A New Middle Stance Emerges in Debate
over Climate
By ANDREW C. REVKIN
Published: January 1, 2007
Amid the shouting lately about whether global warming is a humancaused catastrophe or a hoax, some usually staid climate scientists in
the usually invisible middle are speaking up.
The discourse over the issue has been feverish since Hurricane
Katrina. Seizing the moment, many environmental campaigners,
former Vice President Al Gore and some scientists have portrayed the
growing human influence on the climate as an unfolding disaster that
is already measurably strengthening hurricanes, spreading diseases
and amplifying recent droughts and deluges.
Conservative politicians and a few scientists, many with ties to energy
companies, have variously countered that human-driven warming is
inconsequential, unproved or a manufactured crisis.
A third stance is now emerging, espoused by many experts who
challenge both poles of the debate.
They agree that accumulating carbon dioxide and other heat-trapping
smokestack and tailpipe gases probably pose a momentous
environmental challenge, but say the appropriate response is more
akin to buying fire insurance and installing sprinklers and new wiring
in an old, irreplaceable house (the home planet) than to fighting a fire
already raging.
“Climate change presents a very real risk,” said Carl Wunsch, a
climate and oceans expert at the Massachusetts Institute of
Technology. “It seems worth a very large premium to insure ourselves
against the most catastrophic scenarios. Denying the risk seems
utterly stupid. Claiming we can calculate the probabilities with any
degree of skill seems equally stupid.”
Many in this camp seek a policy of reducing vulnerability to all
climate extremes while building public support for a sustained shift to
nonpolluting energy sources.
They have made their voices heard in Web logs, news media
interviews and at least one statement from a large scientific group,
the World Meteorological Organization. In early December, that
group posted a statement written by a committee consisting of most
of the climatologists assessing whether warming seas have affected
hurricanes.
While each degree of warming of tropical oceans is likely to intensify
such storms a percentage point or two in the future, they said, there is
no firm evidence of a heat-triggered strengthening in storms in recent
years. The experts added that the recent increase in the impact of
storms was because of more people getting in harm’s way, not
stronger storms.
There are enough experts holding such views that Roger A. Pielke Jr.,
a political scientist and blogger at the University of Colorado,
Boulder, came up with a name for them (and himself): “nonskeptical
heretics.”
“A lot of people have independently come to the same sort of
conclusion,” Dr. Pielke said. “We do have a problem, we do need to
act, but what actions are practical and pragmatic?”
This approach was most publicly laid out in an opinion article on the
BBC Web site in November by Mike Hulme, the director of the
Tyndall Center for Climate Change Research in Britain.
Dr. Hulme said that shrill voices crying doom could paralyze instead
of inspire.
“I have found myself increasingly chastised by climate change
campaigners when my public statements and lectures on climate
change have not satisfied their thirst for environmental drama,” he
wrote. “I believe climate change is real, must be faced and action
taken. But the discourse of catastrophe is in danger of tipping society
onto a negative, depressive and reactionary trajectory.”
Other experts say there is no time for nuance, given the general lack
of public response to the threat posed particularly by carbon dioxide,
a byproduct of burning fossil fuels and forests that persists for a
century or more in the air and is accumulating rapidly in the
atmosphere and changing the pH of the oceans.
James E. Hansen, the veteran climate scientist with the National
Aeronautics and Space Administration who has spoken out about
climate dangers since 1988, has recently said that scientists have been
too quiet too long.
“If we want to avoid producing a different planet, we need to start
acting now,” and not with paltry steps, he said in a recent e-mail
exchange with a reporter and other scientists. “It seems almost to be a
secret that we cannot put all of the fossil-fuel CO2 into the air without
producing a different planet, and yes, dangerous change. There are
people who don’t know that!”
Debate among scientists over how to describe the climate threat is
particularly intense right now as experts work on the final language in
portions of the latest assessment of global warming by the
Intergovernmental Panel on Climate Change.
In three previous reports, the last published in 2001, this global
network of scientists operating under the auspices of the United
Nations has presented an ever-firmer picture of a growing human
role in warming.
Studies used to generate the next report (portions are to be issued in
February) have shown a likely warming in the 21st century — unless
emissions of greenhouse gases abate — at least several times that of
the last century’s one-degree rise.
But substantial uncertainty still clouds projections of important
impacts, like how high and quickly seas would rise as ice sheets
thawed.
Recent drafts of the climate report used a conservative analysis that
does not project a rise most people would equate with catastrophe,
scientists involved in writing it say. Other experts say this may send
too comforting a message.
Dr. Hulme insists that it is best not to gloss over uncertainties.
In fact, he and other experts say that uncertainty is one reason to act
— as a hedge against the prospect that problems could be much worse
than projected.
His goal, Dr. Hulme said, is to raise public appreciation of the
unprecedented scale and nature of the challenge.
“Climate change is not a problem waiting for a solution (least of all a
solution delivered and packaged by science), but a powerful idea that
will transform the way we develop,” he said in an e-mail message.
Dr. Hulme and others avoid sounding alarmist, but offer scant
comfort to anyone who doubts that humans are contributing to
warming or believes the matter can be deferred.
These experts see a clear need for the public to engage now, but not to
panic. They worry that portrayals of the issue like that in “An
Inconvenient Truth,” the documentary focused on the views of Mr.
Gore, may push too hard.
Many in this group also see a need to portray clearly that the response
would require far more than switching to fluorescent light bulbs and
to hybrid cars.
“This is a mega-ethical challenge,” said Jerry D. Mahlman, a
climatologist at the National Center for Atmospheric Research in
Boulder, Colo., who has studied global warming for more than three
decades. “In space, it’s the size of a planet, and in time, it has scales
far broader than what we go-go Homo sapiens are accustomed to
dealing with.”
Dr. Mahlman and others say that the buildup of carbon dioxide and
other greenhouse gases cannot be quickly reversed with existing
technologies. And even if every engine on earth were shut down
today, they add, there would be no measurable impact on the
warming rate for many years, given the buildup of heat already
banked in the seas.
Because of the scale and time lag, a better strategy, Dr. Mahlman and
others say, is to treat human-caused warming more as a risk to be
reduced than a problem to be solved.
These experts also say efforts to attribute recent weather extremes to
the climate trend, though they may generate headlines in the short
run, distract from the real reasons to act, which relate more to the
long-term relationship of people and the planet.
“Global warming is real, it’s serious, but it’s just one of many global
challenges that we’re facing,” said John M. Wallace, a climatologist at
the University of Washington. “I portray it as part of a broader
problem of environmental stewardship — preserving a livable planet
with abundant resources for future generations.”
Some experts, though, argue that moderation in a message is likely to
be misread as satisfaction with the pace of change.
John P. Holdren, an energy and environment expert at Harvard and
president of the American Association for the Advancement of
Science, defended the more strident calls for limits on carbon dioxide
and other heat-trapping gases.
“I am one of those who believes that any reasonably comprehensive
and up-to-date look at the evidence makes clear that civilization has
already generated dangerous anthropogenic interference in the
climate system,” Dr. Holdren said. “What keeps me going is my belief
that there is still a chance of avoiding catastrophe.”
THE ENERGY CHALLENGE
Wal-Mart Puts Some Muscle Behind PowerSipping Bulbs
Emile Wamsteker for The New York Times
Customer Andres Moreno walked past a Wal-Mart display of energy-saving fluorescent light bulbs
in Secaucus, N.J.
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By MICHAEL BARBARO
Published: January 2, 2007
As a way to cut energy use, it could not be simpler. Unscrew a light
bulb that uses a lot of electricity and replace it with one that uses
much less.
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While it sounds like a promising idea, it turns out that the longlasting, swirl-shaped light bulbs known as compact fluorescent lamps
are to the nation’s energy problem what vegetables are to its obesity
epidemic: a near perfect answer, if only Americans could be
persuaded to swallow them.
But now Wal-Mart Stores, the giant discount retailer, is determined
to push them into at least 100 million homes. And its ambitions
extend even further, spurred by a sweeping commitment from its
chief executive, H. Lee Scott Jr., to reduce energy use across the
country, a move that could also improve Wal-Mart’s appeal to the
more affluent consumers the chain must win over to keep growing in
the United States.
“The environment,” Mr. Scott said, “is begging for the Wal-Mart
business model.”
It is the environmental movement’s dream: America’s biggest
company, legendary for its salesmanship and influence with
suppliers, encouraging 200 million shoppers to save energy.
For all its power in retailing, though, Wal-Mart is meeting plenty of
resistance — from light-bulb makers, competitors and consumers. To
help turn the tide, it is even reaching out to unlikely partners like
Google, Home Depot and Hollywood.
A compact fluorescent has clear advantages over the widely used
incandescent light — it uses 75 percent less electricity, lasts 10 times
longer, produces 450 pounds fewer greenhouse gases from power
plants and saves consumers $30 over the life of each bulb. But it is
eight times as expensive as a traditional bulb, gives off a harsher light
and has a peculiar appearance.
As a result, the bulbs have languished on store shelves for a quarter
century; only 6 percent of households use the bulbs today.
Which is what makes Wal-Mart’s goal so wildly ambitious. If it
succeeds in selling 100 million compact fluorescent bulbs a year by
2008, total sales of the bulbs in the United States would increase by
50 percent, saving Americans $3 billion in electricity costs and
avoiding the need to build additional power plants for the equivalent
of 450,000 new homes.
That would send shockwaves — some intended, others not — across
the lighting industry. Because compact fluorescent bulbs last up to
eight years, giant manufacturers, like General Electric and Osram
Sylvania, would sell far fewer lights. Because the bulbs are made in
Asia, some American manufacturing jobs could be lost. And because
the bulbs contain mercury, there is a risk of pollution when millions
of consumers throw them away.
Michael B. Petras, vice president of lighting at G.E., concedes that
“the economics are better with incandescent bulbs.”
All that has only spurred Wal-Mart to redouble its efforts — and, in
typical fashion, it is asking those who may be hurt by the change to
help achieve it.
During an extraordinary meeting in Las Vegas in early October,
competing bulb makers, academics, environmentalists and
government officials met to ponder, at times uncomfortably, how
Wal-Mart could sell more of the fluorescent lights.
The proposals discussed at what Wal-Mart dubbed the “light bulb
summit” ranged from the practical (advertise the bulbs on the back of
a Coke 12-pack) to the quixotic (create a tax on incandescent bulbs to
make them more expensive).
Selling 100 million bulbs “is not a slam dunk by any stretch of the
imagination,” Stephen Goldmacher, an executive at Royal Philips, the
Dutch company that is one of the world’s largest light-bulb makers,
told the group. “If this were easy, it would have happened already.”
The attendees did not need to look far for evidence. Wal-Mart had
asked the owners of the Mirage Hotel and Casino, where the
conference was held, to commit to using the energy saving bulbs in its
guest rooms in time for the meeting. The hotel politely declined.
It is not alone. Compact fluorescent bulbs, introduced in the United
States with much fanfare in 1979 by Philips just as the nation’s second
energy crisis of the decade was getting under way, have never
captured the public imagination.
The new bulbs — lighted by sparking an efficient chemical reaction,
rather than heating a metal filament — were ungainly, took several
seconds to light up and often did not fit into traditional light fixtures.
Since then, refinements have made them far more convenient to use,
reducing their size and price as well. But Wal-Mart sold only 40
million in 2005, compared with about 350 million incandescent
bulbs, according to people briefed on the figures.
And it would have stayed that way unless Wal-Mart decided to go
green. More than a year ago, Mr. Scott, the company’s chief executive,
began reaching out to some of environmental groups, telling them
that Wal-Mart, long regarded as an environmental offender, wanted
to become a leader on issues like fuel efficiency and greenhouse gas
emissions.
Mr. Scott viewed such a move as a way to use Wal-Mart’s influence to
improve the environment, cut costs and, of course, burnish the
company’s bruised image. In September 2005, Mr. Scott and Andy
Ruben, Wal-Mart’s vice president for strategy and sustainability,
drove 6,000 feet to the Mount Washington Observatory in New
Hampshire with Steve Hamburg, an environmental studies professor
at Brown University, and Fred Krupp, the president of the advocacy
group Environmental Defense.
At the summit, where scientists measure climate change 24 hours a
day, the men discussed global warming, acid rain, the hole in the
ozone layer and what Wal-Mart could do about them.
“You need to look at what is being sold on the shelf,” Mr. Hamburg
recalled telling Mr. Scott over a dinner of turkey and mashed
potatoes. He began talking excitedly about compact fluorescent bulbs.
“Very few products,” he said, “are such a clear winner” for consumers
and the environment.
Soon after returning from the trip, Wal-Mart publicly embraced the
bulbs with the zealotry of a convert. In meetings with suppliers,
buyers for the chain laid out their plans: lower prices, expanding the
shelf space dedicated to them and heavily promoting the technology.
Light-bulb manufacturers, who sell millions of incandescent lights at
Wal-Mart, immediately expressed reservations. In a December 2005
meeting with executives from General Electric, Wal-Mart’s largest
bulb supplier, “the message from G.E. was, ‘Don’t go too fast. We
have all these plants that produce traditional bulbs,’ ” said one person
involved with the issue, who spoke on condition of anonymity
because of an agreement not to speak publicly about the negotiations.
The response from the Wal-Mart buyer was blunt, this person said.
“We are going there,” the buyer said. “You decide if you are coming
with us.”
In the end, as Wal-Mart suppliers generally do, the bulb makers
decided to come with the company.
Philips, despite protests from packaging designers, agreed to change
the name of its compact fluorescent bulbs from “Marathon” to
“energy saver.” To keep up with swelling orders from the chain,
Osram Sylvania took to flying entire planeloads of compact
fluorescent bulbs from Asia to the United States.
“When Wal-Mart sets its mind to something with a narrow objective
like that, they are going to make it happen,” said Jim Jubb, vice
president for consumer product sales at Sylvania.
At the same time that it pressured suppliers, Wal-Mart began testing
ways to better market the bulbs. In the past, Wal-Mart had sold them
on the bottom shelf of the lighting aisle, so that shoppers had to bend
down. In tests that started in February, it gave the lights prime real
estate at eye level. Sales soared.
To show customers how versatile the bulbs could be, Wal-Mart began
displaying them inside the lamps and hanging fans for sale in its
stores. Sales nudged up further.
To explain the benefits of the energy-efficient bulbs, the retailer
placed an education display case at the end of the aisle, where it
occupied four feet of valuable selling space — an extravagance at WalMart. Sales climbed even higher.
In August 2006, the chain sold 3.94 million, nearly twice the 1.65
million it sold in August 2005, according to a person briefed on the
numbers.
But to reach 100 million, Wal-Mart has to do much more — and that,
executives concede, is where the biggest challenges rest. In the fall,
the company began reaching out to competing retailers, Internet
companies and even filmmakers.
The goal was to turn its sales campaign into a broader cultural
movement.
