More Leadership - Not More Oil - Needed to Transform the Energy Economy

by Larry Smith

“I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.” -- Thomas Edison in 1931, the year he died.

Well, many experts argue that - while there is still a lot of coal in the ground - oil is becoming a problem, with most reserves now held by state companies in politically unstable regions.

And oil is what runs our economy, which is why energy concerns are expected to be a central theme of President George W Bush's State of the Union address next week.

According to Al Hubbard, the president's chief economic advisor, the speech will focus on energy independence to the extent that it will 'knock your socks off.' And he told a recent university symposium that "within 30 years, we will have pollution-free and basically free energy."

That's good news - especially coming from a Bush administration expert - because the prospect of adjusting to a shrinking oil supply and creating a low-carbon economy is something the world must come to grips with soon to avoid environmental disaster. But the Bushites have been reluctant to act on this.

Experts say we have to transition to alternative fuels such as clean coal, nuclear fission, hydrogen cells, biofuels, solar and wind power. And, they add, if we get serious about controlling carbon emissions to cut pollution and head off global warming, we could buy enough time to transform our energy economy without breaking it.

In his last State of the Union address, Bush (a former oil executive) drew lots of attention by acknowledging America's addiction to oil. He went on to unveil the Advanced Energy Initiative - a 22 per cent increase in clean energy research to push for breakthroughs in vital areas.

"To change how we power our homes and offices, we will invest more in zero-emission, coal-fired plants; revolutionary solar and wind technologies; and clean, safe nuclear energy," he said at the time.

"We will increase our research in better batteries for hybrid and electric cars, and in pollution-free cars that run on hydrogen. We will also fund additional research in cutting-edge methods of producing ethanol, not just from corn but from wood chips, stalks,or switch grass."

But many say that a well-managed transition will require military-scale investments (like the Apollo project to reach the moon), which the Bush administration has so far been unwilling to make. Now, with America's dependence on foreign oil broaching 60 per cent, there is hope that rising security concerns may change official thinking.

And there are lots of people pushing for change. The Energy Security Leadership Council, a high-profile group of top business executives and senior military officers, recently called for greater energy efficiency as part of a plan to reduce oil dependency. It is a message we should heed in the Bahamas, where Dr Marcus Bethel is working on a national energy policy that has yet to be unveiled.

In the US, the Energy Security Leadership Council makes four main points - cut oil use, expand use of alternatives, make better use of existing resources, and manage risks through multilateral security arrangements.

Specific recommendations call for more government subsidies for hybrid gas-electric vehicles, raising fuel efficiency standards for cars and trucks by a minimum of 4 per cent a year, offering incentives for biofuels production, and supporting research into clean technologies for oil shale and coal liquification production.

"Chief among (our) formidable energy challenges is dependence on oil, which fuels 97 per cent of US transportation needs," the Council says." Since there are few readily available substitutes for oil, even a relatively minor disruption of the global oil supply has the potential to cause economic dislocation for tens of millions of Americans."

The Council is noteworthy as much for its membership as for its advice. It is a bipartisan group that includes the chief executives of companies like Fedex, UPS, Dow Chemicals and Royal Caribbean, as well as some of America's best-known retired generals and admirals.

"With each passing year," they say, "the global oil trends now at work—rising consumption, reduced spare production capacity, high levels of instability in key exporting countries, and the threat of terrorism—all increase the likelihood of an energy crisis...real progress is possible if we can come together around balanced policies that address both the supply and demand sides of the oil equation."

The European Union recently announced aggressive plans to lower energy use, look at new ways to cut carbon emissions and develop renewable sources such as wind power and biofuels in order to address its growing dependence on oil and gas imports.

Europe is even more dependent than the US on imported oil and gas. And EU leaders will vote on the plan at a March summit. The proposals call for 20 per cent of energy to come from renewable sources within 15 years by boosting wind and solar power and improving efficiency in factories, homes and vehicles.

In fact, the EU Commission says it wants to lead the world into a post-industrial revolution - the development of a low carbon economy: "we need new policies to face a new reality - policies which maintain Europe's competitiveness, protect our environment and make our energy supplies more secure," said Commission chief Jose Manuel Barroso.

