Human Misery of Hurricane Sandy Not Caused by Energy Policy

Russ Steele

One of my regular reads every day is Roger Pielke Jr.’s Blog, he is a moderate voice in the climate change debate.  He had an insightful look at the impact of Sandy in the Wall Street Journal. Hurricanes and Human Choice

Sandy was terrible, but we’re currently in a relative hurricane ‘drought.  Connecting energy policy and disasters makes little scientific sense.

Hurricane Sandy left in its path some impressive statistics. Its central pressure was the lowest ever recorded for a storm north of North Carolina, breaking a record set by the devastating “Long Island Express” hurricane of 1938. Along the East Coast, Sandy led to more than 50 deaths, left millions without power and caused an estimated $20 billion or more in damage.

But to call Sandy a harbinger of a “new normal,” in which unprecedented weather events cause unprecedented destruction, would be wrong. This historic storm should remind us that planet Earth is a dangerous place, where extreme events are commonplace and disasters are to be expected. In the proper context, Sandy is less an example of how bad things can get than a reminder that they could be much worse.

In studying hurricanes, we can make rough comparisons over time by adjusting past losses to account for inflation and the growth of coastal communities. If Sandy causes $20 billion in damage (in 2012 dollars), it would rank as the 17th most damaging hurricane or tropical storm (out of 242) to hit the U.S. since 1900—a significant event, but not close to the top 10. The Great Miami Hurricane of 1926 tops the list (according to estimates by the catastrophe-insurance provider ICAT), as it would cause $180 billion in damage if it were to strike today. Hurricane Katrina ranks fourth at $85 billion.

To put things into even starker perspective, consider that from August 1954 through August 1955, the East Coast saw three different storms make landfall—Carol, Hazel and Diane—that in 2012 each would have caused about twice as much damage as Sandy.

Here is a graph from his blog.

The graph above shows normalized US hurricane damage, based on data from ICAT, which applies an extension to the methodology of Pielke et al. 2008. The 2012 estimate for Sandy comes from Moody’s, and is an estimate.  The red line represents a linear best fit to the data — it is flat

So there your have it! Sandy is not the new normal, regardless of what the lame steam press has to say, you now have the facts.

H/T to a regular reader for the WSJ article.

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About Russ Steele
Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.

13 Responses to Human Misery of Hurricane Sandy Not Caused by Energy Policy

  1. stevefrisch says:

    Really, measuring storms in inflation adjusted figures for property damage? I can think of about 30 reasons why this is a lame measurement. Starting with not calculating the cost of increased building code compliance to reduce damage in the first place, to the accuracy of reporting on the damage cause by individual storms, to inaccuracy of the measurement of disruption to supply chain or lost wages and productivity, and finally only measuring losses in economic terms without calculating the social and environmental costs of such storms–since we have no accurate measure of ecosystem services destroyed, such as the value of a coastal wetland in New Orleans or a tidal marsh in New Jersey, we really have no accurate measure of the total cost.

    If one is going to apply such logic the most damaging storms would be the ones that strike the richest neighborhoods, right? Seems lame to me.

  2. Sean says:

    I have a take on this one that is a little different. Dr. Pielke is arguing that energy policy and severe weather disasters should not be connected. However, Mr. Bloomberg made it a point of doing exactly that, saying that Mr. Obama would provide leadership on climate change which implies leadership on clean energy policies. Oddly enough, clean energy policies have barely made it into the political discourse this time around, not because the Democrats don’t want them, but because most of the swing states in the midwest are highly dependent upon fossil fuels and the campaign realized “climate change leadership” would cost swing state votes. So while NY is dealing with flooded subways, the folks in Ohio, particularly the southeastern Appalacian region, were dealing with snow from the same system in October no less. The upshot is that this storm has flushed out the energy policies that Democrats would like to pursue in a second Obama term and these may cost Obama some critical votes.

  3. stevefrisch says:

    I substantively agree with you Sean; climate issues and associated energy issues have not been covered for primarily political reasons. In short, the President already wins the ‘renewables’ states which are primarily coastal–it is one of my strongest criticism of the Presidents campaign. Leadership really should mean leadership, and since climate and energy policy are critical issues, it should have been a mainstay of both candidates campaigns. The campaign was actually the best platform where this national debate could have played out.

    But the other reality is that this President is not solely a ‘renewable’ guy. Sure, he has boosted temporary public sector investment in renewables (through stimulus), but he has simultaneously lowered regulatory barriers equally to fossil fuels and maintained subsidies to them, and has been an apostle of ‘clean coal’, an oxymoron if I have ever heard one.

    The reality is that through stimulus the government has been acting essentially as a venture capital investor (and their record is better than most venture capital funds with a default rate lower than most funds even with high profile failures like Solyndra according to my VC sources). But the difficulty of making the case when the Russ’s of the world can point to the failures was too high a public relations barrier to overcome–thus energy policy took a backseat in the election. Too bad. It means the debate will have to play out without the focus of a national campaign.