One proposal, headed by Lawrence Bender, who produced Al Gore’s
2006 documentary, “An Inconvenient Truth,” is to create a Web site
that would track sales of compact fluorescent bulbs at major retailers
like Walgreen’s and Target. The result would be a real-time map, with
data collected by a third party, showing how much Americans have
saved by using the energy-efficient bulbs.
Mr. Ruben said such a map “helps consumers see this as something
bigger than buying a bulb.”
At the same time, Google and Yahoo are in talks with Wal-Mart about
how to use their search engines to promote the bulbs.
But Home Depot and Lowe’s balked at the idea of cooperating with
their larger rival. “We don’t think we need an organization like that to
sell more CFLs,” said Ron Jarvis, the vice president of environmental
innovation at Home Depot, using the bulb’s industry nickname.
Then there is the mercury inside the bulbs, a problem Wal-Mart is
working with the federal government and environmental groups to
resolve, possibly by collecting the bulbs at its stores or off-site
locations for recycling.
In the end, though, the biggest obstacle to overcome is America’s love
affair with cheap, familiar-looking incandescent bulbs — a habit 130
years in the making.
For that to turn around, Wal-Mart will have to persuade its
traditional consumers that it is worth paying a bit more at the
checkout counter to save a significant amount money down the line, a
seemingly simple task that few companies ever accomplish. It is
particularly difficult at a retailer that has long emphasized “always
low prices.”
“It has taken the American public forever to grasp this,” said Charlie
Jerabek, the chief executive of Sylvania.
Helen Capone encapsulates the challenge. Ms. Capone, 68, said she
“curses the energy company every month” because of her electricity
bill and loves the five-year-old, trouble-free compact fluorescent bulb
in her attic. But she won’t switch to the energy-saving bulbs in the
rest of her house in Secaucus, N.J. “They are not the prettiest things
in the world,” she said, surveying the bulbs at a Wal-Mart.
That has put Wal-Mart in the strange position of racing ahead of its
customers and coaxing them, bulb by bulb, toward energy
conservation.
“We start with the premise,” Mr. Ruben, “that customers make good
choices.”
THE ENERGY CHALLENGE
Travel Habits Must Change to Make a Big
Difference in Energy Consumption
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By MATTHEW L. WALD
Published: December 30, 2006
WASHINGTON, Dec. 29 — The Environmental Protection Agency
kicked off Energy Awareness Month in October with the slogan
“change a light, change the world,” and encouraged Americans to buy
compact fluorescent lights instead of conventional incandescent
bulbs.
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Useful as that may be, picking a large sport utility vehicle that goes
two miles farther on a gallon of gasoline than the least-efficient
S.U.V.’s would have an impact on emissions of global warming gases
about five times larger than replacing five 60-watt incandescent
bulbs. The dollar savings would be about 10 times larger. And the
more-efficient light bulbs would have a negligible effect on oil
consumption.
Almost everything Americans do uses energy, making the earth
warmer and purses thinner, and often raising demand for oil from
unstable places. People eager to reduce their consumption can take
many steps, but the size of their benefit — or cost — is not always
evident.
The New York Times compared a number of such steps by three
standards — reduction in global warming gases emitted, reduction in
oil consumed and the dollar savings.
The calculations, shown in the accompanying chart, found that while
choosing energy-efficient lighting and appliances makes a difference,
changing how we travel would make by far the biggest difference.
Energy-saving light bulbs, the experts say, are relatively easy to
adopt, and if everybody used them, the collective difference would be
large. But they do not rival vehicles in potential savings.
Changing to a light bulb that gives three times as much light per watt
of electricity means reducing energy use by cutting “a big share of a
small thing,” said Lee Schipper, research director of the World
Resources Institute, an environmental group. But picking a better
vehicle, or using it less, is “a small share of a big thing.” And that has
more potential, he said.
The larger the vehicle, the bigger difference even a small increase in
fuel economy makes. For example, buying an S.U.V. with fuel
economy rated at 16 miles per gallon instead of 14 — say a Chrysler
Pacifica or a Buick Rendezvous, instead of a Chevrolet Tahoe or GMC
Yukon — cuts oil consumption and reduces carbon dioxide emissions
by three and a half times more than saving 2 miles per gallon in a
typical car — going from, say, the 23 miles per gallon consumption of
a V-6 Camry to the 25 miles per gallon of a Saturn Ion or a Honda
Accord hybrid.
Of course, driving a car far more fuel-efficient than an S.U.V. saves
the most of all. But many people will not consider such a vehicle, so
they can help by picking a better model in the class they prefer.
Two miles per gallon may mean nothing more than picking a vehicle
with the standard engine instead of the souped-up version, or picking
the vehicle that has the best fuel economy in its size class.
The 16-mile-per-gallon models (as measured in road tests by
Consumer Reports magazine) are very big S.U.V.’s, although not as
large as the 14-mile-per-gallon models. Mr. Schipper said it was a
change “that your neighbors won’t notice. They won’t look down on
you.”
There are lots of choices available beyond compromising on the size
of an S.U.V. Some of the biggest also involve travel.
Commuting by train or bus, when that choice is available, will make
the biggest difference. Consider the average round trip to work — 23
miles. In the average sedan, which gets 23 miles to the gallon, that is
250 gallons of gas a year and about 5,000 pounds of carbon dioxide
emissions.
In cutting emissions of carbon dioxide, consumers can help by saving
either gasoline or electricity. But as for cutting consumption of oil,
saving electricity provides little help, because only 3 percent of
electricity comes from burning oil.
That said, there are changes around the house that make a big
difference. In many parts of the country, for example, heating a home
for a winter takes about as much energy as running a car for a year. In
a climate like Boston’s, replacing single-pane windows and storm
windows with new thermal windows in a two-story, 2,000-squarefoot house would save about 100 gallons of heating oil (about twothirds as much oil as the switch to a 16-mile-per-gallon S.U.V). It
would also reduce carbon dioxide production by more than 2,000
pounds. If the heating fuel is natural gas, the savings is about 1,600
pounds.
The next biggest energy user at home — again, depending on climate
— is the air-conditioner. Replacing a 10-year-old air-conditioner with
a new one would save about 871 pounds of carbon dioxide a year,
although only a little more than a gallon of oil.
Even the most significant energy savings mentioned here are modest
when compared with what it would take to limit global warming.
Joseph J. Romm, an analyst at the Center for Energy and Climate
Solutions and a head of the Energy Department’s efficiency and
renewable energy program during the Clinton administration, said
American carbon dioxide emissions come to about 44,000 pounds
per person per year. Stabilizing the atmospheric concentration of
carbon dioxide would require cutting that by 26,000 pounds to
35,000 pounds.
But the more modest goal set by the Kyoto Protocol, which would
have required the United States to cut emissions by about 3,100
pounds per person annually, are well within reach.
Mr. Romm, the author of a new book about energy and climate
change, “Hell and High Water,” said that eventually the world’s
industries would have to switch to lower-carbon fuels, but before that
time individuals and industries could take plenty of action. “You use
efficiency to stop demand growth,” he said.
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THE ENERGY CHALLENGE
It’s Free, Plentiful and Fickle
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By MATTHEW L. WALD
Published: December 28, 2006
Correction Appended
Wind, almost everybody’s best hope for big supplies of clean,
affordable electricity, is turning out to have complications.
Enlarge This Image
Emma Graham-Harrison/Reuters
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David J. Phillip/Associated Press
Coal being loaded near Fairfield, Tex. Electricity from coal is cheaper than from wind if the
environmental and health costs are not factored in.
Engineers have cut the price of electricity derived from wind by about
80 percent in the last 20 years, setting up this renewable technology
for a major share of the electricity market. But for all its promise,
wind also generates a big problem: because it is unpredictable and
often fails to blow when electricity is most needed, wind is not reliable
enough to assure supplies for an electric grid that must be prepared to
deliver power to everybody who wants it — even when it is in greatest
demand.
In Texas, as in many other parts of the country, power companies are
scrambling to build generating stations to meet growing peak
demands, generally driven by air-conditioning for new homes and
businesses. But power plants that run on coal or gas must “be built
along with every megawatt of wind capacity,” said William Bojorquez,
director of system planning at the Electric Reliability Council of
Texas.
The reason is that in Texas, and most of the United States, the hottest
days are the least windy. As a result, wind turns out to be a good way
to save fuel, but not a good way to avoid building plants that burn
coal. A wind machine is a bit like a bicycle that a commuter keeps in
the garage for sunny days. It saves gasoline, but the commuter has to
own a car anyway.
Xcel Energy, which serves eight states from North Dakota to Texas
and says it is the nation’s largest retailer of wind energy, is eager to
have more. Wind is “abundant and popular,” said Richard C. Kelly,
the chairman, president and chief executive, speaking at a recent
conference on renewable energy.
But Frank P. Prager, managing director of environmental policy at the
company, said that the higher the reliance on wind, the more an
electricity transmission grid would need to keep conventional
generators on standby — generally low-efficiency plants that run on
natural gas and can be started and stopped quickly.
He said that in one of the states the company serves, Colorado,
planners calculate that if wind machines reach 20 percent of total
generating capacity, the cost of standby generators will reach $8 a
megawatt-hour of wind. That is on top of a generating cost of $50 or
$60 a megawatt-hour, after including a federal tax credit of $18 a
megawatt-hour.
By contrast, electricity from a new coal plant currently costs in the
range of $33 to $41 a megawatt-hour, according to experts. That
price, however, would rise if the carbon dioxide produced in burning
coal were taxed, a distinct possibility over the life of a new coal plant.
(A megawatt-hour is the amount of power that a large hospital or a
Super Wal-Mart would use in an hour.)
Without major advances in ways to store large quantities of electricity
or big changes in the way regional power grids are organized, wind
may run up against its practical limits sooner than expected.
At a recent discussion of clean energy technologies held at General
Electric’s research center in Niskayuna, N.Y, Dan W. Reicher, a
former assistant secretary of energy for conservation and renewable
energy, predicted that renewables, led by wind, could reach 20
percent of demand in the next decade or two. President Bush has also
said that wind could supply 20 percent of the nation’s electricity.
But Mr. Reicher drew a quick response from James E. Rogers, chief
executive of Duke Energy, one of the nation’s largest utilities, and
chairman of the Edison Electric Institute, the industry’s trade
association. “I love his optimism,” Mr. Rogers said. “But
unfortunately, I have to deliver electricity every day.”
Mr. Rogers said that wind and another big renewable source that is
available only when nature cooperates, solar power, will be necessary
because the government would eventually regulate carbon emissions
from coal-fired power plants. He later said that his reply to Mr.
Reicher had been a “cheap shot,” but he and others are still
wondering how much wind the nation can absorb.
General Electric, a major maker of wind machines, says that along
with lowering the price for a megawatt-hour, engineers have made
other improvements in wind machines. With better electronic
controls, many of them now help stabilize voltage on the grid, and
have been cured of their tendency to shut off when detecting a voltage
fluctuation, a problem that can escalate into a blackout.
Juan de Bedout, manager of the electric power and propulsion
systems lab at G.E., said this was more important now because wind
machines had grown from a few hundred kilowatts to 1.5 megawatts,
and his company was exploring machines four times bigger than that.
“That’s ginormous,” he said.
In many places, wind tends to blow best on winter nights, when
demand is low. When it is available, power from wind always
displaces the most expensive power plant in use at that moment. If
wind blew in summer, it would displace expensive natural gas. But in
periods of low demand, it is displacing cheap coal.
And in places where suppliers enter bids each day to supply power on
the next day, on an hour-by-hour basis, wind is at a disadvantage.
Wider use of wind requires the invention of a new kind of weather
forecasting, according to the Electric Power Research Institute, a
nonprofit consortium based in Palo Alto, Calif., sponsored by the
utility industry and its suppliers. Rather than forecasting from
temperature or rainfall, what is needed is a focus on almost minuteby-minute predictions of wind in small areas where the turbines are.
The economics of wind would change radically if the carbon dioxide
emitted by coal were assigned a cash value, but in the United States it
has none. Coal plants produce about a ton of carbon dioxide each
megawatt hour, on average, so a price of $10 a ton would have a
major impact on utility economics.
Another possibility is energy storage, although this presents other
difficulties.
In May, Xcel and the Energy Department announced a research
program to use surplus, off-peak electricity from wind to split water
molecules into hydrogen and oxygen. The hydrogen could be burned
or run through a fuel cell to make electricity when it was needed
most. Xcel plans to invest $1.25 million, and the government
$750,000. But storage imposes a high cost: about half the energy put
into the system is lost.
The Electric Power Research Institute said that existing hydroelectric
dams could be used as storage; they can increase and decrease their
generation quickly, and each watt generated in a wind machine
means water need not be run through the dam’s turbines; it can be
kept in storage, ready for use later, when it is most needed.
The institute listed another possibility, still in the exploratory stage:
using surplus electricity made from wind to pump air, under
pressure, into underground caverns. At peak hours, the compressed
air could be withdrawn and injected into generators fired by natural
gas. Natural-gas turbines usually compress their own air;
compression from wind would cut gas consumption by 40 percent,
the institute said.
That would help with an important goal, reducing consumption of
natural gas, which is increasingly scarce and costly in North America.
But not everyone is so sanguine that wind will do that.
Paul Wilkinson, vice president for policy analysis at the American Gas
Association, the trade group for the utilities that deliver natural gas,
said that wind, while helpful in making more gas available for home
heating and industrial use, would still need a gas generator to back it
up. And the units used as backup are generally chosen for low
purchase price, not efficient use of fuel.
At the American Wind Energy Association, Robert E. Gramlich, the
policy director, said that one solution would be to organize control of
the electric grid into bigger geographic areas, so that a drop-off in
wind in one place would be balanced by an increase somewhere else,
reducing the need for conventional backup. That is among several
changes the wind industry would like in the electric system; another
is easier construction of new power lines, because many of the best
wind sites are in prairies or mountain ranges far from where the
electricity is needed.
A problem for new power lines is that they would be fully loaded for
only some of the year, since the amount of energy that the average
wind turbine produces over 12 months is equal to just 30 to 40
percent of the amount that would result from year-round operation at
capacity. That number runs closer to 90 percent at a nuclear or coal
plant.
Thus a 1,000-megawatt nuclear plant will produce nearly three times
as much electricity as 1,000 megawatts of wind turbines. But
operating costs at the wind farm are lower, and the fuel is, of course,
free.
Correction: December 29, 2006
An article in Business Day yesterday about the difficulties of relying
on the wind to provide electricity included an outdated reference to
the company led by James E. Rogers, who expressed some concern
about wind energy. It is Duke Energy, not Cinergy, which was
acquired by Duke. The article also misstated the size of the wind
turbines produced by General Electric. They are 1.5 megawatts, not
gigawatts.
Outsize Profits, and Questions, in Effort to
Cut Warming Gases
Quilai Shen for The New York Times
The view from a dirt road near a chemical plant in Quzhou, China, provides a sense of how
severe pollution is becoming as the nation industrializes.