In China, one of the world's biggest economies, energy use has been growing faster than gross domestic product for years. Oil use is rising rapidly and nearly all new demand is supplied by increasingly expensive oil imports. Although the government has set goals for cleaner and more efficient energy use, experts say it has yet to move from principles to action.

China is the world's second largest producer of greenhouse gases and the second largest oil consumer after the United States. Pollution control and energy security are key problems for the Chinese, but the government says it aims to source one-tenth of energy from renewables by 2020 and China's huge demand is expected to have a big impact on the renewable fuel industry by helping to bring costs down.

The fact is that a growing chorus of experts believe that the world's existing economic model - the fossil-fuel-based, automobile-centred, throwaway economy - is no longer viable and we must move to a new system powered by renewable energy sources. But an orderly transition requires leadership and capable management.

Tax shifting to reflect true environmental costs, investment incentives to promote new products and industries, sensible policies to guide consumer behaviour, and the elimination of environmentally destructive subsidies can help balance the books during this transition.

Archaeological records prove that environmental mismanagement can lead to the collapse of entire civilisations. And there is a growing sense today that business as usual is no longer viable if we want to avoid difficulties. You don't have to predict the end of the world to take steps toward a better future.

In the coming energy transition there will be winners and losers, writes Lester Brown of the Earth Policy Institute:

"Countries that fail to plan ahead, that lag in investing in more oil-efficient technologies and new energy sources may experience a decline in living standards. The inability of national governments to manage the energy transition could lead to a failure of confidence in leaders and to failed states."

And as Edison - the inventor who perfected the light bulb and other uses for electricity once said: "This scheme of combustion to get power makes me sick -- it is so wasteful."

Clearly, we need an environmental revolution.

Comments

[George Woodin]

I found this article about renewable energy sources very interesting.

A lot of R&D on this has been done around the world and the prices have gone down on simple solar and wind power generation.

Have you ever been to the Island School on Cape Eleuthera? They have both solar and wind generators, use biofueled vehicles, solar heated water, and have grey water and waste water irrigation systems.

I haven't seen anywhere else in this country with this kind of drive to be this self sufficient in power and water use. I know there are a few small resorts that are into this type of program. Keep up the good work.

[Jason Hayman]

The complete lack of awareness of energy issues in The Bahamas is absolutely astounding. I am very keen to see Dr. Bethel's new energy policy but I seriously doubt that it will go anywhere near as far as it should towards addressing the real issues.

As I see it there are two fundamental issues in The Bahamas:

1. The Bahamas imports all of its primary energy. This is extremely expensive, not just in terms of physical cost but in terms of its effect on the GDP. Studies performd by the Rocky Mountain Institute in the US suggest that producing the equilivalent of a barrel of oil domestically can add $800 to the nation's GDP. This effect is probably even more pronounced in The Bahamas. If the government was to take a responsible and forward-looking approach it could actually utilise its vast renewable resource potential (wind, solar and marine current) to become a net energy exporter, which would totally change the face of the Bahamian economy.

2. The other issue is that of environmental stewardship. As a a low-lying island nation, The Bahamas is extremely susceptible to the effects of sea-level rise as a result of climate change and must take independent action. To just rely on the actions taken by other nations is extremely irresponsible. The government must take up the gauntlet and join the battle against climate change in a meaningful way.

The Bahamas, because of its high energy costs actaully has a competitive advantege in terms of developing renewable energy technologies that are not yet financially competitive in countries like the UK, as they are currently financially competitive in The Bahamas. This could be utilised to provide an economic oppurtunity and efforts could be made to encourage renewable energy technology developers (particularly in the marine sector) to utilise The Bahamas as a venue for strategic deployment. This would lead to the development of a technolgy cluster with the potential for producing jobs and export earnings.

It is time for The Bahamas to stop being a spectator on the sidelines and create a niche for itself in the new low-carbon economy.

[EB Christen]

Again, phenomenal article! This is the struggle of our time and the beauty of it is that it combines security concerns and terrorism (depriving petro-dictatorships of oil revenue to fund terrorism), environmental action, and forced cooperation that will lead the government to rely and work with the private sector to effect change. These three cluster points are true for the USA and for the Bahamas.

