Innovative Renewable Energy Project Starts Up in Wisconsin

Posted on March 31, 2014 by Michael McCauley

Quarles & Brady recently represented Wisconsin Energy Corporation and Wisconsin Electric Power Company (doing business as "We Energies") in the construction and commencement of operation of a $250 million biomass-fueled co-generation plant. The project is located at Domtar Corporation's paper mill facility in Rothschild, Wisconsin. Wood, waste wood and sawdust are now being be used to produce 50 megawatts of electricity. The new co-generation project also supports Domtar's sustainable papermaking operations. 

The new facility adds another technology to We Energies' renewable energy portfolio. That portfolio includes the 145 megawatt (MW) Blue Sky Green Field Wind Energy Center in Fond du Lac County and the 162 MW Glacier Hills Wind Park in Columbia County. Under Wisconsin law, utilities must use renewable energy to meet 10 percent of the electricity needs of their retail customers by the year 2015. With the start of commercial operation of the Rothschild biomass plant, We Energies estimates that it now has secured enough renewable energy to remain in compliance with the state mandate through 2022. Together, We Energies' three renewable energy operations are capable of delivering nearly 360 MW of renewable energy, enough to supply approximately 120,000 homes.

The Rothschild biomass project created approximately 400 construction jobs and 150 permanent jobs in the surrounding community. This includes independent wood suppliers and haulers from northern and central Wisconsin who are now securing waste wood for the project. We Energies appeared in proceedings before the Public Service Commission of Wisconsin in support of the Company's application for a Certificate of Authority for approval for the biomass plant. The Company filed an application for an air permit and other environmental approvals for the project, including the preparation of environmental assessments in support of the regulatory decisions. 

The air permit for the project was issued on March 28, 2011. We Energies obtained one of the first PSD BACT (Prevention of Significant Deterioration - Best Available Control Technology) determinations for this project for Greenhouse Gas (GHG) emissions in the U.S. under EPA's GHG Tailoring Rule. The Company worked with the Wisconsin Department of Natural Resources (DNR) in developing a novel case-by-case Maximum Available Control Technology (MACT) determination for the biomass boiler under the Section 112 (hazardous air pollutant) provisions of the federal Clean Air Act. The permit was challenged by several environmental groups. The Company prevailed in the permit appeal process. The appeal was dismissed on the merits by the Marathon County Circuit Court in October, 2011. The facility started commercial operation on November 8, 2013.

Coming Attractions: Sea-Level Rise, New IPCC Reports, and Floating Wind Power Projects

Posted on September 4, 2013 by Jeff Thaler

There has been a flood (no pun of course) of new stories this month about rising sea levels, acidifying oceans, drought-driven wildfires, and extreme weather events in the U.S. and globally. At the same time, with the official release of the eagerly-awaited Fifth Assessment Report of the Intergovernmental Panel on Climate Change due in several weeks, leaks of a draft portion of the Report are coming out in the media, indicating increasing confidence in the underlying science and in a substantial human role in warming, primarily as a result of burning fossil fuels. Additionally, as reported in the N.Y. Times, it appears that the draft projects that sea level could rise by only about 10 inches by 2100 under the “most “optimistic” scenario. But “at the other extreme,” with emissions continuing to swiftly increase, “sea-level rise could be expected to rise at least 21 inches and might increase a bit more than three feet” by the end of this century—which “would endanger many of the world’s great cities — among them New York, London, Shanghai, Venice, Sydney, Australia, Miami, and New Orleans.” Some believe that the FAR will still understate the likely forthcoming climate disruptions.

Coincidentally (or not?), those of you who still subscribe to the National Geographic Magazine would have seen in August a cover story entitled “Rising Seas”, which leads off with questions a panel of ACOEL members will (coincidentally?) in part be addressing at our Annual Meeting in Boston: “As the planet warms, the sea rises. Coastlines flood. What will we protect? What will we abandon? How will we face the danger of rising seas?” . And rising sea levels are especially of relevance to any ACOEL member living in a state on the Atlantic coast, because sea levels have been rising three to four times more rapidly off the Atlantic Coast than the global average, according to a recent study. For those of you living between the coasts, the San Francisco water supply and Yosemite National Park are both threatened by an out-of-control wildfire, while the western United States are experiencing significant drought.

