Archive for the ‘Energy Policy’ Category

Making Clean Energy Cheap

March 24, 2010

Jesse Jenkins, at the Breakthrough Institute, eloquently proclaims one of the major themes of my Alternative Energy Page: “The urgent challenge of our century … is to make clean energy cheap.”

Without Affordable Clean Alternatives, South Africa Turns to Coal
Breakthrough Institute – Jesse Jenkins on March 23, 2010
Until clean and cheap energy sources are available for deployment on a massive scale, developing nations like South Africa will remain stuck in the Development Trap: forced to either sacrifice climate and ecological security in the name of development and poverty alleviation or to condemn countless millions of citizens to energy poverty in the name of climate protection. Breaking out of this untenable position is the urgent challenge of the century. It’s time to make clean energy cheap.

Jenkins’ article goes beyond the geopolitical, economic and environmental arguments for greener energy future in America, putting a human face on the cruel reality that faces much of the developing world – environment-friendly energy development often means continuing poverty (an abject, crushing sort of poverty not seen in the US for 80 years).

The problem is that, even in the developed world, we have not yet learned an answer to Jenkins’ plea to “make clean energy cheap.” As I’ve written on numerous occasions (here, here, and here, for example), getting to a clean energy future will not be cheap, nor will it come easily or quickly.

Basic science poses few of the hurdles to a green energy future, and the technology and engineering hurdles are largely ones of economy and scale. The problems, rather, relate to the political will of people and governments in the developed world to:

1. Create an investment climate in which private capital can confidently invest Billion$ in demonstration plants and start-ups. Alternative energy project will not thrive in an environment where oil bounces from $20 to $150 to $40 to $80 in just a few years.
2. Provide government and private leadership, encouragement and incentives for developing the business infrastructure and pool of trained and talented people to rapidly build alternative energy capacity.
3. Assure access to development and start-up capital during the early, uncertain stages of development


Alternative Energy and the Environment: Who’s Winning?

January 15, 2010

Who is winning? It sure isn’t the large majority of us who want rational, reasonable environmental protection and energy development, as progress is held hostage by the zealous extremes – Red State, Blue and Green.

A flurry of current and recent stories from the NEW YORK TIMES underline the tensions and conflicting interests of environmental protection, wilderness preservation, and alternative energy development. People who are, in most cases, comfortable and natural allies find themselves as bitter foes, and the strangest of partners jump into the policy bed together.

Take Boone Pickens – oil patch entrepreneur, funder of the Swiftboaters who sank John Kerry’s Presidential bid, and passionate advocate of energy independence thru wind power and the conversion of truck, busses and cars to natural gas fuel. Last year, plunging oil prices, regulatory hurdles and a miserable investment climate caused Pickens to pull the plug on his massive plans for electricity-from-wind developments in Texas and the Plains.

So now, the TIMES tells us, Boone is emphasizing the the second part of his vision (“Forget Wind. Pickens Turns Focus to Gas.” by Clifford Krauss) with a compaign that promotes natural gas as an economical and environmentally friendly alternative to imported oil.

Environmental purists criticize the idea of natural gas as motor fuel – for a variety of reasons that seem to boil down to “it’s not green enough” or “Pickens is in it for the money, so it can’t be a good idea”. This faction, it seems, wants all-or-nothing: plug-in electric and hydrogen fuel cell vehicles or ‘I’ll take my ball and go home!’

Toyota, the undisputed leader in alternative fuels technologies, provides a practical and sobering assessment of the shortcomings of today’s electric car technologies and the long development road ahead of us. (“Toyota Executive Sees Limits to Electric Cars” by Jim Motavalli) And beyond the limitations of current car and battery technologies are the over-arching twin questions “Where will we get all that electricty and hydrogen, and at what environmental cost?”

Meanwhile, environmentalists and home-town politicians are bitterly opposing wind and solar energy development off the US East Coast – “Decision Promised Soon on Cape Cod Wind Farm” by John M Broder – and the California desert “Desert Vistas vs. Solar Power” by Todd Woody. Objections, it seems, are mostly on the grounds that wind turbines and solar panels will spoil their beach views or the wilderness experience. Never mind that this wind and solar generated electricity could displace electricty made from coal, the dirtiest and most environmentally-disruptive fuel around.

