Will New Congress Move First on Energy?

Politico reported yesterday in “10 to watch: Senators on energy“:

“With Republicans controlling the House and ramping up oversight and investigations of the Obama administration, focus at least initially in the next Congress will be on the Senate to lay a potential pathway for legislative compromise on energy and environmental policy.

“The Senate will set the energy agenda especially at the beginning,” said Paul Bledsoe, a senior adviser with the Bipartisan Policy Center and a former Senate Democratic aide.

“We are going to have a run at energy legislation,” Majority Leader Harry Reid said on CNN on Dec. 22.”

This builds on President Obama’s statement in a press conference on Dec. 22 that he plans to “immediately engage with Republicans” in an attempt to pass an energy bill in 2011.

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In the wake of the disappointment over the death of cap and trade, the U.S. clean energy movement was given much needed direction and focus at the December 15th Energy Innovation 2010 conference at the National Press Club.  Hosted by the Information Technology & Innovation Foundation and Breakthrough Institute, and co-sponsored by several other think tanks, the conference highlighted a variety of critical issues for forging a new national energy consensus.

The conference demonstrated strong and growing consensus on the need for increased federal investment in clean energy RD&D (see AEL’s previous coverage), but there was also debate about the merits of allocating resources to innovation or to implementation of existing technology. Keynote speaker Nobel Laureate Dr. Burton Richter argued forcefully for innovation as well as implementation, particularly shutting down coal fired power plants in favor of natural gas plants. Gas offers a cleaner electricity option than coal and is set to experience a major boom due to new extraction methods.

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EIA Predicts U.S. Emissions to Rise 6% by 2035

EIA’s recently released preview of its Annual Energy Outlook 2011 showcases an updated reference scenario for US energy production and consumption through 2035.  The predictions highlight the complex relationship between the goals of energy independence and renewable deployment. Petroleum and natural gas are now predicted to contribute slightly more to domestic energy production, largely due to updated assumptions about greater availability of domestic shale gas and oil which will coincide with lower prices.

While this is good news for US energy independence, meaning lower reliance on energy imports, it is bad news for renewable energy deployment.  The EIA reduced the outlook for the renewable energy contribution (not including biomass or hydropower) to total energy production for both 2025 and 2035. “Other” renewable energy, including solar, wind, and geothermal, decreased from 4% to 3% of total energy production from the 2010 to the 2011 reports. Biomass and hydropower have slightly increased contributions.

Renewable energy production is still projected to grow by 2.9% per year to eventually have a 14% share by 2035, in part a result of the renewable fuel standards for transport fuels and state-level renewable portfolio standards. Unfortunately this business as usual growth rate is insufficient to counteract the influence of predicted lower petroleum and natural gas prices.

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The electric car is back.  With an assist from government, Nissan delivered the first models of its new electric vehicle (EV) to customers earlier this month, and thanks to a $100 million Federal program hundreds more will be on the road soon.  Nissan is the first manufacturer out of the gate, but others are expected to offer EVs for sale in the next couple of years.  While governments at the Federal, state, and local levels have been heavily involved in the roll-out of EVs, the new Congress will decide whether EVs will continue to receive government support.

The primary rationale for continued government support is that EVs can help wean the US off of its addiction to oil.  Each day, the US burns 380 million gallons of gasoline, and more than 60 percent of oil consumed in the US is imported. But with 255 million oil guzzling registered vehicles in the US today, even the most optimistic forecasts predict that it will take decades before EVs meaningfully contribute to a reduction in oil consumption.

EVs have also been touted as a means for creating jobs and stimulating the struggling car industry.  To that end, the February 2009 Recovery Act included $2 billion in grants for battery and component manufacturers, and the DOE’s Advanced Technology Vehicles Manufacturing loan program, passed by Congress during the Bush Administration, has lent $2.4 billion to support the development of EV factories.  Perhaps no state has leveraged Federal money as successfully as Michigan, which is looking to revitalize its auto industry. By offering packages of tax credits in combination with Federal incentives, the state has attracted eighteen companies developing advanced batteries, an effort that the Governor predicts will generate 63,000 jobs. (more…)

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A mainstay in the conversation around energy innovation is the clean energy ‘race’ between the United States and China.  While U.S. competitiveness in the clean energy sector is undeniably important, both in terms of short-term job creation and long-term economic outlook, the ‘race’ metaphor provides a rather limited perspective.  A recent article in Foreign Affairs, “Globalizing the Energy Revolution: How to Really Win the Clean-Energy Race,” notes that “an energy agenda built on fears of a clean-energy race could quickly backfire.”  The authors make a strong case for the U.S. to facilitate international cooperation in clean energy technology, particularly with India, China, and Brazil (see our coverage).

The gist of the argument is this:  If national competitiveness is seen as the primary factor motivating policy, governments will embrace green protectionism, erecting barriers and therefore stifling technological innovation coming from cross-border innovation.  Washington will make it more difficult for itself to play a role in mitigating geopolitical concerns like nuclear proliferation, lose the opportunity to gain access to major new clean energy markets for U.S. firms, and retard the pace of decreasing the costs of low-carbon technologies.  If instead the government takes a long term view and prioritizes the creation of an optimal global innovation environment, in addition to encouraging major efforts at home, it will create a winning dynamic for American clean technology firms and strengthen the overall transition to clean energy.