And while forests burn and seas warm, acidify, and rise, one good news story was the recent launching in Maine of the first grid-connected floating wind turbine outside of Europe.

It also is the first concrete-composite floating wind turbine in the world, using advanced material systems with a unique floating hull and tower design.  The 65 ft tall turbine prototype is a one-eight-scale version of a 6 MW, 423 ft rotor diameter design.  Currently being developed by the University of Maine and beginning preliminary environmental and permitting work, Maine Aqua Ventus I had been selected by the Department of Energy early this year out of 70 competing proposals as one of 7 winners of $4 million in initial funding.  The project is now a finalist for an additional $46.6 million in funding. This project is critical, because floating offshore wind energy projects have the potential to generate large quantities of pollutant-free electricity near many of the world’s major population centers (but far enough away, in water depths up to 400’, to not be visible from shore), and thus to help reduce the ongoing and projected economic, health, and environmental damages from climate change. Wind speeds over water also are stronger and more consistent than over land, and have a gross potential generating capacity four times greater than the nation’s present electric capacity.

(Full disclosure:  I am legal counsel for the project)

SHOULDN’T WE BE WATCHING AFRICA’S ENERGY CONSUMPTION?

Posted on March 13, 2013 by Eileen Millett

We’ve all seen the head shaking over how energy conservation efforts in the United States are dwarfed by energy consumption increases in India and China.  But, what about Africa? 
 
The African continent, with close to 600 million people, 15% of the world’s population, now consumes about 3% of world energy production.  However, Africa’s energy picture is changing rapidly due to growing investment, upgraded infrastructure, and success in tackling corruption.  Africa always rich in natural resources, is expected to replace more basic energy sources with more efficient and environmentally friendly sources like oil and gas. However, huge areas in Africa — the Sudan, Uganda and even Kenya lack national electricity grid systems.  But improving infrastructure and abundant energy resources hold promise for the future. 

Most of Africa is not flicking a switch for lights, but instead is using matches to light a kerosene lamp or igniting a charcoal stove for heating or cooking.  This will continue for the foreseeable future, which means more tree-cutting for fuel, more wood burning, and thus, more harmful air emissions.  Using kerosene lanterns and charcoal stoves correlates directly with increased respiratory disease.  Unfortunately, environmental health and safety will, in the short term, take a back seat to the need to rely on fossil fuels.

Renewables?  Why shouldn’t a continent known for its hot sun be a natural for solar power?  In Africa, questions about reliability and the lack of trained personnel are being taken seriously.  So for the foreseeable future, the more likely result is that fossil fuels will increase, and renewables will take aback seat.  The developing world views energy/environment trade-offs as part of the price for advancement, particularly in nations where energy resources and infrastructure is so underdeveloped.  Opportunities are enormous, but so are the challenges and risks.  Africa’s test will be how much financing, regulation and environmental mitigation is needed to propel the continent forward. 

Getting serious on climate change and reforming regulatory review of clean energy projects

Posted on December 19, 2012 by Jeff Thaler

The attached article will be published in the upcoming issue of the Lewis & Clark Law School Environmental Law Review.  The article is among the first to integrate current climate change science, particularly ongoing impacts and predicted impacts, with a detailed roadmap for substantial reform of our environmental processes for reviewing proposed renewable energy projects.
 
Most existing articles either focus only on climate science or on minor modifications to the regulatory system. Using offshore wind power as a case study, this article demonstrates how, in an increasingly carbon-constrained world, our existing environmental laws and regulatory process no longer achieve their underlying goals of long-term ecosystem conservation. To the contrary, these laws and regulations are supporting a system with increasing greenhouse gas emissions that is annually costing trillions of dollars.

