Alternative Energy Crisis
When it comes to renewable energy, the DOE is DOA
11 Jun 2002
The question isn't whether the Bush administration is in bed with the old-school energy industry; most of us have pretty much accepted that Big Oil and King Coal are the current sexy interns in the White House. Nor is the question whether we should be bracing for another oil shock; given the Iraqi oil boycott and political turbulence in Venezuela and Nigeria (two of the biggest oil suppliers to the U.S.), the likelihood of a third oil crisis heightens with every passing headline. The question is not even whether Washington should accelerate the shift toward a new-school energy system based on clean technologies and energy efficiency; thanks to a combination of the current political tensions and ever-worsening symptoms of global warming, the need for that shift has never loomed larger in the public mind.
The question is whether anyone in the staunchly traditional Bush administration (most of which hails from fossil fuel-related industries) is doing anything at all to make such a forward-looking shift possible.
That person -- and there seems to be only one -- is David Garman, the assistant secretary for energy efficiency and renewable energy in Bush's Energy Department. Garman, a clean-energy optimist who can talk tirelessly about the latest in solar, wind, geothermal, biofuel, and green building technologies, worked on various energy and environmental committees in the Senate for over two decades, and was chief of staff for Sen. Frank Murkowski (R-Alaska). He has a master's degree in environmental science from Johns Hopkins, drives a hybrid-engine Toyota Prius, and got nominated for the position largely because he had signatures from a wide range of Democratic supporters in the Senate, and hence struck the Bush administration as a safe bet for a department oft-maligned by environmentalists. But though Garman is highly regarded by most people in the alternative energy industry, and though he has an ambitious and well-informed vision of the future, he's not likely to get very far as long as he's forced to champion -- as he steadfastly did when I spoke with him -- the Bush administration's energy plan. And though he's hardly in any position to admit it, there is simply not enough White House backing to help him implement an effective action plan.
"When I envision the kind of world that I want my daughter to live in 50 years from now, I want it to be one where the major energy carrier is pure hydrogen. That's our ticket to a pollution-free energy society," Garman said recently. Then he went on, in his characteristically affable, science-nerd way, to chart out the trajectory toward a hydrogen economy: "We are well on our way to eliminating the carbon from the hydrocarbons we've been burning for thousands of years. Hydrogen has always been the energy carrier -- it's the good-guy molecule. The bad-guy molecule is the carbon that burns off to become pollution. The transition from wood to coal to oil to natural gas has been a steady process of de-carbonization -- lowering the ratio of carbon to hydrogen. I believe that the future lies in pure hydrogen. That hydrogen could be extracted from water molecules using an electric current powered by renewables such as solar and wind."
Sounds good. But what exactly is the Bush administration doing to get us there? Garman mentions the $150 million FreedomCAR program that the DOE launched last January, in an effort to develop a hydrogen-powered fuel cell car for the mainstream market by the year 2015. Problem is, this program took the place of a Clinton administration program with nearly double the budget called Partnership for a New Generation of Vehicles -- a collaboration between Washington and the Big Three to develop highly fuel-efficient cars. Environmentalists criticize the FreedomCAR program as an effort to take pressure off the auto industry to come up with more immediate solutions to the oil crisis, such as transition technologies for fuel-efficient cars. Plus, $150 million is petty cash compared to the billions in subsidies that are funneled into the traditional energy industries.
When you get right down to it, the FreedomCAR plan is the most ambitious new clean-energy program to come out of the Bush DOE in the last two years -- and it won't produce results for at least a decade. What gives? Garman defends the Bush administration's energy policy, saying his budget for renewables and efficiency is up by 4 percent from the Clinton administration's. He points out that of all the money spent by the Department of Energy on R&D and deployment in 2001 ($2.4 billion), more than half ($1.3 billion) was spent on energy efficiency and renewable energy.
Those numbers are all true, but deceptive. First off, the Bush administration can't take credit for any increase in its renewables budget. When Bush first entered office, he proposed slashing that budget in half. Congress rejected his recommendation, and offered a counterproposal that ramped up spending to the current levels. The DOE's renewables budget request for next year is up 5 percent from what Congress gave it this year. That's some progress, but in the face of the current Middle East crisis, anyone concerned about America's energy independence (not to mention greenhouse emissions) would hope -- if not expect -- this number to be significantly higher.
