Sunday, June 01, 2008

Alternative Energy—Our Only Alternative—Part V

Here’s The Good News

If you haven’t noticed, the concept of global warming has not only been gaining recognition, the acceptance of its existence has been gaining momentum in some unexpected circles. In mid-May the presumptive Republican president nominee, Senator John McCain delivered a very forceful and emotional speech in which he criticized the fact that in the past eight years the current administration ignored the problem, and promised that if elected president, climate change will be a major focus of his administration. (His official website should be updated to reflect this new commitment.)

Hillary Clinton’s plan (assuming she is still in the nomination race when you read this) is much more detailed, incorporating a cap and trade system for carbon emissions, and a significant increase in green research funding. She has established specific targets that would reduce greenhouse gas emissions by 80 percent from 1990 levels, and cut foreign oil imports by two-thirds by 2050.

Barack Obama has also committed to a market based cap and trade system that would reduce U.S. carbon emissions by 80 percent by 2050. He has stated that the U.S. can and should be a global leader in the development of alternative energy such as solar and wind.

Now the Bad News

So, the good news is that whichever politician becomes our next president, global warming will be viewed as a significant threat to our planet’s well being, and that the rapid development of alternative energy sources would presumably be a priority undertaking. The bad news is that a key group of other politicians, members of the U.S. Congress, seem to have other priorities that will actually hinder the propagation of alternative energy sources.

For the full story about Congressional stupidity (and I use that word advisedly), Google the following: “Dumb As We Wanna Be.” That is the headline on The New York Times op-ed page of April 30 th, authored by the three-time Pulitzer Prize winner, Thomas L. Friedman. Whether you are a Conservative, Centrist, or a Liberal, if you believe that that achieving the goals of mitigating global warming and realizing oil independence are critical, I think you will be appalled by the cavalier treatment of a legislative action vital to the ultimate success of solar and wind power. For those who choose not to access the original, here are some of Mr. Friedman’s writings:

“Are you sitting down? Few Americans know it, but for almost a year now, congress has been bickering over whether and how to renew the investment tax credit to stimulate investment in solar energy and the production tax credit to encourage investment in wind energy. The bickering has been so poisonous that when Congress passed the 2007 energy bill last December, it failed to extend any stimulus for wind and solar energy production.” Now comes the real kicker: “Oil and gas kept all their credits, but those for wind and solar have been left to expire this December.” Without these tax credits, incentives to build these clean sources of power will be sorely diminished.

The problem is that one political group “wanted the wind and solar credits to be paid for by taking away tax credits from the oil industry,” but there were not enough votes to overcome a certain presidential veto. The next time you pay over $4.00 for a gallon of gas or read that the price of a barrel of oil has hit $135 (as it did the day before this article went to the printer), or recall that oil company profits are hitting record highs (Exxon Mobil alone made a record $40 billion in profits last year), I don’t think I’m being overly cynical when I wonder how many of these industry profit dollars are going to Congressional members’ campaign funds. Efforts are underway to reintroduce the legislation, and perhaps a compromise will result. (The last paragraph of this article will explain.)

Wind Power

It’s ironic to learn that we have resurrected a 2,000-year-old technology to insure the future of our planet. The on-line magazine,, points out that “Like thermal [solar], wind energy has a long history. More than 2,000 years ago, simple windmills were used in China to pump water and in Persia and the Middle East to grind grain. Merchants and returning veterans of the Crusades introduced windmills to Europe in the 11 th century, where first the Dutch and then the English improved the design. By the 18 th century, more than 10,000 windmills operated in the Netherlands where they were used to grind grain, pump water, and saw wood.” Salon continues, as does the irony: “Ultimately, the mills were replaced by steam engines because they could not compete with the low cost, convenience and reliability of fossil fuels.” Those attributes of fossil fuels still exist today and are the major detriments to the development of alternative energy sources such as wind.

