Carbon Regulation is Already Here

Most people talk about carbon taxes, cap and trade, and other carbon-related costs and regulations as if they were something new and unusual. In fact, most companies already face a very complex environmental and Greenhouse Gas (GHG) regulatory system that includes both private standards and government laws and regulations.

The private and public restraints on GHG emissions range from the Walmart Sustainability Index that requires 100,000 Walmart suppliers to disclose their carbon footprints and sustainability initiatives, to regional GHG cap and trade programs that require power plants to reduce their emissions or purchase allowances in an open auction. And, of course, the 1990 Clean Air Act Amendments instituted a cap and trade program for acid rain that achieved 100% compliance in reducing sulfur dioxide emissions during the 1990's.

The most prominent GHG cap and trade program today is the Regional Greenhouse Gas Initiative (RGGI). The ten Northeastern and Mid-Atlantic states that comprise RGGI have agreed to a mandatory, market-based effort to reduce greenhouse gas emissions. The member states have capped CO2 emissions from the power sector with the goal of reducing those emissions by 10% by 2018. States sell nearly all emission allowances through auctions and invest proceeds in consumer benefits: energy efficiency, renewable energy, and other clean energy technologies.

Similarly, the Western Climate Initiative (WCI) is a collaboration of seven western US states and three Canadian provinces working together to identify, evaluate, and implement policies to reduce greenhouse gas emissions, spur investment in clean-energy technologies that create green jobs, and reduce dependence on imported oil. WCI has announced plans to implement a cap-and-trade system in January 2012 that will provide financial incentives to reduce carbon emissions. The program will start with power plants, then extend to large industrial producers and transportation.

These GHG cap and trade programs, however, are only the highly visible tip of the iceberg. Almost every company in the US faces a complex web of private standards and public laws that regulate their GHG emissions, other environmental impacts, and overall sustainability. CERCLA, RCRA, NEPA, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Ocean Dumping Act, and the Endangered Species Act are just a few of the US laws regulating the environmental impacts of companies and individuals in the US. Companies that export to Europe must also be aware of the specific regulatory, green labeling, and other environmental requirements in the European Union and locally.

My good friend Stan Alpert believes that smart companies can use their compliance with environmental regulations as a competitive advantage and ultimately to reduce costs. Stan should know. In addition to working for many years as the Chief Environmental Prosecutor in the U.S. Attorney's Office that covers parts of New York City and all of Long Island, Stan has extensive experience as a lawyer in private practice advising green and sustainable businesses.

Stan has put together a free online webinar entitled Sustainability is Smart Business: A Legal Perspective. The seminar covers the triple bottom line, carbon regulation in the US and internationally, and toxin reduction in the product and waste streams. Businesspeople can view the webinar by clicking here. US lawyers who wish to receive free Continuing Legal Education (CLE) credits for watching the webinar can view it by clicking here.

John Howley
Woodbridge, New Jersey

Could This Be The Year for the All-Electric Car?

The stars are finally aligning for what might be the year of the electric car. Demand will be there as gasoline prices are expected to hit $4 per gallon this summer. Consumers will be able to test drive all-electric vehicles at car rental agencies such as Hertz, and a number of different manufacturers will offer a range of models to choose from. The infrastructure -- a network of electric recharging stations -- is starting to fall into place. There's even an iPhone app that will tell you where the nearest charging station is located.

Let's begin with demand for all-electric vehicles. As noted in yesterday's post, most experts expect oil prices to exceed $100 per barrel this year. That means gasoline prices above $4 per gallon this summer. And high prices are most likely here to stay. While most analysts expect that OPEC will try to keep prices in the $100 to $150 range, Morgan Stanley and others question whether they have enough capacity to keep up with increasing demand from China and other emerging economies. If not, then $200 per barrel oil is within the range of possibilities. John Hofmeister, former president of Shell Oil and author of "Why We Hate The Oil Companies," points out that this could mean gasoline at $5 per gallon by 2012.

Gasoline at $4 to $5 per gallon will start people thinking about alternatives. Can all-electric cars meet their needs?

