Friday, December 31, 2010
Green Resolutions for a Happy New Year
Resolution #1: Keep The Faith
It is easy to get discouraged during a year when the media and Congress ignored an urgent warning from the National Academy of Sciences that Strong Evidence on Climate Change Underscores the Need for Actions to Reduce Emissions.
But do not despair. We did make progress this year. Walmart launched a Sustainability Index requiring 100,000 of its suppliers to disclose their energy and water consumption, carbon footprint, waste management practices, and what they are doing to become more green and sustainable. President Obama ordered federal agencies to reduce the federal government's carbon emissions by 28% by the year 2020. Both of these actions are having ripple effects as evidenced by Deloitte LLP acquiring three of the largest carbon consulting firms in the world. Deloitte, IBM, Accenture, McKinsey, and all the other consulting firms are building sustainability practices because their clients know that being profitable in the 21st century means finding ways to reduce waste and becoming more sustainable.
So resolve to keep the faith in 2011. We are making progress.
Resolution #2: Share the News
Edward R. Murrow, Walter Cronkite, and other low-key, professional newscasters have been replaced with jesters and snake-oil salesmen. Traditional media are desperately trying to get our attention because we no longer rely exclusively on them for news. Most of us get our news from many different sources including, most importantly, our social networks. Think about how many times you have found a story or a video because a friend sent it to you via email or posted it on your favorite social networking site.
That, my friends, is how we will continue to build upon the growing consensus in support of green and sustainable energy. When you see an interesting article / video / podcast on green energy or climate change or sustainable business practices, post it and share it with your friends. Some of them will share it with their friends. Sometimes it will even go viral.
So resolve to share the news. We can change the world by sharing.
Resolution #3: Think and Choose Green
Many of us have made greener choices when buying cars based on their fuel efficiency rating or when buying appliances based on their EnergyStar rating. This makes sense because a single decision will save energy, save money, and reduce environmental impacts for many years. There is another choice that we should be making and that has only become available in the past 5 years or so. That is choosing where our electricity comes from.
In many states, you have the right to tell your utility to get your electricity from green and sustainable sources. It does not cost any more than you pay now, and it often costs less to choose greener energy. I've done this for my own home. We now get greener energy for 12.4% less than we were paying before. You can click here to find out how you can choose greener energy at an affordable price for your home or business. It's free, it's easy, it will help the environment, and it could save you money. And it will increase the demand for sustainable energy.
So resolve to think and choose green whenever you can. We can make a difference.
Happy New Year!
Woodbridge, New Jersey
Thursday, December 30, 2010
Breakthrough in Genetically Modified Plants for Renewable Energy
Huanzhong Wang, Ph.D., a postdoctoral fellow at the foundation, found a gene that controls the production of lignin in the central portions of the stems of Arabidopsis and Medicago truncatula, species commonly used as models for the study of plant genetic processes. Lignin is a compound that helps provide strength to plant cell walls, basically giving the plant the ability to stand upright. When the newly discovered gene is removed, there is a dramatic increase in the production of biomass, including lignin, throughout the stem.
Increasing lignin in non-food crops, such as switchgrass, may increase the density of the biomass and produce more feedstock per plant. Compared to corn- or soybean-based biofuels, switchgrass and other low-input grassland perrenials can provide more usuable energy, greater greenhouse gas reductions, and less agricultural pollution per acre. In addition, many of the grass varieties can be grown on agriculturally degraded land, are drought and salt tolerant, and therefore can be grown on land that is not used for food production. Perrenial grasses also offer an excellent habitat for a wide variety of birds and small mammals.
"In switchgrass, as the plant matures, the stem becomes hollow like bamboo," said Dr. Richard Dixon, director of the Noble Foundation's Plant Biology Division. "Imagine if you use this discovery to fill that hollow portion with lignin. The potential increase in biomass in these new plants could be dramatic. This technology could make plants better suited to serve as renewable energy sources or as renewable feedstocks to produce advanced composite materials that consumers depend on every day."
Collaboration with scientists at the University of Georgia revealed that removing the gene also increases the production of carbohydrate-rich cellulose and hemicellulose material in portions of the plant stem. These are the components of a plant that are converted to sugars to create advanced biofuels, such as cellulosic-derived ethanol or butanol. More celluloses and hemicelluloses mean more sugars to use for carbohydrate-based energy production.
Biofuels have already shown that they can help even a large nation wean itself from foreign oil. Brazil has eliminated its dependence on foreign oil by using ethanol from sugar cane to meet most of its fuel needs. Increased lignin production in switchgrass and other perennial grasses could help the US reach energy independence as well.
Woodbridge, New Jersey
Wednesday, December 29, 2010
Kurdistan Attracts Billions for Oil Exploration
Of course, Kurdistan is a pretty dangerous and unstable place. Just because you find oil today doesn't mean you will get to profit from it in the future.
So why does this company have a market capitalization of almost two billion dollars? Analysts say it is because investors are very confident that there are large oil reserves in the parts of Kurdistan where Gulf Keystone has been drilling. In fact, Gulf Keystone hit oil with its first well drilled in August 2009.
Ok. I can understand that line of thought. But this oil is in Kurdistan, a place that has been in almost continual violent conflict with Iraq since it was first recognized as an autonomous region in 1970. What about the very significant risks of violence, war, or even just political instability? How can a company afford all the security and insurance that must be necessary to cover those risks.
This is where we start to understand how the oil industry benefits from costs assumed by others. The ability to drill for oil in Kurdistan is a direct result of the hundreds of billions of dollars our governments have spent on the Iraq war and the ensuing seven years of efforts to stabilize that country. The door was opened, and it remains open, because of huge government investments and the personal sacrifices of hundreds of thousands of American, British, and other troops, including almost 5,000 Americans who lost their lives and more than 30,000 who were seriously wounded.
Next time we fill up our cars with relatively inexpensive gasoline, let's remember the hidden costs that are not reflected in the price. And let's also keep those costs in mind when we consider government investments in sustainable alternatives.
Woodbridge, New Jersey
Saturday, October 9, 2010
Wednesday, October 6, 2010
The (Green) Military-Industrial Complex
There are many reasons for this dramatic push towards renewable energy on the battlefield:
1. Oil Kills
A US Army study found that one soldier or civilian is killed for every 24 fuel convoys that are sent out to provide fuel to troops on the battlefield. The Times reports that six Marines were wounded guarding oil convoys in just the past three months.
2. Oil Keeps Our Troops from Fighting the Enemy
The Navy Secretary is quoted in the Times as saying that guarding fuel in Afghanistan "is keeping our troops from doing what they were sent there to do, to fight or engage local people."
3. Oil is Outrageously Expensive
Do you think the military pays $2 or $3 per gallon for gasoline? Actually they get it for a wholesale price of about $1 per gallon, but transporting it to the battlefield adds on huge costs. For some remote locations, the cost of supplying fuel reaches $400 per gallon.
4. Oil Telegraphs Our Strategy to the Enemy
Want to know where our troops are low on fuel or getting ready to fight? Just follow the convoys of oil tankers. They will lead the enemy directly to our troops, inform the enemy of the size of our forces (more oil for larger contingents or more equipment), and provide hints of what might happen next. On the other hand, troops that do not need to re-fuel have tactical advantages not only on land but on sea as well. The Navy Secretary told the Times that "[e]very time you cut a ship away from the need to visit an oiler -- a fuel supply ship -- you create an advantage."
