Energy Exchange

Clean Energy And Economic Development Are Birds Of A Feather

By Jackie Roberts / Published: January 10, 2013

Our new Clean Energy Economic Development Series highlights the successful creation of clean energy clusters in Ohio, Iowa and Colorado.  Some report highlights: 

  • Ohio experienced record investment and merger and acquisition deals in clean energy in 2010 and 2011.  Ohio also significantly increased patents in batteries, fuel cells and wind technologies, moving up in national rankings in all three areas.
  • The Metro Denver region alone had about 1500 companies and 18,000 workers in the cleantech sector in 2011, and achieved a 35 percent increase in direct employment growth since 2006.
  • Iowa leads with the second-highest installed wind capacity in the nation, and is one of only two states that receive over 20 percent of electricity from wind power.  According to the American Wind Energy Association, Iowa has attracted more major wind industry manufacturers than any other state.

While the road map to economic growth differs somewhat for each region or state, these road maps share a formula for success where policy and economic development actions work together across three fronts: (1) stimulating demand for clean energy products and services, (2) seeding innovation in clean energy solutions and (3) recruiting and supporting new firms, jobs, and workforce skills in clean energy. 

But the work is just starting, not just for Ohio, Iowa and Colorado, but for all states.  Every state needs to look to expanding clean energy policy and actions, for example:

Stimulating Demand: The American Taxpayers Relief Act (ATRA) provides critical federal support for wind energy through a production tax credit (PTC), as well as extending energy efficiency tax credits for residences and businesses.  (Under current law, the solar investment tax credit remains in effect through December 31, 2016.)  The wind tax credit helps create customers for the nearly 500 wind manufacturing facilities across the country.  Renewable Portfolio Standards (RPSs) should be strengthened (and certainly not weakened as in Michigan).  Utilities need incentives to invest in smart grid, energy efficiency and other demand-side management programs.   New policies, such as on-bill repayment (OBR), should be passed to create customers for energy efficiency while saving consumers and businesses money.

Innovation: As spending debates loom, we need to maintain investments of federal dollars in clean energy research and development (R&D).  States need to create local programs, such as Ohio’s Third Frontier which promotes technology commercialization.  Third Frontier has helped take the fuel cell industry in Ohio to a new level (measured by higher patent rankings in fuel cells and batteries). 

Recruiting & Workforce Development:  Smart grid investments create modern infrastructure and resilience that is valuable to companies.   Other recruitment tools include easy siting — Iowa City created a Wind Energy Supply Chain Campus that is “shovel-ready” for wind-related companies – and the availability of skilled labor.  Iowa Lakes Community College trains 200 students a year in construction, operations and maintenance of wind turbines using five training labs at the college.   

Clean energy policy and economic development go hand-in-hand because America needs growth sectors to reduce unemployment.  A Brookings Study of clean economy jobs found that between 2003 and 2010, the newer, “cleantech” sub-sector related to energy efficiency and renewable energy grew at a “torrid pace” across the nation.  (Wind: 14.9%, Solar Thermal: 18.4%, Solar PV: 10.7%, Fuel Cells: 10.3%)  As Ohio, Iowa and Colorado have shown, clean energy can deliver economic growth.

Posted in Renewable Energy, Washington, DC / Tagged | Read 1 Response

Wind Update: The PTC And A Christmas Day Record

By Marita Mirzatuny / Published: January 9, 2013

This commentary was originally posted on EDF’s Texas Clean Air Matters blog.

Source: Houston Chronicle

Good news came out of the fiscal cliff ordeal last week when Congress voted to extend the Production Tax Credit (PTC) for renewables, which had expired on January 1. While the 2.2 cent-per-kilowatt-hour credit has only been extended through 2013, it provides some certainty to an industry that was holding its breath. As we’ve discussed previously, while the tax breaks for the oil and gas industry are written into the permanent tax code, the credits for wind and other renewables are not. Created under the Energy Policy Act of 1992, the PTC income tax credit is allowed for the production of electricity from utility-scale wind turbines, geothermal, solar, hydropower, biomass and marine and hydrokinetic renewable energy plants.

