Solving the Energy Poverty Problem

solving the enrgy poverty problemIn the age of iPhones, Facebook, and Twitter, we have instant access to information and constant means of communication. It is difficult to imagine life without these luxuries, but they are just that, luxuries. For a large portion of the world these technologies are not only a rarity, but an impossibility, as there is no access to electricity.

1.5 billion people do not have access to electricity; 585 million of them living in Sub-Saharan Africa and 404 million in India. Three billion people, almost half of the world’s population, rely on biomass, such as wood, charcoal, and dung for cooking and heating purposes. Sub-Saharan Africa is an especially dire case. Only 31% of the population has access to electricity and the Sub-Saharan African population (excluding South Africa) of 791 million consumes as much energy annually as New York State, a population of 19.5 million, according to a recent IEA and UNDP report entitled “Energy Poverty: How to Make Modern Energy Access Universal.”

These people are living in energy poverty, the ramifications of which extend far beyond heating and cooking. Instead of children – usually young girls – going to school, they have to spend hours collecting firewood to heat their homes and cook. If the children are able to go to school, they can only do school work during daylight hours because they have no light to study by at night.

Energy poverty is one of the least discussed aspects of our current energy challenge, yet it poses serious threats to economies, national security, the environment, and public health throughout the world. It is unacceptable that such a massive social problem exists, yet here in the U.S. we do little to alleviate it. This article seeks raise awareness about energy poverty and to describe the threats posed by it and what is being done to remedy them. (more…)

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As every cloud has a silver lining, the recession and the resulting weakness in the dollar has been a boon for American manufacturers.  Exports surged 21% to $1.28 trillion in 2010, and the American manufacturing sector added jobs for the first time since 1997.

Unfortunately, as long as the renminbi (RMB) remains pegged to the dollar, weakness in the dollar is synonymous to a weak currency in China.  While the recent détente in Sino-American relations has drawn focus away from the “managed float” of the RMB, the effects of this peg are rippling through both the American and Chinese economies. Inflation is building in China as foreign exchange reserves and M2 have surged as the American-Chinese trade deficit surpassed $273 billion in 2010

Chinese exchange rate policies directly impact the competitiveness of American renewable energy manufacturers.  One underlying similarity across the multi-faceted renewable energy sector, from wind to solar to fuel cells and beyond, is that each technology is still in its nascence.  Unlike more established industries where low-cost Chinese suppliers have come to provide components or assembly to higher value-add Western manufacturers, supply chains remain flexible and American products compete directly with Chinese on both function and cost.

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A New Approach to Passenger Rail

a new approach to passenger railFlorida’s rejection of $2.4 billion of federal rail money last week brings to light a new truth of federal projects: the federal government cannot simply act like a charitable foundation. Under such a foundation model, in which states choose whether or not to compete for grants and governors can pull out at a whim, we may end up with one high-speed rail line connecting Los Angeles to San Francisco and another connecting New York City to Buffalo. It’s difficult, however, to see how this system will produce a national passenger rail system. Luckily, there are a score of other strategies to pursue.

Eisenhower’s aspirations of building an interstate highway system were in some ways similar to Obama’s current rail aspirations. The interstate highway system was a huge investment spread over multiple decades. Like a national passenger rail system, our highway system would be much less useful if it only went through states with pro-infrastructure governors. Also on par with current rail proposals, the federal government fronted about 90% of our highway system’s cost, while states funded the remaining 10%, as stipulated in the Federal Highway Act of 1956.  Florida’s $2.4 billion of rail funds would have required matching funds of $280 million, or 10.4% of the projected total cost.

Unlike current passenger rail projects, however, there is little indication that individual governors attempted to send back federal funds or otherwise resist the construction of highways in their states. This may be in part because the interstate highway system was understood as important to national security. It may also be true that infrastructure investment was, in the 1950’s, seen as patriotic in a way it no longer is today. Prevailing economic theory has also shifted in the past half-century. These and a dozen other factors point to the conclusion that a plan to simply dish out federal funding, while it may have been successful in 1956, will not work today.  Seeing a national passenger rail network through to completion requires that we understand why the foundation model is no longer appropriate, and what the possible alternatives look like.

