Friday, January 29, 2010

Time for a Rethink on Global Warming

Mandated carbon cuts won’t work.

Jan 28, 2010

By BJøRN LOMBORG, for the Wall Street Journal

With most of the world still reeling from the worst recession in 40 years, this week some 2,500 members of the international political, business and media elite are descending on Davos, Switzerland. The occasion is the annual meeting of the World Economic Forum, that well-publicized Woodstock for movers and shakers. The point of Davos is to swap big ideas about big issues, and this year’s theme couldn’t be bigger: “Improving the State of the World: Rethink, Redesign, Rebuild.”

If you detect a whiff of “back to the drawing board” in that slogan, you’re right. There is a growing consensus in policy circles that if the recent economic carnage has taught us anything, it’s that our 20th-century prescriptions are not up to the challenges of our 21st-century world.

This kind of intellectual humility would certainly be welcome in my particular area of interest: the debate over how best to cope with man-made climate change. For nearly two decades, environmental policy makers have been single-mindedly marching down the same road, trying without success to get the governments of the world to endorse a binding agreement to drastically reduce carbon emissions. Just last month, we saw this strategy fail again when yet another global climate summit convened and adjourned without accomplishing anything. Yet policy makers refuse to change course.

There is a superficial logic to the conventional wisdom that the only serious way to stop global warming is to get governments to either force or bribe their citizens into slashing their reliance on fuels that emit carbon-dioxide. After all, if carbon emissions cause global warming, shouldn’t eliminating them cure it?

Yes, it would. The question is at what cost? The fact is that whatever prosperity we currently have or are likely to achieve in the near future depends heavily on our ability to acquire and burn carbon-emitting fuels such as coal, oil and gas.

Right now, developing nations like China and India are most vocal in their opposition to cutting carbon emissions—and it is not hard to see why. Compared to other forms of energy, fossil fuels are abundant, efficient and cheap. In order to make drastic cuts in their carbon emissions, developing countries would have to pull the plug on domestic economic growth—thus consigning hundreds of millions of their citizens to continued poverty.

But the developed world has an interest at stake here as well. All the major climate economic models show that to achieve the much-discussed goal of keeping temperature rises under two degrees Celsius, we would have to impose a global tax on carbon emissions that, by the end of the century, would cost the world a phenomenal $40 trillion a year. Even the wealthiest of nations would have trouble paying that price.

Viewed in this light, it’s no wonder so many governments are skeptical of the idea that environmental salvation lies in just saying no to fossil fuels. So what’s the alternative? I believe it’s time to take a page from the World Economic Forum’s book and rethink, redesign and rebuild our climate policy.

Despite all the optimistic talk about solar, wind and other green-energy technologies, the alternatives we currently have aren’t anywhere close to being able to carry more than a fraction of the load fossil fuels currently bear. For two decades, we’ve been putting the cart before the horse, pretending we could cut carbon emissions now and solve the technology problem later. But as we saw in Copenhagen last month, that makes neither economic nor political sense.

If we really want to solve global warming, we need to get serious about developing alternatives to coal and oil. Last year, the Copenhagen Consensus Center commissioned research from more than two dozen of the world’s top climate economists on different ways to respond to global warming.

An expert panel including three Nobel Laureate economists concluded that devoting just 0.2% of global GDP—roughly $100 billion a year—to green-energy R&D could produce the kind of breakthroughs needed to fuel a carbon-free future. Not only would this be a much less expensive fix than trying to cut carbon emissions, it would also reduce global warming far more quickly.

Mr. Lomborg is the director of the Copenhagen Consensus Center at Copenhagen Business School and the author of “Cool It: The Skeptical Environmentalist’s Guide to Global Warming” (Knopf, 2007).

Tuesday, January 26, 2010

Can farming save Detroit?

By David Whitford, editor at large,Fortune

December 29, 2009: 11:37 AM ET

DETROIT (Fortune) -- John Hantz is a wealthy money manager who lives in an older enclave of Detroit where all the houses are grand and not all of them are falling apart. Once a star stockbroker at American Express, he left 13 years ago to found his own firm. Today Hantz Financial Services has 20 offices in Michigan, Ohio, and Georgia, more than 500 employees, and $1.3 billion in assets under management.

Twice divorced, Hantz, 48, lives alone in clubby, paneled splendor, surrounded by early-American landscapes on the walls, an autograph collection that veers from Detroit icons such as Ty Cobb and Henry Ford to Baron von Richthofen and Mussolini, and a set of Ayn Rand first editions.

With a net worth of more than $100 million, he's one of the richest men left in Detroit -- one of the very few in his demographic who stayed put when others were fleeing to Grosse Pointe and Bloomfield Hills. Not long ago, while commuting, he stumbled on a big idea that might help save his dying city.

Every weekday Hantz pulls his Volvo SUV out of the gated driveway of his compound and drives half an hour to his office in Southfield, a northern suburb on the far side of Eight Mile Road. His route takes him through a desolate, postindustrial cityscape -- the kind of scene that is shockingly common in Detroit.

Along the way he passes vacant buildings, abandoned homes, and a whole lot of empty land. In some stretches he sees more pheasants than people. "Every year I tell myself it's going to get better," says Hantz, bright-eyed, with smooth cheeks and a little boy's carefully combed haircut, "and every year it doesn't."

Then one day about a year and a half ago, Hantz had a revelation. "We need scarcity," he thought to himself as he drove past block after unoccupied block. "We can't create opportunities, but we can create scarcity." And that, he says one afternoon in his living room between puffs on an expensive cigar, "is how I got onto this idea of the farm."

Yes, a farm. A large-scale, for-profit agricultural enterprise, wholly contained within the city limits of Detroit. Hantz thinks farming could do his city a lot of good: restore big chunks of tax-delinquent, resource-draining urban blight to pastoral productivity; provide decent jobs with benefits; supply local markets and restaurants with fresh produce; attract tourists from all over the world; and -- most important of all -- stimulate development around the edges as the local land market tilts from stultifying abundance to something more like scarcity and investors move in. Hantz is willing to commit $30 million to the project. He'll start with a pilot program this spring involving up to 50 acres on Detroit's east side. "Out of the gates," he says, "it'll be the largest urban farm in the world."

This is possibly not as crazy as it sounds. Granted, the notion of devoting valuable city land to agriculture would be unfathomable in New York, London, or Tokyo. But Detroit is a special case. The city that was once the fourth largest in the country and served as a symbol of America's industrial might has lately assumed a new role: North American poster child for the global phenomenon of shrinking postindustrial cities.

Nearly 2 million people used to live in Detroit. Fewer than 900,000 remain. Even if, unlikely as it seems, the auto industry were to rebound dramatically and the U.S. economy were to come roaring back tomorrow, no one -- not even the proudest civic boosters -- imagines that the worst is over. "Detroit will probably be a city of 700,000 people when it's all said and done," says Doug Rothwell, CEO of Business Leaders for Michigan. "The big challenge is, What do you do with a population of 700,000 in a geography that can accommodate three times that much?"

Whatever the answer is, whenever it comes, it won't be predicated on a return to past glory. "We have to be realistic," says George Jackson, CEO of the Detroit Economic Growth Corp. (DEGC). "This is not about trying to re-create something. We're not a world-class city."

If not world class, then what? A regional financial center? That's already Chicago, and to a lesser extent Minneapolis. A biotech hub? Boston and San Diego are way out in front. Some think Detroit has a future in TV and movies, but Hollywood is skeptical. ("Best incentives in the country," one producer says. "Worst crew.") How about high tech and green manufacturing? Possibly, given the engineering and manufacturing talent that remains.

But still there's the problem of what to do with the city's enormous amount of abandoned land, conservatively estimated at 40 square miles in a sprawling metropolis whose 139-square-mile footprint is easily bigger than San Francisco, Boston, and Manhattan combined. If you let it revert to nature, you abandon all hope of productive use. If you turn it over to parks and recreation, you add costs to an overburdened city government that can't afford to teach its children, police its streets, or maintain the infrastructure it already has.

Faced with those facts, a growing number of policymakers and urban planners have begun to endorse farming as a solution. Former HUD secretary Henry Cisneros, now chairman of CityView, a private equity firm that invests in urban development, is familiar with Detroit's land problem. He says he's in favor of "other uses that engage human beings in their maintenance, such as urban agriculture." After studying the city's options at the request of civic leaders, the American Institute of Architects came to this conclusion in a recent report: "Detroit is particularly well suited to become a pioneer in urban agriculture at a commercial scale."

In that sense, Detroit might actually be ahead of the curve. When Alex Krieger, chairman of the department of urban planning and design at Harvard, imagines what the settled world might look like half a century from now, he sees "a checkerboard pattern" with "more densely urbanized areas, and areas preserved for various purposes such as farming.

The notion of a walled city, a contained city -- that's an 18th-century idea." And where will the new ideas for the 21st century emerge? From older, decaying cities, Krieger believes, such as New Orleans, St. Louis, Cleveland, Newark, and especially Detroit -- cities that have become, at least in part, "kind of empty containers."

