What Will It Take For California Voters To Change Their Minds?

June 8, 2017 By Todd Royal 4 Comments

VotingIn Malcolm Gladwell’s famous book, “The Tipping Point,” his central thesis is how events collate together to form a “tipping point,” that changes individuals, companies, governments and society. Has California reached a tipping point? Seemingly it has. Then why do voters keep electing the same Democrats, and allow the Republican Party to fade away into oblivion?

Moreover, apathetic voters don’t care that the Democratic governor and Legislature say one thing, and do something completely opposite as long as the hot causes are in line with the media and Democratic Party’s narrative of gay marriage, abortion and global warming. Those three shibboleths of California public policy have overtaken the central tenets of state government: infrastructure, public safety and education – since all three are in shambles or disarray at best.

For Democratic voters, independents who lean conservative, but never hear an organized message, along with Republican voters who still long for Reagan, here are issues to consider along with our downward trajectory. Your apathy and unrealistic expectations are taking California to a brutal tipping point that could easily mirror the disaster being ignored by the mainstream media (LA Times, NY Times, ABC, CBS, NBC) about Venezuela since it doesn’t fit their false narrative that socialism espoused by Bernie Sanders should be emulated.

The next number of paragraphs will begin showing the current path for California this year and decades ahead. It is sobering to envision what California will look like for our children if changes in voting patterns and the domination of the Democratic Party aren’t broken.

Gov. Brown and the Democratic supermajority Legislature raised taxes again, and openly misappropriated the funds giving middle-class families and businesses additional reasons to flee the state. If these two trends push forward in the future and the CRP does nothing about this with candidates who can explain what’s taking place in California – versus not supporting a Republican President during election seasons – then the CRP will be relegated to the dustbin of history. Translated, California will remain having the worst environment in the nation for job creation and business friendliness.

Unfortunately, Democrats are now job killers and only believe in the above-mentioned public policy shibboleths along with hating Trump. The days of Gov. Brown’s father, FDR, Truman, JFK and Scoop Jackson are over – Democrats who believed in strong defense, single-family homes, infrastructure, education and two-parent families as the backbone of stable, thriving societies. Imagine a California Democrat who didn’t back abortion-on-demand, gay marriage and global warming and was pro-life instead, questioned the sanctity of marriage and was against global warming – even doubted the veracity of the environmental movements claims? That person wouldn’t win a City Council race against a dead person in San Francisco.

Pensions as currently configured are 100% unsustainable, no matter what the stock market achieves in the near future using historical rates of return. Democrats and Republicans who don’t make a case for pension reform will bankrupt California, and don’t expect Trump or Pence to rescue us. Even Sacramento has ominous pension problems. Hundreds of billions, even trillions are owed, yet voters are only concerned about the three shibboleths?

Unions now run California’s education standards, and three new bills (AB450, AB1209 and SB63) would further influence the destruction of our economy and labor practices all in the name of being progressive Democrats. Yet voters keep voting for these measures and legislators, instead of sensible, business-friendly, moderate Republicans like David Hadley (though I disagreed with him about not supporting Trump during the Presidential election).

Social issues that have nothing to do with California’s upward trajectory are en vogue by Democratic legislators and their supporters: a former teacher at Diablo Valley College was arrested for attacking a Trump supporter with a bike lock at the Berkeley protests and AB1576 would tax items and their price equivalent based on gender for businesses who don’t price items exactly the same throughout California. Litigation for consumers and businesses will skyrocket costs.

Republicans who only want to be moderates and worry about taxes, business growth and strong defense should understand that gender, class and race are additional shibboleths added onto the social diagram of how Democrats beat Republicans in this state. The days of not articulating reasonable social policies are now over since President Obama introduced all three into public policy and the national media to win elections and fragment the United States.

While Gov. Brown and the Democratic-controlled legislature obsess over nothing, Joel Kotkin states:

“In the coming years, California’s claim of being the economic exemplar of the country may be further undermined by legislative overreach. The statewide rise in the minimum wage will hit the lower-wage sector, particularly outside the coastal enclaves. Various plans to boost the welfare state, such as a single-payer health care system (costs $400 billion annually) that includes the undocumented, and a host of union-driven initiatives, seem certain to drive up costs and impose an ever-heavier tax burden on the state’s struggling middle class. Perhaps most threatening, over time, may be a host of new environmental laws which will impose enormous burdens on affordable housing, energy prices and industrial growth.”

This warning is coming from a self-described, “Truman Democrat,” and not a Tea Party Republican or Trump supporter. Somehow, Los Angeles believes receiving an Olympic bid in 2024 or 2028 will alleviate these concerns, without considering what prior cities have done with billion dollar stadiums in bankruptcy, disrepair and out-of-use? What our society should care about and attempt to alleviate before the Olympics being awarded is dropping the homeless rate in Los Angeles – which surged 23% according to the Greater Los Angeles Homeless Count.

San Francisco has taken the illegal-immigrant debate to a new level. Mayor Ed Lee stated in his 2017 State of the City address, “We are a sanctuary city, now, tomorrow, forever,” without understanding the implications of H.R. 2431 that punishes sanctuary cities by withholding federal monies. In 2016 San Francisco received $509,260,129 in federal grants and direct payments. And Democrats who control all levers of state government want to burden businesses with immigration policy, which will only drive more of them out of the state.

California isn’t in a shots-fired civil war, but we are dangerously close to moving in that direction when the mayor of California’s most prominent city so openly defies the federal government. The Civil War decided that federal laws supersede state laws whether we like it or not.

State, county and local monies for mobility are allocated towards public transportation that the public either doesn’t want or use commiserate to cost, or the cost-to-benefit ratio is negative when you consider as an example, the miniscule affect on traffic that bike sharing produces. Meaning, billions are wasted on transportation projects that don’t improve pedestrian safety or traffic mobility. Whereas a better use would be the construction of quality-of-life infrastructure: schools, roads, highways, sidewalks, bridges and water systems.