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Energy Security by the Numbers

Last spring the Institute for 21st Century Energy, a U.S. Chamber of Commerce affiliate, released The Index of U.S. Energy Security Risk, a report aimed at clarifying one of the most ambiguous buzz terms of the last several years: energy security.  Thrown around ad nauseam by politicians, the media, and scholars alike, any advancement in securing our energy sector has been overshadowed by an inability to determine what is meant by this vague, but important objective – begging the question, how can we protect something we have failed to define?

Our understanding of energy security has lacked clarity in part due to its conceptual complexity. All part of the popular lexicon, none of the descriptive terms often evoked in conversation (reliable, green, affordable, resilient, domestic, etc.) suffice as exhaustive definitions.  While it might be tempting to parse out favored adjectives and champion them as the most critical, promoting an oversimplified understanding of energy security only prohibits real progress toward achieving it, simultaneously condoning a public lack of awareness about energy and its global importance.  Toward the goal of influencing policy decisions to mitigate current risks and meet future energy needs, the Institute for 21st Century Energy constructed the most expansive attempt at quantifying energy security to date.

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Grounding Our Innovation Policy Debate

grouding our innovation debateAs Congress begins to debate whether the DOE deserves a funding increase to support innovation initiatives, a look at its record over the last two years will become a key point of contention. Organizations such as ARPA-E and the Energy Frontier Research Centers (EFRCs) will come under particular scrutiny with regard to their cost and effectiveness.

Programs of any nature, whether public or private, will always have a mixed record of successes and failures. It is equally inevitable that proponents and opponents of a given program will focus on certain elements of that program in order to make the strongest possible case for their position. This disagreement can be healthy when it helps policy makers to get a complete and revealing assessment of that program. Once each argument is made in full, a productive debate can begin and the most effective policy can be crafted. However, the increasing polarization between proponents and opponents of government financial support for innovation is, at times, preventing this healthy debate from occurring.

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Presidents Day: Winning Our Energy Future

Today, we have an op-ed published in the Presidents’ Day edition of The Plain Dealer, the largest newspaper in Ohio. The op-ed, “Winning Ohio’s energy future,” arrives one day before President Obama visits Cleveland to promote the administration’s “winning the future” agenda and host a business forum on entrepreneurship and innovation.

Co-authored with the CEO of the Cleveland Foundation, one of the country’s largest community foundations, we discuss how greater federal investment in clean energy technology innovation — on the scale of $15 billion annually for R&D — can unleash economic growth in the Midwest and across America, help recapture our global clean-tech leadership, and drive down the price of low-carbon energy.

Winning Ohio’s energy future
The Plain Dealer – Cleveland, OH
Monday, February 21, 2011

By Ronald B. Richard and Teryn Norris

When President Barack Obama visits Cleveland on Tuesday to talk about entrepreneurship and innovation, he will find a city and state where those forces are driving a revolution in clean, green energy – and where a greater federal commitment to energy innovation can secure our national competitiveness.

Northeast Ohio entrepreneurs are building an innovation ecosystem in clean-energy technologies and pushing the region and state into national leadership. NorTech, the regional technology-promoting nonprofit, has pulled together more than 400 public and private partners to create a cluster of advanced-energy innovation. Case Western Reserve University’s Great Lakes Energy Institute is conducting cutting-edge research into improvements in power generation, storage and transportation.

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Senate Democrats have adopted the principles and rhetoric set forth in Obama’s State of the Union Adress in their new “Winning the Future” plan. Senate Majority Leader Harry Reid yesterday released his caucus’ plan to simultaneously cut spending and increase targeted investments in order to “out-build, out-innovate, and out-educate the rest of the world, so that the jobs and industries of our time will take root in America.

In the face of Republican attacks on Obama’s budget proposal, Senate Democrats have produced a twenty point plan broken up into four focuses: “Deficit Reduction,” “Out-Innovate,” “Out-Build,” and “Out-Educate.” The strategy focuses on expanding and extending already existing successful initiatives such as the Advanced Energy Manufacturing Tax Credit (48C), the R&D Tax Credit, the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.

