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State clean energy funds create jobs and a healthier, safer economy

2012-01-12T22:35:09Z

Nathanael Greene, Director of Renewable Energy Policy, New York City

A new report by the Brookings Institution details the success and benefits of an important mechanism for funding clean energy growth – state clean energy funds. These funds can be a very effective tool when targeted wisely, and Brookings argues that their expansion could serve as a useful counterweight to the political turmoil in Washington.

In Congress, some politicians and entrenched interest groups have tried to turn the funding of clean energy into something dirty. They’ve done this loudly, in Congressional hearings, and quietly, by failing to extend important tax provisions that have created tens of thousands of jobs and promoted the development of clean-energy installations in every state in the union.

To these critics, it doesn’t matter that federal support for fossil fuels has outstripped similar support for renewables by a factor of 9 to 1 in the last 60 years. Or, that government underwriting has been instrumental in almost every major technological breakthrough the country has seen since World War II. Consider: the semiconductor; the personal computer; the Internet; and, many of the blockbuster drugs that save the lives of people we love. All were made possible by federal underwriting in conjunction with a vibrant private sector.

To make matters worse, inside-the-Beltway critics of federal support for renewable energy seem unbothered that the US has lost its lead in renewable technologies (technologies it originally invented!) to both China and Germany.

State clean energy funds are investment pools that more than 20 state governments have used to promote clean energy within their borders. The programs, the Brookings report indicates, benefit consumers, businesses and utilities alike. Among their many accomplishments, these programs have pushed down the cost of energy and jumpstarted mom-and-pop solar installation companies. They’ve underwritten important technological breakthroughs that have made electric grids safer and more reliable. Through state CEFs, Americans in 22 states have become investors in the clean-energy progress that will allow our country to become energy self-reliant, and to clear the air of pollution that harms the health of our children and that of our increasingly fragile atmosphere. Such funding has spurred technological breakthroughs that can once again make America the leader in the 21st century’s most important industry: energy.

Combined, these funds’ investments total about $500 million a year, driving the job growth and the technological innovation we need as a nation. (Just remember, the solar industry alone is the nation’s fastest growing, with jobs doubling from 50,000 to more than 100,000 in the last two years.)

We absolutely support the idea that CEF’s have tremendous value through their investments although we would also want to ensure that efforts to expand the scope of these funds sustain their core benefits for utility systems and their customers, and be focused only on support for clean energy technologies. Here are some highlights from state clean energy funds across the nation:

In Ohio, the state’s Advanced Energy Fund has helped fund 660 solar photovoltaic, solar thermal and wind power installations for homeowners, non-profits, houses of worship and businesses. Investments have totaled almost $45 million.
As of March, 2011, the New York State Energy Research and Development Agency has saved consumers in the state $895 million in energy annually through cost-effective energy efficiency and renewable energy programs, reducing yearly global-warming pollution by more than 2.3 million tons, the equivalent of taking 460,000 cars off the road each year. Its Clean Energy Business Incubator program has created hundreds of new jobs in start-up companies, leveraged $41 million in private capital and $11 million in federal funding, and resulted in the introduction of 33 new products to serve the clean-energy market.
California’s Public Interest Energy Research program, established in the mid-1990s, has funded research that’s led to nearly $38 worth of private investment for every dollar of PIER funding. PIER funding was used to develop syncrophasors that help stabilize electric grids, helping to prevent costly power outages; to create at least five new building and appliance standards that will save utility consumers $1 billion a year by 2020; and to invent a less expensive solar tracking system that boosts efficiency by 15-35 percent.

Whether state CEFs are small-scale operations like Ohio’s, or nation-leading programs like California’s, each one demonstrates the benefits of public funding for clean energy. Utility consumers save money; businesses and jobs take root; technological breakthroughs that can make our energy system safer, more reliable and far cleaner are given the support they need to flourish. Critics in Congress would do well to take note.

How to make the end of 2011 and the corn ethanol tax credit the beginning of real alterantives to oil

2011-12-23T19:33:19Z

Nathanael Greene, Director of Renewable Energy Policy, New York City

Americans want the U.S. to lead the world in renewable energy, but these are screwy times in our nation’s capital. Some people are trying to turn clean, renewable energy into something dirty. The fossil fuel industry and the radical right, including Grover Norquist and politicians looking to score cheap political points, are taking on key policies that level the playing field for renewables. Everything from renewable electric standards passed by 29 states to the Production Tax Credit for renewables is under attack.

But just like a broken clock is right twice a day, these people trying to stop renewables occasionally get things right. That’s the case with the impending expiration of the main corn ethanol tax credit. Despite Norquist’s initial defense of the subsidy, at the end of the day, not even the millions the corn ethanol industry spent on lobbying could stand up against the evidence: the VEETC was redundant and wasteful, throwing billions in scarce taxpayer dollar towards another dirty fuel.

Given that tax extensions are almost automatic and that Big Oil and Big Ethanol remain extremely powerful interest groups, this is a huge victory for average Americans and common sense. The end of the VEETC clears the way for us to think about how we can focus Federal funding on American innovation so we can have a real alternative to oil instead of trading the perils of oil for the higher food prices and dirtier air and water that come with corn ethanol.

We all know we need a clean alternative to oil. Our dependence on oil hurts our economy, helps our adversaries and puts our security at risk. Each day we send over $1 billion overseas for oil, often to hostile nations like Iran, Libya, Iraq, Venezuela and Saudi Arabia. With more renewable, made-in-America energy, we can reduce the money we send to foreign countries - including those that don’t support our interests or way of life.

The cars we drive, our airplanes, school buses, construction and farm equipment will all demand liquid fuels for many years to come. This means that low-carbon liquid alternatives to oil are arguably not something we can do without.

Corn ethanol was meant to be a stepping stone to these better biofuels. But while the corn ethanol industry has paid lip service to the potential of next generation cellulosic biofuels, its lobbyists have spent their time pushing for more giveaways, whether in the form of tax credits or costly loan guarantees for infrastructure that would lock more corn ethanol into the market.

