It’s the Chinese, Stupid

Published by National Journal’s Energy & Environment Expert Blog

It’s time to take off the kids’ gloves in the energy debate.

For the last five years, clean-tech advocates have extolled the potential benefits of a clean energy economy. You know the drill: millions of new jobs; freedom from oil; better technologies and cleaner air.

Where have we gotten in terms of policy outcomes? Besides ARRA’s clean energy investments and higher fuel mileage standards, practically nowhere, and the clean energy industry is poised for a crash, as my colleagues argued on this forum.

Meanwhile, on the political front, we are witnessing one of the harshest backlashes against the role of government and public investment in U.S. history. The Tea Party has successfully hijacked the national agenda to focus on deficit reduction at all costs, even with unemployment above 9%. Science and technology budgets are under attack across the board, with the recent House Appropriations bill slashing budgets for energy innovation, NIST, NASA, and the Office of Science and Technology Policy, which was cut by over 55 percent. What will emerge from the Joint Committee on Deficit Reduction – or what the outcome will be if it fails to reach a deal – is highly uncertain, but it could result in even more draconian cuts to energy and technology budgets.

The bottom line: clean energy and innovation advocates across the board are losing. Badly. No matter how grand the benefits of a sensible economic policy proposal might be – whether in clean energy or other sectors – extolling these benefits is hardly a winning approach in today’s political environment.

Hence the need to take off the kids’ gloves and develop a new strategy.

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America Needs a New Vision

Published by The Huffington Post
By Teryn Norris
August 5th, 2011

Just three short years after Barack Obama’s campaign, “No We Can’t” is the new “Yes We Can,” and the vision of hope and unity that re-inspired a generation has been shattered.

In the aftermath of Washington’s fabricated debt-ceiling crisis, and amidst a looming double-dip economic recession, prospects for the United States look grim. Public disapproval of Congress has soared to the highest level on record, and a deepening sense of disillusionment has swept the country.

When future historians look back, they may conclude that 2011 was the beginning of a lost decade – when the U.S. descended into a decade or more of political dysfunction and economic malaise, and the American people concluded that the nation’s problems are largely insurmountable.

But it doesn’t have to end this way.

Instead, those future historians might conclude that 2011 and 2012 were watershed years that ignited a Great Renewal — when a generation of Americans realized how much is at stake if we fail to unite behind an optimistic vision for national revitalization, make essential investments in our future, and fight back against those who would tear the country down. For what is at stake today is nothing less than the foundation of American leadership and the international order.

The 20th century was the American century in large part due to our economic dynamism and innovation, which depended on unrivaled public-private partnerships to invest in the engines of progress: science, technology, infrastructure, and education. This dynamism positioned the United States to underwrite the most peaceful and prosperous global period in modern history.

These investments spanned across Democratic and Republican administrations alike. As one president declared in a national address, “I’ve urged Congress to devote more money to research… It is an indispensable investment in America’s future… Some say that we can’t afford it, that we’re too strapped for cash. Well, leadership means making hard choices, even in an election year.”

Jimmy Carter? No, that was Ronald Reagan.

He was no exception. President George Washington supported the development of interchangeable parts, which revolutionized U.S. manufacturing, as the Breakthrough Institute has documented. Lincoln delivered railroads and land grant universities, FDR oversaw the Manhattan Project, Eisenhower developed interstate highways and nuclear power, Kennedy advanced microchips and the Apollo Project, Nixon launched the quest to cure cancer, and both Clinton and George W. Bush helped triple the budget of the National Institutes of Health.

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Why Recycling is an Energy Policy

Recycling Saves Energy - poster from NCDENR</ins>More than three-quarters of all Americans recycle, and on the East and West Coasts, nearly 90% do. But although virtually everyone agrees that recycling is good for the environment, most people do not think of recycling as a solution for one of today’s biggest problems – energy dependence on climate-disrupting fossil fuels. A closer look reveals that recycling can play a serious role in reducing energy use and increasing efficiency.

