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U.S. energy policy - Aug 5

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Many more articles are available through the Energy Bulletin homepage


What should Southern Co. do about [global warming]? (utility company)

Russell McLendon and Ken Edelstein, Creative Loafing (Atlanta, Georgia)
CL asked knowledgeable Atlantans what Southern Co. should do about global warming. More answers -- and a chance for you to comment -- are available here.

William Buzbee
Emory University law professor and director of the Emory Environmental and Natural Resources Law Program

First, from my following of the regulatory battles, the science of climate change is as sound as any regulatory issue in decades. So Southern Co.'s claims that there's a need for more science is puzzling and a little disappointing.

Second, Southern Co.'s call for voluntary action is a typical move for industries seeking to avoid regulation, but voluntary measures historically tend to be highly ineffective. The auto industry [and] the oil industry have made similar arguments in the past on other issues. In this setting, there will need to be broad-based action that's uniformly enforced if there's to be room for improvement.

I understand a company will be making business decisions for business reasons, but there are times when a risk is broad enough that you'd hope a company would take a longer-term perspective. I think Southern Co. is probably wrong here. I think that there will be regulation. And I think they'll be behind other companies like Duke [Energy] that have accepted the reality of the climate change problem.

Benita Dodd
Vice president of the Georgia Public Policy Foundation, a conservative think-tank

I think utilities have done a commendable job, actually. They've invested millions in cleaning up coal. ... Human carbon emissions are a drop in the ocean compared to natural emissions, and when we stop worrying about trees and volcanoes, then we can start worrying whether humans are adding too much carbon to the atmosphere. I think that climate change takes place all the time, and I think we're incredibly pompous if we think humans have that much influence on it.

The problem is we're not opening the door to a variety of energy choices, like nuclear [and] opening up [the Arctic National Wildlife Refuge]. It's all very well to point your finger at one source of energy, but if you're closing doors as far as regulatory access, what do you expect utilities to do? When you give utilities access to alternatives that are viable, then it becomes easier to set coal as a resource aside.

We need more legislators with the courage to take a stand against NIMBY-ism ["Not in my back yard"]. It's fear-mongering. Good lord, nuclear energy is the cleanest source of energy. There's a lot of fear about it because of activists who bring up things like Three Mile Island. Everyone acknowledges nuclear [power plants] are clean sources of energy, but no one wants them in their back yard because of this paranoia.

Patty Durand
Director of the Georgia Sierra Club

It is the duty of government to look out for the common good of clean air and clean water, and to address the serious issue of global warming -- not Southern Co.

By taking money from corporations, our elected officials like the governor and the Legislature compromise their ability to protect the public interest. Citizens need to understand this process. We have a serious problem with the fact that elected officials' decisions are compromised by large corporate donations and an inattentive public.
(2 Aug 2006)
Many more interviews in the article. A fascinating spectrum of opinions. -BA


Q&A with Jeremy Rifkin

Ken Edelstein, Creative Loafing
Jeremy Rifkin’s 2002 book, The Hydrogen Economy, trumpets the prospect of an energy future in which clean, renewable energy could be stored by companies — and even individuals — in the form of hydrogen.

A well-known social critic and author, Rifkin is a lecturer at the Wharton School of Business at the University of Pennsylvania and a consultant to major companies. He spoke last week with CL Editor Ken Edelstein:

Some 70 percent of Southern Company’s generating capacity relies on coal. On one hand, there’s plenty of coal in the United States. On the other, coal emits a huge amount of greenhouse gas, which seems likely to face some sort of regulation soon. So does Southern Co.’s reliance on coal bode well or poorly for the company future?

I think it bodes poorly. Let me put it this way: The power companies and energy companies understand that we’re heading toward peak oil. That’s No. 1. We don’t know how soon. The optimists say we don’t peak on oil until 2037. That’s the wisdom of the International Energy Agency, that’s the optimists. ... [Peak oil is] when half the oil’s used up and of course that’s the top of the bell curve. That’s when it’s over because you can’t afford the price after you’ve reached peak oil production. The pessimists now — some of the world-class geologists, some of the best in the business — are relooking at the numbers. They say, “Well, we might peak as early 2010 to 2020.” I have no idea who’s right.

As I said in the book [The Hydrogen Economy], they’re only arguing about 20 years, it’s still a small window. They do agree that when we do peak, two-thirds of the reserves of oil will be in the Middle East, which is politically unstable.

