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Renewable Energy Consumption & Electricity Preliminary 2007 Statistics

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TRANSCRIPT OF ENERGY INFORMATION ADMIN. REPORT ON RENEWABLE ENERGY CONSUMPTION

Data For: 2007
Report Released: May 2008
Next Release Date: May 2009

Renewable energy consumption declined 1 percent between 2006 and 2007 to 6,830 trillion Btu, according to preliminary 2007 data (Table 1 and Figure 1).  In contrast, both total energy and non-renewable energy increased 2 percent.

There was wide variation in the consumption behavior of individual renewable energy sources. Hydro electricity dropped 14 percent in 2007 due to reduced precipitation in several regions of the country. On the plus side, biomass-based energy grew 7 percent and wind-generated electricity jumped 21 percent (Table 3). Major increases in consumption of biomass to produce and use biofuels (ethanol and biodiesel) were almost entirely responsible for the increase in biomass during 2007 (Table 1).

From 2003 through 2007, renewable energy consumption’s average annual growth rate was 3 percent, compared with just 1 percent for total energy consumption. Again, biofuels and wind were largely responsible for the increase, with 5-year average annual growth rates of 25 and 29 percent, respectively.

Just over half of renewable energy consumption occurred in the electric power sector in 2007 (Table 2). The industrial sector was the second-leading consumer of renewable energy, accounting for nearly 30 percent. The transportation, residential, and commercial sectors accounted for 9, 8, and 2 percent, respectively. While the electric power sector currently consumes the most renewable energy (51 percent), its use dropped 8 percent between 2006 and 2007. In 2003, the electricity sector accounted for 59 percent of total renewable energy consumption.

In contrast, transportation sector renewable energy consumption increased 30 percent during 2007, and residential sector consumption grew 12 percent. Residential sector growth was due to healthy increases in all three energy sources: biomass, geothermal, and solar/photovoltaic. Commercial and industrial uses of renewable energy changed little between 2006 and 2007 and have also changed little as a fraction of total renewable consumption since 2003. That could change for the industrial sector if ethanol and biodiesel use continues to grow rapidly resulting in increased feedstock consumption. This is especially significant in view of the fact that the largest biomass fuel consumed in the industrial sector, wood and derived fuels, has grown little since 1989 and appears to have peaked in 1997.[1]

Within the electric power sector, wind energy consumption has grown each year since 1998.[2] From 2003 to 2007, wind’s share of total renewable energy consumption increased from 2 percent to 5 percent. For the first time ever in 2007, wind energy consumption in the electric power sector exceeded geothermal. Hydro electricity accounted for 36 percent of total renewable consumption in 2007, down from 46 percent in 2003. However, hydro consumption is tied mostly to precipitation, which can vary year to year. Few plants are being built or retired.

Electricity generation from renewable sources fell 9 percent in 2007 to 351 billion kilowatthours (kWh), largely due to reduced precipitation (Table 3). Excluding hydro electricity, however, renewable electricity generation grew 7 percent. This gain was led by a 21 percent increase in electricity from wind and moderate increases in electricity from biomass waste. There has been little change in generation from the largest non-hydro renewable electricity source, wood and derived fuels, since 2003.

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Pres. Bush Lifts Executive Ban on Offshore Oil Drilling, Challenges Environmentally-minded Congress

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US pres. George W. Bush has lifted the executive ban on offshore oil drilling on the Outer Continental Shelf (OCS), and has challenged the US Congress to act to open the OCS to new oil exploration, saying the US needs to increase domestic production to reduce its dependence on imported oil. The ban was put in place by his father, George H.W. Bush, the 41st US president, for environmental concerns and in part because the oil companies have leases for huge expanses of underwater terrain they have not explored or exploited.

Critics say lifting the ban will have little to no effect, short or long-term on the price of crude oil or on gasoline at the pump, in part because the US is not part of the OPEC cartel that sets production rates and prices, and in part because it will take so long for any of the new production to come online. Opponents in Congress have said it is just a ploy to put political pressure on Democrats in an election year when gas prices are high.

Both presidential candidates have made a point to repeatedly state their intention to provide heavy increases in funding for the development of alternative energy sources. Sen. John McCain, however, has said he backs lifting the ban, and he has backed policy intervention to alter the price of gasoline, like lifting the federal gas tas temporarily. Sen. Obama has often talked of the need to tap America’s resources, but he supports maintaining the ban.

The truth of the matter at present is that there is no known way for offshore drilling to bring oil prices down to sustainable levels, as the projected rise in global demand far outstrips the expected production capacity of the US offshore reserves. As evidenced by oil tycoon T. Boone Pickens’ massive national campaign for wind-power, only by changing the structure of our national energy economy can we bring energy and transport-fuel prices back within reach of the average consumer.

As reported by The Hot Spring last week:

Special transparent dyes coating glass or plastic panes concentrate the Sun’s rays, guiding them to solar-voltaic cells lining the edges, allowing a window to act as a solar panel with 10 times the electricity generation capacity of solar cells, by current standards. The ‘organic solar concentrator’ (OSC) system also reduces cost, by reducing the surface area that needs to be coated by solar-voltaic cells and by eliminating the need for large concentrating mirrors and sun-tracking mechanisms.