5. Oil Causes Wars
Although not directly quoting the Secretary of the Navy, the Times reports that he and others said that "greater reliance on renewable energy improved national security, because fossil fuels often came from unstable regions and scarce supplies were a potential source of international conflict." Duh! You mean we fight wars over oil? When did someone realize that?
We have known all this for, well, forever. So why are we only now making the push for renewable energy on the battlefield? The Times suggests that recent advances in technology make renewable energy more viable. This tells only a very small part of the story. Most of the renewable energy technologies being used by the military are not based on dramatic technological breakthroughs. If the military had been serious in the past, it could have financed and tested new technologies better than almost anyone else. The Navy Secretary admitted as much: "If the Navy comes knocking, they will build it. The price will come down and the infrastructure will be created."
So why is the military "knocking" on the renewable energy door now? Simple. The war is not ending, and our the competitive advantages on the battlefield from high-tech weapons and communications are far more dependent on energy than ever before. Oil supply convoys have become a very dangerous Achilles heel.
Civilians should take note. Our civilian economy is also far more dependent on energy than ever before. In the future, other countries will compete against us for jobs and growth not on the basis of lower wages, but on the basis of lower energy costs. How competitive will our economy be when we are still paying for oil, coal, and other non-renewable fuels, while other countries are getting 50% or more of their power from sources with almost no ongoing fuel costs such as wind, solar, geothermal, hydro, and nuclear?
A great nation will not wait until we are in a crisis and stalemated on the economic battlefield. If we want to retain our status as a great nation, we must start building sustainable energy infrastructure right now. Let's build a competitive advantage into our economy with energy sources that have no fuel costs. Let's build a society that can say "No" to despotic oil regimes, "Keep your oil because we're not buying it." Let's build a society with a foreign policy focused on promoting our economic interests and our interests in democracy and human rights, instead of one that goes to war to protect access to oil fields.
If the military can do it on the battlefields of Iraq and Afghanistan, certainly we can do it from the comfort of home. Let's start right now.
Wednesday, August 25, 2010
Megacities and Environmental Catastrophes: An Update
These new, modern cities are essential. As reported in an earlier post, more than 5 billion people, or 60% of the world's population, will live in cities by 2030 -- and many of those cities will have populations in excess of 25 million people. Unless we build new infrastructure and even new cities, the pollution and waste generated by megacities will literally kill millions of people.
The problem is what we are leaving behind. Critics of the new cities say they are only for small populations of the rich, while tens of millions of poor people will be left behind in the old cities. Without investments in the old cities, they will turn into massive shantytowns as the existing infrastructure decays. Critics see a future not all that different than the animated movie Wall-E, where all the humans left earth to live on a space ship because cities had become massive garbage dumps surrounded by decaying infrastructure. It turns out in real life that we have enough vacant space outside existing cities so we need not move to outer space. We are just moving 20 miles outside the existing city instead.
The impacts of cities, however, have never been contained within their geographic boundaries. Throughout history, cities have influenced the culture, politics, and commerce of entire nations. That is as true today in the internet age as it was at the dawn of civilization. (My recent-college-graduate son, for example, is considering employment opportunities in the web-based video game industry. All the job offers are in either New York City or Irvine, California, and none allow telecommuting. It appears that even those who spend most of their waking hours in virtual worlds on the internet want to physically live and work in the same city as everyone else working on their virtual worlds.)
Cities also have tremendous impacts on a nation's ecology. Highly efficient housing, energy, waste disposal, and mass transportation systems can dramatically reduce pollution not only within a city, but also throughout a region and across national boundaries. On the other hand, inadequate housing, energy, waste disposal, and transportation systems result in increased pollution that create health risks to everyone who shares the air, groundwater, rivers, streams, lakes and oceans. Even if they live 20 miles or more away.
These new, ultra-modern cities are a step in the right direction. They will provide more efficiency in energy, housing, waste disposal, and transportation. It just makes no sense to build them if we are going to ignore the environmental catastrophes that will develop in forgotten urban wastelands 20 miles down the road.
Friday, August 20, 2010
The Energy Saving Power of White
Let's take the color of our roofs. A new study by researchers at the Lawrence Berkeley National Laboratory concludes that installing cooler roofs and pavements in cities has the potential to offset the heating effect of two years of worldwide carbon emissions. Put another way, Art Rosenfeld, a Berkeley Lab physicist, calculates that if all the flat roofs in cities in the tropical and temperate regions of the world were converted to white, the cooling effect would reduce carbon emissions by an amount equal to taking 300 million cars off the road for 20 years.
Installing a white roof instead of a darker-colored roof creates tremendous energy and environmental benefits. The white roof will keep the building cooler, meaning that its air-conditioning system will not use as much energy. That is why California requires a cool roof on any commercial buildings that have an air-conditioning units.
A white roof is also cooler for the rest of us outside the building. A dark-colored roof will absorb heat that is then carried into the air by the wind. This heat creates what is known as the urban heat island effect -- which explains in large part why cities are always hotter than the countryside.
The urban heat island heat effect takes on increased importance when we consider that more than 5 billion people, or 60% of the world's population, will live in cities by 2030. Many of these city dwellers will live in megacities with populations in excess of 10 million people. We must plan and design these cities carefully to avoid turning urban heat islands into urban heat ovens.
Energy Secretary Steven Chu has directed that his department install light-colored roofs on any new buildings or when replacing roofs on existing buildings. He has also sent a letter to all other federal department heads urging them to adopt the same policy. "Cool roofs are one of the quickest and lowest cost ways we can reduce our global carbon emissions and begin the hard work of slowing climate change," says Secretary Chu. "By demonstrating the benefits of cool roofs on our facilities, the federal government can lead the nation toward more sustainable business practices, while reducing the federal carbon footprint and saving money for taxpayers."
Secretary Chu's cool roofs initiative is one major step federal agencies are taking to comply with President Obama's Executive Order 13514 directing that the federal government greenhouse gas emissions be reduced by 28% over the next 10 years.
The Homeowner's Handbook to Energy Efficiency
The Home Energy Diet
The Living Series: Conservation for a Greener Home
Monday, August 16, 2010
Greece Invests Bailout Billions In Greener Energy
If successful, Greece will get 40% of its electricity from renewable sources within 10 years, compared to only 4% today.
Imagine what 40% renewable electricity could do for an economy and an environment. Yes, it requires a large investment up front, but within 10 years Greece could get a significant portion of its energy needs from sources such as wind and solar that have zero fuel costs. Talk about a competitive advantage. Businesses in other countries will be paying inflated prices per ton of coal or barrel of oil, while Greece will have zero fuel costs for a significant portion of its energy needs.
Considering all the ways IMF bailout funds have been used by countries in the past (where, exactly, did all that money go?), investing in infrastructure that will reduce energy costs and emissions over the long term has to be one of the better plans.
Greece hopes to leverage its investment by attracting an additional 32 billion euros of private sector funding for energy infrastructure projects such as natural gas pipelines and storage terminals. It also hopes to create almost 200,000 new jobs in the process.
This will be fascinating to watch. Getting 40% of electricity from renewable sources and creating jobs over 10 years is not a pipe dream. I wish Greece all the best on this venture….and hope they succeed as an example for the rest of us.