This is a lot to hang on Hantz. Most of what he knows about agriculture he's picked up over the past 18 months from the experts he's consulting at Michigan State and the Kellogg Foundation. Then there's the fact that many of his fellow citizens are openly rooting against him. Since word leaked of his scheme last spring, he has been criticized by community activists, who call the plan a land grab. Opponents have also raised questions about the run-ins he's had with regulators at Hantz Financial.

But Detroit is nothing if not desperate for new ideas, and Hantz has had no trouble getting his heard. "It all sounds very exciting," says the DEGC's Jackson, whose agency is working on assembling a package of incentives for Hantz, including free city land. "We hope it works."

Detroit's civic history is notable for repeated failed attempts to revitalize its core. Over the past three decades leaders have embraced a series of downtown redevelopment plans that promised to save the city.

The massive Renaissance Center office and retail complex, built in the 1970s, mostly served to suck tenants out of other downtown buildings. (Today 48 of those buildings stand empty.) Three new casinos (one already bankrupt) and two new sports arenas (one for the NFL's dreadful Lions, the other for MLB's Tigers) have restored, on some nights, a little spark to downtown Detroit but have inspired little in the way of peripheral development. Downtown is still eerily underpopulated, the tax base is still crumbling, and people are still leaving. The jobless rate in the city is 27%.

Nothing yet tried in Detroit even begins to address the fundamental issue of emptiness -- empty factories, empty office buildings, empty houses, and above all, empty lots. Rampant arson, culminating in the annual frenzy of Devil's Night, is partly to blame. But there has also been a lot of officially sanctioned demolition in Detroit. As white residents fled to the suburbs over the decades, houses in the decaying neighborhoods they left behind were often bulldozed.

Abandonment is an infrastructure problem, when you consider the cost of maintaining far-flung roads and sewer systems; it's a city services problem, when you think about the inefficiencies of collecting trash and fighting crime in sparsely populated neighborhoods; and it's a real estate problem. Houses in Detroit are selling for an average of $15,000.

That sounds like a buying opportunity, and in fact Detroit looks pretty good right now to a young artist or entrepreneur who can't afford anyplace else -- but not yet to an investor. The smart money sees no point in buying as long as fresh inventory keeps flooding the market. "In the target sites we have," says Hantz, "we [reevaluate] every two weeks."

As Hantz began thinking about ways to absorb some of that inventory, what he imagined, he says, was a glacier: one broad, continuous swath of farmland, growing acre by acre, year by year, until it had overrun enough territory to raise the scarcity alarm and impel other investors to act. Rick Foster, an executive at the Kellogg Foundation whom Hantz sought out for advice, nudged him gently in a different direction.

"I think you should make pods," Foster said, meaning not one farm but many. Hantz was taken right away with the concept of creating several pods -- or lakes, as he came to think of them -- each as large as 300 acres, and each surrounded by its own valuable frontage. "What if we had seven lakes in the city?" he wondered. "Would people develop around those lakes?"

To increase the odds that they will, Hantz plans on making his farms both visually stunning and technologically cutting edge. Where there are row crops, Hantz says, they'll be neatly organized, planted in "dead-straight lines -- they may even be in a design." But the plan isn't to make Detroit look like Iowa. "Don't think a farm with tractors," says Hantz. "That's old."

In fact, Hantz's operation will bear little resemblance to a traditional farm. Mike Score, who recently left Michigan State's agricultural extension program to join Hantz Farms as president, has written a business plan that calls for the deployment of the latest in farm technology, from compost-heated greenhouses to hydroponic (water only, no soil) and aeroponic (air only) growing systems designed to maximize productivity in cramped settings.

He's really excited about apples. Hantz Farms will use a trellised system that's compact, highly efficient, and tourist-friendly. It won't be like apple picking in Massachusetts, and that's the point. Score wants visitors to Hantz Farms to see that agriculture is not just something that takes place in the countryside. They will be able to "walk down the row pushing a baby stroller," he promises.

Crop selection will depend on the soil conditions of the plots that Hantz acquires. Experts insist that most of the land is not irretrievably toxic. The majority of the lots now vacant in Detroit were residential, not industrial; the biggest problem is how compacted the soil is. For the most part the farms will focus on high-margin edibles: peaches, berries, plums, nectarines, and exotic greens. Score says that the first crops are likely to be lettuce and heirloom tomatoes.

Hantz says he's willing to put up the entire $30 million investment himself -- all cash, no debt -- and immediately begin hiring locally for full-time positions. But he wants two things first from Jackson at the DEGC: free tax-delinquent land, which he'll combine with his own purchases, he says (he's aiming for an average cost of $3,000 per acre, in line with rural farmland in southern Michigan), and a zoning adjustment that would create a new, lower tax rate for agriculture. There's no deal yet, but neither request strikes Jackson as unattainable. "If we have reasonable due diligence," he says, "I think we'll give it a shot."

Detroit mayor Dave Bing is watching closely. The Pistons Hall of Fame guard turned entrepreneur has had what his spokesman describes as "productive discussions" with Hantz. In a statement to Fortune, Bing says he's "encouraged by the proposals to bring commercial farming back to Detroit. As we look to diversify our economy, commercial farming has some real potential for job growth and rebuilding our tax base."

Hantz, for his part, says he's got three or four locations all picked out ("one of them will pop") and is confident he'll have seeds in the ground "in some sort of demonstration capacity" this spring. "Some things you've got to see in order to believe," he says, waving his cigar. "This is a thing you've got to believe in order to see."

Many have a hard time making that leap. When news of Hantz's ambitious plan broke in the Detroit papers last spring, few people even knew who he was. A little digging turned up a less-than-spotless record at Hantz Financial Services. The firm has paid fines totaling more than $1 million in the past five years, including $675,000 in 2005, without admitting or denying guilt, "for fraud and misrepresentations relating to undisclosed revenue-sharing arrangements, as well as other violations," according to the Financial Industry Regulatory Authority. (Hantz responds, "If we find something that isn't in compliance, we take immediate steps to correct the problem.")

Hantz Farms' first hire, VP Matt Allen, did have an established reputation in Detroit, but it wasn't a good one. Two years ago, while he was press secretary for former Detroit mayor Kwame Kilpatrick, Allen pleaded guilty to domestic violence and obstructing police after his wife called 911. He was sentenced to a year's probation. Hantz says he has known Allen for many years and values his deep knowledge of the city. "He has earned a second chance, and I'm willing to give it to him," he says.

Some of Hantz's biggest skeptics, ironically, are the same people who've been working to transform Detroit into a laboratory for urban farming for years, albeit on a much smaller scale. The nonprofit Detroit Agriculture Network counts nearly 900 urban gardens within the city limits. That's a twofold increase in two years, and it places Detroit at the forefront of a vibrant national movement to grow more food locally and lessen the nation's dependence on Big Ag.

None of those gardens is very big (average size: 0.25 acre), and they don't generate a lot of cash (most don't even try), but otherwise they're great: as antidotes to urban blight; sources of healthy, affordable food in a city that, incredibly, has no chain supermarkets; providers of meaningful, if generally unpaid, work to the chronically unemployed; and beacons around which disintegrating communities can begin to regather themselves.

That actually sounds a lot like what Hantz envisions his farms to be in the for-profit arena. But he doesn't have many fans among the community gardeners, who feel that Hantz is using his money and connections to capitalize on their pioneering work. "I'm concerned about the corporate takeover of the urban agriculture movement in Detroit," says Malik Yakini, a charter school principal and founder of the Detroit Black Community Food Security Network, which operates D-Town Farm on Detroit's west side. "At this point the key players with him seem to be all white men in a city that's at least 82% black."

Hantz, meanwhile, has no patience for what he calls "fear-based" criticism. He has a hard time concealing his contempt for the nonprofit sector generally. ("Someone must pay taxes," he sniffs.) He also flatly rejects the idea that he's orchestrating some kind of underhanded land grab. In fact, Hantz says that he welcomes others who might want to start their own farms in the city. "Viability and sustainability to me are all that matters," he says.

And yet Hantz is fully aware of the potentially historic scope of what he is proposing. After all, he's talking about accumulating hundreds, perhaps even thousands, of acres inside a major American city. And it's clear that he views Hantz Farms as his legacy. Already he's told his 21-year-old daughter, Lauren, his only heir, that if she wants to own the land one day, she has to promise him she'll never sell it. "This is like buying a penthouse in New York in 1940," Hantz says. "No one should be able to afford to do this ever again."

That might seem like an overly optimistic view of Detroit's future. But allow Hantz to dream a little. Twenty years from now, when people come to the city and have a drink at the bar at the top of the Renaissance Center, what will they see? Maybe that's not the right vantage point. Maybe they'll actually be on the farm, picking apples, looking up at the RenCen. "That's the beauty of being down and out," says Hantz. "You can actually open your mind to ideas that you would never otherwise embrace." At this point, Detroit doesn't have much left to lose.

Monday, January 25, 2010

Save the salmon -- and us

Los Angeles Times Opinion

The Obama administration's plan for the Columbia Basin doesn't go nearly far enough.

By Carl Safina

January 24, 2010

Recently, a photograph made its way to me on the Internet: In a surging Alaskan stream, a grizzly bear stands with a salmon in its jaws, and in the shallows, a wolf -- keeping its distance -- also hoists a thrashing salmon. Your eye goes to the bear, then the wolf. But the salmon convened the meeting. Without the salmon, you'd see only water.