The biggest killers to California are environmental issues that strictly pertain to global warming as fact and the regulations that will kill this state. As an example, President Obama’s last year in office, he produced regulations that totaled $2 trillion according to the Competitive Enterprise Institute. The Clean Power Plan was just one type of environmental regulation that California wholeheartedly embraced along with the Paris Climate Agreement without understanding the costs or zero affect either would have on cleaner air, efficient use of environmental resources or how China and India would negate any gains by California adhering to these onerous regulations and agreements since both are still building coal-fired power plants.

Moreover, renewable energy and electric vehicles (EVs) don’t currently work now or in the near future as envisioned by Gov. Brown and State Senator Kevin de Leon. Both (EVs and renewables) have vast unanswered questions and technologies that need to be solved before either is scalable the way fossil fuels and the combustible engine is at this time. Since all environmental strategy and policy is based on man-made global warming in California through the Democratic-controlled Legislature then the questions raised here need to be answered before moving forward with global warming-centric political hysteria. That’s not how good policy is made, or to truly answer the questions about the climate changing and what that means for California, the U.S., industrialized nations and the developing world.

As a former Republican State Assembly nominee (43rd State District) I call on the CRP to begin soberly asking why they can’t win elections anymore? Particularly, Los Angeles County (as goes L.A. County so goes this state) when candidates like Pete Peterson should’ve been embraced, his campaign funded by the party, and should currently occupy a top CRP leadership position while gearing up to either run for Governor, Lieutenant Governor or Secretary of State again. Imagine if now, Dean Peterson (Pete is the Dean of Pepperdine University’s School of Public Policy where I am a December 2015 graduate) were Secretary of State?

Dean Peterson ran on a platform of transparency, efficiency and effectiveness for the office, instead of the politicized entity it currently is that knowingly has illegal immigrants on its voter rolls. Anyone who believes there aren’t differences in a Democrat or Republican begin trying to clean up voter rolls, and the mess that brings up to find out the differences. Dean Peterson would’ve have accomplished that task, or at least wouldn’t have added to the disaster. The CRP and national party should embrace him and others vibrant candidates like him as well.

California has gotten lucky economically through Silicon Valley exploding, Los Angeles exploding home prices and the popular presidency of Barack Obama protected by and prodded forward by the media. A narrative not unlike Pravda during the Soviet Union’s days, but still we have the highest poverty rates, welfare usage, income inequality and fleeing of citizens over the other 49 U.S. states. We’ve created a system that is no longer sustainable in the long-run and unless voters change their minds, character or sources of voting information then the words of Samuel Johnson, in Oliver Goldsmith’s The Traveller, will come true: “How small, of all that human hearts endure, That part that laws or kings can cause or cure.”

Todd Royal is a geopolitical risk and energy consultant based in Los Angeles.

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California Is Headed Into a Very Dark Pit

May 2, 2017 By Todd Royal 12 Comments

california-flagAs California still continues thumbing their nose at the brute, non-global-warming believing Donald Trump, we the people may need him now more than ever. After eight years of doing away with 70 years of post World War II deterrence, realpolitik, balancing hostile nations and leading the world, supposedly California voters thought it was more prudent “to lead from behind.” And now the price to restore global deterrence that will protect California is being paid.

These actions, where elections have consequences, now find California in the cross hairs of North Korean nuclear missiles. Global warming, human rights (whether gay rights or religious freedom) and despising Donald Trump/Republicans won’t take precedent when the threat ignored by “strategic patience” takes aim at Los Angeles and San Francisco for nuclear annihilation. Eight years of hand wringing and indecisive rhetoric has produced North Korea, Iranian, Chinese and Russian belligerence. Each of these war-seeking nations will strike California (the heart of the U.S. economy) if and when they are given the chance.

None of these issues are crossing the California Legislature or Gov. Brown’s collective minds at this time. If that’s the case then what is the state of the state? We’re on our way to passing the largest transportation tax in the history of California, according to State Senator John Moorlach, that will do nothing to alleviate the current transportation issues, address concerns about former transportation taxes that were appropriated elsewhere or address Cal Trans union-led inefficiencies, instead of accounted for transparency. Additionally, CalSTRS continues missing investment return rates, and the unfunded liability will drain state, city and county finances in only a few years. Other California pensions aren’t doing much better, and these workers who were promised one thing will more than likely never see there money in the coming decades.

Something will have to give – pensions to public employee unions. The promise was, we (the Democratic controlled state), will promise you hundreds of billions of taxpayer money, if only you keep electing us without ever actually asking how that plays out in the real world of diminished returns, an aging society and an already overtaxed electorate. California is also trillions in debt along with almost a trillion dollars of infrastructure (roads, bridges, dams, canals) work that needs to be done immediately.

Through this maelstrom, Gov. Brown is leading in polls to replace Senator Feinstein if she retires and the California Legislature has solid approval ratings. Yet crime soars in all major California cities after the passage of anti-cop, anti-incarceration propositions (47 and 57) and AB109. Democratic voters, moreover, allow the governor to reign over a “green clergy or green clerisy state,” says Joel Kotkin, to the detriment of the very constituents he claims to help with his anti-carbon, non-negotiable environmental policies.

Now cities such as Hermosa Beach want to be carbon-free without ever asking the economic, long-term, scalable viability of renewable energy to replace coal or gas-fired power plants. With the difficulties imposed by environmental mandates, (which do nothing to offset coal-fired carbon use by countries such as Germany, the U.K., China, India, most of Asia and Africa), the U.S. Census Bureau now reports housing permits and construction have slowed in Los Angeles County. Los Angeles, where I am based, continues to pass higher taxes while flouting federal immigration law. When does the madness stop? Or does it ever, particularly if Prop. 13 is overturned and state revenue would soar. That is an ever-looming possibility to solve budgetary gaps, but California continues voting for Democrats who govern this way.

