Discussion on Renewable Energy, Externalities, Sustainability, Etc.

Here’s a conversation I’m having with a friend that readers may find interesting:

Craig: I said something that I regret in our talk on the phone yesterday.  In particular, I said that “clean coal doesn’t exist.” As a broad fact, this is not correct.  Obviously, it depends on exactly what you mean; clearly there are steps that can be – and are – taken to scrub the emissions, sequester the CO2, etc.  I’m not an expert on this, but I’m sure it’s getting better all the time. 

Here, btw, is my take on Solyndra and the stimulus money in energy:  http://2greenenergy.com/arpa-e-stimulus/31601/.

Friend:  Good piece on Solyndra.

I believe that you’re right on this issue, but we can’t let the administration off guilt-free by saying “there really is nothing shocking about a loan guarantee like this going south;” or that there was no malfeasance. In general, speculative tech investments are often crapshoots because they depend on unknowable variables. For example, investors can’t know if the public will embrace a new social media competitor, or if a power like Apple will capriciously damage a supporting technology and harm all companies that use it.

By comparison, the Solyndra dynamics were much simpler to evaluate. There were established technologies that didn’t require a high degree of new market acceptance. Ultimately success or failure came down to price competition with the Chinese. That was a fairly predictable issue. Looking at this as a reasonable outsider, I believe that there was a politically driven rush to invest, and knowledgeable voices were drowned out by the perceived urgency of the economic stimulus program. There was no malfeasance—those claims are political nonsense. It was just the rush to invest without considering information available from due diligence. The rush of governmental hordes badly tainted a high-minded energy policy that deserved better execution.

Thanks for the clarification on “clean coal.” A one-time business partner led a company that offered scrubber technologies in the early 90’s. The company failed, but he was hired by the UN to visit China four times a year to lecture on how coal-burning Chinese power producers could clean up their act. He talked, they listened, and continued their filthy operations. But the scrubbing and CO2 capture technology were available in 1992! Why don’t we invest in improving them? Wouldn’t the billions of dollars in cost be a better approach than shutting down coal producers and throwing thousands of people out of work? I’m just an uninvolved observer, but I like to see practical solutions rather than rushing to boutique technologies that will probably never earn serious economic traction.

Craig: I have no evidence to support the idea that the investment in Solyndra wasn’t political, and it didn’t overlook things that should have been obvious.  Government, especially 21st Century US government is rife with corruption and stupidity.  That said, I believe (as you read there) that government really does need to be involved.

Re: “boutique” technologies, recognize that 4% of 5.4 terawatts being generated in the US as we speak comes from wind and another 1% from PV; it’s a pretty big boutique, and it’s growing even despite the uncertain, on-again-off-again environment in Washington.  Recognize also that wind and solar create jobs too; in fact, most suggest that the job creation in clean energy exceeds that in fossil fuels.

Friend: I agree that wind and solar have earned the right to be called mainstream technologies. Whenever I drive through the Altamont Pass wind farms, I have to be a believer. By “boutique” technologies, I was referring to things like bio fuels, tidal, and hydrogen fuel cells because both Hillary Clinton and Obama promised these and other undeveloped clean tech during their campaigns in 2008. Even if these and the other 100 renewable ideas are viable, they won’t be mainstream for at least 25+ years.

“Boutique” isn’t a bad thing. It’s what you have until something is fully developed and economically sustainable. Economics are really the issue. Steven Chu has been quoted as saying that we should force gasoline prices so high that people would abandon hydrocarbon fuels. Obama said, “If somebody wants to build a coal-powered plant, they can, it’s just that it will bankrupt them.” These two statements represent approaches that won’t work. The key is to find ways to make clean technologies more competitive. Solar and wind suppliers are well on the way. Even if we need to subsidize a few, it’s better than trying to drive up gas prices or kill coal producers. 