The first and most important step in moving towards the biofuels we need is to stop funding mature, conventional, and dirty biofuels. The end of the VEETC marks an important turning point on this front.

Second, the entrepreneurs and innovators in the advanced biofuels industry all say that the Renewable Fuel Standard is critical to getting their fuels out of the lab and into the market place. But to be effective, the RFS and its implementation need to be strengthened and improved over time. This includes ensuring that GHG’s remain a core plank in evaluating the environmental performance of fuels and that any assessment of the GHG impacts of biofuels continues to include emissions from indirect land use change. It also means protecting the advanced and cellulosic ethanol carve-outs in the RFS from being taken over by corn-based biofuels.

Third, we must support the production of responsibly-grown energy crops that don’t compete with our food or feed supply. This means protecting and watchdogging programs like the Biomass Crop Assistance Program, which help farmers grow the sustainable biomass that’s critical to sustainable biofuels. No matter how efficient and clean a biofuels refinery gets, it cannot turn unsustainable biomass into a sustainable biofuel.

Next, we need to use the power of our purchases to pull the best sustainable biofuels into the market. Here, it’s our military that’s leading the way. The military’s top leaders agree that that we must expand our country’s renewable energy sources if we’re going to keep our nation secure and adequately support our troops. From the battlefields to the barracks, the military is working to do just that. The latest example is a 3-year, $510 million dollar plan to make long-term purchases of advanced biofuels, which was kicked off by the Navy early in December. A Defense Department procurement specification that could be used by other companies, cities and states would be a great way to leverage the military’s leadership even further.

And finally, we need to reform biofuel tax credits so that American taxpayers get real clean energy for their money. Unlike the VEETC, which paid for volumes without requiring measurable environmental performance, a Greener Biofuels Tax Credit would be technology neutral and performance-based. That means it would reward biofuels producers for not only running their plants efficiently, but also for choosing environmentally preferable feedstocks—such as wastes, sustainably harvested cover crops or perennial energy crops like switchgrass and willow, and algae—that require little land disturbance, fertilizer, or irrigation to grow and thereby greatly reduce GHG emissions.

These four steps will do a lot to level the playing field for clean, renewable, advanced biofuels that can be produced here at home and will never run out. In the next 3 to 5 years, we need to get the first billion gallons of the best biofuels into the market.

America has led every major technological revolution over the last 100 years, from airplanes to the internet, and sold the products from these advances to the world, making us richer and improving our lives. Why shouldn’t America lead the clean energy revolution as well?

America has a choice next year and in the years ahead. We can allow fossil fuel companies, entrenched special interests, and their supporters in Congress to block our progress on renewable energy and take our country in a direction Americans don’t want to go. Or we can move forward with building a future that secures America’s leadership in homegrown renewable energy, drives economic growth and jobs, and provides a cleaner, healthier life for us and our children.

Which way do you want to go next year?

Americans want renewable energy. Why is Norquist trying to stop them?

2011-12-20T20:31:37Z

Nathanael Greene, Director of Renewable Energy Policy, New York City

Everyone loves renewable energy – even Grover Norquist, who writes in an otherwise completely inaccurate opinion piece that:

Opposition to renewable energy mandates should not be misinterpreted as an aversion to renewable energy. In fact, renewable sources could play a significant role in the future.

I totally agree Grover! And in fact, nine in ten Americans—including 85 percent of Republicans and 89 percent of independents—say developing renewable energy should be a priority for the President and Congress.

And what’s not to love? Renewable energy serves core American values like economic prosperity, self-sufficiency, independence and security.

The renewable energy industry is growing rapidly, with some sectors like solar and wind creating jobs at triple the rate of the overall economy. While most industries were cutting jobs during the recession, employers in the broader clean economy added 500,000 jobs between 2003 and 2010. Electric and hybrid vehicle technology is driving a resurrection of the U.S. auto industry in places like Michigan and Kentucky. Renewable energy is providing new markets for old industries, like fiberglass boat makers in Florida that now also make wind turbine blades. There are renewable energy projects in every state and new renewable energy jobs are being created every day.

Meanwhile, renewable energy reduces pollution, protects public health, and builds a cleaner future. Instead of forcing American children to continue to suffer from asthma attacks, and other health and developmental issues as a consequence of breathing dirty air from fossil fuels that contains mercury, lead and other toxics, we can move to a future where renewable energy makes our air and water cleaner and safer for us and for our children.

Then of course, there’s the fact that renewable energy is homegrown energy that we own and won’t run out. Producing clean and reliable renewable energy right here in our country helps make us more independent and more in control of our energy future.

So what’s the problem? Well, unfortunately for Norquist, fossil fuel companies and their entrenched special interests in government, you can’t just say you love renewables, then block our progress on renewable energy and take our country in a direction Americans don’t want to go.

In his opinion piece, Norquist tries to tie the policies that support the growth of renewable energy like wind and solar, which the vast majority of Americans want, to inaccurate, fossil-fuel industry funded studies and misleading statistics about the cost of power, or high unemployment. The four linked articles in the previous sentence do an excellent job addressing these inaccuracies. To synthesize them, he confuses correlation with causation between standards and energy prices, he misrepresents data on state energy prices, he ignores the myriad of reasons why the energy sector isn’t a free market and therefore requires policies that level the playing field for renewables and he misses the incredible growth story of the renewable sector.

Norquist even tries to claim that Americans aren’t interested in policies for renewable energy, despite that fact that two-thirds of the public say it is important for federal funds to be invested in renewable energy, especially to boost the economy and 72 percent of Americans support Renewable Portfolio Standards, exactly the policies he is questioning!

Unfortunately, as much as Norquist and his polluter allies would like to proclaim otherwise, Federal funding has always helped drive our greatest and most complex innovations—from railroads and highway systems to space travel. These transformations were partnerships between the private sector and government. Without effective government, they would have never occurred, and neither will the transition to renewable energy in America.