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By KEITH BRADSHER
Published: December 21, 2006
QUZHOU, China — Foreign businesses have embraced an obscure
United Nations-backed program as a favored approach to limiting
global warming. But the early efforts have revealed some hidden
problems.
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Cleaning Up
The New York Times
Emissions from a factory in Qu- zhou match those of a million cars.
Under the program, businesses in wealthier nations of Europe and in
Japan help pay to reduce pollution in poorer ones as a way of staying
within government limits for emitting climate-changing gases like
carbon dioxide, as part of the Kyoto Protocol.
Among their targets is a large rusting chemical factory here in
southeastern China. Its emissions of just one waste gas contribute as
much to global warming each year as the emissions from a million
American cars, each driven 12,000 miles.
Cleaning up this factory will require an incinerator that costs $5
million — far less than the cost of cleaning up so many cars, or other
sources of pollution in Europe and Japan.
Yet the foreign companies will pay roughly $500 million for the
incinerator — 100 times what it cost. The high price is set in a
European-based market in carbon dioxide emissions. Because the
waste gas has a far more powerful effect on global warming than
carbon dioxide emissions, the foreign businesses must pay a premium
far beyond the cost of the actual cleanup.
The huge profits from that will be divided by the chemical factory’s
owners, a Chinese government energy fund, and the consultants and
bankers who put together the deal from a mansion in the wealthy
Mayfair district of London.
Arrangements like this still make sense to the foreign companies
financing them because they are a lot less expensive, despite the large
profit for others, than cleaning up their own operations.
Such efforts are being watched in the United States as an alternative
more politically attractive than imposing taxes on fossil fuels like coal
and oil that emit global-warming gases when burned.
But critics of the fast-growing program, through which European and
Japanese companies are paying roughly $3 billion for credits this
year, complain that it mostly enriches a few bankers, consultants and
factory owners.
With so much money flowing to a few particularly lucrative cleanup
deals, the danger is that they will distract attention from the broader
effort to curb global warming gases, and that the lure of quick profit
will encourage short-term fixes at the expense of fundamental, longrun solutions, including developing renewable energy sources like
solar power.
As word of deals like this has spread, everyone involved in the nascent
business is searching for other such potential jackpots in developing
countries.
As for more modest deals, like small wind farms, “if you don’t have a
humongous margin, it’s not worth it,” said Pedro Moura Costa, chief
operating officer of EcoSecurities, an emissions-trading company in
Oxford, England.
The financing of the chemical factory’s incinerator here and other
deals like it are now drawing unfavorable attention. Canada’s
environment minister, Rona Ambrose, announced in October that her
government would withdraw from the trading program.
“There is a lot of evidence now about the lack of accountability
around these kinds of projects,” she said.
Another concern is that the program can have unintended results.
The waste gas to be incinerated here is emitted during the production
of a refrigerant that will soon be banned in the United States and
other industrial nations because it depletes the ozone layer that
protects the earth from ultraviolet rays.
Handsome payments to clean up the waste gas have helped chemical
companies to expand existing factories that make the old refrigerant
and even build new factories, said Michael Wara, a carbon-trading
lawyer at Holland & Knight in San Francisco.
Moreover, air-conditioners using this Freon-like refrigerant are much
less efficient users of electricity than newer models. The expansion of
large middle classes in India and China has led to soaring sales of
cheap, inefficient air-conditioners, along with the building of coalfired plants to power them, further contributing to global warming
and the depletion of the ozone layer.
The program is at the forefront of efforts to address the most
intractable problem in climate change: how to limit soaring emissions
from the largest developing countries. Sometime in 2009, China’s
total emissions of carbon dioxide, the most important global warming
gas, are expected to surpass those from the United States, according
to the International Energy Agency.
While the challenge of addressing global warming is daunting, so are
the consequences of inaction. Scientists warn that rising
concentrations of carbon dioxide and other global warming gases
could result in more severe storms, wide crop failures, the spread of
tropical diseases and rising sea levels endangering some coastal cities.
Programs like the one the United Nations supports are increasingly
common in Europe. In general, they allow companies to buy rights on
the market to exceed their limits on global warming gases from other
companies prepared to reduce emissions elsewhere at a lower cost.
Many economists consider emissions-trading systems, which are
driving participants to the cheapest cleanups with the biggest impact,
as the most efficient way to address pollution.
But a study commissioned by the world organization has found that
the profits are enormous in destroying trifluoromethane, or HFC-23,
a very potent greenhouse gas that is produced at the factory here and
several dozen other plants in developing countries. The study
calculated that industrial nations could pay $800 million a year to
buy credits, even though the cost of building and operating
incinerators will be only $31 million a year.
The situation has set in motion a diplomatic struggle pitting China,
the biggest beneficiary from payments, against advanced industrial
nations, particularly in Europe. At a global climate conference in
Nairobi, Kenya, in November, European delegates suggested that in
the case of Freon factories now under construction in developing
countries, any payments for the incineration of the waste gas should
go only into an international fund to help factories retool for the
production of more modern refrigerants that do not deplete the ozone
layer.
But the Chinese government blocked the initiative, insisting that
money for Chinese factories go into the government’s own clean
energy fund. Negotiators ended up setting up a group to study the
issue.
Even as hundreds of millions of dollars from the program are devoted
to the refrigerant industry, countries in sub-Saharan Africa, which
were originally envisioned as big beneficiaries of emissions trading,
are receiving almost nothing. Just four nations — China, India, Brazil
and South Korea — are collecting four-fifths of the payments under
the program, with China alone collecting almost half.
Two-thirds of the payments are going to projects to eliminate HFC23.
Those payments also illustrate conflicting goals under Kyoto and the
Montreal Protocol, a 1987 agreement that requires the phasing out of
ozone-depleting substances. The problem is that the trading program
backed by the United Nations, known as the Clean Development
Mechanism, is helping support an industry that another international
organization is trying to phase out.
And while ozone depletion is a separate problem from global
warming, some gases, like HFC-23, make both worse. The separate
secretariats under the protocols have little legal authority to resolve
this quandary.
“It’s tricky in that we don’t have a mechanism other than the Security
Council, and who cares there about HFC’s?” said Janos Pasztor, the
acting coordinator of the organization that oversees the program.
In the end, officials say, there should be more projects aimed at
providing renewable energy and sustainable economic development
for the world’s poorest people.
“If people only do HFC-23 projects, then they miss the whole idea,”
Mr. Pasztor said.
Richard Rosenzweig, chief operating officer of Natsource, a company
in Washington arranging emissions deals between poor and rich
countries, said it was not fair to look only at incineration costs and
compare them with the size of payments from industrial nations. The
administrative costs of the program are high, he said, and at least
disposal of the waste gas is taking place.
If the world tried to reduce emissions through an outright ban or
regulation alone, as many environmentalists recommend, it might not
happen at all, he said. The United Nations-favored program may have
flaws, he added, but “it’s a pilot phase — this is a 100-year problem.”
Environmental groups say that governments in developing countries
should either require factories to incinerate the waste gas as a cost of
doing business, or receive aid from wealthier countries to cover the
relatively modest cost of incinerators.
“Couldn’t we pay for the cost, or even twice the cost, of abatement and
spend the rest of the money in better ways?” Mr. Wara asked.
DuPont produces HFC-23 as part of its output of Teflon, but has
routinely burned the colorless, odorless waste gas without
compensation for many years, even though it is not required by law to
do so, a DuPont spokeswoman said.
The secretariat of the Clean Development Mechanism estimates that a
ton of HFC-23 in the atmosphere has the same effect as 11,700 tons of
carbon dioxide. James Cameron, the vice chairman of Climate
Change Capital, which organized the chemical factory deal here, said
there were considerable costs and risks in setting up plans that
required elaborate certification by consultants, acceptance by
developing-country governments and approval by a United Nations
secretariat.
For small projects involving less than $250,000 worth of credits, fees
for deal makers, consultants and lawyers can far exceed the cost of
installing equipment to clean up emissions.
Even the Chinese government, the main seller of carbon credits and a
defender of the program, is expressing some misgivings.
“We do not encourage more HFC projects,” a statement by Lu Xuedu,
deputy director of the Office of Global Environment Affairs at the
Ministry of Science and Technology, said. “We would prefer to have
more energy efficiency and renewable-energy projects that could help
alleviate poverty in the countryside.”
But for now, the projects involving industrial gases like HFC-23 are
where most of the action is.
“You can do those quickly,” Mr. Rosenzweig of Natsource said, “and
it’s worth the investment.”
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THE ENERGY CHALLENGE
The Cost of an Overheated Planet
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By STEVE LOHR
Published: December 12, 2006
The iconic culprit in global warming is the coal-fired power plant. It
burns the dirtiest, most carbon-laden of fuels, and its smokestacks
belch millions of tons of carbon dioxide, the main global warming gas.
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Climate Change Science Project
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"Alternatives to Kyoto: the Case for a Carbon Tax" by Richard N. Cooper of Harvard
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Report From the National Commission on Energy Policy
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Web Site of Venture Firm Headed by Vinod Khosla, an Alternative Energy Investor
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Carbon’s Possible Future
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Chris Keane for The New York Times
James E. Rogers, chief executive of Duke Energy and chairman of a leading utility trade group, at
an electrical substation in Charlotte, N.C.
So it is something of a surprise that James E. Rogers, chief executive
of Duke Energy, a coal-burning utility in the Midwest and the
Southeast, has emerged as an unexpected advocate of federal
regulation that would for the first time impose a cost for emitting
carbon dioxide. But he has his reasons.
“Climate change is real, and we clearly believe we are on a route to
mandatory controls on carbon dioxide,” Mr. Rogers said. “And we
need to start now because the longer we wait, the more difficult and
expensive this is going to be.”
Global warming is not only an environmental hazard, but also a great
challenge for economic policy. Without economic incentives, analysts
say, the needed investments in industrial cleanup, innovative lowcarbon technologies, fuel-efficient cars and other ways of reducing
energy waste will not occur.
Mr. Rogers’s stance is far from universal within the power industry,
but it has surprising support, particularly from those, like him, who
also produce electricity from carbon-free nuclear reactors.
And despite the Bush administration’s adamant opposition to any
limits on fossil fuel emissions, the idea is beginning to pick up
momentum in the American political arena as well. Already,
California has adopted a policy aimed at reducing the state’s
contribution to global warming by 25 percent in the next 14 years.
In Washington, several influential lawmakers, including Senator John
McCain, a leading Republican contender for president in 2008, have
introduced legislation intended to limit the nation’s carbon dioxide
output.
But how would those goals be achieved? Global warming can be seen
as a classic “market failure,” and many economists, environmental
experts and policy makers agree that the single largest cause of that
failure is that in most of the world, there is no price placed on
spewing carbon dioxide into the atmosphere.
Yet it is increasingly clear that there is a considerable cost to carbon
dioxide emissions, especially to future generations, as climate
specialists warn of declines in farm output in poor tropical countries,
fiercer hurricanes and coastal floods that could make many people
refugees.
Price List for Polluting
“Setting a real price on carbon emissions is the single most important
policy step to take,” said Robert N. Stavins, director of the
environmental economics program at Harvard University. “Pricing is
the way you get both the short-term gains through efficiency and the
longer-term gains from investments in research and switching to
cleaner fuels.”
Some academics see an analogy between a global warming policy and
the pursuit of national security in the cold war. In the late 1950s,
American military spending reached as high as 10 percent of the gross
domestic product and averaged about 4 percent, far higher than in
any previous peacetime era. A Soviet nuclear attack was a danger but
hardly a certainty, just as the predicted catastrophes from global
warming are threats but not certainties.
“The issues are similar in that you pay now so things are less risky in
the future — it’s an insurance policy,” said Richard Cooper, a Harvard
economist. “And in the cold war, we taxed ourselves fairly highly to
mitigate that threat.”
What makes such a view more than a conceptual argument is that
executives like Mr. Rogers, who is also chairman of the Edison
Electric Institute, a utility trade group whose members provide 60
percent of the nation’s electric power, are also pushing for a carbon
dioxide-pricing policy to reduce the risk to their companies.
They say that only with some sort of federal policy in place — which
would probably take the form of a tax on carbon dioxide waste from
any source, or a “cap and trade” regulatory system — will it become
clear what carbon cleanup or fuel-switching moves their companies
may have to make, and on what sort of timetable.
Investors in alternative energy projects also emphasize the need to set
policy priorities.
“We need a policy framework for the long term,” said Vinod Khosla, a
leading environment-oriented venture capitalist. “Fifteen years is the
minimum horizon of stability that we need.”
Beyond incentives for business, a national global warming policy
should include increased federal spending on research on futuristic
technologies to curb carbon emissions, advocates say.
Combating global warming, they say, will require over-the-horizon
breakthroughs involving safe nuclear energy, hydrogen power and
advanced carbon sequestration — or technologies that have not yet
been imagined.
But even today, there are sizable opportunities, by insisting on more
efficient energy use, that are not being seized, according to the
McKinsey Global Institute. In a new report, the institute, a businessoriented research group that is part of McKinsey & Company
consultants, estimated that the yearly growth in worldwide energy
demand could be cut by more than half through 2020 — to an annual
rate of 0.6 percent from a forecast 2.2 percent, using current
technology alone.
Available steps that would yield a more productive, and efficient, use
of energy include compact fluorescent lighting, improved insulation
on new buildings, reduced standby power requirements and an
accelerated push for appliance-efficiency standards.
All these moves, McKinsey said, would save money for consumers
and businesses. “We were really surprised by these huge
straightforward opportunities that are not being taken,” said Diana
Farrell, the McKinsey Global Institute’s director. “In some senses,
there is a big market failure.”
Energy efficiency can help slow the pace at which the risk from global
warming risk increases, but it cannot reverse the trend alone. In the
very long term, environmental experts say, the world’s economy
needs a technological transformation, from deriving 90 percent of its
energy from fossil fuels today to being largely free of emissions from
fossil fuels by 2100, through cleanup steps or alternative energy
sources.
Science and Uncertainty
Given all the uncertainties, the scientists and economists who design
and run simulations of global warming policy acknowledge that their
work is at best a tool for thinking about climate change issues.
Still, they tend to agree that over the next 50 years, the cost of slowing
and eventually reversing carbon emissions growth will be 1 to 2
percent of global economic output. They assume the focus over those
years will be mainly on efficiency and cleaning up electricity
generation.
In later years, their cost projections become more varied, ranging
from 1 percent to as high as 16 percent of global output, depending on
assumptions about how difficult it will be to wean the world’s vehicle
fleet from fossil fuels, and to make other technological leaps.
“Going past 2050, the cleverness really has to kick in,” said John M.
Reilly, an economist at the M.I.T. Joint Program on the Science and
Policy of Global Change.
A global warming policy would be shaped first by science and social
values, before economics. A sensible goal, according to many
environmental specialists, is to try to avert a doubling or more of
atmospheric concentrations of carbon dioxide in this century.