In line with this information, and because climate scientists, US courts, international treaties, and American law, all suggest that we move toward a long-term ongoing decline in carbon emissions, the US Congress continues to oppose lifting the ban, which they would have to do with new legislation. According to the San Francisco Chronicle:

On the surface, President Bush’s decision Monday to lift the presidential moratorium on offshore drilling – a policy initiated by his father and extended by Bill Clinton – appeared only to embolden Democrats in their efforts to preserve the 27-year-old federal ban.

Congress has renewed its ban on drilling on the Pacific and Atlantic coasts every year since 1981, and top Democrats said Monday they will do so again this year, despite the pressure from Bush. House Speaker Nancy Pelosi called Bush’s action a hoax that “will neither reduce gas prices nor increase energy independence.”

Coming just days after the EPA announced it would not institute caps on carbon emissions this year, the executive action is likely to intensify political attacks related to the issue of energy production and oil prices. Pres. Bush has sought to blame Congressional Democrats’ opposition to drilling offshore and in the Arctic National Wildlife Refuge (ANWR) in Alaska for the recent upsurge in oil prices. Since that policy has not changed in nearly 3 decades, it is hard to see the immediate cause and effect.

If we look for geopolitical causes, we find ongoing chaos in Iraq, threats of a possible military action against Iran, Iran’s threat to close the Strait of Hormuz, interrupting potentially more than one-third of the world’s oil traffic, a rogue regime in Sudan and a surge in sabotage on Nigerian oil fields. On the economic front, we have the collpase of major financial institution in the US, the dollar now worth less than half its 2001 value against the euro, and the predicted approach of peak oil production.

Rep. Lois Capps (D-CA) wrote on the issue:

a report last year threw cold water on the idea of new offshore drilling as the way to lower gas prices. It said that new offshore drilling “would not have a significant impact on domestic crude oil and natural gas production or prices before 2030″ and that the impact on prices would be “insignificant.”

Pres. Bush’s own Energy Information Administration issued that report. Rep. Capps went on to note that “the oil and gas industry is sitting on 68 million acres of public lands where it could be drilling but isn’t. It has some 6,000 leases in the Gulf of Mexico (where the majority of oil and natural gas reserves are found) that are not being explored.”

The argument that oil and natural gas firms would gladly lower prices if only they were given access to drillable reserves does not hold up, if we consider that they are not doing this now, though they can. So the summer will likely see a heated contest for public support between Congressional conservationists and the Bush White House, with Senators McCain and Obama squaring off as spokespeople for the competing points of view, but something other than future drilling will have to be done to lower prices at the pump.

Food Insecurity & Failing States

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EXCERPT FROM PLAN B 3.0, CH. 2: “DETERIORATING OIL & FOOD SECURITY”

Lester R. Brown, EPI :: During the concluding half of the last century, the world was making steady progress in reducing hunger, but during the transition into the new century, the tide began to turn. In February 2007, James Morris, head of the U.N. World Food Programme (WFP), announced that 18,000 children are now dying each day from hunger and related causes. For perspective, this loss of young lives in one day is almost five times U.S. combat deaths in Iraq through four years of fighting. Although these huge numbers of dying children may be an abstraction, each represents a young life ended far too soon. (75)

There are many ways of measuring hunger. The U.N. Food and Agriculture Organization (FAO) calculates the number of hungry people based on food intake. FAO data say the long-term trend in reducing hunger is encouraging, but not the recent trend. The number of people in developing countries who are hungry and malnourished, which declined from 960 million in 1970 to 800 million in 1996, has turned upward, reaching 830 million in 2003. (76)

Projections by Ford Runge and Benjamin Senauer of the University of Minnesota four years ago showed the number of hungry and malnourished people decreasing to 625 million by 2025. But an update of these projections in early 2007 that took into account the effect of the massive diversion of grain to ethanol distilleries on world food prices shows the number of hungry people climbing instead of decreasing—to 1.2 billion by 2025. (77)

One of the manifestations of a sharp rise in grain prices is a correspondingly sharp drop in food assistance. Since the budgets of food aid agencies are set a year or more ahead, a rise in food prices shrinks food assistance. For example, the United States, by far the largest food aid donor, saw the price of a ton of food aid in 2007 climb to $611, up from $363 per ton in 2004. In the absence of supplemental appropriations, food aid will drop by 40 percent. Key recipients, like Ethiopia, Afghanistan, and the Sudan, will be hit hard. (78)

Working together, the FAO and WFP each year release an assessment of crop and food conditions that lists the countries in dire need of food assistance. In May 2007, a total of 33 countries with a combined population of 763 million were on this list. Of these, 17 were in need of external food assistance because of recent civil strife and conflict. Many of these countries are on the top 20 list of failing states, including Afghanistan, Burundi, Côte d’Ivoire, the Democratic Republic of the Congo, Guinea, Pakistan, Somalia, Sudan, and Zimbabwe. The bottom line is that political insecurity and food insecurity often go hand-in-hand. (79)

The countries on WFP’s food emergency lists are mostly societies trapped between lowered mortality and continuing high-levels of fertility. In this situation, which leads to state failure if permitted to continue indefinitely, agricultural development is often interrupted by a decline in personal security that makes it difficult to maintain technical support for farmers and to sustain timely flows of seed and fertilizer.

