US Energy Security – Update from NY Energy Week

ImageOn Tuesday I had the pleasure of attending Redefining US Energy Security for the 21st Century as part of New York Energy Week.  The panel was composed of self described “Energy Warriors” Vice Admiral Lee Gunn (US Navy, Ret.), Brigadier General Steven M. Anderson (US Army, Ret.), and Brigadier General Stephen A. Cheney (US Marine Corps, Ret.) and offered insight into the massive amount of energy required by the DOD as well as their goals to reduce energy demand without compromising operational efficiency.  Here are some interesting facts:

  • The US military is the largest organizational user of petroleum in the world consuming around 120m barrels per year at a cost of about $17 billion.
  • Petroleum accounts for 71% of the DOD’s energy consumption by source; electricity ranks second at 11%, natural gas third at 8%.
  • Since 2005, DOD’s petroleum use has deceased 4% but spending on petroleum increased 381% in real terms.
  • After taking into account the hidden costs of personnel and assets required to move, store and protect fuel from the supplier to the point of use, one gallon of fuel can cost up to $50.
  • One project that used spray foam insulation on tents in Iraq reduced cooling costs by 75% and resulted in savings of $3.6 per day!  The original contract for $95 million saves up to $1 billion dollars annually and keeps 11,000 fuel trucks off the road.  Think about the reduced risk to our soldiers who would otherwise have to protect those convoys as the fuel makes its way from its origin to its final destination.

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All this adds up to a massive energy bill and a lot of time and resources dedicated fueling the operation rather than the operation itself.  The diversion of resources, vulnerability of supply chains and reduced mobility of combat forces make our military’s reliance on fossil fuels a national security issue as much as a financial one.  Each and every branch of the military understands this fact and has taken steps to increase their energy efficiency and reduce their demand.  However, the opportunities are endless.

As I stated in an earlier article, the DOD should leverage its purchasing power to drive cost reductions in advanced clean energy products.  In addition to economies of scale, the DOD would also provide real world testing of new technologies so they can be measured and verified and eventually reach commercialization.

Furthermore, as energy efficiency contributes to organizational effectiveness, there should be a top down approach where commanders are held accountable for reaching their energy reduction goals.

It is well established that our addiction to fossil fuels poses a national security risk.  It was especially motivating hearing the alarm being sounded by former members of the DOD.

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Mr. Greenbacks Goes to Costa Rica!

La Fortuna, CRIt has been much too long since my last post, but I think this one is worth the wait.  Back in February Mrs. Greenbacks and myself were invited to a wedding in Costa Rica and we gladly attended!  Special shout out to Connie and Dave – Congratulations Again!

Aside from the beautiful ceremony and spectacular reception, we got to enjoy much of what Costa Rica had to offer – beaches, rainforest and volcano.

Costa Rica is at the forefront of promoting sustainable practices in their everyday life and as Mrs. Greenbacks pointed out, one of the 5 “Blue Zones” of the world where people regularly live to be over 100 and generally enjoy better health and less incidence of disease than the rest of the world.

Just a few of the common practices that we saw in Costa Rica was composting of all organic materials, low flow faucets and showers as well as automatic shut off switches on the room lights after the key has been removed.  A heavy public awareness campaign also goes a long way toward making guest appreciate the natural beauty of the land.

ImageOn our hanging bridges canopy tour, our guide explained that Costa Rica was well on its way toward meeting its power needs using renewable sources such as hydro, wind, and geothermal.  Almost 95% of CR’s power is produced from renewable sources with hydro accounting for a full 75% of the total.  Geothermal ranks second due to the areas 5 active volcanos and wind installations have been steadily increasing in recent years.  Distributed solar would make a great addition to CR’s renewable energy portfolio and would help to power regions where grid transmission is simply too costly.

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Tonight’s the Night: Will the President Speak on Renewable Energy and Climate Change

Seal of the POTUSThe State of the Union speech marking the beginning of a Presidents second term has historically been a chance for the President to lay out big, hairy, audacious goals for the upcoming administration.  Reagan had tax reform, Clinton had education, and GW had Social Security reform.  Some were achieved while others failed.  So too tonight, Obama will lay out his agenda for the next four years.  Given the economic condition of the US right now, it is rightly expected that jobs will be a major theme of the speech, but some others for consideration:

  1. Jobs, Jobs, Jobs
  2. Deficit Reduction
  3. Economic Growth
  4. Immigration
  5. Gun Violence

Missing from this list is Climate Change.  Will the President even mention those words tonight?  With North Korea’s nuclear test last night, I expect the President to devote more time and attention to foreign policy issues rather than outlining climate initiatives.  Prove me wrong Mr. President.

Question for my readers:  Will Obama mention Climate Change or Renewable Energy in tonight’s State of the Union address?

Four Climate Change Policy Ideas for the Next President

Congratulations! We are finally out of this election cycle and all the negative ads. And no matter who the winner is, I hope that we can all come together to build a stronger economy and a healthier society. While we wait for the mudslinging over the fiscal cliff to begin, here are the top four recommendations on climate change policy for the incoming (or returning) president as stated in Businessweek.