As for the R& D and deployment that Garman cites, this spending represents just a small piece of the DOE puzzle. Looking at tax incentives and breaks in 2002, $4.4 billion was doled out to oil and gas producers and $3.2 billion for nuclear plants and electric utilities "trying to develop" clean coal technologies. In comparison, $4 billion in tax incentives and breaks was allotted to encourage energy conservation and efficiency and the use of alternative fuels in vehicles, and $2.3 billion to encourage development of renewable energy sources, including wind, solar, geothermal, and biomass. Again, the numbers don't sound too bad until you ask the question: Why are there tax incentives for oil and coal -- hardly emerging technologies -- in the first place?
And even those numbers don't give the full picture. A New York Times editorial recently stated that the Bush administration has put a total of $6 billion in subsidies into conservation and fuel efficiency, compared to $27 billion in subsidies for fossil fuels. In an April 15 column, the Nation's Matt Bivens cited similar numbers from Norman Myers and Jennifer Kent, authors of Perverse Subsidies, who concluded that the U.S. pays $21 billion every year to subsidize fossil fuels and nuclear power. These higher numbers presumably factor in the military costs related to defending our foreign oil imports and the health costs paid to the government associated with pollution from power plants. Bivens also quoted a bill before Congress last year that advocated drilling in the Arctic National Wildlife Refuge, which stated that the U.S. "spends over $100 billion per year for foreign energy and equally significant amounts on our military presence in the Persian Gulf oil arena."
Additionally, in testimony before Congress, the executive director of the American Lung Association said that power plant emissions, which cause and/or accelerate lung and heart disease, were responsible for 31,200 premature deaths every year. The CDC reports that in 1998, the last year fully covered in their asthma report, asthma killed more than 5,438 people, brought 2 million people into emergency rooms, and cost the U.S. economy a total of $12.7 billion. When challenged on this, Garman says these numbers are incredibly difficult to determine with any accuracy (it's misleading, for instance, to say that all troops in the Persian Gulf are exclusively serving oil interests), and are often skewed to serve the interests of the organizations that prepare them. In short, he argues, "true cost" indicators are too difficult to calculate and inherently too imprecise to implement in any practical way.
Okay -- so if the Bush administration isn't willing to factor in "true cost" price indicators when considering energy expenses, perhaps it would show its support for a next-generation energy plan by setting some long-term goals? A Renewable Portfolio Standard, for instance, would aim to make renewables a certain percentage of our total power supply by a certain date. Today, non-hydropower renewables account for less than 2 percent of our energy supply, according to Garman. There have been two attempts in Congress to legislate an RPS; a bill supported by Sens. James Jeffords (I-Vt.) and John Kerry (D-Mass.) proposed 20 percent by 2020, while Sen. Tom Daschle (D-S.D.) proposed 10 percent by 2020. The Senate has currently agreed to an RPS of 10 percent, but Garman says this is not something the Bush administration is likely to endorse: "We feel that a renewables standard would raise prices for utilities, and those price hikes would get passed along to consumers."
Would the Bush administration, then, consider something less binding -- like using renewable energy to power federal buildings? With more than 500,000 buildings and a much larger number of vehicles, the federal government uses 2 percent of all U.S. energy, making it the largest single energy consumer in the nation. If the Bush administration invested in a bulk purchase of solar and wind technology for federal buildings, the argument goes, it would stimulate economies of scale and reduce prices for mainstream consumers. Garman says he is working on it, but as it stands, not even the DOE headquarters has a solar panel rigged to its roof.
"We feel that most renewable technologies, solar in particular, are not mature enough yet in terms of cost for substantial tax credits and buy-down programs for consumers, or bulk purchases on a federal level. We feel our dollar is better spent on R&D to create cheaper solar products before we promote them in the mainstream," says Garman. He points out that Bush just signed off on a hefty tax credit for wind, the most cost-competitive of the renewables. But Scott Sklar, a solar lobbyist and longtime renewables advocate, criticizes that approach for shifting the focus of the renewables budget away from "end use" programs that would actually put renewables products on the market in favor of "white lab coat R&D" that keeps the technology cooped up in research facilities.