With failing states and declining personal security, it is difficult even to operate food relief programs. WFP head James Morris, discussing the food relief operation in early 2007 in Sudan’s Darfur region, where violence and insecurity are rampant, says, “Our convoys are attacked almost daily. We had a driver killed there at the end of last year. Our convoys coming through Chad from Libya are always at risk.” In failed and failing states, food relief, however sorely needed, is not always assured. And sometimes even though people are starving, it is simply not possible to reach them with food. (80)

There are many threats to future food security, including falling water tables and rising temperatures, but the most immediate threat may be the diversion of an ever-larger share of the U.S. grain harvest into the production of fuel for cars. Only the U.S. government can intervene to restrict this diversion and avoid life-threatening rises in world grain prices.

ENDNOTES:

75. Edith M. Lederer, “U.N.: Hunger Kills 18,000 Kids Each Day,” Associated Press, 17 February 2007; Iraq Coalition Casualty Count, icasualties.org/oif, updated 31 July 2007.

76. Loganaden Naiken, “Keynote Paper: FAO Methodology for Estimating the Prevalence of Undernourishment,” at www.fao.org/docrep/ 005/y4249e/y4249e06.htm, viewed 1 August 2007; FAO, op. cit. note 41.

77. C. Ford Runge and Benjamin Senauer, “How Biofuels Could Starve the Poor,” Foreign Affairs, May/June 2007.

78. Missy Ryan, “Commodity Boom Eats into Aid for World’s Hungry,” Reuters, 5 September 2007.

79. FAO, Crop Prospects and Food Situation, no. 3, May 2007; Fund for Peace and Carnegie Endowment for International Peace, “The Failed States Index 2007,” Foreign Policy, July/August 2007; U.N. Population Division, World Population Prospects, op. cit. note 2.

80. Lederer, op. cit. note 75.

Excerpt from Plan B 3.0: Mobilizing to Save Civilization
(New York: W.W. Norton and Company, Earth Policy Institute, 2008)
Republished here by permission of the Earth Policy Institute

Transparent Dyes Allow Windows to Act as Super-powerful Solar Panels

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Special transparent dyes coating glass or plastic panes concentrate the Sun’s rays, guiding them to solar-voltaic cells lining the edges, allowing a window to act as a solar panel with 10 times the electricity generation capacity of solar cells, by current standards. The ‘organic solar concentrator’ (OSC) system also reduces cost, by reducing the surface area that needs to be coated by solar-voltaic cells and by eliminating the need for large concentrating mirrors and sun-tracking mechanisms.

According to the journal Science, where the findings were published:

Light is absorbed by the coating and reemitted into waveguide modes for collection by the solar cells. We report single- and tandem-waveguide organic solar concentrators with quantum efficiencies exceeding 50% and projected power conversion efficiencies as high as 6.8%. The exploitation of near-field energy transfer, solid-state solvation, and phosphorescence enables 10-fold increases in the power obtained from photovoltaic cells, without the need for solar tracking.

The Economist is using the term ‘luminescent solar concentrator’, and notes that the work reported by Michael Currie and Jonathan Mapel of the Massachusetts Institute of Technology (MIT) is being researched elsewhere as well, and is related to the standard functioning of fiber optic technologies, which concentrate light and contain it within a conductive glass or plastic fiber. The OSC system conducts light toward the edges of the glass or plastic pane, trapping photons within the pane, causing it to seek out the high-efficiency solar-voltaic cells at the panel’s edge.

There are technical complications with perfecting the OSC system for harvesting solar energy. The dyes capture and concentrate the incoming sunlight, but an excess of dye molecules may prevent a quantity of light from reaching the circumferential solar cells, either by re-absorbing the light or by allowing heat to accumulate and losing the energy through that concentration of heat on the dyed surface.

The EE Times reports that the “edge-mounted” solar cells could receive light concentrated as much as 40 times. With the extreme heightening of efficiency, and the attendant reduction of costs, related to the new panels’ lack of need for mirrors or solar tracking mechanisms, the MIT advance could revolutionize the role of solar power in the global energy economy.

The dye-based solar concentrators could be on the commercial market within three years, distributed widely and helping homeowners and businesses establish productive capacity in linking up with the spreading renewables grid. Consumers with solar and wind-generation capacity can earn money on energy fed back into the local electricity grid.

The solar concentrating dye-coating can also be applied to exiting solar cells, heightening their light-capturing capability by as much as 30%, according to the MIT team. Marc Baldo, an MIT engineer, says “We think that ultimately this approach will allow us to nearly double the performance of existing solar cells for minimal added cost.”

