERCOT outage has shown that a 100% renewable grid is NOT a viable solution for the modern age as renewables are unavailable during ice or snow weather events. Commercial batteries are not ready to supply a large city for one or two days with electrical power, much less an entire state. Critical infrastructure like the electricity grid needs to have an “all available” option to meet times of peak demand, not the icy frozen choices based on one man’s whims.

The post Why Does ERCOT’s Mess in Texas Mean That New York is Next? appeared first on Larry Sharpe, Libertarian.