When salmon return from the sea, their bodies are the ocean made flesh. Their tails propel ocean nutrients upstream and into forests, rivers and range lands, where they benefit hundreds of other species. Everything else in the photograph -- trees, bushes, all the animals and plants in the forest and the water -- contains ocean nutrients from salmon.

And now add orcas to the web of life fed by salmon. New research tells us that, before salmon hit the flowing streams, they are by far the most important food for resident killer whales along the Pacific Coast.

These killer whales, like wild salmon, are endangered. Of course the problems are connected: The fewer salmon, the fewer orcas.

Hope flared in early 2009, when the Obama administration's blueprint for Sacramento River salmon affirmed this salmon-orca connection and promised to put policies in place that would result in more wild salmon. It seemed like a strong first step in protecting West Coast salmon stocks.

But then two months ago, in a swift trick no one saw coming, the Obama administration embraced the Bush administration's failed salmon plan for an even more important watershed, the Columbia/Snake River system. The Columbia and its tributaries formerly produced more salmon than anywhere else on Earth, but the once-mighty rivers now have 13 salmon stocks in danger of extinction.

Federal scientists say this decline of Columbia/Snake salmon is the largest single change to the resident killer whale's food supplies. Yet the administration's Columbia plan seems to ignore that connection. While the Sacramento plan stated clearly that increasing wild salmon stocks is important -- for the whales and for people alike -- the Columbia plan contends that hatchery salmon will be enough to compensate for further losses.

The Obama plan adopts the Bush plan's legal and scientific analysis unchanged and in its entirety. It makes a few small tweaks elsewhere, but does not require anything that would actually save fish. The most "major" change calls for additional actions to be studied -- though not necessarily enacted -- if listed species continue to decline precipitously.

The fundamental problem with the plan is that its goal seems to be to maintain endangered salmon in an endangered state rather than revitalizing them. The administration appears unmotivated to restore salmon abundance and their role in the ecology and economy. Here's what gives the administration's game away: The one salmon species that is already at levels low enough to trigger additional action in the new plan has been exempted from the new triggers.

Jane Lubchenco, the administration's point person for oceans and salmon, insists that "the actions in the plan will prevent further declines." But keeping salmon in a coma and on life support does not heal them, nor help the other species, including people, that depend on them. The likeliest outcome of a salmon strategy based on just avoiding extinction will be extinction -- and not only of salmon.

A wiser strategy would focus on restoring salmon's workhorse role for people and ecosystems. In the Columbia Basin, it would include removing four federal dams on the Snake River, which would open 3,000 miles of healthy streams above the present dams for three salmon species and double the spawning habitat for a fourth.

The Obama administration missed its first chance to hit the "reset" button on Pacific Northwest salmon strategy. But it's not too late to reconsider. It should embrace salmon abundance as the beating heart of the Pacific Northwest -- the flow of energy that connects and sustains people, fishing towns, bears, wolves, orcas, forests and the rivers and seas we all love and use.

There's another photograph I saw recently. Taken just two months ago where Puget Sound meets the Pacific, it shows a new orca calf emerging from the water atop its mother's back. The scientists from the Center for Whale Research who track orcas named her Star, hoping she will guide another seemingly intelligent mammal -- us -- to restore the salmon abundance she will need to become a mother herself 13 years from now. May she inspire the Obama administration to think again.

Carl Safina's books include "Song for the Blue Ocean," "Eye of the Albatross" and "Voyage of the Turtle." His awards include the John Burroughs Medal and a MacArthur Prize.

Friday, January 22, 2010

Clearing the air on carbon credits


Mark Schapiro of the Center for Investigative Reporting talks with Kai Ryssdal about an article he wrote for Harper's Magazine, which discusses how we can measure a credit of carbon.

Mark Schapiro (


KAI RYSSDAL: The price of a ton of carbon lost some ground in the European carbon markets today. They actually have a climate exchange over there, where companies can buy and sell the right to pollute, in essence. Europe has what is called a cap-and-trade system. Greenhouse gas emissions are capped, that is limited, and then those pollution credits become a tradeable commodity, between industries that need 'em and companies that have pollution to spare. Cap and trade is one of the big linchpins of climate policy, using the market to control the amount of carbon in the atmosphere. But, of course, the reality is not even remotely so simple.

In this month's Harpers Magazine, Mark Schapiro spent some time trying to figure out how you verify those carbon credits. Mark, welcome to the program.

MARK SCHAPIRO: Good to be here.

RYSSDAL: The cap and trade regime has two purposes. One is actually functioning as a market. The other side of the coin, though, is the questionable part. Whether or not it actually does really reduce carbon emissions.

SCHAPIRO: Yes, let me give you an example. If a major German utility, which monitors the emissions at every one of their utilities all around Germany, and every month that company knows exactly how much over their emission cap they're going; and so whenever they reach that cap they know they have to go buy five million tons, 10 million tons, 50 million tons, 100 million tons of these things called credits.

RYSSDAL: And when they need those credits they go to Brazil or some other developing economy where some entrepreneur has set up a system whereby he can promise reductions in emissions, yes?

SCHAPIRO: Yes, so that utility can then look to a developing country like Brazil, or China, or India to find a project where a developer is saying all right, I would have been emitting X amount of methane, for example. But I'm going to put in a little machine that's going to capture the methane from the landfill and therefore I'm going to reduce my emissions by X percent.

RYSSDAL: He gets the credits for it, and then he sells that to the German utility and everybody is happy, yes?

SCHAPIRO: Exactly.

RYSSDAL: OK, so here is what has always stumped me about a possible cap-and-trade market mechanism. It's not like you're buying and selling a pound of pork bellies here. You have this amorphous thing, this unit of carbon, it's a unit of air, as your piece talks about it. And you explain in your piece that the United Nations has set up a verification mechanism. Tell us about that.

SCHAPIRO: Yeah, my piece explores who are the people that are doing these measurements. And how reliable are these measurements? They are like the carbon accountants, they are the ratings agencies that we saw in Wall Street that assess the value of publicly-traded companies. Well, the same kind of process occurs with carbon. And what's happened, for example, is two of the biggest of those ratings agencies were actually suspended by the United Nations because of what the United Nations determined was inadequate oversight of the audits that they had conducted and inadequate technical skill levels of the people who work for them.

RYSSDAL: Where does this leave us then? With the United States possibly getting into this market, and yet the underlying premise of measuring the carbon credits not being entirely reliable. I mean what happens next? I mean, this was the thing that was going to save the planet, right?

SCHAPIRO: This was the thing that was going to save the planet. The cap-and-trade system was largely designed by the United States as a way to detour around this idea of a carbon tax. So now the rest of the world was left to execute this plan, of course, when the United States left Kyoto in 2001. Now we're about to jump in. Where this leaves us is a very serious debate over how you're going to oversee this market. For example, is it going to be the Securities Exchange Commission, the Commodity Futures Trading Commission, the people who regulate utilities? And how much regulation is there going to be to ensure that the emissions that are promised are actually delivered?

RYSSDAL: Mark Schapiro. He's a senior correspondent at the Center for Investigative Reporting. His piece in Harper's Magazine this month about carbon trade, and cap and trade and all that, is called "Cunning the Climate." Mark, thanks a lot.

SCHAPIRO: Thank you.

Tuesday, January 19, 2010

Solar Flare Ups

A fight over the future of clean energy is pitting environmentalists against one another.

by Ed Humes, The Daily Journal

True or false: California's plan to generate massive amounts of clean, sustainable solar power is a win for everyone—liberal or conservative, environmentalist or business executive.

Answer: True ... but only in principle.

In practice, the state's new solar gold rush is generating far more conflict than current. At issue is not whether we should green the grid, but how to do so: Should we build massive solar-powered generating plants deep in the Mojave Desert on ecologically sensitive public lands to take advantage of some of the most sun-drenched landscapes on earth? Or would it be just as effective, with less impact on the environment, to deploy thousands of smaller solar arrays closer to civilization—on abandoned farms, urban "brownfields," and rooftops?

When environmentalists clash with giant utilities on such questions, no one is surprised. But what is surprising is how much this issue is pitting environmentalists against each other.

In one corner sit the desert conservationists, who see widely distributed solar installations as far preferable to building giant power plants, even green ones. In the other are the global-warming hawks, who have lined up with big power companies in support of utility-scale solar farms, which, they say, is the most effective way to substantially reduce greenhouse gas emissions in the shortest possible time.

This disagreement is more than just a local or even regional matter. The Mojave Desert—which straddles Arizona, Nevada, and Utah as well as California—is one of the most valuable solar resources on the continent, with the potential to generate enough clean electricity to displace tens of thousands of megawatts of dirty coal-generated power. As federal and state policies increasingly emphasize renewable energy, investors and energy companies that once shied away from solar power as a money loser are now racing to the Mojave to stake their claims.

But as the stakes have risen, so has the rancor. Among the major players, Sen. Dianne Feinstein, a desert conservation advocate, wants to curtail solar development in sensitive desert areas by creating a new national monument. That puts her at odds with stalwart environmental attorney Robert F. Kennedy Jr., who spoke out against Feinstein's proposal and supported a mammoth solar power plant in the Mojave. Meanwhile, the Sierra Club and the Natural Resources Defense Council (NRDC) have lined up in some cases with utilities against such traditional allies as the Wildlands Conservancy and the Center for Biological Diversity.