Policies like the renewable electricity standard are critical tools that can level the playing field so that renewable energy companies have a fair chance to compete against entrenched fossil fuel technologies. In fact, a renewable standard is probably the most market friendly of all options – requiring renewable energy technologies to compete on price and allowing utilities to select the cheapest options available.

More importantly, if we don’t lead on renewable energy, other countries will. China has stated plants to invest $1.7 TRILLION in renewable energy and other strategic technology sectors over the next five years. Are we going to stand on the sidelines, or are we going to compete?

America has a choice. We can allow fossil fuel companies, entrenched special interests, and their supporters in government to block our progress on renewable energy and take our country in a direction Americans don’t want to go. Or we can move forward with building a future that secures America’s leadership in homegrown renewable energy, drives economic growth and jobs, and provides a cleaner, healthier life for us and our children.

Which choice would you prefer?

Leading with American clean energy: the greatest gift Congress could give

2011-12-14T19:53:13Z

Nathanael Greene, Director of Renewable Energy Policy, New York City

America can and should be the world leader in renewable energy. America has led every major technological revolution over the last 100 years, from airplanes to the internet, and sold the products from these advances to the world, making us richer and improving our lives. Why shouldn’t America lead the clean energy revolution as well?

We are already taking the lead in many areas, from new solar technologies in Tennessee to advanced battery companies in Michigan, and are making great strides in others.

For example, Michigan’s Richard Stuedemann, a former auto worker, is employed today thanks in large part to the support the federal tax code has offered to developers of renewable energy. “I get to take all my previously learned skills from the automotive industry,” says Stuedemann, now the quality reliability coordinator at Hemlock Semiconductor Group in Hemlock, Michigan, “and apply them to a completely different set of manufacturing conditions.” Hemlock produces the raw materials used in most solar cells. There are well over 100,000 other people working in the solar energy industry.

But some people are trying to turn clean, renewable energy into something dirty. The fossil fuel industry, other entrenched interest groups and politicians looking to score cheap political points are inaccurately portraying America’s growing renewable energy industry as a fantasy. They’re more interested in political scandal than leveling the playing field for renewables or helping American companies compete around the world. Some from this crowd in Congress want to let the clean energy tax credits expire.

Even as so many American industries hemorrhage jobs in the continuing recession, renewable energy job growth is skyrocketing, thanks in part to federal tax credits. Why would anyone want to snuff out a bright spot in our economy?

In the solar field alone, jobs have more than doubled in the last two years, from 50,000 in 2009 to more than 100,000 today. That’s nothing short of a miracle. A miracle that can be credited, in large part, to tax credit help. Just one of these tax programs alone—the Section 1603 Treasury Grant Program—has created more than 115,000 jobs since it began two years ago. Another, the Renewable Energy Production Tax Credit, will create 17,000 new wind-energy jobs in the next four years, and will prevent the loss of another 37,000 existing jobs, if it is extended until 2016.

These are real jobs providing power that we invented, we own and it’s never going to run out. The last thing we need to do is put up roadblocks now.

And American’s want more clean energy. Americans of all political stripes support federal funding for the expansion of renewable energy. Nine out of 10—including 85 percent of Republicans and 89 percent of independents—say developing renewable energy should be a priority for the President and Congress. Developing and deploying renewable energy helps American innovators and employers continue our country’s long history of world-leading technological innovation. Renewable energy keeps our energy dollars here at home, in the US, instead of sending them overseas. It creates energy security for our nation. And finally, renewable energy tax credits help us limit pollution and create a clean energy future for our children.

Congress’ failure to enact long-term price supports is limiting all of these benefits by making it impossible for renewable energy businesses to plan and grow. “If the Production Tax Credit isn’t extended soon, the uncertainty for our customers will tend to have them hold back,” Kevin Hazel of Siemens Wind Power told the New York Times this week. In fact, previous failures to renew the Production Tax Credit have led to precipitous drops in wind installations. In 2000, for example, one year after Congress failed to renew the PTC, new wind energy installations dropped by a stunning 93 percent. Neither our fragile economy nor our fragile atmosphere can afford these kinds of delays.

For those who argue that government support for renewable energy is a boondoggle, consider this: In the last 60 years, the US fossil fuel industry has received almost $600 billion in federal support, compared with only $74 billion for renewables. (Check out the chart below from the NEI report available at that link, which compares the level of federal support relative to the maturity of various energy technologies. It’s mind-blowing!)

America has a choice. We can allow fossil fuel companies, entrenched special interests, and their supporters in Congress to block our progress on renewable energy and take our country in a direction Americans don’t want to go. Or we can move forward with building a future that secures America’s leadership in homegrown renewable energy, drives economic growth and jobs, and provides a cleaner, healthier life for us and our children.

Before Congress leaves town this winter, it owes it to the American people to extend these tax credits, not just for next year but for the next 4 years. Urge your representative to keep our clean energy economy moving forward and support the renewable energy tax credit. Such extensions would be a holiday gift to the nation, creating pollution-free energy and the kinds of jobs that workers like Richard Stuedemann need now.

Sec Chu goes on the offensive to help America win clean energy race

2011-11-17T19:55:48Z

Nathanael Greene, Director of Renewable Energy Policy, New York City

Department of Energy Secretary Steven Chu on Friday is scheduled to visit General Electric’s PrimeStar thin-film solar factory in Colorado, where he’ll stress the importance of the clean energy industry to America’s future and reaffirm his commitment to it.

It’s something Secretary Chu is wise to do. And it’s something the 2.7 million Americans who make their living in the country’s still-growing clean economy, the thousands of American clean energy companies that employ them and the investors who back them all need to hear.

Certainly, we weren’t hearing that kind of support for America’s clean energy industry in Washington on Thursday, where Chu testified for more than four hours before the House Energy and Commerce Committee’s investigative subcommittee. You can read his testimony here.

