EcoLogic Blog

This has been an exciting few weeks for energy: The stimulus bill had a mix of funding for renewables and efficiency, proven technologies and emerging ones. And maybe you got just as excited as I did when Obama said in his pseudo-State of the Union: “…I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America.”

To complete the trifecta, Obama released his proposed $3.55 trillion budget yesterday. It’s got significant funding to address the energy problem, both in terms of expanding homegrown, secure energy sources, building up our renewables capacity, and making our existing infrastructure more efficient. Here’s the latest:

• Includes $15 billion per year for renewable energy programs
• Proposes a five-year, $5 billion high-speed rail state grant program
• Uses money from a cap-and-trade program to pay for middle-class tax cuts and further investments in renewables
• Investments in R&D and demonstration of smart grid technologies (i.e. a more efficient transmission system)
• Investments in carbon capture and sequestration projects (sometimes called “advanced coal technologies”)
• Funds for the development of space-based research sensors for climate monitoring
• Creates a new Energy Innovation Fund to support an energy-efficient housing market — including retrofits of older, inefficient homes

Cries of over-spending have already come up from some camps. But spending on energy addresses the vital issues we can all agree on: Cutting our reliance on foreign sources of energy, securing our energy supply, making our energy more efficient and clean, and growing a new sector of our economy.

via the Washington Times, Earth2Tech.com and AFP

Momentum is the quarterly magazine of the University of Minnesota’s Institute on the Environment. The Institute is the University’s research hub tackling all issues environmental, including climate change and renewable energy. They’re doing some really fantastic work - go check them out.

Experts from the nonprofit sector, business and the blogosphere were asked to give President Obama advice on energy policy. Read my letter on page five of Momentum.

In early February, Growth Energy – a prominent ethanol trade association – held a press conference in Washington D.C. to announce former U.S. Army General Wesley Clark as its new co-chairman. The announcement adds another high profile name to (what I refer to as) the “biofuels battle.” 

During the press conference, General Clark was clear on delivering the latest Growth Energy objective; to remove the 10 percent federal blending cap (which limits the amount of ethanol a state can blend into gasoline). He also highlighted the immediate potential for the creation of green-collar jobs by the ethanol industry and pushed for the advancement of cellulosic ethanol.

As a prominent and widely respected political and security figure, the addition of General Clark can be considered a smart and strategic move on the part of Growth Energy and an overall benefit for the entire ethanol industry. And General Clark isn’t new to the energy world: he has been a long-time advocate of clean, renewable energy as a way to strengthen national security. By introducing him as voice for the ethanol industry, Growth Energy draws upon General Clark’s expertise in energy security and keeps the topics of ethanol capacity and demand in the media headlines.

As the economy continues to be the primary concerns for most Americans, it will be important for the renewable fuels industry to shift its key messaging. Positioning the ethanol industry as a producer of domestic jobs should be the lead message, coat-tailed by the importance of gaining independence from foreign oil. The industry should also make it clear that the move to cellulosic ethanol – the next generation of ethanol that does not require the use of food inputs – is dependent on the success of corn-based ethanol – both in fundamental industry structure as well as political and financial support.

There’s been a lot of discussion online about a new study from the Pew Research Center that found the public’s concern for global warming has declined. Global warming now ranks dead last out of 20 possible priorities people are worried about in 2009.

Some are wringing their hands over how to keep people’s attention focused on this big issue. But what’s not being mentioned is the fact that the #1 issue of concern among survey respondents is the economy, the #2 issue is jobs, the #3 issue is terrorism and the #6 issue is energy.

Solutions to the global warming problem are wrapped up many of the same strategies we must use to alleviate these top concerns.

Investing in a new, clean energy infrastructure can help stimulate the economy, create new jobs, secure our energy supply and end our reliance on oil-producing, unfriendly nations - all while cutting emissions and slowing global warming.

For those of us who communicate about energy and environmental issues, this study and others like it are important to watch. During these times of extreme economic stress, it’s not enough to talk about global warming for the planet’s sake. Lucky for us, fighting global warming is a bonus result of actions we must take to solve so many other issues that are top-of-mind for the public.

via Pew Research Center

Cross-posted at Maria Energia on January 28, 2009

Solar power is one of the cleanest methods of producing energy and is increasingly popular among commercial businesses and citizens looking to be more “green.”   To help aid businesses and citizens buy and install solar-powered electric systems – which can be an expensive endeavor – a number of states have implemented solar incentive programs, providing in some cases up to $10,000 in assistance.

But an overwhelming response to the programs, paired with a struggling U.S. economy, has caused funding problems for many state programs. As a result, government officials and solar enthusiasts are concerned about how these popular solar programs will fit into state budgets that are facing large deficits.