What California has become, moreover, is a paradox of dysfunctional Republicans and Democrats who aren’t the kind of Democrats our parents grew up under – Pat Brown, FDR, Truman and Kennedy – men who cared about middle class prosperity and jobs, instead of billionaire Tom Steyer’s environmental edicts. Which is ironic, since he made billions off fossil fuels. We also lead the nation in illegal immigration, increasing welfare recipients, decreased incarceration causing skyrocketing crime rates and a overregulated middle class that is fleeing the state. But this is good for Democrats since the arriving poor take their place hoping for generous entitlements, service jobs or some type of government employment that benefits the California Democratic Party. It’s a perfect storm of how California is headed into a very dark pit of titanic proportions.

According to a Social Science Research Council report California has the most un-equitable levels of income, education levels and standards of living between coastal and inland communities. But as Joel Kotkin states: “Our emerging republic of climate” will only exacerbate these problems while tech, entertainment and media companies keep headquarters in California, but the real work is done in Texas, Nevada, North Carolina and other low cost, low tax states. California, however, was once the heart of the American dream, but the Democratic Party and apathetic, longing-for-Reagan-Republicans have killed that dream until voters change their patterns.

California losing its manufacturing base, aerospace and military industries is analogous to the U.S. losing deterrence; seeking to recapture that lost spirit is among the most dangerous moments when great powers lose their way. California and the U.S. will find this out at their peril whether this year or in the near future – but we will find out.

Allowing the North Koreans to develop an ICBM or signing a nuclear agreement with the world’s largest sponsor of terrorism – Iran – or letting the Chinese militarize the $5 trillion a year South China Sea while backing down to Assad continuing to gas his population are the same as California wholeheartedly believing in climate change/global warming without ever asking the consequences of your actions? California and the U.S. are on a sure-fire path to war – militarily and economically – because what was once normal (deterrence and middle class prosperity) have been replaced by fashionable, progressive policies. The false canard of sloganeering has taken over from that passé, dullard way of studying how economies grow, jobs are created and families being at the epicenter of public policy is no longer in vogue.

I implore California voters to begin asking themselves, their families and friends why they keep voting for the same public officials while expecting different results. Further, President Donald Trump doesn’t need us – and would beat Hillary Clinton again if the election was held today – so the Legislature and Gov. Brown should make nice immediately. One strategically placed nuke flips California’s massive electoral college votes to the next Republican running for president. That’s not made up scenarios, but realpolitik at its scariest. So stop the nonsense and imprudent hatred of the president. Our lives and state may depend upon it, quicker than we want to believe.

While elite, California enclaves decry high crime rates, they voted for the very people who put in place the propositions that treat criminals the way a parent treats a child who takes an extra piece of candy. Deterrence works – for societal criminals, murderous, nation-state tyrants and for California policymakers – but for now, sticking our heads in the sands and hoping for the best while Senator Kevin de Leon and Gov. Brown shove climate change legislation down our economic throats won’t stop North Korea or the downfall of California.

Todd Royal is a geopolitical risk and energy consultant based in Los Angeles.

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The #NeverTrump Crowd Owes President Donald Trump An Apology

April 20, 2017 By Todd Royal 2 Comments

donald-trump-3Before launching into this piece I know wonderful conservatives who are part of the #NeverTrump ideologues. I also have close, personal friends – even mentors – who are still part of this movement; but now for the good of the country, California and professional reputations I implore all of you to let prudence be your guide. Stop your continued misguided, ridiculous and frankly embarrassing behavior and admit he is a great, conservative president who actually stands up and fights for what is best for the United States and California.

Let’s review what President Trump accomplished in one week. He got Judge (now Associate Justice) Neil Gorsuch onto the Supreme Court, and according to Senator Tom Cotton (a former member of the 101st Airborne, served in Iraq and Afghanistan), “Restored America’s credibility in the world,” after striking Syria over their chemical weapons attack. Senator Cotton further remarks:

“It’s also telling that the strikes in Syria occurred while President Trump dined with President Xi Jingping of China since the president has repeatedly expressed his concerned about North Korea and expects China to restrain Pyongyang.”

No fan of President Trump, Ian Bremmer, president of Eurasia Group, echoed the same sentiments as Sen. Cotton, that Trump understands the rough and tumble world of international diplomacy. He one-upped President Xi by making him wait an hour for his arrival at their recent summit the same way Ronald Reagan first greeted Gorbachev on a cold winter day wearing only a suit while Gorbachev was bundled in a heavy top coat and scarf. Trump understands what Obama didn’t, and the Chinese have begun changing their behavior after the summit, when it was reported by Reuters that China is turning back North Korean coal (North Korea’s main export) from their docks.

“But wait,” the #NeverTrump crowd will say, “Donald Trump is an ally of Putin and aligned himself with his crude behavior against American interests by wanting normalized relations with Russia.”

Sen. Cotton takes issue with that line of reasoning from the #NeverTrump crowd when he further stated in an op-ed for the New York Times (not the biggest President Trump fans by the way):

“Russia’s geopolitical standing has taken a severe blow. Mr. Putin was powerless to protect his client in Damascus. Moscow now faces a Hobson’s choice of empty words of condemnation or escalation on behalf of a global pariah, which risks further American action. After years of Russian aggression being met by empty American words, now Mr. Putin finds his credibility at stake.”

Or, as my former graduate school professor Victor Davis Hanson recently opined about “redline threats” in a brilliant article titled, “Ancient Laws, Modern Wars,” when smaller nations (Russia, China, North Korea, Iran) believe deterrence is nothing more than hollow words – which the former administration gave the U.S. and the world – then wars such as World War I are the outcome. Words need forcible actions and this president and his secretary of state are proving that on a daily basis.