The chairman of the subcommittee, Florida Rep. Cliff Stearns, and other Republicans tried desperately to find some evidence of malfeasance by Chu and President Obama regarding the Solyndra failure. In the end, they found no wrongdoing. But that didn’t stop Stearns and others to call for Chu to resign anyway.

You may remember Stearns is the Sunshine State representative who recently said America should just give up on solar and cede the market to China. According to Stearns, we should just pay China for the solar panels and other products we need, instead of using American ingenuity and American workers to make them ourselves.

Talk about a jobs-killing clean energy agenda.

Fortunately, Chu and the rest of the Obama administration disagrees. They aren’t giving up on the most promising and important sector of our economy. As Chu said at Thursday’s hearing, the clean energy race is something we have to play to win. Hopefully, he’ll repeat those words in Colorado on Friday.

Americans are beyond frustrated with the gotcha politics of DC. But the efforts by Rep. Stearns and some of the other House Republicans to turn the Soyndra bankruptcy into a scandal is more dangerous than the usual.

American innovators and entrepreneurs have led the development of wind technology, solar technologies, better batteries and more efficient washing machines. And government loan guarantees and other federal support helped provide these American innovators and entrepreneurs the foundation they needed to get going just as they have for every other major technological revolution including railroads, cars, planes, and the internet. All of these technologies lead to a richer American and a better quality of life. The clean economy will do that too if we stop the Republicans in Congress from taking us backwards.

Just to make the Obama administration look bad, GOP leaders in Congress are threatening to end that national support of clean energy. In doing so, they’re also threatening to end the potential and promise of clean energy in America, and give up to China and other countries.

Like Secretary Chu, I and most Americans disagree. We know that America can still lead the world in the clean energy race. Faced with the choice to compete or concede defeat, we always rise to the challenge to compete. We know that doing so is critical for our country’s future.

We only need members of Congress to quit playing politics, to quit trying to score political points, to quit doing the bidding of the fossil fuels industry, and support the development of clean energy that we all want and need.

We need members of Congress to stand for what they say they stand for:

American innovation, American jobs and a cleaner, brighter American future.

New study shows thinning forests for biomass is not a climate win-win

2011-09-26T20:07:49Z

Nathanael Greene, Director of Renewable Energy Policy, New York City

Demand for biomass is growing rapidly, as power companies come under increased pressure to find alternatives to fossil fuels like coal. (See NRDC's Forests not Fuel site.) One of the main sources they are targeting is trees harvested as part of wholesale thinning operations. Together with the forest biomass industry, they argue that using thinnings to fuel their power plants is an environmental win-win: good for forest management because, they assert, thinning reduces the risk of forest fires and good for the climate since trees can re-grow and are therefore a “carbon neutral” fuel source.

The pressing need for sustainable sources of energy make the industries’ claims tempting. But the results of a new report from researchers at Oregon State University strongly suggest that even if thinning needs to be done for non-climate reasons, there’s a price to pay in terms of climate pollution, not the win-win claimed by industry.

The study looks at the lifecycle carbon emissions impacts of different levels of thinning on forest plots in eastern and western Oregon. It finds that far from providing a “carbon neutral” fuel source, forest thinning increases net carbon pollution in the atmosphere for more than 50 years, even accounting for tree re-growth and the carbon emissions avoided when thinnings are used as biomass to displace fossil fuels. Carbon losses on-site account for the bulk of the effect of thinning on carbon.

These results hold for multiple kinds of thinning operations across a wide spectrum of forest locations and types in the Pacific Northwest. And while carbon stocks in the forest can, in time, rebound, it may be many centuries or longer before carbon stocks in a thinned forest catch up to one left unlogged.

And while the study doesn’t consider the impacts of thinning on fire, this factor would likely show further net emissions of carbon. Restoration thinning requires reintroduction of frequent low intensity fires. The total carbon emitted from this series of fires over time is likely to greatly exceed the carbon emissions from one intense fire every 200 years or so.

OSU’s findings are part of a growing body of science on the lifecycle impacts of biomass that points to the need for our bioenergy policies to distinguish amongst different sources of biomass. Some, like switchgrass grown on non-forested land and other short-rotation energy crops, can reduce carbon pollution or achieve carbon neutrality within 1 to 3 years. But others, like whole trees sourced from practices like thinning, will increase carbon pollution for decades or longer, and cannot be considered sustainable. (See our video on the carbon accounting for whole trees.) And this is just looking at thinning. In addition, these operations risk degrading critical wildlife habitat, soil and water quality.

Unfortunately, both federal and state policies are failing to differentiate between the good, the bad, and the ugly when it comes to biomass, maintaining a blanket assumption that all biomass—even the worst kinds, like whole trees—are carbon neutral. With a rapidly growing bioenergy industry adding substantial new demand for biomass to the existing market for forest products, the pressures on our forests have never been greater.

Lessons from Solyndra: We need more, not less clean energy innovation investment

2011-09-08T14:28:56Z

Nathanael Greene, Director of Renewable Energy Policy, New York City

The recent headline of the $535 million loan loss to the Dept of Energy in backing Solyndra was indeed an eye opener, but not for the reasons you might think or have recently seen written about it. In particular, New York Times Op-Ed contributor David Brooks, "Where the Jobs Aren't", argues against existing public policy support for clean energy and jobs. While I won’t pick through his arguments here – see Joe Romm of Climate Progress who thoroughly rebuts Brooks in his blog – I do want to highlight two important issues that this story touches. First, Solyndra's failure exposes the overall inadequacy of existing U.S. clean energy policy, especially when viewed through an international lens. In the words of clean energy economy job experts Mark Muro and Jonathan Rothwell of Brookings, we have a U.S. clean energy policy that is “incomplete, fragmented, and uncertain”. Second, the U.S. needs to leverage what it does best – innovation and building new companies. The Solyndra story is a lesson in understanding the risks and rewards that come with pursuing these types of policies.