And then there's Gov. Arnold Schwarzenegger, who is staking his legacy on securing renewable sources for a third of the state's energy needs by the year 2020. "If we cannot put solar power plants in the Mojave Desert," he says, "I don't know where the hell we can put them." But Peter Galvin, cofounder of the Center for Biological Diversity, says the governor is missing the point: "We're not against solar projects in the Mojave. We're against solar projects in terrible locations in the Mojave. There's a difference."

Although this battle is new, efforts in the Mojave to turn the sun's energy into a commercially viable alternative to fossil fuels date back decades. In the 1970s, after the country was hammered by a Middle Eastern oil embargo and long lines at gas pumps, President Jimmy Carter came up with a mix of tax breaks and federal subsidies to encourage development of renewable energy sources, including solar. His game-changing goal: to have the United States produce a fifth of its power through solar by the year 2000.

Under that initiative, the U.S. Department of Energy and a consortium of utility companies in 1982 began running a ten-megawatt test facility near Barstow, dubbed Solar One. It utilized fields of mirrors to focus intense amounts of sunlight on a "power tower," in which water was heated to make steam to drive otherwise conventional electrical generators. Then, in 1996, Solar One became Solar Two after the boiling water was replaced with molten salt, which could store the sun's heat for many hours, allowing the facility to continue generating energy both at night and on sunless days. In one record-breaking test run, Solar Two generated electricity around the clock for seven days straight.

However, well before the government decommissioned this facility in 1999, Carter's successor, Ronald Reagan, killed the solar stimulus program, and without that support the clean solar technology of that era could not compete with cheaper and dirtier energy options. Now the Obama administration has brought the stimulus program back, and with it a renewed sense of urgency to fully exploit new technologies to make solar power much more competitive with fossil fuels. As of July more than 225 permit requests had been filed with the U.S. Bureau of Land Management to use federal lands as sites for new solar plants. And just under a third of those would be in California. Many would use the tower technology pioneered by Solar One and Two; others would deploy fields of electricity-generating photovoltaic solar panels like those used on rooftops.

Taken together, these proposals could increase California's relatively small solar-electricity output by nearly a hundredfold—more than enough, it seems, to help the state meet the governor's 33 percent renewable-energy goal. In 2008 nearly 11 percent of the electricity on California's grid came from sources classified as renewable, of which only a paltry one-quarter of 1 percent was solar; the rest came from wind, hydroelectric, geothermal, and biomass projects.

But while solar power itself may be green, the facilities that produce it may not be: One company, for example, proposes dropping a sprawling solar farm in the wild desert east of Twentynine Palms that would occupy 58 square miles of land—an expanse larger than the city of San Francisco. Another wants to build a 55-square-mile plant near Cadiz Lake in San Bernardino County. Meanwhile, the lure of government incentives and potential profits is so great that the conflict is spilling out of the desert and into other treasured landscapes in the state, including the Carrizo Plain in San Luis Obispo County, sometimes called the Serengeti of California, where energy companies have proposed some of the largest solar plants ever conceived. And that doesn't even include the erection of hundreds of miles of steel transmission towers and high-voltage lines that would be needed to bring the power to California's cities and towns.

In fact, it's the proposed transmission lines that are sparking some of the fiercest battles over solar power right now. Two projects in particular are worth watching. One, called Green Path North, would link Los Angeles to sources of renewable energy in the desert. The other, Sunrise Powerlink, would feed power to San Diego.

If Sunrise Powerlink's long-delayed and legally convoluted history is at all suggestive of what lies ahead, California's solar gold rush could easily come to a screeching halt. The $2 billion, 123-mile-long, 1,000-megawatt high-voltage transmission corridor, first proposed in 2005 by San Diego Gas & Electric, generally would not follow existing highways or utility rights of way. Rather, it would carve a fresh path through desert wilderness, fragile habitats, and national forestland. SDG&E had hoped to have the project mostly built by now, and up and running by 2010. But it has yet to break ground.

The utility argued that Sunrise Powerlink is needed to meet growing power demand in the San Diego region, and the California Public Utilities Commission (CPUC) agreed with that assessment. "It's something we really feel is in the best interest of our customers and in the best interest of the state in furthering a policy on renewables," SDG&E President Debra Reed has said.

But from the start, the proposal angered environmentalists, consumer advocates, and desert dwellers who felt that SDG&E could not possibly have done worse. Opponents were particularly incensed by the project's original pathway—since abandoned under pressure—which would have run high-voltage lines through Anza-Borrego Desert State Park, one of California's premier parks. Other portions of the transmission lines would have disrupted wilderness areas and habitats for a variety of endangered species, including the protected desert tortoise. Residents along the proposed path also voiced concerns about fire hazards and the despoiling of the area's scenic beauty.

Another irritant: the utility's refusal to make any legally binding commitment about what percentage of energy carried by the new lines would be clean. SDG&E's parent company owns enormous natural-gas facilities just across the border in Mexico, notes San Diego County Supervisor Dianne Jacob, and nothing in the proposal as it now stands would prevent the company from turning Sunrise Powerlink into a conduit for polluting, fossil fuel–based energy any time it wanted.

Meanwhile, some are wondering whether this project is even needed. Bill Powers, a San Diego engineer who frequently testifies as an expert witness to challenge power-plant permits, expressed his views last year at a CPUC hearing. Powers contended that equivalent amounts of energy—produced with far less environmental damage—can be brought to San Diego through a determined effort to install an array of small solar panels on suburban land and city rooftops.

Why would a big utility company favor billions of dollars in generation and transmission construction over a distributive approach? Attorney Michael Shames, executive director of the San Diegobased nonprofit Utility Consumers' Action Network, says it's no mystery: Big transmission projects allow utilities to maintain control of both the grid and the flow of electricity, while a distributed-generation system provides financial rewards to homeowners and businesses that generate their own power. Furthermore, big investments in transmission lines carry no risk for a utility—and a huge payoff. Once state regulators approve a project, Shames says, they guarantee that the utilities can charge ratepayers enough to recover all their costs, plus a 12 percent return on their investment.

"It's the privatization of profits and the socialization of risk," says Powers. "The incentives are all wrong. It's a terrible way to make energy policy."
Still, at the Sierra Club, Carl Zichella, who is director of western renewable programs, remains unconvinced that distributed solar power can make a difference fast enough. "You could increase [the number of rooftop solar panels] we've got by an order of magnitude, and it still wouldn't be enough," he says. "We have to have utility-scale power plants, and we have to have transmission because we are running out of time."

At 11,000 pages, the environmental impact report that SDG&E submitted to the CPUC for Sunrise Powerlink is thought to be the longest in state history. But last year the project was dealt a severe setback when an administrative review panel voted 2–1 to recommend against granting a permit. Administrative Law Judge Jean Vieth, joined by fellow ALJ Steven Weissman, found the project to be uneconomical and a serious fire risk in a region that had already been devastated by fires. In their proposed decision, Vieth and Weissman also agreed with Powers's assessment that the project was unnecessary.

Two months later, though, the appointed members of the CPUC took the unusual step of overturning that ruling, approving the project 4–1 with one major modification: The transmission lines would be routed around the Anza-Borrego state park, cutting instead through a portion of the Cleveland National Forest. But this, too, has generated opposition.

In the town of Alpine, which stands along the project's currently approved path, a protest meeting in April drew 600 people from the area, including County Supervisor Jacob, who promised she would keep fighting the project despite the CPUC's decision. Attorney Shames was also there, and he announced that his consumer group had a $500,000 war chest for litigation against the project. Already he had filed a request for reconsideration with the commission, a necessary prelude to filing suit.

Then, in August, Shames went ahead and petitioned for relief in the Fourth District Court of Appeal. He argued that the CPUC had failed to consider economically viable alternatives to Sunrise Powerlink; failed to properly consider the seismic vulnerability of the approved transmission route; used an improperly weak burden of proof (preponderance of evidence) in evaluating the utility's claims, instead of a "clear and convincing" standard; and broke its own rules by relying on information outside of the evidentiary record that opponents didn't have a chance to challenge (Utility Consumers' Action Network v. Pub. Util. Comm'n, No. D055666 (Cal. Ct. App. filed Aug 12, 2009)). At the same time, Shames's organization joined with the Center for Biological Diversity in seeking to have the California Supreme Court overturn Powerlink's approval on the grounds that it violated the California Environmental Quality Act. The petition charges the utility commission with misrepresenting and underreporting the environmental impact of Sunrise Powerlink, and failing to evaluate and require feasible mitigation of the project's greenhouse gas emissions. It also takes the CPUC to task for not requiring SDG&E to use the line exclusively for its stated purpose: transmitting renewable energy (Utility Consumers' Action Network v. Pub. Util. Comm'n, No. S175532 (Cal. Sup. Ct. filed Aug. 12, 2009)).