Even a former high-ranking Obama administration official despaired over the moral depravity and ineptitude of her former colleagues and boss who knew chemical weapons were still in Syria, lied about it anyway, and did nothing to stop this latest chemical attack – except having the Treasury Department:

“Quietly introduce last minute treasury sanctions against Syrian officials involved in chemical warfare. Assad in particular.”

In other words, President Obama’s administration, led by former Secretary of State John Kerry (Kerry said, “100 percent of chemical weapons are out of Syria”), knew Putin and Russia had done nothing about Assad’s chemical weapons, continued the myth, or are such gross incompetents they had no idea that Putin’s government didn’t keep their promises to remove Assad’s chemical weapons.

That would mean the 16 U.S. government intelligence agencies, “that work separately and together to conduct intelligence activities considered necessary for the conduct of foreign relations and the nationals security of the United States,” never spoke with, wrote a memo of, or even had an underling relay that information (chemical weapons still exist in Syria) to President Obama, his national security team (led by Susan Rice), or former Secretary Kerry.

But the Republican purists and #NeverTrump crowd will still argue and debate President Trump’s merit as a leader, policymaker and how he isn’t presidential enough for their liking. As Dennis Prager articulates in a recent column: “Purists Kill Whatever They Believe In,” whether health care reform (Obamacare is still law costing hundreds of billions in taxes, wages and premiums), no hope of tax reform (also costing hundreds of billions), or not having the ability, reasonable level of competency and skill to actually govern, which purist Republican are demonstrating right now in California and the U.S. Congress.

Why wouldn’t he go to Twitter to bash his own party and the press? Given the above example does any reasonable person believe he will receive fair coverage by the press and his own party at this time?

Ironically, his tweets of Sweden being overrun by terrorist-immigrants and President Obama spying on him have more truth than falsehoods to them. Read Eli Lake’s piece in Bloomberg on Obama officials spying on Trump transition team members where NSA Susan Rice was behind breaking the law and high-ranking national security officials (Deputy Defense Secretary Evelyn Farkas) admitted to spying on the incoming administration along with high-ranking officials from the National Security Council, Department of Justice, the Office of the Director of National Intelligence and the CIA.

But Trump is a buffoon and un-presidential, correct? Now the Swedish Prime Minster has said, “His country will never go back to the days of mass immigration,” after the failed asylum seeker (who launched the recent Swedish terrorist attack) was let in Sweden without being vetted. The #NeverTrump crowd and Republican purists owe President Trump their deepest gratitude for their safety, because he doesn’t seem so wrong after all – now does he? And whom do you trust – the eloquent, former law school professor or the rough and tumble real estate developer?

Yet Republican policymakers are still blaming President Obama while not working with Trump for their inability to pass any of the above changes. This was confirmed by Congressman Frank Lucas (R-Ok.) to Politico when he said, “Clearly President Obama gave us a common focus. Now that he’s gone, we have to govern.”

Congressman Lucas and his ilk should be voted out of office. Either govern or at least support the president, because members like Congressman Lucas and California State Republican Senator Anthony Cannella are killing the Republican Party while making the case for the continuation of leftism perpetuated by the Democratic Party.

Using the reasoning that the enemy of the good is the perfect, here are a few questions for the #NeverTrump crowd: Who else was going to beat Secretary Clinton? I voted for Cruz and supported Rubio wholeheartedly until he dropped out of the race, but if it weren’t for Trump in Florida, Rubio loses, to the detriment of Florida and the country. Were Drs. Thomas Sowell and Victor Davis Hanson wrong for supporting Trump? Are they stupid, unwise, without domestic or international knowledge or simply non-prudent bumpkins? Not hardly.

Final question for The National Review and The Weekly Standard folks and California policymakers who didn’t support Trump, and still lost: After your high-priced and overpaid columns, speeches, lectures, luncheons, dinners, conferences, radio and television appearance along with week long cruises around the world, where you are all speak and no action, what would you have done if Hillary Clinton had won and the Democrats were in control?

Because for 99.9 percent of the world under assault from the U.S. and California Democratic Party over social issues (abortion, gay marriage – support it or else – transgender rights – also support it or else, and global warming – unfortunately, support it or else) not to mention the disaster that is taking place around the world echoed by Victor Davis Hanson and for California, written extensively by Joel Kotkin over its forthcoming financial and societal meltdown there are few options over our intrusive, leviathan government. What are your answers? As opposed to we hate Trump’s tweets and he isn’t Reagan?

Trump is confronting Russia, China, North Korea and Iran the way Reagan confronted Russia. Secretary Tillerson is exactly what is needed to deal with those four bastard countries. The day of niceties red-reset buttons with Russia are over.

Here’s what today’s Democrats are giving us: Higher taxes, horrible racist, crime-infested cities, poor infrastructure, failing universities and public education, higher taxes, global warming policies costing trillions and most Republicans go right along with it like lambs to the slaughter. Is it any wonder the country elected Trump? Paradoxically, these same Republicans and the #NeverTrump crowd still haven’t repealed Obamacare, cut taxes or begun rebuilding the military – it’s been Trump – and it’s why you owe him an apology. Begin working with him, and start preparing for the foreign policy disaster that is coming our way when California implodes and China/North Korea, Russia or Iran attacks us.

Todd Royal is a geopolitical risk and energy consultant based in Los Angeles.

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The Disaster of Believing in 100% Renewable Energy

March 1, 2017 By Todd Royal 8 Comments

Solar panelsSenate Bill 584, the California Renewables Portfolio Standard Program, introduced by state Senator Kevin de Leon, would reformulate the calculations for how much energy California would receive from renewables while eliminating fossil fuels. Senator de Leon wants to amend Section 399.11 of the Public Utilities Code relating to energy that currently states by December 31, 2030, California would have retail sales of renewable energy at 50 percent. Under the senator’s bill, California would have 100 percent of energy only from renewables. Currently, the U.S. receives around 10-13 percent from renewables, according to the Energy Information Administration (EIA), and sees that figure only reaching 21-26 percent by 2050.