For example, Green Tech Media reported both Connecticut and Maryland have exhausted their funding for solar incentive programs designed to encourage citizens to produce clean, renewable energy. Other states experiencing similar funding issues with solar rebate programs include Colorado, Florida, New York, and New Jersey. 

According the New York Times, until recently Connecticut’s solar incentive program has “been widely regarded as the best run and most generous in the nation. Since January 2005, more than $20 million was committed to 815 residential solar projects and, since May 2005, nearly $65 million to 127 business and government projects.”  But as Connecticut faces a $6 billion budget deficit, the long-term future and sustainability of its solar program is in question.

Despite economic hardships, states will likely continue solar incentive programs in a reduced form. Appropriating smaller rebates to applicants will help stretch the allotted funding, while still supporting the acceleration of clean, renewable energy. Many states have mandated renewable energy goals, so it is important that they continue to communicate the importance of renewable energy as a long-term investment; one that may have to be adjusted – but not abandoned – during tough economic times.

As many of us are making resolutions for the New Year, Times Square will be kicking off 2009 in a mighty “green” fashion.

On December 29, the Coca-Cola Co. announced that it will be the first company with billboards advertisements in Times Square to be powered by wind (Disclaimer: Midwest Coca-Cola is a client of Tunheim Partners). Coke’s new wind-powered billboards (both in Times Square and three neighboring buildings) are estimated to save 1,866 metric tons of carbon dioxide each year. According to a press release from Coke, this is the equivalent to removing 75 cars from the roads or converting 38 homes to clean energy for a year.

The wind powered billboards are another initiative of Coke’s “Refresh. Recycle. Repeat.” campaign. The campaign’s goal is to recycle or reuse all aluminum cans and plastic bottles purchased by consumers in the United States.

According to the New York Times, other advertisers in Times Square have also committed to changing their boards, including Ricoh. Ricoh recently installed 16 wind turbines and 64 solar panels at its 55 foot billboard across the street from where the ball drops. By generating its own electricity — enough to light six homes for a year — the sign could save as much as $12,000 to $15,000 per month. Richo says the four wind turbines and 45 solar panels will produce an average of 98 kwh of electricity per day. The same amount of electricity required by an ordinary sign would result in as much as 18 tons of C02 per year. But there are drawbacks to the new signs: Ricoh admits that when the wind doesn’t blow and the sun doesn’t shine, the boards will go dark.

Nonetheless, these announcements demonstrate how a company can make a commitment to greener operations and successfully help to position itself as a leader in green America. For many businesses, not every eco-friendly initiative will garner the same level of media attention; however, strategic planning and proper timing can help a company reap the benefits of green initiatives - both in public image and long term sustainability.

Higher Gas Prices if Cellulosic Ethanol Industry Cannot Pull Its Weight

It appears that the cellulosic ethanol industry is having a hard time delivering on its promises and living up to the expectations set by the Renewable Fuels Standards.  A survey conducted by ThinkEquity — research-centric institutional investment bank focused on the growth economy — indicates that the cellulosic industry will come up 71 percent short of its 100 million gallon per year goal it had set out to achieve by 2010.  According to the survey, only 28.5 million gallons of cellulosic ethanol will be produced in the United States in 2010, leaving a 71.5 million gallon shortfall.

What does this mean for to the average consumer?  It may mean higher prices at the pump.

By 2010 fuel retailers are required to blend a certain percentage of their gasoline with cellulosic ethanol. If a retailer cannot find the necessary cellulosic ethanol on the market (due to a 71 percent lack of production), they are required by the Federal government to cover any shortfalls by buying credits from the Environmental Protection Agency.  The credits will cost retailers the difference between whatever the wholesale price of gasoline happens to be and $3.

Greentech Media broke it down like this.  So let’s say today it’s 2010 and fuel retailers are paying a wholesale price of $1 per gallon of gas (which is pretty close to our current wholesale prices).  For every gallon of gas they purchase that does not have the necessary amount of cellulosic ethanol blend, the retailer would have to pay $2 per gallon instead of the $1 per gallon wholesale price.

This means the retailer would be paying double the wholesale price for gasoline solely because the cellulosic ethanol industry did not produce the necessary amount needed for retailers to meet federal standards.

And it’s the consumer who is likely to be picking up that cost.

So why is the cellulosic ethanol industry struggling? The reasoning behind this lag in production is because very few companies have been able to bring cellulosic ethanol into the commercial market. Most are still in the research and development stages of production.

Also, many companies have delayed cellulosic plants because the necessary capital is becoming scarce. And although we were all relieved to see a drop in gas prices, lower gas prices also curb enthusiasm for ethanol investing.

Increases in the cost of ethanol will make the fuel a tougher sell to consumers already struggling. The biofuels industry can’t afford another backlash like we saw in the great food vs. fuel debate of 2008 that unfortunately damaged much of its credibility (and which turned out to be largely unfounded). It may also become more difficult for policymakers to continue to back renewable fuel initiatives.

