Cornucopia of Prosperity Can Flow From Carbon Tax
Photo by author
Craig A. Severance
November 19, 2012
Right now the climate and energy community is stuck. There is a growing consensus, including among conservatives, that it is finally time for a carbon tax. Yet, no politician -- especially President Obama -- seems ready to advance the proposal.
The previous proposal to do something about climate -- cap&trade -- failed to gain wildly popular public enthusiasm (and we need this level of support). While economists thought cap&trade was the best way to address the carbon pollution that is causing extreme climate disruption, it wasn't seen as "giving back" enough to the public.
We Need Work not Wonk. A recent American Enterprise Institute conference on a carbon tax showed broad support for the idea among both Republicans and Democrats. Conservatives have long wanted to lower taxes on earnings, and many have called for taxing consumption or pollution to achieve this. A properly structured carbon tax can also bring investment and jobs, and effective action on climate.
However, the conference showed how quickly the discussion can fall into a "wonky" technical morass of various ways to carry out a carbon tax. There are a host of different and complex ways to assess a carbon tax -- but that is not where the discussion needs to begin.
To gain wildly enthusiastic public support, we must first discuss the economic prosperity that can flow from a carbon tax.
No "Bitter Pill". As much as Americans now want action on extreme climate disruption, the public just won't take any "bitter pill" to solve the problem.
Climate economists know preventing loss of life and economic damages from superstorms, droughts, floods, and wildfires more than justifies taking action now. This is all very true and rational, but President Obama knows the public wants action on the economy.
The nation's main focus is still "jobs, jobs, jobs". The President has his ear keenly attuned to the public voice, and he is right to insist economic prosperity must flow from any climate proposals.
The price of climate action will be acceptable if it is used to deliver what the public wants. Salespeople never begin by focusing on price, but rather strive to meet what the customer wants. Once the customer decides they want something, they are willing to pay the price to get it.
To gain wild enthusiasm from the public, we must learn to talk about climate action smartly, and show that action on climate is also a way to achieve very popular and tangible economic proposals the public wants.
Fortunately, this won't be hard.
Top 10 Ways Economic Prosperity Can Flow From Carbon Tax:
To read entire article, click here.
Can We Hope for Change Now?
by Craig A. Severance
November 6, 2011
Barack Obama has won, and now his supporters and detractors alike are hoping America can move forward to tackle our toughest problems.
The Bull in the China Shop. With the devastation of Superstorm Sandy still in the daily news, the re-elected U.S. President now has an opening to address our most serious threat. He must finally lead Americans to face the truth that extreme climate disruption is already underway -- caused by our excessive use of coal, oil and natural gas. The $50 Billion toll and dozens of lives lost from one storm will only be the beginning if this problem is not addressed.
The very difficult task of weaning ourselves off the unmitigated burning of fossil fuels is the pre-eminent challenge of the 21st Century. Will future generations suffering from destructive hurricanes, droughts, floods, and wildfires look back kindly on a President who ducks this issue?
With a struggling economy foremost in the public's mind, however, Mr. Obama would be well-served to find climate solutions that also create jobs. There is much work to do -- rail lines to be built, homes to be insulated -- if we just put money into the hands of the true "Job Creators".
The need to cut tax burdens on workers and small businesses was another rallying cry for many on both sides of the recent election. The most innovative climate solutions -- taxing what we burn instead of what we earn -- can accomplish this tax savings goal.
The same old, tired ideas of the Washington Establishment will not work, as they typically pit one group of Americans against another. If Mr. Obama is to be successful in his second term he would do well to listen to the people, and act boldly. He must confront his opponents where they live -- by garnering support for local issues and local projects, from local citizens.
New grassroots ideas such as those listed below -- which are already very popular with the public -- can work together to move us "Forward":
To read entire article, click here.
Can Energy Loans Bring Wonderful Life to Economy?
Image: Wikmidea Commons
November 25, 2010
by Craig Severance
In Frank Capra's classic 1946 film It's A Wonderful Life, Jimmy Stewart as Building and Loan manager George Bailey discovers what the world would have been like if he had never existed.
Without George Bailey's heroic efforts to save the small lender that helped the middle class, Bailey's home town of Bedford Falls would have fallen into decay. Bailey's guardian angel Clarence shows him the town, renamed "Pottersville", under the control of evil slumlord and big banker Henry Potter. The crushing effects of poverty have destroyed the lives of many closest to Bailey.