With California it’s more severe than in other parts of the country for how much renewable energy is required for consumers and business, because the California Renewables Portfolio Standard Program already states:

“The Public Utilities Commission to establish a renewables portfolio standard requiring all retail sellers, as defined, so that the total kilowatt hours of those products sold to their retail end-use customers achieves benchmarks of 25 percent, 33 percent, 45 percent, and 50 percent.”

California already has some of the highest electricity rates in the country, and passing this bill would only exacerbate the problem while sending more companies and jobs to other states or overseas. There is a direct correlation between higher business costs (electricity being a large cost) and business relocation. Why is Senator de Leon risking this happening by upping the cost of electricity when even the EIA says a large, fully-developed economy – that is California – will have a difficult time thriving and keeping middle class families and workers with skyrocketing energy costs? Not to mention we owe trillions in outstanding debts.

Believing renewable energy is scalable, and not downtrodden when intermittent weather occurs, while having excess energy storage issues follows the same misguided policies guiding electrical vehicles. Where even with generous tax credits and beautiful vehicles built by Tesla and all major car manufacturers has still only allowed EVs to capture roughly 1 percent of worldwide car sales.

But there are even bigger problems with renewables, and this bill that need to be ascertained by Senator De Leon, Governor Brown and other advocates for turning California into a 100 percent renewable energy state. Internationally, we are seeing that countries that attempt to do away with fossil fuel realize they can’t. A great example is the U.K., which in 2016 saw oil production gains for the second straight year. Not coincidentally the U.K. also saw the best economic growth in the world per these gains in 2016. There is direct causation between oil, natural gas, and coal production linked with economic prosperity for all sectors of society.

The facts about renewables are the issues that need to be overcome before proceeding forward with SB584. According to the BP 2016 Statistical Review of World Energy – the most popular forms of renewable energy – wind and solar accounted for less than 2 percent of world energy consumption. The U.S. electrical grid will have to be completely updated and overhauled, costly trillions of dollars, because The American Society of Civil Engineers gives the U.S. grid a D+ grade in every category of electrical use. Without a state-of-the-art grid that can handle spikes and fluctuations in energy that renewables create and cause (particularly wind and solar) then California will have blackouts and expenses worse than previously experienced in the early 2000s.

During the recent rain and snowstorms that were unprecedented that is when some of the biggest energy needs occur that renewables can’t handle. Natural gas is a flexible fuel, along with coal and oil (WTI & Brent), but all forms of renewables need a fossil fuel backing them up. In other words what SB584 doesn’t address is reliability and the costs to the grid compared to fossil fuels. Beijing, China recently switched from coal to just coal-based electricity and saw costs rise 100 percent from $200 a month to $300 a month. Renewables will be more expensive than what Beijing experienced.

Moreover, Senator de Leon and legislators agreeing with SB584 need to make sure they are using the correct calculations for Energy Return on Energy Invested or at least consider the overall levelized costs. Boundary issues are relevant to wind and solar but more accurate analysis needs to use “point of use,” because wind and solar need massive changes as described above for them to work on a scalable, statewide basis. Many publications touting renewables don’t calculate this properly, and in some cases could be less than 1:1 energy-to-energy ratio.

Storage isn’t discussed enough either. If you want heat in the winter and cool air in the summer then somehow wind, solar, biomass and hydroelectric have to be stored. For now small amounts can be stored, but for extreme weather, even overbuilding solar farms and wind turbines doesn’t solve the intermittent weather and storage problems that would be caused by SB584.

Some countries such as Sweden, Norway, Finland and Switzerland have large shares of their electricity from all types of energy mixes, but even that is deceiving. The BP Statistical Review confirms these four countries have high proportions of their energy from multiple sources, but each country has low populations and significant hydroelectric supply. Currently, as an example, the Oroville Dam is old, decaying and giving away to torrential rains; therefore, would the legislature be willing to appropriate billions towards new dams and maintenance of old ones to up California’s percentage of hydroelectric? So far the answer seems to be no for environmental reasons. The EIA (source: Gail Tverberg, OurFiniteWorld.com) has also confirmed that hydroelectricity deals with the problems of intermittency, reliability, scalability and storage – the same as all other renewables.

What California needs to decide in their quest for a 100 percent renewable energy portfolio are how much consumers are willing to pay in their quest for energy parity? Californians can only purchase what wage growth predicates, and if the cost of a commodity increases (energy) then wages, though rising, aren’t keeping up with the cost of living or doing business. Peak energy is a myth, and there is more oil and gas than the world can fathom. Thus energy demand comes not from a lack of supply but from a lack of affordability, seen from the Beijing example.

Rising costs don’t translate necessarily into a more prosperous society. What SB584 doesn’t take into account are what happens to fossil fuel companies that still have to pay interest on loans, continuing retirement benefits for workers and pipelines that have to operate for 365 days a year. The question isn’t renewables versus fossil fuels or vice versa, but the question is whether California is willing to pay for two systems of electricity. There’s the rub, and more than likely, unless you can afford higher electricity costs, the state will see more businesses and middle class families along with their taxes, leave the state.

Todd Royal is an independent public policy consultant focusing on the geopolitical implications of energy based in Los Angeles, California.

This piece was originally published by Fox and Hounds Daily

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How Iran and North Korea Could Wreck California’s Energy-Dependent Economy

February 17, 2017 By Todd Royal Leave a Comment

Iran OilIt’s difficult to ascertain what non-OPEC, and even some OPEC members will do about future supply cuts and how this will affect the California economy. According to energy trader Martin Tiller, “90 percent compliance is a good sign for OPEC, but Venezuela, UAE and Iraq aren’t following commitments.” Contrary signals are also coming from Nigeria and particularly Libya. New specters of doubt have also been raised whether Nigeria will be able to deliver vast amounts of new oil to the market. This is all good news for OPEC though prices are still struggling to reach the $60-70 a barrel range because of oversupply problems. The market is having a tough time finding equilibrium, and U.S. shale producers are ramping up production, causing prices to stay in the mid 50s. These are all interesting aspects of energy markets, but there are other factors for California to consider moving forward with the state’s energy and economic portfolios.

