Energy Exchange

New EPA/DOT Vehicle Standards – The Reality Behind The ‘Job Killing’ Sound Bite

By Jackie Roberts / Published: November 22, 2011

Last week, I wrote about energy efficiency’s role in greenhouse gas standards for power plants and the reality behind the “Job killing EPA regulations” sound-bite.  The recently announced new fuel economy and greenhouse gas standards for light vehicles provides further evidence that the reality of Environmental Protection Agency (EPA) regulations is job creation, not job destruction.

According to the government, the “proposed program for model year 2017-2025 passenger cars and trucks is expected catalyze demand for currently-available, innovative technologies including advanced gasoline engines and transmissions, vehicle weight reduction, lower tire rolling resistance, improvements in aerodynamics, diesel engines, more efficient accessories, and improvements in air conditioning systems. The standards should also spur manufacturers to increasingly explore electric technologies such as start/stop, hybrids, plug-in hybrids, and electric vehicles [and] … includes a number of incentive programs to encourage early adoption and introduction of “game changing” advanced technologies, such as hybridization for pickup trucks.”

U.S. auto companies are already investing in these new technologies as the best bet to gain market share in the world economy.  The Energy Department’s battery program (an investment of $2.4 billion in 48 advanced battery and electric drive projects) is ensuring that the U.S. supply chain is ready so that we don’t just buy batteries from Japan and others.  According to the Department of Energy (DOE), the United States is on track to achieve a 40% share of global capacity to produce lithium-ion batteries for vehicles by 2015.  An assessment of the battery value chain by Duke University shows at least 50 U.S.-based firms are involved to date, with 119 locations in 27 states performing manufacturing and research and development (R&D). 

We have leading material science experts in Dow, Dupont and 3M that can help design new composite materials to help meet the need for less weight.  The 70,000 tire workers would love to have a chance to make the most efficient, low rolling resistant tires- and then sell those tires to the rest of the world.  A second value chain assessment of hybrid vehicle technology shows U.S. firms dominating the hybrid market for medium and heavy-duty trucks, putting the U.S. in a great position to develop hybrid light duty pick-up trucks. 

At every turn, there are job creation possibilities.  What the EPA and Department of Transportation (DOT) proposal does is ensure that the market for efficient vehicles is a strong and vibrant market, one that grows jobs at every turn.  Furthermore, ensuring that U.S. firms have enough customers today – the key ingredient to growing a healthy business – is the only way to compete in the global markets of tomorrow.   EPA regulations maintain auto jobs and create new jobs in sectors such as battery manufacturing.  Now, the new battery plant by A123 Systems lithium ion in Livonia, Michigan won’t have to fire the 300 new workers it just hired. 

For consumers, these improvements would save an average of up to $6,600 in fuel costs over the lifetime of a model year 2025 vehicle for a net lifetime savings of $4,400 after factoring in related increases in vehicle cost. Overall, the net benefit to society from this rule would total more than $420 billion over the lifetime of the vehicles sold in model year 2017-2025.  No lost jobs here.

In sum, this is what “job killing EPA regulations” look like in the real-world.

Posted in Washington, DC / Read 1 Response

Energy Efficiency Investments – The Reality Behind The ‘Job Killing’ Sound Bite

By Jackie Roberts / Published: November 15, 2011

In letters to the President delivered yesterday, business groups as diverse as the Industrial Energy Consumers of America (representing major manufacturing sectors such as cement, paper, chemicals and steel), the Ohio Business Council for a Clean Economy, Ingersoll Rand and Recycled Energy Development all agree and are asking for the same  thing: EPA should make energy efficiency front and center as it adopts regulations to set greenhouse gas standards for power plants under the Clean Air Act. 