While this extension through the year does not appear to provide a great deal of long-term certainty, my colleague Colin Meehan points out that “an important distinction with this extension is that prior to 2013, the tax credits were awarded to facilities operational by the end of 2012. The extension now applies to facilities for which construction begins by the end of 2013. As a result, this is more like a two-year extension.” Cameron Fredkin, director of project development at Cross Texas, further emphasizes the point by highlighting that “the key provision in the extension is the requirement to begin construction in 2013 versus previous one-year extensions that required wind developers to complete construction and begin operations in 2013. Wind developers in the Panhandle region in the interconnection study process would have had difficulty achieving commercial operations in 2013.”

According to the American Wind Energy Association, “America’s 75,000 workers in wind energy are celebrating over the continuation of policies expected to save up to 37,000 jobs and create far more over time, and to revive business at nearly 500 manufacturing facilities across the country. Half the American jobs in wind energy – 37,000 out of 75,000 – and hundreds of U.S. factories in the supply chain would have been at stake had the PTC been allowed to expire, according to a study by Navigant Consulting.”

As I wrote back in November, many of those projects and jobs that were on the line while Congress delayed are here in Texas. In Amarillo, Walt Hornaday, president of Ceilo Wind Energy, said the tax credit helped “dust off projects [they] had put on the shelf.” Hornaday says he is “impressed wind was in the bill with big-ticket items like Medicaid and the Farm Bill. It used to be wind wouldn’t have a chance to be included. I thought we’d be left out in the cold.” According to The Hill, “The wind industry has floated a phase-out plan for the credit as a way to cement some stability and avoid annual battles to extend the credit. Securing the extension now sets the table for those discussions.”

Andy Geissbuehler, head of Alstom’s North American wind business, a manufacturer of wind turbine equipment, believes that “the extension of the Production Tax Credit for wind power is a positive development for our company, our customers, and the many workers across the country employed directly and indirectly by the wind power industry. As an equipment supplier, we stand ready to provide the equipment that can be manufactured in our Amarillo facility to project developers across North America. We remain optimistic about the long-term market for wind power market in North America, especially now that the U.S. Production Tax Credit has been extended another year.”

One possible casualty of Congress’ stalling is the $5 million, 80,000-square-foot facility left behind by Zarges Aluminum Systems. The German company planned to produce wind tower components, such as ladders and platforms. A spokesman at the time blamed the recession and uncertainty regarding the tax credits as well as low natural gas prices for putting pressure on its customers and the company itself.

This extension comes at a time when wind set a new record in 2012 by installing 44 percent of all new electrical generating capacity in America, according to the Energy Information Administration, leading the electric sector compared with 30 percent for natural gas, and lesser amounts for coal and other sources. Here in Texas, wind set another record, providing 8,638 megawatts (MW) of power on Christmas Day, with 6,600 MW coming from West Texas wind farms and 1,600 MW coming from the Texas coast. This adds up to nearly 26 percent of the system load, which is 117 MW higher than the previous record set in November 2012.

As Kent Saathoff, vice president of grid operations and system planning at the Electric Reliability Grid of Texas (ERCOT), points out, “Unlike traditional power plants, wind power output can vary dramatically over the course of a single day, and even more so over time. With new tools and experience, our operators have learned how to harness every megawatt of power they can when the wind is blowing at high levels like this.”

Those new tools and experience are exactly why the PTC is an important component of this emerging energy sector’s ability to grow and innovate, especially as ERCOT reviews an additional 20,000 MW of wind power capacity. This is in addition to the more than 10,000 MW it already has installed, which is the highest amount in the nation.