Recycling delivers a host of environmental benefits, including conserving scarce natural resources, keeping dangerous and toxic chemicals out of landfills where they can leach into the groundwater, and reducing methane emissions from landfills. In spite of these benefits, recycling has always had its detractors. In a notorious 1996 New York Times Magazine article, staff writer John Tierney argued that recycling programs wasted more resources than they saved. That turns out to be a spurious argument, but it is closer to true if the only averted costs considered are those associated with collecting garbage and hauling it to landfills (although, it seems fair to mention that no one has ever criticized garbage collection for not paying for itself). But averted disposal costs are only a tiny slice of the savings generated from recycling. The big savings come in the form of energy.

Energy is used throughout the entire lifecycle of consumer products, from extracting and processing the raw materials used, manufacturing the products themselves, distributing those products to retailers, and of course, collecting and processing or disposing of products once consumers no longer find them useful. Those first two phases—extracting/processing raw materials and manufacturing—are by far the most energy intensive, and that is where recycling can deliver big reductions.

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India’s Clever Nuclear Power Programme

india-energy-nasaCounted among the fifteen countries currently building reactors and intently following the forty-five countries which intend to introduce fission to their energy portfolios soon, India may be positioning itself as the foremost purveyor of international nuclear growth. It would gain this position by emerging as one of the world’s largest customers for nuclear power plants while simultaneously injecting its own reactor technology – which Indian engineers have long been developing and could soon bring to market – as a potentially disruptive product in the energy industry.

Note that while the fallout of the disaster at the Fukushima Daiichi nuclear power station in Japan is yet to be seen and difficult to predict, it is doubtful that emerging economies like India and China will alter their ambitious nuclear programs in its wake. In fact, the delay in new builds that may occur in more regulated markets like that of the United States (US) and Germany could further India’s leadership position. While the US takes pause to second-guess and triple-check the integrity of designs and plant locations, India will continue to build new generation reactors and commercialize environmentally-beneficial and highly-profitable energy technology.

India’s nuclear sector has enjoyed steady growth because of its Nuclear Power Programme (NPP): a multi-decade, three-stage schedule for meeting rapidly increasing electricity demand and liberating the nation from energy dependence.  In the first stage, the industry was jumpstarted with proven technology, Pressurized Heavy Water Reactors (PHWRs), in order to equip domestic engineers with reactor-operation experience and to help meet the nation’s anticipated electricity needs. The second stage incorporates research, development, and deployment of Fast Breeder Reactors (FBRs).

India’s nuclear policy body, the Atomic Energy Commission, sought to develop breeder technology because it is capable of producing and reproducing the material necessary for fission reactions until nearly no material is left, and it does not need natural uranium – a resource which India lacks. In the long term, breeders could clean up after PHWRs by using their waste as fuel and eliminate the need for spent fuel storage. Finally, NPP’s third stage envisions another breeder design, called the Advanced Heavy Water Reactor (AHWR), which would primarily use thorium – India’s indigenous fuel. So, after about fifty years of deliberate and well-planned growth, the bustling economy could derive as much as a quarter of its electricity from a carbon-free, domestic resource.

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With the most recent announcement that China is committed to peaking its total energy use by 2015, in addition to its energy and emissions intensity reduction goals, China’s ability to swallow the bitter pill of aggressive environmental policy seems unprecedented. Skeptics may ask, “But is it enough?” The answer from the Chinese perspective is that it’s much more than the world’s largest democracies are currently willing to do.

China has committed to an absolute energy consumption cap of 4 billion tons coal equivalent (tce) by 2015, a binding limit on energy use which has been included in the current draft of the 12th Five-Year Plan. Depending on how one determines China’s projected energy consumption, the 4 billion tce cap could be more or less than business-as-usual  for 2015. However, in this case, the fact that a cap is even being discussed – much less implemented - is more important than the actual number: the 2010 World Energy Outlook projected that Chinese energy consumption would increase by 75% between 2008 and 2035, thereby reaching approximately 5 billion tce.[1] That the world’s largest energy consumer, which is otherwise projected to contribute 36% of global growth in energy consumption over the next 25 years, could instate such a cap is actually quite meaningful.