Everything Old is New Again

However wind energy is approaching a position where it can compete price-wise with fossil-fueled electricity plants—with improved blade designs and much taller turbine structures that capture faster winds at greater heights, costs continue to fall. (The size of these power-generating turbines is astounding. Pictured is the largest and most powerful one to date. It has been installed in Emden, Germany by its creator Enercon, produces 7+ megawatts of electricity, and is 453 feet high with a blade diameter of 413 feet.)

But government commitments to the concept in the form of subsidies are imperative to the success of wind energy. In fact, according to Salon, “With major government investments in wind in the 1970’s the U.S. was poised to be a dominant player in what was clearly going to be one of the biggest job creating industries of the next hundred years. As late as the mid-1980’s we had over 85 percent of the world’s global installed capacity and U. S. companies possessed the most critical knowledge about how to develop wind farms cost-effectively.”

Déjà Vu All Over Again— Yogi Berra

So what happened that almost irreversibly damaged that advantageous position? Salon maintains, “President Reagan cut the renewable energy budget more than 80 percent after he took office, and eliminated the wind investment tax credit in 1986.” This was pretty much the death of most of the U.S. wind industry. The possibility of the exact same scenario is playing out right now according to Tom Friedman. Unless Congress can come up with a compromise on the current legislation, and unless the president rethinks his veto option, we could face the same fate again. Another round of irony is that the state that has installed the most wind power (5.5 gigawatts) is Texas, and that has been the result of the strong support of the then governor of Texas—George W. Bush. Nonetheless there is more good news developing.

Assuming that the federal tax credit legislation is reenacted, new wind farms can offer power at 4 to 8 cents a kilowatt hour (kWh). That is the conclusion reached by the California Public Utility Commission. The Commission’s price estimates for power from new nuclear plants (where building costs have tripled) is 15 cents and new coal plants (without carbon capture and storage) is 10 cents per kWh. A new report, apparently ignored by the administration, is from its own Department of Energy titled, “20% Wind Energy by 2030.” It found that wind power should cost 6 to 8.5 cents unsubsidized. In addition to huge greenhouse gas savings, the study notes, “few realize that electricity generation accounts for nearly half of all water withdrawals in the nation.” With future water shortages a certainty, a shift to wind power would cut water consumption by 450 billion gallons a year.

Pickens Sees Sweet Pickin’s

If anyone doubts the potential of wind power, perhaps the opinion of a legendary multi-billionaire with some 57 years of experience in the oil industry (who you might assume would be negative on any alternative energy suggestions), will change your mind. In an interview in the May issue of American Prospect magazine, he says: “There’s only one source of energy that’s going to make a substantial difference for this country, and its wind. It’s renewable, it’s green, there’s no question it will work, and it’s being developed very aggressively now in Texas, western Oklahoma, Kansas, and up the Great Plains. For the next ten years, America will need about a 15 percent increase over the amount our country needs now. It could come from wind.”

Money Talks

There is a saying, “Don’t talk the talk if you can’t walk the talk.” Not only does Pickens walk the talk, he also lives up to another popular adage, “Put your money where your mouth is.” Is $2 billion enough to convince you that Pickens is serious? In mid-May Mr. Pickens announced his company, Mesa Power, placed the largest order for a single-site wind power development in the history of the industry—687 wind turbines from General Electric. The $2 billion investment is for the first of a four-phase plan that when complete (ultimately costing $10 billion) would be the largest in the world, covering 400,000 acres in Texas, generating 4,000 watts of energy, enough for 1.3 million homes by 2014.

Pickens is essentially placing a bet when he says, “I believe that Congress will recognize that it is critical not only to this project, but to renewable energy in this country that they enact a long-term extension of the Production Tax Credits.” Just when you were probably developing a nice fuzzy, warm feeling for T. Boone Pickens, if you think it’s credible to believe that multi-billionaires don’t place that kind of bet without knowing the outcome, you would be right.

I would advise Tom Friedman to adopt the position of Alfred E. Neuman of Mad magazine—“What, me worry?” Pickens has his bet very well covered with none other than the guy who has veto power over the tax legislation. Pickens gave $5.5 million to influence the 2004 election including $3 million to the notorious Swift Boat Vets and POW’s for Truth. I’ll let you know if, in this case, money does talk.


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