So, the bottom line here is the same as with any big issue – nobody’s position is totally right, but no one’s approach is totally wrong, either. And that, unfortunately, puts the purists and the ideologues – red state, blue or green, whatever – squarely in control.

Sequestering CO2 – Part 2

September 22, 2009

The issues of CO2 emissions, coal-fired power plants, global warming and global economic growth are so important and so intertwined that they deserve considerably more attention than my short, earlier post on Carbon Sequestration. If you believe, as I do, that:

1. Economic growth is a GOOD thing – in the US, Europe and Japan, in China, India, Brazil, Russia and the rest of the fast industrializing countries, and especially for the poor, sick and hungry majorities in the under-developed parts of the world.
2. Energy, especially electricity and transportation fuel, is the vital ingredient for economic development and growth.
3. Fossil fuels – oil, coal, natural gas – are dirty, from the time they’re brought out of the ground through their ultimate use. However, using them is easy, cheap (in direct costs, at least), and they’re readily available.
4. Alternative energy sources (wind and solar, for example) are attractive for their green-ness and inexhaustability – but be prepared (for the near- and mid-term future, at least) to pay a high $$$-per-unit-of-energy price and an additionally high price for developing the supporting infrastructure.

Bottom line – Like it or not, the world is stuck, for the next couple of decades, with using a lot of coal for creating electricity. That leads to 2 inescapable conclusions:

1. Make sure that we use the coal in the least-dirty way possible. (I can’t bring myself to use the words ‘clean’ and ‘coal’ together.) That means new power plants should use IGCC Integrated Combined Cycle Gasification technology, a process that recovers more energy from a ton of coal and produces emissions that are easier to handle. See my earlier “Clean Coal?” post.
2. Develop viable, useful alternatives for the CO2 that is the inevitable by-product of fossil energy. Sequestration works, but it’s purely a cost, the equivalent of paying to haul your household garbage to the landfill. How about spending some of those $$$ and effort, instead, on creating (perhaps subsidizing) positive uses for CO2? (Such as this idea, for example.)
3. Adopt a combination of energy tax / carbon tax schemes – based on objectiove measures of the FULL, TRUE cost of fossil energy – that produce energy prices reliably and predicably high enough to foster development and maturation of renewable energy technologies such as wind and solar.

Solar Burnout?

September 17, 2009

NEWSWEEK (Sep 21, 2009. Pg17) announces “Solar Burnout”, the fast approaching demise of the solar energy industry. Typical of the media, the story is long on sensationalism but painfully short on nuance, but it underscores the difficult economic hurdles faced by alternative energy developers. It’s a song that I’ve sung more than once …
( here, here, here and here )

Now, I’m a solar energy fan going way back to the first oil crisis and alternative energy boom three decades ago, and I’d love to see a substantial share of fossil fuel usage converted to wind, solar and nuclear. But I’m also a businessman and a realist who knows that an exciting new technology has to ultimately succeed not on altruism and goverment subsidy, but on its own economic merits.

The science and technology are within our grasp to transition our economy from oil and coal to more sustainable primary energy sources. Unfortunately, the deck of economic development cards is stacked overwhelmingly in favor of the incumbent oil- and coal-based technologies. Breaching the barrier that shields our fossil-fueled present from an alternative energy future won’t be easy, but (perhaps) it can be done …

1. Exploit our North American natural gas resources as a substitute for oil (ie transportation fuel) and coal (electricity), until wind, solar and other alternatives reach commercial maturity. Natural Gas isn’t perfect – it’s a fossil fuel that you burn – but it’s a whole lot better (cleaner, cheaper, and geo-politically safer) than oil or coal.
2. Tax oil, coal and natural gas used for transportation fuel or electricity at an adjustable rate sufficient to maintain an end-user price equivalent to crude oil at about $80 per BBL. Use the proceeds to fund R&D, science education, alternative energy start-ups, etc.
3. A national tax on gasoline and diesel transportation fuel, graduated to reflect the fuel efficiency of your vehicle – drive a gas guzzler, pay a high per-gallon tax rate; drive fuel-efficiently, pay a low rate. Use the proceeds as incentives to individuals and businesses to convert to energy friendly technologies.
4. Streamline regulatory and permitting processes in a way that encourages alternative energy development, while protecting legitimate health, safety and environmental interests.