U.S. Clean Energy Policy: Think Global

Likely resulting from clean energy opponents’ ongoing fear mongering against renewables as too expensive and/or too ‘small scale’ to meet ‘our growing energy needs’, we still have a major perception problem to overcome in the U.S. when it comes to solar and wind industries. Solar and wind are no longer cottage industries offering expensive technologies only catering to a niche set of green-minded businesses and consumers or off-grid minimalists. Instead these are burgeoning global competitive industries on their way to trillion-dollar markets, fueled by skyrocketing demand, declining costs, and increasing public policy support. Solyndra failed because, despite the best of intentions and a promising technology, it simply could not keep pace with innovators in other companies at a time of extraordinary growth in demand for clean energy.

Narrowly focusing on Solyndra also misses the point that the company was only one part of a much larger solar value chain, and in many sections on that value chain, U.S. companies are dominating. This includes companies selling silicon, machining and tooling, developing projects, creating balance of system components such as inverters, or installing systems. The Solar Energy Industries Association (SEIA) recently published a report showing that the U.S. is a net exporter of solar energy products across the entire value chain, adding $1.9 billion in value to the U.S. economy last year. This also includes a trade surplus in China.

U.S. Clean Tech Innovation: Still on the Cutting Edge

The best chance for the U.S. to build world-leading clean energy companies is not to compete on turf that is already well covered by other countries, but rather to leverage what it does best – innovation and building new companies. However, this means backing riskier companies that may not have access to private financing and that may not have an established market now. If private investors were rushing to back riskier next generation technologies, this wouldn’t be a problem. But as has been well-demonstrated, this is not the case. First Solar is a classic example of a next generation solar technology that was launched in the U.S. and is a global leader. So is A123. Solyndra could have been another example, but its technology didn’t develop as hoped for. That doesn’t mean the U.S. should stop doing what it’s doing.

And this does not signal the end of U.S. clean energy investment. Devon Swezey, Jesse Jenkins and Alex Trembath wrote earlier this week in Forbes.com Energy Source blog:

“… when judged by its entire diverse portfolio of investments, the LGP [DOE Loan Guarantee Program] has performed remarkably well. Indeed, with a capitalization of just $4 billion, DOE has committed or closed $37.8 billion in loan guarantees for 36 innovative clean energy projects. The Solyndra case represents less than 2% of total loan commitments made by DOE, and will be easily covered by a capitalization of eight to ten times larger than any ultimate losses expected following the bankruptcy proceedings.”

The U.S. is rightly following a portfolio strategy with its investments. Through funding for the Treasury Cash Grants, ARPA-E, tax credits and loan guarantees, and DOE support innovation research; the U.S. government is helping the private sector clean energy industry pursue a number of different strategies.

We need to understand the government’s role in these companies. Yes, they have had a supporting role in many companies, but Solyndra isn’t a government-owned entity. Among the other private investors were KKR, Argonaut, CMEA, Masdar, Redpoint, RockPort and US Venture Partners, and when added together made for a greater than 2:1 private-public investment ratio behind Solyndra. These are all experienced and well-respected cleantech investors in the field. But we’re not suddenly questioning the motives of those investors, not asking macro-questions about the value of private investment. It’s a complicated point – governments typically aren’t very good at most due diligence activities. But the investors and developers we’ve spoken with described the government due diligence process equally as onerous and difficult as any private financing with extensive diligence requirements. Keep in mind that that nearly 40 loan guarantees have been made across a range of different companies, industries and technologies. Not all will work out. In fact if all of them did it would be a sure sign that the loan guarantees were being targeted to companies that are too mature and not innovative enough. As any venture capitalist will tell you, failure is part of innovation.

The future of clean tech will be won by those who seize the best opportunities to create it. Not all U.S. backed companies will have the right strategy, but those that do have the potential to dominate a multi-trillion dollar a year industry.

Northeast Clean Fuels Standard = Thousands of Jobs, Billions of Dollars

2011-08-16T16:07:56Z

Nathanael Greene, Director of Renewable Energy Policy, New York City

An economic analysis done for 11 northeast and mid-Atlantic states shows that a clean fuels standard (CFS) is a winning idea for the region. It could save consumers in the region billions, bring in billions more in revenue for these states, and create up to 50,000 jobs per year – dramatically increasing the region's self-sufficiency.

The CFS would drive economic growth in the region by reinvesting billions of dollars here at home to develop clean, local alternatives to gasoline and diesel. That keeps American dollars for heading out of our pockets into the hands of big oil companies and unfriendly oil producing countries. It would also help improve the health of residents in the area by cleaning up the air we breathe.

(My colleague Luke Tonachel is also writing today about the economic analysis, which was circulated on Friday as an "early-release".)

We all know the oil industry has us over a barrel and has too many of our politicians in their pocket. Every time anyone talks about doing something serious to get us off oil and make us more self-sufficient, big oil and its mouth pieces go into high gear to keep us from finally, actually doing anything.

The Clean Fuels Standard can change that. The economic analysis shows that in the next 10 years, it could:

Create up to 50,000 jobs annually
Increase personal disposable income in the region by up to $3.2 billion
Grow our state economies by up to nearly $30 billion dollars
Reduce our region's dependence on oil by as much as 29 percent
Reduce harmful air pollution that causes climate change up to 9 percent

It does this by setting a standard that requires the oil companies to make their fuels 10 percent cleaner on average when it comes to carbon pollution. They can sell any fuel they want. The Clean Fuels Standard just focuses on the average. The economic analysis shows that they will probably choose to sell a lot less oil and buy a lot more advanced biofuels and electricity for electric vehicles—fuels that are produced here at home.

Predictably Big Oil is already lining up [subscription required] to try to scare politicians away from doing anything to protect us from the high and volatile oil prices that squeeze us all everyday at the pump. (Here's a perfect example of the oil industry's messaging. To learn more about who's fronting for oil, read this.) It's a brazenly weak and fearful message all about what we as American's supposedly can't do.

Well, I say enough is enough. It's time for action.