Poverty Now Spreading in America. Much as in the Pottersville scene from the movie, hopelessness and poverty are now spreading across America. The most inclusive U.6 jobless rate is at 17%, the alternate measure calculated by Shadow Government Statistics shows there are 22.5% jobless, ominously close to the estimated Great Depression peak of 25% unemployment. One in eight Americans are now on food stamps, the highest percentage since records began in 1969. While Congress debates extending tax cuts for the wealthiest Americans, unemployment benefits will expire for millions who still have no hope of finding work.
Chart: John Williams Shadow Government Statistics
Most families and businesses are simply "Maxed Out" and at the limits of their budgets. To create jobs, Americans must spend money, but that money has to come from somewhere.
Projects That Pay For Themselves. While American families and businesses may have little ability to spend more right now, the opportunity to spend less makes sense.
Energy saving and renewable energy projects can more than pay for themselves by cutting the energy expenditures of households and businesses. Though they take up-front dollars to implement, a steady monthly stream of utility bill savings pays off the cost of the project.
An energy loan on good terms can convert the cost of the energy saving and renewable energy projects into a monthly payment that is less than the savings. The family budget improves from Day 1 of project completion.
Creating American Jobs. While these projects pay for themselves with the same money people are already spending on utility bills, energy saving projects are not a "wash" for American job creation, for four reasons:
1. More money is spent now, on the project, than current year utility bills.
2. Energy saving and renewable industries are more labor intensive.
3. Many fuels are imported from other countries.
4. Most energy-saving products such as caulk & insulation are USA made.
The customer saves money, and the project creates jobs. If there was ever a definition of a "no-brainer" you've-got-to-do-this idea, this is the one.
We Need George Bailey. All of the above makes sense, but if your credit rating is shot, or your home equity is gone, your chance of getting an energy loan is nil. Even if you qualify, you may not do it as you don't know how long you will live in the house. If you are a renter, forget it completely.
To create American jobs doing these projects that pay for themselves, there are two proposals now afloat -- Federally Guaranteed Loans, and On-Bill Financing from utilities.
Click here to read entire article.
Climate Hope in a Prison of Despair
Image: Holman, Despair of the Defenders of Jerusalem, Wikimedia
There is a Way Forward From Here
August 4, 2010
By Craig Severance
The U.S. Senate has rejected taking action on a significant climate or energy bill this year. Heads are hanging in despair, moans of anguish are rising, and arguments are breaking out about who is to blame.
Earth Not Waiting. While Washington has failed to act, the Earth is showing accelerating strains from our continued dumping of warming pollutants to the atmosphere.
The latest alarming news: the phytoplankton that produce 50% of all the Earth's oxygen and form the base of the ocean's entire food chain are now dying off. World temperature records continue to be set monthly in this hottest of all years and hottest of decades on record. Panicked scientists are frantically warning "the urgent need to act cannot be overstated".
When We See the Iceberg it Will Be Too Late. We are as passengers on the Titanic desperately trying to convince the Captain to change course. The iceberg isn't yet in sight, so few believe us. When it finally looms into view and everyone rushes on deck with deer-in-the-headlight eyes, it will already be too late.
Is There Any Hope? Action must be taken now. If Congress will not act, is there any hope in this Prison of Despair?
Hope is here --- a light can still shine . . .
Image: Hope in a Prison of Despair, De Morgan (WikiMedia)
Here's how:
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What Will it Take to End Our Oil Addiction?
Deepwater Horizon Oil Spill Peak Oil Coming Sooner Than Expected
May 29, 2010
by Craig Severance
It's time we moved on to something else, or this is going to kill us.
Not only are world oil supplies running out, but what oil is still left is proving very dirty to obtain. We need to kick our oil addiction now if we expect to preserve any hopes of economic prosperity, or unspoiled habitats.
"This is What the End of the Oil Age Looks Like." We have the Deepwater Horizon oil spill now precisely because the easy to obtain oil is already tapped. You don't drill in mile deep waters if you have somewhere else you could go.
The worst is yet to come. If we don't kick oil now, we will see more disasters as oil companies move to the Arctic offshore, clear more forests for tar sands, and rape the American West to develop oil shale. Worldwide droughts, floods and dead seas will also ensue from global warming caused from burning oil.
Richard Heinberg of Post Carbon Institute said it best: "This is what the end of the oil age looks like. The cheap, easy petroleum is gone; from now on, we will pay steadily more and more for what we put in our gas tanks—more not just in dollars, but in lives and health, in a failed foreign policy that spawns foreign wars and military occupations, and in the lost integrity of the biological systems that sustain life on this planet. The only solution is to do proactively, and sooner, what we will end up doing anyway as a result of resource depletion and economic, environmental, and military ruin: end our dependence on the stuff."