“This is not something that goes on inside a computer, but a grand
political calculation,” said Stephen H. Schneider, a climate expert at
Stanford University.
Yet even in realms of social policy, where uncertainty is high, there is
an implicit calculation of costs and benefits. In the case of global
warming, the cost of society’s insurance policy may well be worth it,
measured in the damage averted.
But it will not be cheap. Take the experts’ consensus estimate that
curbing carbon dioxide emissions over the next 50 years will, on
average, cost about 1 percent of global economic activity annually.
It seems a modest figure. Yet in today’s terms, 1 percent of the United
States economy is more than $120 billion a year, or $400 a person.
Put another way, $120 billion is about equal to the Bush
administration’s tax cuts in 2001; it is also roughly the amount spent
on the Iraq and Afghanistan wars this year.
“There’s no easy way around the fact that if global warming is a
serious risk, there will be serious costs,” said W. David Montgomery,
an economist at Charles River Associates, a consulting group.
A price on carbon dioxide emissions, most economists agree, would
be the most efficient way to combat global warming. And the price,
they say, should start small to give industries time to adapt, then
ratchet up over the years to encourage long-term investments in
energy saving, carbon cleanup and new technology.
The two methods of pricing carbon are to charge a tax on each ton of
carbon dioxide emitted into the air, or to place a cap on total
emissions and then let polluters trade permits to emit a ton of carbon
dioxide.
Economists like William D. Nordhaus of Yale and Mr. Cooper of
Harvard advocate a tax as the clearest price signal to the energy
marketplace, and less susceptible to political tampering and market
manipulation than a cap-and-trade system. It could also be used to
raise revenue to offset other taxes.
In a recent paper, Mr. Cooper suggested an initial tax around $14 a
ton of carbon dioxide emitted, which he calculated would translate
roughly into a 100 percent tax on coal and add 12 cents to each gallon
of gasoline. Such a tax would raise as much as $80 billion a year in
the United States.
“There’s nothing sacred about the number,” he said, “but you need to
get a significant price into the system to create the incentive for
people to go out and look for solutions.”
A Quota or a Tax?
Economically, a cap-and-trade system has the same goal as a tax,
putting a price on carbon dioxide emissions, but goes about it
differently. A limit would be placed on overall emissions, with
polluters allocated permits. Then, companies able to go below their
emission targets would be allowed to sell their unused “permits to
pollute” to companies that could not.
A cap-and-trade system also has some political advantages. It can
deflect the anger over higher costs and enable governments to use
their allocations to essentially buy political support, since permits are
the equivalent of cash. Big polluters, who will have to invest most to
clean up, could be granted extra allowances in the early years of the
program to subsidize their investments.
In the United States, caps and trading have a record of success in
combating acid rain, which is caused by sulfur dioxide emissions from
fossil fuel power plants.
“People said it was a crazy idea, too complicated and too regulatory,”
said Richard L. Schmalensee, an M.I.T. economist who was an
economic adviser to the first President Bush when the sulfur
emissions program was designed. “But the lesson learned was that a
cap-and-trade system can work.”
The global warming legislative proposals before Congress — including
one sponsored by Senator McCain and Senator Joseph I. Lieberman
of Connecticut, and another by Senator Jeff Bingaman of New Mexico
— envision cap-and-trade systems.
But the challenge of controlling carbon emissions is far greater than
sulfur. Carbon dioxide is a pervasive byproduct of the economy, and
the polluters are many and varied. Once emitted, carbon dioxide is
vexingly long-lived in the environment.
The early struggles of the European Union’s carbon emission trading
system, set up last year, point to the administrative and political
difficulties. The European governments, responding to lobbying by
domestic businesses, handed out permits that exceeded the emissions
that most companies were already putting into the air. When that
became clear in April, the market price of carbon dioxide emissions
fell by half.
Senator Barbara Boxer of California, who will soon take the chair of
the Senate environment committee, has pledged to push Congress to
impose a price on carbon dioxide emissions, as the Europeans have
done.
Yet without coordinated international action, even if the United
States — the largest source of carbon emissions — reined them in, this
would have only limited effect on global warming. China is on track to
surpass the United States as the leading emitter of carbon dioxide by
2009, according to a recent report by the International Energy
Agency.
“Unless China and India are brought in, it won’t matter much what
the developed world does,” said Scott Barrett, a professor of
environmental economics at the School of Advanced International
Studies of Johns Hopkins University.
But developing nations like China and India, energy specialists say,
would certainly avoid joining any international effort on global
warming without an emphatic move by the United States.
“Every year we delay, we contribute to another year of delay in China,
India and elsewhere,” said Jason S. Grumet, executive director of the
National Commission on Energy Policy, a bipartisan group of energy
experts. “The ecological and economic imperative is to start now.”
THE NATION
A Terrible Thing to Waste. Or Try This.
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By JEREMY W. PETERS
Published: December 10, 2006
ENERGY conservation has been linked with more than its fair share
of ambitious causes: preserving American liberty and saving
humanity, for starters
DEUTSCH “We wanted to shake people up and let them know this is a grave situation,” said
Bryan Black, an executive vice president with Deutsch in New York. In addition to the print ad, his
firm proposed a mock magazine that would be aimed at readers who live in a polluted future.
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KIRSHENBAUM BOND & PARTNERS “America, to be truly free in the world, needs to be
dependent on itself and not on foreign oil,” said Lance Ferguson, associate creative director with
Kirshenbaum Bond & Partners in New York. The slogan is meant to tap into both national pride
and feelings of vulnerability.
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ANOMALY “This is really more to be symbolic, but it has some practical application as well,” said
Johnny Vulkan, a partner with Anomaly in New York. His firm proposed a campaign that would
include these signs and temporarily lower the speed limit to 54 m.p.h. to demonstrate how a
relatively modest effort could produce significant results.
If ever an issue was ripe for one of those ubiquitous, can’t-get-it-outof-your-head public service slogans, one would think that this is it.
But advertisers and the federal government aren’t rushing to produce
a public service campaign along the lines of “Only you can prevent
forest fires” and “This is your brain on drugs,” which have become
part of the national consciousness. The New York Times enlisted
three advertising agencies known for their creative flair to take a shot.
The assignment was to imagine that the Ad Council, the nonprofit
organization behind some of the most memorable public service
announcements, has asked them to create the definitive campaign to
promote energy conservation.
Creating any P.S.A. is a chore, ad executives said, because the goal is
getting people to alter everyday behavior.
“To compel people to change their behavior, we need to help them
decide what’s at stake is worth changing their lifestyle for,” said Gail
Barlow, creative director with Kirshenbaum Bond & Partners, an
advertising agency in New York. “You need to identify something that
people hold dearly.”
Is that their pocketbooks? Drinking water? Security?
The White House has said that the nation’s “addiction” to oil
threatens its ability to compete in the global economy. “We are too
dependent on oil,” President Bush said recently.
Experience shows that even if faced with the loss of something they
say they hold dear, it is hard to sway many Americans because they
don’t see the need to change.
Vice President Dick Cheney, the former chief executive of an oilservices company, famously dismissed conservation as a “personal
virtue” in 2001. Senator James M. Inhofe, Republican of Oklahoma
and chairman of the Senate Environment and Public Works
Committee until control shifts to the Democrats, has called global
warming “the greatest hoax ever perpetrated on the American
people.” In a committee hearing last week, he said that global
warming was exaggerated by “advocates for alarmism.”
Here are the efforts of three advertisers, two of whom said
unabashedly that they have no problem with alarmism.
THE ENERGY CHALLENGE
Budgets Falling in Race to Fight Global
Warming
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By ANDREW C. REVKIN
Published: October 30, 2006
DENVER — Cheers fit for a revival meeting swept a hotel ballroom as
1,800 entrepreneurs and experts watched a PowerPoint presentation
of the most promising technologies for limiting global warming: solar
power, wind, ethanol and other farmed fuels, energy-efficient
buildings and fuel-sipping cars.
The Energy Challenge
The Research Shortage
Articles in this series are examining the ways in which the world is, and is not,
moving toward a more energy efficient, environmentally benign future.
Previous Articles in the Series »
Related Links
An Explainer of Socolow/Pacala's Breakdown of the Carbon Challenge
Recent Congressional Hearing on Whether We Need a "Manhattan Project for Energy"
Historical Trends in Federal R&D
(PDF from aaas.org)
Reversing the Incredible Shrinking Energy R&D Budget
rael.berkeley.edu)
Multimedia
Graphic
What Matters Most
(PDF from
Graphic
Declining Investment in Energy R&D
“Houston,” Charles F. Kutscher, chairman of the Solar 2006
conference, concluded in a twist on the line from the movie “Apollo
13,” “we have a solution.”
Hold the applause. For all the enthusiasm about alternatives to coal
and oil, the challenge of limiting emissions of carbon dioxide, which
traps heat, will be immense in a world likely to add 2.5 billion people
by midcentury, a host of other experts say. Moreover, most of those
people will live in countries like China and India, which are just
beginning to enjoy an electrified, air-conditioned mobile society.
The challenge is all the more daunting because research into energy
technologies by both government and industry has not been rising,
but rather falling.
In the United States, annual federal spending for all energy research
and development — not just the research aimed at climate-friendly
technologies — is less than half what it was a quarter-century ago. It
has sunk to $3 billion a year in the current budget from an inflationadjusted peak of $7.7 billion in 1979, according to several different
studies.
Britain, for one, has sounded a loud alarm about the need for prompt
action on the climate issue, including more research. [A report
commissioned by the British government and scheduled to be
released today calls for spending to be doubled worldwide on research
into low-carbon technologies; without it, the report says, coastal
flooding and a shortage of drinking water could turn 200 million
people into refugees.]
President Bush has sought an increase to $4.2 billion for 2007, but
that would still be a small fraction of what most climate and energy
experts say would be needed.
Federal spending on medical research, by contrast, has nearly
quadrupled, to $28 billion annually, since 1979. Military research has
increased 260 percent, and at more than $75 billion a year is 20 times
the amount spent on energy research.
Internationally, government energy research trends are little different
from those in the United States. Japan is the only economic power
that increased research spending in recent decades, with growth
focused on efficiency and solar technology, according to the
International Energy Agency.
In the private sector, studies show that energy companies have a long
tradition of eschewing long-term technology quests because of the
lack of short-term payoffs.
Still, more than four dozen scientists, economists, engineers and
entrepreneurs interviewed by The New York Times said that unless
the search for abundant non-polluting energy sources and systems
became far more aggressive, the world would probably face
dangerous warming and international strife as nations with growing
energy demands compete for increasingly inadequate resources.
Most of these experts also say existing energy alternatives and
improvements in energy efficiency are simply not enough.
“We cannot come close to stabilizing temperatures” unless humans,
by the end of the century, stop adding more CO2 to the atmosphere
than it can absorb, said W. David Montgomery of Charles River
Associates, a consulting group, “and that will be an economic
impossibility without a major R.& D. investment.”
A sustained push is needed not just to refine, test and deploy known
low-carbon technologies, but also to find “energy technologies that
don’t have a name yet,” said James A. Edmonds, a chief scientist at
the Joint Global Change Research Institute of the University of
Maryland and the Energy Department.
At the same time, many energy experts and economists agree on
another daunting point: To make any resulting “alternative” energy
options the new norm will require attaching a significant cost to the
carbon emissions from coal, oil and gas.
“A price incentive stirs people to look at a thousand different things,’ ”
said Henry D. Jacoby, a climate and energy expert at the
Massachusetts Institute of Technology.
For now, a carbon cap or tax is opposed by President Bush, most
American lawmakers and many industries. And there are scant signs
of consensus on a long-term successor to the Kyoto Protocol, the first
treaty obligating participating industrial countries to cut warming
emissions. (The United States has not ratified the pact.)
The next round of talks on Kyoto and an underlying voluntary treaty
will take place next month in Nairobi, Kenya.
Environmental campaigners, focused on promptly establishing
binding limits on emissions of heat-trapping gases, have tended to
play down the need for big investments seeking energy
breakthroughs. At the end of “An Inconvenient Truth,” former Vice
President Al Gore’s documentary film on climate change, he
concluded: “We already know everything we need to know to
effectively address this problem.”
While applauding Mr. Gore’s enthusiasm, many energy experts said
this stance was counterproductive because there was no way, given
global growth in energy demand, that existing technology could avert
a doubling or more of atmospheric concentrations of carbon dioxide
in this century.
Mr. Gore has since adjusted his stance, saying existing technology is
sufficient to start on the path to a stable climate.
Other researchers say the chances of success are so low, unless
something breaks the societal impasse, that any technology quest
should also include work on increasing the resilience to climate
extremes — through actions like developing more drought-tolerant
crops — as well as last-ditch climate fixes, like testing ways to block
some incoming sunlight to counter warming.
Without big reductions in emissions, the midrange projections of
most scenarios envision a rise of 4 degrees or so in this century, four
times the warming in the last 100 years. That could, among other
effects, produce a disruptive mix of intensified flooding and withering
droughts in the world’s prime agricultural regions.
Sir Nicholas Stern, the chief of Britain’s economic service and author
of the new government report on climate options, has summarized
the cumulative nature of the threat succinctly: “The sting is in the
tail.”
The Carbon Dioxide Problem
Many factors intersect to make the prompt addressing of global
warming very difficult, experts say.
A central hurdle is that carbon dioxide accumulates in the
atmosphere like unpaid credit card debt as long as emissions exceed
the rate at which the gas is naturally removed from the atmosphere by
the oceans and plants. But the technologies producing the emissions
evolve slowly.
A typical new coal-fired power plant, one of the largest sources of
emissions, is expected to operate for many decades. About one large
coal-burning plant is being commissioned a week, mostly in China.
“We’ve got a $12 trillion capital investment in the world energy
economy and a turnover time of 30 to 40 years,” said John P.
Holdren, a physicist and climate expert at Harvard University and
president of the American Association for the Advancement of
Science. “If you want it to look different in 30 or 40 years, you’d
better start now.”
Many experts say this means the only way to affordably speed the
transition to low-emissions energy is with advances in technologies at
all stages of maturity.
Examples include:
¶ Substantially improving the efficiency and cost of solar panels;
¶ Conducting full-scale tests of systems for capturing carbon dioxide
from power plants and pumping it underground;
¶ Seeking efficient ways to generate fuels from crops;
¶ Finding new ways to store vast amounts of energy harvested
intermittently from the wind and sun.
Carbon dioxide levels will stabilize only if each generation persists in
developing and deploying alternatives to unfettered fossil-fuel
emissions, said Robert H. Socolow, a physicist and co-director of a
Princeton “carbon mitigation initiative” created with $20 million
from BP and Ford Motor.
The most immediate gains could come simply by increasing energy
efficiency. If efficiency gains in transportation, buildings, power
transmission and other areas were doubled from the longstanding
rate of 1 percent per year to 2 percent, Dr. Holdren wrote in the M.I.T.
journal Innovations earlier this year, that could hold the amount of
new nonpolluting energy required by 2100 to the amount derived
from fossil fuels in 2000 —a huge challenge, but not impossible.