While obstacles to containing and harvesting the full amount of energy captured by the dyes are an issue, Baldo’s team went far beyond previous attempts at increasing the efficiency of solar cells with the dye-retransmit method, by coating only the surface of a glass pane with the dyes, mimicking techniques used to improve the efficiency of lasers, which also contain and bounce light to intensify the retransmission of light at the other end of the contained space.

Oilman T. Boone Pickens Wants to Create National Wind-energy Network in the US

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T. Boone Pickens has started what USA Today reports will be “the biggest public policy ad campaign ever” to promote a national economic shift from oil to renewable fuels, primarily wind. The campaign is centered on the PickensPlan website, which shows the oil tycoon explaining how and why the US can and must break its dependence on foreign oil —for which American consumers pay $700 billion per year— by transitioning to an energy economy founded on exploiting the massive wind resources of the Great Plains.

The Texas oil baron uses information about the wind resources available across the world to declare that the United States is “the Saudi Arabia of wind”. If we look at other studies that have been done, rooted in a US-government study published in 1991, just three midwestern states possess enough wind to power the entire US economy, with total aeolic development potentially leading to the US becoming a wind-energy exporting powerhouse.

In 2003, the Earth Policy Institute reported that:

In 1991, a national wind resource inventory taken by the U.S. Department of Energy startled the world when it reported that the three most wind-rich states —North Dakota, Kansas, and Texas— had enough harnessable wind energy to satisfy national electricity needs. Now a new study by a team of engineers at Stanford reports that the wind energy potential is actually substantially greater than that estimated in 1991.

The new estimates showed that “Wind power can meet not only all U.S. electricity needs, but all U.S. energy needs.” Since the mid-1990s, wind has been the fastest-expanding form of energy-extraction on the planet. The 2003 EPI report noted that “Rising from 4,800 megawatts of generating capacity in 1995 to 31,100 megawatts in 2002, it increased a staggering sixfold.” Since 2002, it jumped another 333%, reaching 100,000 megawatts in March 2008, according to Jonathan Dorn, also of EPI.

Pickens notes that “”Nixon said in 1970 that we were importing 20% of our oil and that by 1980 it would be 0%. That didn’t happen. It went to 42% in 1991 with the Gulf War. It’s just under 70% now. Where do you think we’re going to be in 10 years when our economy is busted and we’re importing 80% of our oil?” He notes also that, while other problems such as healthcare costs are vital to the nation’s economic future, “If you don’t solve the energy problem, it’s going to break us before we even get to solving health care and some of these other important issues.”

And wind is a booming business in the state of Texas, ranked 2nd among US states in potential wind resources. According to USA Today:

Were it a country all by itself, Nolan County, Texas, would rank sixth on the list of wind-energy-producing nations, says Wortham. Year-round wind conditions, the terrain, low land prices and a small population make it an ideal location for wind farms. It already produces more wind-generated electricity in a year than all of California.

Pickens’ plan to speed the adjustment, even as infrastructure development is getting underway for a national wind-energy network, aims to move a significant percentage of automotive fuel to natural gas, while replacing the non-automotive power generation achieved by use of natural gas to wind energy, which can expand more rapidly than carbon-fuel extraction due to zero necessary refinement and simpler extraction process.

While the plan may go a long way to helping free the United States of its reliance on foreign oil, Pickens’ plan does not necessarily break the addiction to combustible carbon-based fuels, and so does not do enough to cut into damaging carbon emissions. Pushing US development of wind energy will, however, be a watershed moment in the transition to a clean, green economy.

Wind Power Set to Become World's Leading Energy Source

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Lester R. Brown, EPI :: In 1991, a national wind resource inventory taken by the U.S. Department of Energy startled the world when it reported that the three most wind-rich states —North Dakota, Kansas, and Texas— had enough harnessable wind energy to satisfy national electricity needs. Now a new study by a team of engineers at Stanford reports that the wind energy potential is actually substantially greater than that estimated in 1991.

Advances in wind turbine design since 1991 allow turbines to operate at lower wind speeds, to harness more of the wind’s energy, and to harvest it at greater heights —dramatically expanding the harnessable wind resource. Add to this the recent bullish assessments of offshore wind potential, and the enormity of the wind resource becomes apparent. Wind power can meet not only all U.S. electricity needs, but all U.S. energy needs.

In a joint assessment of global wind resources called Wind Force 12, the European Wind Energy Association and Greenpeace concluded that the world’s wind-generating potential —assuming that only 10 percent of the earth’s land area would be available for development— is double the projected world electricity demand in 2020. A far larger share of the land area could be used for wind generation in sparsely populated, wind-rich regions, such as the Great Plains of North America, northwest China, eastern Siberia, and the Patagonian region of Argentina. If the huge offshore potential is added to this, it seems likely that wind power could satisfy not only world electricity needs but perhaps even total energy needs. (See data http://www.earth-policy.org/Updates/Update24_data.htm)

Over the last decade wind has been the world’s fastest-growing energy source. Rising from 4,800 megawatts of generating capacity in 1995 to 31,100 megawatts in 2002, it increased a staggering sixfold. Worldwide, wind turbines now supply enough electricity to satisfy the residential needs of 40 million Europeans.