We Can Do That. I said in my recent Peak Oil article "The End of the World as We Know It" that we need to adapt to Peak Oil, but we can do that. This article explains how.
Click here to read full article.
Colorado Shows How It's Done
30% Renewables by 2020, Efficiency, and Phaseout of Coal Plants
Graphics: CO Climate Action Plan
April 24, 2010
by Craig Severance
As the U.S. Senate now prepares to consider a new climate bill, Congress can consider how readiily climate action can take hold, through the example of Colorado. This politically diverse state has aggressively embraced climate action as a way to grow its economy.
Bipartisan Support. Colorado's action plan is noteworthy because key elements of the plan have received strong bi-partisan support, in a "purple" Swing State that is neither dependably Democratic nor Republican. As an example, the latest measure adopted -- a bill to encourage conversion of older coal-fired power plants to cleaner natural gas -- was co-sponsored by the Republican Senate Minority Leader Sen. Josh Penry and several other Republicans, along with most Democrats and Democratic Governor Bill Ritter.
This strong support for climate action is remarkable, considering Colorado is one of the nation's most heavily coal-dependent states.
Coal Was King. As recently as 2005, Colorado relied upon coal to supply over two thirds of its electricity, making Colorado far more dependent on pollution-spewing coal than the nation as a whole, which averages around half of total electricity from coal. Coal has been cheap yet produces massive carbon dioxide emissions which cause global warming. The idea of a major coal-dependent state such as Colorado becoming a climate change leader was thus a daunting challenge.
Colorado is nevertheless now leading the way to achieve one of the highest reductions in carbon emissions anywhere in the world. Colorado is on track to achieve a total 30% reduction by 2020 in CO2 emissions from its electric power industry. This is far ahead of 17% reduction by 2020 greenhouse gas reduction goals set in Congressional climate legislation -- showing that even a "coal state" can far exceed those goals.
As the nation's 8th largest coal-producing state, Colorado could have chosen to resist climate change action like many other states with strong coal lobbies. However, led by Colorado's own citizens through a 2004 renewable power initiative, strong leadership by Governor Bill Ritter and bipartisan action by the Colorado legislature, Colorado is instead showing "how it's done" to the rest of the country and the world.
Click here to read full article.
Job Losses Push Need for Energy Bill
February 10, 2010
by Craig Severance
America's urgent need for new job creation may be the driver that pushes the Senate to pass a jobs & energy bill this year. After the loss of 8.4 million jobs in the current Great Recession, Congress is searching desperately for any means to create new jobs.
Unemployment vs. Deficit "Conundrum". As former Treasury Secretary Henry Paulson said Saturday on National Public Radio, "we as a nation save too little and we borrow too much, both individually and the government." In Paulson's new book On the Brink, he argues that Americans' relative lack of savings helped to propel the financial crisis.
Paulson: "Conundrum"
However, Paulson acknowledged to NPR host Scott Simon, the "conundrum" is that to spur the economy, we now need to spend more and create more jobs. Paulson did not offer a solution to this impasse.
Indeed, this contradiction is now paralyzing the nation's political life, as Americans are worried about both high unemployment and record deficits. The Obama Administration and Congress are now walking a tightrope between these anxieties.
Investment as Solution. The solution to this jobs vs. savings conundrum is to invest money now, into projects that when completed will help us individually and as a nation to save more.
For instance, an investment now into energy efficient buildings would create desperately needed construction jobs, but pay for itself with increased energy savings.
Investments in an advanced electric grid using renewable energy will create the engine to power the economy, without skyrocketing fuel costs.
Investments to wean our cars and trucks off imported oil can stop the transfer of wealth of trillions of dollars from the U.S. economy that is now building the economies of oil exporting nations, many of them hostile. These dollars can instead remain in the U.S. to build our own economy.
Measures which spur investments that help us to save thus meet both the urgent need for more jobs and make structural changes to help America thrive through thrift.
Click here to read the full article.
Tax Policies to Help Climate Action, Create Jobs
November 11, 2009
by Craig Severance, CPA
The Senate Finance Committee, Chaired by Senator Max Baucus (D-MT), held a Hearing Tuesday over the "future of jobs" in the context of the proposed energy and climate bill. The strange list of witnesses -- including polluter industries who hold few prospects for job creation in a new energy economy -- seemed to only distract the Committee from its primary responsibility, which is to use the powers under its jurisdiction to contribute real solutions.