Sunday, August 15, 2010
Peak Oil and the Reactionary Media
News that the world's largest insurance market sees significant risks in the problem of peak oil was reported in the UK media, but I did not see (and have not been able to find) a single mention of it in the mainstream US media.
If the US media doesn't cover the story, does that mean the story isn't real? Even if the story comes from a reputable organization such as Lloyd's of London? What is going on here?
The problem is that "peak oil" is a very expensive story to develop and report. Our media prefer to report on "events" that they can simply "cover" and comment upon. For example, the media spent very little time or effort on the risks of offshore drilling or corrupt and ineffective government regulators before the BP Deepwater Horizon catastrophe happened. And you can bet that they will pay only passing attention to the complicated environmental consequences of that spill now that oil slicks on the surface are evaporating (no more photos of oil soaked pelicans) and the underwater video stream no longer shows oil gushing from a broken pipe.
Peak oil is not so dramatic as an oil spill, and its consequences are only felt over a period of years or decades. It is not the end of oil. It is simply the end of increasing oil reserves and the start of declining oil reserves.
As Lloyd's of London warns, however, peak oil will will be very disruptive over the coming decade or so. As reserves start decreasing instead of increasing, supplies will tighten and prices will rise. That will happen even in a weak economy. And as demand grows dramatically in developing markets, prices will rise dramatically.
It does not take an economics degree to understand that demand will grow dramatically in the coming decade. Billions of families in China, India, and other growing economies want more cars and SUVs just like the American dream. That's why, even in a Great Recession, GM is already selling more vehicles in China than it sells in the US. As the economy improves, China alone will put 2 or 3 times as many vehicles on the road as are on the road in the US today. Plus billions of people in China, India, and other developing countries would love to have lawnmowers, pickup trucks, ATVs, buses, recreational vehicles, air travel, and ocean cruises. Plus pharmaceuticals, plastics, cosmetics, and thousands of other products that contain petroleum by-products. Plus more factories and industrial plants to make all these oil-derived and oil-consuming products.
All of this dramatically increasing oil demand will occur as the accessible oil reserves start declining.
Now if only we could figure out a way to put that on streaming video.
Saturday, August 14, 2010
2 Great Books for Green Energy Advocates
What will it take to create a clean and sustainable energy industry that can replace, or at least significantly reduce, our reliance on dirty oil and coal? Two excellent books about the history of oil and electricity suggest that technological breakthroughs will only get us halfway there. We also need a fundamental shift in government policies, incentives, and investments.
In The Power Makers: Steam, Electricity, and the Men Who Invented Modern America, Maury Klein tells the story of Fulton, Edison, Westinghouse, and less well known, but equally brilliant men who built an energy infrastructure that powered the modernization of industry and continues to power our energy-intensive businesses, industries, and lifestyles today.
This is a fascinating story on many levels. Professor Klein describes the many technological breakthroughs from the invention and refinement of steam engines and turbines to the development of power plants and transmission grids that fit together like a complex jigsaw puzzle to create the modern electric utilities we know today. Along the way, he provides clear, understandable descriptions of the essential science and technology.
Professor Klein also explains why Edison and Westinghouse achieved great commercial success while other equally brilliant scientists and inventors such as Tesla faded into obscurity. The commercially successful innovators combined technological brilliance with the fine arts of raising money in private capital markets, procuring government contracts and subsidies, pursuing intellectual property lawsuits, mastering (and often influencing) a maze of new and changing government regulations, and of course self-promotion and public relations. Their successes provide important lessons for those of us working to build a clean and sustainable energy industry today.
Similar insights are found on every page of Daniel Yergin's Pulitzer Prize winning book, The Prize: The Epic Quest for Oil, Money & Power. From modest beginnings capturing oil oozing from the ground in Pennsylvania to modern-day deepwater wells thousands of feet below oceans, the story of petroleum is one of both technological advances and government policy.
The early oil trusts concentrated power and control to make massive and risky investments in oil wells and the infrastructure needed to refine the oil and transport it to market. Over time, however, that concentration of economic power threatened to harm the economy and cause innovation to stagnate. After Standard Oil was broken up as a result of President Teddy Roosevelt's antitrust suits, big oil did not weaken and wither. To the contrary, the new competition between what became 7 major oil companies actually strengthened the oil industry.
When we look at government energy policies today, it is important to remember the critical role that government policies and investments have played -- and continue to play -- in the business of oil and electricity. Big Oil is what it is today because of many government decisions from the construction of a national highway system to foreign policy decisions in the Middle East. In like manner, renewable energy will be defined not just by technological advances, but also by government policies and investments in basic infrastructure.
Both of these books read like Tom Clancy novels, with exciting characters who come to life and great technical details that are clear, accurate, and do not put you to sleep. Only these stories are 100% true and hold critical lessons for those of us who want to replicate the successes of dirty energy with clean and renewable alternatives.
Wind Power Exceeds 10% of Electricity Generation in Four States
The US added 10 Gigawatts of new wind power generation in 2009. Texas led the way with 2,239 Megawatts but 27 other states also added to their wind generation capacity last year. Four US states now generate more than 10% of their electricity from wind power. Iowa gets 20% of its electricity from wind, followed by South Dakota (13%), North Dakota (12%) and Minnesota (11%).
“Wind power projects accounted for 39 percent of all new electric generating capacity added in the U.S. in 2009," noted Ryan Wiser, a scientist at Lawrence Berkeley National Laboratory, "and wind energy is now able to deliver 2.5 percent of the nation’s electricity supply.” Berkeley Labs and the US Department of Energy released a study last week with more details on the state of wind power in the US.
Investments in wind power are creating good manufacturing jobs in the US. Seven of the top ten wind turbine manufacturers already have manufacturing facilities in the US. Two of the remaining 3 have announced plans to open manufacturing facilities here. And, of course, the actual installation and ongoing management of wind turbines create domestic jobs.
Wind power also creates competitive advantages for manufacturers by lowering electricity rates over the long term. While the up front investment is high (construction of wind farms costs about twice as much per MW as construction of coal-fired power plants), wind and other renewables are less expensive over the long term because they have zero ongoing fuel costs. This advantage will become even more pronounced if, as predicted by many economists, the costs of coal, petroleum and natural gas increase dramatically as the world economy comes out of the Great Recession.
Transmission remains a significant stumbling block. In Texas, 17% of existing wind generating capacity was not used last year because of inadequate transmission. Billions of dollars in investments in smart grid technologies will be required to pave the way for more wind and solar generation. (See DOE Says Grid Needs Upgrade to Handle Wind Power, Jan. 20, 2010).
The US accounted for 26% of all new wind generating capacity in the world last year. That put the US in second place after China, which accounted for 36% of all new wind generation capacity and is the world leader.
Thursday, August 12, 2010
Does It Matter Where Your Electricity Comes From?
Recently we switched our New Jersey home to a third party electricity supplier that gives customers a choice of either 20% or 100% wind power -- and that charges about 10% to 15% less per kwh than the utility's rates.
This is one of the little known benefits of energy deregulation. In many states, the delivery of electricity has been separated from the supply. Our utility company still provides delivery, service, emergency repairs, customer support and a single bill, but we can choose a third party for the supply portion of our bill.