What’s happening with most power companies is they’re making a shift to natural-gas-fired power plants because they’re cheap. But this shift — I think 270 natural-gas-fired power plants were scheduled to come on line in the decade — these are decisions that were made early in the decade before the price of gas started rising. What should have been anticipated is that the price of gas would absolutely shadow oil, which is exactly what’s happening. Gas is shadowing oil on the prices, and gas is finite and will probably peak in shadow of oil.
(2 Aug 2006)
A truncated version of this interview appears in the preceding article. -BA


How California failed in efforts to curb oil addiction

Jeffrey Ball, Wall Street Journal via Pittsburgh Post-Gazette
...For a quarter century, California has pursued petroleum-free transportation more doggedly than any other place in the U.S. It has tried to jump-start alternative fuels ranging from methanol to natural gas to electricity to hydrogen. None has hit the road in any significant way. Today, the state that is the world's sixth-largest economy finds itself in the same spot as most of the planet: With $75-a-barrel oil, and increasing concern about the role fossil fuels are playing in global warming, 99 percent of its cars and trucks still run on petroleum products.

At a time when President Bush is advocating alternative fuels, particularly ethanol, as an antidote to what he calls America's "addiction" to oil, California's experience offers a reality check. Perfected over a century, gasoline is convenient, reliable, and, even at current prices, relatively affordable. Challengers start with big disadvantages: inadequate infrastructure, their own performance problems, and higher costs. Moving alternative fuels into the mainstream would require hard political and economic choices -- choices that even California hasn't been willing to make.

California launched its alternative-fuel drive as an energy-diversification effort following the 1979 global oil shock. When oil prices fell back, the state shifted its emphasis to fighting air pollution. Since then, California has rolled out mandates and subsidies for alternative-fuel demonstrations along with broader rules forcing the oil and auto industries to clean up their conventional fuels and internal-combustion engines. The assumption was that the one-two policy punch would induce the industries to shift away from oil.

But the market hasn't responded the way California intended. The oil and auto industries got the state to kill or water down the alternative-fuel mandates, arguing that making the technologies viable would require big public subsidies -- something most Californians didn't support. Meanwhile, the industries made their conventional products clean enough to meet the state's pollution limits.

The upshot: The alternative-fuel push has helped scrub California's air, but it has done so by forcing improvements in fossil fuels and the cars that burn them. It hasn't curbed California's oil consumption, because it hasn't meaningfully deployed alternative fuels.
(2 Aug 2006)


US: Delusional Thinking in the Senate

Editorial, New York Times
Almost six months to the day after President Bush urged Congress in his State of the Union address to help break America’s addiction to imported oil, the Senate approved a bill yesterday that would do nothing to cure that addiction and could actually make it worse.

The bill, which would open up 8.3 million acres in the Gulf of Mexico for new energy development, is bad fiscal policy, since one-third of the royalties that would normally accrue to all Americans from drilling in federal waters would flow to just four gulf states. Even as a drilling bill it makes little sense; to placate Florida’s senators, it prohibits drilling in offshore areas that are richer in resources than the areas it opens up. And as energy policy it’s hopelessly one-sided, encouraging production while ignoring consumption.

After Mr. Bush’s address in January, the Senate legislative machinery went into overdrive and produced scores of energy-related bills, at least two of which were comprehensive, bipartisan measures aimed at reducing oil consumption by half over the next quarter-century by encouraging energy efficiency and alternative fuels. But Bill Frist, the Senate majority leader, prohibited any changes to this bill, pretty much shutting the door on any grown-up discussion of the country’s energy future.

Mary Landrieu, a Democrat whose home state of Louisiana would benefit handsomely, conceded that by ignoring demand the bill represented only “half the solution” to the country’s energy problems. Even that is a big exaggeration. The gulf might well yield enough natural gas to make a difference in price. But there is not enough oil there or anywhere else in the United States to make a difference in the price of a barrel of oil or a gallon of gasoline at the pump. Why the Senate persists in deluding itself on this remains one of the mysteries of the age.
(2 Aug 2006)


But Where are the Solar-Powered ICBMs?

Center for Defense Information
...The need to reduce fossil fuel consumption, once an exclusive concern of the liberal left, has become a theme with broad appeal in American public life in recent years. More than anything else, the rising cost of oil has driven this change, though more fundamental concerns are also implicated: the attacks of Sept. 11, 2001 raised questions about U.S. ties to Middle Eastern oil producers, while the need to protect the environment is emerging as an imperative that Americans across party lines are willing to pay a price to obey. In all, the problem of America’s fossil fuel consumption is receiving more attention than at any point since the 1973 Middle Eastern oil crisis.

Since oil dependence is recognized today as a threat not only to the environment but to national security, one might expect the Department of Defense (DoD), the nation’s largest consumer of fuel and its most important sponsor of scientific research, to be leading the way in developing technology to reduce fossil fuel consumption.

DoD has publicized heavily its efforts to save energy and tap renewable energy resources at its facilities. Developing alternative fuel and power generation technology for the military, on the other hand, seems to be a low priority at the Department’s scientific research agencies.

Recently, however, the short-term disruptions to the overall U.S. fuel supply caused by Hurricane Katrina have thrown the problem of the military’s fuel consumption into sharp relief. Since the hurricane and the ensuing spike in U.S. oil prices, several high-ranking military officials have been quoted in the press suggesting that the time may have come for the military to take seriously the current lack of alternatives to fossil fuels.
(29 Sept 2005)

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