The New Battlefield in the Energy Wars

The somewhat geeky looking guy in this picture is Jonathan Small a registered lobbyist for the giant oil and gas conglomerate known as Koch Companies Public Sector LLC.  In other words he is a shill for the Koch brothers.  And in this picture (provided by Andy Marso of the Capital Journal) he is attending a public hearing of the House Energy and Environment Committee for the state of Kansas. 

It clearly an understatement to say that the Koch brothers and their compadres in the oil and gas industry are busy in the political arena and one of the places they have been most active has been in the state legislatures.  Why, you might ask?  Because that is where they can have the greatest influence in countering the rapidly growing strength of the Renewable Energy industry.  Despite their Red State leanings, renewable energy is just going plain gangbusters in the plain states like Kansas, and this scares the bajeeezus out of guys like the Koch brothers.

Kansas now ranks 3rd in the overall United States when it comes to wind energy, just behind California and Texas.  Kansas has lots of wind, and thanks to to an aggressive Renewable Energy target it set in 2009, it is making huge strides in reducing the state's dependency on coal and foreign oil.  The Wind industry in Kansas is now generating over $3 billion dollars in investments, has generated 13,000 jobs,  and is making lots of friends among farmers who have discovered that wind is an easy way to hugely increase their revenue without having any negative impact on their existing farming and ranching activities.  Wind energy is a total win-win for the people of Kansas but not for the oil companies so that is why the Koch brothers intend to put a stop to it. 

One of the ways the Koch brothers are going after renewable energy is to knock down the Renewable Energy Standards (RES) that have allowed Kansas to build such success. They sponsored two bills, one in the state House (HB 2241) and one in the state Senate (HB 82) before the Kansas legislature which were designed to water down the renewable energy standards.  The current Renewable Energy Standard says that the state utilities must get 15% of their energy from renewable sources by 2016 and 20% by 2020.  The state has been making great progress towards those laudable goals but the new bill being sponsored by the Koch brothers would extend the 15% benchmark by two years and eliminate the 20% benchmark all together.  Heaven forbid that a state should get 20% of its energy from non-polluting, non global warming resources!

Now For the Good News!

So before I go much further let me bring you the good news. Both bills in the Kansas state legislature were defeated, though by fairly narrow margins!  So the good guys one this round.  However, now is not a time to be overconfident!  A few more votes the other way and the progress Kansas has made would have been defeated.

The battle for our environment won't always be fought in big battles or standoffs in Congress with CNN and the other media hanging on every word.  Most of the real work for the environment gets done quietly at the state and local level and what is happening in Kansas is a perfect example of this.

One of the things I find fascinating about all of this is that the oil company manipulations are happening right out in the open.  Rep. Dennis Hedke, the Chairman of the Kansas House Energy and Environment Committee readily admits that he met with the Koch brothers lobbyist, Jonathan Small to "talk about the merits of the bill." To those who know Rep. Hedke such meetings should hardly be a surprise. When not doing his legislative gig Hedke is a contract geophysicist with a client list that includes 30 regional oil and gas  companies.  He has long been at the beck and call of the oil lobby and recently proposed a law requiring Kansas science teachers to teach students “evidence which both supports and counters” the science of climate change.  Given this level of scientific reasoning one can't help but wonder if a bill to have students debate the arguments for and against gravity is next!

The ugly reality is that state legislators are a whole lot easier and cheaper to buy than federal legislators so it is hardly surprising that the battle for the environment is being fought hard on the state front.  If we are going to solve global warming and protect our survival as a species, it is up to citizens to be diligent, not only in following federal environmental politics, but state politics as well!

California Renewable Energy Targets are Working

California has one of the most aggressive renewable energy targets of any state in the U.S. The type of standard California uses is called a Renewable Portfolio Standard (RPS). What this means is that all investor owned utility companies, such as PG&E or SMUD, must get a certain percentage of their electricity from a renewable energy provider. That source could be a privately held 3rd party energy company such as a hydro-electric plant, solar farm or wind farm operator. It could also come from solar or wind farms that are owned directly by the utility.