With supply opened up to competition, third party suppliers are competing for our business by providing electricity that is greener and less expensive. It is similar to when long distance companies competed with one another after phone services were deregulated.
We quickly understood the financial impact of our choice when our electric bill went down, but I wasn't really sure about the "greenness" of the electricity. Was this just a marketing gimmick? After all, it's not as if the specific watts that find their way to our home can be identified as wind generated. The utility and the third party suppliers push all their electricity onto the same grid, and by the time it reaches our home you cannot distinguish between the watt generated by a dirty coal-fired plant and the nice, clean wind power that we bought. In fact, depending on the time of day, overall demand on the system, and strength of the wind, most of the electricity powering our home could be "dirty."
So, does it matter that we signed up and paid for 100% Green-E certified renewable power?
Yes. Because over time the demand created by people choosing renewable electricity will require more of it.
Watts, volts, and amps can be difficult to comprehend, so let me explain by analogy to something more tangible. Consider a car dealership that carries an inventory of 80 gas guzzling SUVs and 20 hybrids. If 8 out of 10 customers continue to buy the less fuel efficient SUVs, then the dealership will continue to replenish its inventory with 80% gas guzzlers and only 20% hybrids.
Now consider what will happen if 8 out of 10 customers start buying hybrids. The car dealer does not want to lose money. It will start to rebalance its inventory with more of the fuel efficient hybrids and fewer of the gas guzzlers. Which will cause the manufacturers to start producing more hybrids and fewer gas guzzlers.
The same thing can happen with electricity. If enough of us start choosing clean, renewable electricity, then more wind, solar, hydro, and geothermal plants will have to be built to meet the demand.
To help make that happen, we decided to promote the company that provides our home's clean, green electricity supply. We will earn a small referral fee whenever anyone signs up for the service through our web site and, more importantly, we will do our small part to increase the demand for clean and renewable energy.
If you live in New Jersey, Pennsylvania, Connecticut, or Maryland, you can click here to find out how much it will cost (actually, how much you will save) by switching to either 20% or 100% clean, renewable electricity. New Yorkers should be able to take advantage of this in a month or so, with Massachusetts and Illinois not far behind. You can also check with your utility or state regulatory agency to find the names of other third party suppliers.
With a little collective action that costs us nothing, and can actually reduce our electric bills, we can promote a cleaner and greener energy future.
Woodbridge, New Jersey
Sunday, July 4, 2010
Oil and The Declaration of Independence
That is a quote from the Declaration of Independence. It is one of the grievances against the King that justified the fight for Independence.
How could the colonies pursue Independence when so many jobs, indeed much of the economy, were dependent on trade with or through Great Britain?
With leadership and will. And a realization that an Independent America would ultimately be far more powerful and prosperous than an America subservient to a tyrant.
Today as we face an oil addiction that has "plundered our seas, ravaged our coasts, ... and destroyed the lives of our people," it is fitting to ask if we have the leadership and will to pursue a Green revolution that will secure our independence from oil.
Do we realize that an America independent of oil will ultimately be more powerful and prosperous than an America subservient to the tyranny of oil?
Can we afford to wage a Green revolution to secure new clean energy jobs in the future when so many jobs and much of our economy are dependent on oil today?
Can we afford not to?
Let us remember the courageous acts of those who secured our independence in the past, and let us have the courage to secure our independence for the future.
Happy Independence Day!
Friday, June 25, 2010
Is Big Oil Too Big to Fail?
Didn't we just go through this with the financial industry? Lax regulations and enforcement led to reckless behavior by financial institutions, resulting in an economic disaster. Fearing that a failure of financial institutions would cause more devastating harm to the economy, our government rescued them with a multi-billion dollar bailout.
Now the oil industry has come up with its own "too big to fail" type of argument. When our President proposes new safety regulations, the oil industry responds that they are too important to our economy. We cannot increase their costs with new safety regulations, they say, because that will decrease government revenues and increase energy prices. And that will reduce our ability to compete in the global economy because oil is essential to everything we produce.
What should President Obama do? As several readers of this blog have pointed out, President Obama ranks with Teddy Roosevelt and Jimmy Carter as one of the most pro-environment Presidents in history. I agree. But those two prior Presidents had very different approaches to solutions. Our current President would be well-advised to consider those differences and choose between them.
President Carter saw government as the solution. He authorized new regulations, enhanced environmental enforcement, and spent government money on research into new technologies such as synthetic fuels.
What was the lasting effect? Subsequent Presidents starting with Reagan and continuing through two Bushes relaxed the regulations and dismantled the synfuels corporation. Thirty-five years after the first oil crisis that inspired President Carter to act, we find ourselves even more dependent on oil and in the midst of an even greater crisis.
Now let's consider the approach of Teddy Roosevelt. President Roosevelt did spend a good deal of government money on the environment, most notably buying up land and establishing the national parks system. That investment has endured for more than a century. He also addressed the lack of competition in energy markets by commencing antitrust suits against Big Oil, ultimately resulting in the breakup of the Standard Oil Company.
President Roosevelt recognized that the lack of competition in the oil industry was causing fundamental problems in our energy markets and beyond. By breaking up Standard Oil into separate companies, his antitrust suits completely restructured energy markets across the country and throughout the world. The competition between oil companies that ensued promoted innovations and investments in new technologies that ultimately helped the US oil industry become a world leader. It also resulted in more efficiency and better prices for consumers.
The question presented to President Obama is not whether he will follow in the tradition of Presidents Teddy Roosevelt and Jimmy Carter. The question is whether he will choose between them. Will he follow the lead of President Carter and concentrate his efforts on regulations and government spending on specific technologies with possible short-term benefits but no long-term restructuring of our energy markets? Or will he follow the lead of President Teddy Roosevelt and focus his efforts on structural changes that will force oil to compete with alternative energy over the long term?
The first step is to identify the structural problem in our energy markets. Reagan advisor and Nobel Laureate Milton Friedman noted that oil has an artificially low price because the price does not include the cost of cleaning up the particulates, carbon and other forms of pollution that are emitted when oil is burned. We would not think a trash hauling company was giving us a good price if it cut its costs by dumping the trash in our public parks; nor should we think that oil is giving us a good price when it is dumping dangerous emissions into the air that we breathe.
The artificially low price distorts the market and deters innovation and competition. Alternative energy sources and technologies cannot compete because their main advantage -- less or no pollution -- is not reflected in energy prices.
By forcing the price of oil to include the cost of pollution we would see three immediate benefits. First, we would become more efficient in our use of energy. That efficiency alone could offset all or part of any increase in oil prices. Second, we would see increasing private investments in alternative energy technologies that were not burdened by the cost of pollution. Third, the oil companies would be forced to moderate price increases for fear that businesses and consumers would switch to alternatives in response to price increases. Over the longer-term, increased competition between oil and alternative energy sources would encourage continuous innovation and efficiencies to stay competitive.
We are in the current mess because oil has become too important to our economy. The only solution that will produce sustainable results is one that ensures a less important role for oil in our economy. Safety regulations and government-directed investments will not accomplish that objective. We need a game-changing restructuring of energy markets to inject more competition between different sources of energy.
I hear those who say that cap-and-trade or carbon taxes will never fly because the American people want cheap energy today and are not willing to go through the disruptions and higher prices that would occur in the near term. That is why timing is so critical. The sense of disgust and despair over our inability to contain the BP Deepwater Horizon catastrophe invites bold leadership. President Obama should seize the moment to push for fundamental changes in energy markets while he can.