Will Finance Committee Senators use the power of their Committee over Federal tax policy to actually do something about climate change, and America's 10.2% and climbing jobless rate?
Or, will the Committee be pushed to give more breaks to the very polluters who are causing the climate catastrophe?
Tax a Powerful Tool. The ability to tax -- or to give tax breaks -- is one of the most powerful tools of the Federal government. It is discouraging the tax committees of Congress-- Baucus' Senate Finance Committee and Rep. Charles Rangel's House Ways & Means Committee -- have done little to examine how the Federal Tax Code is actually encouraging energy waste. While other Committees have led the way on energy and climate legislation, the tax committees have been sitting on the sidelines for most of this year.
How could tax laws now help create jobs and curb climate catastrophe? ''
Building Industry in Crisis. We can start with the industry most seriously affected with job losses right now -- and which is also responsible for almost half of U.S. energy use: the building industry.
Source: Architecture 2030
Idea: Long Term Extension of Homebuyer Tax Credit -- Targeted for Energy Efficient Homes. The construction industry has led this recession, and is still suffering from over 20% unemployment. When the Stimulus Bill passed in February, a separate bill for the housing sector was promised -- yet never materialized.
Click here to read entire article.
Cap and Trade: Unexpected FRIEND to Gas Industry
Grand Jct, CO Chamber of Commerce Energy Briefing June 2009
June 20, 2009
by Craig Severance
GRAND JUNCTION, CO -- You can see it in the faces of those gathered to hear the latest news on the natural gas industry: Anxiety. Anger. Fear of losing everything they have. Frustration that there seems nothing anyone can do.
The rigs are down. Here in Western Colorado and nationwide, the drilling rigs that employed thousands in well paying jobs are down. Where just a year ago this region was bustling with new drilling activity, rig counts are now down 74%. Across the nation the story is the same: 74% down in W. Texas/NM; 68% down in Green River Basin (WY); 50% down in Arkoma Basin; 49% down in E. Texas/N. La. The gas resources are still there, but new drilling activity is being curtailed.
Local Economy is Hurting. When the rigs go down, so goes the local economy of a gas-producing region. In Western Colorado, $3.2 - $3.5 Billion less investment by the natural gas industry is expected in 2009 versus 2008. Housing prices are down and unemployment is rising. Retail sales have fallen drastically, stressing merchants and local governments. The flow of dollars coming from elsewhere into the local economy has dropped off a cliff. When natural gas -- a domestic energy resource -- goes down, it is not Saudi oil sheiks but American gas workers and the communities where they live that feel the impacts.
Source: Energy Information Administration
Natural Gas Was High Priced & Unreliable. Just a year ago, in June 2008, the average U.S. wellhead price for natural gas was $10.82 per thousand cubic feet, (about $10.50 per Million BTU, or MMBTU). Electric utilities, concerned about the volatility of natural gas prices and worried about its reliability of supply, were beginning to explore high priced alternatives to natural gas, even considering reviving a nuclear power industry that had been dead for over 30 years.
Then, everything changed almost overnight.
39% Increase in Total U.S. Natural Gas Resources. High natural gas prices, together with relatively new "fracturing" technologies to free gas from shale deposits, prompted massive gas exploration efforts nationwide. These resulted in discoveries of major new natural gas resources, which became apparent before the end of 2008.
On Thursday, the nonprofit Potential Gas Committee industry group, assisted by the Colorado School of Mines, released the results of its 2008 assessment, indicating a total increase of U.S. natural gas resources of 39% since its last assessment, for 2006. The report notes the new natural gas resource estimate is the "highest resource evaluation in the Committee's 44-year history" -- indicating the U.S.has far more resources of natural gas than previously considered.
"Furthermore, new and advanced exploration, well drilling and completion technologies are allowing us increasingly better access to domestic gas resources—especially ‘unconventional’ gas—which, not all that long ago, were considered impractical or uneconomical to pursue.” noted Dr. John B. Curtis, Professor of Geology and Geological Engineering at the Colorado School of Mines and Director of the Potential Gas Agency there, which assists the Committee.
“Consequently, our present assessment demonstrates an exceptionally strong and optimistic gas supply picture for the nation.”, Curtis concluded.
Foreign Liquified Natural Gas Now Entering U.S. at Low Prices.
In an article titled "Who Knew? Looks Like We're In for an LNG Glut", the April 2009 issue of Electricity Journal noted "In early 2000, the conventional wisdom was that U.S. domestic production capacity was on the decline, requiring massive imports of liquefied natural gas (LNG) from overseas."