Let me emphasize — We already have the science, technology and engineering tools we needs to begin building our alternative energy future. I fear, however, that we lack the collective patience and political will to invest the $$$ and the decades of effort required to move beyond our current entrapment in coal mines and Middle East political intrigue.

Chemical Plant and Refinery Safety and Security

August 6, 2009

Now I’m all for safety in our chemical plants and refineries – I’ve spent most of my life working in and around them. But the NEW YORK TIMES August 3 editorial regrading pending federal legislation is just silly – and remarkably wrong.

In terms of the safety of workers and communities, the chemical industry is among the best performers, year after year, in terms of injuries and death among its workers. And although accidents may result in spectacular clouds of smoke and flame, they are exceptionally rare. The NYTimes unfortunately ignores the very real and factual safety record that is in the OSHA data for everyone to see.

The Times also perpetuates the confusion over the difference between the internal operational and engineering safety of the chemical plants themselves (which is today, and for decades has been, quite good) and security from an external – terrorist – threat.

Chemical plants and refineries are, contrary to the Times and public perception, not very vulnerable to terrorists. While a broadly destructive terrorist attack is not impossible, it would require a great deal of insider information about the configuration of a particular factory to cause much more than an on-site inconvenience. Chemical plant sites are typically isolated, and the truly vulnerable units within the site are obscure and randomly located within the welter of towers, pipes and tanks the public can see in the distance from the road.

The one area where we are particulary vulnerable is in the transportation sector. Every day, thousands of tons of potentially dangerous products travel, relatively unprotected, over our streets, highways and rails. And while exotic sounding ‘chemicals’ catch the public attention, the most truly frightening of these – in terms of the amount of destructive potential around us every day – is the gasoline that every one of us uses every day.

So by all means, spend political capital and national resources on improving public safety, but please use a bit of intelligence and common sense to spend it where it will do some real good.

Responses to “Pickens Plan – RIP?” from Linked-In

July 14, 2009

Lots of strong responses to my recent “Pickens Plan – RIP?” post – positive and negative – over on Linked-In. Here they are – sorry the list is not so convenient. [Any suggstions on how to drive the comments over here, instead of the Linked-In group discussion sites?]

You are right on the money !
I just spent a few weeks in Portugal, a country about the size of Maine.
Five years ago, when I was there last, there was not a single windmill for electrical generation in sight.
Today, within 5 years, they are everywhere you look…in fact, hard to avoid seeing one.
If they can do it, why can’t we? By the way, Regular Gasoline there costs about US$7.25 a gallon. Maybe they are just more “motivated”.
Your last tid-bit says it all. The greens want wind power, but they HATE transmission lies. It takes YEARS to overcome the nimbys. This article
that the anti-energy folks won’t be satisfied until we’re freezing in the dark.
I would agree but keeping the idea on the public’s mind and wallet are the key. Make alternative energy options affordable is also important.
Yes, yo-yo’ing petroleum prices aren’t a good environment for the green energy revolution the world needs as a matter of urgency.
I sincerely hope the Pickens Plan will come to fruition eventually. Meanwhile, many other plans for renewables schemes of all shapes and sizes are afoot.
For examples see and – there are hundreds of others, of course.
Brother Brothers!
Do you read entire statements and articles or just enough to form a reaction? Your reports pronouncing the demise of the Pickens Plan and Wind Power in general are greatly exaggerated.
I am no fan of “Big Wind” or any remote power generation schema at all, yet this is simply the realistic reaction of a businessman to the need for transmission lines, which will not arrive for at least three years, at which time installation of his giant wind farms will resume. In the big picture, such delays are minuscule.
Personally, I hope the new grid never arrives. My schema is 100% localised power generation via Small-Wind, Micro-Hydro, Micro-Tidal, Co-Generation, Heat Exchange, Small Geothermal, Waste Fermentation, Small Solar, etcetera.
We will be instrumental in the wind aspect. Examine to see a small part of what we are doing to that end.
Peter Sharma III, founder and chair
sirius/pureprophet, ltd.
Almost touche’ Peter, but the ‘update’ included in my post rounds out the story.
Re the question of power via The Grid vs power from local sources, I’m keeping an open mind while the economics jury is still out. Living off-grid may be an attractive alternative for some wealthy or dedicated individuals (and a nice business for entrepreneurs), but, in the 300+Million person national aggregate, local sources will have to make big strides in cost, reliability, and convenience to overcome the grid’s economies of scale.
Bigger picture — I filled up my little Honda yesterday with $2.12 gas, surrounded by Hummers, big SUVs and pick-ups, emphasizing the most important point of my post, that cheap oil removes most of the incentives for green energy, off-grid or on.