Thursday, June 17, 2010
Oil Disasters and Sub-Prime Mortgages: When Risk is Taken Out of the Price
In the sub-prime mortgage market, the rating agencies gave what turned out to be deceptively favorable ratings to Collateralized Mortgage Obligations (CMOs), in part because the risks were chopped up and spread around in pools. Investors did not demand a high risk premium because they could not see the full extent of the risks.
Something very similar happened with BP's investment in the Deepwater Horizon. BP's spill response plan estimated the worst case scenario at 177,400 barrels of oil, a number that we now know was absurdly low. And the bulk of the risk was assumed by the US government when it limited BP's liability for damages claims to $75 million.
If BP had to assume the full risk (potentially billions of dollars) in a gulf that has seen some of the worst hurricanes (including Katrina), the insurance premiums or reserves required to cover that risk presumably would have been much larger. Larger insurance premiums or reserves would have reduced the potential return on investment for the project.
What would BP have done if the financial projections for the Deepwater Horizon project had been lower because they included the full cost of insuring against a multi-billion dollar risk? Maybe BP would have invested in a less-risky natural gas project that would have produced fuel with 30% to 40% lower carbon emissions. Or maybe BP would have invested in some of the new Green and sustainable technologies that it was touting in its advertisements. Or maybe it would have invested in a different oil project that did not carry the risk of destroying the fishing industry in the Gulf of Mexico.
Here's the bottom line: Our best hope for a future of clean and sustainable energy is to encourage rational investments by the private sector. That is only possible if the price of oil includes the full cost of pollution and the full cost of insuring against environmental disasters. Once that happens, alternative energy sources that do not carry those costs will become very attractive investments and the smart money will flock to them. So if you want to start a shift to cleaner and more sustainable energy sources, the first step is to stop subsidizing oil with free liability insurance courtesy of the US Government.
Wednesday, June 16, 2010
Mr. President, Put General Petraeus in Charge of the BP Catastrophe
Well, our shores are under attack. By the worst man-made environmental catastrophe in history. Eleven people have died, untold thousands are losing their livelihoods, and the damage may haunt us for generations.
The first thing you must do is appoint a battle-tested General and call up the troops. Call the oil companies and tell them that you are drafting all of their top scientists and engineers. You want them in the gulf tomorrow morning. They will no longer report to the oil companies. Until this catastrophe ends, the scientists and engineers will report solely to a chain of command headed by General Petraeus who will be advised by Energy Secretary Chu.
They will not work only on plugging the blowout. They will also do everything possible to protect the people of this nation from the devastating effects of the blowout -- even if that means doing things that will increase BP's costs or reduce its future profits.
General Petraeus knows how to organize and lead people. He knows how to get things done. He will not be distracted by falling stock prices, profit and loss statements, or corporate lawyers advising on potential future liabilities. He will not increase the number of people cleaning the beach when the press is around, and then send them home without finishing the job when the press follows you back to Chicago or the White House. With General Petraeus in charge, you (and the American people) will be confidant that everything is being done with the sole objective of protecting our nation and its people.
Mr. President, you have said that we need the oil industry's superior expertise in deepwater oil drilling. That may be the case. But this is not about expertise. This is about leadership. It is not enough for you to "supervise" or "approve" everything that BP does.
We know from experience what happens when war profiteers and mercenaries like Halliburton and Blackwater make decisions subject to the "supervision" and "approval" of the US government. The profiteers make billions and the national interest is not well served.
You must relieve BP and all of its corporate officers from any authority to develop strategies or make decisions. They can provide technical support. They can serve as advisors. They can make suggestions. But you must have one person, and one person only, who is directly responsible for developing strategies and making decisions. And that person must have no loyalty other than his loyalty to you as President and to the People of the United States of America.
Mr. President, you promised us change. You promised us that we would no longer rely on war profiteers and mercenaries to defend this nation. We need you to keep that promise. Please put our best battle-tested General in charge of the situation and tell everyone else that they are reporting to him effective immediately.
Tuesday, June 15, 2010
$550 Billion In Welfare Payments for Dirty Energy
In fact, that number represents only half the story. The $550 billion in direct government welfare payments for the oil and coal industries does not include all of the indirect government subsidies that these industries receive. It does not include the cost of soldiers protecting oil fields in Iraq; or the cost of treating respiratory illnesses caused by particulate emissions; or the cost of free liability insurance for oil and coal companies (in the form of limitations on their liability for harm to third parties); or the cost to individuals who lose their livelihoods when oil gushes uncontrollably into the Gulf of Mexico or the Niger Delta.
But let's stick with the very tangible number of $550 billion in cold, hard cash for now. What would happen if we took that $550 billion away from oil and coal, and invested that cash in clean, sustainable energy technologies instead?
Just taking the welfare payments away from the oil and coal industries would have a tremendous impact on the level of investments in clean, sustainable energy technologies. Think about it for a moment. You are considering an investment in a new technology. But the existing technology that you want to compete against receives $550 billion in direct government welfare payments every year to keep its price artificially low. So your new technology will not only have to be better than the existing technology, it will also have to be a half trillion dollars less expensive. That is a high hurdle for anyone considering an investment in new technologies.
Take away that half trillion dollars in government welfare payments, and now you have a level playing field. That alone removes a hurdle and provides an incentive to investors in new technologies.
And if you actually shift that half trillion dollars from the oil and coal companies to investments in clean, sustainable energy technologies, you can start a green revolution.
As an added benefit, the clean, sustainable energy technologies will not require these subsidies forever. Give a man a welfare payment to buy oil today and he'll be back for another welfare payment tomorrow. But give him the same payment to buy solar panels, and he'll have energy for a lifetime.
Monday, June 14, 2010
The Blame Is On BP, But The Solutions Are All Ours
In 1973 members of the Organization of Arab Petroleum Exporting Countries refused to sell us oil, causing an economic crisis. We invented the SUV and the McMansion to consume even more oil.
In 1989 the Exxon Valdez spilled 10.8 million gallons of crude oil along 1,300 miles of pristine coastline. We built more and larger supertankers.
In 2001 the son of a Saudi Arabian construction magnate orchestrated the worst terrorist attack ever on US soil. We went on to buy more oil than before, sending more of our money to Saudi Arabia and other oil-producing countries where, as Thomas Friedman notes, "it ends up with mullahs who build madrasas that preach intolerance."
In 2010 the BP blowout is destroying the ecosystems and the economy along our Gulf coast. We . . . .
Have we learned anything at all? Or will we increase our dependence on rapacious oil companies and despotic regimes once again?
We can and should blame BP for their reckless disregard of the environment in the Gulf of Mexico, the Niger Delta, and other places around the world where they and the rest of their industry have destroyed entire ecosystems and communities.
But they will never give us the solutions. The solutions will depend entirely on our own choices.
Will we choose to continue wasting energy? Or will we require that all cars, trucks, and buildings reduce energy consumption by 20% or more?
Will we allow oil companies to sell products that pollute the air and water without including the cost of that pollution in the price of the product? Or will we level the playing field for clean and renewable alternatives by imposing the type of pollution tax (or cap and trade system) favored by well-known conservative and libertarian economists such as Nobel Laureate and Reagan advisor Milton Friedman?