Meanwhile, up in Los Angeles, that city's Department of Water and Power was struggling to forge ahead with Green Path North, the 1,200-megawatt desert transmission project that would carry geothermal, as well as solar, power 118 miles to L.A. from the Salton Sea. Green Path North is not as far along as Sunrise Powerlink, yet it could end up being built faster. Because the CPUC does not regulate local public utilities, federal clearance is all that's required. Moreover, the Obama administration has told the principal agencies—the Bureau of Land Management (BLM) and the U.S. Forest Service—to move ahead as quickly as possible on renewable-energy projects.

But desert residents reacted even more angrily to the Los Angeles utility's plans than they did to Sunrise Powerlink. "The desert route for Green Path North runs through three preserves and protected lands," notes April Sall, who chairs the California Desert Coalition (CDC) and also manages the Pipes Canyon Wilderness Preserve for the Wildlands Conservancy. "It is not environmentally responsible."

Desert activists were particularly incensed when they learned that the utility's work crews had made secretive forays into the area, placing survey markers for the proposed power line on both public and private land without proper notice.

In a fence-mending exercise, David Nahai, chief of the L.A. Department of Water and Power, appeared at a town hall–style meeting in Yucca Valley to apologize for missteps made before he became general manager in late 2007. He also promised a more open approval process—and consideration of alternative routes that would satisfy environmentalists.

Sall said her group preferred a route that would run alongside the I-10 freeway, which already serves as a right-of-way for Southern California Edison (SCE) and where the environmental impact would be negligible. Nahai responded that SCE and L.A.'s power department were meeting regularly to see if such a shared-use plan could be negotiated. So far, however, those negotiations have not altered Green Path North's proposed route through nature preserves, prompting threats of court action to block the project.

Are such court fights inevitable? In an effort to avoid the costs and delays that so often come with such conflicts, the state formed a task force three years ago to plan future renewable-energy projects. The goal of the Renewable Energy Transmission Initiative (RETI)—comprised of industry, government, and environmental representatives—is to flip the planning process for power projects on its head and deal with environmental concerns first, before new routes are proposed.

"We want RETI to identify the sites that are least damaging to the environment and that make the most sense economically. We're looking for the sweet spot where those two issues intersect," says Johanna Wald, senior attorney at the NRDC's San Francisco regional office. Wald, a seasoned legal eco-warrior in California, is one of two environmental stakeholders on the state's 29-member RETI board. (The Sierra Club's Zichella is the other.) "There will always be impacts," says Wald, "but our job is to keep them to a minimum. The bottom line is there's no free lunch when it comes to meeting our energy needs."

As Wald explains it, RETI is mapping out the areas of the state where renewable energy can be produced most efficiently and with the least impact on important wild lands and habitats. The utility industry supports the process because it reduces its legal and financial risk and the potential for delays—even though that means utility-preferred sites such as Anza-Borrego are off the table. The approach may sound like common sense, says Wald, but the fact is, it's never been tried before.

She ought to know. As one of the NRDC's first staff attorneys in California, she has been engaged in environmental litigation since 1973. Beginning in 1976, Wald litigated the landmarkNatural Res. Def. Council v. Hodel (819 F.2d 927 (9th Cir. 1987)), which ended the BLM's long-standing practice of letting ranchers graze their livestock on public lands without regard to the environmental impact. Now she works nearly full time on renewable-energy issues because, in her view, there is no more important environmental cause.

Even environmental groups that do not have a direct voice on the RETI panel appreciate Wald and Zichella's efforts, but they express concerns as well. Larry Hogue, blogger and former communications director for the Desert Protective Council, complains that RETI embraces the assumption behind the Sunrise Powerlink project: that large-scale projects deep in the desert are the only practical solution to our energy problems. "I'm glad that Carl and Johanna are on RETI, because we would have seen much worse renewable-energy zones [without them] than we've got," says Hogue. "But it's not a process that started out by asking what is the best solar solution for our state. ... They had already made up their minds."

RETI initially justified its preference for locating large solar thermal projects in the desert by citing numbers showing they were by far the cheapest way to produce renewable energy. But Bill Powers, the San Diego engineer, submitted documents showing RETI was using outdated data, so its assumptions about the cost of building smaller, ground-based solar-panel installations near electrical substations, augmented by rooftop systems, were twice the current estimates. Planning documents issued by RETI have since conceded the point.

Still, the trajectory of current plans—ramping up renewable energy by embracing utility-scale solar plants and big transmission projects like Sunrise Powerlink—did not change in the task force's latest report, released in September. RETI argues that, no matter how California's energy future pans out, placing new transmission lines in areas such as the Mojave will lead to the "least regrets" in the years to come—a notion desert conservationists wholeheartedly dispute.

Yet another series of proposed big solar projects that has touched off fierce battles involves an Oakland-based company called BrightSource Energy, which has contracted with Southern California Edison and Pacific Gas & Electric to provide more than four gigawatts of renewable energy through a variation of the tower technology that was used in experimental facilities dating back to the '80s. The company's investors include Morgan Stanley, Google, Chevron, and Silicon Valley's VantagePoint Venture Partners. Their plan was to begin construction on the first 3 of 14 solar thermal plants by the end of 2009 on a 4,000-acre site in the Ivanpah Valley near the California-Nevada border. The site is adjacent to existing transmission lines, so it was considered ideal except for the fact that it is the home of a small population of endangered desert tortoises.

BrightSource spokesman Keely Wachs says the company and the Sierra Club are working together to deal with the endangered-species issues. "The site was selected for its environmental characteristics," Wachs says. "We want to do this responsibly." But the Center for Biological Diversity intervened in the permit hearings before the California Energy Commission. According to the center's Peter Galvin, the Ivanpah site supports a number of imperiled species and habitats in addition to the desert tortoise. "It's a big desert," he says. "There are plenty of alternative sites."

As head of the Wildlands Conservancy, which presides over the state's largest private system of nature preserves, David Myers is widely known within environmental circles for his ability to broker quiet compromises. But recently he found himself at the center of a highly publicized fight over another big BrightSource solar project slated for a pristine desert area known as the Catellus lands. A 600,000-acre expanse of that property between the Mojave National Monument and Joshua Tree National Park was once owned by railroad companies and then donated to the federal government during the Clinton administration, with the understanding that the area would be preserved in its wild state in perpetuity. Myers's group engineered the unprecedented donation, the largest such private land gift in U.S. history, so he was naturally outraged when the BLM opened those areas for possible solar development. Nineteen companies filed applications to develop solar plants there.

In response to that threat, Myers turned to Senator Feinstein for help. Feinstein had been involved in the Catellus negotiations, and after hearing from Myers she went to work on a proposal for a 1-million-acre national monument. That legislation would force BrightSource and other solar developers to relocate their projects.

BrightSource, however, had powerful allies as well, including attorney Robert Kennedy Jr., who complained that some conservationists were so focused on local concerns that they were "putting the democratic process and sound scientific judgment on hold to jeopardize the energy future of our country."

The argument got particularly nasty when a New York Times article in September quoted Myers as complaining that Kennedy's advocacy for BrightSource might have more to do with his financial ties to the company than his concern for the environment. Kennedy responded in kind. He pointed out that the Wildlands Conservancy's major financial backer (and the source of the $45 million to buy and donate the Catellus lands) is also an investor in a rival company, eSolar, which Myers has praised for eschewing pristine and remote desert sites in favor of less sensitive lands closer to cities. (ESolar has developed a compact form of tower technology that takes up less space than competing systems.)

The spectacle of conservationists as prominent as Kennedy and Myers sniping at one another in the pages of the New York Times underscored the widening rift within the environmental community over the future of renewable energy. And even when BrightSource itself backed down (just ten days after the Times story ran, the company scrapped its plans to build in the Catellus lands), the two sides were hardly closer to a reconciliation. As Myers noted, other companies were still pursuing solar projects in the same area.

And so the battle goes on. At first blush, it seems to be about competing priorities—protecting wilderness versus curbing global warming—but in truth opponents agree that both goals are vital. Rather, the fight is over direction: Who has the best technology, which are the best locations for it, and what is the proper role for utilities in producing the renewable energy that our well-being, as well as the planet's, depends upon.

Meanwhile, conservationists and environmentalists alike say that inaction on greenhouse gasses is not a viable option. With a "one-degree rise in global temperature, we lose about 20 percent of species in California," estimates Zichella of the Sierra Club. A "four-degree rise by the end of the century, [and] we lose a third of the world's species. That's pretty horrifying."

Ed Humes, based in Southern California, is a Pulitzer Prizewinning journalist and author of ten nonfiction books.

Monday, January 18, 2010

Big Ag Squeezes Value While Farmers and Consumers Lose

December 17, 2009

Food & Water Watch

The government is finally wising up to Monsanto’s industry bullying. The Justice Department’s current investigation of the stranglehold agribusinesses have on the food system reveals the confidential commercial licensing agreements at the heart of Monsanto’s market monopolization.

As companies all along the food chain squeeze value out of the system, farmers and consumers lose out. The farm share of the retail food dollar is declining (now less than 20 cents), but retail grocery prices continue to rise. Last year, consumers faced the highest grocery inflation in 30 years.Farmers are caught in a vice between a handful of companies that sell inputs like seed and fertilizer, and the few companies that buy the bounty of their farms (like grain handlers or meatpackers). In a hyper-consolidated marketplace, farmers buy high and sell low. It is no wonder that half of all operations are not breaking even from their farming alone.