Wind is popular because it is abundant, cheap, inexhaustible, widely distributed, climate-benign, and clean–attributes that no other energy source can match. The cost of wind-generated electricity has dropped from 38¢ a kilowatt-hour in the early 1980s to roughly 4¢ a kilowatt-hour today on prime wind sites. Some recently signed U.S. and U.K. long-term supply contracts are providing electricity at 3¢ a kilowatt-hour. Wind Force 12 projected that the average cost per kilowatt hour of wind-generated electricity will drop to 2.6¢ by 2010 and to 2.1¢ by 2020. U.S. energy consultant Harry Braun says that if wind turbines are mass-produced on assembly lines like automobiles, the cost of wind-generated electricity could drop to 1-2¢ per kilowatt hour.

Although wind-generated electricity is already cheap, its cost continues to fall. In contrast with oil, there is no OPEC to set prices for wind. And in contrast to natural gas prices, which are highly volatile and can double in a matter of months, wind prices are declining.

Another great appeal of wind is its wide distribution. In the United States, for example, some 28 states now have utility-scale wind farms feeding electricity into the local grid. While a small handful of countries controls the world’s oil, nearly all countries can tap wind energy.

Denmark leads the world in the share of its electricity from wind —20 percent. In terms of sheer generating capacity, Germany leads with 12,000 megawatts. By the end of 2003, it will have already surpassed its 2010 goal of 12,500 megawatts of generating capacity. For Germany, this rapid growth in wind power is central to reaching its goal of reducing carbon emissions 40 percent by 2020.

Rapid worldwide growth is projected to continue as more countries turn to wind. In addition to the early leaders —Denmark, Germany, Spain, and the United States— many other countries have ambitious plans, including the United Kingdom, France, Brazil, and China.

In densely populated Europe, the off-shore potential for developing wind is also being exploited. Denmark is now building its second off-shore wind farm, this one with 160 megawatts of generating capacity. Germany has some 12,000 megawatts of off-shore generating capacity under consideration.

Wind power is now a viable, robust, fast-growing industry. Cheap electricity from wind makes it economical to electrolyze water and produce hydrogen. Hydrogen is the fuel of choice for the highly efficient fuel cells that will be used widely in the future to power motor vehicles and to supply electricity, heating, and cooling for buildings. Hydrogen also offers a way of storing wind energy and of transporting it efficiently by pipeline or in liquefied form by ship.

With the wind industry’s engineering know-how and manufacturing experience, it would be relatively easy to scale up the size of the industry, even doubling it annually for several years, if the need arose. If, for example, crop-shrinking heat waves raise food prices and generate public pressure to quickly reduce carbon emissions by replacing coal and oil with wind and hydrogen, it will be possible to do so. If the need arises to shift quickly to hydrogen-fueled automobiles, this can be done by converting
gasoline-burning internal combustion engines to hydrogen with inexpensive conversion kits.

For energy investors, growth in the future lies with wind and the hydrogen produced with cheap wind-generated electricity. Solar cell sales are growing at over 30 percent a year and are likely to supply much of the electricity for the 1.7 billion people who are still without electricity, most of them living in developing country villages. But solar cells are still too costly to supply the vast amounts of energy required to power a modern economy.

World coal burning peaked in 1996 and has fallen 2 percent since then. It is a fading industry, not an exciting investment prospect. Nor is oil particularly promising, since world production is not likely to expand far beyond current levels. Production of natural gas, the cleanest and least climate-disruptive of the fossil fuels, is likely to continue expanding for a few more decades, fortuitously developing an infrastructure that can be adapted for hydrogen. Nuclear power generation is expected to peak soon, when the large number of aging plants that will be closing down will exceed the small number of plants that are under construction.

The energy future belongs to wind. The world energy economy became progressively more global during the twentieth century as the world turned to oil. It promises to reverse direction and become more local during the twenty-first century as the world turns to wind, wind-generated hydrogen, and solar cells. Wind and wind-generated hydrogen will shape not only the energy sector of the global economy but the global economy itself.

Originally Published: June 25, 2003
(http://www.earth-policy.org/Updates/Update24.htm)
Reproduced here by Permission of Earth Policy Institute
Copyright © 2003 Earth Policy Institute

Wind Energy Demand Booming

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COST DROPPING BELOW CONVENTIONAL SOURCES MARKS KEY MILESTONE IN U.S. SHIFT TO RENEWABLE ENERGY

Lester R. Brown, EPI :: When Austin Energy, the publicly owned utility in Austin, Texas, launched its GreenChoice program in 2000, customers opting for green electricity paid a premium. During the fall of 2005, climbing natural gas prices pulled conventional electricity costs above those of wind-generated electricity, the source of most green power. This crossing of the cost lines in Austin and several other communities is a milestone in the U.S. shift to a renewable energy economy.

