Rediscovering the Will to Change: A New Energy Economy

Summary.  The growth of the U.S. from an agricultural society to an industrial power was driven in important ways by ambition, a positive attitude, and an ability to see opportunities and develop them.  Examples of changes that contributed to this growth include new means of transportation and communication.

As our economy grew and matured, however, unforeseen harmful effects of some activities became apparent.  Acid rain from electric generation was identified as the cause of dying forests.  Synthetic refrigerants were flagged as the cause of the depletion of ozone in the stratosphere.  Increased carbon dioxide from burning fossil fuels for energy was marked as the cause of global warming and its harms. The industries in question ignored the science behind these findings, and fought the need to change their business activities.

Global warming remains an unresolved problem.  Because of the vast size of the fossil fuel industry and the major changes already brought about by global warming it needs to abandon its resistance to change.  Its business model of providing energy for a growing and developing world remains, but needs to switch to carbon-free sources and to develop new technologies.  This new model will still yield profits for the industry, and continue to provide jobs for the economy.

 

American growth.  Throughout much of our history America has been a country marked by people bent on succeeding.  An entrepreneurial spirit drove the development and widespread adoption of new devices and new technologies that dramatically advanced our economic growth and improved living conditions for our population.

Railroads.  For millenia news and articles of commerce could travel no faster than men, or their animals, could carry htem.  The advent of the industrial revolution in the early nineteenth century, however, brought coal-powered transportation; railroads crossed the landscape faster and further than had been possible earlier.  This dramatically accelerated commerce and the exchange of technologies among populations separated by large distances, improving the lives of the participants.   Coal was also the fuel used in the growing iron and steel industry that permitted forging the rails, building the bridges, and providing the skeletons for new skyscrapers rising in cities.  The force behind all this growth was the vision of the industrialists and architects who created these enterprises and buildings.

Automobiles.  Human ambitions also led to the development of the gasoline engine and its use to power individual transportation, the automobile.  This depended on newly discovered sources of liquid fuels, the petroleum deposits in Pennsylvania, Oklahoma, and elsewhere.  Liquid fuels provided vastly improved convenience and independence to the consuming public, as well as to the military.  The foresight and ambition driving this change is another example of the positive attitudes of the entrepreneurs behind this growth. 

This spirit gave rise to America's exceptional industrial expansion, helped it survive the Great Depression of the 1930's, and was the spirit invoked by President Roosevelt and our military leaders to fight the war that ultimately defeated the Axis powers. 

Electronics.  A final example is drawn from the electronics industry.  Over the course of the 20th century electronics moved completely from analog to digital circuitry based on solid state transistors.  This transformation likewise was driven by forward-looking scientists and entrepreneurs.  Its growth was highly dependent on creativity and resilience, since the pace of technological advance, and therefore the competition in the industry, was very intensive.

Optimism.  These examples are cited to emphasize the "can-do" enthusiasm that has marked the growth of America over its history.   Much of our expansion was further promoted by favorable state and congressional action.  The Homestead Act drew Americans with a vision to move west and spread roots in a new setting.  Railroad expansion likewise was fostered by supportive laws.  Recovery from the Great Depression and fighting the Second World War depended crucially on the cooperation between the president and Congress.

Resisting change: Acid rain.  In more recent decades, however, interest groups have opposed the need, based on scientific findings, for changes in their operations.  In the 1970s forests in the American northeast and southern Canada began dying mysteriously.  Lakes and rivers had massive fish die-offs.  Scientists eventually traced the cause to the presence of sulfur dioxide and nitrogen oxides, strong acids when they combine with moisture, in the exhaust gas from coal-burning power plants.  The plumes from these plants became windborne and carried the acids many hundreds of miles from their sources.  The acidic moisture fell to the ground whenever it rained.  The acidity became so severe that forests could no longer tolerate it and died in vast swaths.  The same phenomenon occurred in Europe.