Posted in Renewable Energy, Texas / Tagged | Read 2 Responses

Measuring Fugitive Methane Emissions

By Steven Hamburg / Published: January 4, 2013

In recent days, news reports and blog posts have highlighted the problem of fugitive methane emissions from natural gas production — leakage of a potent greenhouse gas with the potential to undermine the carbon advantage that natural gas, when combusted, holds over other fossil fuels. These news accounts, based on important studies in the Denver-Julesburg Basin of Colorado and the Uinta Basin of Utah by scientists affiliated with the National Oceanic and Atmospheric Administration (NOAA) and the University of Colorado (UC) at Boulder, have reported troubling leakage rates of 4% and 9% of total production, respectively —higher than the current Environment Protection Agency (EPA) leakage estimate of 2.3%.

While the Colorado and Utah studies offer valuable snapshots of a specific place on a specific day, neither is a systematic measurement across geographies and extended time periods  and that is what’s necessary to accurately scope the dimensions of the fugitive methane problem. For this reason, conclusions should not be drawn about total leakage based on these preliminary, localized reports. Drawing conclusions from such results would be like trying to draw an elephant after touching two small sections of the animal’s skin: the picture is unlikely to be accurate. In the coming months, ongoing work by the NOAA/UC team, as well as by Environmental Defense Fund (EDF) and other academic and industry partners, will provide a far more systematic view that will greatly increase our understanding of the fugitive methane issue, though additional studies will still be needed to fully resolve the picture. What follows is a briefing on the fugitive methane issue, including the range of measurements currently underway and the need for rigorous data collection along the entire natural gas supply chain.

Why methane leakage matters. Natural gas, which is mostly methane, burns with fewer carbon dioxide emissions than other fossil fuels. However, when uncombusted methane leaks into the atmosphere from wells, pipelines and storage facilities, it acts as a powerful greenhouse gas with enormous implications for global climate change due to its short-term potency: Over a 20-year time frame, each pound of methane is 72 times more powerful at increasing the retention of heat in the atmosphere than a pound of carbon dioxide. Based on EPA’s projections, if we could drastically reduce global emissions of short-term climate forcers such as methane and fluorinated gases over the next 20 years, we could slow the increase in net radiative forcing (heating of the atmosphere) by one third or more.

Fugitive methane emissions from natural gas production, transportation and distribution are the single largest U.S. source of short-term climate forcing gases. The EPA estimates that 2.3% of total natural gas production is lost to leakage, but this estimate, based on early 1990’s data, is sorely in need of updating. The industry claims a leakage rate of about 1.6%. Cornell University professor Robert Howarth has estimated that total fugitive emissions of 3.6 to 7.9% over the lifetime of a well.

To determine the true parameters of the problem, EDF is working with diverse academic partners including the University of Texas at Austin, the NOAA/UC scientists and dozens of industry partners on direct measurements of fugitive emissions from the U.S. natural gas supply chain. The initiative is comprised of a series of more than ten studies that will analyze emissions from the production, gathering, processing, long-distance transmission and local distribution of natural gas, and will gather data on the use of natural gas in the transportation sector. In addition to analyzing industry data, the participants are collecting field measurements at facilities across the country. The researchers leading these studies expect to submit the first of these studies for publication in February 2013, with the others to be submitted over the course of the year. Read More »

Posted in Methane, Natural Gas / Tagged , , | Read 4 Responses

“Promised Land”: A Love Letter To Longmont

By Mark Brownstein / Published: December 27, 2012

Source: The Daily Digger

Promised Land is not a movie about “fracking.” You will be sorely disappointed if you go to the theatre expecting to see lurid visuals of sinister-looking waste water ponds, plumes of diesel soot and road dust, or bucolic landscapes scarred by roads and pipes. You will see none of that.

Promised Land is a movie about what happens before the drilling rigs and man camps rumble into town. It is the story of a rural community, proud but poor, struggling to reconcile itself with an enormous economic opportunity that comes at an enormous cost.