We have little time left to create a practical path to achieving an 80% reduction in greenhouse gases by 2050—with failure resulting in average global temperatures rising more than the internationally-agreed targeted ceiling of 2°C. After examining the obstacles confronting a potential developer of offshore wind, this article clearly lays out why and how the existing regulatory process should be quickly reformed so that offshore wind and other clean renewable energy sources can help us escape the escalating consequences of our carbon-intensive economic system.

OREGON’S AMBITIOUS 10-YEAR ENERGY ACTION PLAN

Posted on June 8, 2012 by Rick Glick

On June 6, Oregon Governor John Kitzhaber released his draft 10-Year Energy Action Plan. Written comments on the draft plan may be submitted to tenyearenergyplan@odoe.state.or.us and accepted through July 31.  Three public workshops will be held at times and places to be announced. 

The plan consists of a broad range of goals for the state government, private sector and public-private collaboration to address what the Governor calls the:

fundamental challenge—that is, to develop a comprehensive energy strategy that meets the state’s carbon reduction, energy conservation and renewable energy goals and timetables, and that balances complex needs– including affordability and reliability – while enhancing Oregon’s economic objectives.

The plan seeks to build off of existing programs and redirect funding to advance its three central strategies, the details of which are to be developed through a lot of public participation:

1.  Maximizing energy efficiency and conservation to meet 100 percent of new electric load growth.  The plan is unclear as to when this goal would be achieved, but refers to the Northwest Power and Conservation Council’s goal of using conservation to meet new electric demand by 2020.  Key to implementing this goal is creation of a new State Building Innovation Lab.  The Lab would focus initially on improving efficiency in four million square feet of state office space and then using the Lab as a model and resource for others.
2.  Enhancing clean energy infrastructure development by removing finance and regulatory barriers.  Streamlining the siting process, including use of a strong project manager to help navigate state regulatory requirements, would bring certainty to developers of facilities.  Also, conducting planning on a “landscape level” would help to ensure protection of natural resources.
3.  Accelerating the market transition to a more efficient, cleaner transportation system.  Central to this goal, over the next ten years the plan would convert 20% of large fleets to electric, compressed or liquefied natural gas or other alternative fuel vehicles.

The plan is self-congratulatory on various initiatives already in place and reads like a compendium of good ideas on how to secure a clean energy future.  So ambitious a plan requires continual commitment over a long period of time—at the highest levels of state government—to keep it from becoming yet another plan on the shelf.  Such sustained effort of course is not assured. 

In the early 1980s I was chair of the City of Portland Energy Commission whose job it was to further develop the City’s Energy Conservation Policy, which at the time was seen as cutting edge.  Then as now, energy planning was a hot topic for policy makers.  Champions arise to push forward change.  In those days it was Mayor Neil Goldschmidt and Commissioner Mike Lindberg, today it is Governor Kitzhaber.  While Portland has made progress, many of the elements of the Governor’s plan echo what we were talking about back then.  I hope that the Governor builds a governance platform to continue work on the plan after he departs the scene.

Implementation of the plan depends on new legislation and regulatory reform among several state and local agencies.  Whether the plan can develop the consensus necessary to achieve such change will depend on how the details emerge over the coming months and the enthusiasm the plan can garner. 

Fiddling While Rome – and the World – Burns: An Update on Climate Change

Posted on June 1, 2012 by Jeff Thaler

How can each of us leave the world to our children and grandchildren at least as healthy as when we were born? How can we more quickly move from fossil-driven economies to ones more based on renewable sources, in an increasingly carbon-stressed world? And how can policy makers, at various governmental levels, make changes in how energy projects are evaluated and developed before we use up too much of the atmosphere’s and oceans’ capacities to safely absorb carbon dioxide?

These and similar questions were tackled at two recent conferences in which I participated: a small climate change justice forum at Chicago Law School, and the much larger World Renewable Energy Forum in Denver. In Chicago, participants tackled approaches to bridging the who-pays-how-much gap between developing and developed nations – should it be per capita, or total carbon shares based on past emissions (if so from when), or a polluter-pays approach bridging past and future (next 20 years) CO2 emissions? Some say the US should pay less than China and India, others say more. Ultimately, all agreed that human-induced climate change is the single greatest threat facing human society—not just environmental, but also posing huge economic, public health, and military security costs.