The solution to this malady lay in desulfurizing the exhaust gases of the offending power plants or fuel switching to low sulfur fuels.  The U. S. Environmental Protection Agency (EPA) imposed limits on how much sulfur dioxide and nitrogen oxides could be emitted by the power plants.  The power companies objected vigorously to what they protested would be the great expense required to implement this remedy. 

As of 2014 EPA projected that acid emissions would fall between 54 and more than 70% from 2005 levels, with estimated health savings of $120 to $280 billion per year . The measures have been effective, as the acid rain problem has diminished significantly in recent years.

 

Depletion in the ozone content of the upper atmosphere.  Ozone, a molecule consisting of three oxygen atoms, forms by the action of sunlight on the more common oxygen molecule, consisting of two oxygen atoms.  Depletion of ozone over Antarctica was first detected in the 1980's, and grew worse each year during that region's summer.  Ozone is important because it screens out the sun's ultraviolet (UV) rays, whereas the oxygen molecule does not.  Penetration of UV increases the occurrence of skin cancer and promotes cataracts in the eye lens.

Atmospheric scientists Mario Molina, F. Sherwood Rowland and Paul Crutzen showed that man-made chlorofluorocarbons (CFCs), used in aerosol spray cans, air conditioners and refrigerators, can cause the loss of ozone when combined with the action of sunlight.  (They were awarded the Nobel Prize for this work in 1995.)  The scientists strongly recommended phasing out use of CFCs for refrigeration. 

Companies in the U. S. that made CFC's, such as DuPont and Pennwalt; chemical manufacturers in Europe; and makers of aerosol spray cans mounted intense public relations campaigns questioning the science connecting CFCs with ozone loss.  They warned of massive economic loss if they were required to halt production.  Major constraints on CFC use came with the Montreal Protocol, an agreement under the United Nations (U. N.) in 1987, which U. S. President Ronald Reagan agreed to.  It called for phasing out the use of CFCs.  By 2016, Susan Solomon (who had helped identify the problem at the time of Montreal Protocol) and coworkers reported the ozone extent over Antarctica is starting to increase, decades after the Protocol was agreed to.  They were able to link the increase to lower levels of ozone-depleting chemicals in the stratosphere.

Global warming. Ever since the beginning of the industrial revolution, economic progress and enhanced living standards have relied on the ready availability of energy sources, primarily fossil fuels.  Worldwide consumption of energy continues to increase, driven especially by policies promoting economic growth in the developing world.  As of 2010, providing energy to the world’s population accounted for about 8% of global economic activity, of which about US$4.4 trillion was for the fossil fuel share.  Yet scientists as long ago as the nineteenth century recognized that carbon dioxide (CO₂), the combustion product obtained when fossil fuels are burned, is a greenhouse gas leading to global warming. 

In recent decades scientists from around the world have warned that the growing accumulation of CO₂ in the atmosphere from human fuel use would have serious harmful effects on the earth’s living systems.  They have pointed out in a succession of reports, beginning in 1990, that the sooner we agree to limit fossil fuel use, the easier and more effective the abatement measures would be. 

In the United States, the economic power of the fossil fuel industry and the political power of naysayers have been directed against the predictions of harm from the scientific community.  Dr. James Hansen, a renowned climate scientist, had been warning of the effects of global warming for many years.  His concerns were suppressed by the administration of President George W. Bush, made possible since Hansen, employed by the National Aeronautics and Space Administration, was a government employee (James Hansen, “Storms of my Grandchildren”, Bloomsbury, 2009).  Fossil fuel interests have mounted an ongoing campaign to plant seeds of doubt among the public concerning man-made global warming (Naomi Oreskes and Erik. M. Conway, “Merchants of Doubt”, Bloomsbury Press, 2010).  U. S. Senator James Inhofe has published the book “The Greatest Hoax: How the Global Warming Controversy Threatens Your Future” (WND Books, 2012).  Scientists at Exxon Mobil in the 1970’s and 1980’s published research addressing the global warming issue.  At the time they recognized “Exxon's … ethical credo on honesty and integrity."  Yet by the late 1990’s, when the U. N.-sponsored Kyoto Protocol to limit further warming was being negotiated, the company reversed its policy and sought to raise doubts about the scientific basis of man-made global warming.