Obama has moved to increase the efficiency of our vehicles, which is a tremendous step forward. But the federal Renewable Fuel Standard isn't enough to give us real alternatives to oil, and Congress can't get it together to do anything serious to protect us from Big Oil. So that leaves it to the states.

The 11 states involved here, from Maine to Maryland, were all among the original 13 colonies. We broke away from one type of tyranny then and we can break away from the tyranny of oil now.

The economic analysis shows that we can protect ourselves and our economy. We have the technologies and the companies here, at home. We can invest in our entrepreneurs and keep our energy dollars at home. We can grow our economy and clean up our air. The Clean Fuels Standard is the path forward.

We wouldn't have listened to the redcoats back in 1775. We shouldn’t listen to the oil companies now.

Another victory against king corn and big oil

2011-07-08T15:30:54Z

Nathanael Greene, Director of Renewable Energy Policy, New York City

Late in June, the Senate voted 73-27 to end the corn ethanol tax credit, which gives oil companies about $6 billion a year to buy corn ethanol--the same corn ethanol the oil companies are obliged by law to buy under the renewable fuel standard. And then last week, Sen Feinstein announced that she had reached an agreement with Senators Thune and Klobuchar--both big corn ethanol supporters--that would greatly increase the chances of a bill ending the corn ethanol tax credit actually becoming law. (Here's a statement on the deal from a coalition of food interests, fiscal conservatives and enviros that NRDC signed on to yesterday.) If this agreement is enacted it will be a big step forward for taxpayers and the environment.

Beyond the specifics of the agreement, it represents a remarkable victory over King Corn and Big Oil. The Volumetric Ethanol Excise Tax Credit (VEETC) will die. Now or at the end of the year, it will die. And just as importantly in the long-run, the idea that King Corn and Big Oil never lose is dead.

NRDC's goal is to stop wasting any tax dollars on corn ethanol and the oil industry and to shift our biofuels policies to technology neutral, performance-based incentives. By this yard stick, the deal isn’t perfect: it would extend a tax credit for supposedly small corn ethanol refiners that are in reality not that small, waste some money on pumps that can blend ethanol (though this provision also extends support for electric vehicle charging), and extend the cellulosic tax credit without any new performance based requirements, but these provisions are far less costly and damaging than the VEETC, which would be repealed.

We need to end the rest of the waste on corn ethanol, but more importantly, we can now get back to pushing smart biofuels policies such as the Billion Gallon Challenge and the Greener Biofuels Tax Credit. We've got to get off oil and save our deteriorating atmosphere from all the carbon pollution our cars and trucks currently spew. We need 60MPG cars, electric vehicles and a good transportation bill.

A victory cheer with big thanks to Senator Feinstein! Onward and upward.

EPA finalizes punt on carbon pollution from biomass

2011-07-06T21:19:46Z

Nathanael Greene, Director of Renewable Energy Policy, New York City

On July 1, EPA Administrator Lisa Jackson signed the final plan giving facilities burning biomass a three-year exemption from Clean Air Act permitting requirements for carbon dioxide emissions while the agency studies the effect of biogenic carbon emissions on climate change. The temporary exemption for biomass means that all biomass—the good, the bad and the ugly—will be treated as zero and won't need preconstruction permits or Title V operating permits. What’s more coal burning plants will be able to mix in a little biomass and claim that they’re using Best Available Control Technology, as is already happening in MI. (See this E&E article if you have a subscription.)

During these three years, EPA plans to conduct a study on biogenic carbon emissions and then employ a Science Advisory Board for input as it crafts final rules for the treatment of biomass. It’s good that this is a temporary exemption, that the rule recognizes that not all sources of biomass are created equal, and that EPA is committed to developing final rules based on sound science. However, there is simply no scientific or administrative basis for treating all biomass as zero carbon emissions. While fossil fuel carbon emissions will—properly—now finally be accounted for, the agency’s decision to ignore biomass carbon emissions for the next three years will distort the marketplace towards greater use of biomass fuel, with a greater toll on our forests.

In the rule, EPA bends over backwards expressing concern about possibly regulating truly low-carbon biomass, but the 3 year punt ignores the science and relatively easy distinctions that EPA should be drawing on now. The lifecycle greenhouse gas emissions of some forms of biomass are neutral or close to neutral over a reasonable time period. For example, some biomass feedstocks, such as landfill gas, forest and crop residues that would otherwise be burned, and annual crop residues not needed to preserve soil carbon stocks, have clearly low net emissions within very short periods of time and can reasonably be considered potential low-carbon alternatives to fossil fuels.

Conversely the science is equally clear that the net carbon emissions from harvesting and burning whole trees and other similar forms of biomass will result in as much if not more emissions than burning coal for decades.

Other types of biomass such as forest residues that would otherwise be left to decay in the forest probably do need to be studied, but facing pressure from the forest biomass industry, EPA has made a bad decision and ignored the science some simple options to narrow its exemption. Permanently exempting some sources and counting others fully would have better protected our deteriorating atmosphere and provided the industry with greater clarity. Now any projects permitted in the next 3 years face the very likely prospect that any future modifications to those permits will require them to count some or all of their biogenic emissions.

MI Principal becomes tour guide, helps save world (with geothermal)

2011-06-17T18:49:30Z

Nathanael Greene, Director of Renewable Energy Policy, New York City

When Tom DeKeyser became principal of Whitmore Lake High School in Whitmore Lake, Michigan, he knew he’d have to wear a lot of hats--principals do that. The one hat he wasn’t expecting, though, was that of tour guide.

But now, “I give a lot of tours of our building,” DeKeyser says. “We’ve had a couple of international groups come through recently. And anyone in the Detroit metro area who’s building a new school and thinking about energy--they come to us.”

The reason is the more than $100,000 in energy savings the high school accrues each year, thanks to its ground-source heat pump HVAC system.

