It’s Hard To Be Green – Or Is It?

12/12/2005

Paul Munnis

The White House and Congress would be wise to listen to the Greens. They need to stop ignoring them for awhile and listen to their message, especially as it concerns alternative energy. Bill Joy, the former chief scientist at Microsoft Corporation has listened and as a result he says:  “I’m interested in energy…It’s great that it’s so socially relevant, but it’s also an area of huge opportunity to create new more efficient forms of energy and apply that to the economy. There are a lot of factors coming together which likely will make this a very big area for change in the economy in the next 10 to 20 years.

Given predictions of oil prices surpassing $100 per barrel, alternative energy should be a lucrative area for Joy and others who listen to what the Greens have to say.

MN Republicans understand the opportunity presented by alternative energy and they have worked together with Democrats to make our state friendly to alternative fuel. As a state we have been pushing for ethanol and bio-diesel laws for America even as we have led the way in the use of these as mandated additives to our MN gasoline supply. 

For America, alternative energy means jobs, jobs, and more jobs. Not only new jobs created but also old jobs retained. For newly arising industrial nations there will be increased energy demand. It would be nice for the U.S. if we are the suppliers of that demand. To accomplish that we have to change our energy profile including who we purchase our energy from. Wouldn’t it be nice to stand the manufacturing equation for product production on its head so that the U.S., although suffering higher labor costs, could offer low energy cost instead, thus making American products cheaper or at least fully price competitive in the marketplace? That is within our reach as a people. 

The White House has a banana in its ear and the recent conference in Montreal on global warming was a good illustration of it. They opted to send 150 nations packing without a pledge of American involvement in cutting back on greenhouse gases and emissions. The Bush Administration was totally uncooperative and the U.S. came close to boycotting the conference. Many Minnesotans were disgusted with the White House.

By contrast, Bill Clinton ‘gets it’ and he was there and he spoke about a future that would embrace opportunities created by alternative energy investments. He accurately described the investment opportunities and the future for a nation that leads in this area. The White House was miffed at Clinton’s attendance. Nearly a week later, the Administration politicians finally ‘got it,’ but the realization came too late. It was another missed opportunity.

Green living is not about cutting down wood and consoling ourselves that it will grow back. The demand for energy is much higher than wood products can sustain and we’ll soon look like a barren land if we try to go back to living a log cabin life style. Yet wind, methane gas, bio-diesel, ethanol, bio-mass, solar power, and an enlightened approach to recycling, could all do much to assure a high quality future for American citizens.

American utility companies ‘get it.’ They know they cannot meet future demand without participation by the masses—the citizens of America.

Flip open a magazine today and you’ll read an article about putting solar panels on your roof, tying them into the grid, and running your electric meter backwards. That is what is meant by the idea of working with the masses of U.S. citizens. There are lots of sunny roofs in America just waiting to be tapped.

Decentralization for harvesting diverse sources of alternative energy and not centralization for the sake of economy-of-scale is the way of the future in energy production. Such programs are the Democrats’ area of strength but are seen as the enemy of capitalism by some of our Republican brothers and sisters. Yet it is clear that the easy days of energy waste are ending as the value of oil rises and speculators are hastening the day when oil hits $100 per barrel faster than many of us care to admit. Some argue that accelerating alternative energy development will force prices of oil based products upwards due to less oil being pumped, yet that flies in the face of the laws of supply and demand. We don’t believe that argument although it does move the break-even point of alternative energy production upwards making it more viable to produce energy from other means than petroleum. At $0.25 per gallon, gasoline was cheaper to use than ethanol, but at a price of $2.50 per gallon for gasoline, ethanol at $0.75 per gallon is looking better and better by the day.

Suddenly leaves that fall from our trees each autumn are interesting potential sources of energy. Can they be compressed into pellets? Can the pellets be burned to power generators? And even as these questions are being asked, ordinary people are off proving the concepts and the innovation is not coming from places like MIT or the U of M, instead leadership is coming from curious people working in their basement and garage workshops and doing home based engineering.

Governor Tim Pawlenty advocates the creation of an organization to develop alternative energy in MN and we agree with him. We’d love to see such a research facility in Rochester but there are good alternative locations in MN too and creating and staffing the institution is more important than where it is sited.

Patent and copyright law was used to lock-in intellectual property in the past. But new mass communication formats are making these mechanisms less intimidating and in many countries of the world they have become totally irrelevant. Cooking, heating, transportation, agriculture, and communication all take priority over control of energy profit in much of the world today. If the means of production and distribution of energy are not freely granted access to by the public then the facilities will simply become nationalized.

Many governments and utility companies understand that but the White House is not acting as if they do when it comes to using opportunities created by global warming to launch America into the alternative energy era. A trip to our Department of Energy website will convince you that our government understands the need for R&D in alternative energy production and distribution and the means for living more energy efficiently are shown on that website, yet alternative energy is down played at the national political level by the political leadership. The White House and Congress is way out of phase with the rest of America on this subject.

America is shifting from an industrial society to an intellectual property society it is said. It’s true that smokestack industry is disappearing in America and appearing in China, India, and other third-world nations instead. It is cheap labor casuing the shift we are told. The U.S. green house gas emissions are not dropping fast enough. The Bush tax credit for SUV’s and the messages given to the public about energy consumption by his Administration is a major culprit. It’s the ethos of the oil patch Bush is exporting not the ethos of Americans who argue for conservation and alternative energy production.

Yet America is still innovating, still inventing, still developing, still trying to employ our people and we intend to continue that into the foreseeable future. To get America into a leadership position we must produce energy, including exportable energy products, and that means political leadership is needed to encourage producing alternative energy. We need to hasten the day when local lumber yards stock solar panels for example, for indeed are we that far off from zoning boards mandating the use of these in our building codes? 

The Bush vision is quite different from that of Democrats and our MN Republicans neighbors. Bush encourages more use of nuclear power, more use of traditional energy to split the hydrogen atom and of course subsidy for SUV’s, and more tax benefits for power utilities and oil companies. Bush’s vision of green is more like the color brown, as in ‘brown-outs’ and his leadership increases our problems with nuclear waste. Bush is not all wrong about nuclear production, it will still play a role in our energy equation but increasing our nuclear waste is not seen as being “green.”

America really does not need government to deal with our energy future and it can happen in spite of government. We the people can go right ahead and develop alternative energy in spite of impediments in leadership by government. The main thing that government has to offer is relief from oppressive taxation and an improvement in return on investment. However the people who harness alternative energy have something that government lusts for – supply, in an energy intensive world of increasing energy cost it’s about cost effective supply. So we need to accommodate tax credits for innovative supply solutions. That means R&D tax credits for alternative energy.

Our future for energy efficiency lies in increased decentralized production with centralized cost effective distribution. That can be done just fine and dandy using co-ops that buy energy from individuals and then sell it back to their co-op members. It can be accelerated by government with the use of tax credits to hasten recovery of investment.

Utilities can stay in the game if they dovetail with the home and business owners of America. For rural America this is a critical subject and operating wind and solar farms will soon become a major component of future farming. 

As oil costs rise, then wage demands do too. People have to pay for their energy. If we want to level off wage increases so as to be competitive with Asia then we should cap the cost of energy as a start on solving the problem of being price competitive with American labor costs. 

In the matter of alternative energy development bi-partisan politics is sorely needed. MN leads the nation on this and we encourage others to join us. We also encourage our State of MN to look at giving MN R&D tax credits for alternative energy. That is the way forward.