Another area requiring immediate intensified work, Dr. Holdren and
other experts say, is large-scale demonstration of systems for
capturing carbon dioxide from coal burning before too many old-style
plants are built.
All of the components for capturing carbon dioxide and disposing of it
underground are already in use, particularly in oil fields, where
pressurized carbon dioxide is used to drive the last dregs of oil from
the ground.
In this area, said David Keith, an energy expert at the University of
Calgary, “We just need to build the damn things on a billion-dollar
scale.”
In the United States, the biggest effort along these lines is the 285megawatt Futuregen power plant planned by the Energy Department,
along with private and international partners, that was announced in
2003 by President Bush and is scheduled to be built in either Illinois
or Texas by 2012. James L. Connaughton, the chairman of the White
House Council on Environmental Quality, said the Bush
administration was making this a high priority.
“We share the view that a significantly more aggressive agenda on
carbon capture and storage and zero-pollution coal is necessary,” he
said, adding that the administration has raised annual spending on
storage options “from essentially zero to over $70 million.”
Europe is pursuing a suite of such plants, including one in China, but
also well behind the necessary pace, several experts said.
Even within the Energy Department, some experts are voicing
frustration over the pace of such programs. “What I don’t like about
Futuregen,” said Dr. Kutscher, an engineer at the National Renewable
Energy Laboratory in Golden, Colo., “is the word ‘future’ in there.”
Beyond a Holding Action
No matter what happens in the next decade or so, many experts say,
the second and probably hardest phase of stabilizing the level of
carbon dioxide will fall to the generation of engineers and
entrepreneurs now in diapers, and the one after that. And those
innovators will not have much to build on without greatly increased
investment now in basic research.
There is plenty of ferment. Current research ranges from work on
algae strains that can turn sunlight into hydrogen fuel to the inkjetstyle printing of photovoltaic cells — a technique that could greatly
cut solar-energy costs if it worked on a large scale. One company is
promoting high-flying kite-like windmills to harvest the boundless
energy in the jet stream.
But all of the small-scale experimentation will never move into the
energy marketplace without a much bigger push not only for research
and development, but for the lesser-known steps known as
demonstration and deployment.
In this arena, there is a vital role for government spending, many
experts agree, particularly on “enabling technologies” — innovations
that would never be pursued by private industry because they mainly
amount to a public good, not a potential source of profit, said
Christopher Green, an economist at McGill University.
Examples include refining ways to securely handle radioactive waste
from nuclear reactors; testing repositories for carbon dioxide
captured at power plants; and, perhaps more important, improving
the electricity grid so that it can manage large flows from intermittent
sources like windmills and solar panels.
“Without storage possibilities on a large scale,” Mr. Green said, “solar
and wind will be relegated to niche status.”
While private investors and entrepreneurs are jumping into
alternative energy projects, they cannot be counted on to solve such
problems, economists say, because even the most aggressive venture
capitalists want a big payback within five years.
Many scientists say the only real long-term prospect for significantly
substituting for fossil fuels is a breakthrough in harvesting solar
power. This has been understood since the days of Thomas Edison. In
a conversation with Henry Ford and the tire tycoon Harvey Firestone
in 1931, shortly before Edison died, he said: “I’d put my money on the
sun and solar energy. What a source of power! I hope we don’t have to
wait until oil and coal run out before we tackle that.”
California, following models set in Japan and Germany, is trying to
help solar energy with various incentives.
But such initiatives mainly pull existing technologies into the market,
experts say, and do little to propel private research toward the next
big advances.
The Role of Leadership
At the federal level, the Bush administration was criticized by
Republican and Democratic lawmakers at several recent hearings on
climate change.
Mr. Connaughton, the lead White House official on the environment,
said most critics are not aware of how much has been done.
“This administration has developed the most sophisticated and
carefully considered strategic plan for advancing the technologies that
are a necessary part of the climate solution,” he said. He added that
the administration must weigh tradeoffs with other pressing demands
like health care.
Since 2001, when Mr. Bush abandoned a campaign pledge to limit
carbon dioxide from power plants, he has said that too little is known
about specific dangers of global warming to justify hard targets or
mandatory curbs for the gas.
He has also asserted that any solution will lie less in regulation than
in innovation.
“My answer to the energy question also is an answer to how you deal
with the greenhouse-gas issue, and that is new technologies will
change how we live,” he said in May.
But critics, including some Republican lawmakers, now say that
mounting evidence for risks — including findings that administration
officials have tried to suppress of late — justifies prompt, more
aggressive action to pay for or spur research and speed the movement
of climate-friendly energy options into the marketplace.
Martin I. Hoffert, an emeritus professor of physics at New York
University, said that what was needed was for a leader to articulate
the energy challenge as President John F. Kennedy made his case for
the mission to the moon. President Kennedy said his space goals were
imperative, “not because they are easy, but because they are hard.”
In a report on competitiveness and research released last year, the
National Academies, the country’s top science advisory body, urged
the government to substantially expand spending on long-term basic
research, particularly on energy.
The report, titled “Rising Above the Gathering Storm,” recommended
that the Energy Department create a research-financing body similar
to the 48-year-old Defense Advanced Research Projects Agency, or
Darpa, to make grants and attack a variety of energy questions,
including climate change.
Darpa, created after the Soviet Union launched Sputnik in 1957, was
set up outside the sway of Congress to provide advances in areas like
weapons, surveillance and defensive systems. But it also produced
technologies like the Internet and the global positioning system for
navigation.
Mr. Connaughton said it would be premature to conclude that a new
agency was needed for energy innovation.
But many experts, from oil-industry officials to ecologists, agree that
the status quo for energy research will not suffice.
The benefits of an intensified energy quest would go far beyond
cutting the risks of dangerous climate change, said Roger H. Bezdek,
an economist at Management Information Systems, a consulting
group.
The world economy, he said, is facing two simultaneous energy
challenges beyond global warming: the end of relatively cheap and
easy oil, and the explosive demand for fuel in developing countries.
Advanced research should be diversified like an investment portfolio,
he said. “The big payoff comes from a small number of very large
winners,” he said. “Unfortunately, we cannot pick the winners in
advance.”
Ultimately, a big increase in government spending on basic energy
research will happen only if scientists can persuade the public and
politicians that it is an essential hedge against potential calamity.
That may be the biggest hurdle of all, given the unfamiliar nature of
the slowly building problem — the antithesis of epochal events like
Pearl Harbor, Sputnik and 9/11 that triggered sweeping enterprises.
“We’re good at rushing in with white hats,” said Bobi Garrett,
associate director of planning and technology management at the
National Renewable Energy Laboratory. “This is not a problem where
you can do that.”
More Articles in Business »
British Government Report Calls for Broad
Effort on Climate Issues
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By ANDREW C. REVKIN
Published: October 30, 2006
A report commissioned by the British government and scheduled for
release Monday calls for substantial international cooperation to
combat global warming and doubling public spending on research
into low-carbon technologies.
The main findings of the 16-month study, led by Sir Nicholas Stern,
the chief of Britain’s economic service, were described over the
weekend in several British news reports. The Reuters news agency
quoted the report’s 27-page summary as saying, “The evidence
gathered by the review leads to a simple conclusion: the benefits of
strong, early action considerably outweigh the costs.”
The report, prepared for Tony Blair, the prime minister, and Gordon
Brown, the finance minister, has been heavily promoted by Britain
and environmental groups as one of the most authoritative reviews of
climate costs, although some economists and energy experts at antiregulatory research groups saw it as understating the cost of an
accelerated transition away from the fossil fuels that provide nearly
90 percent of the world’s energy today.
The report, called the Stern Review on the Economics of Climate
Change, will be published online at www.sternreview.org.uk.
If emissions are not cut and temperatures rise as many scientists
project, the Reuters agency quoted the report as saying that, among
various impacts, melting glaciers would threaten one sixth of the
world population by raising sea levels and drying up river sources.
The Observer, a British newspaper, reported that the study cited a
figure of £3.68 trillion (the equivalent of $6.98 trillion) as the cost to
society of failing to start blunting global warming within a decade.
“Our actions over the coming few decades could create risks of major
disruption to economic and social activity, later in this century and in
the next, on a scale similar to those associated with the great wars and
the economic depression of the first half of the 20th century,” the
report said, according to Reuters.
The study estimated that the cost of cutting emissions in 2050 to 60
percent to 80 percent below 1990 levels would be about 1 percent of
total global economic activity by then, Reuters and The Observer said.
If emissions cannot be cut to those levels, the cost from climatic
impacts could be 5 to 20 times higher, The Observer cited the study as
saying.
The study, according to the news reports, said that progress would
best be accomplished by doubling global investment in research on
climate-friendly energy technologies and placing a rising cost on
further emissions of the greenhouse gases, led by carbon dioxide, to
propel the shift toward non-polluting options.
The news reports on the study are consistent with presentations by
Sir Nicholas, including a speech last January at Oxford University.
Other recent estimates of the eventual annual costs of stabilizing
concentrations of greenhouse gases over the 21st century have ranged
from 1 percent of global gross domestic product to 16 percent by
around 2100, not counting any savings from averted damage.
By comparison, the world is currently spending just over $1 trillion a
year, or about 2.5 percent of global gross global domestic product, on
defense, according to a yearly survey by the Stockholm International
Peace Research Institute. (Military spending in the United States is
about 3.7 percent of gross domestic product.)
“This confirms what we’ve seen for a long time,” said Kert Davies, a
climate-policy coordinator for Greenpeace. “The longer we take to act,
the greater the costs will be.”
Jerry Taylor, an expert on energy and climate policy at the Cato
Institute, a libertarian research group in Washington, said the wide
range of cost estimates for cutting emissions “basically tells you we’re
guessing.”
Overall, he said, he put more faith in academic analyses than one
produced at a government’s request, particularly at a time when the
public appears eager to see signs of action on the issue.
The release of the 700-page report, which was 16 months in the
making, will come one week before the start of the latest round of
talks on the Kyoto Protocol, the first international pact requiring cuts
in heat-trapping emissions.
The United States has not ratified the Kyoto pact but is a party to the
voluntary treaty that preceded it, which requires all signatories to
seek to avoid a dangerous buildup of greenhouse gases.
The Kyoto Protocol, an addendum to the original treaty, requires
three dozen participating industrialized countries to cut their
combined emissions 5 percent below 1990 levels between 2008 and
2012.
At the moment, many of the three dozen industrialized countries
bound by the pact are not on track to meet targets. And there are few
indications of a shift toward accepting binding restrictions in the
United States, the world’s biggest emitter of greenhouse gases, or
China and India, which are projected to be the dominant sources of
emissions in a couple of decades.
California, Taking Big Gamble, Tries to Curb
Greenhouse Gases
Max Whittaker for The New York Times
AN INCENTIVE-DRIVEN VENTURE Dan Bolden installing solar panels in a subdivision in
Rocklin, Calif. A new law requires the panels to be a standard option for buyers of new homes by
2012.
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By FELICITY BARRINGER
Published: September 15, 2006
SACRAMENTO — In the Rocky Mountain States and the fast-growing
desert Southwest, more than 20 power plants, designed to burn coal
that is plentiful and cheap, are on the drawing boards. Much of the
power, their owners expected, would be destined for the people of
California.
The Energy Challenge
Clearing the Air
Articles in this series are examining the ways in which the world is, and is not,
moving toward a more energy efficient, environmentally benign future.
Previous Articles in the Series »
Related Links:
Environmental Defense/Center for Energy Efficiency and Renewable
Technology: Report on Coal-Fired Plants
Report on Climate Change and Management of Water Resources in California
2004 National Academy of Sciences: Report on the Impact of Climate Change
in California
American Council for Capital Formation Report: "Is AB 32 a Cost-Effective
Approach?"
California Climate Action Team 2006 Report
The Chamber of Commerce: Rebuttal to the Governor's Climate Action Team's
Report
Multimedia
Video
A California Solar Subdivision
Graphic
Green and Getting Greener
Graphic
An Energy-Thrifty State
Enlarge This Image
Jim Wilson/The New York Times
A POLITICAL PUSH Speaker Fabian Núñez and Assemblywoman Fran Pavley sponsored a law
to cut carbon dioxide emissions by 25 percent.
But such plants would also be among the country’s most potent
producers of carbon dioxide, the king of gases linked to global
warming. So California has just delivered a new message to these
energy suppliers: If you cannot produce power with the lowest
possible emissions of these greenhouse gases, we are not interested.
“When your biggest customer says, ‘I ain’t buying,’ you rethink,” said
Hal Harvey, the environment program director at the William and
Flora Hewlett Foundation, in Menlo Park, Calif. “When you have 38
million customers you don’t have access to, you rethink. Selling to
Phoenix is nice. Las Vegas is nice. But they aren’t California.”
California’s decision to impose stringent demands on suppliers even
outside its borders, broadened by the Legislature on Aug. 31 and
awaiting the governor’s signature, is but one example of the state’s
wide-ranging effort to remake its energy future.
The Democratic-controlled legislature and the Republican governor
also agreed at that time on legislation to reduce industrial carbon
dioxide emissions by 25 percent by 2020, a measure that affects not
only power plants but also other large producers of carbon dioxide,
including oil refineries and cement plants.
The state’s aim is to reduce emissions of climate-changing gases
produced by burning coal, oil and gas. Other states, particularly New
York, are moving in some of the same directions, but no state is
moving as aggressively on as many fronts. No state has been at it
longer. No state is putting more at risk.
Whether all this is visionary or deluded depends on one’s perspective.
This is the state that in the early 1970’s jump-started the worldwide
adoption of catalytic converters, the devices that neutralize most
smog-forming chemicals emitted by tailpipes. This is the state whose
per capita energy consumption has been almost flat for 30 years, even
as per capita consumption has risen 50 percent nationally.
Taking on global warming is a tougher challenge. Though California
was second in the nation only to Texas in emissions of carbon dioxide
in 2001, and 12th in the world, it produced just 2.5 percent of the
world’s total. At best, business leaders asked in a legislative hearing,
what difference could California’s cuts make? And at what cost?
California, in fact, is making a huge bet: that it can reduce emissions
without wrecking its economy, and therefore inspire other states —
and countries — to follow its example on slowing climate change.
Initiatives addressing climate change are everywhere in California,
pushed by legislators, by regulators, by cities, by foundations, by
businesses and by investors.
Four years ago, California became the first state to seek to regulate
emissions of carbon dioxide from automobile tailpipes. Car dealers
and carmakers are challenging the law in federal court.
In late August, Gov. Arnold Schwarzenegger signed a measure
requiring builders to offer home buyers roofs with tiles that convert
sunlight into electricity. Homeowners in some communities are
already choosing them to reduce their electric bills.
California, which has for decades required that refrigerators, air
conditioners, water heaters and other appliances become more
energy efficient, just added to the list: first, chargers for cellphones or
computers; second, set-top boxes and other remote-controlled
devices. Those categories consume up to 10 percent of a home’s
power.