In 2020 will our children thank us for making the right decisions today? Or will they suffer even worse catastrophes brought on by our selfish, thoughtless, and unnecessary addiction to oil?
The choice is ours.
Sunday, June 13, 2010
How Monitoring Dramatically Reduces Energy Costs
Let's take an actual example. Forward Energy Solutions recently subscribed to Continuous Energy Management & Optimization (CEMO) from Davies Energy Systems. The process involved two steps: (1) installing a real-time energy monitoring system from Noveda Technologies; and (2) having Davies Energy's engineers analyze the data and develop better ways to manage and optimize facility energy usage.
Here is the minute-by-minute display of electricity consumption that Foward Energy Solutions saw after just one day:
Notice the two distinct sets of spikes in energy consumption. The first occurred just before 4:00 a.m. when no one was in the building. The next set of distinct spikes started at 7:00 a.m. and continued until 5:00 p.m. Each of the spikes lasted only a minute or less and were not noticed by the people in the building. But over time they amounted to a significant increase in kwh consumption. They also may increase the peak demand charges on the company's monthly electric bill.
The culprits were quickly identified. A small refrigerator was malfunctioning and spiking the consumption at 4 a.m. An air-conditioning system in need of repair was causing the spikes during regular business hours.
Catching these types of problems generates immediate savings by reducing kwh consumption and peak demand charges. The avoided costs will continue to be realized each and every month into the future, often adding up to thousands of dollars in energy savings.
Identifying these types of problems early on also avoids the cost of more expensive repairs down the line. Without monitoring, no one would have noticed the air-conditioning problem until it stopped cooling the building -- most likely on the hottest day of the year. At that point, the company would have already wasted money on unnecessary energy costs, plus it would be facing the higher cost of repairing or replacing the air-conditioning system on an emergency basis. Not to mention the loss of employee productivity in a sweltering office until the repairs could be made.
Francis X. Lamparello, P.E., the Chief Technology Officer at Davies Energy Systems, says that he finds these types of issues in almost every building. But these problems are just the tip of the iceberg when it comes to saving energy. "Buildings are living, breathing entities that must be monitored and adjusted on a continuous basis," he says. "For example, maintaining proper air pressure inside the building can keep warm air from entering in the summer, and letting in more cool outside air on a sunny Fall day can give you 'free cooling' to offset the heat caused by the sun shining on the windows." All of these energy saving solutions, he points out, are free or inexpensive once you have real-time monitoring and expert advice on how to manage the facility.
What's next for Forward Energy Solutions? Now that they have the data, they are working with Davies Energy on a number of additional ways to drive down their energy costs. More on that in later blog posts.
Tuesday, March 9, 2010
The Power of Green Thinking (and Small Green Acts)
Many people scoff at such lists of "easy" ways to save the planet. Thomas Friedman, for example, worries in his book "Hot, Flat, and Crowded," that the "amount of time, energy, and verbiage being spent on making people 'aware' of the energy-climate problem, and asking people to make symbolic gestures to call attention to it, is out of proportion to the time, energy, and effort going into designing a systemic solution." He points out that the energy problems we face are huge -- if you convert global energy consumption into oil equivalents, we are consuming 420 million gallons per hour. We need game-changing technologies and policies, not just six easy ways to go Green.
I agree. So why did I join the C3 group and invite my friends to join too?
Because our daily thoughts and actions drive our national policies and investments.
Think about the 1980's and 90's. Does it surprise you that a nation of people who drove SUVs and built McMansions elected politicians in both parties who did not think about climate change or how our oil consumption was subsidizing despotic regimes? This is not an ideological issue. Very few people in either political party thought much about energy efficiency when buying cars and homes in the 80's and 90's. That thoughtlessness was an important driver of our national energy policies during those decades.
Since then, we have become more aware of energy and the environment as a result of a few extraordinary events. The terrorist attacks of September 11, 2001, and the realization that the terrorists came from countries subsidized by our oil purchases. The escalation of oil prices a couple of years ago. The current Great Recession. The debate over global warming.
Those of us who lived through gasoline and home heating fuel shortages during the oil embargo of the 1970's know too well how transitory these trends can be. How do we sustain our interest in sustainability?
By changing the way we act. People who act every day in small Green ways will enter the polling booths with a completely different mindset than people who drove their gas guzzling SUVs to the polls.
Besides, we must do something while we wait for the game-changing technologies. The six simple steps will have a meaningful impact.
Let's take just one of the six simple steps: Breaking the bottled water habit.
World consumption of bottled water has increased by 70% since 2001 to more than 200 Billion litres. Of that amount, Americans bought more than 33 Billion litres. That's a lot of plastic bottles that need to be manufactured, filled with water, shipped to warehouses and stores, cooled in stores or home refrigerators, and recycled or thrown into landfills where they will take up to 1,000 years to decompose. Each stage of this process uses much more energy than running tap water through a filter.
Will reducing or eliminating all this waste solve our energy and environmental challenges? No. But it's a start. And an American public that thinks about how much energy and other resources are consumed to produce a bottle of water is one that will think about energy and environmental issues when choosing its leaders.
That's why I joined the Carbon Conscious Consumer (C3) Campaign and am promoting the group to my friends. Because thinking and acting Green in our daily lives will make a difference today, and it is the only way we will build a public consensus to invest in the game-changing policies and technologies we need for the long term.
Tuesday, March 2, 2010
How Warehouses Become Power Plants
This is the second rooftop solar project built by Prologis and Portland General Electric (PGE), the local utility. Together, the two projects will generate 3.5 MW of solar energy.
There's more. ProLogis has solar power projects installed or under construction on 27 other buildings in France, Germany, Japan, Spain and the United States. The installations cover more than 8.1 million square feet (755,000 square meters) of roof space and will produce 13.5 MWs of electricity.
ProLogis says that it has another 450 million square feet (42 million square meters) of roof space available for solar installations on industrial buildings in the United States, Europe and Asia.
So could this be the start of something really big?
That depends as much on regulatory and financial environments as it does on natural environments.
Oregon and the European nations where ProLogis is building solar projects have regulatory and financial frameworks that make these projects possible. For example, the Oregon Renewable Energy Act mandates that the largest utilities in the State must deliver 25 percent of their power from renewable sources by 2025. To meet the mandates, Oregon utilities will require about 1,500 megawatts of renewable energy by 2025.
Oregon also has a feed-in tariff that allows renewable energy to be sold back to the grid. In the ProLogis project, all the generated power will feed directly into PGE's electrical system to serve its customers.
Oregon's incentives for promoting renewable energy include an extensive menu of financial incentives including tax credits, production incentives, and loans for renewable energy, on top of federal incentives.
Oregon's regulatory structure and financial incentives have created new business opportunities for everyone involved in the ProLogis project. PGE formed a joint venture with US Bank to own and operate the system and to secure state and federal solar tax credits to help finance the project. In addition to receiving rent payments, ProLogis established its own Renewable Energy group to procure new business, manage installations and provide development management services.
ProLogis hopes this will turn into an extension of its global distribution and logistics business. "Our program is unique because we have dedicated resources across the globe," says Drew Torbin, vice president of renewable energy for ProLogis. He adds that ProLogis has "the construction management experience and local relationships to get solar installations on the fast-track to completion."