Austin Energy buys wind-generated electricity under 10-year, fixed-price contracts and passes this stable price on to its GreenChoice subscribers. This fixed-price energy product is quite attractive to Austin’s 388 corporate GreenChoice customers, including Advanced Micro Devices, Dell, IBM, Samsung, and 3M. Advanced Micro Devices expects to save $4 million over the next decade through this arrangement. School districts are also signing up. Round Rock School District, for example, projects 10-year savings to local taxpayers at $2 million.

Facing a Texas-style stampede of consumers wanting to sign up for the current remaining supply of green electricity, Austin Energy has resorted to a GreenChoice raffle that will be held on March 23. All its customers—both residential and business—were invited to participate in the drawing.

A similar situation has unfolded in Colorado with Xcel Energy, which is the state’s largest electricity supplier. Xcel’s 33,000 Windsource customers, who until late 2005 were paying $6 more each month for their electricity, are now paying slightly less than those using conventional electricity, which comes mostly from natural gas and coal. To meet fast-growing demand, Xcel is currently soliciting proposals from wind developers for up to 775 megawatts of new wind power generation, enough to supply 232,000 Colorado homes with electricity.

Austin Energy and Xcel Energy are among the first utilities to pass on the falling cost of wind energy to their customers. In the short run, the price advantage of wind over conventional electricity may disappear as the surging demand for wind electricity from climate-conscious customers outruns the supply, driving up the price, and as natural gas prices fall from their late 2005 highs. Over the longer term, however, as reserves of natural gas are depleted, its price is projected to rise, giving a strong advantage to wind.

Interest in wind energy is rising as production costs fall. Although media attention focuses on communities with a not-in-my-backyard (NIMBY) response to wind turbines, such as the large, off-shore wind farm planned off Cape Cod, in most of the country wind farms are enthusiastically welcomed. Here, it’s the PIIMBY syndrome—put-it-in-my-backyard.

When Xcel announced it would develop several hundred megawatts of additional wind-generating capacity, it got the attention of ranching communities throughout wind-rich eastern Colorado. In tiny ranch-country towns like Grover, near the Wyoming border, ranchers welcomed a proposed 300-megawatt wind farm that would span some 30 ranches.

With a large, advanced-design wind turbine generating easily $100,000 worth of electricity per year, even a 3-percent royalty would earn ranchers $3,000 a year from leasing a quarter-acre of ranchland. And they can still run cattle on the land. If the proposed project is approved as expected, these 30 or so ranchers will have an average of seven turbines each, yielding roughly $21,000 a year in additional income. A decade from now, there may be thousands of ranchers who will be earning more selling electricity than they do selling cattle.

In upstate New York, dairy farmers in Lewis County near Lake Ontario warmly embraced the 195-turbine Maple Ridge Wind Farm, and the $5,000 to $10,000-annual royalty offered for each of the turbines on their land. Rural communities welcome wind farms because they provide income to farmers and ranchers, skilled jobs, cheap electricity, and additional tax revenue to upgrade schools and maintain roads.

The growing profitability of wind energy is attracting big-time players. Four years ago, General Electric purchased Enron Wind, one of Enron’s few profitable segments, parlaying its advanced wind turbine design into a leading position in the world wind turbine market.

In mid-2005, Goldman Sachs purchased Zilkha Renewable Energy, a small wind farm development company. Now called Horizon Wind Energy, this wholly-owned subsidiary of Goldman Sachs has under construction or in the planning stages 4,000 megawatts of wind-generated electricity, enough to supply electricity to 1.2 million homes.

AES, a leading international player in electricity generation, has used its purchase of SeaWest, another wind developer, to establish a strong position in the U.S. wind sector. It now has under development 1,800 megawatts of wind-generating capacity. Shell, one of the leading bidders for offshore wind rights in the United Kingdom, owns 315 megawatts of wind-generating capacity in the United States and is planning more. And BP is mapping out areas in the United States where it could build some 2,000 megawatts of wind-generating capacity.

Overall, U.S. wind-generating capacity expanded by 36 percent in 2005, reaching 9,149 megawatts. This year it could expand by 50 percent. At the end of 2005, there were commercial wind farms in 30 states. (See data.)

Wind power generation would grow even faster if it were not constrained by the availability of turbines. General Electric, now supplying 60 percent of the U.S. wind turbine market, is sold out through 2007. Clipper Windpower, a startup turbine manufacturer, is planning to produce 20 of its 2.5-megawatt Liberty turbines per month by mid 2006 and a total of 250 turbines in 2007. Its production is also committed well into the future.

After years of industry uncertainty, when Congress allowed the wind production tax credit (PTC) to lapse several times, the 2005 PTC extension through 2007 has given investors renewed confidence in the future of wind power. The extension of the PTC, which is designed to offset subsidies to fossil fuels and nuclear power, is leading to record growth in the number of new wind farms planned.

Wind energy is emerging as a centerpiece of the new energy economy, because it is abundant, inexpensive, inexhaustible, widely distributed, clean, and climate-benign. Three of the 50 states—North Dakota, Kansas, and Texas—have enough harnessable wind energy to satisfy national electricity needs. The cost of wind-generated electricity has fallen from 38¢ per kilowatt-hour in the early 1980s to 4¢ to 6¢ today, offering an almost endless supply of cheap energy.