Next year, the Justice Department and USDA will hold long-overdue workshops on concentration in agricultural markets. These meetings should be a foundation for a re-energized effort to restore fairness to agricultural markets that have become warped by consolidated agribusiness market power.

-Wenonah Hauter, Executive Director

Food & Water Watch

Friday, January 15, 2010

Forget Wind. Pickens Turns Focus to Gas.

January 14, 2010


DALLAS — Arabic script is about to appear on television sets across the country, with the Texas oilman T. Boone Pickens helpfully reading an English translation.

“Go back to sleep, America; the oil crisis is over,” Mr. Pickens intones, deadpan, in the new video. Seductive Middle Eastern music plays in the background.

But suddenly, the picture switches to American troops on a desert battlefield as flames leap skyward, and Mr. Pickens declares, “I don’t think so!”

What, exactly, is he up to now?

The Texas billionaire spent much of the last two years, and $62 million of his fortune, on an advertising and public relations offensive in which he tried to persuade Americans to embrace his Pickens plan. It called for a vast expansion of wind energy to displace natural gas, freeing the natural gas for use in vehicles, thus displacing foreign oil.

No American with a television set could escape Mr. Pickens’s argument last year. But somehow, a mass conversion to natural gas cars failed to ensue.

So now Mr. Pickens is turning up the volume, and changing his pitch with some extra alarm bells. He is opening his wallet to spend millions more on a new campaign, with the first advertisements scheduled to be broadcast Thursday on cable stations across the country.

His aides hope that a stronger message, focused on national security, will be effective after the attempted Christmas Day airliner bombing and other terrorist actions. They say they discussed whether using the Arabic lettering might be viewed as incendiary or offensive, but concluded that any added attention would be good for the cause.

“We’re infidels with most of these people and they have no use for us,” the 81-year-old oilman said in an interview on the way to a speech here recently. “We’re getting more and more dependent on the wrong people.”

The Pickens campaign has been suspended since October, when Mr. Pickens decided that health care was drowning out the energy debate. But he says he thinks the energy policy will soon move back to the top of Washington’s agenda.

This time, he has tweaked the Pickens plan in a way that just happens to conform with his changing business interests.

The man who made much of his fortune on oil, then in recent years turned to wind power, is now underplaying wind as a possible solution, while continuing to promote natural gas. Some of his stakes in companies would be more valuable if natural gas consumption were to rise.

Natural gas is the cleanest fossil fuel, emitting fewer greenhouse gases than coal or oil. Many experts say they think it is underused as a power and transportation fuel, especially after new technologies recently unlocked huge reserves in shale gas fields across the country.

Proponents of natural gas took a back seat when the House of Representatives passed a climate bill last year, as lawmakers from coal-producing states dug in to keep coal as the nation’s principal fuel for electricity production. Natural gas may get a warmer hearing in the Senate, but its prospects there are also in doubt.

Skeptics say putting in the infrastructure for natural gas vehicles would be too expensive, and battery-powered electric cars and hybrids are a better alternative. And worries are growing that the techniques used to blast through shale rock to release gas could pollute drinking water.

“It’s very hard to move mountains on energy policy, and Pickens has not yet even moved a hill,” said Amy Myers Jaffe, an energy expert atRice University in Houston. “The problem that Pickens faces is that in this country if you are from the oil industry, people are naturally suspicious of what you say on energy policy.”

Since Mr. Pickens began his campaign in 2008, he has been on the road for 178 days, visiting 37 states and 80 cities. He has amassed 1.6 million signatures on a Web site.

For the new effort, he has developed three television commercials with a toughened emphasis on national security. He is preparing to tour the country again to inspire his “army” of citizens to lobby Congress for tax incentives. He will not disclose how much he expects to spend on the effort this time.

In the old version of the plan, Mr. Pickens called on the country to build thousands of wind turbines from Texas to Canada and install transmission lines to deliver the new power to cities across the country. Now, he is playing down wind because he says it has become almost impossible to finance a wind project, largely because cheap gas has made wind power less competitive. His focus is now almost entirely on gas.

He wants the president to convert the entire federal automobile fleet to natural gas. Then he wants Congress to give large tax credits to companies that use natural gas vehicles, and filling stations that install the necessary equipment. By Mr. Pickens’s estimate, just fueling a small percentage of the country’s trucks and buses with gas could displace as much as 8 percent of oil imports within seven years.

“All you need to do is get the oar in the water,” he said. “Then you are on your way to get off OPEC oil.”

Mr. Pickens has not been winning many battles lately. His natural gas fueling company spent an estimated $3 million on an unsuccessful 2008 California ballot initiative that would have authorized the state to borrow $5 billion to invest in natural gas and alternative energy. Then his multibillion-dollar wind project in the Texas panhandle fizzled because of the credit crisis, regulatory issues and other problems. He was forced to put the project on the back burner last year.

Mr. Pickens made his fortune as a buyout artist and raider, jostling the industry when he set his sights on companies like Gulf Oil and Unocal. He lost about $2 billion when oil prices tanked in 2008, but is still worth an estimated $1.2 billion.

Mr. Pickens drew ire on the left when he helped finance attacks on Senator John Kerry’s war record during the 2004 presidential campaign. But these days, some Democrats and environmentalists have made peace with Mr. Pickens. “It’s been valuable to have Boone as part of the team,” said Carl Pope, executive director of the Sierra Club. This week Mr. Pickens held a news briefing with John Podesta, a former Clinton White House chief of staff, to promote natural gas legislation.

Mr. Pickens talks on the stump about eating cheeseburgers with former Vice President Al Gore and, while he stands by the attacks on Mr. Kerry, he said he was now willing to work with the senator.

“That’s a long time ago,” he said. “When you’re old, you can’t remember that far back.”

Thursday, January 14, 2010

Turmoil in Power Sector

JANUARY 14, 2010

Falling Electricity Demand Trips Up Utilities' Plans for Infrastructure Projects

By REBECCA SMITH, Wall Street Journal

Falling U.S. electricity production in the past two years is frustrating the utility industry and shaking up timetables for some major infrastructure projects.

Electricity output decreased 3.7% last year, the steepest drop since 1938, according to federal statistics, following a nearly 1% decline in 2008.

The recent downward trend is making it trickier for utilities to forecast future power consumption, a critical component of planning investments in new power plants and transmission lines.

The falling electricity demand and production are attributed to a weak economy, conservation efforts and, in 2009, a relatively mild summer in many parts of the country.

The possible completion date for the $1.8 billion Potomac Appalachian Transmission Highline, or PATH project, that Allegheny Energy Inc. andAmerican Electric Power Co. intend to build from West Virginia, through Virginia, to Maryland may be delayed by several years because of weaker electricity demand.

Government energy experts believe a strengthening economy will lift electricity production this year, but don't foresee a return to prerecession levels anytime soon. The Energy Information Administration expects industrial demand for electricity to increase 2.2% this year and 2.5% in 2011, which suggests a return to prerecession levels by 2013.

Energy industry consultants Black & Veatch, which recently polled utilities, said it expected "a moderate economic rebound" this year that would lift electricity demand 1.7% a year from 2010 to 2013 before slowing to a 1.1% growth rate. Those estimates take into account increasing energy-conservation efforts.

Mark Griffith, managing director of Black & Veatch, said utilities may be forced to defer infrastructure projects that weren't critically needed in light of the recent weak demand.

Puget Sound Energy said this week that it was reassessing its customers' energy needs, which it may have underestimated last summer, "in an effort not to overstate our need," said spokesman Roger Thompson. The utility based in Bellevue, Wash., now estimates that it will need 1,600 to 1,800 megawatts of new generating capacity by 2017, mostly to replace aging power plants and expiring energy contracts. The company plans to meet about a third of that through energy-efficiency investments that would permanently reduce consumption.

Puget Sound estimated that its energy efficiency efforts would reduce natural-gas consumption by the equivalent of 108,000 homes by 2020 and would cut electricity usage equal to 400,000 homes by that same date.

Utilities are being encouraged by regulators to find greener ways to meet customers' energy needs, relying less on fossil fuels that create pollution and waste-disposal problems.

"There have been tremendous numbers of cancellations of proposed coal-fired plants," said David Owens, spokesman for the Edison Electric Institute, a trade group for investor-owned utilities. "There has been a dash to gas," which burns more cleanly. EEI counts 43 coal plant cancellations or deferrals since 2008 and 15 new projects announced.

Lower energy use is already having an impact on the U.S.'s carbon-dioxide emissions. In 2009, emissions fell by 6.1% to 5.45 billion tons, according to the Energy Information Administration's monthly short-term outlook.

Greenhouse-gas emissions are expected to rise 1.5% to 5.53 billion tons in 2010 as a healthier economy lifts industrial demand.

A 1.7% increase in greenhouse-gas output is expected in 2011.

President Barack Obama has set a goal of cutting greenhouse-gas emissions to 17% below 2005 levels by 2020.