And, despite what you may have read in the blogosphere, it is not reflexively anti-natural gas. The movie actually does a fairly decent job of presenting all sides of the shale gas development debate. I was intrigued to read a Pittsburgh Post-Gazette article from this past June where John Krasinski, a star in the film and co-author of the screenplay, revealed that he originally conceived the story as a community facing major wind farm development. Krasinski made the switch because natural gas development is more topical, and more visceral, than wind development.  His primary point in making the film was to explore what happens when money and power come to a rural community that has neither.

I suspect the reason why the natural gas industry is so on edge about this movie is because the plot device which propels the story forward is a community referendum on whether development will be allowed within its borders. This is exactly the situation the industry faces in Longmont, Colorado, and to the same or similar degree in many other communities around the country.

The central question the movie poses is whether any amount of potential future prosperity is worth sacrificing a pastoral way of life that has defined a community for generations. Worry over polluted water is part of what fuels the townspeople’s anxiety over what to do, but it is far from their only concern.

Does a community have the right to regulate or prohibit industrial development in its borders?  It’s a tricky legal question currently playing out in Colorado and elsewhere around the country, and there is no simple answer.

One thing is certain: the natural gas industry must be forthcoming and honest about the risks that unconventional oil and gas development create, proactive in taking the steps necessary to minimize those risks, and willing to collect and publicly disclose the data necessary to enable communities to evaluate for themselves whether their health and environment are being fully protected. Many people distrust whether industry can develop shale gas safely, and it’s understandable why they are concerned – especially given recent media reports about industry hiding many of the chemicals they use behind questionable “trade secret” claims.  It appears that even the most basic steps toward greater transparency are grudging and incomplete.

In Promised Land, citizens are repeatedly lied to with predictable results. In real life, the natural gas industry has the ability to write a different story through the actions it takes to address community concerns, measure performance and disclose results. That’s a story I want to see.

Posted in Natural Gas / Tagged , | Read 4 Responses

Don’t Walk Away From Clean Energy Research & Development

By Jackie Roberts / Published: December 20, 2012

“The changing energy landscape and the resulting trade opportunities it affords will continue to provide consumers with more choices, more value, more wealth and more good jobs.” – ExxonMobil Energy Outlook, 12/12/12

I agree with Exxon.

We are moving closer to energy independence. But, even as the U.S. is facing a boom in natural gas, the only way we’ll reach our goal is if we don’t shortchange alternative energy research and development.  Changing the energy landscape must include rapid advances in zero carbon energy technologies, for very good reasons that are in danger of being overlooked in the fiscal cliff negotiations.

First, despite its great promise, we should remember that important questions remain about the health and environmental impacts of natural gas operations. The extraction and distribution of natural gas can result in the release of methane – the main ingredient in natural gas and a greenhouse gas many times more potent than carbon dioxide.  Due to the many possible escape routes for methane into the atmosphere, the true carbon footprint of natural gas is uncertain right now, and we need to diversify our energy portfolio and avoid getting locked into an over-reliance on one energy source.

Second, micro-grids will be increasingly important in a world with more storms, flooding, and other “weird weather.” We must be prepared for that scenario. Alternative energy and smart grid solutions can be more resilient, if designed properly. The current model of a large, centralized energy plant is increasingly problematic.

Third, alternative energy offers enormous potential for economic development, exports, and even savings on energy bills. As just one example, look at the Department of Energy’s investments into fuel cells.  According to the Clean Energy Patent Growth Index, more clean energy patents are associated with fuel cell technologies than with any other clean energy technology, with over 950 fuel cell patents issued in 2011. Fuel cell durability has doubled, expensive platinum content has been reduced by a factor of five, and the cost of fuel cells has fallen 80% since 2002. With DOE support, 36 commercial technologies have entered the global market as of this past fall.