Denver discussions focused on how to quickly increase the amount of renewable energy used for electricity, heat and transportation. My presentation, “U.S. Renewable Law and Policy: Catch Up or The Clock Strikes Midnight”, provided an overview of existing and predicted impacts from the still-increasing carbon dioxide emissions accumulating in our air and oceans; a comparison of the direct and indirect costs of different fossil and renewable energy sources; a summary of the permitting and regulatory hurdles facing renewable energy projects; and a roadmap to level the regulatory playing field to help renewables catch up.
Brief high (or low) lights: In April 2012, the International Energy Administration warned that, under current policies, energy use and CO2 emissions will increase by a third by 2020, and almost double by 2050 – sending global temperatures at least 6⁰C higher. What would the world look like with such an increase?

What are the “true” costs of energy to be factored into pricing?  In 2009, the National Research Council’s “Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use” estimated in 2005 dollars (higher now) that non-climate damages from our use of fossil fuels exceed $120 billion, with climate damages possibly being equally as large – and both numbers exclude ecosystem, infrastructure, insurance,  and national security costs.

Those bucks stop with each of us and this generation.

Energy Subsidies: Weighing the Playing Field

Posted on March 9, 2012 by Elliot Laws

Even as a latent issue, subsidies to the oil and gas industry have the potential to be a political hot potato.  But with President Obama putting them front and center in his recent speech at New Hampshire’s Nashua Community College, the issue joins the already crowded landscape of political fodder heading into the fall elections.  President Obama’s “all of the above” energy program covers a variety of activities, including production of oil and gas, funding renewable energy sources, and encouraging innovation of new technologies.  In the end, fossil fuels are an exhaustible source of energy that cannot be the total answer to our energy needs, as even oil and gas companies recognize.  And they come with a real set of hazards, as the recent Deepwater Horizon settlement reminds us.
 
Although not directly part of his “all of the above” energy program, President Obama is rightfully addressing government subsidies for oil and gas that could be migrating towards increasing subsidies for solar farms and wind turbines.  While fossil fuels will eventually run out, wind, solar, and biomass will not, but have yet to enjoy the level of support afforded to the oil and gas industry.  According to a recent analysis of the economics of energy by experts at the Imperial College London and the UK Energy Research Center electricity from wind power may, in five years, be less expensive than electricity from natural gas in the U.K. if current levels of government subsidies were transferred to renewable energy sources.
 
While the study is specific to the United Kingdom, there are takeaways applicable in the U.S.  First the analysis recognizes the important support that subsidies provided to oil, gas, and nuclear energy development when each were in infancy.  Through those subsidies, energy companies were encouraged to develop technologies, survey areas that were geologically ripe for oil and gas exploration, and hire workers to help build up the industry.  Second, now that oil, gas and, to a lesser extent, nuclear energy sources are more completely developed, those subsidies should be transferred to the development of renewable energy.  In addition, the gains made by the wind and solar industry should not be set aside in search of the elusive promise of cheaper oil through more drilling.  Fossil fuels will run out.  If “all of the above” is to be a real strategy, then it must provide more of an equal opportunity for all sources of energy.
           
The Department of Energy recently announced $150 million in grants under its ARPA-E program.   This money is intended for development of cutting-edge energy technologies so that they can gain the necessary traction to be self-sufficient.  The announcement follows on the heels of an additional $30 million offered under the ARPA-E program toward development of natural gas-based vehicles.  Both these numbers pale in comparison to the $4 billion in yearly subsidies for oil and gas developers.   Even shifting half of the oil and gas subsidies into renewable and developing technologies could well make a dramatic difference in our overall energy future by encouraging the build-out of wind, solar, and biomass businesses into viable and self-sufficient industries.  There will come a time for a full discussion of the value of energy subsidies as a whole, but this would provide a fair start toward creating parity with fossil fuels.
               