In 2011 California passed Senate Bill 2 (SB-2) which raised the portfolio standard from 20% renewables to 33% by 2020. This move was seen as exceedingly ambitious by many renewable energy critics and was quickly discounted as just a political ploy. However, what these critics failed to grasp is that RPS standards actually work! This week PG&E, California's biggest investor-owned utility announced that it is making significant progress towards meeting this demanding target. PG&E stated that for 2011 it had generated more than 19.4% of its energy from completely renewable energy sources including wind, solar, geothermal, biomass and small hydro-electric sources. Furthermore, PG&E says that it is completely on track to hit the 33% RPS target by 2020.

Since 2002 PG&E has signed more than 110 contract for energy from renewable energy contractors. That's about 10,000 Megawatts of energy! Moreover, PG&E has been able to do this without having to increase the price it pays for energy. Many citizens do not realize that in 2012 modern renewable energy power plants such as wind farms and solar farms are completely cost competitive with polluting fossil-fuel sources such as coal and natural gas when a long-term contract is used. That's because the cost of renewable energy sources are already low and going down, and fossil-fuel and nuclear sources are steadily going up in cost. PG&E has done the math and has seen how much solar and wind sources have come down in cost. For them renewable energy is a win-win. They get the positive public image of supporting non-polluting renewable energy and they completely avoid the risk of price spikes because they have locked in the price with a long-term RE contract. Most fossil-fuel providers won't sign long-term contracts because they know fossil-fuel prices will inevitably increase in the future as supplies begin to dwindle or as speculation drives up the cost (as we are seeing right now with Iran).

The progress California is making towards its RPS goals is incredibly good news. Think about it! The country's largest, most energy hungry state will be getting one third or more of its energy from renewable energy in less than 8 years. This would be an enormous step forward for California and would clearly give it a huge economic advantage over competing states. In terms of GDP California is the fifth largest economy in the world. If California can do this, nearly any other country in the world could do this to. And that, my friend, is the whole point! Renewable energy is real, its big, and its working now, not just in some distant future.

The great success states like California and Colorado have had in using aggressive RPS standards leads to the obvious question of why not have a national RPS, not just a state-by-state standard. National level RPS standards have worked wonderfully for countries in Europe so why not in the United States. This week Senator Jeff Bingaman, a Democrat from New Mexico introduced the Clean Energy Standard Act of 2012, a bill that would try to set nationwide standards for large retail utilities. Unfortunately, the bill does not limit sources to truly renewable energy sources, but includes coal with carbon capture and nuclear power.

We think the idea of having a national RPS is a good one but it needs to be limited to truly renewable sources, not just less polluting sources. Nonetheless, it is a start and it will be interesting to see how it fares in Congress. At least it will get the discussion started and hopefully in a few years our entire country can begin chasing and achieving a national RPS target. Let's go for it!!

Throwing Good Money After Bad

The above expression has always struck me as a bit esoteric.  Its an expression I have seen and heard a lot and yet the meaning of it never quite seems to fit the words themselves. The best definition I have seen of this expression is as follows:  "To spend more and more money on something that will never be successful."  The best example I have seen lately of this expression comes, not surprisingly, from our friends in the coal industry. 

It seems that Kentucky Power Company, a privately held power company serving the eastern counties of Kentucky has proposed spending $980 million of the public's dollars in order to update its 800 MW Big Sandy Power Plant near Louis, Kentucky in order to meet the recent regulations on air pollution which are finally being enforced by the Environmental Protection Agency (EPA). 

We have to admit that this is a good news/bad news type of story. The fact that coal-based utility companies are finally being held accountable for the tons of pollutants they have been putting into the atmosphere is a very good thing.  We are thrilled that the EPA is, at last, being allowed to do their job by the Obama administration given that they were completely hog tied during the administration of George W. Bush, the oilman. Still, nearly a billion dollars spent on a single power plant that will only be marginally less polluting after this is all done?  Isn't this a perfect example of throwing good money after bad, and in this case, a whole lot of good money?