Discussion
 
The growth of the United States, and its westward expansion, in the nineteenth and early twentieth centuries is a reflection of the optimistic, “can-do” spirit that pervaded the country in those periods.  Much of this growth depended on exploitation of new scientific, engineering and technological advances by enterprises in both the private and public realms.   

In more recent times as technology has expanded, however, unforeseen harmful effects of byproducts from the use of these technologies have become apparent.  The cases described above are examples of how commercial and political interests coalesced to refuse to accept scientific realities and to reject the remedies required.  Acid rain arose from the trace levels of sulfur present in coal and oil, while the heat of combustion converted the nitrogen of the air into acidic nitrogen oxides.  Depletion of stratospheric ozone is due to the diffusion to the stratosphere of trace amounts of man-made refrigerants.  The industries in question, electric power generation and chemical manufacturers, opposed implementing the changes needed to address the problems even in the face of compelling scientific evidence.  In the end the technological fixes for these two effects were not excessive, and remedies were put in place.

Refusal to accept the scientific validity of man-made global warming is the most profound example of the “won’t change” mentality that replaced the “can-do” attitude of American growth.  Because of the fundamental importance of the global energy industry in the world’s economy, the actions of this sector have major effects on our planet’s environmental wellbeing.  Exxon Mobil’s internal research, for example, set out the compelling need for energy companies to modify their activities and limit production of fossil fuels.  Yet by the time that the Kyoto Protocol was issued in 1997, Exxon Mobil changed its policy to one of creating doubt.  In general the world’s fossil fuel companies opposed changing their operations.  Political forces also resisted change.  Whereas Europe and most of the developed countries ratified the Protocol, the U. S. never did.  Canada and Australia, which initially agreed on policies to limit CO₂ emissions, later changed course and withdrew from the Protocol. 

 

Conclusion

In the U. S. the “can-do” mindset that inspired its early expansion and economic growth has, in the cases examined here, been replaced by a “won’t change” operating principle.  This is especially important for our planet’s wellbeing, in the global warming case.  Producing carbon-based fuels comprises an important part of the world’s gross economic product, resulting in emission of massive amounts of CO₂, a greenhouse gas. 

The world’s energy demand will continue to grow as economies develop and populations increase.  The U. N.-sponsored Paris Agreement of December 2015 recognizes the absolute necessity for worldwide change in energy production.

The present situation calls for the world’s fossil fuel companies to develop new business models. Fulfilling the growing worldwide demand for energy means that there is profit to be made in this industry.  That demand must be provided, however, by technologies that do not emit CO₂.  We have to change to an energy economy that emits near-zero carbon in order to minimize further warming.  New technologies will have to be developed.  The energy industry has to abandon its fossil fuel-driven business model, and create the vast infrastructure for provision of energy from renewable sources. It has to give up its present “won’t change” mindset and adopt again a “can-do” attitude.

 
© 2016 Henry Auer

Connecticut’s First Wind Farm and the Growth of Wind Energy

Summary: The author recently participated in a tour of Connecticut’s first wind farm.  Operation of the wind farm represents the success of its campaign to gain permitting and financing, and to complete construction.

Wind generation capacity has grown dramatically, but erratically, in the U. S. in response to the cyclical operation or expiration of a series of production tax credits.  The current credit, in place for five years until the end of 2019, will provide a more stable investment and business environment for wind development.

The Department of Energy foresees major expansion of wind energy by 2030, and even more by 2050.  Wind could provide a significant fraction of U. S. demand for electricity by then.

 

On a beautiful sunny day at the end of June 2016 I joined a group of interested citizens on an organized tour of the state of Connecticut’s first wind farm.  Our guide was Gregory Zupkus, the CEO of BNE Energy, the business venture that built the farm.