Beyond that, these wells will never go dry. No one can cut off the supply or raise the fuel cost. And wind can supply our energy needs without disrupting the earth’s climate.

Originally Published online: 22 March 2006
(http://www.earth-policy.org/Updates/2006/Update52.htm)
Reproduced here by Permission of Earth Policy Institute
Copyright © 2006 Earth Policy Institute

Oil Shock: the Coming Economic Unraveling & How We Can Adjust

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Petroleum is the most pervasive base resource other than water in the global economy of the 21st century, and as demand is exploding, production is nearing its geological peak, and untenable price increases are hitting a strained economy hard. Oil prices could be in a stagflation lock, unable to readjust to consumers’ means, unable to compete as emerging energy sources repeatedly slash development and commercial prices. Whatever factors are at play, crude oil prices have jumped over 900% since 1998, and it looks like production cannot meet global demand. 

Security factors, including mounting tensions with Iran, are playing a role in driving prices up, but they are also playing a role in provoking serious thought about how to best speed the shift away from petroleum as a fundamental economic resource. Burning petroleum-based fuels is not only bad for the environment, it is propping up regimes whose legitimacy is questionable by democratic standards and whose record on human rights, transparency and corruption is of serious concern.

After Israeli military exercises that many observers said appeared aimed at practicing for a strike on Iran, the Iranian government said it would “close” the Strait of Hormuz, cutting off perhaps 20% of all global oil exports. Washington says it would move to keep the Strait open, suggesting military confrontation, which in itself would reduce commercial shipping and drive the price of crude still higher.

The New Scientist magazine, in its 28 June 2008 edition, ran a feature on the coming “oil shock”, claiming “the real crisis has yet to hit”. Quoting the director of Boston University’s Center for Energy and Environmental Studies, Cutler Cleveland: “Much of the economic expansion of and growth of the human population in the 20th century is directly tied to the availability of large amounts of cheap oil.” Cleveland added that “There isn’t a single good or service consumed on the planet, except in rural economies, that doesn’t have oil embedded in it. Oil is the lifeblood of the global economy.”

The worrying gist of the comments is that, should anything cause a serious interruption in the supply, the global economy would slow down at perhaps unprecedented rates, or worse, enter a period of chaos and collapse. Major organs of the global economy could shut down as they are drained of that “lifeblood”, and political and strategic balances could be thrown off kilter or wasted altogether. Supply is not keeping up with the astounding increase in demand, as emerging economies, including the world’s two most populous nations (China and India), each with over 1 billion inhabitants, seek ever greater supplies of the lifeblood commodity. 

According to the New Scientist report, “In 2005, a group of current and former US government and national security officials were asked to address [the question of a large-scale supply interruption] in a live role-play exercise.” Teaming Shell Oil, counter-terrorism specialists and industry analysts, the simulation explored the possibility of a mounting compound disruption of supplies. Over the course of the 2005 simulation, the price of a barrel of crude reached $123.

“Against the recent peak price of $139, that rise would take the cost per barrel to $295,” reports Ian Sample for the New Scientist. Speculation due to the dim security outlook would then push the price to $161, which translates to $341.69 when accounting for current prices. Former CIA chief James Woolsey, one of the simulation participants said the scenario explored was “relatively mild compared to what is possible”. 

As things stand, the International Energy Agency‘s director for oil markets and emergency preparedness, Didier Houssin, warns “It’s hardly conceivable the world could function without oil”. The problem is in part due to a lag in production of new technologies and a reliance on political and military clout to ensure that supplies remain relatively constant. With more far-reaching economic markets competing for key resources than ever before, and the global security environment deteriorating at the seams, this dependence is an unsustainable economic vulnerability, with potentially disastrous consequences. 

For security reasons as much as for environmental reasons, every nation that can must begin to diversify at wartime speed its prevailing energy sourcing options: the US could power its entire consumer and industrial economy with the immense wind resources of the Great Plains, while many of the world’s poorest nations could, if able to build the infrastructure, speed their economic development with state of the art solar farms, freeing them of the volatility of the oil markets and related security risks.

The potential economic and geopolitical fallout of allowing the full-blown “oil shock” to hit lies beyond the furthest horizon of what we can envision, even amid the economic strain of the present situation. The time is now for a major paradigm shift in thought about energy production: how we do it, what the goal is, what the standards are for economic viability, environmental sustainability and security requirements. What may be a coming age of resource-wars (petroleum, water, grain and arable land), means we must move to methods that have no geopolitical fallout built in.

What the Market Doesn't Know Can Hurt You, Whoever You Are

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Every participant in any system, is dependent upon the quality of information behind the major forces at play, just as any player in any system is beholden to the quality or jeopardy posed by the system’s prevailing methods. Free flow of information is the best hope of achieving the optimum level of functionality for the broadest array of stakeholders.

We need to ensure that the highest quality, most profoundly-informed, most widely-available information possible is accessible throughout any given market, because what the market doesn’t know can hurt you. And that goes just as much for workers, consumers and the underprivileged as it does for corporations, corporate bosses, government programs and the privileged. Everyone has a stake in the possibility of optimal outcomes.