Quote: “cheap oil removes most of the incentives for green energy” – absolutely! Groups such as Friends of the Earth have been saying this for more then 20 years! In any case, the era of cheap oil will soon be over, and once it is over the green energy revolution can begin in earnest.
Our Sirius Green Windmill, grid tied, currently provides a negative-net-metered solution for householders at under $6K and with mass manufacturing, we’ll bring that down to around $2K prior to Q2 of 2010. At this price point, we trump cheap oil with ease. Localisation does not require destruction of the local grid, just disconnection of the national grid, which is a hazard to the environment and national security.
But y’all can keep spouting old saws that support status quo thought OR you can join those of us who know that this is a national and personal security issue as are Public Option Health-Care, Water Supply Reform, Food Supply Reform, Fiduciary Reform, and Constitutional Preservation…all on the same scale of importance.
I know the members of this group are intelligent; it would be nice to see folks combine this intelligence with wisdom to get smart in application of the power inherent in technocratic allegiance to reform our society before revolution occurs.
By the way, where did you get gas for $2.12? The rest of the nation is paying $2.30 or above.
The $2.12 gas was Okla City. Actually saw a couple of stations at $1.99 on Sunday. Back home in the DFW area, it looks to be in the 2.25-2.40 range, unleaded reg pump price.
Also saw a signif number of vehicles with dealer tags – people here are still buying a few cars. Almost all, by informal tabs, were big SUVs and pickups. Fuel effeciency seems soooo 2008.

Whatever the price of oil, obsolete since the day we started burning it,
The inconvenient truth about alternative energy is that it has miles to go before it sleeps. Putting up windfarms, solar panels, etc require significant new infrastructure as well as backup generating systems that will cause more pollution than is currently produced, however, the media is ignoring that part of the equasion. There are many alternatives but few are actually sustainable meaning that they are balanced between the environment, economy, and community. Electric vehicles are impractical except in large urban environments. They do not save energy since they must be charged off of the power grid. Adding this burder to the power grid requires significant new additional infrastructure (see above). We MUST attack the issue by stopping the analytical approach and taking a synthesis approach. It is a systemic energy problem, not an alternative energy problem.

However, we as a world population will never agree on how to approach it – the Kyoto attempt and other similiar programs str a farce since they use a political approach which cannot even agree on a problem definition.
Mr. Pickens business operations have much in common with Mr. Madoff. He is very successfull and others pay for the failures- such as what occurred 20 years ago in northern California (Sacramento County area) where Mr. Pickens “Alternate Energy Sustainment Program” was bought- the results were less than expected and the taxpayers of those communites who bought the program are still paying off the multi-million dollar debt. A position that clearly protects Mr. Pickens and his stockholders but clearly shifts the liability for success or failure onto the clientelle. There are numerous communites in the US with similar results.