I realize that a billion bucks probably is not what it used to be, but that's one thousand million dollars and that's still a pretty good chunk of change. Why isn't Kentucky spending that money on a renewable energy plant, either wind power or solar power, instead of trying to retrofit an old coal plant that has already seen too much use.  Kentucky has plenty of sun and given the incredible price drop in the cost of solar panels in the last couple of years Kentucky Power could build one heck of good solar power plant or wind farm for what its planning to spend to put lipstick on one very ugly pig! 

Solar has gone through an unprecedented decline in costs in recent years and solar plants are going up all over our country.  One big solar project currently under construction is the Topaz solar project in San Luis Obispo County, California.  This plant will be a 550 megawatt plant and will cost $1.2 billion to construct, only a little less than what Kentucky is proposing to spend just to clean up an already well aged coal plant.  The solar PV plant will put out no pollution, zero, have no significant environmental impact, will not contribute to global warming and will last at least 50 years.  When you look at all energy costs (see Dr. Paul Epstein's recent Harvard study on coal costs) the energy from a solar or wind plant will cost less than the energy from the coal plant. Moreover, solar photovoltaic plants are incredibly straightforward in design and require very few people to maintain them.  The maintenance costs alone would be a fraction of what they would be for a coal plant.   Wouldn't that be a better deal for the people of Kentucky!

The numbers are about the same if Kentucky were to look at building a modern Wind Farm instead of fixing an old coal plant.  Eastern Kentucky has plenty of wind resource.  A large wind farm could easily provide the same amount of electricity at less cost than coal. Costs for modern wind turbines have also gone under significant decline and the current cost of a megawatt of wind energy appears to be just a little over $1 million per megawatt.  That means that for a couple of hundred million less than they are now planning to spend to clean up the old coal plant Kentucky could have a totally non-polluting wind farm that would last much longer than a coal plant and produce the same amount of energy.  Once again, it would put out zero pollution, no contribution to global warming and could move Kentucky into the modern energy era. Once again, a better deal for the people of Kentucky!

There is a saying that there is nothing so powerful as an idea who's time has come.  I would like to believe that is true since renewable energy is definitely an idea who's time has come.  However, it may be the case that it has run up against an even more powerful force, the power of human inertia, the tendency of senseless humans to keep on doing what they have always done even when it no longer makes any sense.  The plans of Kentucky Power strike me as a perfect example of inertia.  They are going forward with spending massive amounts of public money on coal, even when coal no longer makes any sense, either for the people of Kentucky or the people on our planet. 

The time has come to realize that if we are really going to stop global warming we are going to have to do something about coal.  Coal is without a doubt the single biggest contributor to global warming.  It is not enough to build new solar farms and wind farms. If we are going to escape the ravages of a too warm planet, we must eliminate coal from our energy vocabulary.  To do that we have to stop throwing good money after bad and start replacing, not repairing, the thousands of coal-fired energy plants that are killing us and our planet.

The Real Problem with Nuclear Energy

Yesterday's Supreme Court decision which struck down the existing laws limiting contributions from corporations is bound to have some immediate impact. Look for lots of campaign commercials from the Nuclear lobby promoting your friendly neighborhood nuclear power plant (along with continuing absurd commercials about the mythical "clean coal"). The doors are now wide open for big corporate energy interests to campaign and we doubt that they will waste any time beating down our virtual doors. However, it is my fervent hope that the public will think twice about buying the pitch for more nuclear plants. Increasing our use of nuclear energy would be very bad policy, though not necessarily for the reason most citizens think.

When most people think about nuclear energy the first thoughts that come to mind probably have something to do with Chernobyl, Three Mile Island, or other glow-in-the-dark scenarios. Nuclear waste also frequently rears its head as a concern given that nuclear waste is dangerous for thousands of years. However, it may be that the biggest thing we should be worrying about (though it doesn't make for a good movie of the week) is the whooshing sound of dollars leaving our wallet, because when looked at carefully it quickly becomes clear that nuclear power plants are just too darn expensive.

