In a study released last week, energy expert Dr. William Shobe of the University of Virginia dismantles the key, state-sanctioned analysis of how Virginia should meet the requirements of the federal Clean Power Plan to reduce carbon emissions.
That analysis, produced last fall by a team led by Dr. Michael Karmis, director of the Center for Coal and Energy Research at Virginia Tech, is part of the Virginia Energy Plan and is relied upon by Gov. Terry McAuliffe and the legislature as they make decisions about the state’s energy future.
“In short, the report is almost certainly worse than no study at all because it misstates likely costs, analyzes irrelevant options, and gives short shrift to the cases that really matter,” writes Shobe.
A professor of public policy and director of the Center for Economic and Policy Studies, Dr. Shobe’s research focuses on climate change, greenhouse gas markets, and auction design. Shobe was part of the team that designed the Regional Greenhouse Gas Initiative for nine Northeast states, a cap-and-trade program to reduce carbon emissions that has generated $1.3 billion in economic benefits and 14,000 job-years over the past three years.
“Old Boy” Selection Process
Last fall, we questioned why Dr. Karmis – who is an international consultant to the coal industry – had been chosen by the McAuliffe Administration’s Dept. of Mines, Minerals & Energy (DMME) to write a 199-page analysis of how Virginia should best meet the requirements of the federal Clean Power Plan. By repeatedly evading my basic questions about how and why he was chosen, Karmis and DMME only heightened suspicions about what appears to be an “old boy” selection process heavily influenced by the fossil fuel industry.
But now it is clear that the process was more than unseemly: the sloppy, coal-friendly conclusions of Karmis’ report are contributing to Virginia status as an also-ran in clean energy development.
Notable problems Shobe found with Karmis’ analysis include:
- Double counts compliance costs by about $400 million annually because the authors added together two different estimates of compliance costs.
- Made a calculation mistake that cut the estimated benefits of emission reductions by more than 40%.
- Used inappropriate and incomplete economic analysis in estimating total economic costs and associated job losses, inflating cost and job losses.
- Misinterpreted, on at least two occasions, analysis provided by the EPA in the EPA’s regulatory impact analysis of its proposed rule.
(For a full list of errors, click here.)
In addition to reviewing Karmis’ analysis, Professor Shobe makes useful recommendations to ensure state agencies such as DMME, the Dept. of Environmental Quality, and the State Corporation Commission are able to properly assess studies presented to them.
An Impartial Coal Expert?
Virginia is having a critical conversation about Clean Power Plan compliance options and strategies. Citizens must ask themselves: should the Commonwealth’s policymakers continue to rely upon an energy analysis produced by coal expert Michael Karmis that we now know is utterly flawed?
Last November, I concluded a post by asking whether Dr. Karmis was too conflicted to write a document the governor and legislature would depend upon as an unbiased, informed look at how the state can best respond to the Clean Power Plan. By submitting a report with flawed methodology, basic factual errors and biased conclusions in favor of the coal industry, it seems the answer regarding Dr. Karmis’s conflicts is a resounding yes.
Scott Peterson is executive director of the Checks and Balances Project, a national watchdog blog that seeks to hold government officials, lobbyists, and corporate management accountable to the public. Funding for C&BP comes from pro-clean energy philanthropies and donors.