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The Pew Center on Global Climate Change released a brief in April discussing economic and job growth opportunities in clean energy markets. According to the report, global investment in renewable energy more than doubled from 2004-2009. From 2008-2009, China was the only country — out of the U.S, EU, Brazil, and India — whose investment increased. China attracted more investment in clean energy technologies ($34.6 billion) than the United States ($18.6 billion) for the first time in 2009. This first movers advantage could have large implications for future competitiveness:

“History shows that it matters where industries are first established, and countries can use policy to foster domestic “lead markets” for particular industries, giving them the foothold that can lead to significant growth in global market share. In the United States, well-crafted climate and clean energy policy can give nascent clean energy industries such a foothold by creating domestic demand and spurring investment and innovation.”

With China and the EU leading the way in clean energy investment, the U.S has already fallen behind and is losing opportunities to get a “foothold” in industries such as wind energy.  As we previously reported, for two quarters running Ernst and Young’s quarterly “Renewable Energy country attractiveness indices” have listed China as the most attractive destination for clean energy investments over the United States.  As part of the indices, the U.S. ranked third behind the China and the U.K. in both offshore and onshore wind investment attractiveness. Recognizing the rapid expansion of the world wind energy market — “China Wind Power Outlook 2010” asserts that over 100 countries will have installed wind power by the end of 2009 — China has moved to the forefront of the industry and is looking to expand its global market share.  World total installed wind capacity has steadily increased since 2001 and China has lead the way with a 2009 growth rate of 113%, says the 2009 World Wind Energy Report.

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The term ‘energy efficiency’ usually brings to mind better-insulated homes and smart power meters. But emerging thermoelectric technology could give energy efficiency a whole new meaning by tackling the huge energy waste that happens before the watts even reach our homes.  Yet, to reach market, thermoelectics will have to overcome a number of technological and policy related barriers.

The Promise

Thermoelectric devices, which enable the conversion of heat into electricity, are still at an early stage in the energy innovation chain, but the principle behind how they work can help to highlight a crucial aspect of energy waste across the world that is often ignored in the policy realm.

You may have heard that homes in developed countries waste 25-35 percent of their energy due to insulation problems and inefficient devices. But the lion’s share of energy waste actually comes at the early stages when the electric power is generated in power plants and carried across transmission lines.

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Saving the Oceans or the Oceans Saving Us?

Amidst all the hustle and bustle of the most recent round of UN climate negotiations in Cancun, an important event went overlooked by many: Oceans Day. While this may at first brush sound like a “save the dolphins” affair, over 90 high-level participants from governments, the UN, NGOs and academia gathered to discuss not only how we can save the oceans, but how they can save us.

Oceans are an enormous carbon sink, soaking up nearly as much anthropogenic carbon dioxide as the atmosphere. However, they are also an incredible source of energy through thermal heat, waves, tides, currents, even salinity gradients (differences in “saltiness” across bodies of water), which could ultimately provide for up to 10% of the US energy needs. Oceans Day participants discussed how to use oceans in fighting climate change, both through increasing the CO2 absorptive capacity of marine ecosystems and using ocean energy technologies to displace fossil fuels.

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By Teryn Norris and Kevin Hsu

In a new article for Foreign Affairs, “Globalizing the Energy Revolution: How to Really Win the Clean-Energy Race” (subscript. req’d), Michael Levi and colleagues at the Council on Foreign Relations argue that the world is “woefully underspending on clean-energy innovation” and needs to pursue a new international strategy:

“Clean energy is almost always more expensive than energy from fossil fuels, and often by a big margin… Yet the world is woefully underspending on clean-energy innovation… the IEA estimated that the world would need to spend an average of $51-$100 billion each year to support the research, development, and demonstration of clean-energy technologies. Current public spending is a mere $10 billion annually… The shortfall is staggering.”

What should be done?  First, the developed world needs to ramp up its efforts. “Major scientific advances are still most likely to occur in the developed world, alongside much of the work necessary to commercialize clean-energy technologies and the capital required to support those efforts,” they write.  U.S. strategy should include two basic element: first, incentives to create a larger domestic market to drive both deployment and indirect innovation; and second, direct government support for clean energy innovation through research, development, and demonstration.

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While the greenhouse gas emission reductions of switching from coal to natural gas have been well documented, less attention has been paid to their effects on water.  Worldwatch Sustainable Energy Fellow Saya Kitasei and I recently coauthored a briefing paper comparing the lifecycle impacts of natural gas-fired and coal-fired electricity on fresh water in the United States. We looked at water consumption from mining and drilling in a few different resource basins, including regions where natural gas is produced by more water intensive methods like hydraulic fracturing or coal seam dewatering. We also looked at water consumption in processing, transportation, and at the power plant itself, along with pollution controls and waste disposal for those sites.

Perhaps unsurprisingly, we concluded that the biggest consumptive use of water comes at power plants, where water is routinely used as a coolant. Natural gas-fired power plants generally use less water for cooling for two major reasons. First, natural gas-fired power plants are often more efficient than coal-fired power plants, so less heat needs to be dissipated. Second, natural gas can be burned directly in a turbine (unlike coal, which is solid), and gas turbines are air-cooled. So power plants running gas turbines (including combined cycle plants, which run natural gas through a gas turbine, then use the waste heat to boil water and run a steam turbine) use less water for cooling than plants with steam turbines.

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