Saturday, January 30, 2010
President Obama Orders 28% Reduction in Government Greenhouse Gas Emissions
The announcement came after a review of GHG emissions by all federal agencies that began when the President signed Executive Order 13514 back in October 2009.
A 28% reduction in GHG emissions would have a tremendous impact on overall emissions in the US, because the federal government is the largest single energy user in the country. It would reduce Federal energy use by the equivalent of 646 trillion BTUs, equal to 205 million barrels of oil or taking 17 million cars of the road for one year. It is expected to save a cumulative total of $8 to $11 billion in avoided energy costs.
Key to the success of the GHG reduction program is measuring and verifying actual reductions in energy consumption and GHG emissions. The Executive Order requires agencies to measure greenhouse gas emissions and to maintain a greenhouse gas inventory -- in other words, their carbon footprint. White House Council on Environmental Quality Chairwoman Nancy Sutley emphasized this point, telling reporters, "You can't manage what you can't measure."
Compliance with the measurement and reporting requirements will have a significant impact on virtually every company that does business with the federal government. For example, Section 2(h) of the Executive Order directs each federal agency to ensure that 95% of new contracts for products and services (except weapon systems) are energy efficient (e.g., Energy Star), water efficient, bio-based, environmentally preferable, non-ozone depleting; contain recycled content; and are non-toxic or a low-toxic alternatives. It will be up to the supplier to prove that their products meet these criteria.
The General Services Administration (GSA) is required to give the White House additional procurement recommendations by April of this year. The GSA is considering:
- requiring vendors and contractors to register with a voluntary registry or organization for reporting greenhouse gas emissions;
- requiring contractors, as part of a new or revised registration under the Central Contractor Registration or other tracking system, to develop and make available its greenhouse gas inventory and description of efforts to mitigate greenhouse gas emissions;
- using Federal Government purchasing preferences or other incentives for products manufactured using processes that minimize greenhouse gas emissions; and
- other options for encouraging sustainable practices and reducing greenhouse gas emissions.
The message to private business is clear: If you want some of that purchasing power to come your way, then you better start measuring and documenting your carbon footprint, energy efficiency, and sustainable practices.
Wednesday, January 27, 2010
The Mouse That Roared: Micronesia Challenges a Czech Power Plant
The Federated States of Micronesia has demanded that the Czech Republic allow an international audit of a planned upgrade of the largest coal-fired power plant in the Czech Republic . . . and the Czech Republic acceded to the demand.
Micronesia made the demand pursuant to recently adopted European Union regulations allowing any nation in the world to challenge construction or upgrades of industrial sites emitting carbon dioxide. Under EU law, transboundary environmental impact assessments are part of normal procedure.
The essence of Micronesia's claim is that the upgraded Czech power plant should be required to use the best available technology for the project. The Czech plant is the 18th-largest CO2 emitter in Europe, emitting 40 times more CO2 annually than the whole of Micronesia.
Why is a nation on the other side of the world complaining about a coal-fired power plant in the Czech Republic? Micronesia is a chain of more than 600 islands in the west Paciﬁc, and some of its land area has already been lost to rising ocean tides. It asserts that failure to control CO2 emissions in the Czech Republic will further contribute to the warming of the planet blamed for rising ocean water levels. It fears that climate change could also result in more intense and damaging storms.
“Climate change is real and it is happening on our shores. It’s a matter of survival for us,” Andrew Yatilman, the director of Micronesia’s Ofﬁce of Environment and Emergency Management, told Reuters.
The Czech utility that owns the plant, CEZ AS, asserts that it is using the most advanced technologies and that the refurbished power plant will emit less CO2 than it does now. The plant's efficiency will increase from a current level of 32.8% to 39.06%, a spokeswoman for CEZ AS said.
Wednesday, January 20, 2010
NYC Mayor Bloomberg Promises to Clean Up Toxic Heating Oil
The mayor's announcement follows an EDF report last month showing that just one percent of New York City's buildings -- those burning the dirtiest grades of heating oil -- produce more pollution than all the city's cars and trucks combined.
"Mayor Bloomberg's pledge to green the dirtiest types of heating oil is one of the biggest steps New York can take to reduce soot pollution linked to asthma and heart disease," said Isabelle Silverman, an attorney for Environmental Defense Fund. "The dirtiest grades of heating oil must be phased out by 2020. Ten years is a long enough timeframe for buildings to convert and get the best use out of the older burners that can't burn cleaner fuel right away."
More information on toxic heating oil is available on the EDF Website.
Northeast and Mid-Atlantic Governors Commit to Low-Carbon Fuel Standard
The proposed regional LCFS would involve a market-based, fuel-neutral program to address the carbon content of fuels. If adopted by states, it would apply to the transportation sector, and potentially to fuels used for heating buildings. According to a press release issued by the Governors, a regional LCFS has the potential to reduce transportation-related greenhouse gas emissions, which represent approximately 30 percent of emissions in the region, reduce regional vulnerability to petroleum price volatility, and facilitate the long-term transition from petroleum-based fuels in the transportation sector. In addition, the Governors expect that the regional LCFS will spur economic growth related to development of advanced technologies and green energy jobs.
The Low-Carbon Fuel Standard initiative began in June 2008, when Massachusetts Governor Deval Patrick sent a letter to the governors of all 10 member states of the Regional Greenhouse Gas Initiative (RGGI) inviting them to work together on developing a Low-Carbon Fuel Standard that would apply to the entire region, creating a larger market for cleaner fuels, reducing emissions associated with global climate change, and supporting the development of clean energy technologies. Based on Letters of Intent signed in December 2008 by state environmental commissioners, the participating states - the 10 RGGI states plus Pennsylvania - have been doing preliminary work toward designing a regional LCFS program.
The LCFS MOU signed on December 30 establishes a process to develop a regional framework by 2011 and to examine the economic impacts of an LCFS while getting input from business and environmental stakeholders. The 11 signatories include Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont.
Click here for more information on the LCFS work in the Northeast and Mid-Atlantic region.
DOE Says Grid Needs Upgrade to Handle Wind Power
The bottom line is: The existing grid serving most of the United States east of the Rockies would need a multi-billion dollar upgrade before it could handle even 20% wind-generated power.
The DOE's Eastern Wind Integration and Transmission Study (EWITS) evaluates the impacts of wind energy penetration into the power system through 2024. The study encompasses the majority of the utilities in the Eastern Interconnection, one of the two major alternating current (AC) power grids in North America. The Eastern Interconnection reaches from Central Canada eastward to the Atlantic coast (excluding Québec), South to Florida, and back West to the foot of the Rockies (excluding most of Texas).
About a year ago, a Joint Coordinated System Plan study group concluded that a 20-percent wind energy scenario would “require 15,000 miles of new extra-high voltage lines, at an estimated cost of $80 billion, in addition to $1.1 trillion in total generation capital costs by 2024.”
The new DOE study increases those numbers to 22,000 miles of new transmissions lines at a cost of $90 billion. But it argues that the $90 billion cost for transmission upgrades is only a small percentage of the total cost to build the wind generation capacity.
The new study also cautions that wind farms must be spread out geographically so they will not account for a large percentage of power generation at any given point in the grid. According to the new DOE study, "increasing the geographic diversity of wind power projects in a given operating pool generally makes the aggregated wind power output more predictable and less variable, while also reducing the variation in load and increasing the number of generation assets that can be committed and dispatched."