Also put forth are some new programs that have been previously proposed, the most notable example being the Clean Energy Deployment Administration (CEDA). CEDA has long been touted as an efficient way to bring clean energy technologies to market, helping them to avoid the “valley of death.” Other new itiatives would include an “America builds” bond program as well as a transportation authorization bill.

While Senate Democrats’ support of Obama’s innovation agenda is highly encouraging, it is yet to be seen what will be able to make it out of a House bent on deep spending cuts. Regardless, it is good to see an emerging consensus forming around policies that aim to stimulate innovation and American competitiveness.

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Note: The views expressed are solely those of the author and do not necessarily reflect the position of AEL.

Thomas Friedman popularized it in 2009; Barack Obama reiterated in 2011. The Sputnik metaphor employed by both—Obama most recently in the State of the Union—handily condenses the clean energy challenge into a “great race” to win our nascent energy economy, to win the future, and to put America back on a path to exceptionalism.

We’ve had a few weeks to review and digest the Sputnik metaphor as put forth in the State of the Union. Commentary (including that from AEL) has been positive, noting a need to unify Americans in “stark and bracingly simple” terms, embrace a supply-side investment strategy, and inspire the action needed to take America’s energy future by the reins.

On the other hand, those skeptical of the metaphor have focused on the idea that Sputnik is generally mismatched to America’s current challenge — some stating that America’s energy situation doesn’t demand the same urgency as the Space Race and that if Obama’s domestic investment policies don’t bear fruit quickly, the public may soon grow disenchanted with them.

Atlantic Wire, while dutifully acknowledging the power of Sputnik as a catalyst, admirably synthesized various reasons for the perceived metaphor mismatch. One argument put forth— “Can We Have ‘Sputnik’ Without an External Enemy?” –is worthy of further discussion, and argues that “President Obama wants us to recreate the same sense of urgency [as in the Space Race], and the same national unity, but without the same fear of another competitor country, unless that country is supposed to be China.”

Particularly in light of President Hu’s recent visit, the administration does not appear to want to turn China into a competitor country on the same scale as the Soviet Union. (Nor should it.) But while China is not currently considered an outright competitor country, what if, in attempts to further the Sputnik narrative, the administration’s approach to a Sputnik-centered energy policy unwittingly transforms China into a staunch “competitor” in the eyes of Americans? And if that begins to occur, how do we prevent the alienation of Chinese Americans within the United States, or a general mistyping of the Chinese people as a whole?

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DOE Favoring Renewables or Reality?

At today’s Senate Energy and Natural Resources Committee hearing on the Department of Energy’s proposed $29.5 billion budget, both Democrats and Republicans expressed concern over increased funding for the DOE’s renewable initiatives while simultaneously cutting its spending on fossil fuels. Yet on a day when the Wall Street Journal reported on Exxon Mobil’s struggles to find new sources of oil, it seemed oddly out of touch for Senators to press Energy Secretary Chu for pushing renewable technologies over traditional fossil fuels.

Senator Murkowski, Ranking Member of the committee, pointed toward preferential treatment as a big problem in the new budget: “It seems to me that within the administration, you are picking those areas through the budget process that you would like to see advanced.” However, as Secretary Chu stated, “there are mature technologies and there are technologies that need more help,” challenging the notion that the Obama administration has simply ‘chosen’ arbitrary technologies.

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Arctic Oil and Gas: The Emerging Question

“What would happen if a Deepwater Horizon-type oil spill were to happen in the Arctic?” is a question Arctic coastal nations have been asking themselves for almost a year now.  It is important to stress that this is not a high-flown hypothetical.

The USGS released a report in 2008 saying that there could be up to 400 billion barrels of oil equivalent reserves in the Arctic, comprising 6.7% of the world’s proven oil reserves and 26% of natural gas reserves, recoverable with current technology. Much of the world is waiting to see exactly how these resources will be exploited and who, if anyone, will ultimately reap the riches.

The Arctic hydrocarbon question has resulted in a flurry of interest in all things Arctic by many northern countries. With oil and gas in the equation, nearly every aspect of Arctic management becomes a geopolitical issue to any country with a stake in energy security.

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