Last fall, California regulators barred major investor-owned electrical
utilities from signing long-term contracts to buy energy unless the
seller’s greenhouse-gas emissions meet a stringent standard.
“We are dealing with it across the board,” said Michael R. Peevey, the
president of the Public Utilities Commission. By contrast, the Bush
administration has been averse to any legislative assault on climate
change.
Opponents say California may hurt its own residents with its cleanenergy mandate. Scott Segal, a lawyer for Bracewell & Giuliani who
represents electric utilities, summarized California’s policy as: “All
electrons are not created equal. We’re going to discriminate against
some of them, and create artificial barriers in the marketplace for
electricity.” California consumers could end up paying more for their
energy and struggling to find enough, Mr. Segal said.
Is California dreaming? Can its multifaceted approach become a
toolkit for other states? Will investors make the state the incubator
for clean-energy technologies that will reduce its energy bills and
buoy its economy? Or will all this turn California into a stagnating
economic island of ever-rising electricity prices and ever-rolling
blackouts?
One thing is certain: The issue will not go away. This summer, a
brutal California heat wave killed roughly 140 people. A 2004
National Academy of Sciences report predicted that, at the current
growth rate of emissions, there would be at least five times as many
heat waves in Los Angeles by 2100 compared with the current
historical average, and twice as many heat-related deaths.
The study predicted that at least half the state’s alpine forests would
disappear by century’s end, and that the Sierra snowpack — crucial to
California’s water supply — would decline by at least 29 percent and
as much as 70 percent.
There seems to be political support, in California and nationally, for
action on climate change. Statewide, a July 26 poll from the Public
Policy Institute of California showed that 79 percent of 2,051 people
surveyed said that global warming was a “very serious” or a
“somewhat serious” threat to the state’s economy and quality of life.
The findings mirrored those of a national poll of 1,206 people
conducted in mid-August by The New York Times and CBS News.
But polling organizations have asked little about the potentially
painful sacrifices that may be required.
The Car Culture
Back in the 1950’s, when the movie director George Lucas was
growing up, cars rocked around the clock in Modesto, and they were
so enshrined in his 1973 hit, “American Graffiti.” The movie
reaffirmed what much of the nation knew — there was no car culture
like California’s. Sleek convertibles? Muscle cars? Sport utility
vehicles? Many were hatched in the design studios of Detroit, but
popularized by Hollywood movies and celebrities, and by plain old
California consumers.
Fast forward to August. In the middle of the sales lot at Modesto
Toyota sat a long row of sport utility vehicles the dealership had
acquired as trade-ins in previous weeks. Leaning on a 2006 Ford
Expedition, George S. Ismail, a sales manager, said, “We’re getting a
lot of people trading in their sport utility vehicles for smaller cars.”
Even heavily discounted, the used S.U.V.’s sit for weeks.
Yet Modesto Toyota is breaking records, Mr. Ismail said, selling about
400 vehicles a month, up from 260 a year ago. Most are small cars —
Camrys and Corollas. Some are hybrid vehicles that use even less fuel,
like the Prius. One-quarter of 200,000 new hybrid vehicles registered
nationwide in 2005 belonged to Californians, according to the
automotive analyst R. L. Polk.
With smaller cars increasingly popular, California now burns less
gasoline per capita than all but six states. Burning less gasoline cuts
carbon dioxide. Tailpipes account for more than half the state’s
carbon dioxide emissions, federal figures show.
Much of this change in driver taste is attributable to the higher price
of gasoline. But what if gasoline prices fall again and bigger, less
efficient vehicles become more popular? California has an answer.
It came from Assemblywoman Fran Pavley, a Democrat and former
schoolteacher who drives a Prius and whose South Coast district has a
bird’s-eye view of the smoggy Los Angeles basin. Four years ago Ms.
Pavley wrote the first state law regulating carbon dioxide emissions
from cars and trucks. It requires vehicle makers to eventually reduce
the average emissions of carbon dioxide of the mix of cars it sells in
California by 30 percent, beginning with the 2009 model year. Light
trucks, including sport utility vehicles, must meet the same standard
by the 2016 model year.
Ten states, including New York, New Jersey and Connecticut, have
followed suit. Canada instituted voluntary emissions reductions at
similar levels, which major automobile manufacturers have agreed
they can meet. “We think that, coupled with Canada, we’re now over
one-third of the market,” Ms. Pavley said in an interview.
But automobile manufacturers and some dealerships have vowed to
wipe her law from the books. Their lawsuit’s central assertion is that,
by regulating carbon dioxide emissions, California is using a backdoor
means to control fuel efficiency, which, under the federal Energy
Policy and Conservation Act, is the exclusive preserve of the federal
Transportation Department. To produce less carbon dioxide, cars
would have to be more fuel efficient.
On Sept. 15, Judge Anthony W. Ishii of Federal District Court in
Fresno will hear arguments on California’s request to dismiss the
case. If the lawsuit survives, the first hearing is set for January. This
schedule overlaps with that of another case with direct bearing on this
issue. The Supreme Court, petitioned by a dozen states, led by
Massachusetts, and three cities, including New York, will decide
whether the law requires the Environmental Protection Agency to
declare carbon dioxide a pollutant and to regulate it. The Bush
administration contends it has no authority to do either.
If the Supreme Court accepts the administration’s arguments, it will
not help California in its legal fight against Detroit, because a key to
the state’s case is the contention that carbon dioxide is in fact a
pollutant under the Clean Air Act.
Hungry Electronics
Imagine all the small electronic devices in a modern home — iPods
and handheld organizers, cellphones and laptops — charging at a
power strip.
Arthur H. Rosenfeld, a member of the California Energy Commission,
knows how much electricity is wasted when people unplug the devices
but leave the charger plugged in. Dr. Rosenfeld estimates that such
chargers — along with appliances like televisions that draw power
even when they are off because they are designed to respond to
remote controls — use up to 10 percent of an average home’s power.
He calls them “vampires” — things with teeth that suck power at
night.
Recently, Dr. Rosenfeld proudly held up a small green cellular phone
charger that consumes less than half a watt of electricity — a fifth as
much as its predecessors — when left plugged into an outlet. It meets
state standards that take effect in 2007. The same standards will
require sharp power cutbacks from audio and video equipment, both
when the devices are in use and when they are standing by for a
remote signal.
Since the 1970’s, California’s energy-efficiency standards have
reduced electricity consumption by the equivalent of the output of
more than 20 average power plants, Dr. Rosenfeld said. And the
standards have become templates for other states and Washington.
Nationally, Dr. Rosenfeld added, energy-efficiency policies have saved
the economy $700 billion since the 1970’s.
But why would utilities, which sell electricity, have any interest in
seeing sales diminish? In 1982, the Public Utilities Commission
decoupled utilities’ sales and their profits by allowing rate increases
for utilities that helped customers cut energy use.
The logic was that for every dollar the consumer did not spend on
energy, the utility would get real income — say 15 cents, which would
exceed the profit the utility could have made on that dollar. For
consumers, efficiency savings more than offset the rate increases.
“Even though rates go up, bills go down,” said Mr. Harvey of the
Hewlett Foundation.
Ralph Cavanagh, the co-director of the energy program at the Natural
Resources Defense Counsel, said: “Every other state in the country
rewards utilities for selling more energy. It’s a perfectly perverse
incentive.”
Mr. Peevey, of the utilities commission, said he expected new
efficiencies to absorb half the increase in demand as the state grows
to 40 million people, from 38 million.
Mr. Peevey’s commission has also been a prime mover in increasing
state support for residential solar power. Solar energy remains four
times as expensive as electricity produced by conventional fuels. But,
he said, “the idea is to make the solar industry a self-sustaining,
economically viable industry,” and to make the cost come down.
California businesses and investors, public and private, are getting
into the act. The state’s huge pension fund, Calpers, is committing
just under $1 billion to renewable-energy investments. Among the
early incentive-driven ventures in solar power are the homes in the
Carsten Crossings subdivision in Rocklin, a Sacramento suburb. In
August, Mr. Schwarzenegger signed legislation making solar panels a
standard option for new-home buyers by 2012 and ensuring that
utilities reduce homeowners’ bills based on the electricity returned to
the grid.
Some of those incentives were available when construction started.
Now four families have moved in. They see themselves as
pragmatists, not crusaders. “This is the next logical step” in
construction, said one of the homeowners, Lt. Col. Thomas Sebens, a
specialist in drone aircraft at Beale Air Force Base.
Their roofs show how public and private decisions, markets and
government, have meshed. T. J. Rodgers, a fiercely anti-regulatory
entrepreneur, underwrote the solar cells’ production. The PowerLight
Corporation, based near San Francisco, bought the cells from Mr.
Rodgers’s company, the SunPower Corporation, and turned them into
roof tiles. The tiles ended up on houses built by Grupe Homes, based
in Stockton, because state utility regulators established a $5,500
state-financed rebate for builders who install similar systems, which
cost $20,000. Federal law gives home buyers a $2,000 tax credit;
state law guarantees lower electric bills as utilities buy back power
homeowners do not need.
The July utility bills, the new homeowners’ first, were the talk of the
neighborhood.
Larry Brittain, an office products salesman with a four-bedroom,
2,400-square-foot home, was the winner at $73.27 for electricity in
the month ending July 25 — the hottest July on record. For the last 10
June days in a similar house nearby, his bill was $103.
“This is a bet with a winning hand,” Mr. Brittain said. “You can’t
lose.”
Pressure on Suppliers
In Gerlach, Nev., 100 miles north of Reno, a high desert butte was
made ready two years ago for its wedding to the Granite Fox Power
Project, a plant designed to burn pulverized Western coal. Electrical
transmission lines were close by.
But, like Miss Havisham in Dickens’s “Great Expectations,” Gerlach
waits for a groom that may never arrive. The plant was a certain
source of significant new carbon dioxide emissions. Mr. Cavanagh
predicted that it “would wipe out all the carbon dioxide savings from
California’s spectacularly successful efforts to save electricity during
2001 and 2002.”
Southern Californians would likely be the eventual customers. But
last fall, the California Public Utilities Commission barred the
investor-owned utilities it regulates from signing long-term contracts
for electricity if the emissions exceeded those of the cleanest gasdriven plants. The only technology that could accomplish that with
coal is expensive and has not been perfected.
Said Mr. Peevey of the commission, “All we’re saying is, Fine, you
send it here, but it has to be, in terms of air quality and greenhouse
gas emissions, it has to be comparable to the newest combined-cycle
gas turbine.” One fifth of California’s electricity comes from coal, the
vast majority of it from outside the state.
This past winter, Sempra Energy, the parent of San Diego Gas &
Electric and Sempra Generation and the developer of Granite Fox,
put the project up for sale. Neal E. Schmale, Sempra’s president, said
the ruling had had a negligible impact on the decision. High natural
gas prices prompted the company to invest in gas storage and
terminals instead, Mr. Schmale said.
Among California environmentalists, however, the “for sale” sign on
Granite Fox was taken as a victory for a pioneering policy that reaches
beyond the state’s borders. V. John White, an environmental lobbyist
in Sacramento, compares building a Southwestern power plant to
building a mall: California is a desirable anchor tenant.
But California is also the state where electricity deregulation
foundered in 2000; bills soared and an economic crisis ensued. Even
without a crisis, Californians’ electricity rates are about 40 percent
above the national average.
Robert McIlvaine, a coal industry consultant from Northfield, Ill.,
said, “If you are going to generate electricity from gas, the cost of
doing so is going to be considerably greater than coal — 50 percent
more or 100 percent more.”
But, Mr. Harvey said: “People don’t pay rates. They pay bills. You can
have twice the rate and half the consumption and be just as happy.”
On Aug. 31, legislators enacted the bill sponsored by the State Senate
president, Don Perata, Democrat of Oakland, and extended the
commission’s rule to all power providers.
Business people ask if this could provoke another crisis. Power-plant
siting experts, like Thomas A. Johns, the vice president of
development at Sithe Global Power, a New York company, say that, in
the short term, the loss of California business may not matter much to
the merchants of power in the Southwest. Fast-growing cities like
Phoenix and Las Vegas are ready markets.
In the long run, however, “California is a big piece” of the total
consumption in the West — 40 percent, Mr. Johns said. “If 40
percent of the Western load will not buy coal, you will have less coal.”
The risk, both Mr. Johns and Mr. Schmale said, is in increasing the
state’s reliance on natural gas, whose price has been extremely
volatile in recent years. (California law bars construction of nuclear
plants until the questions of waste disposal are resolved.)
“When you exclude coal and nuclear from your base load,” Mr. Johns
said, “you’ve only got one option, and that’s natural gas.” Another
measure awaiting the governor’s signature toughens standards by
requiring that by 2010, 20 percent of the energy sold in California
comes from a portfolio of renewable sources, like geothermal and
wind. Last year, 10.7 percent of California’s power came from
renewable sources.
New renewable energy sources could make prices less volatile, but
Mr. Schmale of Sempra said California’s policy makers need to
muster “the political will” to build transmission lines and “all those
other things that would be necessary to make the environmental
things work.”
Caps, Costs and Credits
Perhaps the most ambitious measure California has undertaken is the
newly mandated 25 percent reduction in carbon dioxide emissions.
“If we do it right,” Mr. Schwarzenegger said at a news conference, “it
can be an example for the rest of the world and the rest of the country
to see.” If not, the concept could be discredited.
The law, sponsored by Ms. Pavley and the Assembly speaker, Fabian
Núñez, Democrat of Los Angeles, gives the California Air Resources
Board authority to set industry-specific targets for emissions
reductions, effective in 2012, and to establish mechanisms —
including the creation of emissions allowances that companies might
trade or bank — to facilitate compliance. These targets would be
adjusted from 2012 to 2020 to meet the 25 percent goal.
Those who have studied the question agree that the new system will
cost consumers more. “A cap-and-trade system will raise the cost of
electricity to consumers to some degree,” said Lawrence H. Goulder, a
professor of environmental and resource economics at Stanford
University.
As the European Union found after the 1997 Kyoto Protocol, figuring
out how to assign emissions credits is not easy.
Whatever the decisions, chances are that they will be met by a
lawsuit. Margo Thorning, the chief economist at the American
Council for Capital Formation, a group supporting business interests,
argues in a study that “sharp cutbacks in California’s energy use
would be necessary to close the 41 percent gap in 2020 between
projected emissions” and the cuts the law requires. Dr. Thorning
added in an interview, “The technologies that will enable us to move
quickly in a cost-effective way away from fossil fuel just aren’t there
yet.”
Allan Zaremberg, president of the state Chamber of Commerce,
predicted that businesses would flee to unregulated areas and
continue to emit climate-changing gases.
Dr. Thorning’s study was countered in mid-August with a study by
David Roland-Holst, an adjunct professor of agricultural and resource
economics at the University of California, Berkeley. Professor RolandHolst argued that the new law would add $60 billion and 17,000 jobs
— in fields like alternative energy — to the California economy by
2020 by attracting new investment.