Given the existence of many positive return-on-investment energy efficiency options, including energy efficiency as a compliance strategy, is a no-brainer. In fact, McKinsey & Company’s Unlocking Energy Efficiency in the U.S. Economy shows the U.S. industrial sector alone can reduce annual energy consumption 18 percent by 2020 and save more than $442 billion in energy costs by investing in energy-efficiency opportunities that quickly pay for themselves (investments that have a positive NPV, or net present value). In the process, they also reduce greenhouse gases, which is what EPA wants. 

But energy efficiency goes beyond a cheap compliance strategy.  It pays returns in perpetuity:  Imagine if several years down the road when these investments have paid for themselves, this $442 billion savings is made available for investments in U.S. manufacturing. The job creation potential then takes off.  At conservative rates of four jobs per million dollars invested, that would create an estimated 1.75 million jobs.  

Typically, facilities can find 20-30 percent in energy efficiency opportunities that pay for themselves in less than two years. For example, EDF recently helped the IUE-CWA union conduct a three day “Treasure Hunt” to search for energy-saving opportunities at the Cobasys advanced battery manufacturing plant in Springboro, Ohio. Even at this state-of-the-art facility built in 2003, the team identified savings that would cut the plant’s energy bill by 18.5 percent and emissions of greenhouse gases (carbon) by 19 percent.

It’s hard to see how a regulation that asks facilities to implement these savings would “kill jobs” when the investments pay  back in less than two years, and provide the company with benefits from  cost savings in perpetuity.          

Once again, a careful look at how companies can comply with EPA regulations shows the “jobs killing” rhetoric to be simply scaremongering. Energy efficiency investments create 8.9 to 11.9 jobs for every $1 million in spending. (Spending on fossil fuels, by contrast, generates 3.7 jobs (oil and gas) to 4.9 (coal) jobs per $1 million in spending.)  So, compliance isn’t a burden and the path forward is job intensive. 

It’s a nice added benefit that energy efficiency jobs can be found across the U.S. and across industry sectors.  For example, the Industrial Energy Consumers of America asked EPA to place special emphasis on industrial cogeneration, an energy efficiency solution also known as ‘combined heat and power’ or ‘waste heat recovery’. A value chain assessment of this solution by Duke University shows that it will increase demand for large equipment such as generators and turbines, all made in the U.S., and lots of new steel piping, good news for the steelworkers.

In sum, a dollar spent on energy efficiency provides triple returns: industrial facilities and building owners quickly see their investments generating annual cost savings (just 2-3 years out), power plants don’t need to build new capacity and raise rates to pay for it, and all the firms across the U.S. that supply energy efficiency solutions see new customers.  And, in the process, CEOs can also check off that “compliance with EPA regulation” box because greenhouse gas emissions will drop significantly.  “Job killing EPA regulations” is a great sound-bite but the experience of firms in the real-world doesn’t support the rhetoric.

Posted in EDF Climate Corps, Energy Efficiency, Jobs / Read 4 Responses

2011 World Energy Outlook Implications

By Drew Nelson / Published: November 10, 2011

By: Drew Nelson, EDF’s Clean Energy Project Manager

Source: IEA

Yesterday the International Energy Agency (IEA) released its 2011 World Energy Outlook.  The report models expected demand for energy in three scenarios: a business as usual scenario, an aggressive policy scenario to cut greenhouse gas emissions and a middle of the road scenario.  As a result of this analysis, the report lays out some pretty eye-catching conclusions.  The conclusion that will likely receive the most press attention is summed up by the head of the IEA, who states:

“[by] 2015 over 90% of the permissible energy sector emissions [to avoid dangerous climate change]… will already be locked in [due to investments in carbon-based energy sources].  By 2017, 100%. We can still act in time to preserve a plausible path to a sustainable energy future; but each year the necessary measures get progressively tougher and viciously more expensive.”

In other words, we only have five years to make investments in the energy sector that avoid locking us into a future of dangerous climate change.  Any delay will be more expensive than taking action today.  Some of the best scientists, economists, and business officials who drafted and provided comments on this report are clear – NOW is the time to make the urgent investments needed in clean technologies like wind and solar as well as smart-grid technologies to deliver that clean energy to consumers.

