SAY GOODBYE TO CALIFORNIA—SEC/ENERGY

“It’s all good,” was a popular slang phrase a few years ago. It was commonly used by Grammy-, Emmy- and Oscar-award nominees who did not win and it trickled down to salaried workers stuck in traffic calling in to racey talk-radio shows. NewEnergyNews has yet to notice the phrase come up in a discussion of global climate change.

Yet it is tempting to shrug and say “It’s all good” in response a recent description by Dr. Steven Chu, the Obama-appointed Secretary of Energy, of what global climate change could bring about.

Chu: “We're looking at a scenario where there's no more agriculture in California… I don't actually see how they can keep their cities going…”

Secretary Chu was describing potential consequences of the drought-induced evaporation of California’s snowpack, the source of its agricultural region’s vital water. A University of California study put potential climate change-induced real estate losses alone in the trillions.

But, as the Nobel laureate-turned-Energy Secretary pointed out, this could be a wake-up call.

Chu: "I don't think the American public has gripped in its gut what could happen…"

It is not entirely clear the public-at-large fails to understand the situation. Polls repeatedly show the bulk of the public aware and concerned. If it is not cognizant of specific dangers, it certainly knows enough to want its leaders to deal with the situation. (See POLL FINDS AMERICANS WANT ACTION…)

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What is more likely is that a recalcitrant minority, the minions of vested interests, continue to voice denials. The public, frightened by what it HAS “...gripped in its gut...” and seeing no effective response from its elected leaders, accepts these false reassurances. It is no accident that the public is more activist and involved where there is bold state and local leadership.

Maybe the drying up of cheap California wine and the disapperance of cheap California produce will turn the public away from misleading leaders. Although, frankly, many of the most recalcitrant among the leaders and the followers seem to be the kind of people who prefer steak to salad and may need to chomp for a while on thirst-toughened plains-bred beef to get the idea into their guts.

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The most prominent climate change denier in the U.S. Senate seems to be a steak and potatoes type. Senator James Inhofe (R-Okla.) is Ranking Member on the pivotal Environment and Public Works Committee that, chaired by climate change hero Senator Barbara Boxer (D-Calif), will produce this year’s climate change legislation.

Here is the obstinate Mr. Inhofe’s response to Secretary Chu’s remarks: "I am hopeful Secretary Chu will take note of the real-world data, new studies and the growing chorus of international scientists that question his climate claims…Computer model predictions of the year 2100 are simply not evidence of a looming climate catastrophe."

One of the most anti-science members of the U.S. Senate, Inhofe has, in speeches on the Senate floor, compared sophisticated computer modelling of climate to video games. Despite his head-in-the-sand, unsubstantiated declarations to the contrary, the only "...growing chorus of international scientists..." is the one calling more stronger and more immediate action to stem global climate change.

What deniers like Mr. Inhofe need to get in their gut is that there is a better way. In energy, it is NOT all good. That’s why BusinessWeek writer L.J. Furman calls meeting the GORE CHALLENGE (of shifting the U.S. entirely to New Energy) a “business imperative.”

Furman: “We could meet the "Gore Challenge" via the deployment of 250 gigawatts of wind generation capacity and 50 gigawatts of solar, and it would cost approximately $911 billion. But is 'clean, renewable, and sustainable' energy really necessary? … I'd argue yes—it's a business imperative. As I commented in the article MBA Programs Go Green, ‘we must shift the business focus from today, tomorrow, and this quarter to the long term, [and] we must also shift the energy paradigm from fossil fuels to conservation, solar, wind, and geothermal.’”

Furman makes 3 clever arguments on behalf of New Energy, (1) the legal argument, (2) the financial argument and (3) the Johnny Appleseed argument.

The legal argument amounts to “New Energy is the law.” A 2007 Supreme Court decision essentially makes it the responsibility of the U.S. Environmental Protection Agency (EPA) under the Clean Air Act to take control of greenhouse gas emissions.