In response to this outlook, a number of major LNG terminals were constructed to import LNG from producing countries overseas, where natural gas is often an unused byproduct of oil production. Those projects are now coming to fruition -- at exactly the wrong time for the U.S. natural gas industry.
Electricity Journal noted " there is now broad agreement that a U.S. LNG import surge is coming." The article noted three new U.S. terminals came online in 2008, after a record-setting LNG import total of 770 billion cubic feet in 2007.
Most distressing for the U.S. natural gas industry is that LNG imports are being sold at incredibly low prices. With a glut of LNG terminal and tanker capacity, foreign producers now have the LNG loaded and ready to sell, and often are merely trying to cover their marginal costs of operation. The article noted "Setting aside the need to recover massive fixed investments, the LNG itself can be sold for as low as $3 per [MMBTU], including transportation costs".
"Why would anybody sell LNG at such a low price? Because, as Zach Allen, head of Pan EurAsian Enterprises, says, 'Some cash is better than none', especially for low-cost producers such as Qatar or for others where natural gas is a byproduct of extracting oil.", the Electricity Journal article concluded.
Natural Gas Prices Have Crashed. With a new abundance of resources both domestic and foreign now flooding the market, U.S. natural gas prices have crashed.
Data Source: Energy Information Administration, Office of Oil & Gas
Price Not High Enough to Support Drilling. While good in the short term for consumers, natural gas prices this low have now largely curtailed new drilling and exploration activities. It is generally accepted that new drilling costs from $6.00 to $7.50 per MMBTU, so until prices can rise high enough to cover those costs, the rigs will stay down.
Little Hope On Horizon. Gas producers are looking at a very bleak outlook for 2009 and expect prices to remain depressed until increased demand for natural gas catches up with the very plentiful supplies now available. "The worst is yet to come, '09 activity is down 70-75%", stated Carter Mathies of Arista Midstream Services LLC during his presentation at the Grand Junction, CO Chamber of Commerce last week.
Enter "An Inconvenient Truth" -- for COAL. Unexpected help to the natural gas industry may come soon, and just in time, through a "Cap and Trade" bill to limit emissions on carbon dioxide production from electric power plants. This is a major piece of legislation that proposes to change the energy sources we use to generate power -- and the outcomes would greatly favor natural gas.
Scientists worldwide have concluded that the raising of carbon dioxide (CO2) levels in the atmosphere is having severe impacts on our climate. They say fossil fuel emissions must be controlled to prevent flooded coastal cities, dust bowls from Kansas to California, destruction of coral reefs and low-lying island nations, among other catastrophic effects. (See here for a good summary of the science.)
The major culprit, they say, is the burning of coal to produce electric power. Our nation's top climate scientist, NASA's Dr. James Hansen, argues "coal is the single greatest threat to civilization and all life on our planet". (See Hansen's full remarks here.)
Natural Gas is Winner When CO2 is Regulated. While natural gas is also a fossil fuel and produces carbon dioxide when it is burned -- it has a major advantage over coal. The best natural gas power plants produce less than half as much carbon dioxide per kWh of electricity as coal fired power plants.
Natural gas combined cycle gas turbines (CCGT's) are very efficient because they use two cycles to recover heat (hence the name "combined cycle"). These gas turbines are also far less costly to build than a new coal fired power plant.
Click here to read full Article.
We're Coming Down ... to the Ground
Wall-E by Pixar Animation Studios, Walt Disney Pictures
Coming Back to What We Forgot
June 3, 2009
by Craig Severance
I saw Wall-E again this week, and was struck once more by the message of the film -- regardless of how advanced we are, we can make terrible choices if we forget where we came from.
If you are one of the few hundred people who have not yet seen this amazing film, rent it, buy it -- see it now. If you've already seen it, it's worth seeing again. It's basically a fun family film, but much more.
The film presents a vision of a future where humans have completely destroyed the planet, and have parked in space on giant cruise ships while robots (such as Wall-E) are left behind to clean up the mess.
As we are now actually facing the prospect we may soon cause massive desertification of now productive farmland, acidification of the oceans, and mass extinctions of up to half the species on the planet, this vision seems eerily close to reality.
Walt Disney Pictures
Stupid People? The humans in Wall-E were not stupid in the traditional sense. They were very smart, having developed technology to provide everyone with the comforts of life in a society powered by highly automated systems.