Sklar also criticizes the DOE for failing to make the way easier for renewables by helping to streamline certain technical issues. For example, federal standards for net-metering and interconnection -- the rules associated with connecting new energy sources to the grid -- would go a long way to encourage marketplace acceptance of renewable technologies. In states with standards in place, a net-metered building with solar panels draws juice from the grid whenever necessary -- at night or when it's cloudy. On the flip side, when a net-metered building creates a surplus, it pumps that clean electricity back into the grid and sells it to the local utility. Net-metering laws, in other words, transform any building into an independent, revenue-producing power plant. So far, 33 states have net-metering laws, but the initiative needs to go nationwide. And in the absence of a national interconnection standard, it's technically very complicated to connect site-specific renewable energy systems to the grid. Businesses and homeowners have to pay utilities exorbitant fees and, in some cases, wait years to get hooked up.
Garman says the Bush administration is willing to push for interconnection standards, but in general prefers that states stay in the driver's seat on making decisions about net-metering laws, interconnection standards, and Renewable Portfolio Standards. Such aggressive federal regulations could have adverse economic consequences, he says, and when the technologies are ready for the mainstream, the marketplace will react.
On the one hand, it's reasonable that the Bush administration wants to take things slowly, given the potentially traumatic side effects of weaning our economy off of oil. Even small fluctuations in oil prices can send shock waves through the economy by hiking up gas prices and production costs in factories and causing inflation. But ultimately there's no excuse for the prodigious subsidies that the DOE is funneling into traditional energy industries -- subsidies which unfairly disadvantage renewables, and strongly discourage the marketplace from opting for cleaner solutions.
Garman talks a good game, and his heart is surely in the right place, but his ambitions are being dwarfed by a much larger and more powerful force in the Bush administration: fear of change. In the face of escalating political and environmental crises, what the United States needs is a Manhattan Project of renewables and energy efficiency. Instead, what we're stuck with is a welfare project for the powers that be.
The question is whether anyone in the staunchly traditional Bush administration (most of which hails from fossil fuel-related industries) is doing anything at all to make such a forward-looking shift possible.
David Garman, clean-energy man.
"When I envision the kind of world that I want my daughter to live in 50 years from now, I want it to be one where the major energy carrier is pure hydrogen. That's our ticket to a pollution-free energy society," Garman said recently. Then he went on, in his characteristically affable, science-nerd way, to chart out the trajectory toward a hydrogen economy: "We are well on our way to eliminating the carbon from the hydrocarbons we've been burning for thousands of years. Hydrogen has always been the energy carrier -- it's the good-guy molecule. The bad-guy molecule is the carbon that burns off to become pollution. The transition from wood to coal to oil to natural gas has been a steady process of de-carbonization -- lowering the ratio of carbon to hydrogen. I believe that the future lies in pure hydrogen. That hydrogen could be extracted from water molecules using an electric current powered by renewables such as solar and wind."
Car Talk
Sounds good. But what exactly is the Bush administration doing to get us there? Garman mentions the $150 million FreedomCAR program that the DOE launched last January, in an effort to develop a hydrogen-powered fuel cell car for the mainstream market by the year 2015. Problem is, this program took the place of a Clinton administration program with nearly double the budget called Partnership for a New Generation of Vehicles -- a collaboration between Washington and the Big Three to develop highly fuel-efficient cars. Environmentalists criticize the FreedomCAR program as an effort to take pressure off the auto industry to come up with more immediate solutions to the oil crisis, such as transition technologies for fuel-efficient cars. Plus, $150 million is petty cash compared to the billions in subsidies that are funneled into the traditional energy industries.
Freedom car?
Those numbers are all true, but deceptive. First off, the Bush administration can't take credit for any increase in its renewables budget. When Bush first entered office, he proposed slashing that budget in half. Congress rejected his recommendation, and offered a counterproposal that ramped up spending to the current levels. The DOE's renewables budget request for next year is up 5 percent from what Congress gave it this year. That's some progress, but in the face of the current Middle East crisis, anyone concerned about America's energy independence (not to mention greenhouse emissions) would hope -- if not expect -- this number to be significantly higher.
Blowing off renewables?
Photo: NREL.
And even those numbers don't give the full picture. A New York Times editorial recently stated that the Bush administration has put a total of $6 billion in subsidies into conservation and fuel efficiency, compared to $27 billion in subsidies for fossil fuels. In an April 15 column, the Nation's Matt Bivens cited similar numbers from Norman Myers and Jennifer Kent, authors of Perverse Subsidies, who concluded that the U.S. pays $21 billion every year to subsidize fossil fuels and nuclear power. These higher numbers presumably factor in the military costs related to defending our foreign oil imports and the health costs paid to the government associated with pollution from power plants. Bivens also quoted a bill before Congress last year that advocated drilling in the Arctic National Wildlife Refuge, which stated that the U.S. "spends over $100 billion per year for foreign energy and equally significant amounts on our military presence in the Persian Gulf oil arena."