Americans must not forget why the U.S. began its most recent push for renewable energy in the first place. The biofuels industry will need to remain consistent in their messaging that gasoline prices are volatile. Just as quickly as prices fell, gasoline prices in the U.S. could – and most likely will – reach $4 per gallon again in the future. When this occurs, biofuels will continue to be the most viable solution for reducing the country’s dependence on foreign oil and creating a sustainable energy source for the future.

I was back on Minnesota Public Radio’s “The Week” from “In the Loop” with Jeff Horwich. “The Week” is an entertaining and informative program that provides perspective and context to the week’s news, and I was on to talk about Bush’s latest executive orders opening up mining in Utah, oil shale development in the West and offshore drilling. Listen to the show here (forward to 1:16 to hear my segment).

On Thursday I was invited to a call-in news conference hosted by the leaders of the major renewable energy trade associations in the U.S.:

• Randall Swisher, Executive Director, American Wind Energy Association
• Karl Gawell, Executive Director, Geothermal Energy Association
• Linda Church Ciocci, Executive Director, National Hydropower Association
• Rhone Resch, President, Solar Energy Industries Association

All of these industries were obviously thrilled at the prospect of a new administration that has so explicitly committed to advancing clean energy via national renewable energy requirements, cap-and-trade mechanisms and investment in efficiency. That commitment, coupled with the crippling economic crisis and the global warming problem make it clear that renewables can play a valuable role in addressing our energy security, economic growth and cutting emissions. While each industry has sector-specific policies (wind and geothermal, for example, want a multi-year tax credit like solar received, rather than the 12-month one they got), they are collectively seeking the following:

• A national renewable energy standard, which would require a certain percentage of our energy to come from renewable sources.
• An extension of flexible production tax credits
• A major new investment in transmission
• An investment of $30 billion in new clean energy projects right away to help kick start the economy (President-elect Obama has stated he would commit $150 billion over the next 10 years, but these industries believe more immediate action is needed to boost the economy)
• A cap-and-trade policy

Most of these requests fall within Obama’s stated energy plans. But it would be great, Karl Gawell of the Geothermal Energy Association noted, if the Obama administration would bring solar panels to the White House, along with the new puppy. So what could slow down or stall the renewable renaissance? Not global warming deniers. Not even fossil fuel companies. Transmission. Randy Swisher of the American Wind Energy Association explained that transmission – infrastructure – is the single largest long-term constraint facing wind and other renewables.

“We can’t meet the climate challenge or the energy challenge without these green energy superhighways.”

Specifically, these renewable industries believe a nationwide transmission system – a “high voltage backbone” of thousands of miles – is essential. This doesn’t mean that states shouldn’t have a say in lines or the environmental impacts of them, but a federal coordination of the largest lines is the most cost-effective way to build the infrastructure of the country. The leaders of these renewable energy industries will be meeting with the Obama transition team and Congress to discuss moving their agenda forward. The renewable sectors also hope for a change in the new administration’s energy advisory team. Gawell explained:

“We don’t need the leaders of yesterday’s fossil fuel technology running any advisory council. It needs to be the leaders of tomorrow’s energy. But we can’t get lost in more studies and more meetings. It’s time for action and we can’t discount getting things done.”

Originally posted on Maria Energia

There’s been a lot of talk in the media and the blogosphere about what’s going to happen with renewable energy investments and efforts to regulate carbon now that the economy has taken a dive. Basically, can we afford to still be green?

In most instances I say we can. Sure, a barrel of oil is cheaper now. But as we know, that price is volatile. Continuing towards greater energy independence from fossil fuels and towards homegrown sources of energy will only help us in the long run and continue to strengthen the rural economies that (many times) are the epicenter of these resources, like biofuels and wind power.

In an interesting twist, the Wall Street bail out bill contained provisions extending the tax credits for wind and solar power plants. These are sectors that should continue to grow if we truly want to move toward a more secure energy system. What’s more, both Sen. Obama and Sen. McCain support some sort of federal law regulating carbon emissions, a major source of global warming. And more than 30 states have mandates for a certain amount of their energy to come from renewable sources. So this isn’t going to all disappear overnight.

But that’s not to say it’s all rosy, either. European nations like Italy and Poland are backpedaling on their commitments to cut carbon regulation and U.S. venture capitalist money is shrinking in some areas. While there may be real funding cutbacks in some sectors, however, policymakers must keep us on track and businesses must keep pushing the technology that can get us cleaner and greener. It’s up those of us supporting clean energy policies and solutions to communicate the economic benefits of these technologies, whether they be jobs in rural areas or energy efficiency savings. Smart energy and clean technology aren’t luxuries that will disappear with a tight market, but they are a way of life that we can grasp more fully if we keep our eye on the prize.