Car makers and car rental companies are betting that consumers will fall in love with electric cars once they drive them, and so far the reviews have been great. Jim Motavalli, writing in Forbes.com, describes the Nissan Leaf as "impressive, quiet, comfortable, sophisticated, and bristling with high-tech aids to help with charging and plug-in connectivity." He also says that it "handles excellently." In addition to the Nissan Leaf and the Chevy Volt, new all-electric cars are expected this year from BMW, Ford, Mercedes, Mitsubishi, Renault, Subaru, and Toyota in a variety of price ranges. At the top end of the price range, you can even get the very sleek, powerful, and fast all-electric Aston Martin pictured above. A number of other manufacturers are also preparing to enter the market with all-electric vehicles, including China's BYD (backed by Warren Buffett), which is building an all-electric 5-passenger sedan.

OK, so the supply of all-electric vehicles and the demand for them might show up this year, but what about the infrastructure needed to recharge them? Turns out that charging stations are already in place, and more can come on line very quickly in response to demand. For example, utilities around the nation are installing recharging stations for electric cars. Hertz has installed charging stations in Manhattan, and will soon be installing more charging stations at select Starwood Hotels. Walmart has been planning to deploy recharging stations in its parking lots across the country, and if that happens it won't be long before Target, Walgreens, CVS, and other national chains follow the lead.

The constraint this year may be whether supply of all-electric vehicles can keep up with demand. When the Prius first came out, many prospective buyers found themselves on waiting lists to get one of the now iconic hybrids. The same could happen this year, especially with a federal tax credit of up to $7,500 for electric vehicles plus additional credits from states such as California, Georgia and Tennessee.

The longer term, and more troubling issue is whether the electric grid will be "smart" enough to handle the new type of demand for electricity. It is not simply a capacity issue. Existing generation capacity could probably handle tens of thousands of electric cars being recharged during off-peak hours, such as overnight. The problem arises if large numbers of electric cars are being charged during peak demand periods. Ideally, electric cars would act as back-up storage sending electricity back to the grid during peak demand hours and recharging during off-peak hours. But the grid is not yet capable of handling that or billing for it. Building a smarter grid, more than anything else, is the biggest barrier to a future of electric vehicles.

John Howley
Woodbridge, New Jersey

Green Resolutions for a Happy New Year

2010 was the best of times and the worst of times for green energy. Here are a few resolutions to help us make 2011 a Greener and Happier 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!

John Howley
Woodbridge, New Jersey

Breakthrough in Genetically Modified Plants for Renewable Energy

Scientists at The Samuel Roberts Noble Foundation in Ardmore, Oklahoma, have uncovered a gene that could revolutionize the biofuels industry in the United States. The gene is responsible for controlling the density of plant material. By removing the gene, farmers can grow denser plants that produce more biomass from the same acreage. In short, more energy from the same amount of land and less conflict with land needed to grow food.

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.

John Howley
Woodbridge, New Jersey

Kurdistan Attracts Billions for Oil Exploration

Investors are betting billions of dollars that oil will flow freely from wells being drilled in Kurdistan. The Financial Times reports that one small oil exploration company, Gulf Keystone Petroleum, already has a market capitalization of $1.9 billion, which would put it on the FTSE 250 index if it gets listed on the London Stock Exchange. Not bad for a company that has no proven reserves, has never earned any money for its investors, and has run operating losses every year of its existence.

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.

John Howley
Woodbridge, New Jersey
www.HowleyGreenEnergy.com

Learning 2010

Posting may be sporadic this week as I am getting ready to be a keynote speaker on sustainability at LEARNING 2010 in Orlando.  Other keynoters include Apolo Ohno, Marshall Goldsmith, and of course Elliott Masie.  For details, go to http://www.learning2009.com/L10-Keynotes/john-howley.htm  You can expect a full report in this blog after the conference.

John Howley
Orlando, Florida
www.HowleyGreenEnergy.com

Peak Oil and the Reactionary Media

Lloyd's of London issued a report two weeks ago warning that businesses must take our peak oil problems seriously. The report predicts oil prices above $200 per barrel by 2013, and it warns businesses to take action now or face "expensive and potentially catastrophic consequences."

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.

John Howley
Orlando, Florida
www.HowleyGreenEnergy.com

Oil Disasters and Sub-Prime Mortgages: When Risk is Taken Out of the Price

The BP Deepwater Horizon catastrophe has much in common with the implosion of the sub-prime mortgage market. In both instances, very intelligent people failed to take basic precautions with risky investments. Why? Because the risks were not fully included in the investment analysis.