What California policymakers should begin concerning themselves with more than President Trump’s energy policies, shale producers and OPEC compliance are the two dynamics that could make oil jump significantly in the future – the geopolitical rumblings coming from Iran and North Korea.

These geopolitical-investment risks are financial pieces not being mentioned enough by state agencies responsible for energy regulation, large energy companies such as Chevron based in California, the Legislature and Gov. Brown. Both countries have upped their belligerence towards the world community, and that doesn’t bode well for consumers, which could add further hardship onto California’s economic fortunes.

Recently, the National Iranian Oil Company (NIOC) reported the discovery of multiple new fields with 30 billion barrels of crude reserve, and the Iranians are ramping up production to Europe in spite of other OPEC members cutting back production. NIOC also wants to boost oil production up to 4 million barrels a day.

Higher exports and increased oil production gives Iran billions in additional resources to cause global disruptions. However, the major uncertainties for California and world energy markets are whether the Iranians continue flouting United Nations ballistic missiles sanctions. These actions by a powerful nation and member of OPEC reveal the underlying significance and implications of future California energy developments. With California being one of the largest economies in the world, the economic forecasting entities (whether private or public) need to begin analyzing the Iranian dynamic.

California decision-makers also need to understand that Iran is not the pre-sanction weakling they once were, but instead is a rising global energy powerhouse with the means and capability to develop any type of military weapon system they deem necessary for the regime’s survival.

The western world led by President Obama, with California’s backing, and Iran began pursuing détente towards normalizing relations in 2015 with the nuclear weapon agreement between the P5 + 1. California markets welcomed those stabilizing signals, but that isn’t the case anymore. Iran is now a Middle East hegemonic force that has to be recognized by California citizens, public officials, energy investors and firms.

Nicholas Hereas of the Center for a New American Security believes:

“In order to confront Iran or push back more fiercely against it, you may find you’re in a conflict far more far-reaching and more destructive to the global economy.”

This plausible scenario could cause California gas prices to return to the days when wars in Iraq, continued Sunni-Shiite tensions and Hezbollah (an Iranian military proxy) fighting Israel in Lebanon caused oil to rise above $100 a barrel. Only focusing on supply and exploration & production (E&P) profitability without considering geopolitical-investment risk is either a boom or a curse for California. Hedge funds have taken historic long bets on oil rising, but wars and conflicts cause markets and governments to move in unforeseen ways. And with companies such as PIMCO and other investment management firms based in California this could open up our economy to a host of unforeseen risks.

This is why the Institute for the Study of War in a recent report said:

“For the first time in its history, Iran has developed the capacity to project conventional military force for hundreds of miles beyond its borders. This capability, which very few states in the world have, will fundamentally alter the strategic calculus and balance of power within the Middle East.”

These are turbulent winds to not take Iranian threats seriously. Having state investment pension risk equations that don’t account for how Iran acts in the Middle East now that their influence stretches from Tehran to Mediterranean while simultaneously fighting conflicts in Syria, Iraq and Yemen seems misguided. Moreover, they command tens of thousands of proxy militias, and without factoring these real-world facts into the price of servicing California’s trillions of dollars of debt doesn’t seem prudent either. Unfortunately, political risk and production are now equal partners when it comes to Iran and California’s economic stability.

North Korea is never mentioned in relation to California oil prices, but could very well be the biggest reason gasoline prices skyrocket at the pump. Thae Yong-ho one of the highest-ranking officials in the North Korean government to ever defect ardently believes Kim Jong-un would attack the U.S. with nuclear weapons if his regime were on the brink of failure. Mr. Yong-ho further elaborated the North Korean leader lives a secretive, isolated life that includes no one having the location of where he even lives. Kim Jong-un is further painted:

“His ability to wreak harm should not be underestimated if his very survival were threatened he would lash out and destroy whatever he could and once there was an effective nuclear arsenal the leader would be prepared to use it.”

In early February, North Korea tested a ballistic missile, which could be used to further its quest for an intercontinental ballistic missile (ICBM) that could eventually strike California. A U.S. Pentagon spokesman, Navy Captain Jeff Davis stated:

“North Korea openly states that its ballistic missiles are intended to deliver nuclear weapons to strike cities in the United States, the Republic of Korea (South Korea), and Japan.”

For California officials to not imagine a scenario where North Korea has the ability to strike major oil producers and consumers doesn’t seem shrewd. The difficult part for California energy regulators, energy firms, and consumers are how to measure the likelihood of North Korean belligerence into our economy?

Additionally, China is now angered that North Korean and Iranian sanctions placed on those countries have now affected Chinese firms. China has close economic and diplomatic ties with both countries, but particularly North Korea whom they share a border with on the northeastern part of China. North Korea needs China since they are its biggest trading partner along with its main source of food, arms and energy. Despite all this, China has allowed North Korea to continue multiple nuclear tests, and doesn’t appear likely to stop them anytime soon. This seems a perfect opportunity for Gov. Brown to push for closer ties between China and California to counter this risk.

Long-arching trends have been building up between North Korea and western-aligned nations for decades. At least Iran has OPEC to constrain them, but seemingly North Korea only has China to keep them from having a negative enduring impact on the global economy. Therefore, would China allow North Korea to fire off an ICBM towards California if that would have a lasting impact on their ability to grow their economy without abundant fossil fuel availability? The South China Sea standoff is just one example when confrontational geopolitics and economic trade collide – and the results can be disastrous – unless properly managed.