The market, as an organizational model, can be an optimal resource-allocating mechanism, not because of ideology or mystical superiority, but because when it works, those who require a given solution will either call out for it, implement it, or pay for someone to do so… and opportunity creates possibility. This is the simultaneously adversarial-collaborative relationship between demand, supply, consumer interest and financing.

The market is a self-reinforcing optimization model. But when the market lacks information or those who require a given solution don’t know they do, the allocation of resources is clumsier, less accurate, than in the optimal case, and that imprecision has real socio-economic ramifications.

For instance, not knowing one’s rights can lead to their being ignored or violated, because one’s actions and reactions evince a weaker informational position. Or, not seeing the thought and production gap that will need the next big infusion of private capital can lead to poor performance for businesses, as inadequate planning leads to poor positioning with regard to opportunities or even to replacement technologies.

How, for instance, will the right businesses with the vision appropriate to the task capitalize on the possibility of providing an endless resource of ambient energy, self-powering vehicles, a green world where without ‘giving up the ghost’, or any sap or carbon, plantlife doing what it does can make things move? First, they will have to be able to see the possibilities, then they will have to see the lacunae where those possible innovations fit into the functioning of markets, then they will have to see how to piece together a business model based on that vision.

If people lack useful information about their interests or about the risks or resources in their environment, then they are unlikely to demand the precise improvements to prevailing conditions, improvements the market could provide and which would best serve them. And without that “summoning” of improvements, specific, the market may also fail to come to that necessary information about possibility.

And there the market finds its most worrying weakness. Worrying in part because it gives fodder to critics who argue that hierarchical dictates and dominance-based reasoning are what will protect against the perilous aspects of relying on human ingenuity and voluntary cooperation, based on shared interest.

What we now see as a grave obstacle to realizing the dream of an open global village is that the logic of dominance reigns in the minds of those planning to benefit from “open markets”, while it is the logic of dispersed and multifaceted vision and shared interest that will allow global markets to democratize and provide. People everywhere should make a conscious effort, as citizens of the world, to delink the logic of dominance from market dynamics and elevate the logic of free-flowing unfettered information to a goal in and of itself.

Corn Ethanol is a Destructive Economic Force, Not the Basis of Our Energy Future

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CafeSentido.com :: Corn-ethanol, long a fascination for US politicians and for the farm lobby that courts their support for ethanol subsidies, may play some role in remediating the economic fallout of soaring gasoline prices, though it seems unlikely, for a number of reasons. First and foremost is the fact that the numbers work against us: in order to produce more corn-ethanol, we must divert cropland destined for food production to fuel production, and that has a severely negative impact on the availability and affordability of corn for human consumption.

The economic fallout of this diversion of grain is far more severe than any symbolic softening of the cost of petroleum-based fuels, in the short-term. In hard economic times, the last thing any economy, no matter how wealthy or dynamic, can afford, is to force consumers to choose between food and fuel. Food is more necessary and will win out, and a reduction in mobility means robbing that economy of the dynamism that might save it from impending ruin. In short, ethanol is not a cost-of-living reducer, but an inflater, and will not help us to prevent recession.

Now, the ripple effects are also egregiously negative: we face the very real possibility that for the foreseeable future, wealthy economies transitioning to bio-ethanol as a fuel source, will be robbing the poorest in the human world of the capacity to sustain life with affordable foods. This will cause a number of damaging long-term consequences in the global economy:

  1. increased malnutrition, which is corrosive to political, geographical and economic stability;
  2. deepening endemic international wealth divide;
  3. closing of markets to foreign trade that appears linked to negative internal dynamics;
  4. mounting scarcity-based authoritarianism;
  5. slower move away from carbon-emitting fuels (bio-ethanol is a carbon-emitter).

If we take these risks seriously, and we should, we can see that corn-ethanol is a band-aid for a major trauma. The ecological and economic conditions we now face are not conducive to extracting from an ethanol-driven economy whatever benefits it could bring. We need, at the very least, to move away from crop-based ethanol toward waste-product cellolosic ethanol, where ethanol is attractive, to avoid the dangers of crop-ethanol’s negative scaleability: it increases overall cost-of-living the more we produce, instead of permitting economies of scale to reduce costs to consumers.

We also have a vested national interest in the diplomatic consequences of leaning heavily on the corn belt for fuel production: after years of an antagonistic foreign relations environment, we cannot afford to be classed by critics as a nation that puts its automotive convenience ahead of the right of the world’s poor to basic sustenance. Our own agricultural bounty has long been a source of our ability to provide massive amounts of food aid abroad, something that will be severely diminished if our solution to increased fuel costs is a product that inflates food prices even further.

It may be that our entire farm-subsidy system must be rethought, in order to provide for the economic elasticity we need in these pressing times. Farm subsidies in the US were designed to prevent over-production, which would drive prices down, creating an excess-production spiral, dust-bowl effect, and potential economic disaster. But we may now have more complex realities to face in connection with our domestic agricultural production, relative to a global market for both food and fuel.