Presently a major utility company has partnered with a high tech company in California and the state (with the full support of the Govenor) will be paying millions od tax dollars to develop this new energy technology. Seems they have a great (said with a smirk) energy plan that in summary will…..
1. Deploy satellites into space
2. Collect energy from the sun’s rays
3. Transmit this energy to a ground station, yet to be built, located in Fresno California
4. Redistributed the energy throughout the state

This high tech company……
1. The CEO/President is a former Boeing executive with a background in DoD satellite programs
2. This corporation is located in Manhatten Beach, California- not in the aerospace industrial park but across the street from a city park in a condo complex

While these types of CEO’s and business practices yeald results for the corporations, others are actually developing usable technologies. One company based in Chicago, has re-developed solar cells that are 100+ times more efficient than that currently in use (even in the aerospace industry), cost pennies (literally) to manufacture and eliminates 90% of the hazardous materials used in the present solar systems. The R&D is completed and they are moving into production design.

It is disturbing that while the infrastructure of our communites is falling apart, the promotion of organizations whose value systems are less than outstanding are brought to the forefront as leaders of our community, while the true leaders work quietly, in silence creating the foundation for our success that others may very well in the future claim all rights to.
Yes, yo-yo’ing petroleum prices aren’t a good environment for the green energy revolution the world needs as a matter of urgency.
I sincerely hope the Pickens Plan will come to fruition eventually. Meanwhile, many other plans for renewables schemes of all shapes and sizes are afoot.
For examples see and – there are hundreds of others, of course.
by Steven Sheiner, Partner at Venture Development Center Inc
The solution is for the government to tax oil so that the price stays above $100 a barrel. That will make alternative energy viable, force automakers to make fuel efficient and alternative fuel vehicles, encourage the development of sustainable mass transit and eliminate the power of the middle eastern countries to dictate foreign policy. As long as oil is relatively inexpensive we won’t migrate to alternatives… simple economics.
by Bill Holder
Here it is again…

The one in North Africa and other places could well become larger with the backing of the mega co.s, but this one in sunny central Washington state appears planned, funded and awaiting permit approval.
I hope that projects like those cited by Bill Holder will prosper, but history gives sound reasons to be pessimistic. Without some long term energy price umbrella of the sort suggested by Steven Sheiner, the likelihood of alternate energy success will be slim.

As an advocate of using natural gas as a fuel for vehicles, I would like to put the record straight as far as Mr. Pickens current level of involvement in renewable energy. While there has been delays on the market adoption of an number of renewable energy technologies, this is not to imply that Mr. Pickens has packed up the bag. In fact, he is surging ahead on several political and technical fronts. The following update from the Pickens team will hopefully put the issues in the proper perspective.


Anyone who wondered about the status of the Pickens Plan or claimed it had lost steam now knows the truth: The Pickens Plan is surging ahead at double-time speed.

Over the two days celebrating the first anniversary of the Pickens Plan, Boone was interviewed by two wire services, a major business magazine, more than a dozen TV stations and four national TV networks. He met with nearly 40 Members of the U.S. House and Senate and participated in the introduction of the NAT GAS Act in the U.S. Senate, sponsored by Senator Robert Menendez (D-NJ) and co-sponsored by Senator Orrin Hatch (R-UT) and Majority Leader Harry Reid (D-NV).
You all know this: News media and politicians have very sensitive antennae. They gather around positive momentum and ignore inaction.

The amount of media and political attention Boone attracted in New York and Washington in the last 48 hours is a testament to your hard work.

As an example, Bloomberg reporter Margaret Carlson wrote the following:
Boone Pickens came to Ben’s Chili Bowl, a landmark Washington dive not far from the White House. He brought with him the “Pickens Car” and more importantly the “Pickens Plan,” a blueprint for weaning the U.S. off foreign oil, introduced a year ago.

Carlson also wrote in her Bloomberg piece:
In one year, Pickens got Congress to take notice. Yesterday, Senators Orrin Hatch and Robert Menendez introduced a bill (co-sponsored by Majority Leader Harry Reid) that mirrors legislation working its way through the House. It would extend for 18 years tax credits for natural gas fuel, vehicle and infrastructure (gas stations of the sort Barack Obama supported as a senator) to get more natural gas vehicles into production.

The Washington, DC affiliate of FOX did a great story on Boone’s day in Washington, including his visit with Army members like you at Ben’s Chili Bowl – click here to check it out.