Walt Disney Pictures
As we race to oblivion ourselves, we too are occupied with technologies to entertain us and provide comforts on our ride over the cliff. (If you think you are not tied into this, try going a week without your cell phone, television, and internet.)
Click here to read full Article.
Better Buildings Soon?
Energy & Climate Bill Would Set National Energy Codes
May 26, 2009
by Craig Severance
It's important to "get things right" when a new building is constructed. More so than perhaps anything else we create, new buildings will be with us for a very long time.
Mistakes We Have to Live In. Our gas guzzler cars and trucks will rust away to the scrap heap in little more than a decade. Appliances and machinery share a similar fate. This quick turnover assures us our mistakes of the past will not stay with us very long.
Not so with buildings -- an energy hog building will likely still be around a hundred years from now. Thoughtlessness in design and orientation of buildings creates inefficiencies that are often impossible or prohibitively expensive to fix. As energy costs rise, such buildings will be a burden to their owners and renters.
Almost Half of Our Energy Use. While it is fashionable to talk about wind farms and hybrid cars, buildings are the "elephant in the room" seldom discussed, though they are responsible for almost half of U.S. energy use.
Climate scientists have concluded we must cut global warming emissions by at least 80% within just 40 years, or face catastrophic climate disasters. If we don't start making better buildings now, we have no hope of meeting this goal.
Stop Doing Things Wrong. For all of these reasons, strong measures are urgently needed to stop new buildings from being built the wrong way, when we know how to build them right.
I know many builders who would like to build better, more energy-efficient houses. They don't do it, because "the builder down the street" is not doing it. Most energy efficiency measures are literally invisible. Since the added advantages don't "show well", they are not perceived by buyers to add value. No builder can add extra features without recovering the cost, so we keep "building stupid buildings" even though we have known for 30 years how to build smarter.
Getting All the "Builders Down the Street" On Board. The way improvements in building technology achieve widespread adoption is through building codes. If everyone has to do it, everyone does it.
When the Waxman-Markey comprehensive energy & climate bill (which is also known for its "Cap and Trade" program for greenhouse gases) was first introduced as a Discussion Draft on March 31st, many criticized its failure to take strong action on buildings. Though the draft called for a national "model" energy building code that states should adopt, it had no teeth. An arduous campaign would have ensued for adoption in all 50 states, where special interest lobbying campaigns would likely stop or delay many. If someone like Alaska Governor Sarah Palin wanted to grandstand and oppose requirements for better energy efficiency in buildings, there was then nothing in the bill that could be done about it. Pockets of America would continue with no advancements in building energy codes.
This might be acceptable if there were no overarching national and global crisis. However, global warming now threatens to inundate our coastlines and turn vast stretches of fertile American farmland into dustbowls.
The Committee "got it" and strengthened the bill. The bill (H.R. 2454) that passed the full House Energy & Commerce Committee last week no longer speaks of a national "model" energy building code. Instead, it establishes enforceable "national energy effficiency building codes" for new residential and commercial buildings. States and local governments will be required to adopt the new national codes, or codes that achieve equal or better energy savings. Noncompliance will result in loss of significant funding. If they still do not do so, the Federal government itself will step in and enforce the national energy efficiency building codes. (Nobody actually wants that to happen, but you have to be willing to do it to enforce compliance.)
Click Here to read entire Article
Pardon Me -- Your Stimulus is Showing
Photo: Solylunafamilia
May 18, 2009
by Craig Severance
I've been very busy lately, too busy to write a new article here for 10 days. When today I contemplated getting together a new story, I realized the busyness IS the best story. In just the last 2 weeks, my activities have included:
- Helping an energy conservation firm prepare for a major expansion
- Analyzing the cents/kwh a local courthouse would need to pay for a a solar electric system installed with 3rd party financing
- Writing a memo for an investor on tax credits in the Stimulus Bill, in preparation for a possible clean energy business
- Working with another businessman on a strategy to move the local economy in his area toward energy efficiency and clean energy
A year ago, none of this was happening. Now, it's hard to keep up with it.
Click here to read entire story.
Beltway Blindness Hampers New Energy Plan
Photo: ricoeurian
May 5, 2009
by Craig Severance
All of us are familiar with the story of the group of blind men who encountered an elephant. None of them could see the whole picture, so each of them described the elephant from his own perspective.
Blindness has also habitually been a problem for those we send to Washington, D.C. "Beltway Blindness" is now clearly hampering the discussions about the new Energy & Climate legislation working its way through Congress. It is easy to believe that solutions you are exploring will work, if the only people you hear from are Washington think tanks, law firms, and lobbyists. Examples:
Click here to read full article.