Relative oil and gas price stability has returned since prices have risen the last few months, but 2017 could see energy upheaval. Likewise energy asset prices for California could swing wildly, not at all, or somewhere in between. But geopolitical tumult could cause everything within the California energy value chain to wildly escalate; catching the state flat-footed the way the housing crisis in 2008 caught many banks off guard. The economics of oil and gas can manifest frustration in many ways, but what California officials at the local, county and state level shouldn’t overlook are how Iran and North Korea are shifting global conditions and energy markets.

Todd Royal is a geopolitical risk and energy consultant based in Los Angeles.

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Renewables Have Glaring Obstacles to Overcome for California

February 1, 2017 By Todd Royal 1 Comment

Solar panelsBloomberg is now reporting that solar energy is cheaper than coal, and could become the lowest form of energy within a decade. Economies of scale are causing solar to drop from an average of $1.14 a watt all the way to .73 cents per watt by 2025. This should be great news for California’s overwhelming embrace of renewable energy.

Agencies such as the U.S. Department of Energy’s National Renewable Energy Lab to the International Energy Agency all confirm this decline in costs. Capacity for solar is doubling causing lower costs for bank loan premiums and manufacturing capacity in the solar energy space; and now with Tesla’s gigafactory opening, the cost of batteries is also expected to drop for electric vehicles and home battery systems.

China also plans to invest over $360 billion on renewable energy and fuels to help decrease their serious smog issues. Unsafe, coal-fired power plants are currently suffocating that country’s air supply. And California can feel the affects of China’s crippling smog depending on seasonal wind patterns.

California could be entering a new era in energy, and an era renewable investors and environmental advocates have been touting this century. Unfortunately they are overlooking glaring weaknesses, and for renewables to truly breakthrough into a low-cost, scalable energy along the lines of coal, oil and natural gas numerous obstacles such as costs, back-up generation power, storage and grid modernization will need to be solved.

Gov. Brown, the California Legislature and the California Air Resources Board need to understand the true costs and limitations at this time when using renewable energy.

Yes, costs are possibly going down for solar and wind, but is that truly the case? And while costs for manufacturing and kilowatts per hour are dropping that isn’t the final costs when it comes to renewables. The BP Statistical Review of Global Energy in 2015 showed renewables provided only 2.4 percent of total worldwide energy needs, hydroelectric power generated 6.8 percent and nuclear came in at 4.4 percent. California citizens and businesses need clean fuel, and at this time renewables can’t provide that for them.

Moreover, no matter how much renewables are touted as a replacement for fossil fuels, and even with positive economies of scale, they still will not overtake coal, oil and natural gas in the near future even with AB32 and SB32 in effect.

Weather is the biggest hindrance for both solar and wind, but not as much for biomass or hydroelectric – though hydroelectric, or the process of damning water for electric use, can run into serious environmental issues. But if the sun isn’t shining and the wind isn’t blowing then solar and wind become difficult to use without fossil fuels – particularly natural gas and coal-fired power plants – backing them up. Additionally, batteries have not caught up to enhanced storage for renewables, and they aren’t productive enough for entire California cities, counties and the state at-large.

When looking at the total cost of renewables versus fossil fuels there really isn’t a comparison in the near-term future because wind and solar can only generate intermittent electricity. Fossil fuels can run without backup supplies, and then factoring in levelized costs for renewables makes them under-productive and more expensive as a wide-scale energy source for California.

As much as California continues using renewables it still hasn’t been achieved without fossil fuels backing them up. The Energy Information Administration’s Annual Energy Outlook 2017 to 2050 (page 13) only has renewables at 18-26 percent penetration by 2050 in the United States. The equivalent of not understanding the facts about renewables are how electric vehicles currently only have 1 percent of the market and are projected to only have 6 percent by 2040, but are highly touted as being able to replace the combustible engine vehicle.

Energy storage and grid modernization are separate issues for California policymakers to understand, yet the two issues are linked together in many ways. How energy is stored from fluctuating renewable sources (wind and solar) are needed to accommodate, “multiple grid services, including spinning reserve and renewables integration.” To improve the problem of intermittent generation for resources such as wind and solar the EIA recommends:

“Examine the potential for transmission (grid) enhancements to mitigate regional effects of high levels of wind and solar generation while developing higher resolution time-of-day and seasonal value and operational impact of wind.”

Further, the EIA also perceives utility rate structure for different levels of photovoltaic solar generation being needed to control costs for consumers and industry when using renewable energy. What the EIA is saying is that renewables fluctuate in power generation based upon different weather patterns, which causes the grid to fluctuate. These upward grid spikes are then passed on in higher electricity costs to utility’s customers. It is one of the reasons California has some of the highest energy costs in the United States due to its heavy reliance on renewable energy.

The most important component in the entire process of renewables overtaking fossil fuels for a cleaner future is grid modernization. According to T. Boone Pickens, “The electrical grid of the future will have to be built,” for renewable energy to overcome the above-mentioned hurdles. With California’s exploding pension costs it is difficult to envision a brand new, multi-trillion dollar grid being built in the near future.

Renewable energy has incredible potential for California, but until power grids are modernized renewables will lag behind fossil fuels through rising costs and unstable energy delivery. California’s electric grids can’t handle millions of electric vehicles, varying, spiked energy from wind and solar and the ability to be flexible the way a natural gas power plant is at this time. The best power plants for energy efficiency and lowering carbon emissions while keeping costs reasonable are natural gas. A natural gas-fired power plant is the biggest reason coal is losing market share in the United States.

Majorities of Californians want renewables to be the number one source of energy in our state’s portfolio for cleaner air, water and a healthier environment. But instead, renewables like electric vehicles have taken on a fad-like quality without the technology having caught up to the hype. CARB needs to look at the facts, and not the emotions that currently lead the renewable energy debate. Let’s not pit renewables against fossil fuels, but look to incorporate the different energy sources into what’s best for California and the United States.

Todd Royal is a geopolitical risk and energy consultant based in Los Angeles.