The Deepwater Horizon disaster is a reminder of the cost associated with use of fossil fuels.  Significant government subsidies provided to the oil and gas industry played an important part in encouraging their initial and ongoing development.  Programs such as ARPA-E can provide a jump-start for emerging energy technologies, and shifting subsidies can offer a chance for “all of the above” to be a real solution.


MIXED RESULTS FOR OREGON CLIMATE CHANGE LEGISLATION

Posted on August 3, 2009 by Rick Glick

In my February 23, 2009 posting, I described Oregon Governor Ted Kulongoski’s ambitious agenda for state action to reduce green house gases (GHG). But then the tumbling economy got in the way and GHG lost its position at center stage. Still, some things did get done in the session that ended last month.

 

Oregon had already adopted renewable energy portfolio standards (RPS) for its electric utilities, adopted California automotive emissions standards and had the nation’s most generous business energy tax credit (BETC). This year the plan was to add a GHG cap and trade program and establish fuel standards, among other things.   Some of it passed, some didn’t, and the Governor has said little as to which he will sign into law.

 

SB 80 would have established the cap and trade program, in line with the Western Climate Initiative, but failed. The principle reason seems to be that a federal bill may be imminent. That legislation, the Waxman-Markey bill (HR 2454) passed the House on June 26 by a razor thin vote along party lines (219-212). The bill includes a provision pre-empting state legislation. Its fate is in the Senate, where it will need at least 60 votes to survive a filibuster, and the final shape of the bill is anyone’s guess. If it appears a federal cap and trade bill is not achievable or indefinitely delayed, SB 80 is likely to be reintroduced in Oregon in some form.

Other climate bills did pass. 

 

  • SB 38 authorizes a rulemaking to require registration and reporting for import to the state of electricity or fossil fuels. 
  • SB 101 establishes a GHG standard for electricity generation and prohibits utilities from long-term financial commitments for resources that do not meet the standard, effectively banning import of coal fired plant output. 
  • HB 2186 calls for development of a standard to reduce GHG emissions from transportation fuel 10% by 2020 and to conduct a study on retrofitting of trucks to make them more efficient; this element was proposed as mandatory, but a compromise calling for the study was adopted. This provision is intended to piggy-back on a California study of improving existing truck efficiency. HB 2186 also established a task force to look at reducing GHG emissions through integrated land use and transportation planning. 
  • HB 3039 promotes solar energy and provides a 2:1 RPS credit for each kWh produced from a qualifying facility operational before January 1, 2016 and that generates at least 500 kW. The bill sets a limit of 20 MW of capacity for the RPS credit. 

 

  • HB 2940 allows RPS credits for biomass facilities in place before 1995, capped at 100 MW. There are 8 biomass plants and one garbage burner in the state. This controversial bill was not proposed by the utilities, rather it was driven by the Oregon forest products industry in the interest of maintaining jobs and to provide a source of income for declining mills. Thought the bill had broad bi-partisan support among legislators, many observers see it as inappropriate to give RPS credits to old generating plants, predicting that existing hydropower will be right behind. The concept behind RPS for many is to offer an incentive for new development of renewable resources, not to reward existing ones. As of this writing the Governor has not acted on the bill but is known to be considering a veto.

 

  • HB 2472 modifies the BETC to include manufacture of electric vehicles among the industries eligible for the credit, along with renewable energy facilities and manufacturers of equipment for renewable energy production. The BETC was reduced to match budget concerns, and the Governor is also considering a veto of this bill in the interest of keeping Oregon competitive to attract clean tech business.

All eyes now shift to the U. S. Senate to see if there will be federal GHG controls enacted. It may take a while, these things take time.

MIXED RESULTS FOR OREGON CLIMATE CHANGE LEGISLATION

Posted on August 3, 2009 by Rick Glick

In my February 23, 2009 posting, I described Oregon Governor Ted Kulongoski’s ambitious agenda for state action to reduce green house gases (GHG). But then the tumbling economy got in the way and GHG lost its position at center stage. Still, some things did get done in the session that ended last month.

