EcoLogic Blog

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.

I was recently on Minnesota Public Radio’s latest “The Week” segment 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 excited to talk about all the great renewable energy happenings. Listen to the whole show below or forward to 15:36 to hear my segment.

More than 800 people gathered at the FARGODOME to hear billionaire and oil tycoon T. Boone Pickens talk about his energy plan.

After the morning panel discussion, AWEA held a news conference with the panelists. This is an excerpt of the questions from reporters and bloggers (including one from yours truly) and the panelists’ answers.

Q: General Clark, what would federal energy legislation look like to you?

General Clark:

“Big picture legislation would look like cap and trade legislation, benchmark goals and a timeline, incentives, research and funding, energy efficiency standards apart from the cap and trade system and incentives to promote energy efficiency. If you put those in and probably some other pieces like dealing with the strategic petroleum reserves, you could address energy security in terms of infrastructure and protection.”

Wood didn’t think government was the most effective way to create change. What it should do is create a market, he said, like with renewable energy standards, and then let the market work itself out.

But, Clark responded, you do need a regulatory piece when you’re talking about carbon sequestration or nuclear power. To launch technologies like these, we’ll have to have a public-private partnership.

“…There are winners and losers as you move forward. It’s who gets what, how much, how soon that determines whether these programs work or not. Emphasize the best technology and spread the profit opportunities around in a fair way. Spread it wide enough to pick up the little producers as well as the big producers.”

I thought about the American Petroleum Institute/Newsweek energy series last week at Stanford, and how a few of those panel members said the real test of renewables would come when the price of oil comes back down. And so I asked these panelists: “If the price of oil were to plummet tomorrow, how would this effect renewable energy markets and the political will to keep moving in this direction?”

General Clark answered first, noting that although we’re at a time when the price of oil and the awareness helps the drive towards cleantech, the fundamentals of energy policy – like the cost of oil extraction – don’t change with the price of oil exactly. Oil prices are certainly a stimulus to cleantech, but regardless of the price of oil, it’s still a matter of national security and climate change.

Podesta:

“When I was in the White House [as President Clinton’s Chief of Staff], oil was $13 a barrel…but we didn’t capture what the cost of that all meant to climate change, the economy, and the effect it had on national security like the regimes in the Mid-East. We need to learn from that experience.”

Wood:

“Even at $65/barrel, you could still do corn ethanol and other more efficient fuels profitably. I think we’re there and it’s going to take time to change out the auto fleet but I think we still will.”

Next, a reporter asked whether the climate bill in the Senate could put coal on the right track?

Wood was skeptical that Congress could deal efficiently with a topic as complicated as energy and global warming. Instead, he said, we should have a bill that either says “Coal, you’re over with” or “Coal, you have to get cleaner.” Although there have been a number of states who have just said “no” to coal, he questioned: can we do that as a nation?

Goodell completely agreed with Wood except he thought such a straightforward move on coal would be politically impossible:

“You’re asking politicians to put their finger on the red button…It’s easier to do it if it looks like you’re doing something else rather than to just say what you’re doing. It’s one of the hottest political issues right now.”

Then Podesta made an interesting point: If Congress can’t pass a bill to regulate CO2, the EPA now has the authority to directly regulate CO2 from power plants. “I think [that option] can be a backstop to partisan gridlock.”

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But like the states that have put renewable energy standards in place and are now getting into the dirty details, the details of national CO2 regulation will get at least as messy, especially when we start talking about who’s going to pay for what. So how far down into this new cleantech market does government legislate? Yesterday afternoon, I arrived to a session late but just in time to hear a panelist practically yell:

“If government’s going to create the markets then they can’t set the prices! You either regulate [emissions] or you don’t, but a bill that creates a ‘free market’ and then sets a price or price limit will fail. That’s what Europe did and it didn’t work. Let the market decide.”

The Tuesday morning panel was outstanding: Diverse opinions, common goals, wise thoughts. The following people addressed the question: What’s next in American energy policy?