How to Get Bankers to Fund Green Buildings
April 1, 2009 photo: boltron
by Craig Severance
A "comprehensive" Energy and Climate bill discussion draft was released by House Energy and Commerce Chair Henry Waxman (D-CA) and Energy and Environment Subcommittee Chair Ed Markey (D-MA) Tuesday. The full bill draft is here and a summary is here.
The Bill is still very weak on how buildings will really be brought up to a higher efficiency standard, because the money is really not there. Most of the goals set in this Energy and Climate Bill depend on you and me and the neighbor down the street finding the money to build better (but more expensive) new buildings, and to spend money to retrofit our existing homes and businesses. Almost half of the energy consumed in this country is from buildings.
The Stimulus Package passed earlier this year provided funds for retrofitting government buildings and low-income housing. Beyond that, however, "its my house, and I have to fix it." (There's not enough Federal money -- even with wild Deficit Spending -- to even think of the government paying for all this. Nor should it.)
The Waxman/Markey Bill takes a stab at providing Federal funding for some nice grants to states for "building labeling" programs and some demonstration projects. (Just wait a few years for all that to roll out.) It promotes innovative "property tax" or "utility bill" financing of building energy improvements -- those will be real popular in the Berkeleys and Boulders of America.
There is no mention in the Bill of how Americans actually buy buildings and fund building improvements. We use mortgages! We have to go to bankers for those mortgages, and if we ask for too much money, we don't get the mortgage.
This is why builders are afraid of (and will fight!) the new "model" building codes that would require more energy-efficient (but more costly up-front) houses and commercial buildings. If bank lending processes remain the same, a more expensive building means fewer buyers can qualify -- and fewer buyers translates into lower prices, and an inability for a builder to recoup the extra up-front costs for a more energy efficient building.
This is also why most homeowners have yet to ask their banker for a "Home Energy Makeover" refinancing package. If it is time to refinance to build a new kitchen, what will your banker say if you also ask for funds for a Home Energy Makeover? What do you do if the banker says you have to choose between the kitchen remodel, or the energy improvements?
Sure, the energy saving upgrades for either a new home or a refinancing will pay for themselves. They typically save more than the extra loan payments needed to fund them. Is my banker required to include that fact in qualifying me for the loan? There are some "Green Loans" out there that do this, but these are now more of a "boutique" lending product and are not normal lending practice
Click here to read the entire Article.
Solar for Lawyers and Big Corporations
HOW TO KEEP NORMAL FOLKS FROM INVESTING IN NEW ENERGY
March 25, 2009
By Craig Severance
President Obama has promised to energize the renewable energy sector to more than double its power production in just the next 3 years. Despite the Federal government's ambitious goals for renewable energy, two Federal tax rules are now actually preventing willing investors from participating in renewable energy projects.
Financing for the "new energy economy" is stalled. My experiences in just the last few weeks illustrate the frustration on all fronts:
Click here to read entire Article.
Nuclear, Solar Not Red or Blue
March 1, 2009
by Craig Severance
Within days of the well-publicized release of my new study Business Risks and Costs of New Nuclear Power in January by the Center for American Progress, the Heritage Foundation, the arch-nemesis of CAP, thought it necessary to respond with an article defending nuclear power. Their article, which also gained wide publicity, was entitled New Study on Staggering Cost of Nuclear Energy, Staggeringly Pessimistic.
My purpose in doing the updated nuclear cost study was to open up nuclear costs to public scrutiny, with a detailed cost analysis where all assumptions were clearly spelled out. It is now incumbent upon nuclear supporters to present specific analysis to the contrary. (None has been forthcoming).
Though the title of their article implied I was being "staggeringly pessimistic", Heritage did not actually challenge the assumptions in the Study.Instead they noted:
Though the title of their article implied I was being "staggeringly pessimistic", Heritage did not actually challenge the assumptions in the Study.Instead they noted:
Aside from the cherry-picking of data and its clear tilt toward Big Green (the vast industrial complex and lobbying machine being built around global warming alarmism), its conclusions are potentially not that far off.
From the above quote, it seems Heritage is a bit paranoid of the green movement (currently being championed by such far-left institutions as Chevron, IBM, and Microsoft). The thrust of the Heritage "rebuttal" was to blame nuclear's staggering cost on environmentalists, and to call for measures to prevent the outcomes predicted in my Study:
The value of the CAP study is to demonstrate why a nuclear renaissance may never unfold unless something is done to ensure that the conditions set forth by the study never come to pass.
