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Hurricanes are crashing Gulf-area homeowners insurance, and carbon capture is expensive
Although hurricane season is over, the Louisiana and Florida homeowner’s insurance markets are an ongoing disaster, with over a dozen insurance companies going insolvent in the two states.
1. Homeowners insurance is crashing in the Gulf due to increased hurricane damage
Although hurricane season is over, the Louisiana and Florida homeowner’s insurance markets are an ongoing disaster, with over a dozen insurance companies going insolvent in the two states. Since 2017, six property and casualty companies that offered homeowners insurance in Florida liquidated. Five more are in the liquidation process in 2022. Other insurance companies are voluntarily leaving the two states. To prop up markets, the state legislatures have created state-chartered insurance companies to replace private companies, although they too have been battered by the cost of hurricane damage. This year, the Louisiana and Florida state-chartered insurance companies may have to borrow $1.35 billion to pay hurricane-related damage claims of insolvent insurers. While the payout expenses will be largely borne by policyholders in the form of higher premiums and surcharges, the costs are becoming prohibitive for lower-income homeowners and the many fixed-income seniors living on the coast. In Florida, all homeowners, regardless of location, will have to pay an assessment to help prop up the state’s insurance market.
2. The unproven, but expensive plans for carbon capture and storage
To curb climate change, not only do we need to get to net-zero carbon emissions, but we likely need to extract carbon from the atmosphere. Also, as nations wean themselves off coal and natural gas electricity generation, carbon capture and storage (CCS) seems like an attractive mitigation tool. Trouble is, CCS, which generally involves sucking carbon out of the air and pumping it into shuttered oil wells, hasn’t been proven as a scalable technology – even though global climate negotiators are behaving like it’s just around the corner. Even so, CCS looks like it’ll be a big business, costing an estimated $200 per ton of carbon, and since the U.S. vented 325 million tons of carbon in the air in 2021, the cost of mitigation would be a cool $65 billion. To figure out how to scale it up, the U.S. Department of Energy plans to award $3.5 billion this year to help build massive capture hubs across the United States.
In 2009, the Obama Administration spent $1.1 billion on 11 CCS projects. Four were never built, and of the 7 that were, only two are still operating.
Besides pumping it into the ground, there’s other unproven, ocean-based CCS technologies, such as growing kelp at the surface and then sinking it to the deeps, where it would stay for centuries.
The U.S. EPA is expected to issue rules next month that will require coal plants to employ CCS. Some might be able to afford it, but most won’t and will have to close, which seems to be the point of the rule.
3. The utilities halting transmission
Back in the day, if an area needed more electricity, the local utility would build a power plant nearby. But today, most wind, solar, hydro, and nuclear power is generated hundreds of miles away from urban consumers, which makes long distance transmission wires increasingly important to the green energy transition. However, U.S. and Canadian electricity transmission is managed by a patchwork of regional grids controlled by the local utilities, who mostly don’t make money from electricity generated somewhere else. Most new transmission for solar and wind is built by non-utilities who want to move power to large urban markets, but those new wires don’t always benefit the utilities, nor the rural communities the new wires are running through, which often results in years of delays in the form of “environmental reviews”. Congress is struggling to pass legislation that would speed the approval of new transmission, but predictably, the GOP House has tied it to approving more oil and gas wells, so that’s not moving too quickly.
The Indiana state legislature just awarded local utilities right of first refusal for new transmission lines, slowing the possibility of new wind projects in the state.
A 145-mile Main transmission line first approved in a 2021 ballot measure to bring Canadian hydro to New England, was blocked in court until a jury voted 9-0 last month to let the line go through.
The TransWest Express, a 732-mile line from Wyoming to Las Vegas, will carry wind power, is finally under construction after almost 20 years of delay. Another line, the SunZia, from New Mexico to Arizona, to carry solar power, was delayed until recently for 17 years.
Other Things Happened
The Senate approved an already House passed bill to bring back Trump-era tariffs on Chinese solar panels. Pres. Joe Biden has promised to veto it. New York State passed a ban on natural gas in new buildings starting in 2026.
You made it to the end! Here’s photos of an AI-designed “Alien:The Musical” as a reward.