In his article for the Salt Lake Tribune, reporter Robert Burr wrote about the introduction of the Senate NAT GAS Act:
Sen. Orrin Hatch teamed up with T. Boone Pickens on Wednesday to promote legislation that would boost natural-gas-fueled vehicles through tax incentives. The Utah Republican and the Texas oilman — along with Senate Majority Leader Harry Reid and Democratic Sen. Bob Menendez of New Jersey — say the measure could help curb pollution and create American energy independence at the same time.

“I’ve been very pleased with the growth and use of hybrid-electric vehicles in this country,” Hatch said at a Capitol news conference. “But I’ve been less pleased with the growth of natural gas as a transportation fuel. I believe strongly that we need an extra push to spur on the greater use of natural gas, to get more natural gas vehicles on our roads.”

These two articles and the TV clip are only a sampling of the great coverage Boone and the Pickens Plan have gotten recently – check out more at

The Pickens Plan Army remains on the move! We’re going to need to stay together and continue our momentum to get the NAT GAS Act passed in the House and Senate and signed into law by President Obama. Click here to contact your Members of Congress today.

Thanks, Barry, for the update from the Pickens perspective. Looks now as if the original wire service story was a bit sensationalized, even thought the “update” included in my originial post backed off considerably from the original.

Bigger picture — I filled up my Honda with $2.12 gas yesterday, emphasizing the main point of my post about yo-yo’ing energy prices – cheap oil removes much of the incentive for alternative energy, Pickens’ Plan or anyone else’s.

Pickens Plan, RIP?

July 8, 2009

Like him or not, T Boone Pickens has some intriguing and inspiring ideas about our energy future. By putting a considerable amount of his own money where his mouth is, T Boone has done us a great service in at least 2 ways —

1. He has used his ‘bully pulpit’ as one of our richest and most notorious oil men to educate the public that the days of oil are passing – that it’s time to transition to primary energy sources that are keep our Dollars at home and preserve oil for more value-adding uses than moving us from here to there.
2. He has spent big money to prime the alternative energy pump – wind farms for electricity, natural gas as transportation fuel, and publicity to educate and motivate the public. Absolutely (to answer some critics), he would get richer still if his recommendations were carried out, but better, I’d say, that he get rich if it means we all get a better energy and economic future.

And so I was disappointed (but not much surprised) that Pickens is pulling back from many of his wind and natural gas plans.
UPDATE – July 9
Pickens now says the earlier story was wrong. The wind farm project will be delayed until 2013, due to inadequate transmission lines, not cancelled.

As I’ve predicted (here, for instance, and here) more than once, alternative energy developments cannot thrive in an environment of yo-yo’ing petroleum prices. They killed alternative energy 30 years ago, and they are strangling alternative energy today.

“Clean Coal”???

June 29, 2009

Two important stories about ‘clean coal’ over the past couple of days in the NEW YORK TIMES …. ‘Clean coal’ of course refers to a set of technologies that 1.) reduce the amount of pollutants emitted from coal-generated electricity, 2.) substantially raise the amount of electricity that can be squeezed from a ton of coal, and 3.) makes it easier to capture and ‘sequester’ the inevitable CO2 by-product.

Lots of environmental purists argue that ‘clean coal’ is a lie. And, in fact, they’re right – even the best of coal technologies will be far from clean. From mining to transport to usage and disposal, it’s a nasty business. But, unfortunately, it’s a nasty business we’re going to be stuck with for the next couple of decades. Over half of US electricity today comes from coal, and – like it or not – the cheapest and easiest new large-scale generating capacity (technology-wise and regulatory-wise) comes from coal or natural gas.

The point is that there is a cleaner, better way to turn coal into electricity today – controlled gasification, then combustion of the coal gases in a huge jet engine sort of affair followed by a steam turbine generator. IGCC, as the technology’s called, works, is proven, and – with a hint of regulatory encouragement – is ready to go today.