  4. stevefrisch says:

    By the way, the characterization of the position of clean energy advocates like me that we are de-emphasizing investments in fossil fuels is very disingenuous.

    My position has long been that transitioning to a low-carbon energy sector is going to take decades, just as it took us decades to create it– and that in the interim we are going to need coal, natural gas and oil–but how we use them and control the externalities needs to be gradually ramped up.

    For example, we should be transitioning our goods movement systems from oil to natural gas, a position that many support; but the only way we are going to get there is policy–truck and rail manufactures and operators are not going to switch quickly without support–we need to create incentives to get them there. Another example; we should be diversifying energy supplies into our grid, and create redundancies to manage risk. The investments in linking projects like the BrightSource solar in the California desert to storage and making it part of a blended supply are critical.

    That mean environmentalists need to be heard, their issues dealt with, then they need to get the hell out of the way. Kind of like this effort to designate more than 280,000 acres of federal lands for utility scale solar

    http://www.doi.gov/news/pressreleases/Obama-Administration-Approves-Roadmap-for-Utility-Scale-Solar-Energy-Development-on-Public-Lands.cfm

    The characterization of the ‘environmental interests’ as a monolithic group all agreeing that blocking these projects is desirable is simply not true.

  5. Sean says:

    My biggest problem with the renewable energy sector is that badly placed government support can create distortions in the market. I read stories in the SacBee about a local solar company seeing is biggest success in New Jersey. In Europe the biggest installed base of solar is in Germany, a fairly cloudy country. It’s clear, solar doesn’t follow the sunshine, it follows subsidies. And those subsidies have to be paid for by someone and its usually done through rate payers. Germany has the second highest electricity prices in Europe behind Denmark (who invested very heavily in wind). I have heard there is almost a million German’s in danger of having their electricity cut off because they cannot pay their bills and this was before a new rate increase set to go into effect at the end of the year to cover the cost of renewables. And then there is the problem they are having with distribution since most of the wind energy is in the north and the demand is in the industrialized south but there isn’t tansmission capacity to move it where it’s needed.

    California, which already has high rates, is not going to see its rates go down as the renewables expand, all that new infrastructure is going to show up in people’s bills. This may not be a big deal along the California Coast where most people with money tend to migrate since the weather is about as moderate as anywhere on earth. The folks inland in the valleys (where I grew up) will be paying through the nose while the rich influential people on the coast will be wondering what the problem is.

    California’s deserts certainly should be a good place for renewables but there is a host of problems, even beyond the environmental roadblocks that seem to crop up at every turn. The biggest I see is that the peak power producing time of day for wind and solar does not correspond to peak power consumption. Those times are offset by several hours. This could be handled if there was short term load leveling and storage available as their often is with systems closely aligned with hydroelectric dams but try pushing that past California’s environmental lobby. And with California’s laws giving almost anyone standing in court cases it doesn’t take a large mainstream organization to throw a monkey wrench into any type of plan.

  6. stevefrisch says:

    With all due respect Sean, the case that government intervention creates market distortions, might have merit if it were not for the fact that intervening in the market holds equally true for carbon based fuels.

    The best example may be the federal requirement that coal be shipped on private sector rail carriers at less than 1/2 the price of other freight. So while coal makes up a little over 40% of rail freight, it only accounts for 20% of the revenue for rail carriers. The reason is that previous to 1980 the freight price was set for each class of product (coal is its own class). Consequently the power grid we designed pre-1980 was based on the cost of shipping coal being less than half of the real price if it had been set by the market. Although the Staggers Act in 1980 deregulated most freight pricing, it left in place the requirement that coal receive preferential treatment. In addition, the cost of designing that network of rail freight was underwritten by the federal government in the form of federal and grants for railroad rights of way, meaning that the cost of locating the infrastructure was underwritten by the federal government. So when someone like Russ points of that coal is half the price of solar, one of the reasons that is true is that we have systematically subsidized coal for 150 years.

    And that is only one example: I could give you a dozen more ways the federal government creates market distortions that favor fossil fuels, starting with low cost leases on federal lands, moving to our military protecting supply lines (such as keeping the Straights of Hormuz open) and ending with direct subsidies for research and development. In short, if one oppose subsidies for renewables, you should be opposing subsidies for carbon based fuels as well….but tellingly, most critics of renewables don’t do that.

    The bottom line is that the development of a carbon based fuel economy was built on federal intervention, subsidy and market distortion; there is no reason to believe that in the re-designing of a system this huge it is not going to take the same investment to achieve renewable success.