Craig: Personally, I see a combination of the two.  The externalities to burning coal in the US, according to a fairly recent report from Harvard Medical School, is about $700 billion per year.  And that’s not counting some of the items that I would include.  So here’s a question: who should pay that cost?  Currently the answer is: our grandchildren.  They will be inheriting a planet whose ability to support life will have been severely depleted, and eventually, someone will have to pay for the damage. 

Is it so radical an idea that each generation pay its own way?  Here’s a piece I wrote on this a while back: http://2greenenergy.com/pay-it-now/5208/.

Friend:  For many sad historical reasons, this generation can’t pay its own way. Millions of people are out of work. The food stamp rolls have ballooned from 26-million (2006) to 47-million today. The recent Federal Reserve announcement of QE3, will create rampant inflation as soon as things get better. Energy costs are a major driver of the inflation that has already begun in your grocery shopping. Fuel is a major cost element in the transport of food and other goods as well as people. Every time fuel prices jump, more people are hurt. Driving fuel prices upward can’t be a good thing. It doesn’t affect me very much, and many other middle class people aren’t hurt very much either. If you have enough resources, high fuel prices are only an annoyance. But poorer people suffer. We need economically attractive clean energy alternatives that drive all energy prices downward. The government can/should take a role in making it happen. Driving gas prices upward is short-sighted, even if you hate the oil companies.

Craig:  It’s most certainly true that we can’t afford our current energy and transportation paradigm.  We have individually owned 4000-pound cars to carry around one 150-pound body.  The average food item we eat traveled 1200 miles to get here.  The vast majority of the buildings in which we live and work have abominable energy efficiency characteristics.  All of this nonsense must go.  I firmly believe that market conditions need to change such that idiocies like this become expensive.  Or, if you prefer the carrot over the stick, create incentives for living wisely and decently. 

Friend: You’re 100% right. Unfortunately it takes several years to change a paradigm as widespread as our fuel-wasting, overweight automotive population. When the Big-Three thought they could do so with their half-wit design of K-Cars in the mid ‘70’s, they got their collective asses kicked. American culture wouldn’t accept low-powered cars.

Politicians and corporate execs
throw around terms like “change the culture”, and “develop a new culture.” But they don’t even know what “culture” is. I studied this subject while at DEC in a special assignment to the Sloan Biz School at MIT. Cultures take a minimum of 10 years to change. A few early believers might be transformed. A few more will mouth the words while harboring doubts. But most people won’t change their beliefs, tastes, opinions, habits, heroes, work styles, and rhythms in less than 5-10 years.

Though you and I might agree on the vital need to change the energy/transportation paradigm, changing the culture is equivalent to pushing a river upstream. Carrots would have to be sweeter than sugar, and sticks will only result in “throw the bums out.” Look at a somewhat simpler issue: the cost of Medicare. Both parties agree that we can’t sustain it. Bipartisan committees make proposals that wouldn’t affect anyone 55 or older. The changes recommended would be relatively painless. Yet politicians insist that any change is akin to pulling the plug on Grandma. Their solution is “go find more borrowing or taxes to pay for it.” Anyone who passed 7th grade math can calculate that that approach can’t work. Taxing 100% of all assets of all of the millionaires and billionaires in the US would only pay to run Medicare for a few weeks. But our culture is built on inertia and supported by political demagoguery.  

Craig: You, my friend, are a really smart guy, and I’ve known that since I met you 20+ years ago.  But you seem to be saying that we’re screwed, and that’s a postion I cannot accept.  Those who believe in the literal word of the Book of Revelations may see the Apocalypse as a good thing; however, that’s not the way I think, and I’m doing everything I can to prevent it.  When I find myself despondent over humankind’s eroding condition, I’m reminded of environmentalist Paul Hawken, who points out that there are literally 200,000 groups in the world focused on sustainability and social justice.  Yes, there are a lot of forces pointing us toward doom, but at the same time, many millions of people trying to help us to turn the corner.