James D. Marston, the head of state global warming programs for
Environmental Defense, the New York group that helped lead the
fight for California’s new carbon cap, said, “We’ll look back in 10
years and say this was the final breakthrough and the final political
consensus that we have to do something meaningful on global
warming.”
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Fill Up on Corn if You Can
Peter Wynn Thompson for The New York Times; illustration by The New York Times
The Becker’s Hotrod BP station in Dwight, Ill., is one of 135 in the state to sell the corn-based fuel
E-85.
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By ALEXEI BARRIONUEVO
Published: August 31, 2006
SPRINGFIELD, Ill. — Standing next to his pickup truck at a service
station here, Robert Beck squeezed a yellow nozzle and filled up with
the corn-based fuel blend of 85 percent ethanol and 15 percent
gasoline that car companies, farmers and politicians alike love to
promote as a way out of America’s oil addiction.
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Peter Wynn Thompson for The New York Times
Robert Beck said E-85 was worth buying for his pickup only if it was at least 30 cents lower than
gasoline.
Mr. Beck, an agronomist who travels throughout the Midwest, likes
the idea of E-85, as the fuel blend is known, because it is made mostly
from a domestic crop. But he still finds that buying the fuel is almost
more trouble than it is worth.
“Everyone talks about it, but exactly where is it?” he said. “You have
to have more fuel out there for consumers to buy.’’
That could take a while.
To assess just how efforts to help E-85 catch on were going, a New
York Times reporter, accompanied part of the time by a
photographer, drove through the region where its popularity is
greatest. They found that despite all the good will toward ethanol,
success is far from assured.
The fuel does have plenty of powerful supporters. General Motors
used the Super Bowl this year to kick off its “Live Green, Go Yellow”
campaign to encourage Americans to buy vehicles that can run on
either E-85 or conventional gasoline. Ford Motor and VeraSun
Energy, the second-largest ethanol producer after Archer Daniels
Midland, christened 300 miles of highway from Chicago to St. Louis
the “Midwest Ethanol Corridor” in a marketing campaign that began
in June.
But it also has plenty of drawbacks. Most oil companies want nothing
to do with E-85, which they see as a money-losing alternative to their
own petroleum-based products. Without help from the oil industry or
a lot more flexible-fuel cars on the road, gasoline retailers are hesitant
to install the expensive pumps, which can cost up to $200,000 with a
new underground storage tank.
“There is no way E-85 can survive on its own without massive
government subsidies at the state and federal levels,’’ said Lawrence
J. Goldstein, president of the Petroleum Industry Research
Foundation, an energy consultancy in New York.
Many drivers whose vehicles can run on ethanol will not buy E-85
unless it is markedly cheaper than regular gasoline, which has not
always been the case. Part of the reason is basic economics: E-85
delivers only three-quarters as much energy per gallon as gasoline,
meaning drivers will have to fill up their tanks more often if they
choose to use the fuel.
More than 850 service stations now carry E-85, an increase from 350
since the beginning of 2005, but the fuel is still unavailable at most of
the 169,000 stations in the United States. Sales are so slim that some
retailers count their regular E-85 customers on one hand.
Customers like Mr. Beck, who want the fuel, struggle to find it: in
Illinois, 135 stations carry it, but in neighboring Missouri only 54
stations have E-85 pumps. Kansas has 13.
None of this has discouraged E-85’s supporters, who are relentlessly
pushing to expand use of the fuel, which already benefits from a tax
credit of 51 cents a gallon for producers of all forms of ethanol.
And in states like Illinois, the country’s second-biggest corn producer,
after Iowa, politicians are lining up state financing to subsidize the
installation of pumps at service stations, while offering rebate
incentives to customers who use the fuel.
“E-85 is really I-85 — it’s about energy independence,” said Daniel
Yergin, chairman of Cambridge Energy Research Associates, an
energy consultancy.
But that dream remains far out of reach. For one thing, E-85 barely
exists outside the Corn Belt. You cannot fuel up on it in New York or
New England. California has only one station.
And even in Chicago, at the entrance to the ethanol corridor, it was
hard to find a flexible-fuel car for the road trip. When Janet Conlon, a
travel agent from Garber Travel, contacted four major rental car
agencies, none said they had such cars available.
“Nobody had a clue what I was talking about,” Ms. Conlon said. The
Times ended up renting a flexible-fuel Chevrolet Impala from a
company affiliated with General Motors.
At the first stop, Becker’s Hotrod BP in Dwight, Ill., 75 miles south of
Chicago, E-85 was selling for $2.70 a gallon, 50 cents cheaper than
the station’s regular unleaded.
Four years ago, the Illinois Corn Growers Association approached
Phillip E. Becker, the station’s owner and a longtime gasoline retailer,
with an offer to pay to install an E-85 pump, an investment of about
$100,000. Because the alcohol in E-85 corrodes traditional gasoline
storage tanks, a new underground one was necessary, along with
special fuel lines and a special dispenser.
Mr. Becker, wanting to help local farmers, accepted the deal, agreeing
to sell the E-85 at no profit for at least five years so he could offer it at
a price lower than gasoline.
“I am selling this at cost as a good-will thing,” Mr. Becker said. The E85, he said, also helps bring passengers into his store for sodas and
collectible toy cars, and into an adjoining Burger King, in which he
has a business interest. But without the help of the growers’
association, he said, he probably would not have made the
investment.
Mr. Becker has enjoyed the local celebrity his E-85 pump has brought
him. Officials from the state of Illinois have even shot photos there for
postcards that are placed in the vehicles of state employees, urging
them to stop at Becker’s.
E-85 sales at his service station, though, have proved erratic. They
rose as high as 9,000 gallons a month in September last year when
gasoline prices climbed over $3 a gallon, widening the spread with
ethanol prices. But in July, Becker’s pumped only 3,010 gallons of E85, after gasoline prices dropped and ethanol prices rose.
Mr. Becker said he had “four really good customers,” two of them
believing so strongly in E-85 that they traded in their vehicles for
flexible-fuel ones. “E-85 is all they burn, no matter what the price is,”
he said.
The farmers continue to champion their project. In June, they parked
a small 1940’s-era corn wagon at a highway ramp near Mr. Becker’s
stations to advertise the E-85 price. General Motors included him in a
recent regional promotion in which the company gave away $1,000 in
free fuel — E-85 or gasoline — to purchasers of flexible-fuel vehicles.
The three-month promotion, however, did not help overall sales at
nearby Tyler Chevrolet/Buick, said Byron Moore, the new-car sales
manager. At best, it may have caused some buyers already set on
certain truck models to choose the flexible-fuel engine to grab the free
fuel.
But Mr. Moore said he doubted the buyers would actually fill up on E85 very often, because “the word is out” that the fuel offered less
mileage per gallon than gasoline. Ethanol is made up mostly of
alcohol and yields less energy.
Mr. Becker said he saw E-85 sales slip when the price got to within a
dime of gasoline. Mr. Beck, the E-85 customer in Springfield, said he
had decided that E-85 was worth buying for his Ford truck only if the
price was at least 30 cents lower than gasoline.
Volatile ethanol prices in recent months, driven by a regulatory
change that has led to its increased use as a 10 percent additive in
more states, have stymied the goals of E-85’s supporters. The
National Ethanol Vehicle Coalition, a lobby group founded by corn
growers, had estimated the number of stations would grow to 2,500
this year. Now, the coalition is willing to settle for 1,200, said
Michelle Kautz, a spokeswoman for the group.
Still, the buzz over E-85 is growing — where it is available. Further
south along Interstate 55, Theresa Kight, a cashier at a Qik-n-EZ in
Normal, Ill., said more customers were asking about the station’s E85 pumps. “A lot of them that are interested buy it just to support the
farmers,” Ms. Kight said.
Outside the station, though, Kevin Hart, a heating and airconditioning service contractor, was fueling up his van on gasoline.
“Using more E-85 won’t solve the problem” of too much oil
consumption and too little conservation, he said. “People will just
think they are helping the environment, so now ‘I can burn more
fuel.’ ’’
But the owners of Qik-n-EZ said they believed in E-85’s potential to
diversify the country’s fuel sources — and help the Midwest’s
economy. Grady Chronister, the president and founder of the
company, said the stations, which get all their ethanol from VeraSun,
were selling the E-85 very close to cost.
“This is not a product that warrants the financial investment at this
time,” said Mr. Chronister, who added that his family owns farms that
grow corn, giving them extra incentive to support E-85. “But we are
glad we did it. We are in favor of alternative energy forms, especially
those produced here in the United States.”
Along the ethanol corridor very few people were actually buying E-85.
At a Qik-n-EZ in Springfield, there was a 45-minute wait before the
first customer, Mr. Beck, arrived to refuel his 2006 Ford F-150 truck
at the lone E-85 pump set well away from the four rows of gasoline
pumps.
After buying his truck in April, Mr. Beck discovered only two months
ago that it was dual-fuel. In the past, most drivers did not even know
they had flexible-fuel vehicles because the car companies did not
bother to tell them and the engines are virtually indistinguishable.
But from now on, “we’re going to do more to let people know what
they have,” said Susan Cischke, vice president for environmental and
energy engineering at Ford. She said Ford marked its flexible-fuel
vehicles on the hood and fuel cap.
American automakers hope to double annual production of flexiblefuel vehicles, to two million, by 2010. There are now about 5 million
on the road, out of 238 million total vehicles.
Detroit has much to gain from producing E-85-ready vehicles. In
addition to acting as a positive diversion from their broader financial
problems, the flexible-fuel vehicles help them meet federal standards
for average fuel economy without having to build far more expensive
hybrid cars.
But car companies bristle at the notion that they alone can make E-85
a national or even regional success. “This is a bigger problem than
one industry can solve,” Frederick Henderson, the chief financial
officer at General Motors, said recently.
Major oil companies, which own fewer than 10 percent of the
country’s gasoline stations, say they will not stand in the way of
retailers who want to put in E-85 pumps. But they will not help,
either.
That has placed the burden on the states where E-85 is linked with
the success of ethanol. This year, Iowa, the country’s biggest corn
producer, began giving its retailers a 25-cent-a-gallon credit for
selling E-85 and is providing up to half the cost of installing E-85
pumps. The governor of Illinois, Rod R. Blagojevich, just proposed
spending $30 million to add 900 pumps over the next five years, a
sevenfold increase.
At the retail level, however, the effort to trumpet E-85 is inconsistent
at best. Mr. Beck said he found the Springfield station only after
doing some research, because the E-85 Web site run by the National
Ethanol Vehicle Coalition lists pumps only by city, with a limited
mapping function that fails to show drivers their location in relation
to each other.
Unlike the standard gasoline pumps, the E-85 pump at the Qik-n-EZ
did not take credit cards, forcing Mr. Beck to stand in line for 15
minutes behind customers buying beer, cigarettes and lottery tickets.
“You would think it would be as easy as buying fuel,’’ he said, “but it is
a pain in the fanny.”
And there is no room for error when trying to drive only on E-85. Do
not leave Emporia, Kan., for instance, without fueling up a nearly
empty tank first. Otherwise, somewhere on the Kansas Turnpike the
fuel gauge needle goes below empty.
What then? Turn off the air-conditioning, coast part of the way in
neutral and, finally, a service station — the only one for another 30
miles — has gasoline. But no E-85.
Slow Start for Revival of Nuclear Reactors
Pool photo by Dennis Brack
President Bush, second from right, visited the Calvert Cliffs Nuclear Plant last year with
Constellation Energy officials.
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By MATTHEW L. WALD
Published: August 22, 2006
BALTIMORE — Nobody in the United States has started building a
nuclear power plant in more than three decades. Mayo A. Shattuck III
could be the first.
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Laura Pedrick for The New York Times
William F. Hecht, chairman of PPL, believes cleaning up coal-fired plants maximizes shareholder
return better than building nuclear plants.
Steve Ruark for The New York Times
Mayo A. Shattuck III, Constellation Energy’s chief, is proposing a fleet of identical nuclear plants.
As the chief executive of Constellation Energy, a utility holding
company in Baltimore that already operates five nuclear reactors, Mr.
Shattuck is convinced that nuclear power is on the verge of a
renaissance, ready to provide reliable electricity at a competitive
price. He has already taken the first steps toward achieving that,
moving recently to order critical parts for a new reactor.
But Constellation’s neighboring utility, the PPL Corporation, takes a
different view. Even though PPL has successfully operated two
reactors since 1983, its chairman, William F. Hecht, said that he had
no plans for new nuclear plants.
When nuclear reactors were first commercialized almost half a
century ago, every self-respecting electric utility wanted one. They
were encouraged by a government that saw nuclear energy as a
peaceful, redemptive byproduct of the deadly power unleashed at
Hiroshima. The federal official for promoting nuclear energy, Lewis
L. Strauss, said it would produce electricity “too cheap to meter.”
It has never given consumers anything like that. But with the industry
now consolidated so that most reactors are in the hands of a
comparatively few operators, utility executives are sharply divided
over whether nuclear power offers an attractive choice as they seek to
satisfy a growing demand for electricity.
For them, the question comes down not so much to safety and
environmental impact but to whether the potential reward is worth
the financial risk. And those who already operate several reactors are
prone to want more.
The debate within the utility industry over reviving nuclear power has
taken on added importance, though, because unlike plants that burn
coal and other fossil fuels, reactors do not produce gases that
contribute to global warming.
And once again, Washington is encouraging utilities to push ahead.
The summer of 2005’s energy bill offered a generous production tax
credit, insurance against regulatory delays and loan guarantees.
Earlier legislation gave the industry money to help plan new plants.
And they continue to benefit from a ceiling on liability damages in
case of an accident.
Despite nuclear power’s promise as a clean energy source that could
hold down emissions of global warming gases, most
environmentalists are skeptical of the latest claims by its advocates.
They say that utilities, at best, will move ahead with a handful of
plants that will receive lavish incentives from the government. But the
risks of nuclear power are still so high, they argue, that no utility will
be willing to put its own money into building a plant unless the
federal government heavily subsidizes it.
“What dismays me about the present situation is the extent to which
the Congress and the administration, and now an occasional state
legislature, have rushed to anoint it as the solution to climate
change,” said Peter A. Bradford, a former member of the Nuclear
Regulatory Commission and former chairman of the public service
commissions of both Maine and New York. If nuclear plants cannot
compete without subsidies, he said, they should not be built.
Today, nuclear power supplies just under 20 percent of the electricity
used in the United States. Its share has been slipping lately as new
plants running on other fuels have come online.
With the price of natural gas increasing, coal has emerged once again
as the most popular way to generate electricity, a trend that — if it
continues — is expected to lead to a significant rise in emissions of
carbon dioxide. The utility sector emits about a third of the carbon
dioxide produced in this country, nearly all of that from coal.