However, another conclusion of the report caught our eye here in EDF’s energy program.  For the scenarios that were modeled, natural gas was “the only fossil fuel for which demand rises in all three” scenarios.  This highlights the important role that natural gas will play as an energy source no matter how aggressive policy-makers are in reducing greenhouse gas emissions.  Natural gas use will grow because deposits of “unconventional” sources of gas, like shale gas, are being discovered and drilled in almost every part of the globe.  The report finds that the share of unconventional gas production in North America is projected to rise so that there will be more “unconventional” gas in North America than “conventional.” 

This has broad implications.  Increased shale gas means greater energy security and jobs, but also potential increased impacts in the backyards of some of our most populous states.  There are significant public concerns with shale gas drilling: water quality, air pollution, noise, wildlife impacts and increased traffic are some of the most common.  New data is also showing that current methane gas leakage rates are cutting into the previously accepted greenhouse gas benefits of natural gas.

Yet many oil and gas industry representatives, rather than working with the public, are dismissive of these concerns.  At an industry gathering last week one representative referred to critics of shale gas as an “insurgency.”  This comes on the heels of a gas company announcing that it has employed former military officials who specialize in “psychological operations” in order to help “convince” communities of the merits of shale gas.  Many companies continue to refuse disclosing the chemicals they are pumping into the earth.  These actions do not build trust or goodwill and could endanger further growth of shale gas.  The IEA report states that growth in output of natural gas will “depend on the gas industry dealing successfully with the environmental challenges: a golden age of gas will require golden standards for production.” 

At EDF we are working to develop those golden standards and ensure that shale gas is developed the right way in order to maximize the benefits of shale gas without sacrificing public health, environmental protection and safety.

Posted in Natural Gas / Comments are closed

DOE Roadmap Toward Cleaner Natural Gas Development – Sign Reads “Still Under Construction”

By Mark Brownstein / Published: November 10, 2011

Today the Department of Energy’s Shale Gas Production Subcommittee released a final report that follows up on its earlier recommendations for increased oversight and transparency, assesses their implementation to date and lays out a roadmap for improvement.  The report proposes a focused set of steps for strengthening environmental management in the shale gas industry and developing this abundant energy source in ways that safeguard public health and the environment.  

The report is a call to action, stating “Americans deserve assurance that the full economic, environmental and energy security benefits of shale gas development will be realized without sacrificing public health, environmental protection and safety” and the Subcommittee believes that these recommendations, if implemented, would make real progress toward meeting these goals.  Time is of the essence, though, as the ramifications of inaction pose more risk every day.  

While much more remains to be done to ensure shale gas development is safe for people and the environment,  important progress is currently underway on federal, state and local levels.  The EPA, for example, has proposed rules to reduce air pollution from oil and gas development activities that, while needing improvement, are a critical first step.  Likewise, we’ve seen that states can move very quickly to update their oil and gas rules when they have a mind to.  For example, in only the past eleven months Arkansas, Texas, Montana and Louisiana have adopted requirements mandating the disclosure of chemicals found in hydraulic fracturing fluid.  And Colorado, New York, New Mexico and North Dakota have recently proposed requirements relating to fracturing fluid chemical disclosure.  In Pennsylvania, West Virginia and Ohio, legislatures have passed, or are in the process of debating, more stringent regulations on the exploration and production of natural gas.  

EDF is actively engaged across the country to further the safety and environmental protection of our natural resources wherever the production of natural gas is occurring.  It’s a long, cross-country road trip on highways still under construction.  We’re prepared for the long haul.