At present, BNE Energy’s farm consists of two wind turbines.  Planning for a third turbine is underway.  The towers to the hub that houses the generation equipment are about 330 feet (100 m) high, and the blades are about 135 feet (41 m) long.  Each turbine, made by General Electric, can produce 2.85 MW of electricity.  The scale of this equipment is truly inspiring, as can be seen below.

 

BNE Energy wind turbine.  Some of our colleagues are visible to the right of the base.  The lower inset shows the base of the turbine, held by closely spaced rods.  The rods descend a few feet then splay out horizontally like the roots of a tree; the entire assembly is embedded in concrete.

Photos: Henry Auer 

 

 

The BNE Energy wind farm project took many years to come to fruition, including a three-year battle with local opponents of the project.  They were concerned, among other factors, about noise pollution from the rotating rotors.  This aspect of the process was concluded by a favorable decision from the Connecticut Supreme Court in 2014, allowing the project to continue. 

 

There was also opposition from activists concerned about collisions between the rotors and birds in flight.  During our visit Mr.Zupkus pointed out a person crisscrossing the meadow beneath one of the turbines.  He said this was an environmentalist looking for dead birds.  He pointed out that from the time the wind farm began producing electricity in October 2015 until our visit only two dead birds had been found by such searches.

 

The energy from this wind farm enters the local electricity grid via a feeder line that is only 1 ½ miles (2.4 km) long, a very short distance indeed.  This helped keep the cost of the project low.  The amount of electricity is enough to provide the power for the residents of nearby towns.

 

The project’s cost is US$23 million.  It benefited from a U. S. law providing a production tax credit (i.e., a credit during operation dependent on the amount of electric energy provided).  The financing was seeded by a loan from the Connecticut Green Bank, a state agency intended to stimulate public-private financing in fields that the state seeks to promote.  With that stimulus, and a long term power purchase agreement from the local electric utility company, financing was obtained from three regional commercial banks.  The loans differ in their details, but Mr. Zupkus indicated they would be redeemed at various times, the earliest being five years.  Once paid off, BNE Energy will be earning profits.

 

Developing wind energy creates new jobs.  During construction the contractors employed several dozen high-skilled workers.  Furthermore, the project promotes secondary labor demand in the fabrication of the various parts of the wind turbine installations such as steel working, manufacturing the turbine blades, and electronic controls for operation.  During operation there are far fewer job needs, as the day-to-day functioning of the turbines is largely controlled electronically.  Expansion of wind energy will obviously create many more job opportunities in the future.

 

Discussion

 

Wind Energy in the U. S.  The installed wind generation capability in the U. S. has grown dramatically, albeit by fits and starts, in the past 15 years.  This is seen in the following graphic, which shows the annual additions of new wind capacity, and the total cumulative generation capacity from 1999 to 2015:

Annual and cumulative wind-powered generation capacity.  DEEP BLUE, cumulative capacity.  AQUA and MULTI-COLORED bars, generation capacity added each year.  The arrows show dates of expiration of federal production tax credits (see text).

Source: Adapted from the American Wind Energy Association, http://www.awea.org/Resources/Content.aspx?ItemNumber=5059.

 

 

Production Tax Credit.  It is seen that the annual capacity additions (light-colored bars) surge to time-dependent maxima, than fall precipitously the following year.  These are indicated by the arrows in the graphic above, and arise as follows.  A federal production tax was enacted in 1992 but allowed to expire in December 1999; after six months it was reinstated until December 2001; after 3 months it was reenacted until December 2003; after 10 months it was again reinstated until 2009, at which time wind businesses could choose between three taxing alternatives until 2012 when the production tax credit again expired; it was renewed to expire in Dec. 2014; it was again renewed for 1 year to Dec. 2015.  “Congress giveth and Congress taketh away.” 

