John Hofmeister – “Despite the talk, ideology doesn’t translate to actual alternative energy”

Chasing votes with ‘clean and green’ – Despite the talk, ideology doesn’t translate to actual alternative energy

By JOHN HOFMEISTER
HOUSTON CHRONCLE

March 6, 2010, 4:00PM

Part one in a series.

I’m a backer of wind, solar and biofuels as new, high-technology future contributors to the energy supply of the nation. Facing the daunting demand forecasts of the medium- and long-term future, the nation will need all the energy it can produce from every available source. Today’s seeming abundance of energy is a recession-driven aberration from the continuing rise in postindustrial, electron-dominated energy requirements in this century. Companies, institutions, governments and homes are run by information systems and countless electrical devices. When transportation also demands electrons, watch your meter spin!

Yet public officials from the president and vice president to Cabinet and congressional leaders insult our intelligence by delivering scripted messages that the future of the new energy system in this country is clean renewable energy that will be delivered by countless so-called green jobs. The fake chimes of energy independence echo up and down Pennsylvania Avenue. Do headlines make truth, regardless of content? What is it about organizations like Repower America and the Center for American Progress, which provide ideology, not substance, to the administration and congressional leadership on the so-called new energy system? Why are their conclusions unchallenged? Is it ease of messaging, for who can be against clean and green? Is it to run away from hard choices about hydrocarbons and nuclear energy? No one’s against cleaner energy. But is it material? Is it affordable? Can it deliver commercial, ample new energy to the ever-aging existing energy system? Let’s be honest. It’s incremental and expensive.

The American people, if sometimes late, are eventually pragmatic about energy hype without substance. Wind and solar don’t reduce the electric bill; biofuels don’t reduce gas prices. Misinformation and disinformation lead to communications bankruptcy. I told Sen. Barack Obama he needed a hydrocarbon plank in his presidential energy platform to deliver affordable gasoline. He responded that, as president, he would do biofuels. I said I’m doing biofuels (at the time as Shell Oil’s president) but not materially by 2012, or even 2016. He said we’ll do biofuels. I asked, with what subsidy? End of conversation.

Clean and green, the energy system we aspire to, is subsidized like no other energy source in history. By whom? Us, and our progeny. All energy has historically received some type of public support to even out the volatility of high and low price cycles. The Energy Information Agency of the U.S. government’s Department of Energy reports that, for 2008, natural gas was subsidized 25 cents per megawatt hour of electricity produced, coal received 44 cents per megawatt hour, nuclear $1.59. Oil was not reported in these numbers since oil is hardly a factor in electricity production. However, oil benefits from a variety of tax subsidies for dry well expenses and royalty holidays dating from the $10-a-barrel oil days of the late 1990s, which the administration promises to rescind. At the same time in the same year, wind energy received public subsidy of $23.37 per megawatt hour; solar energy received $24.34. These numbers do not include the additional subsidies we taxpayers have been compelled to pay for wind, solar and biofuels through the stimulus plan, the 2010 budget and the 2011 framework budget. These subsidies help support 2 percent of today’s energy system. Their proponents promise to double and double again the amounts of subsidized supply from clean and green with no commitment to ending subsidies. That’s not a new energy system.

Frittering at the edges

Here’s the problem I have with what the administration and Congress are doing. They are frittering at the edges of the energy system, not even building a manufacturing base to sustain its growth, because it’s politically popular. Polls say bashing the energy industry gets votes. You don’t govern by promoting coal, oil, gas and nuclear when you just got elected berating them. Symbols trump substance. Meanwhile, our leaders ignore 93 percent of base energy — hydrocarbons and nuclear, which are aging rapidly and in need of major new investment — at their constituents’ peril. The nation needs its leaders to promote short-, medium- and long-term energy supplies from all sources and do what it takes to deliver. Beginning with the Nixon administration, we’ve had eight presidents and 18 Congresses who have promised energy independence and never delivered.

Recent announcements on tripling loan guarantees for future nuclear construction are little more than sleeves off the vest. Loan guarantees are useless for unaffordable new nuclear investments, which have also just lost their future source of nuclear waste disposal. The administration torched $20 billion of our money, announcing its determination to forever close Yucca Mountain, Nevada’s national nuclear waste repository. After decades of build-out, just as the site sought license approval, an eight-week-old administration pulled the budget plug.

It’s politics

Does anyone suspect the reason? Sen. Harry Reid of Nevada, the Senate majority leader, faces a tough re-election race in 2010; he is benefited by the energy secretary’s announcement, undoubtedly from orders on high, to shut down the nation’s only safe and reliable storage site. Now we’re appointing a blue ribbon panel to study what we studied decades ago and report out in two more years. Why not a blue ribbon panel to commoditize nuclear and reprocess waste to lower costs, so we can actually build more plants?

As for hydrocarbons, the administration is proposing a series of demonstration projects to evaluate carbon capture and sequestration by 2016. Never mind that new coal leasing is all but dead, stopped in its tracks by the EPA. They’re kicking the can down the alley, while making headlines as if they’re doing something.

Regarding other hydrocarbons, EPA regulation of fracking is being proposed, which will add time and cost to developing tight gas reserves. Offshore leasing for drilling is as stalled as it was when congressional and presidential moratoria precluded it for 30 years.

But “clean and green” it is: the simplistic formula to make it look like we’re serious about producing more energy. It will produce votes, not material energy. It’s not enough and never will be. We’re headed for an energy abyss.

Hofmeister, the former president of Shell Oil, is founder and CEO of Citizens for Affordable Energy. He also is the author of the book Why We Hate the Oil Companies: Straight Talk From an Energy Insider (Palgrave Macmillan, $27).

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One Response to John Hofmeister – “Despite the talk, ideology doesn’t translate to actual alternative energy”

  1. Jon Boone says:

    We’ll await Part II. Meanwhile, although Hofmeister’s general thesis–substance over ideological fantasy–is doubtless correct, his opening should make us all cringe. Why in the world is a guy like this saying that he’s for renewables like wind because “the nation will need all the energy it can produce….” Poppycock. Some forms of energy, particularly wind, are dysfunctional, making everything else less productive. And he of all people should know this, and not pander, as he does at the beginning of his piece, to those pushing this misconception–in an effort to appear likable.

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