Additionally, in testimony before Congress, the executive director of the American Lung Association said that power plant emissions, which cause and/or accelerate lung and heart disease, were responsible for 31,200 premature deaths every year. The CDC reports that in 1998, the last year fully covered in their asthma report, asthma killed more than 5,438 people, brought 2 million people into emergency rooms, and cost the U.S. economy a total of $12.7 billion. When challenged on this, Garman says these numbers are incredibly difficult to determine with any accuracy (it's misleading, for instance, to say that all troops in the Persian Gulf are exclusively serving oil interests), and are often skewed to serve the interests of the organizations that prepare them. In short, he argues, "true cost" indicators are too difficult to calculate and inherently too imprecise to implement in any practical way.
Power Puff Boys
Okay -- so if the Bush administration isn't willing to factor in "true cost" price indicators when considering energy expenses, perhaps it would show its support for a next-generation energy plan by setting some long-term goals? A Renewable Portfolio Standard, for instance, would aim to make renewables a certain percentage of our total power supply by a certain date. Today, non-hydropower renewables account for less than 2 percent of our energy supply, according to Garman. There have been two attempts in Congress to legislate an RPS; a bill supported by Sens. James Jeffords (I-Vt.) and John Kerry (D-Mass.) proposed 20 percent by 2020, while Sen. Tom Daschle (D-S.D.) proposed 10 percent by 2020. The Senate has currently agreed to an RPS of 10 percent, but Garman says this is not something the Bush administration is likely to endorse: "We feel that a renewables standard would raise prices for utilities, and those price hikes would get passed along to consumers."
An exception: a solar-powered federal building in Chicago.
Photo: NREL.
"We feel that most renewable technologies, solar in particular, are not mature enough yet in terms of cost for substantial tax credits and buy-down programs for consumers, or bulk purchases on a federal level. We feel our dollar is better spent on R&D to create cheaper solar products before we promote them in the mainstream," says Garman. He points out that Bush just signed off on a hefty tax credit for wind, the most cost-competitive of the renewables. But Scott Sklar, a solar lobbyist and longtime renewables advocate, criticizes that approach for shifting the focus of the renewables budget away from "end use" programs that would actually put renewables products on the market in favor of "white lab coat R&D" that keeps the technology cooped up in research facilities.
Sklar also criticizes the DOE for failing to make the way easier for renewables by helping to streamline certain technical issues. For example, federal standards for net-metering and interconnection -- the rules associated with connecting new energy sources to the grid -- would go a long way to encourage marketplace acceptance of renewable technologies. In states with standards in place, a net-metered building with solar panels draws juice from the grid whenever necessary -- at night or when it's cloudy. On the flip side, when a net-metered building creates a surplus, it pumps that clean electricity back into the grid and sells it to the local utility. Net-metering laws, in other words, transform any building into an independent, revenue-producing power plant. So far, 33 states have net-metering laws, but the initiative needs to go nationwide. And in the absence of a national interconnection standard, it's technically very complicated to connect site-specific renewable energy systems to the grid. Businesses and homeowners have to pay utilities exorbitant fees and, in some cases, wait years to get hooked up.
Garman says the Bush administration is willing to push for interconnection standards, but in general prefers that states stay in the driver's seat on making decisions about net-metering laws, interconnection standards, and Renewable Portfolio Standards. Such aggressive federal regulations could have adverse economic consequences, he says, and when the technologies are ready for the mainstream, the marketplace will react.
On the one hand, it's reasonable that the Bush administration wants to take things slowly, given the potentially traumatic side effects of weaning our economy off of oil. Even small fluctuations in oil prices can send shock waves through the economy by hiking up gas prices and production costs in factories and causing inflation. But ultimately there's no excuse for the prodigious subsidies that the DOE is funneling into traditional energy industries -- subsidies which unfairly disadvantage renewables, and strongly discourage the marketplace from opting for cleaner solutions.
Garman talks a good game, and his heart is surely in the right place, but his ambitions are being dwarfed by a much larger and more powerful force in the Bush administration: fear of change. In the face of escalating political and environmental crises, what the United States needs is a Manhattan Project of renewables and energy efficiency. Instead, what we're stuck with is a welfare project for the powers that be.
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