That's right--instead of using electricity to cool the school’s 150,000 square foot building, or oil or natural gas to heat it, Whitmore Lake uses the relatively constant temperature stored just below the surface of the earth. A network of underground, fluid-filled pipes connect to in-building units known as heat exchangers that, in summer, transfer the heat out of the building and into the ground. In winter, the system moves the earth’s stored heat into the school building.

Heating and cooling that could have cost the district more than $300,000 dollars a year with a conventional system now costs less than $200,000.

Whitmore Lake is not an isolated example to the technology’s benefits. “We’ve found GSHPs had many advantages for schools,” says researcher John Shonder, of the US Department of Energy’s Oak Ridge National Laboratories. “They have the lowest lifecycle costs and the lowest energy use.” In Shonder’s studies, the average school GSHP system used 26% less energy per square foot, compared with conventional systems. “And the lifecycle cost was 13% lower than the next most attractive technology,” he notes. “That includes the equipment costs, installation costs, energy, and operation and maintenance.” New technologies in the works may reduce those costs even further.

There are additional benefits that shouldn’t be discounted: air pollution, including the pollution that’s disrupting our fragile planet, was lower by about 25%. And, importantly, the ground-source heat pump industry is homegrown; virtually all parts and equipment are manufactured here in the US. Meaning that instead of sending its energy dollars overseas, Whitmore Lake High School has helped create jobs here for assemblers, plumbers, engineers and drillers. By using the earth for heating, the school has lessened our country’s dependence on foreign oil.

“What are we doing with the extra cash?” DeKeyser asks, focusing the discussion back on his energy budget. “Our governor has proposed an aggressive plan to cut education spending. We’ve held on to that money to preserve our teaching staff. And we can actually look to hire another teacher next year.” (Interestingly, MI isn't the only place where schools are benefiting from renewables. Check out this story.)

No wonder the principal is happy to serve as a tour guide. His school’s got an HVAC system that saves jobs and improves education. Imagine if every school did.

Senate votes overwhelmingly to end corn ethanol subsidies

2011-06-16T20:40:25Z

Nathanael Greene, Director of Renewable Energy Policy, New York City

This afternoon, the U.S. Senate voted overwhelmingly in favor of a bipartisan amendment offered by Senators Dianne Feinstein (D-CA) and Tom Coburn (R-OK) to end the main corn ethanol tax credit, known as the VEETC, and the ethanol import tariff immediately. The amendment will end three decades of subsidies to the corn ethanol industry and save taxpayers several billion dollars.

In today’s partisan political climate, this 73-27 vote stands out as a truly extraordinary showing of bipartisanship and a decisive rejection of the use of taxpayer dollars to subsidize yet another dirty fuel.

The VEETC isn’t just wasteful and redundant, costing taxpayers $6 billion this year alone and getting almost nothing in return in domestic ethanol production or industry jobs above and beyond what is already mandated by the Renewable Fuel Standard, but it moves the country in the wrong direction. By subsidizing the best and worst gallons of ethanol, the VEETC comes at the expense of developing the new and cleaner advanced biofuels we need to create jobs, increase our energy security and address global warming.

The Senate’s bipartisanship on this issue mirrors the broad and diverse coalition of business associations, taxpayer advocates, hunger and development organizations, agricultural groups, free-market groups, religious organizations, environmental groups, budget hawks, and public interest organizations that have all come together to end subsidies to the mature and polluting corn ethanol industry once and for all.

Today’s vote is a victory for taxpayers and the environment. The message from Senators on both sides of the aisle was clear: U.S. taxpayers will no longer tolerate being forced to line the pockets of big oil companies and old corn ethanol plants while getting nothing in return but dirtier air, dirtier water, and higher prices at the grocery store.

We urge Congress to get a final bill to the President’s desk that ends the VEETC immediately. But regardless of what happens in the coming weeks between the Senate and House of Representatives, today’s vote made clear that the VEETC's time is over.

Now is the time to move beyond corn ethanol and start having a rational discussion about the policies we need to support next generation fuels. Today’s vote is a victory for taxpayers and the environment and an important step in that direction.

Process trumps common sense in Senate but writing is on the wall for corn ethanol subsidies

2011-06-14T21:50:19Z

Nathanael Greene, Director of Renewable Energy Policy, New York City

The intricacies of Congressional process trumped common sense today, when the Senate failed to move forward with an amendment offered by Tom Coburn (R-OK) that would have ended decades of wasteful, environmentally harmful subsidies to the corn ethanol industry by sunsetting the Volumetric Ethanol Excise Tax Credit, known as the “VEETC”.

But procedural issues don’t change the facts.

Since 2006, the Renewable Fuel Standard (RFS) has required oil companies to blend increasing amounts of ethanol into our gasoline. Nevertheless, we continue to bribe oil companies to obey this law by paying them $0.45 cents for every gallon of ethanol they blend—at a cost of nearly $6 billion dollars this year alone—and shield the mature corn ethanol industry from having to compete in the market with a protective tariff on imported ethanol.

On the floor of the Senate this afternoon, Senator Feinstein referred to what she called the “triple crown” of benefits we lavish on the corn ethanol industry, something Senator Susan Collins also highlighted in her comments yesterday:

Historically, our government has helped a product compete in one of three ways: either we subsidize it, we protect it from competition, or we require its use. Right now, ethanol may be the only product receiving all three forms of support.

Despite this redundancy, the rationale for three decades of corn ethanol subsidies has always been that corn ethanol delivers a clean, homegrown alternative to foreign oil.

But corn ethanol isn’t clean. When all direct and indirect costs are added, creates more carbon pollution than the oil it is supposed to replace. On top of that, it increases water pollution, erodes our valuable soils, and increases the cost of corn sold in our stores and fed to our livestock, with devastating consequences for some of the world’s most vulnerable communities.

And as of last year, the U.S. became a net exporter of ethanol, which stands in obvious contrast to the goals of our biofuel policies, which amongst other things seek to reduce dependence on imported oil.

