From Guest Blogger Cameron Atwood: Are Dirty Fighters Throwing Sand in Our Eyes?

There now rages a great contest among our species over the nature of our present and future energy infrastructure.

On the one side, we have people and entities aligned with the status quo – these include the vested moneyed interests that have long extracted massive revenue from our existing fossil energy arrangement. On the other side, we have people and entities now warning against our current path, and instead urging us to look forward toward the very real potential of an energy economy based on sustainable modern resources.

Jeremy Grantham (pictured above) is the co-founder and chief investment strategist of Grantham Mayo van Otterloo (GMO), a Boston-based asset management firm, with more than US $97 billion in assets under management as of December 2011. He’s particularly well-known for predicting and warning us of various financial bubbles. He’s also been a vocal opponent of numerous governmental responses to the global financial crisis. This is not a man given to blithe assessments or wispy conclusions.

He writes in his article, The Race of Our Lives, “I have just two comments about our current problems. First, that there is one particular pressure this time that seems particularly serious: aversion to bad news. The investment business has taught me – increasingly as the years have passed – that people, especially investors (and, I believe, Americans), prefer good news and wishful thinking to bad news… Good news in investing in particular is better for business; good news on resource limitation is better for the suppliers of resources; and good news on climate change – that it basically does not exist and is even a hoax – is better for energy companies, among the biggest and most profitable of all companies. Historians have pointed out the bias against the need for change: there are always clear beneficiaries of the current state of affairs but the benefits of a changed world in contrast will look vague and uncertain to the likely beneficiaries. That is always the case. What is less common, although not unique in history, is what we have today: the near complete control of government by the powerful beneficiaries of the current system.

“The second point is… Yes, we are taking extreme risks with resource depletion and with the environment, especially concerning climate damage and ocean acidification. Yet I believe the case for the near certainty of our running off the cliff misses the existence of two extraordinarily lucky (and, one could argue, undeserved) gifts that were not available to any prior stressed civilization. [These gifts] may arrive like the U.S. Cavalry, just in time to turn us away from the cliff edge. But at best, as Wellington is famously paraphrased as saying about the Battle of Waterloo, it will be a ‘damn closely run thing.’ It will be the race of our lives.”

Those two lucky gifts he writes of are, “Our Last Best Hopes: Declining Fertility and Improving Technology for Renewable Energy.”

So, what about renewable energy today?

Mark Z. Jacobson, a professor of civil and environmental engineering at Stanford University, and a senior fellow with the Stanford Woods Institute for the Environment and the Precourt Institute for Energy, co-authored a study focusing on the state of New York, with scientists from Cornell University and the University of California Davis.

According to Stanford’s website, “The study is the first to develop a plan to fulfill all of a state’s transportation, electric power, industry, and heating and cooling energy needs with renewable energy, and to calculate the number of new devices and jobs created, amount of land and ocean areas required, and policies needed for such an infrastructure change. It also provides new calculations of air pollution mortality and morbidity impacts and costs based on multiple years of air quality data.”

“According to the study, if New York switched to Wind, Water and Solar (WWS), air pollution–related deaths would decline by about 4,000 annually and the state would save about $33 billion – 3 percent of the state’s gross domestic product – in related health costs every year. That savings alone would pay for the new power infrastructure needed within about 17 years, or about 10 years if annual electricity sales are accounted for… It would also create a net gain in manufacturing, installation and technology jobs because nearly all the state’s energy would be produced within the state.

“Currently, almost all of New York’s energy comes from imported oil, coal and gas. Under the plan that Jacobson and his fellow researchers advance, 40 percent of the state’s energy would come from local wind power, 38 percent from local solar and the remainder from a combination of hydroelectric, geothermal, tidal and wave energy… To ensure grid reliability, the plan outlines several methods to match renewable energy supply with demand and to smooth out the variability of WWS resources. These include a grid management system to shift times of demand to better match with timing of power supply, and “over-sizing” peak generation capacity to minimize times when available power is less than demand.”

“It’s absolutely not true that we need natural gas, coal or oil — we think it’s a myth,” said Jacobson, the main author of the study, published in the journal Energy Policy. “You could power America with renewables from a technical and economic standpoint. The biggest obstacles are social and political — what you need is the will to do it.”

“’The economics of this plan make sense,’ said Anthony Ingraffea, a Cornell engineering professor and a co-author of the study, ‘Now it is up to the political sphere.’”

What’s the motivation for the political sphere (besides bribery)?