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.

John Howley
www.HowleyGreenEnergy.com
Orlando, Florida

Mr. President, Put General Petraeus in Charge of the BP Catastrophe

Mr. President, if our shores were being attacked, you would not rely on profiteers and mercenaries to defend us. You would appoint our best General to lead the defense, and you would support him with our best troops. You would not "supervise" private companies and "approve" their decisions. You would appoint one person with authority to make all decisions, and that person would have undivided loyalty to you as President.

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.

John Howley
www.HowleyGreenEnergy.com
Orlando, Florida

$550 Billion In Welfare Payments for Dirty Energy

Governments around the world spent $550 billion on energy subsidies last year, mostly to keep down the price of dirty energy from oil and coal. The Financial Times broke the story today based on an advance copy of an International Energy Agency study.

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.

John Howley
www.HowleyGreenEnergy.com
Orlando, Florida

How Monitoring Dramatically Reduces Energy Costs

One of the most cost-effective ways to reduce energy costs is to monitor energy consumption in one minute increments and watch the trends over time. Almost every building will immediately find quick and easy ways to reduce energy costs by 5% or more. And knowledgeable professionals can often use the data to drive down energy costs by 20% or more and improve facility comfort and performance at the same time.

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.

John Howley
Orlando, Florida

The Power of Green Thinking (and Small Green Acts)

A friend invited me to join a Facebook group called the Carbon Conscious Consumer (C3) Campaign. The group has a simple agenda: To promote "6 easy steps that anyone can take to reduce our carbon emissions."

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.

John Howley
Orlando, Florida

President Obama Orders 28% Reduction in Government Greenhouse Gas Emissions

President Obama announced yesterday that the Federal Government will reduce its greenhouse gas (GHG) emissions by 28 percent by 2020. Every federal agency has been ordered to send a sustainability plan to the White House by June explaining how they will meet this ambitious goal.

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.

When President Obama first signed the Executive Order last year, the White House issued a press release announcing that it was intended to "leverage Federal purchasing power to promote environmentally-responsible products and technologies."

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.

John Howley
Orlando, Florida

The Mouse That Roared: Micronesia Challenges a Czech Power Plant

World government conspiracy theorists must be foaming at the mouth.

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.

NYC Mayor Bloomberg Promises to Clean Up Toxic Heating Oil

The Environmental Defense Fund (EDF) praised New York City Mayor Michael Bloomberg for addressing the issue of toxic heating oil in New York City during his State of the City speech this afternoon. The mayor pledged that his administration will be "greening the heating fuels used in our schools and big buildings."

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.

John Howley
Orlando, Florida

Northeast and Mid-Atlantic Governors Commit to Low-Carbon Fuel Standard

Governors of 11 Northeast and Mid-Atlantic states signed a Memorandum of Understanding (MOU) on December 30 that commits their states to developing a regional Low-Carbon Fuel Standard (LCFS), a market-based, fuel-neutral program addressing the carbon content of fuels.

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.

John Howley
Orlando, Florida

DOE Says Grid Needs Upgrade to Handle Wind Power

The U.S. Department of Energy's National Renewable Energy Laboratory today released a major study of the technical, operational, and economic issues facing the integration of large amounts of wind energy into the power system.

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.
  

For more information about incorporating increasing amounts of wind energy into the power system while maintaining reliable grid operations, see the DOE's Wind and Hydropower Technologies Program's Renewable Systems Interconnection web site.

John Howley
Orlando, Florida

Windmills on Office Buildings?

Solar panels on office buildings and homes have become almost commonplace. But windmills?

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.

John Howley
Orlando, Florida

More Good News for Vehicle Fuel Efficiency

Yesterday I reported on a survey by KPMG suggesting that the automotive industry sees great promise in consumer demand for hybrid and other alternative fuel vehicles, and that the industry plans to build and promote more hybrid and alternative fuel vehicles over the next 5 years.

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.

John Howley
Orlando, Florida

KPMG Survey Suggests Shift Towards Hybrid and Alternative Fuel Vehicles

Senior automotive executives are expected to increase their investment in new technologies to produce more environmentally-friendly, fuel-efficient vehicles. This is the conclusion reached by the 11th annual global automotive survey conducted by KPMG LLP, the US audit, tax and advisory firm.

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).