Oh, if it were only that easy! The nuclear industry has already achieved its political goals of streamlined applications, restricted intervenor rights, and government subsidies for nuclear power. The nuclear industry even carried off a masterful public relations coup in convincing a majority of the public and policymakers that it could be an important solution to global warming. Public opposition to nuclear power is now far lower than at virtually any time in the past several decades.
In the end, however, none of that matters. Though ideologues may see every issue as a political battle between Left and Right, Blue and Red - these are just power plant projects. They are not liberal or conservative, Republican or Democratic. And when the numbers don't add up, they don't add up. (Something about "lipstick on a pig" somehow comes to mind.)
Jerry Taylor, a Senior Fellow at "the other conservative think tank" - the Cato Institute - published an excellent article "Nuclear Energy: Risky Business" in October 2008, in which he wrote:
Nuclear energy is to the Right what solar energy is to the Left : Religious devotion in practice, a wonderful technology in theory, but an economic white elephant in fact (some crossovers on both sides notwithstanding).
Taylor then proceeded to address the myths vs. facts circulating around nuclear power, in a well informed article devoid of ideological bent. His article (written months before my Study) describes the major economic barriers to nuclear power, then debunks the myth that it is all the fault of eco-freaks:
Click
here to read entire Article.
Do it ALL for Energy?
By Craig Severance
Posted: 08/14/2008 DenverPost.com
Lets do it all - everything. This is the politicians' new mantra to calm voters' gas pump anger.
Finally, our politicians realize how to get things done. Just do everything. So, lets get moving using this new principle.
Lets set up NASA right away to go again to the Moon, and to Mars, Venus, and Jupiter. Scientists have been waiting for decades to accomplish these important missions. Now we can do them all.
Afghanistan? Iraq? Iran? Russians in Georgia? Our military can handle it all.
Potholes? Bridge collapses? Amtrak and airlines in crisis? The DOT can fix it all. By the way, since we can do it all, what was wrong with that $300 Million "bridge to nowhere" in Alaska? I hear those 50 islanders could really use that new bridge so they don't have to wait for the ferry.
This all seems ridiculous, so why do we let our politicians get away with saying "do it all" when we ask for energy solutions? Is it because we ignored this problem for 30 years and now no one really knows what is the best thing to do?
Energy solutions are technological, but finding the best way to proceed isn't rocket science. Congress will have to do the same thing it did with the rocket scientists - develop cost effective principles and a budget.
On a budget you don't do it all - you do what works best.
Click here to read full article.
Nuclear Not Only Way to Generate a KWH
By Craig Severance
Posted June 12, 2008 www.opednews.com
Speaking to the nation about the energy crisis recently, President Bush proclaimed, "if there was a magic wand to wave, I'd be waving it". Bush then proceeded to wave the perpetual "magic wand" for energy, urging more nuclear power. Candidate John McCain followed suit in his speech on global warming, linking his carbon emissions cap-and-trade proposal to massive subsidies for the nuclear power industry.
We have seen this all before -- a powerful lobby promoting itself as our energy solution, and receiving Federal billions. Corn ethanol has now received these subsidies for decades, though experts warned it would do little but divert food crops to fill our gas tanks. Today's food price crisis is in part a fulfillment of these prophecies.
The nuclear industry has launched a major effort to convince Americans nuclear power is the solution to global warming. This public relations campaign can be traced directly to a 2003 MIT study, "The Future of Nuclear Power", which recommended it. Why would public opinion matter? The MIT authors noted, "Today, nuclear power is not an economically competitive choice. Moreover, unlike other energy technologies, nuclear power requires significant government involvement because of safety, proliferation, and waste concerns." They concluded nuclear power faced "stagnation and decline", without billions in new government subsidies.
The U.S. nuclear industry has in fact been in stagnation for 30 years. The last nuclear plant built in the United States was ordered in 1978. The industry blames environmentalists for its collapse, yet government policies have always favored nuclear power.
Utility executives, not environmentalists, halted nuclear power
's expansion decades ago, because of extremely high costs. According to the U.S. Energy Information Administration, cost overruns for nuclear plants for the years 1966 to 1977 ranged from 200 to 380 percent. The largest bond default in the history of the municipal bond market was a $2.25 billion bond used by the Washington Public Power Supply System to construct two nuclear power plants. Nuclear power failed because, in the end, it is just one of many ways to generate electricity. In comparison with other choices, nuclear power proved to be one of the most expensive ways to produce a kilowatt-hour.
Click here to read full article.