These advances can benefit communities across the country.  Tulare, California invested in molten carbonate fuel cells for its wastewater treatment plant; this plant now produces about 45% of the electricity needed to run the plant which translates into a savings of more than $1 million per year (not to mention 6,200 tons less CO2 per year).  With over 16,500 wastewater treatment plants in the U.S., communities could find enormous savings and build more resilience — if access to other fuel source is interrupted or electricity goes down, the plant can continue to partially operate and provide critical services to the community.

Talk about more choices and more value for communities, and more wealth and more good jobs for suppliers of fuel cells.

Posted in Renewable Energy, Washington, DC / Read 1 Response

More evidence emerges that California’s Low Carbon Fuel Standard is a winning strategy and oil industry cost estimates are full of holes

By Tim O'Connor / Published: December 14, 2012

California drivers and policy makers should be breathing an extra sigh of relief this week with the release of a new study by the California Electric Transportation Coalition (CalETC). The study, an evaluation of electricity use within the state’s Low Carbon Fuel Standard (LCFS), clearly shows that electrification benefits are on the horizon and oil industry funded analyses have yet again over-dramatized the difficulty of meeting one of the state’s landmark environmental laws.

In the study, CalETC shows that using electric passenger vehicles (both battery electric and plug-in hybrid vehicles), and electric off-road equipment (forklifts and trains), has the potential to generate a significant amount of creditable greenhouse gas reductions in the LCFS.

According to CalETC, three electrification solutions can cut up to 4 million tons of greenhouse gases per year by the year 2020, a significant portion of the total reductions required under the law. What’s more, since electricity as a fuel source costs one to two dollars per equivalent gallon less than gas and diesel, once the vehicles are on the roads and rails, the LCFS can actually save drivers a significant amount of money at the pump.

Prior industry reports on the LCFS like the one funded by the Western States Petroleum Association have lamented that compliance with the LCFS isn’t possible without oil companies going out of business or charging consumers significantly more at the pump. However, a plain reading of oil company cost analyses shows they purposely avoid consideration of the benefits of widespread deployment of alternative electric vehicles (EVs) in their research.

Not the first, probably not the last

Of course, this isn’t the first time industry cost estimates of environmental regulations, and specifically the LCFS, have emerged as highly suspect. For example, in September 2012, the non-partisan business group Environmental Entrepreneurs (E2) published a report showing how well positioned the US biofuel industry is to meet demand under the California standard – a direct counterpoint to recent oil industry estimates that say biofuels simply aren’t available.

In that E2 report, researchers found that 1.6 to 2.6 billion gallons of advanced biofuel will likely be produced in 2015, with increasing volumes thereafter, meaning LCFS compliance can be achieved solely through blending low carbon biofuels in the short, medium, and potentially long term. This blending will allow for compliance over and above what the electrification opportunities provide.

Similarly, for natural gas vehicles, the industry modeling of compliance scenarios assumes natural gas technologies won’t be sufficiently ready for widespread consumer use to be counted as a legitimate LCFS compliance opportunity. However, consistently low natural gas prices along with recent investments and R&D from companies like Chesapeake Energy Corp., Clean Energy, General Electric, Whirlpool and 3M have all been aimed at increasing the availability of natural gas as a fuel for passenger vehicles and heavy duty trucks.

In yet another analysis of LCFS compliance, it was found that “significant inaccuracies and faulty assumptions” led to the results of oil industry funded studies.

A first of its kind strategy whose time has come

California’s first-of-its-kind LCFS strategy for cutting climate change pollution from transportation fuel is designed to work alongside the state’s landmark cap-and-trade regulation between now and the year 2020, facilitating the transition of California’s transportation sector towards one which is lower carbon and is powered from an array of resources.

As Elisabeth Brinton, head of the Sacramento Municipal Utility District’s retail business, so aptly puts it, the California LCFS is “a great idea whose time has come.”

For more information about entities that support the California LCFS, (read here).

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