Observations on The National Clean Energy Summit
I had the privilege of attending the National Clean Energy Summit in Las Vegas on August 18th and 19th. Sponsored by Senate Majority Leader Harry Reid, the University of Nevada Las Vegas, and the Center for American Progress, the summit brought to together an extraordinary number of state and national policy makers to discuss the mandate for a clean energy agenda.
The conference opened with President Bill Clinton and included such major luminaries as T. Boone Pickens, Robert Rubin, and Michael Bloomberg, not to mention the governors of Arizona, Colorado, and Utah. In addition, there were speakers from academia, utilities, finance, and technology related initiatives.
I want to share some of my observations:
First, there is a mandate for a clean energy future. It is bipartisan and it is imminent. Greenhouse gas emissions and our dependence on foreign oil are the driving factors. While state and local governments are well in front of the federal government, policy makers are anxious for Congress to take decisive action.
Second, there were a number of common themes expressed by the vast majority of speakers -- so much so -- that they virtually became the “holy grail” of the summit. Here is what they are:
- Tax Credits - Speaker after speaker called for the extension of current energy tax credits. Beyond that, longer term tax incentives (in the form of both guarantees and credits) were considered essential to jump start and sustain solar, wind, and geothermal industries.
- Energy Conservation and Efficiency - The great low hanging fruit of clean energy. President Clinton’s “no brainer.” The thought is that through energy conservation and efficiency initiatives new generation can be avoided. Paths included utility decoupling, along with utility incentives, longer term financing, and application of new technologies, particularly in lighting and smart meters.
- A Price on Carbon - Unanimity that carbon had to have a price, for social, health, and economic reasons. Most of the time, this meant a cap and trade system. Mayor Bloomberg called for a straight-forward carbon tax. The prevailing view was that it didn’t matter who became next President as both candidates were committed to sign cap and trade legislation.
- The Electric Grid - Perhaps the most prevailing theme was the call for a revamped national transmission structure. In short, both wind and solar are located where the grid is weakest -- wind in the Midwest and solar in the Southwest. A projected $60 billion will be necessary to create an effective national grid that moves these cleaner fuels to populated markets.
The big surprise at the summit, at least to me, was Dan Reicher’s, of Google, presentation that the future of clean renewable energy lay primarily in “enhanced” geothermal energy. In essence, enhanced geothermal means uses the earth’s abundance of hot spots as a heat exchanger. Holes (using newly developed and less expensive drilling technology) are drilled to these hot zones, water is poured into the hole, and steam rises to drive turbines. Google is convinced we can produce massive amounts of clean electricity world-wide using this process.
Continue Reading...Offshore Drilling
I have the following theory about the fallacy of opening offshore areas of the US coastline to drilling as a strategy to push down oil prices:
- Any additional crude oil that could be recovered from US offshore areas does materially not increase OUR oil supply.
- Regardless of whether the firm drilling for such crude is ExxonMobil, Chevron or any other US firm, it would simply become part of the WORLD crude supply and would be sold at whatever the spot price for crude is on a given date.
- Such crude would NOT be sold preferentially to US citizens at a discount but rather at the going price. The fact that it is locally produced may translate into a slight reduction in transport costs (over Venezuela, Mexico, Canada and other nearby oil-producing regions). But, the reality is that the difference at the pump for US consumers would be inconsequential.
- Yes, by increasing the WORLD supply of oil, the price of crude will drop some, but the amount we are talking about here is relatively small (and the effect on price at the pump likely would be even smaller). And that effect is years off.
- The primary effect of drilling offshore would be to increase the amount of product that US oil companies could sell, in other words increase their sales and profits.
- Moreover, drilling offshore would undermine the battle against climate change. Rather than accelerate the pace of drilling, we should encourage US energy firms to invest in alternative energy sources.