What do taxpayers get for the billions we spend each year subsidizing corn ethanol? Not much in terms of additional domestic production beyond what the RFS already drives and few additional jobs as a result. And by subsidizing the best and worst gallons of ethanol, the tax credit comes at the expense of developing the new and cleaner advanced biofuels we need.

Conventional ethanol made from corn is not the fuel of the future and continuing to subsidize the profits of big oil companies and old corn ethanol plants is something we simply cannot afford.

That’s why the coalition of organizations opposed to corn ethanol subsidies—spanning business associations, hunger and development organizations, religious groups, agricultural trade associations, environmental advocates and budget hawks—is bigger, more diverse and stronger than ever. As this coalition has grown, so has strong bipartisan consensus amongst Congressional lawmakers that it’s time to end the VEETC and with it three decades of subsidies for the mature and polluting corn ethanol industry.

Or, as Senator Collins put it:

At a time when we are projecting a deficit, this year alone, of $1.5 trillion, why in the world are we spending $6 billion subsidizing ethanol? Subsidizing the blending of corn-based ethanol into gasoline is simply fiscally indefensible.

Process may have stood in the way of fiscal and environmental progress today, but the writing on the wall is clear: the days of massive handouts for corn ethanol are numbered. Congress should get down to business and stop sending good money after bad supporting the dirty, costly policies of the past. It’s time to invest in the clean energy technologies of the future.

End VEETC, pass Coburn/Feinstein

2011-06-13T16:36:39Z

Nathanael Greene, Director of Renewable Energy Policy, New York City

Today, a diverse coalition of more than 30 organizations again underscored their opposition to wasteful corn ethanol subsidies with a clear message to Congress: it’s time to end the Volumetric Ethanol Excise Tax Credit, the main corn ethanol tax credit known as the “VEETC”. The group sent a letter urging Senate leadership to support a bipartisan amendment offered by Senators Tom Coburn and Dianne Feinstein to sunset the VEETC on July 1st of this year—and with it, 30 years of tax subsidies for the corn ethanol industry. In addition, the amendment would end the import tariff on foreign ethanol.

There are few issues that can garner this type of support from a coalition of otherwise strange bedfellows, including business associations, hunger and development organizations, agricultural groups, environmental advocates and budget hawks. But this effort speaks to the strong bipartisan consensus on ending subsidies to old, polluting corn ethanol, which would save taxpayers billions and finally force the mature corn ethanol industry to compete in the marketplace after three decades of government support.

As the letter states, “continuing to subsidize oil companies to blend ethanol – which they are already required to do by the Renewable Fuel Standard – is wasteful and unnecessary”. RFS mandates already require oil companies to blend increasing amounts of ethanol into our fuel supply. The VEETC is therefore nothing more than a bribe to oil companies to get them to obey the law. Because of its duplicative nature, eliminating it will save scarce taxpayer resources with little impact on domestic ethanol production, prices or jobs in the industry.

Today’s corn ethanol creates more global warming pollution than the oil it is meant to replace. And because the VEETC isn’t tied to environmental performance, it does nothing to encourage cleaner, better performing biofuels. Instead, it simply pumps billions into conventional biofuels made from first-generation feedstocks like corn, which have unacceptable impacts on food prices around the world and comes at the expense of investing in the advanced biofuels we need to reduce our dependence on oil, create jobs and address climate change.

In these difficult times, we have to be smarter than ever about how we use our tax dollars. Billions in subsidies to gasoline refiners for blending dirty corn ethanol they are already required to blend by law is unacceptable. Congress should heed this call to stop subsidizing a mature corn ethanol industry that pollutes our environment at the expense of supporting the cleaner, advanced biofuels we need. It’s time to end the VEETC, once and for all.

Another analysis NOT disproving ILUC

2011-05-24T19:24:46Z

Nathanael Greene, Director of Renewable Energy Policy, New York City

The latest paper on indirect land-use change is getting a lot of press, but unfortunately does not, as some have claimed, prove that the ILUC doesn't exist or isn't happening. To help me explain why, join me for a little parable:

Imagine you're in an airplane heading towards a mountain. As the pilot pulls back on the stick, ice slowly accumulates on the wings. The ice is making the plane heavier and heavier. The pilot pulls more and more. You worry, and wonder is that ice going to make us crash into the mountain? Suddenly an academic step up and says, "don't worry about the ice! I've run a regression and determined that we're not going down."

"But will the ice make us crash into the mountain?" you ask.

"I have proved that as far as my model can detect we're not going down," says the professor.

And then ethanol indusrty lobbysts pop out of an overhead compartment and sing in unison, "this proves there's not such thing as ice or indirect land use change."

Or something like that.

I'm sorry to be flip about this, but this is about the state of affairs with regards to the recent paper from Dr. Seungdo Kim and my friend, Dr. Bruce Dale. I have a lot of respect for both of these guys. They've done really important work on producing animal feed from cellulosic crops such as switchgrass and on distributed production systems. Both of these ideas would help reduce the emissions from indirect land-use change induced by policies that drive the conversion of food and feed and the land that produces them into fuels.

That said, just like the academic in my little parable above, Kim and Dale have asked and answered the wrong question. You can't detect ILUC by just looking at where we are today or by comparing where we are to an historical baseline. Just as in my story, if you want to know what effect the ice will have, you would have to compare against the flight path without ice, for ILUC, you have to compare where we are to where we would be without biofuels.

This is the same mistake that ORNL researchers made a year ago. I wrote a lot about RFA's misguided trumpeting of that analysis and how you could just as easily use current data to make the case that the US is falling behind on feeding the world. And I certainly sympathize with the frustration evident is Kim and Dale's description of the "assumption-heavy global economic modeling approaches" that are necessary to calculate ILUC. But if you want to quantify ILUC, you got to start by asking the right question.

(P.S. I recognize that the parable is imperfect--I would care if we're going to crash not what specific role the ice is playing. Whereas with ILUC we're trying to figure out what specific role biofuels play. But you get the idea.)