Rice researchers push carbon dioxide tax

Sep 27 - McClatchy-Tribune Regional News - Tom Fowler Houston Chronicle

Expanding the number of electric vehicles on U.S. roads would take a big bite out of oil use, according to a collection of studies released by Rice University's Baker Institute for Public Policy, but plans to impose a national quota for renewable energy would barely make a dent.

The studies, being released as part of a two-day conference that begins today, look at efforts to manage U.S. carbon dioxide emissions and cut oil use. They find that policies such as a tax on carbon dioxide or a system limiting emissions while creating a market for credits to pollute would cut U.S. oil use and emissions by 2050.

But those methods would also be costly and won't do much to cut emissions or overseas oil imports in the short term.

"Ironically ... business-as-usual, market-related trends might propel the United States toward greater oil and natural gas self-sufficiency over the next 20 years," according to the executive summary of the studies. "Scenarios specifically focused on strict carbon caps and pricing ... could lead to a significant increase in U.S. reliance on oil imports between now and 2025."

The U.S. currently has about 250 million oil-fueled vehicles on the road, helping to make it the single largest energy consumer and producer of greenhouse gases in the world.

Recently adopted improvements in car fuel efficiency standards are expected to cut U.S. oil use by 3 million barrels per day by 2050. But proposals to replace 30 percent of the U.S. vehicle fleet with electric vehicles by 2050 could cut oil usage by another 2.5 million barrels per day, according to the Rice studies.

But by itself, this electric car scenario would have a modest impact on greenhouse gas emissions, cutting them by just 7.4 percent by 2050. Unless paired with a price on carbon dioxide, imposed by either a carbon tax or a cap-and-trade system that over time lowers the amount of CO2 that industries can emit, emissions would rise as electric car demand leads to more power generation by coal fired plants, the studies conclude.

Some downsides to putting a price on CO2 -- increased electricity costs and, in the short term, greater reliance on foreign oil imports as development of domestic oil resources would become less cost competitive.

Wind power expansion

A national renewable portfolio standard "would make virtually no contribution to lowering U.S. oil use or oil imports" the Rice studies find because oil has little to do with U.S. power generation.

The further expansion of wind power would be costly, as the best wind resources tend to be far from areas of high energy demand, requiring additional transmission capacity.

And since wind power tends to be intermittent, its expansion would drive the construction of natural gas peaker plants rather than more efficient combined-cycle natural gas plants that are designed to run around-the-clock.

Better targets for federal subsidies might be power generated by geothermal sources.

More funding for renewable energy research and development would also be a better target for federal money since it could lead to more "disruptive technologies" that are more likely to have greater impact on energy use.

The studies also conclude that, barring any major impediments to domestic onshore drilling, U.S. natural gas resources found in shale formations should keep the country from having to import liquefied natural gas for many years and help make cleaner-burning gas-fired plants a more-cost-effective alternative to coal plants.

tom.fowler@chron.com