 

Oregon had already adopted renewable energy portfolio standards (RPS) for its electric utilities, adopted California automotive emissions standards and had the nation’s most generous business energy tax credit (BETC). This year the plan was to add a GHG cap and trade program and establish fuel standards, among other things.   Some of it passed, some didn’t, and the Governor has said little as to which he will sign into law.

 

SB 80 would have established the cap and trade program, in line with the Western Climate Initiative, but failed. The principle reason seems to be that a federal bill may be imminent. That legislation, the Waxman-Markey bill (HR 2454) passed the House on June 26 by a razor thin vote along party lines (219-212). The bill includes a provision pre-empting state legislation. Its fate is in the Senate, where it will need at least 60 votes to survive a filibuster, and the final shape of the bill is anyone’s guess. If it appears a federal cap and trade bill is not achievable or indefinitely delayed, SB 80 is likely to be reintroduced in Oregon in some form.

Other climate bills did pass. 

 

  • SB 38 authorizes a rulemaking to require registration and reporting for import to the state of electricity or fossil fuels. 
  • SB 101 establishes a GHG standard for electricity generation and prohibits utilities from long-term financial commitments for resources that do not meet the standard, effectively banning import of coal fired plant output. 
  • HB 2186 calls for development of a standard to reduce GHG emissions from transportation fuel 10% by 2020 and to conduct a study on retrofitting of trucks to make them more efficient; this element was proposed as mandatory, but a compromise calling for the study was adopted. This provision is intended to piggy-back on a California study of improving existing truck efficiency. HB 2186 also established a task force to look at reducing GHG emissions through integrated land use and transportation planning. 
  • HB 3039 promotes solar energy and provides a 2:1 RPS credit for each kWh produced from a qualifying facility operational before January 1, 2016 and that generates at least 500 kW. The bill sets a limit of 20 MW of capacity for the RPS credit. 

 

  • HB 2940 allows RPS credits for biomass facilities in place before 1995, capped at 100 MW. There are 8 biomass plants and one garbage burner in the state. This controversial bill was not proposed by the utilities, rather it was driven by the Oregon forest products industry in the interest of maintaining jobs and to provide a source of income for declining mills. Thought the bill had broad bi-partisan support among legislators, many observers see it as inappropriate to give RPS credits to old generating plants, predicting that existing hydropower will be right behind. The concept behind RPS for many is to offer an incentive for new development of renewable resources, not to reward existing ones. As of this writing the Governor has not acted on the bill but is known to be considering a veto.

 

  • HB 2472 modifies the BETC to include manufacture of electric vehicles among the industries eligible for the credit, along with renewable energy facilities and manufacturers of equipment for renewable energy production. The BETC was reduced to match budget concerns, and the Governor is also considering a veto of this bill in the interest of keeping Oregon competitive to attract clean tech business.

All eyes now shift to the U. S. Senate to see if there will be federal GHG controls enacted. It may take a while, these things take time.

Can Clean Energy Save America?

Posted on December 29, 2008 by Christopher Davis

America, and our new President, face a daunting array of challenges as we close out 2008 and enter the New Year. These include a general economic meltdown, widespread job losses, a collapsing auto industry, unsustainable dependence on foreign oil, climate change and a protracted war in Iraq, among others. Many of these problems relate directly or indirectly to our production and consumption of energy.

The initial focus of the incoming Obama administration is rapid deployment of a massive economic recovery package. Early indications, including the President-elect’s post-election statements and his cabinet-level appointments, suggest that “green jobs” and “green infrastructure” are likely to play a prominent role in Mr. Obama’s efforts to restart the U.S. economy, as reflected in the Presidential transition website.  A number of commentators have talked of a “Green New Deal” as the key to revitalizing our economy. They may just be right.

 

From 2003 through the third quarter of 2008, private U.S. investment in “clean technologies” (mostly alternative energy-related) surged, totaling about $2.5 billion in 2007 and at least $3 billion in the first three quarters of 2008. However, due primarily to the credit crunch and unavailability of project financing for capital-intensive renewables projects such as wind farms, such investment sagged substantially in the fourth quarter. Despite considerable investor interest, many renewable energy projects have been put on hold. This is bad for both the economy and the environment.

