Don’t Hide Energy Innovation Under a Bushel

By Benita Dodd

Benita Dodd, Vice President, Georgia Public Policy Foundation

It’s easy being green these days for environmental activists – green with envy. The darnedest thing has happened in the energy arena, something that this Foundation frequently cites in opposing heavyhanded government mandates and regulation. It’s the innovativeness of Americans.

Not that it’s slowing activists’ efforts to rein in innovation.

A long time ago, Americans faced predictions that oil was running low. “Peak oil” hasn’t happened, thanks to innovation. Vehicles became more fuel-efficient, going farther on less, and businesses and appliances got more energy efficient even as their numbers increased. Improving technology enabled oil producers to locate and extract more resources.

So “global warming” became the reason to push for “renewable” energy such as wind, solar, biomass and waves. Fossil fuels were blamed for increased carbon dioxide emissions melting glaciers and icebergs and flooding low-lying areas. When that didn’t pan out, the mantra became “climate change.” When that got little traction, government stepped in and called for “energy independence” to reduce reliance on fuel imports from unstable and unfriendly countries. (Few pointed out that two of the three top importers are neighboring allies Canada and Mexico.)

Energy “independence” campaigns brought huge subsidies for alternative energy such as biomass (ethanol), solar and wind, and T. Boone Pickens grew famous promoting cleaner, natural gas.

Georgia wisely opted for reliability and expanding Plant Vogtle, outside Augusta – the first nuclear expansion since the legendary Three Mile Island incident. Nuclear power is clean and consistent, though expensive to construct, while waste storage issues are still fiercely debated. (Expect technological innovation to resolve that, too.)

Still, a campaign for solar energy has grown in Georgia, especially amid large taxpayer subsidies offsetting the hefty costs. A buyback program allows Georgia Power customers connected to the grid to sell surplus solar power back to the utility at 17 cents a kilowatt hour. Solar energy advocates pushed unsuccessfully during the 2012 legislative session to increase the power the utility must  buy back (currently limited to 10 Kw for residential customers and 100 Kw for business customers). They also sought to allow power purchase agreements, in which a customer leases or finances the solar panels through another company and contracts to buy the electricity generated, in effect cutting out the utility. (Businesses that invest in solar energy can claim a federal investment tax credit of up to 30 percent.)

The taxpayer subsidies and push to embrace costlier alternative energy were justifiable, many maintained, in anticipation of climbing fossil-fuel costs caused by shrinking resources (peak oil), growing government regulations (environmental concerns) and global uncertainty (energy independence) .

Then came two game changers: technological innovations that improved oil and gas exploration and technological innovations enabling the extraction of unconventional oil resources, such as oil shale and oil sands.

Today, “We have hundreds of years of oil supply stored in unconventional formations in the United States,” Karen Harbert, head of the U.S. Chamber’s Institute for 21st Century Energy, testified before a congressional committee this month.

“In fact, the three states of Colorado, Wyoming and Utah alone contain more oil from oil shale than all of the conventional oil contained in the Middle East. This resource is so vast that when made commercial, it has the real potential to completely alter the global oil markets and secure America’s energy future at the same time.”

The independence, jobs and security this nation wants are at hand. But zealotry threatens innovation. To appease environmentalists, the Obama administration cited environmental concerns in delaying a decision on the Keystone pipeline, which would carry oil from Canadian oil sands, for processing in Texas. Then it gave permission for two deepwater wells in the Gulf to Mexico’s state oil company, which has no experience drilling at that depth.

Over decades, coal, the nation’s most abundant domestic resource, has been regulated into undesirability. And now, predictably, the technology that enables America to tap these vast newly discovered shale resources, hydraulic fracturing – fracking – is being demonized. The federal Environmental Protection Agency is “investigating” after opponents claimed the technique is poisoning groundwater and causing earthquakes. Anyone who has seen the video of an EPA regional administrator explaining the agency’s bullying understands the risk to innovation and progress.

Electricity generation from (cheaper) coal is projected to decline by about 10 percent in 2012 as generation from (cleaner) natural gas increases by about 17 percent. Southern Co., the owner of Georgia Power, announced recently that electricity from natural gas has grown from 16 percent five years ago to 47 percent today, while coal-powered generation has dropped from 70 percent to 35 percent. Unless policy-makers champion innovation and rein in government, Americans will soon know how it’s not climate change by any name, it’s innovation strangulation that undermines the nation.

Leave a Reply

Your email address will not be published. Required fields are marked *