The financial argument amounts to “New Energy is the cheapest way to go.” Calculations vary and depend on what is included in the concept of “costs” but Furman uses a real world wind installation price of $2 billion/gigawatt and a real world solar power plant price of $6.5 billion/gigawatt in comparison to the real world nuclear plant price of $8 billion/gigawatt (and that doesn’t include the cost of disposing of dangerous nuclear waste because, of course, there is no way to do so). Coal MAY presently have a competitive real world new facility price but the impending cost of dealing with coal-fired spew is already leading most power producers to put off or cancel plans for new plants.

The Johnny Appleseed argument is essentially moral.

Furman: “Apple trees produce apples. You can eat the apples year after year or chop down the tree and burn the wood to stay warm or build furniture. But you won't get more apples…we have been chopping down the apple trees and burning them for fuel. Harnessing sunlight, winds, waterfalls, ocean currents, and geothermal energy is like planting apple trees and using the apples as our energy source. Johnny Appleseed would approve.”

In the light of Dr. Chu’s description of what could happen if the nation does not rise to the Gore Challenge, Furman’s arguments seem even stronger. In this way, the threat of global climate change is sort of a bad thing that creates motivation to do good things.

Highlights of the Gore Challenge. From WeCanSolveIt via YouTube.

Secretary Chu talked about solutions. He wants Congress to (1) allot billions for New Energy and Energy Efficiency infrastructure and R&D, (2) pass a national Renewable Electricity Standard (RES) requiring utilities to obtain 10% of their power from New Energy by 2012 and 25% by 2025 and (3) mandate a cap-and-trade systemt to control greenhouse gas emissions (GhGs).

One small problem: The financial crisis.

2008 was a banner year for New Energy. The U.S. took the world lead in wind and put itself on track to take the world lead in solar. Yet turbine manufacturers and solar panel makers are now canceling plans and laying off workers. U.S. production in both sectors may drop 30-to-50%.

Christine Real de Azua, spokeswoman, American Wind Energy Association (AWEA): "Because these are capital-intensive industries, 2009 is not going to be as good a year as 2008…There has been a lot of demand for wind as a new source of energy, but they [developers] need the financing to reach the finish line…A lot will depend on the policies put in place, especially the stimulus bill. If it's well crafted, that will make a difference."

More specifically, the difference will be whether the stimulus bill presently being debated in Congress gets through the legislation-making process with a provision to transform tax credits to grants intact. That provision was approved by the House but is not in the Senate’s bill.

The skyrocketing growth in the New Energy industries over the last 3-to-5 years has been spurred by a production tax credit for wind and an investment tax credit for solar. Big institutions that were making profits in other arenas partnered with wind and solar energy producers, providing capital and taking the tax credits to offset their profits. Many of those institutions are no longer around (example: Lehman Brothers) and others have no profits that require tax offsets (example: AIG). The wind industry reports having lost 8 of its 14 major financial sources in the last 2 years. The solar industry reports having lost 15 of its 20 major sources in the last year.

The provision in the House bill would transmute the tax credits into Department of Energy grants and loan guarantees (administered by Secretary Chu). The change would simply sustain the original intent of the subsidy in this new, less accommodating economic environment.

A recalcitrant Republican minority of fossil fools in the U.S. Senate, representing just enough votes to obstruct with the threat of a filibuster but not enough to do anything constructive, only assented to legislation allotting the tax credits very reluctantly at the end of 2008. This minority is once again penuriously impeding the progress of New Energy in favor of keeping the nation dependent on coal-fired spew and nuclear poison.

In response to calls for domestic energy sources, this backward-looking bunch of Luddites, led by the likes of Senator Inhofe, proposes (1) drilling for inadequate reserves of oil and natural gas in precious, protected areas, (2) devastating the air, water and countryside by mining coal, and (3) building excessively expensive nuclear facilities that would generate radioactive waste for which there is no repository.

It is slightly terrifying to think that Senator Inhofe and his cohorts have such a pivotal say in whether or not the U.S. sustains the growth of vital New Energy capacity. That’s why the phrase “it’s all good” so rarely comes up in these debates.