The evidence-based warnings are growing, in number and urgency, against our digging further into the earth for more prehistoric sunlight. On in a June 4, 2011, Dr. James E. Hansen, then Director of the Goddard Institute for Space Studies at NASA, made the following statements his article, “Silence Is Deadly: I’m Speaking Out Against Canada-US Tar Sands Pipeline.”

“An overwhelming objection is that exploitation of tar sands would make it implausible to stabilize climate and avoid disastrous global climate impacts. Easily available reserves of conventional oil and gas are enough to take atmospheric CO2 well above 400 ppm, which is unsafe for life on earth. However, if emissions from coal are phased out over the next few decades and if unconventional fossil fuels including tar sands are left in the ground, it is conceivable to stabilize earth’s climate.”

In its Mar. 2011 publication, “Say No to Tar Sands Pipeline: Proposed Keystone XL Project Would Deliver Dirty Fuel at a High Cost,” the Natural Resources Defense Council (NRDC) affirmed the following:

“The Alberta tar sands are found under a region of Boreal forest and wetlands similar in size to Florida. The bitumen—or the unrefined product excavated from the tar sands—must either be strip-mined or melted and pumped up after the ground has been heated with steam for several months. Both forms of tar sands extraction fragment and destroy the Boreal forest, killing nesting migratory birds and many other species. Toxic waste from the mining operations is stored in vast man-made dams—called tailings ponds—that already cover sixty-five square miles…”

“In addition to the damage that would be caused by the increased tar sands extraction, the pipeline threatens to pollute freshwater supplies in America’s agricultural heartland and increase emissions in already-polluted communities of the Gulf Coast…”

All that’s a decent chunk of bad news, but what do “the clear beneficiaries of the current state of affairs” have to say?

Much as Jeremy Grantham perceived, there are those with status quo interests who seem doggedly persuaded that America “needs” the Canadian tar sands oil and the Keystone XL pipeline. People under this errant influence may be surprised that 63.4 percent of Canada’s electricity was produced from renewable sources in 2011 – mostly from hydropower, with some wind as well. That little-known fact is likely one significant reason Canada why feels so comfortable exporting her own fossil energy.

Pipeline champions often seem to favor a short list of specific tactics:

…to deflect attention toward competing fossil fuels, particularly coal (even though all fossil fuels are harmful);
…to represent the use of tar sands as inevitable (even though better options are available);
…to appeal to nationalist impulses (even though much of the tar sands product is destined for global export).

Here are a few examples…

An Aug. 24, 2011 editorial in the Calgary Herald opined that “protesters would be doing the planet a bigger service if they were to target the coal-fired generation industry…” and one of the twenty three “senior fellows” at the Manhattan Institute, Robert Bryce, posited that “coal is the real issue when it comes to carbon-dioxide emissions.”

Bryce also wrote, “For many years, the US has relied most heavily on crude imports from Mexico and Canada. Over the past ten years, Canadian crude production has risen by 600,000 barrels per day while Mexico’s has fallen by about that same amount… …Like it or not, oil is here to stay… …the hard fact is that petroleum is a miraculous substance. Nothing else comes close to oil when it comes to energy density, ease of handling, flexibility, convenience, cost, or scale…”

Similarly, the National Petrochemical and Refiners Association stated, “Canada is the largest source of oil imports to the United States, providing nearly 2 million barrels of oil per day… …Canada’s oil sands are important to ensuring secure North American energy supplies today, and production will be even more important in the future as the economy begins to recover and our energy demands increase… …limiting oil sands crude use could cause Canadian producers to ship their product to Asian markets, while the US would have to import more oil in tankers from the Middle East and elsewhere…”

Not to be outdone, Canadian Natural Resources Minister, Joe Oliver, stated not only that “Canada is the environmentally responsible choice for the U.S. to meet its energy needs in oil for years to come,” but also that the massive and growing toxic tailings ponds from tar sands operations will be so clean “you’ll be able to drink from them.”

New depths were plumbed in the morality of pipeline championing when Diana Furchtgott-Roth (another of the Manhattan Institute’s ‘senior fellows’) wrote, “If this oil shipment had been carried through pipelines, instead of rail, families in Lac-Mégantic would not be grieving for lost loved ones today, and oil would not be polluting Lac Mégantic and the Chaudière River.”