• John Podesta, President of the Center for American Progress and former Bill Clinton Chief of Staff
• Pat Wood III, Principal of Wood3 Resources and former chairman of the Federal Energy Regulatory Commission
• Wesley Clark, former Supreme Allied Commander of NATO
• Jeff Goodell author of Big Coal

All panelists agreed that the issue of global warming has come a long way, but while American politicians are just coming around to supporting emissions cuts and the change to a cleantech system, foreign competitors have raced ahead: Japan and Germany are solar leaders and Europe has more wind power installed and better policies to support it.

In order for people to better understand the urgency of the issues, General Clark said, we have to connect the dots between cleantech, the price at the pump and national security. In other words, dependence on foreign imports and global warming. And both have foreign policy impacts: they affect U.S. relationships (our refusal to sign international agreements), enable potential adversaries (petrol dollars funding unfriendly regimes) and distort economic development abroad (China needs a lot of energy and will compete with us for it).

Pat Wood agreed, going on to explain his theory he calls “A tale of two Jihads.” The first “Jihad” is against petrol-totalitarians (transport fuels) and the second is against coal (power generation). Neither of these energy sources will be the future of our power supply. Instead, by 2100, Wood predicts wind, solar and nuclear to make up the electricity sector.

Jeff Goodell said that although we frequently hear we have 250 years of coal left in the ground, that number is based on decades-old studies and on current rates of consumption. But even besides all that, the easy coal is gone: what we have left to dig out is going to be far more expensive and environmentally harmful to get.

Carbon capture and sequestration (CCS), he went on, “is often talked about as a no-brainer, like it’s a technology that’s just about ready for prime time. But I think there are a lot of questions about the economics of it and about the scalability of it.”

Clark disagreed that CCS pie-in-the-sky. “It’s a proven technology; they have a facility up in North Dakota. But just as we’re talking about all the details needed to make wind power work, there’s a million and one details to deal with CCS.”

The General is working and advising cleantech investment firms, and explained that while renewables like solar energy are great, “If you go to the Street, [wind] is a really hot sector. They want opportunities in this field.” But we also can’t think we can exclude certain industries in energy policy negotiations:

“There’s something for everyone…as long as we don’t let ourselves get too narrowly focused in the wind energy business, then I think we can bring others with us and get what we need.”

Podesta explained what the wind industry and wind advocates need to do:

“Energy is still a regional issue….what this [wind] industry needs to do in order to really make progress is to break through that and create a national movement to support clean energy. The states that have embraced – including coal producing states – a clean energy future have done so with great results. People who embrace the future and who embrace a clean technology approach to their economy are succeeding politically and succeeding economically.”

The American Wind Energy Association’s WINDPOWER 2008 conference and expo kicked off this morning with an opening session of top-notch wind power people. The languishing production tax credit for wind (PTC) (stuck in legislation that the president promises to veto) was a big topic of discussion. In fact, chairs in the auditorium had a card on it with all members of Congress’ phone numbers.

All the speakers were very good, but one of the most interesting was Kansas Governor Kathleen Sebelius (D): She and her state have done great things for renewable energy. She talked about the struggles and successes getting there:

“Five years ago, we decided to change the fact that we were so dependent on coal. But we had a hostile regulatory environment, transmission issues and financial uncertainty. So we had to define ‘cost’ in a broader sense; when taking into account jobs, environmental and health costs, you get a very different answer than coal.

We don’t have a majority of legislators ready to embrace a renewable portfolio standard [RPS]. So I had to work on the regulatory side. We created a voluntary RPS of 10 percent by 2010 and 20 percent by 2020.

By the end of this year we’ll be at 10 percent wind in Kansas already…We’re only one of two states to have achieved this without a legislative mandate.”

Regarding the coal plants Kansas denied based on global warming concerns (a first in the nation):

“There were two new coal plants cited for Kansas. But the power wasn’t for us, it was for another state; we wouldn’t actually need to build a coal plant for a very long time.

