Get ready to bend over

Talked to an owner of a major fuel supplier in the Salinas Valley today.  He said on 1-1-13 we could see a 1$ rise across the board in Ca as a result of a carbon tax. 


React!


Eric Morgan
Trident Ultra 4.7
Not the guy selling the Outback
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http://thehill.com/blogs/e2-wire/e2-wire/267075-white-house-obama-isnt-planning-carbon-tax-proposal

http://thehill.com/blogs/e2-wire/e2-wire/267075-white-house-obama-isnt-planning-carbon-tax-proposal

i'm sure this ^ will change come 1/1/13. you can bet your bottom dollar

Why not?, i love being taxed....i cant wait. 

Pretty sure this is a state deal, not federal.   We are always a bit ahead out here, right?


Eric Morgan
Trident Ultra 4.7
Not the guy selling the Outback
Sent from my iPhone using Tapatalk

Cap and trade would be my guess. California is the first state to implement this system.

Yup!
Cap-n-Trade.
Gas will probably be a buck a gallon more and diesel will go up about 2 bucks a gallon.  This will drive up costs for lots of other things too.

I work for SMUD, the electric company.  We have been positioning for years with renewable resources as this approaches.  Since we are about 25% hydro electric, which doesn't produce carbon emissions, we will have more carbon allowances than we need and we will sell those allowances at the state auctions.  Starting in January, utilities and portions of the state’s industrial sector must have allowances for every ton of carbon emissions they produce. The state will issue a set – or “capped” – volume of carbon allowances, which will shrink each year.  Publicly owned utilities (POUs) such as SMUD have been allocated allowances for retail load. POUs will have the option of offering their carbon allowances for sale in the state auction to help reduce costs.  The first auction of allowances is scheduled for next Wednesday, from 10 a.m. to 1 p.m. The California Air Resources Board will oversee the auctions, which will be held quarterly starting next year.  In between auctions there will be daily trading of California carbon allowances on secondary markets.  SMUD expects to earn at least $4 million next year from the sale of carbon allowances and use that money to fund weatherization, whole-house energy retrofits, community retrofits like public pools, etc. 

So if I get this right, SMUD will be allowed to sell the 25% to the highest bidder?

Anthony

Yup!
Cap-n-Trade.
Gas will probably be a buck a gallon more and diesel will go up about 2 bucks a gallon.  This will drive up costs for lots of other things too.

I work for SMUD, the electric company.  We have been positioning for years with renewable resources as this approaches.  Since we are about 25% hydro electric, which doesn't produce carbon emissions, we will have more carbon allowances than we need and we will sell those allowances at the state auctions.  Starting in January, utilities and portions of the state’s industrial sector must have allowances for every ton of carbon emissions they produce. The state will issue a set – or “capped” – volume of carbon allowances, which will shrink each year.  Publicly owned utilities (POUs) such as SMUD have been allocated allowances for retail load. POUs will have the option of offering their carbon allowances for sale in the state auction to help reduce costs.  The first auction of allowances is scheduled for next Wednesday, from 10 a.m. to 1 p.m. The California Air Resources Board will oversee the auctions, which will be held quarterly starting next year.  In between auctions there will be daily trading of California carbon allowances on secondary markets.  SMUD expects to earn at least $4 million next year from the sale of carbon allowances and use that money to fund weatherization, whole-house energy retrofits, community retrofits like public pools, etc.

is that even legal?  auctioning carbon allowances,,,,,what is that? 
oh well, i'm bent over already, whats another arm inside gonna hurt.

So if I get this right, SMUD will be allowed to sell the 25% to the highest bidder?

Anthony

Yeah........and instead of refineries reducing their emmissions (which was the original intent of the laws) they're just going to buy unused shares and pass the cost onto us. 

Anybody want to buy my 4 cyl 2wd ranger? It's a 2000 with 115k miles. First 30 grand takes it!!!