Write to Rebecca Smith at

Monday, January 11, 2010

Missouri Dairy industry revived by New Zealand Farmers

By Phillip O’Connor, Lee Enterprises

VERNON COUNTY -- Kevin van der Poel remembers the skepticism and suspicion when he moved here four years ago from New Zealand with a newfangled approach to raising dairy cattle.

He heard the doubts, peppered with a tall tale or two.

When he started construction on rock walkways for moving cattle between pastures, the rumor spread that he was building housing for victims of Hurricane Katrina.

Some locals thought his cows seemed too thin.

“There was plenty of people who had negative opinions,” said Bernie VanDalfsen, who had farmed in the area for more than two decades.

On and on, van der Poel heard the chatter. He was a foreigner who had purchased a prized farm and had a different way of doing things.

Some folks told him he would fail, though you would be hard-pressed to get many of them to say so now.

Many stakeholders in Missouri agriculture are crediting van der Poel and his colleagues with boosting the state’s dairy industry, which had been reeling from deep declines.

He is one of a handful of New Zealanders who in the past few years have invested $100 million in Missouri’s dairy industry, which annually generates more than $900 million in economic effect.

The New Zealanders operate four dairies — three in Southwest Missouri and one in the Bootheel — and own almost 10 percent of the state’s dairy herd.

With milk prices so low and many dairy farmers losing money, the New Zealanders’ low-cost methods, which mostly involve a different way of feeding cows, are luring converts.

“Their impact has been so significant in our state that it’s hard to get your arms around it,” said David Drennan, executive director of the Missouri Dairy Association.

But, acceptance has come much more slowly.

Tony Finch understands why some people might resent the New Zealanders’ different approach and, ultimately, their success.

“People see that as a threat or a degree of arrogance that we do it right and they do it wrong,” said Finch, general manager of Grasslands Consultants, another New Zealand operation, with 9,000 cows on 10,000 acres around Monett.

“That’s been a struggle — to convince people that what we’re doing is not a threat to what they’re doing, but another way of doing it.”

In many ways, the New Zealanders are returning Missouri dairy farmers to their past.

Traditionally, all Missouri dairies were pasture-based. But, in the 1970s, many began to use confinement operations and increased grain feeding to boost milk production.

In the Ozarks, where most of the dairies are, costs rose as more feed needed to be delivered and more manure needed to be removed. Labor was scarce.

Farm kids were moving away, unwilling to work the intensive hours confinement dairies required.

Shrinking profits and volatile markets drove many out of business or into other types of farming.

As recently as 1975, the state had 20,000 dairy farms and 333,000 dairy cows. Today, there are about 2,000 farms and less than one-third the number of cows.

A decade ago, businesses, farmers, bankers, academics and others gathered around a table in the Greene County Extension Office in Springfield to confront the crisis.

The group realized the business practices of the state’s dairy farms needed to improve.

One way was to tap into one of the state’s great renewable resources — grass. Missouri’s moderate climate, rainfall and short summers and winters make it ideal for growing the kind of forage cows can’t resist.

University of Missouri Extension stepped up its work with the few farmers trying to run pasture-based dairies. The program grew slowly. Most grazed fewer than 100 cows.

“Most of the industry saw it as a stop-gap measure to keep small dairy farmers alive,” said Joe Horner, an economist with MU’s commercial ag program.

Then came the Kiwis.

“They brought in a whole different level of scale than we were used to,” Horner said.

New Zealanders are considered among the most-efficient dairy producers in the world. As a result, much of the country’s suitable land has been converted to pasture, driving up prices and forcing dairy farmers there to look overseas for new opportunities.

Van der Poel, 46, had farmed for 20 years, recently remarried and wanted to expand. The couple found land in Vernon County for $2,000 an acre that would have cost 10 to 15 times as much back home.

Also, because Americans consume most of the milk produced in the United States, they thought prices would be more stable than in New Zealand, where almost all milk is exported.

The operation, which the van der Poels run out of a nondescript yellow barn set back off a rural highway, pumps about $6 million annually into the local community, he said.

They employ 28 people, about a third of the number required

to run a confinement dairy with a similar-size herd.

Despite any differences, newcomers and natives say they have learned from each other and incorporated methods once unique to each country.

New Zealanders have learned to farm in what they call the Midwest’s “big weather,” which sometimes means supplementing grass with grain. Missourians have learned to better manage pasture.

Still, van der Poel said, he has found farming in Missouri more challenging than he anticipated.

There’s also the cultural divide. In New Zealand, van der Poel was surrounded by other dairy farmers.

“At parties, all the men talk about are cows and grass,” he said. “It’s not like that here.”

Saturday, January 9, 2010

$2.3 Billion in New Clean Energy Manufacturing Tax Credits

US Department of Energy

Friday, January 8, 2010

President Obama announced awardees of the clean energy manufacturing tax credit in the American Recovery and Reinvestment Act.

In order to foster investment and job creation in clean energy manufacturing, the American Recovery and Reinvestment Act included a tax credit for investments in manufacturing facilities for clean energy technologies. The Section 48C program will provide a 30 percent tax credit for investments in 183 manufacturing facilities for clean energy products across 43 states.

This tax credit program will help build a robust high technology, US manufacturing capacity to supply clean energy projects with US made parts and equipment. These manufacturing facilities should also support significant growth in US exports of US manufactured clean energy products.

The $2.3 billion in tax credits is being allocated on a competitive basis. Projects are assessed based on the following criteria,: commercial viability, domestic job creation, technological innovation, speed to project completion, and potential for reducing air pollution and greenhouse gas emissions. The Department of Energy also considered additional factors including diversity of geography, technology and project size, and regional economic development.

The program is currently capped at $2.3 billion in tax credits and was oversubscribed by a ratio of more than 3 to 1, reflecting a deep pipeline of high quality clean energy manufacturing opportunities in the U.S. These tax credits for clean energy manufacturing will help rebuild domestic manufacturing and bring private capital off the sidelines.

With this announcement, IRS has certified applications (MS Excel), and notified the certified projects with the approved amount of their tax credit. Awardees will receive acceptance agreements from the IRS by April 16, 2010. Credits will be allocated until the program funding ($2.3 billion) is exhausted. Subsequent allocation periods will depend on remaining funds.

Estimated Jobs Impact and Timeline of the 48C Manufacturing Tax Credits:
Recovery Act investments of up to $2.3 billion for advanced energy manufacturing facilities will generate more than 17,000 jobs. This investment will be matched by as much as $5.4 billion in private sector funding likely supporting up to 41,000 additional jobs.

Timing of Projects:

The statute authorizing the 48C tax credits allows projects that are completed on or after February 17, 2009, when the Recovery Act was signed. Projects must be commissioned before February 17, 2013. The statute favors the selection of projects that are in service early. As a result, some of the selected projects already have been completed and begun operation.

Applicant Pool:

The application deadline for the 48C program was October 16, 2009. Over 500 applications were received with tax credit requests totaling over $8 billion. The 48C applications pool was distributed across many clean energy technologies and was geographically distributed to more than 40 states.

Qualifying manufacturing facilities included the production of a wide range of clean energy products:

Solar, wind, geothermal, or other renewable energy equipment
Electric grids and storage for renewables
Fuel cells and microturbines
Energy storage systems for electric or hybrid vehicles
Carbon dioxide capture and sequestration equipment
Equipment for refining or blending renewable fuels
Equipment for energy conservation, including lighting and smart grid technologies
Plug-in electric vehicles or their components, such as electric motors, generators, and power control units
Other advanced energy property designed to reduce greenhouse gas emissions may also be eligible as determined by the Secretary of the Treasury.

The statutorily specified review criteria included:

Greatest domestic job creation (direct and indirect)
Greatest net impact in avoiding or reducing air pollutants or emissions of greenhouse gases; lowest levelized cost of energy
Greatest potential for technological innovation and commercial deployment
Shortest project time from certification to completion

Expanded Support for 48C Tax Credits to Accelerate Manufacturing Job Creation:

Because the 48C program generated far more interest than anticipated, DOE and Treasury have a substantial backlog of technically acceptable applications. Instead of turning down worthy applicants who are willing to invest private resources to build and equip factories that manufacture clean energy products in America, the Administration has called on Congress to provide an additional $5 billion to expand the program. Because there is already an existing pipeline of worthy projects and substantial interest in this area, these funds will be deployed quickly to create jobs and support economic activity. In doing so, the Administration will employ new approaches to ensure that we maximize private investment for every dollar we invest.

Friday, January 8, 2010

'Google Energy' subsidiary considers clean power

January 6, 2010 9:58 PM PST

by Martin LaMonica

Google took a step toward entering the energy business with the creation of a subsidiary called Google Energy and a request with a federal agency to buy and sell electricity on the wholesale market.

The search giant formed a Delaware-based company called Google Energy on December 16 of last year, according to Delaware state records. The Federal Register on Tuesday referenced Google Energy's request to the Federal Energy Regulatory Commission (FERC), the agency with oversight over the power grid.

Rather than represent a shift beyond Google's core search business, though, the moves are meant to give Google flexibility in pursuing its corporate goal of carbon neutrality, according to a Google representative.

"Right now, we can't buy affordable, utility-scale, renewable energy in our markets," said Google representative Niki Fenwick. "We want to buy the highest quality, most affordable renewable energy wherever we can and use the green credits."