There is much that the federal -- and state -- governments can do to help stimulate investment in clean energy, using both carrots (subsidies) and sticks (regulatory mandates). On the subsidy side, government loans or loan guarantees could do much to ease the credit crunch and facilitate the financing of renewables projects. Other tools include expanding tax credits, governmental procurement of renewable energy, increased federal research and development grants for clean energy technologies, etc. Potential mandates include a federal renewable portfolio standard for electric utilities, increased auto fuel efficiency standards, stronger building and appliance efficiency standards and regulation of greenhouse gas emissions via EPA rule or cap-and trade climate change legislation. Such measures could materially improve the economics of alternative energy production and boost efficient energy use.

Governmental and private sector investment in renewable energy and other “clean technologies – including wind, solar, geothermal and tidal power; advanced biofuels, “smart-grid” development, equipment efficiency, energy storage, green buildings, electric cars and “clean coal” technology – can do much to reinvigorate our economy, increase our energy security and reduce our greenhouse gas emissions. Such investment can also help to jump-start American innovation and entrepreneurship, reinvent our declining manufacturing sector, and improve our balance of payments through reduced oil imports and clean technology exports. Moreover, policies that promote sustainable energy production and consumption can help create a shared sense of national purpose to which everyone can contribute.

So can clean energy save America? We may soon get a chance to find out.

Can Clean Energy Save America?

Posted on December 29, 2008 by Christopher Davis

America, and our new President, face a daunting array of challenges as we close out 2008 and enter the New Year. These include a general economic meltdown, widespread job losses, a collapsing auto industry, unsustainable dependence on foreign oil, climate change and a protracted war in Iraq, among others. Many of these problems relate directly or indirectly to our production and consumption of energy.

The initial focus of the incoming Obama administration is rapid deployment of a massive economic recovery package. Early indications, including the President-elect’s post-election statements and his cabinet-level appointments, suggest that “green jobs” and “green infrastructure” are likely to play a prominent role in Mr. Obama’s efforts to restart the U.S. economy, as reflected in the Presidential transition website.  A number of commentators have talked of a “Green New Deal” as the key to revitalizing our economy. They may just be right.

 

From 2003 through the third quarter of 2008, private U.S. investment in “clean technologies” (mostly alternative energy-related) surged, totaling about $2.5 billion in 2007 and at least $3 billion in the first three quarters of 2008. However, due primarily to the credit crunch and unavailability of project financing for capital-intensive renewables projects such as wind farms, such investment sagged substantially in the fourth quarter. Despite considerable investor interest, many renewable energy projects have been put on hold. This is bad for both the economy and the environment.

There is much that the federal -- and state -- governments can do to help stimulate investment in clean energy, using both carrots (subsidies) and sticks (regulatory mandates). On the subsidy side, government loans or loan guarantees could do much to ease the credit crunch and facilitate the financing of renewables projects. Other tools include expanding tax credits, governmental procurement of renewable energy, increased federal research and development grants for clean energy technologies, etc. Potential mandates include a federal renewable portfolio standard for electric utilities, increased auto fuel efficiency standards, stronger building and appliance efficiency standards and regulation of greenhouse gas emissions via EPA rule or cap-and trade climate change legislation. Such measures could materially improve the economics of alternative energy production and boost efficient energy use.

Governmental and private sector investment in renewable energy and other “clean technologies – including wind, solar, geothermal and tidal power; advanced biofuels, “smart-grid” development, equipment efficiency, energy storage, green buildings, electric cars and “clean coal” technology – can do much to reinvigorate our economy, increase our energy security and reduce our greenhouse gas emissions. Such investment can also help to jump-start American innovation and entrepreneurship, reinvent our declining manufacturing sector, and improve our balance of payments through reduced oil imports and clean technology exports. Moreover, policies that promote sustainable energy production and consumption can help create a shared sense of national purpose to which everyone can contribute.

So can clean energy save America? We may soon get a chance to find out.