Anthony

So if I get this right, SMUD will be allowed to sell the 25% to the highest bidder?

Anthony

Here's their exact words to me in an e-mail today;
"SMUD is in a good position because we’ve aggressively pursued renewable energy and efficiency measures and we get 25 percent of our energy from hydroelectric generation, which doesn’t produce carbon emissions. Because our energy portfolio is so clean, we’ll have more carbon allowances than we need, and we can sell those allowances in the state auctions."

is that even legal?  auctioning carbon allowances,,,,,what is that? 
oh well, i'm bent over already, whats another arm inside gonna hurt.

Yes, legal.  That's the 'TRADE' part of cap and trade.  These will sell at auction to the highest bidder.  I imagine that the first auction next week will set the price of a carbon credit's value.  I suspect there will be a bidding war and prices will be very high.  Reason I think that is, remember a few years ago, when Wilson was governor of California?  The electric rates were deregulated.  They went out on the open market with the intent that free trade would rein in costs instead of a fixed market price by the government.  Electricity would cost what ever folks would pay for it based on it's quantity.  Problem was; the utility companies conveniently took generation off line or had a major problem at a large plant. Now the quantity was reduced and the prices spiked.  Just like gas does and is manipulated.  California imports a bunch of electricity from Texas.  They really screwed CA when they offered to cap the electric rates they were selling to our state with a fixed cost contract.  Wilson bought into it and locked in the high rates that those first few months of open market trading with those contracts and we Californian's have been paying for it ever since.  What Wilson should have done was send the National Guard to the Arizona border a demolish the towers bringing in Texas electricity to our state and deal with the brown-outs (which we had anyways) until we could find other sources for cheap electricity.  Then let those greedy Texas oil men choke on the electricity their oil fired generators were making.  The idea was that Mexico would build huge generation plants and sell back to CA. The price for electricity would plummet.   Poor Pete Wilson.  He blinked at the poker game and lost.   

no mention of gas prices

http://www.calwatchdog.com/2012/05/29/california-counting-its-carbon-tax-riches/

The Bay Area has been under a cap and trade  (and reduce) scenario for other pollutants (NOx, SOx, Particulates, CO, and Hydrocarbons) for years (20+).  Under BAAQMD regs any fired source, (industrial furnace like in a refinery or power plant) that is shutdown allows the owner to bank the emissions (from the furnace) that are no longer put into the air.  Those emissions can then be sold to the highest bidder.  I can't remember if it's going into the bank or being sold out of it but in one of those transactions the emissions sold get reduced by 10%.

The result of this is that INDUSTRIAL pollution for many sources has actually gone done over the years, while still allowing for growth.  New furnace technology has greatly reduced emissions so that a refinery can expand it's production without increasing pollution within the Bay Area by using new tech furnaces and buying emission credits.  The emissions cap for the above mentioned pollutants was established years ago and the banking and selling process reduces the emissions allowed by a slight amount each time it happens.

Now that is a long winded preface to saying the it's going to be much harder to do this for CO2.  Industrial CO2 emissions are basically the byproduct of producing heat either to process crude oil, chemicals or make electricity.  While a new tech furnace produces less of the above mentioned pollutants it still produces about the same amount of CO2.  For industrial plants to reduce carbon (CO2) emissions they are going to have to increase efficiency (do the same processing with less heat).  Since fuel costs are already high for them as well as us they have already made many real advances in processing efficiency and will now continue down that road.

I don't know if there is/was a time frame for CO2 but in the past PGE held huge banks of the other emissions. 

My guess after being in a refinery for 38 years is that there may be some minimal increase in gas price but it won't be a dollar a gallon, I'd bet it gets lost in the noise of the other price drivers like supply, demand, greed, speculation, corruption and gouging. 

Thanks for the insight dale.....an extra $2 a gal for diesel woulda out a serious dent in my wallet.  When it hit $5 a gal I couldn't do squat all summer.

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