Other highlights from the new DOE study include:
- There are no fundamental technical barriers to the integration of 20% wind energy into the electrical system, but transmission planning and system operation policy and market development need to continue to evolve in order for these penetration levels to be achieved;
- Without transmission enhancements, substantial curtailment of wind generation would be required for all of the 20% wind penetration scenarios;
- Although the costs of aggressive expansion of the existing grid are significant, they make up a relatively small piece of the total annual power system costs in any of the scenarios studied;
- Wind generation displaces carbon-based fuels, directly reducing carbon dioxide emissions. Emissions continue to decline as more wind generation is added to the energy supply; and
- Reduced expenditures on fossil fuel costs more than pay for the increased costs of transmission in all wind scenarios.
Wednesday, January 13, 2010
Windmills on Office Buildings?
That is what SC Johnson is doing at its corporate headquarters in Racine, Wisconsin. The company has launched a wind energy pilot program with the installation of three new wind turbines. The objectives are to reduce greenhouse gas (GHG) emissions and raise awareness that renewable energy is not just for factories, but also office buildings in urban settings.
The three wind turbines are located on the roof of one of the seven buildings on SC Johnson's international headquarters campus, which has an approximate eight block radius and where more than 1,300 employees work. The wind turbines are expected to be fully functioning by the end of the month. Once fully operational, the turbines will be connected to the company's electrical distribution system. The output they generate will power a small portion of the company's campus.
Admittedly, this is a test project and it is difficult to project how many computers, machines and other basic office resources can be powered by renewable energy. "While we are not sure how much alternative energy these turbines will produce, we expect to have clear, consistent results within a year," said Johnson. "This pilot program will help provide useful information on ways we can develop more sustainable solutions for our campus."
The turbines are expected to be fully installed and connected in late January and will be monitored closely throughout the year. Depending on the impact of the turbine's energy output, it is possible the company will extend the project to additional local SC Johnson facilities.
This is not SC Johnson's first foray into sustainable energy. Its largest global factory, based in Racine, Wisconsin, is partially powered with cogeneration using methane gas from a local public landfill. The company's Bay City, Michigan plant is powered with wind energy, reducing the annual purchase of coal-fired electricity by nearly half. In Indonesia, waste palm shells are burned as a substitute for fuel, using 80 percent less diesel fuel, and in Mijdrecht, The Netherlands, the company's largest European manufacturing facility is operated by an 80 meter-tall wind turbine which is expected to eliminate 3,900 tons of carbon dioxide annually.
Through these efforts, approximately 36 percent of SC Johnson's total electricity usage worldwide came from renewable energy. The company cut GHG emissions at its worldwide factories by 27 percent during the last eight years, including all its United States operations by 17 percent since 2005. These reductions -- achieved three full years ahead of the company's 2011 target -- are the equivalent of taking approximately 11,100 U.S. cars off the road for one year.
Friday, January 8, 2010
More Good News for Vehicle Fuel Efficiency
Today comes another story that puts a little meat on those bones. According to a study by Thomson Reuters, alternative power and pollution control have become the biggest source of patent activity in the automotive industry, surpassing perennial leaders such as engine design, braking systems and safety in 2009. Together they accounted for 23% of the patents issued within the automotive industry last year, with alternative power accounting for 14% and pollution control accounted for another 9%.
The report notes that "Only unique patent inventions were counted, providing the truest picture of innovation activity."
While it is too soon to tell whether any of these patents represent significant technological breakthroughs, the trend is encouraging. Obtaining patents is an expensive and time-consuming process. The issuance of patents in the areas of alternative power and pollution control means, at a minimum, that the automotive industry is serious about these technologies. It also suggests that the industry has been shifting R&D money to these areas for some time.
The Thomson Reuters study, 2009 Innovation Report: Twelve Key Industries and Their States of Innovation, tracks unique inventions in granted patents and published applications within 12 key industries. Click here to gain access to the full report.
Thursday, January 7, 2010
KPMG Survey Suggests Shift Towards Hybrid and Alternative Fuel Vehicles
Of the 200 senior executives surveyed worldwide, nine in ten expect manufacturers and suppliers to focus on new technologies, while 88 percent predict manufacturers will increase investment on new models/products and 78 percent say suppliers will do the same.
Hybrid Seen As Most Important Fuel Technology
When asked to rate the importance of alternative fuel technologies over the next five years, hybrid fuel systems came out on top (almost 85 percent), followed by battery electric power (68 percent), fuel cell electric power (63 percent), and biodiesel (42 percent).
"The consumer mindset on fuel efficiency is forcing automakers to build more fuel efficient cars and to create new product that satisfies demand,"said Gary Silberg, National Automotive Industry leader for KPMG LLP.
The survey results come on the heels of sales data released earlier in the week showing that 2009 industry sales in the US were 21.2% lower than sales in 2008.
Fuel Efficiency Cited As Key Purchase Factor
The key question of course is: How much of the emphasis on fuel efficiency is the result of economic conditions, how much is due to stubbornly high fuel prices, and how much is due to climate change and environmental concerns?
The survey suggests that both fuel efficiency and environmental friendliness are driving consumer demand. When asked what would influence consumer purchase decisions over the next five years, fuel efficiency was most frequently cited (94 percent), fairly flat from last year's high of 96 percent, followed by environmental friendliness (just over 80 percent). Other consumer desires were significantly lower including safety innovation (71 percent) and vehicle styling (61 percent).
When asked which vehicles the executives expect will see sales increases over the next five years, hybrid fuel vehicles (almost 93 percent) were most frequently named, followed by other alternative fuel vehicles (83 percent), low cost or introduction cars (82 percent), cars (66 percent), cross-overs (46 percent) and small pick-up trucks (just under 45 percent).
Most surprising were the responses on incentives, including discounts, rebates and free offers. When asked to name which vehicles might see an increase in incentives during the next year, the top prediction was SUVs (53%). But almost an equal number of the auto executives surveyed responded that incentives would be increased for hybrid fuel vehicles (almost 50 percent) and other alternative fuel vehicles (48 percent).
Wednesday, January 6, 2010
New Jersey Getting 12 More Megawatts of Grid-Connected Solar Power
The four ground-mounted solar farms will be among the largest to be developed in New Jersey, with the Hamilton project being the largest in the state and the project in Linden the second largest. All four sites will utilize crystalline solar panel technology and have monitoring and communications functionality.
Together, the four projects will add 48,000 solar panels on 38.2 acres of property. They will produce enough energy to power about 1,300 homes and eliminate some 6,700 tons of CO2 emissions, the equivalent of removing nearly 1,200 cars from the road for one year.
The State of New Jersey has become a leader in solar energy installations in the last few years, installing more than 100 MW of solar energy, making it second only to California in terms of the amount of solar capacity installed.
"We're moving ahead with clean energy projects that will put people to work, installing tens of thousands of solar panels that will help the environment and stimulate the economy," said Ralph LaRossa, president and COO of PSE&G.
The latest projects are part of PSE&G's Solar 4 All program, which was approved by state regulators in July. The program involves a total of $515 million investment in 80 megawatts of solar, creating green jobs and nearly doubling the size of New Jersey's installed solar capacity.