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How to Deal with Coal in Federal Legislation

In his state of the Union address, President Obama set a goal of generating 80 percent of US electricity from “clean energy sources” by 2035. President Obama was using a very inclusive definition of “clean energy sources”, leaving coal without carbon capture and sequestration (CCS) technology as the big loser. Obama provided no details of how the country could achieve this goal but left it to Congress to work it out. Any new Federal legislation that comes out of this goal should recognize that electricity markets differ by state, and each state has its own body of laws, regulations, and administrative decisions that govern electricity regulation. A flexible approach from Congress will enable further regulatory innovation by states, dampen the effects of market failures, and allow states to allocate costs to meet their current situations and long-term priorities.

The President was indirectly acknowledging that there are only two ways to significantly reduce CO2 emissions from electricity generation: either reduce the amount of electricity generated by coal combustion or capture and sequester the CO2 emitted by coal-fired plants. Coal combustion for electricity generation is responsible for approximately 30 percent of all U.S. greenhouse gas emissions. Within the electricity sector, coal is responsible for more than 80 percent of greenhouse gas emissions. While the percentage of all U.S. electricity that is generated by coal has decreased over the past 15 years, the total amount of coal combusted by the electricity industry has actually increased by 4 percent from 1996 to 2009, peaking at a 16 percent increase as compared to 1996 in 2007. Coal use is currently widespread throughout the country but concentrated in a handful of states.   (more…)

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Rural Solar BoliviaIn the bone chilling cold of the high Bolivian Altiplano are numerous rural isolated villages. These villages have existed on subsistence agriculture and without electrification for centuries. In this region of the world, unique and innovative strategies to survive and cope with local circumstances are part of everyday life. With the help of hi-tech innovation in the developed world, developing nations like Bolivia can find innovative ways to pull themselves out of energy poverty.

As an example, the resilient inhabitants of Bolivia have been chewing coca leaves to combat altitude sickness for centuries; this age-old remedy is impossible to fully appreciate until you have personally been relieved of a splitting altitude induced headache. If visiting the Altiplano, you’re likely to finish chewing your coca leaves and look up to see your host pull out a cell phone that has been charged by a solar panel. While seemingly odd given the local circumstances, it shouldn’t be unexpected. In developing Bolivia, one of the poorest countries in South America, solar resources are abundant and 3 million of the country’s 10 million people live without electricity access. In fact, solar panels and solar water heaters are a relatively common site along the roadside in Bolivia and in rural villages.

So how is this still costly technology finding a foot hold in Bolivia? The developing world is more apt, in some cases, to find ingenious and efficient applications for technology. Imagine seeing someone charging their phone from a solar panel in New York City, it’s almost as odd as imagining a person chewing coca leaves as they climb the Empire State building. Yet the adage holds true, necessity and circumstance drive innovation, and developing countries aren’t short on necessity or challenging circumstances.

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As the United States struggles to cope with stubbornly-high unemployment rates and a pollution heavy electricity sector, it has turned to alternative energy as a potential solution to both problems. Not surprisingly, most of the attention has focused on well established industries like onshore wind, solar, and nuclear. Yet, over the last two years another once-obscure industry has begun to carry increasing interest from private and public entities alike: offshore wind.

Although a nascent industry, offshore wind faces many of the same hurdles that other renewable industries and government agencies have gained experience in overcoming, suggesting offshore wind could be built out quicker than would be expected. Indeed, given the immense potential benefits of offshore wind, from the investment and employment derived from founding a novel industry to the exploitation of a significant renewable resource, achieving rapid expansion should be a top priority for the public and private sectors. Actions taken by both sides thus far suggest public and private entities agree with this assessment, but to date no offshore wind turbines have been erected in the United States. Why is this?

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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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