Wednesday, August 22, 2007

Time to level the energy playing field

A couple of years ago I was participating in a meeting where policies relevant to offshore wind energy were being discussed. At one point a representative from GE commented "If conventional energy sources were held to the same standard that's been established for wind projects, we wouldn't be turning on any lights".

There are at least two ways to level the playing field so that renewable energy technologies are able to compete fairly with oil, gas, coal and nuclear energy sources. One is to provide renewables with its incentive packages commensurate with those that exist for the conventional energy sources. The other obvious option is to remove all subsidies and let the market sort things out. The author of the following op-ed out of Albany, NY believes that renewables would emerge the winner in either case, although removing all subsidies will surely result in dramatically higher energy costs. (GW)

Courage must fuel renewable energy

By John Schnebly
August 19, 2007

When a CEO of a major oil company, such as John Hofmeister of Shell Oil Co., talks to the editorial board of the Times Union, and when the Times Union publishes next to its editorial on Hofmeister's energy positions a letter from the president of the New York Farmers' Windpower, LLC of Rensselaerville as it did last Monday, we should all know that energy is now a big subject getting renewed attention from our media.

In the short term, oil companies want more drilling, more refineries and a continuation of their tax incentives -- all in the name of stabilizing energy prices. Sure, for the medium and long term, oil companies support coal gasification, biofuels additives to their product and a growing industry in other renewable energy options. But for right now and the foreseeable future, they want the status quo.

What David Weiss, the president of New York Farmers' WindPower, LLC, had to say in his letter to the editor was really far more interesting. Weiss pointed out that the Bush administration is committed to drilling, mining and nuclear development. It's all there in their legislation, their Department of Energy budgets and their rhetoric. Since these options also have the federal incentives, they are what generally gets built and developed. To compete, all other options would need their own set of incentives.

Weiss asserts that "Renewable energy needs no subsidies at all. What it does need is a level playing field -- government policies that remove all subsidies from nuclear power and fossil fuels, forcing them to compete fairly and openly with wind, solar, biomass, and increased efficiency ... ."

The Capital Region Energy Forum has published a variety of articles on these issues in the Times Union. To date, nothing much has happened to lower the price of energy, remove the subsidies for energy from mining and drilling or increase the supply of alternative energy in New York. Few can imagine a Congress that would end subsidies for traditional energy sources when the majority of the public pressure on legislators is for lower prices for gasoline and diesel/heating fuels.

What has happened, however, is passage in the House of utility mandates for 15 percent renewable energy standards for future generation. California has taken such an issue seriously and is on the move to such a 15 percent renewable portfolio balance. Here in New York, we still lack a viable net metering law (giving consumers using renewable energy sources a credit for any excess supply they send to the power grid), an Article X power plant siting law and a brownfield remediation law. Why is this?

Well, I would submit that all of this is because few of us really want to see energy prices rise to a point where alternative energy is directly competitive with traditional energy. Even though we know, in our hearts of hearts, that nothing serious is going to be done about any of these issues until the economics favor alternatives, we mostly cling to the notion that with the "right" policies, energy prices will drop -- they always have in the past and they well may well fall in the future. Therefore, why worry? Sure a few of us have lowered the price of gasoline to $1.50 per gallon by doubling our mileage with hybrid cars, but most of us still prefer traditional SUVs.

As the Times Union editorial said, "reducing demand, not increasing supply, is the best answer to stabilizing gasoline prices ... . "

To reduce demand we need congestion pricing that increases use of mass transit. We need building codes establishing realistic "energy budgets." And we need legislative profiles of courage. Alas, this seems to be where the biggest energy crisis exists: in the supply of energized courage by our elected representatives -- on both sides of the aisle.

John Schnebly is chairman and CEO of the U.S. Energy Independence Consortium and a member of the energy protocol committee of the Capital Region Energy Forum.


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