Of course, the completion of the XL pipeline doesn’t mean rail shipments will end, so her position is blatantly dishonest and manipulative, as well as a callous exploitation of human misery to advance a flawed position. As Oil Change International’s executive director Stephen Kretzmann wrote, “It’s like debating whether or not menthol or regular cigarettes are worse for you. They both kill, and that’s the point.”

Incidentally, the Manhattan Institute is a 501(c)3 ‘conservative libertarian think tank’ founded back in 1978 by Bill Casey, soon to be President Reagan’s CIA director. Major contributors include Exxon Mobil, and one senior fellows’ report now prominently advertised on the entity’s website is, “The Case for Exports: America’s Hydrocarbon Industry Can Revive the Economy and Eliminate the Trade Deficit.”

It’s a dirty job, but somebody’s got to do it…

Another common ploy by these pipeline champions is to circulate inflated predictions of jobs and economic contributions. These projections quite reliably mention nothing of the job potential to be found within competing natural resources like modern sunlight, wind and water, nor do their flawed economic equations account for the numerous externalized costs of fossil energy.

This first example of this approach is from the US Chamber of Commerce (which is a lobbyist group, not a government agency), “…the proposed project will provide approximately 20,000 badly needed manufacturing and construction jobs, and contribute an estimated $20 billion in benefits to the U.S. economy.”

The National Petrochemical and Refiners Association is evasive about the numbers, but struggles to leave the same impression, “The Keystone XL Pipeline and oil sands development will create and sustain thousands of U.S. jobs, and benefit local communities through increased business activity and tax revenues…” and “Completion of Keystone XL pipeline can make an important contribution to lowering oil costs by increasing the supply of crude oil throughout North America.”

Professor of Finance and Business Economics at the University of Michigan-Flint, Mark J. Perry forecasted in September 2011 that “[T]he Keystone pipeline would create 20,000 American jobs and nearly 120,000 indirect jobs as well as increase revenues for state and local governments along its route.” He goes on to predict “an estimated $20 billion in revenue…”

That same month, Mary Anastasia O’Grady, a member of the Wall Street Journal’s editorial board projected similar numbers, wrote, “TransCanada’s Keystone XL pipeline, if the U.S. ever issues the permit, will mean $20 billion in investment. The company says the construction phase will require 13,000 direct hires and indirect new jobs could total 118,000 in the U.S…” She further opined, “Mr. Obama clings to his subsidies for solar panels and his religious faith in green jobs…”

However, these jobs figures are widely disputed by numerous sources, including prior claims by the pipeline company itself, TransCanada, and the inflated job numbers come from a study it paid for, using hidden data, according to information from the organization Tar Sands Action, which shares the following:

…In 2008, TransCanada’s Presidential Permit application for Keystone XL to the State Department indicated “a peak workforce of approximately 3,500 to 4,200 construction personnel” to build the pipeline;

…Jobs estimates above those listed in its application [3,500 to 4,200] draw from a 2011 report commissioned by TransCanada that estimates 20,000 “person-years” of employment based on a non-public forecast model using undisclosed inputs provided by TransCanada;

…According to TransCanada’s own data, just 11% of the construction jobs on the Keystone I pipeline in South Dakota were filled by South Dakotans–most of them for temporary, low-paying manual labor.

What about the jobs found in sustainable energy?

Founded in 1984 by a bipartisan group of Congressional Members dedicated to finding environmental and energy solutions, the Environmental and Energy Study Institute (EESI) notes, “The Center for American Progress (CAP) and the Political Economy Research Institute (PERI) project a $100 billion green investment package over two years would create nearly four times more jobs than spending the same amount of money within the oil industry, and would reduce the unemployment rate to 4.4 % over two years.”

Further, EESI reports, “According to the Worldwatch Institute, in 2006 there were 2.3 million people working directly or indirectly in RE industries around the world. The wind power industry employed about 300,000 people, the solar photovoltaic (PV) sector accounted for an estimated 170,000 jobs, and the solar thermal industry, at least 624,000.”

The bottom line here is this: Our species worldwide, and particularly our nation, is addicted to harmful energy resources, fossil hydrocarbons, which have many hidden but very real costs both physical and fiscal. That addiction has hold of our head, our leadership. As Jeremy Grantham observed, we’re suffering from “the near complete control of government by the powerful beneficiaries of the current system.” That control is exercised through bribery and media influence. Like any addiction, the first step is to end the denial and realize that we have a problem; the second step is to learn how to transform our behavior to defeat the addiction. We need to get our heads out of the sand and turn our eyes to the sky.

PS: Find Jeremy Grantham’s excellent article here.