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California farms, vineyards in peril from warming, U.S. energy secretary warns
Jim Tankersley, February 4, 2009 (LA Times)
and
Alt-energy flagging in recession
Jordan Lite, February 4, 2009 (Scientific American)
and
Green Energy: Our Future Depends on It; BusinessWeek reader sees alternative fuels as common sense for the common good
L.J. Furman, February 4, 2009 (BusinessWeek)

WHO
Secretary of Energy Steven Chu, Nobel laureate in Physics; L.J. Furman, MBA candidate, Marlboro College sustainability program; Senator Barbara Boxer (D-Calif), Chair, and Senator James Inhofe (R-Okla), Ranking Member, Senate Environment and Public Works Committee; Christine Real de Azua, spokeswoman, American Wind Energy Association (AWEA); Monique Hannis, spokeswoman, Solar Energy Industries Association (SEIA); John (Johnny Appleseed) Chapman

WHAT
It has never been so apparent how urgently New Energy is needed but incentives useful in the current financial circumstances to sustain New Energy’s growth hang in the balance.

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WHEN
- 2008: Venture capital investment in solar energy represented 40% of the world’s VC spending.
- 2008: The wind power industry installed over 40% of all U.S. new generating capacity.
- April 2007: The Supreme Court ruled that unless the EPA can prove greenhouse gas emissions (GhGs) don’t contribute to global climate change, it must regulate them under the terms of the Clean Air Act.
- November 2008: The EPA’s own appeals board ruled there was no valid reason to not regulate GhGs.

WHERE
- The U.S. wind power industry surpassed Germany’s installed capacity to take over the world lead.
- The U.S. solar energy industry was on track to take the world lead in installed capacity away from Germany this year.
- Johnny Appleseed introduced the apple as a money crop to Ohio, Indiana and Illinois.

Johnny Appleseed (click to enlarge)

WHY
- It is not widely known that Johnny Appleseed, though very generous with his appleseeds, also became wealthy himself from growing them for apple cider, a very popular source of nutrition and intoxicant in the 19th century.
- The U.S. wind power industry added over 8 gigawatts of capacity in 2008, topping 25 gigawatts of total national capacity.
- The U.S. solar energy industry added 1,000 megawatts of installed capacity.
- T. Boone Pickens’ predicts his Texas wind installations will cost $2 billion per gigawatt. The Atlantic County Utility Authority 500 kilowatt solar array was built for ~$3.25 million, which is $6.5 billion per gigawatt.
- A New York Times estimate: New nuclear capacity costs $8 billion per gigawatt (without fuel, waste management, or government oversight).
- In issuing his challenge, Al Gore said “..enough solar energy falls on the surface of the earth every 40 minutes to meet 100% of the entire world's energy needs for a full year. And enough wind power blows through the Midwest corridor every year to meet 100% of U.S. electricity demand.”

A top energy expert endorses the Gore Challenge. From WeCanSolveIt via YouTube.

QUOTES
- Furman, BusinessWeek: “The question of necessity is easy to answer. In April 2007 the U.S. Supreme Court ruled in Massachusetts vs. Environmental Protection Agency and Environmental Defense Fund vs. Duke Energy that the EPA must regulate carbon emissions…On Nov. 13, 2008, the Environmental Appeals Board (EAB) of the EPA ruled that the EPA had "no valid reason for refusing to limit" carbon dioxide emissions from new coal-fired power plants…We need alternatives to fossil fuels, if for no other reason than to obey the law.”
- Furman: “New Energy technologies] harness a process rather than consume a resource. When we use a process, such as putting a photovoltaic module in sunlight and allowing the photoelectric effect to generate an electric potential, or we put a turbine in the path of a wind or water current, it is as if we have harnessed a horse or hitched a ride on a train that is running regardless of our presence as a passenger…Harnessing sunlight, the kinetic energy of winds and water, and the earth's heat produce energy without fuels. No fuel transport, no greenhouse gases to sequester; no mercury, no radioactive wastes to store and manage…”
- Bernadette Del Chiaro, clean air and global warming program director, Environment California: "To say the least, it's a breath of fresh air…We've been worried about the impacts of global warming for years, even decades. [Secretary Chu is] absolutely right -- California stands to lose so much…"