If we opened up our doors to become a coal exporter, that would send exactly the wrong signals to developers, regulators and the public looking to Kansas for clean technologies. [Our denial of the plants] produced a firestorm. They threatened legislation mandating that the coal plants be built. But the legislature adjourned last week and all of my vetoes were sustained…We were told that without new coal plants, we wouldn’t get the transmission needed that would also help wind. A week after I vetoed, a major transmission line was announced by Warren Buffet’s company in Kansas. This myth was debunked. We’re turning a corner in the heartland.”

Some say Governor Sebelius is a vice presidential contender.

Dr. James Sweeney, economist and director of the Precourt Institute for Energy Efficiency at Stanford, gave the closing remarks. He cautioned (much like David Victor’s comment about Silicon Valley getting “irrationally exuberant” about cleantech) that we get too excited about relatively small gains related to energy: “We’ve got to stop looking at the tiny steps we’ve made so far and thinking we’ve got a solution to the whole energy problem.” Later, when the other bloggers and I were at dinner with him and representatives from Chevron and API, he told us:

“There’s no silver bullet solution to the energy problem. There’s not even silver buckshot. We should be thinking in terms of silver birdshot!”

In other words, getting these technologies to market and scaling them up to commercial use should be the critical focus. It’s great if there’s one manufacturer out there making an efficient solar power system, but that system then needs to be on every home in American to really make a difference. And it’s got to make economic sense for the homeowner to want to put the system on their house.

All panelists seemed to agree that energy efficiency is and should be a major focus to curb our energy use and clean up our emissions. But we still need vast amounts of energy…what should we use?

Chevron is excited about geothermal power, and they are in fact the largest producer of the power on the planet (13% of all geothermal generation, mostly in Indonesia and the Philippines where they were already drilling for oil). Siegele continued:

“We’re going to need every molecule of alternative energy. I’m not dismissing it, but if you look at the numbers of where the world is going and who’s driving the price, all of the forms of energy are going to grow. The era of findings cheap oil is over. That’s not to say there’s not an abundant supply, but it’s getting to be very costly to get it. On the other hand, a lot of these good other energy solutions have a distribution problem.”

He was quite straightforward about Chevron’s priorities. Although the company is spending nearly $3 billion in the next three years on renewables, they spend “considerably more” (as in most of their $72 billion after-tax profits) on conventional oil and gas technologies like deep oil drilling and oil shale development.

David Victor of Stanford noted that energy markets are going to get “very interesting” when liquid fuels and electricity fuels like coal start competing with each other. For example, right now liquids are used in transportation fuels and coal makes electricity. Crossing those resources between the markets is something we haven’t done before.

“But the real test of new energy technologies,” he continued, “will be when the price of oil comes down. Can biofuels or more efficient vehicles survive then?”

Jackalyne Pfannenstiel, chair of the California Energy Commission, is concerned about the current focus on high gas prices.

“When this happened in the 1970s and 1908s, people waited it out. If we do that again, we’re not going to take advantage of the opportunities in front of us! I want to hear that investors are taking advantage of this. We can’t hold our breath while prices are high and then go back to exactly what we were doing before. There’s got to be real change.”

But the general consensus on the panel seemed to be that we’re not moving fast enough on renewables to make them a significant market share. Therefore, fossil fuels are going to be our future (85% of our energy, one panelist said, until at least 2030).

Pfannenstiel did point out that although California won’t make its 20% renewables goal by 2010, it will probably hit it in 2011 and 2012. Governor Schwarzenegger wants to make renewables 33% of the energy system by 2020. Pfannenstiel thinks that’s actually going to be easier than the first target of 20% because the infrastructure (transmission, for example) will already be in place.

“And this drive for renewables is driving other technological innovations,” she explained. California’s publicly owned utilities are installing new “smart meters” on homes that will give homeowners huge amounts of information on how they use their energy, when they use it and what appliances, machines, etc in their home use the most. This is leading other technologies like big in-home displays for the information, smart grids, etc. We’re driving new technology with this new information.