Google already has a very large, 1.6-megawatt solar installation at its Mountain View, Calif., headquarters. But having the ability to buy and sell electricity the way utilities do gives Google the flexibility to use much larger amounts of renewable energy to offset the energy consumption of its operations.

"We don't have any concrete plans. We want the ability to buy and sell electricity in case it becomes part of our portfolio," Fenwick said.

Google is seeking to become a carbon-neutral company by improving the efficiency of its operations, including its energy-hungry data centers. It also has a program of purchasing "high-quality" carbon offsets and it has invested in a renewable energy companies through its philanthropic arm, has funded technology start-ups in solar, enhanced geothermal, and wind. It also developedPowerMeter, a Web-based home electricity monitoring application offered primarily through utilities.

Outside of those efforts, Google employees are active in exploring the intersection of IT and energy, such as ways to use a network of electric car batteries to stabilize grid frequency. Google also created a partnership with General Electric to lobby for policies to promote clean energy.

At an event to discuss U.S. energy policy last November, Google's director of energy and climate initiatives, Dan Reicher, also indicated that Google could get involved in financing large-scale renewable energy projects, according to reports.

Over the past two years, Google has been active in pushing clean energy and efficiency in a variety of ways without becoming directly involved in the business the way a utility is. Making a request with FERC to buy and sell energy for a company outside the utility business is a highly unusual move, experts told Energy & Environment Daily, which reported on Google Energy on Wednesday.

"It's interesting that they'd want to take on the burdens of being a FERC-regulated public utility," John Decker, a partner in the energy regulation practice at Washington, D.C.'s Vinson & Elkins, told Energy & Environment Daily. But, Decker said, "there's no substitute for actually being in the industry if you want to learn about it."

Martin LaMonica is a senior writer for CNET's Green Tech blog. He started at CNET News in 2002, covering IT and Web development. Before that, he was executive editor at IT publication InfoWorld.E-mail Martin.

Monday, January 4, 2010

Alternative Energy Projects Stumble on a Need for Water

September 30, 2009

By TODD WOODY, New York Times

AMARGOSA VALLEY, Nev. — In a rural corner of Nevada reeling from the recession, a bit of salvation seemed to arrive last year. A German developer, Solar Millennium, announced plans to build two large solar farms here that would harness the sun to generate electricity, creating hundreds of jobs.

But then things got messy. The company revealed that its preferred method of cooling the power plants would consume 1.3 billion gallons of water a year, about 20 percent of this desert valley’s available water.

Now Solar Millennium finds itself in the midst of a new-age version of a Western water war. The public is divided, pitting some people who hope to make money selling water rights to the company against others concerned about the project’s impact on the community and the environment.

“I’m worried about my well and the wells of my neighbors,” George Tucker, a retired chemical engineer, said on a blazing afternoon.

Here is an inconvenient truth about renewable energy: It can sometimes demand a huge amount of water. Many of the proposed solutions to the nation’s energy problems, from certain types of solar farms to biofuel refineries to cleaner coal plants, could consume billions of gallons of water every year.

“When push comes to shove, water could become the real throttle on renewable energy,” said Michael E. Webber, an assistant professor at the University of Texas in Austin who studies the relationship between energy and water.

Conflicts over water could shape the future of many energy technologies. The most water-efficient renewable technologies are not necessarily the most economical, but water shortages could give them a competitive edge.

In California, solar developers have already been forced to switch to less water-intensive technologies when local officials have refused to turn on the tap. Other big solar projects are mired in disputes with state regulators over water consumption.

To date, the flashpoint for such conflicts has been the Southwest, where dozens of multibillion-dollar solar power plants are planned for thousands of acres of desert. While most forms of energy production consume water, its availability is especially limited in the sunny areas that are otherwise well suited for solar farms.

At public hearings from Albuquerque to San Luis Obispo, Calif., local residents have sounded alarms over the impact that this industrialization will have on wildlife, their desert solitude and, most of all, their water.

Joni Eastley, chairwoman of the county commission in Nye County, Nev., which includes Amargosa Valley, said at one hearing that her area had been “inundated” with requests from renewable energy developers that “far exceed the amount of available water.”

Many projects involve building solar thermal plants, which use cheaper technology than the solar panels often seen on roofs. In such plants, mirrors heat a liquid to create steam that drives an electricity-generating turbine. As in a fossil fuel power plant, that steam must be condensed back to water and cooled for reuse.

The conventional method is called wet cooling. Hot water flows through a cooling tower where the excess heat evaporates along with some of the water, which must be replenished constantly. An alternative, dry cooling, uses fans and heat exchangers, much like a car’s radiator. Far less water is consumed, but dry cooling adds costs and reduces efficiency — and profits.

The efficiency problem is especially acute with the most tried-and-proven technique, using mirrors arrayed in long troughs. “Trough technology has been more financeable, but now trough presents a separate risk — water,” said Nathaniel Bullard, a solar analyst with New Energy Finance, a London research firm.

That could provide opportunities for developers of photovoltaic power plants, which take the type of solar panels found on residential rooftops and mount them on the ground in huge arrays. They are typically more expensive and less efficient than solar thermal farms but require a relatively small amount of water, mainly to wash the panels.

In California alone, plans are under way for 35 large-scale solar projects that, in bright sunshine, would generate 12,000 megawatts of electricity, equal to the output of about 10 nuclear power plants.

Their water use would vary widely. BrightSource Energy’s dry-cooled Ivanpah project in Southern California would consume an estimated 25 million gallons a year, mainly to wash mirrors. But a wet-cooled solar trough power plant barely half Ivanpah’s size proposed by the Spanish developer Abengoa Solar would draw 705 million gallons of water in an area of the Mojave Desert that receives scant rainfall.

One of the most contentious disputes is over a proposed wet-cooled trough plant that NextEra Energy Resources, a subsidiary of the utility giant FPL Group, plans to build in a dry area east of Bakersfield, Calif.

NextEra wants to tap freshwater wells to supply the 521 million gallons of cooling water the plant, the Beacon Solar Energy Project, would consume in a year, despite a state policy against the use of drinking-quality water for power plant cooling.

Mike Edminston, a city council member from nearby California City, warned at a hearing that groundwater recharge was already “not keeping up with the utilization we have.”

The fight over water has moved into the California Legislature, where a bill has been introduced to allow renewable energy power plants to use drinking water for cooling if certain conditions are met.

“By allowing projects to use fresh water, the bill would remove any incentives that developers have to use technologies that minimize water use,” said Terry O’Brien, a California Energy Commission deputy director.

NextEra has resisted using dry cooling but is considering the feasibility of piping in reclaimed water. “At some point if costs are just layered on, a project becomes uncompetitive,” said Michael O’Sullivan, a senior vice president at NextEra.

Water disputes forced Solar Millennium to abandon wet cooling for a proposed solar trough power plant in Ridgecrest, Calif., after the water district refused to supply the 815 million gallons of water a year the project would need. The company subsequently proposed to dry cool two other massive Southern California solar trough farms it wants to build in the Mojave Desert.

“We will not do any wet cooling in California,” said Rainer Aringhoff, president of Solar Millennium’s American operations. “There are simply no plants being permitted here with wet cooling.”

One solar developer, BrightSource Energy, hopes to capitalize on the water problem with a technology that focuses mirrors on a tower, producing higher-temperature steam than trough systems. The system can use dry cooling without suffering a prohibitive decline in power output, said Tom Doyle, an executive vice president at BrightSource.

The greater water efficiency was one factor that led VantagePoint Venture Partners, a Silicon Valley venture capital firm, to invest in BrightSource. “Our approach is high sensitivity to water use,” said Alan E. Salzman, VantagePoint’s chief executive. “We thought that was going to be huge differentiator.”

Even solar projects with low water consumption face hurdles, however. Tessera Solar is planning a large project in the California desert that would use only 12 million gallons annually, mostly to wash mirrors. But because it would draw upon a severely depleted aquifer, Tessera may have to buy rights to 10 times that amount of water and then retire the pumping rights to the water it does not use. For a second big solar farm, Tessera has agreed to fund improvements to a local irrigation district in exchange for access to reclaimed water.

“We have a challenge in finding water even though we’re low water use,” said Sean Gallagher, a Tessera executive. “It forces you to do some creative deals.”

In the Amargosa Valley, Solar Millennium may have to negotiate access to water with scores of individuals and companies who own the right to stick a straw in the aquifer, so to speak, and withdraw a prescribed amount of water each year.

“There are a lot of people out here for whom their water rights are their life savings, their retirement,” said Ed Goedhart, a local farmer and state legislator, as he drove past pockets of sun-beaten mobile homes and luminescent patches of irrigated alfalfa. Farmers will be growing less of the crop, he said, if they decide to sell their water rights to Solar Millennium.

“We’ll be growing megawatts instead of alfalfa,” Mr. Goedhart said.

While water is particularly scarce in the West, it is becoming a problem all over the country as the population grows. Daniel M. Kammen, director of the Renewable and Appropriate Energy Laboratory at the University of California, Berkeley, predicted that as intensive renewable energy development spreads, water issues will follow.

“When we start getting 20 percent, 30 percent or 40 percent of our power from renewables,” Mr. Kammen said, “water will be a key issue.”