Gregg Easterbrook, in “The Dirty War Against Clean Coal” (NYTimes, 28June, 2009) argues that a combination of inertia, special interests, economics and Federal vacillation is stalling the adoption of this new coal technology that offers real, large improvements over the best current coal technologies. A misguided effort to hold out for perfectly clean coal technology, according to Easterbrook, is dooming us to years more of nothing but the dirtiest. And according to the TIMES’ Matthew Wald, some major utilities have given up on the Federal FutureGen project in favor of pursuing their own cleaner coal programs.

No matter how much you might dream of combustion-free energy sources powering our increasingly electric future, the uncomfortable reality is that coal will continue to play a huge role in your economy and mine. It’s utter foolishness to stand in the way of the cleanest coal alternatives today, while you dream of a wind and solar future that’s 10-20 years down the road.

The Dirty War Against Clean Coal
NYTimes – Published: June 28, 2009
Advanced-technology coal power exists, but regulators are waiting to see what happens with FutureGen, a project that may be just an expensive boondoggle.

Two Utilities Are Leaving Clean Coal Initiative
NYTimes – 29Jun09
The departure of Southern Company and American Electric Power is a blow to a consortium seeking to build a carbon-capture coal plant in Illinois.

“Global Trends in Sustainable Energy”

June 12, 2009

The new United Nations report on “Global Trends in Sustainable Energy Investment” paints a pretty optimistic picture of alternative energy growth, showing 2008 investments ($105B worldwide) almost equalling investments in conventional energy ($110B). Worldwide, wind projects dominated (48%), with approx 22% going to solar capacity and 15% to biofuels.

Half of the new investment total went into Europe, 30% into North America, 24% in Asia and Oceana, and 12% in South America.

Worldwide, alternative energy (excluding large hydro-electric projects) represents 6.2% of global power generating capacity, but only 4.4% of power production.

Brazilian biofuels, according to the report, did not fare so well ….

“The Brazilian market saw investment [in biofuels plants] more than double to $6.3 billion from $3.0 billion in 2007.

“However, the international financial crisis is taking a heavy
toll on Brazil’s ethanol and sugarcane industry. The cheap
and plentiful US dollar-denominated debt that fuelled
tremendous growth is now crippling many producers as
the value of the Brazilian real has tumbled against the dollar.
New Energy Finance research shows that investment in
ethanol producing assets fell by half in Q4 2008 and by an
even greater degree in the first quarter of 2009.”

Source: “Global Trends in Sustainable Energy Investment 2009” United Nations Environment Programme, 2009.

Toward an Alternative Energy Dead End?

June 4, 2009

In my first post, back on Apr 3, I talked about the rollercoaster trajectory of alternative energy development over the past 30 years or so. The centerpiece of that discussion is this graph of crude oil price history – and my fear that we’re about to repeat the 1980s as far as alternative energy goes.

Constant 2007 Dollars

Constant 2007 Dollars

What causes me to be skeptical of the staying power of today’s interest in alternative energy developments? Look at 2 key similarities between today and the few years following 1974:
– Rapidly rising energy costs and restricted availability created panic demand for energy conservation and new energy sources. After about 1982, the Western economies enjoyed the benefits of improved energy efficiencies for the next 2 decades, but …
– Solar, geothermal and wave and tidal developments that flourished under briefly high energy prices withered away under cheap oil. The ‘feel good’ incentive of energy independence and environmental responsibility was insufficient to overcome the higher cost of unconventional energy.

Readers here will not be surprised that I do not expect – in the absence of reliable, long-term economic incentive – that many of the current flurry of alternative energy developments will have much staying power or much impact on our energy economy.

My concern has little to do with the state or quality of the alternative technologies – in most cases, the requisite science and engineering is already well developed. My concern has much more to do with sustaining the political will to assure a predictable, long term economic climate which nurtures the growth of new energy technologies to economic maturity. Oil prices that bounce from $50 to $140 and back, and natural gas prices that vary as widely, undermine any other incentives in place in today’s American economy.

One doesn’t have to be a political radical to see that a purely free market is not especially efficient here. But the political element of a solution is so controversial and emotion-charged that I doubt we can ever adopt an energy policy that permits more than a fits-and-starts progress in alternative energy.

What do you think??? Am I being too pessimistic? What are some good approaches?