Posted in Natural Gas, Washington, DC / Comments are closed

Shale Gas Reserves Could Reignite U.S. Economy

By Drew Nelson / Published: November 4, 2011

By: Drew Nelson, EDF’s Clean Energy Project Manager

Yesterday, Bloomberg News produced a comprehensive article on shale gas and the hydraulic fracturing process used to tap it.  The article provides some interesting history on how hydraulic fracturing has gone from a fringe technology practiced by only a few innovators to a widespread technology that, along with horizontal drilling, led to the current shale gas boom.  It also highlights the fact that expanding U.S. shale gas production will play an important role in the U.S. economy and provide potential wins to local economies, local air quality, and the global climate system.  However, as EDF President Fred Krupp points out in the article, these wins will only materialize IF the U.S. produces shale gas “in the right way.” 

The article highlights EDF’s role on the front lines of ensuring that shale gas is produced in the right way, which we believe should include, among others:

– Comprehensive disclosure of hydraulic fracturing chemicals (significantly, a Chesapeake Energy spokesman notes in the story that industry’s failure to disclose that information has led to a lack of trust by the public and slowed down industry efforts to expand drilling);
– Modernization of rules for well construction and operation;
– Systems-based management of wastes and water;
– State and national standards for improving air quality and reducing climate impacts; and
– Minimization of land use and community impacts from natural gas development.

It is important for the natural gas industry to realize that business as usual isn’t going to cut it and EDF will continue to work with responsible gas companies to get the rules right.  Stay tuned.

Posted in Natural Gas / Comments are closed

Envision Charlotte is Making the Queen City a Green City

By Kristen Coracini / Published: November 1, 2011

Charlotte is North Carolina’s largest city, nicknamed the “Queen City” after Charlotte of Mecklenburg-Strelitz, queen-consort of King George III (okay, I’ll admit that I had to look that up).  I grew up nearby and over the years, I’ve watched in awe as the city has grown both upward, with high-rises housing the corporate headquarters of Bank of America, Wells Fargo and Duke Energy, and outward, as the suburbs expand to accommodate the ever-growing population. 

Today, efforts are underway to make the Queen City a green city, as part of a major sustainability initiative announced last year.  Envision Charlotte was launched in September 2010 as part of the Clinton Global Initiative; partners include Duke Energy, Charlotte Center City Partners, the City of Charlotte, and many other corporate citizens.  This unique public-private partnership comprises volunteers from 28 different organizations, including EDF, that have come together to make Charlotte the most sustainable urban core in the nation.  The program focuses on four pillars to achieve this goal:

  1. energy efficiency,
  2. air quality,
  3. water reduction, and
  4. waste reduction. 

Last week, my colleague Michael Regan and I attended a public event in Uptown Charlotte to celebrate the installation of interactive displays, provided by Cisco, in almost 70 buildings.  These displays show how much energy is being consumed at any given moment in the city’s center, and provide tips on how to reduce that load.  The idea is to provide information to building workers and visitors on what they as individuals and collectively can do to use energy more wisely, and at no cost. 

It’s estimated that simple behavior changes, like turning off lights and computer monitors when not in use, can reduce 5% of the energy being used in the participating buildings. 

That’s impressive, but the overall energy goal for Envision Charlotte is more ambitious: to reduce energy by 20% in five years.  And that will require investments in building energy management systems, smart grid technologies and aggressive education efforts.  Making these investments will ultimately allow companies to save money by reducing what they spend on energy. 

And making these energy-saving improvements will save money for taxpayers too, since several local government buildings are participating in Envision Charlotte. 

EDF has contributed to this effort, by providing two Climate Corps fellows to Mecklenburg County (where Charlotte is located) this summer to identify low- and no-cost energy savings in county-owned buildings.  In reviewing three buildings, they found measures that could save the county more than $500,000 in five years. Imagine the impact of identifying and implementing similar energy efficiency measures in all city and county owned buildings! 

EDF will continue working with Envision Charlotte to make the energy savings goal a reality.  I have served for the past year on the Envision Charlotte steering committee, which is now a board of directors for the newly created non-profit entity.  And we will document the actions taken so that they can be replicated in other communities around the country.  Stay tuned!

Posted in Climate, EDF Climate Corps, Energy Efficiency, North Carolina / Tagged | Comments are closed