  7. Sean says:

    I did not know that the government still regulated the price of transporting coal on private rail networks. But I would ask you, if the price of delivering coal to a power plant for combustion is lower than it supposed to be, will this result in cheaper or more expensive electricity? And while I don’t know much about the coal transportation business, I do know that Warren Buffet bought a railroad a couple years back that has as a big part of it’s business moving coal from the northern plains to power plants all over the country. I hear its been a pretty good deal for him. If railroad companies are burdened by cheap prices for moving coal from mines to power plants, why have their financials suffered when power generation facilities have converted from coal to natural gas which arrives via pipeline?

    The World Watch institute compared the subsidies for fossil and renewable energy, “Estimates based on 2009 energy production numbers placed renewable energy subsidies between 1.7¢ and 15¢ per kilowatt-hour (kWh), while subsidies for fossil fuels were estimated at around 0.1–0.7¢ per kWh.” So we are taking about a factor of 20 more subsidy per kWh for the renewables.

  8. stevefrisch says:

    Two quick points….of course the impact of subsidizing coal would have the effect of reducing electricity prices to consumers…but at the cost of increasing prices in other area…first through the un-subsidized commodities and goods moved by rail, primarily automobiles, foodstuffs, chemicals and other raw materials….just as subsidizing the renewable industry would have the impact of lowering the prices to consumers at the expense of increased costs in other areas.

    If one is going to quote World Watch Institute one might want to quote more than that single finding, for example their entire opening statement to their Vital Signs Report:

    “Total subsidies for renewable energy stood at $66 billion in 2010, but are still dwarfed by the total value of global fossil fuel subsidies estimated at between $775 billion and more than $1 trillion in 2012, according to new research conducted by the Worldwatch Institute (www.worldwatch.org) for its Vital Signs Online service. Although the total subsidies for renewable energy are significantly lower than those for fossil fuels, they are higher per kilowatt-hour if externalities are not included in the calculations, write report authors from Worldwatch’s Climate and Energy team.

    Estimates based on 2009 energy production numbers placed renewable energy subsidies between 1.7¢ and 15¢ per kilowatt-hour (kWh), while subsidies for fossil fuels were estimated at around 0.1–0.7¢ per kWh. Unit subsidy costs for renewables are expected to decrease as technologies become more efficient and the prices of wholesale electricity and transport fuels rise.

    The production and consumption of fossil fuels add costs to society in the form of detrimental impacts on resource availability, the environment, and human health. The U.S. National Academy of Sciences estimates that fossil fuel subsidies cost the United States $120 billion in pollution and related health care costs every year. But these costs are not reflected in fossil fuel prices.

    “These so-called hidden costs, or externalities, are in fact very real costs to our societies that are not picked up by the polluter and beneficiary of production but by all taxpayers,” said Alexander Ochs, Director of Worldwatch’s Climate and Energy program and report co-author. “Local pollutants from the burning of fossil fuels kill thousands in the U.S. alone each year, and society makes them cheaper to continue down their destructive path.”

    Shifting official support from fossil fuels to renewables is essential for decarbonizing the global energy system. Such a shift could help create a triple win for national economies by reducing global greenhouse gas emissions, generating long term economic growth, and reducing dependence on energy imports.”

    • Sean says:

      I think you have to be really careful with that $775 billion number. It may be accurate but highly misleading. The subsidies in the developed world are relatively small. The bulk of those are the subsidized price of fuel in oil exporting countries like Venezuela, Iran, Saudi Arabia and other places. $0.25 a gallon for gas in some of these countries.
      The externalities is really rich. Local pollution from burning fossil fuels? Can you be any more specific. I live on the east coast which has much more coal fired power than the west. I even do business with a company that is literally across the street from one of the large coal fired power stations in our area. It is remarkably clean around that plant. There may be a few old dirty coal plants that are only used when electricity demand is really high but I would bet the base load coal plants are both efficient and have low emissions of real pollutants.
      The entire country benefits greatly having reliable low cost energy. You blame $120 billion in extra health care costs on fossil fuels, which is one of the few things working class people get a break on in their living expenses. Meanwhile, our extraordinarily inefficient health care delivery system costs each household an average of $20,700 a year of earnings. Poverty is really tough on people’s health and a good part of the $4000+ drop in median income over the last 4 years can likely be accounted for $3000+ increase per household in the cost of healthcare.

  9. stevefrisch says:

    By the way, WWI’s report was for 2009 (the ‘stimulus year’, which was the single highest year ever for renewable subsidies).

    My original point was not that subsidies are wrong because they create market distortions, that was your point; my point was that if one is going to blame renewable subsidies for creating market distortion in the energy market, one also has to look at the market distortions caused by carbon based fuel subsidies.

  10. Arthur M. Day. says:

    You are both right, subsidies create market distortions, and waste tax monies. Can we look foward to b.o. reducing all subsidies if he is reelected? Can we look forward to Mr. Romney reducing all subsidies if he is elected? We get to find out real soon now.

  11. Arthur M. Day. says:

    I misspoke myself. We can’t be wasting tax monies on subsidies, they have all been spent. If we want to waste money on subsidies, we’ll have to go deeper into debt.

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