1) Put a price on carbon. I alluded to this in a previous post called Carbon Emission where we discuss the differences between a carbon tax and a cap-and-trade policy. Businessweek says that “A $20-per-ton carbon price—collected as a tax or by auctioning carbon allowances—would raise on the order of $100 billion per year while creating powerful economic incentives to curb pollution in the most cost-effective manner (and develop new technologies to do so). A carbon price is also an ideal way to help address the coming “fiscal cliff”: Using some of the revenue to pay for lower taxes on labor or capital would provide a double dividend by reducing distortions in our tax system. For that reason, a carbon price enjoys broad support from economists across the political spectrum, from N. Gregory Mankiw, Douglas Holtz-Eakin, and Arthur Laffer on the Right, to Paul Krugman, Joseph Stiglitz, and Jeffrey Sachs on the Left.”

2) Cut Non-CO2 Greenhouse Gases. CO2 is obviously the biggest contributor to global warming, accounting for over 80% of GHG’s, but it is not the most potent. Other GHG’s such as Methane, Nitrous Oxide, and other flourinated gases such as hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride are numerous time more potent warmers than CO2.  I wrote a paper on this earlier this year and will post it later this month.  Needless to say, focusing attention on these High Global Warming Potential gases may do more in the short-term to curb warming and create some international “good will” for tackling the CO2 problem. 

3) Promote Clean Energy and Energy Efficiency.  The administration should further the transition to renewable energy sources by removing subsidies for fossil fuels and encouraging smarter subsidies for clean energy.  I wrote extensively on this subject here.  In short, current subsidies to fossil fuels should be removed and invested into R&D.  The current subsidies in place for renewable energy promote widespread deployment of these technologies, but do nothing to increase their output and reduce their cost.  A better subsidy policy would promote increases in efficiency or reductions in cost in order to make these technologies competitive with cheap and abundant natural gas.  After all, the taxpayer wants to see results from their money.

4) Use the Clean Air Act.  Finally, the new administration should take full advantage of the Clean Air Act that sets new vehicle mileage standards, sets limits on pollution from industrial sources, and sets more protective standards for air quality.  “The next administration should build on these steps by setting carbon-pollution emission standards for stationary sources, including new and existing power plants. In doing so, the EPA can draw on a proud tradition, dating back to the Reagan administration, of making clean-air rules as economically efficient and flexible as possible—for example, by allowing averaging and trading so companies can meet standards on a fleet-wide basis rather than at each facility individually. The EPA should also design the carbon standards in a way that rewards states that implement their own rigorous programs—such as the innovative cap-and-trade approaches already in use in the Northeast and getting under way in California.”

There you have it.  In only a few hours from now we will know the next leader of the United States of America.  Now if the time for action on climate change.  The four steps outlined above are only the beginning, but they will help to reduce our dependence on fossil fuels, improve the health of our citizens (and the other 6.7 billion citizen of this planet), and even provide opportunities for the growth of new industries.  This is a tall order, but we have never backed down from a challenge before, why start now?

World Wide Electricty Use

Have you ever seen a picture of the world at night? Take a look at the picture below and then try to comprehend the numbers – USA has a population of 300 million, North America and South America combined have about 800 million inhabitants.  Now look across the Atlantic and take a look at Africa – you don’t see many lights for the more than 1 billion people living on the continent.  Then take a look at Asia, which sports a population of 4 billion.  Now if all these areas had the same electricity usage of the USA, think about much energy we would need.  Think about the air quality in the cities, the reduced cropland from the pollution, the destruction caused by mining and drilling, the traffic on the highways, etc.  That is why we need cleaner sources of energy.  Energy production runs hand in hand with economic development and will bring billions of people out of poverty.  Further innovations in renewable technologies combined with a scale-up in production can drop the cost of clean energy and light up this map without the negative externalities associated with fossil fuel.  Now that is something to think about! 

I would just like to say a quick thank you to Professor John Zindar for teaching a great class on carbon constrained economies and to Chip, Dipa, Iana, Pedro, Terence, and Thiago for making each class fun and interesting.  I learned a lot from each of you and wish you the best in all that you do. The Earth at Night

Wind Projects in the US (2012)

Longtime Mr. Greenbacks friend, reader, and rocket scientist Ryan made some interesting observations regarding US Energy By Source.  Here is some follow-up information on the Wind Industry.  Does anyone out there know what life is like near a large wind farm?  What is the long-term picture for jobs – not just installation, but maintenance as well?  How is the industry looking after the expiration of the 1603 TGP – is it still profitable? 

U.S. Wind Industry Fast Facts

Total U.S. Utility-Scale Wind Power Capacity, Through 1st Quarter of 2012:

48,611 MW

U.S. Wind Power Capacity, Installed in 2011:

6,816 MW

U.S. Wind Power Capacity, Installed in 1st Quarter of 2012:

1,695 MW

U.S. Wind Power Capacity Under Construction as of 1st Quarter of 2012:

8,916 MW

U.S. Wind Power Capacity, Installed in Previous Years (including small-wind):

2010:
2009:
2008:
2007:

5,216 MW
10,010 MW
8,366 MW
5,258 MW

Number of States with Utility-Scale Wind Installations, 2011:

38

Number of States with over 1,000 MW of Wind Installations, 2011:

14

U.S. Wind Resource Potential, Onshore (Source: NREL):

10,400,000 MW

U.S. Wind Resource Potential, Offshore  (Source: NREL):

4,150,000 MW

Top 5 States with Wind Power Capacity Installed, through Q1 2012:

 

1. Texas
2. Iowa
3. California
4. Illinois
5. Minnesota

10,648 MW
4,419 MW
4,287 MW
2,852 MW
2,718 MW

 

http://www.awea.org/learnabout/industry_stats/index.cfm