 

These serial enactments and expirations of production tax credits left the wind industry whipsawed, unable to plan effectively for new investment.  As a result, after the expiration of each short-term credit the graphic above shows that annual installation of new generation capacity fell dramatically. Congress finally recognized the detrimental effects of its fits-and-starts legislative actions.  Accordingly, the production tax credit was further extended at the end of 2015, made retroactive to the beginning of that year, and extended for a five year period, to the end of 2019.  The wind industry now has a stable investment environment in place sufficient for advance planning for new wind energy projects.  It is anticipated that this stable investment environment will lead to a significant expansion of installed wind energy capacity (as well as solar) by the expiration of the current tax credit.

 

The present tax credit regime, which benefits both wind energy and solar generation, is expected to result in 37 gigawatts of new wind and solar capacity—a 56-percent increase during  its 5 year duration, promoting $73 billion in new investment, and enabling as many as 8 million more households to benefit from renewable energy at competitive prices.

 

The cost of producing wind-driven electricity has been falling dramatically in recent years. The Levelized Cost of Energy (LCOE) is an analysis of the lifetime costs involved in constructing and operating an electricity-generating facility over the projected lifetime of the facility, typically several decades.  The LCOE for wind energy has fallen about 60%   between 2009 and 2015, and is reaching a value that is competitive with fossil fuel generating facilities.  By the end of the current tax credit at the end of 2019 the continued improvement of the LCOE as time passes will certainly make wind generation fully competitive with fossil fuel generation.

 

Wind energy is projected to grow dramatically in the U. S.  The U. S. Department of Energy (DOE) projects that wind energy generation will expand dramatically in future decades.  As an example, the graphic below compares actual wind energy production by state in 2013 with an expected extent of generation in 2030.

 

Comparison of actual wind energy generation state by state in the U. S. in 2013 (inset, upper left) with a projection of wind generation capacity in 2030 (right).  GREEN circles/sectors represent land-based generation.  BLUE circles/sectors represent offshore generation.  The size of the circles is scaled to the wind power capacity in gigawatts (right panel, calibrated by the white circles at the lower right of the panel).

Source: U. S. Department of Energy, http://energy.gov/articles/new-interactive-map-shows-big-potential-america-s-wind-energy-future  

 

 

Actual generation capacity in the U. S. in 2013 was 60.7 gigawatts (GW; billions of watts), with generation occurring in 34 of the contiguous 48 states.  This provided about 4.6% of U. S. electricity demand.  By 2030, DOE projects an increase of 269% to 224.1 GW in 47 states, with a significant fraction coming from offshore generation.  By 2050 the projection climbs to 404.3 GW in all 48 states (not shown), with important contributions from offshore generation in both inland lakes and ocean sites.  This could provide as much as one-third of the electricity used in the U. S. at that time.

 

Benefits of wind energy.  DOE writes that by 2050

·        The price of wind energy is projected to be directly competitive with conventional energy technologies within the next decade.

·        Wind energy could be a viable source of renewable electricity in all 50 states.

·        Wind energy could support more than 600,000 jobs in manufacturing, installation, maintenance and supporting services.

·        Wind energy could save $508 billion from reduced pollutants and $280 billion in natural gas costs.

·        Wind energy could save 260 billion gallons of water that would have been used by the electric power sector.   

 

Conclusion

 

The manmade increase in the greenhouse gas carbon dioxide accumulates in the atmosphere as we burn fossil fuels because no natural processes exist that remove it on the (geologically short) time scale needed to reduce global warming.  Therefore it is necessary to end further accumulation as fast as possible by actively migrating to a near zero-carbon energy economy, i.e., one that does not rely on fossil fuels to produce energy.

 

Wind-driven generation of electricity is growing dramatically in the U. S.  It is one way of moving toward zero emissions.  In recent years development of new wind facilities has responded directly to the presence or absence of the federal production tax credit.  Wind is expected to expand even further in coming decades to a point at which it can provide a large fraction of anticipated demand.  A stable federal policy supporting a production tax credit for wind (and other renewable) sources is a significant factor in the growth of wind generation until the industry becomes self-sufficient.

 

© 2016 Henry Auer