I was in Harbour Island for New Years and it was charming and beautiful, but there are more 'real' cars there than ever before - can't the government figure out that cars and small picturesque islands like Briland don't go together (unless you are a plumber, contractor or can prove an overwhelming business need). Actually, scratch that, can't Brilanders figure that out - it is their own welfare after all - whatever happened to local government intiatives - that just seems so ludicrously obvious to everyone that was visiting the island that Brilanders should be embarassed they haven't enacted themselves. In Nassau, what would be still a beautiful and charming island, we are choked by noxious fumes and black clouds from the dense traffic and ridiculously disgusting trucks and buses that belch black exhaust over the entire road. When will the private sector and government step up to the plate and realise that we can take back Nassau and make it clean and beautiful again by actively working to lower fuel emissions and move towards a cleaner economy.

This is the 21st century and this is our Bahamas - it is the prettiest country in the world and we need to defend it from idiocy - both government and societal.

I still see people throwing trash out of their cars and littering KFC boxes for crying out loud!

Shape up Bahamaland!

[drew Roberts]

The government could make a good start by telling people it is legal to generate all of your power requirements by solar, wind, wave, tidal, hydro, etc. (And making it so in cases where it isn't now.)

Then they could take the duty off of the technology that is required to do so.

Is it legal to go off grid in Nassau at the current time? Will the government advertise the fact? (If so and fix the situation if not?)

all the best,

drew

(+1)/10 to send me email

[EB Christen]

Drew raises a very good point. Centralised control of power could be broken down slowly if it was made legal to go 'off grid' if you could prove that you were doing so with cleaner and more efficient technology. If this could be demonstrated, then a license could be offered. Companies demonstrating the ability to install 'clean' off grid technology would then sprout up and create a new energy sector that wasn't quite in 'direct' competition with BEC. This market driven approach to redeveloping the country's power infrastructure would open up the door to 21st century technologies while phasing out state control of the energy industry - a win win situation for consumer prices in the long term.

[larry smith]

Any progress in this field requires a national policy - which the govt is supposed to be working on. They just won't discuss it. Must be a state secret.

[drew Roberts]

To EB,

just came upon this discussoin this morning:

http://hardware.slashdot.org/article.pl?sid=07/01/23/0149215

Imagine if they would go even furhter and let you stay on grid if you wanted and "sell" your extra to them when you had it and buy from them when you were short.

To Larry,

actually we would not need a national policy as such, just getting rid of the monopoly laws, even if only for private homes at first. (Not arguing against some national policy, just against it being necessary for progress. Unless you would call something as simple as this suggestion a national policy.)

all the best,

drew

[larry smith]

what you suggested earlier is the core of a national energy policy - not only allowing distributed power generation, but enabling it with incentives and/or subsidies and actually promoting alternative energy sources.

[drew Roberts]

"what you suggested earlier is the core of a national energy policy"

Larry, cool. If so, we would do well to start with something as simple as possible as fast as possible and tweak as we go. (Rather than wait for 10 years of paralysis of analysis - something I often suffer from.)

all the best,

drew

[drew Roberts]

I came across this link today if anyone is interested:

http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:21189979~pagePK:64257043~piPK:437376~theSitePK:4607,00.html

all the best,

drew

[Donna Thomas]

I agree with Jason's comments and each of you ~ where you indicate a growing concern for the amount of noxious fumes that are choking Nassau's picturesque community and putting the tourist economy at risk.

No one likes to see the black fumes pouring out of the back of the bus or jitney that is riding ahead of us down Bay Street.

There should be government mandates governing emissions and perhaps the introduction of tax cuts for local Bahamians that introduce emission savings products that have been proven effective in reducing emissions.

Check out www.tadgergroup.com and click on the Nassau Press Release to learn more about a proven emission saving product that has been introduced into Nassau and is available for individuals, marine, hotels, business (jitney / bus) and generators. The Tadger can be used on generators, diesel and gas engines.

Reducing emissions should be a priority in the preservation of Nassau's grand scheme of things.

Everyone from the government to the home owner should play an active role in leading this fight.

[Orlowski Zygmunt]

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P.S.
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Thank you for your time and interest.