An excellent explanation of this provided yesterday by Elliott Negin, the media director for the Union of Concerned Scientists in Washington, D.C. in an article that appeared recently on the GreenTechMedia web site. Negrin points out that there have been no new nuclear plants built by utility companies since 1973. The energy companies don't want them because they know how expensive they are. A bit of history is in order. As Negin points out "In the 1960s and 1970s, the industry proposed to build some 200 plants, but as construction costs escalated, only about half were finished. Taxpayers and ratepayers were left footing the bill -- about $300 billion in today's dollars -- for abandoned plants, cost overruns for completed plants, and stranded investments that were higher than the wholesale market price for power. "

The Nuclear lobby has asked the Nuclear Regulatory Commission to approve the building of 26 new nuclear power plants. The cost of these plants would be extraordinary, probably in the range of $7-9 billion dollars apiece. What makes this a bigger concern is that the nuclear power companies are asking for taxpayers to finance these risky investments despite the fact that prior investments led to hundreds of billions of dollars of loss. The Nuclear Energy Institute, which is the lobbying arm for the nuclear industry has petitioned the commission to provide over $100 billion in loan guarantees so they can build the nuclear plants. Folks, this is not chump change. We are talking Iraq war kind of dollars here. Moreover, we are looking at loan guarantees that the nuclear companies could very easily default on. The GAO, the Government Accountability Office estimates that the risk of the nuclear companies defaulting on these loans is at least 50%. I can't imagine any business guaranteeing loans with a 10% risk, much less 50% risk. This is just bad business!

The argument put forward by the nuclear industry is, of course, that the demand for electricity is growing and nuclear plants do not contribute to global warming. Both arguments are true, but what they are not telling us is that there are far better alternatives for getting the renewable energy we need, lots of alternatives.

Let's start with solar energy, for example. As of January 2010 solar has rapidly emerged as an increasingly competitive way of generating commercial electricity. The current cost of a kilowatt-hour of solar energy is hovering around 19 cents per kilowatt hour which is still a bit above nuclear energy costs. However, the cost of photovoltaic panels has dropped by half in 2009 while at the same time the efficiency of the panels went up. Once commercial electric plants begin incorporating these cheaper panels most experts believe PV electricity costs will drop to around 9-11 cents per kilowatt hour which would make them very competitive if not cheaper than electricity from nuclear power plants.

Solar energy can also be generated using solar heat, particularly if the plant is built somewhere in the southwest US where temperatures are high. Solar thermal plants have become far more efficient as the technology becomes refined. There are many solar thermal plants in development that rival nuclear plants in scale. Many of these plants will also address one limitation of solar energy which is its intermittent nature. Recent breakthroughs in the storage of solar thermal energy using molten salt now allow the solar thermal energy to be stored overnight so that the plants can generate energy 24 hours per. This will make them even more viable alternatives to nuclear power plants.

Wind energy is yet another alternative to nuclear power. Large utility scale wind turbines are being manufactured in increasing numbers and as a result are becoming bigger and more cost effective. Over the last 20 years, the cost of electricity from utility-scale wind systems has dropped by more than 80%. In the early 1980s, when the first utility-scale turbines were installed, wind-generated electricity cost as much as 30 cents per kilowatt-hour. Modern wind farms are now producing energy at closer to 4-6cents per kilowatt-hour when you account for the Production Tax Credit. In turn most nuclear power plants are producing energy at somewhere between 11-14 cents per kilowatt-hour when you account for the cost of storing depleted nuclear fuel. Wind farms produce electricity at far less cost and do this without generating any carbon emissions, no radiation risks and without the long-term problem of disposing of nuclear waste. When you look at the whole picture wind energy becomes a no brainer!

Despite these economic hard times are choices for generating cleaner and less expensive energy have never been better. That makes it all the more important that we choose wisely. Give it some thought!