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What President Trump Will Mean for California’s Economy

December 24, 2016 By Todd Royal 6 Comments

donald-trump-3Since Trump’s election we’ve seen a national rebound in consumer, small business and large corporate confidence. The American business and worker class seem to be saying what Californians don’t want to hear: We want an economy not stifled by environmental and tax regulations. We want a president that understands, “It’s the economy, stupid!” California once had that type of mentality, but now with an economy that mostly produces temporary, low paying, service sector jobs where are the positives for the California economy?

The answer is everywhere. Progressive policies were a great idea over a hundred years ago when they were meant to curb female abuse at the hands of alcoholic husbands, child labor in Chicago meatpacking sweatshops epitomized in Upton Sinclair’s, The Jungle, and breaking down corporate monopolies. Former President Theodore Roosevelt led that charge for the working man and woman.

That day has passed, and now gentrified environmental billionaires such as Tom Steyer and his legislative lackeys tow the global warming line for coastal elites. Unfortunately, most of California – and even wealthy Los Angeles – suffer the policies of leaders such as Senate Pro Tem Kevin de Leon’s job killer bill like SB32 and the boosting of AB32 into further restrictions on economic growth.

There isn’t a green economy that comes close to what Trump is proposing to do for energy exploration on public and private lands. Factually, there isn’t such a thing as the California green economy. It doesn’t exist. Nor does it produce anything resembling large-scale economic progress the way oil and gas exploration produces millions of jobs, and billions of tax revenues.

This is what President Trump will pursue when it comes fossil fuel extraction as a nationwide policy. And this will include California, especially if Trump does away with the moratoriums on deep water drilling for oil and natural gas off the California coastlines.

California has billions of barrels of oil and trillions of cubic feet of natural gas. The tax revenue produced by this could turn California into an economy that could reach the second largest in the world. If California would turn their back on the fallacy of the green economy and embrace sensible exploration our public schools could be the envy of the U.S., our infrastructure needs taken care of without tax increases, and a true, thriving middle class. Not the progressive haves and have-nots currently seen in California.

This is what Trump has in mind for the U.S., and dare it seems California could be on his radar to expand American energy opportunities.

Trump’s cabinet picks have all indicated economic growth will be their number one priority, and re-establishing America’s preeminence in the world through a larger blue water navy. What this means for California is hard to understand, but one thing is certain, the tech sector will see growth supplying the U.S. Navy with state of the art software. But China’s recent belligerence could be a bellwether of things to come for California’s economy; if the Chinese begin to make their markets even tougher to enter, this doesn’t bode well for California exports.

Sanctuary cities in California could also see a hit with cheaper labor on the downturn if Trump keeps his campaign promises and begins deporting illegals that are criminals, and not allowing the DREAM Act to continue through executive action. The rush for asylum could see Trump’s Justice Department and I.C.E. taking on Gov. Brown and the California Legislature.

Does California have the stomach for federal funds being cut off? Trump doesn’t need California, more than California needs the president-elect, and the federal dollars he is soon to control. The politics of this issue could be a harbinger for the legal fights and strength of the federal government California will be dealing with in 2017. What happens when Trump appoints the next Supreme Court justice, and then could go after the special status of illegal aliens/undocumented immigrants. California will lose. It’s hard to imagine Brown and the Legislature along with the Congressional delegation negotiating sensibly with Trump and his administration.

Special status will be reserved for California’s fixation on global warming led by Gov. Brown and coastal elites in San Francisco and the west side of Los Angeles. When Trump and his cabinet increase energy, but not necessarily renewables, California laws – AB32 and SB32 – won’t have the ability to make much of a difference. Though they don’t really work as intended anyway.

And with economic growth taking precedence over Paris Climate Agreements and the Clean Power Plan the rest of the U.S. will need cheaper energy that oil, natural gas and coal provide. Further, California’s dream of electric vehicles, solar panels and windmills powering California will not grow and the bullet train will be dead on arrival for the incoming administration and Congress.

California will also not be able, or allowed, to stop shipments of coal that the Obama administration encouraged and certainly didn’t stop. Not to mention the legality of the issue. California again will run into a juggernaut of federal laws, regulations and a hostile federal government if coal shipments are not allowed through California ports to reach an energy hungry China, India and the rest of Asia. Those are American jobs, and votes for Trump’s re-election that he more than likely won’t allow California environmental policy to dictate how and where coal is shipped from our ports. Global warming won’t be high on Trump’s vision of American growth, and it was misguided policy by the Obama administration that hurt Americans of all economic stripes.

We’ve already seen how Trump has dictated new water policies to California that doesn’t involve climate change, or EPA policies curbing manufacturing, but instead showed how water enhancement can assist farmers and development in the Central Valley. Anything that grows the economy will be at the forefront of the Trump administration, and not the reduction of greenhouse gases. These were all economic harbingers shunned by California and the Obama administration’s Commerce, Interior and Energy Departments along with his EPA. That won’t be the case with President Trump.

Economic opportunity will rule the next four years, and because California supported President Obama’s use of executive orders, and his famous, “I’ve got a pen and I’ve got a phone,” form of governance, California can expect the same. The expansion of federal powers under Obama will be stretched to block California progressive laws that don’t coincide with Trump’s presidency.

A Republican House and Senate will thumb their nose at California’s economic and social gains seen under Obama that will be hard to stop if Trump decides he’s had enough of our voter’s malfeasance towards him. The problem with supporting Obama’s way he governed by executive fiat won’t be able to counter Trump is moving beyond the Constitution since that is what Obama has done for eight years with California supporters cheering his every step.

California was certain that Trump would lose and Clinton would expand every social whim most of America finds disdainful. Economic reality will be coming to California and our environmental laws, because Trump can ignore this state for his entire presidency. If you take away California’s bloated vote totals then he won the popular vote by over 1.6 million. We better understand a new dawn is arising, or our economy could be left behind in more ways than we can imagine.

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