Adding dozens more nuclear reactors to that mix could reverse the
rise in carbon dioxide from the electricity-generating system, but its
advance would also run up against certain limits.
Nuclear plants cannot replace all of the fossil fuel used in power
generation because current nuclear designs do not easily alter the
power output. Plants running on natural gas and coal, by contrast,
can adjust their output over the course of a day to match demand.
For a long time, the underlying confidence of utilities in nuclear
technology was moot because the economics would not support a new
reactor; all those ordered after 1973 were canceled.
But now, because of high prices for natural gas and uncertainty about
how emissions from coal plants will be regulated in the future, the
nuclear industry is moving from near death to the prospect that
perhaps a handful of plants will be ordered in the next few years. The
Nuclear Regulatory Commission counts 27 potential reactors under
consideration; 103 are now operable.
For all the momentum behind the push, however, there is still a high
degree of skepticism within the utility industry.
PPL, for example, has successfully operated two reactors in Berwick,
Pa., for 23 years. But with some utilities around the country making
preliminary moves or joining consortiums to explore new designs,
PPL is absent.
There are better places to put the money of shareholders, Mr. Hecht
of PPL said. At the moment he sees a much greater advantage in
cleaning up his coal-fired plants, investing $1.5 billion to scrub out
most of the sulfur dioxide. That would not only benefit the
environment but also generate pollution credits PPL can profitably
sell.
That decision was “dull and basic,” Mr. Hecht said, but adheres to a
paramount goal: maximizing shareholder returns. He won’t rule out
nuclear plants forever, Mr. Hecht said in an interview, but the
business case would have to be a lot clearer than it is now.
“Technology often has zealots, it seems, behind it,” he said of
companies moving forward on nuclear power.
By contrast, Constellation Energy not only wants to build reactors for
itself, it also has formed a partnership with a reactor manufacturer to
build and operate them for other utilities.
“This organization has a history of feeling that they have done well in
nuclear,” Mr. Shattuck said. Constellation executives think that they
“can continue to do well in nuclear and shouldn’t shy away from their
responsibility.”
Constellation plans to apply for a reactor-operating license by the end
of 2007, probably at either the Calvert Cliffs site in Maryland where it
runs two nuclear reactors built in the 1960’s and 1970’s, or at Nine
Mile Point, in Scriba, N.Y., on Lake Ontario, where it operates two
reactors it bought in 2001.
Its decision has implications beyond the corporate bottom line for the
global environment. There are also arguments over nuclear waste and
the risk of accidents. Around New York City, especially, there is
concern over reactors as terrorist targets.
But the risk that really matters to utility executives is financial.
Among the companies that would actually build these plants,
executives focus more on uncertain factors like the future price of
power, the cost of producing competing fuels, and the cost of cleaning
up coal plants to meet standards for the pollutants that Washington
does regulate — sulfur dioxide, nitrogen oxides and soot.
At this point companies do not face any constraints on carbon
emissions.
Companies that want to build — among them Entergy, Dominion and
Duke Energy — talk about new designs intended to further reduce the
risk of an accident and their ability to manage nuclear waste until the
government eventually opens a national waste repository.
Opponents often cite the risk of accidents and the problem of nuclear
waste, but the companies that do not want to build say that those are
not factors in their decisions.
When PPL builds a power plant, it usually sells the power first, and
uses the signed contracts to reassure the investors and the bankers
from whom it is seeking financing. “I’m not going to build any large
generation unhedged,” Mr. Hecht said.
But this is not easy with a nuclear plant. For one thing, Mr. Hecht
said, no one could be sure when it would be finished. And despite the
industry’s efforts to shorten the time from order to completion, it
could still be 10 years, he said.
“If you build 1,000 megawatts,’’ he asked, “how are you going to find
someone to buy it 10 years out, for 10 years after it is finished?”
A nuclear plant ordered in 2007 could well turn out to be a more
economical power source in 2020 than a coal plant ordered at the
same time, he said, but the range of uncertainty is much larger. He is
content to let others take the lead.
Constellation Energy insists it is driving risk out of the proposition.
Constellation, which doubled its nuclear bet in the 1990’s by buying
more reactors as the utility industry reorganized, contends that it has
demonstrated one marketable skill — running reactors profitably —
and that it could quickly follow a new plant with a copycat, building
both on time and on budget.
Constellation has an expertise gained in the early, difficult years of
nuclear power, Mr. Shattuck said, citing Michael J. Wallace, president
of his company’s generation division.
“Mike is the only executive in the utility sector today who was an
executive responsible for building new nuclear plants last time
around,” he said. Mr. Wallace oversaw the construction and start-up
of two nuclear plants built in Illinois: Byron, which fully entered
commercial service in 1987, and Braidwood, the following year.
Constellation proposes a fleet of plants, identical down to the
“carpeting and wallpaper,” Mr. Shattuck said, reducing the design
costs on subsequent reactors to near zero. Operating processes would
be identical, and operators could be shuffled among the plants,
something that is often impossible today even with adjacent reactors.
The company wants partners that would offer either equity or
operating skills.
Constellation has a partnership, called UniStar Nuclear, with Areva,
the French-German company, which is owned by Framatome and
Siemens, to build a model. One model is under construction in
Finland.
“A lot of it is establishing a model that mitigates risk as you move
forward,” Mr. Shattuck said. “A lot of players out there haven’t quite
figured out how they’re going to go to their boards and ask for $4
billion, for which I’ll get cash flows in 13 years.”
Last December, Constellation and FPL, parent of Florida Power and
Light, announced that they would merge, creating the country’s
largest competitive marketer of power. That would put the company
in an even better position to build new reactors, Mr. Shattuck said.
Some experts, however, remain skeptical that new reactors should be
built, although they acknowledge this is increasingly likely. In the last
20 years or so, said Mr. Bradford, the former regulator, utility
restructuring has often shifted the risks of new construction from
ratepayers to investors.
“What the Congress has done now, for the first six or so plants, is to
find a third pocket,” he said. “Now they’ve called upon the taxpayer to
pony up.”
But even if a few plants are built, industry insiders do not expect
nuclear power to assume a significantly greater role. Roger W. Gale,
an electricity expert and former Energy Department official, asks
several hundred utility executives each year what they foresee in their
industry.
While they are convinced that a new plant will be ordered soon, the
more than 100 senior utility executives who responded also said they
do not expect “a future where nuclear generation represents a larger
share of generation” than today.
More Articles in Business »
Search for New Oil Sources Leads to
Processed Coal
Andy Manis for The New York Times
John Diesch, manager of the Rentech plant in East Dubuque, Ill., sees profit in using cheap coal
to produce expensive truck fuel.
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Changing Black Rock to Black Gold
EAST DUBUQUE, Ill. — The coal in the ground in Illinois alone has
more energy than all the oil in Saudi Arabia. The technology to turn
that coal into fuel for cars, homes and factories is proven. And at
current prices, that process could be at the vanguard of a big, new
industry.
Such promise has attracted entrepreneurs and government officials,
including the Secretary of Energy, who want domestic substitutes for
foreign oil.
But there is a big catch. Producing fuels from coal generates far more
carbon dioxide, which contributes to global warming, than producing
vehicle fuel from oil or using ordinary natural gas. And the projects
now moving forward have no incentive to capture carbon dioxide
beyond the limited amount that they can sell for industrial use.
Here in East Dubuque, Rentech Inc., a research-and-development
company based in Denver, recently bought a plant that has been
turning natural gas into fertilizer for forty years. Rentech sees a clear
opportunity to do something different because natural gas prices have
risen so high. In an important test case for those in the industry, it
will take a plunge and revive a technology that exploits America's
cheap, abundant coal and converts it to expensive truck fuel.
"Otherwise, I don't see us having a future," John H. Diesch, the
manager of the plant, said.
With today's worries about the price and long-term availability of oil,
experts like Bill Reinert, national manager for advanced technologies
at Toyota, say that turning coal into transportation fuel could offer a
bright future. "It's a huge deal," he said.
There are drawbacks; the technology requires a large capital
investment, and a plant could be rendered useless by a collapse in oil
prices. But interest was high even before the rise in oil prices; three
years ago, the Energy Department ran a seminar on synthetic
hydrocarbon liquids, and scores of researchers and oil company
executives showed up. The agency that runs municipal buses in
Washington, D.C., and other consumers expressed interest.
But the enthusiasm was not enough to overcome the fear of a drop in
oil prices. Lately, however, the price of diesel fuel, which determines
the value of this coal-based fuel, also called synfuel, has soared, as has
the price of natural gas, which made plants like the one at East
Dubuque ripe for change.
Most of the interest is in making diesel using a technology known as
Fischer-Tropsch, for the German chemists who demonstrated it in the
1920's. Daily consumption of diesel and heating oil, which is nearly
identical, runs more than $400 million. The gasoline market is more
than twice as large, but if companies like Rentech sated the demand
for diesel, the process could be adapted to make gasoline.
The technology was used during World War II in Germany and then
during the 1980's by South Africa when the world shunned the
apartheid regime there. Now Rentech is preparing to use an updated
version.
Sasol, the company that has used the technology for decades in South
Africa, is exploring potential uses around the world and is conducting
a feasibility study with a Chinese partner of two big coal-to-liquids
projects in western China. Last August, Syntroleum, based in Tulsa,
agreed with Linc Energy, of Brisbane, Australia, to develop a coal-toliquids plant in Queensland.
Other projects are in various stages of planning in this country,
although the one here on the Mississippi River just south of the
Wisconsin border has a head start.
But people who think this technology will find wide use presume
some kind of environmental controls, which the Rentech plant, thus
far, does not have. Some environment and energy experts doubt that
the method is compatible with a world worried about global warming.
Unless the factory captures the carbon dioxide created during the
process of turning coal into diesel fuel, the global warming impact of
driving a mile would double.
"It's a potential disaster for the environment if we move in the
direction of trying to create a big synfuel program based on coal to
run our transportation fleet," said Daniel A. Lashof, of the Natural
Resources Defense Council. "There's a brown path and a green path
to replacing oil, and Fischer-Tropsch fuel is definitely on the brown
path."
But the Energy Department sees potential. In March, the Energy
Secretary, Samuel K. Bodman, said in a speech that making diesel fuel
or jet fuel from coal was "one of the most exciting areas" of research
and could be crucial to the President's goal of cutting oil imports. He
said that loan guarantees enacted in last summer's energy bill might
be used for Fischer-Tropsch diesel fuel.
In Des Plaines, Ill., near Chicago, a new company called GreatPoint
Energy has developed, on a laboratory scale, a vastly improved
process for turning coal into natural gas.
The promise and the pitfalls are similar for both GreatPoint and
Rentech. Measured in the standard energy unit of a million British
thermal units, or B.T.U.'s, coal sells for $1 or so, natural gas around
$7. Diesel fuel is around $23. As with all energy conversions, turning
coal into natural gas or diesel fuel means losing something in
translation — specifically, energy — but if the price difference is big
enough, the energy loss is not something that investors will worry
about.
But it also means carbon emissions, which causes concern to
environmentalists. Carbon is released in converting coal into an
energy-rich gas made up of carbon monoxide and hydrogen, and then
converting the gas into something more useful. Rentech wants to turn
it into liquid fuel. GreatPoint wants to rearrange the molecules into
natural gas.
But coal is cheap and the energy possibilities are endless. For
example, at the Rentech plant, a substation on the east side of the
plant that currently pulls in electricity will send it out instead. And,
uniquely in this country, the plant will take coal and produce diesel
fuel, which sells for more than $100 a barrel.
The cost to convert the coal is $25 a barrel, the company says, a price
that oil seems unlikely to fall to in the near future. So Rentech is
discussing a second plant in Natchez, Miss., and participating in a
third proposed project in Carbon County in Wyoming.
The plant here will "bring back an industry that's shutting down,"
Hunt Ramsbottom, the company chairman, said of the fertilizer
business. "The goal is fuels, but to get the plant up and running,
fertilizer is a good backstop."
And it is all local. The coal will come from southern Illinois, by barge
or rail. The diesel can go straight to terminals or truckstops in the
area, said Mr. Diesch, the plant manager, and the fertilizer to local
farms. An odd advantage is that today, most coal-burning power
plants in the area use coal hauled from Wyoming, because its sulfur
content is lower; burning high-sulfur coal encourages acid rain. But if
the coal is gasified, rather than burned, filtering out the sulfur is
relatively easy, and the sulfur changes from a pollutant to a salable
product.
Emissions of traditional pollutants — that is, the ones the government
regulates, and not carbon dioxide — will be lower with coal than they
were with natural gas, he said. Outsiders are interested, but skeptical,
because of the carbon problem. "It might serve our goals in terms of
reducing oil dependence," said Phil Sharp, a former congressman
from Indiana and now head of Resources for the Future, a nonprofit
research organization in Washington. But "they should take into
account that we are headed to a carbon-constrained economy."
Robert Williams, a senior research scientist at Princeton, said "it's a
step backward" to operate a plant like Rentech's without capturing
the carbon. "It almost doubles the emission rate," he said.
Mr. Ramsbottom also sees the carbon dioxide problem. "The
worldwide production of Fischer-Tropsch fuels is going to ramp up
dramatically, and carbon sequestration is on everybody's mind," he
said. But the geology of this part of Illinois is not suitable for
sequestering the carbon dioxide from these plants. Building a pipeline
would be expensive and difficult to justify while carbon emissions are
not taxed, experts say.
GreatPoint has a different plan: move the plant where it can sell the
carbon.
Andrew Perlman, the company's chief executive, thinks it has value.
"Not only is it capturable, one of biggest advantages of the system is,
we can locate our plant near a natural gas pipeline, in places where
we can sell that carbon dioxide for a profit, using existing
technology," he said. Oil producers inject carbon dioxide into old oil
fields, to force oil to the surface.
Backers also hope that methanization, the process GreatPoint uses,
will succeed in part because it fits in with existing energy
infrastructures, like gas pipelines and coal mines. If it did, it could
have a profound impact on the balance of natural gas imports,
lessening or eliminating the need for liquefied natural gas ports. Like
Fischer-Tropsch diesel, methanization is not a new idea; one plant in
North Dakota does it now, using a technology paid for under the
Carter-era Synthetic Fuels Corporation. But GreatPoint is going about
it in a new way, in which far less energy is lost in the transition. There
is a potential to make fuels from gasification better than ordinary
fuels. Robert Williams, a senior research scientist at Princeton
University, points out that crop wastes and wood chips can also be
gasified, producing carbon monoxide and hydrogen.
Normally, biomass is thought of as carbon-neutral, because for each
plant cut down for gasification, another grows and absorbs carbon
from the atmosphere. But if biomass is gasified and the carbon
dioxide sequestered by being pumped into the ground in the
expectation that it will stay there, then atmospheric carbon actually
declines for every gallon produced.
From a greenhouse perspective, that is more attractive than what
Rentech does now with the carbon dioxide from its plant here. It is
sold to soft-drink bottlers. That keeps the gas sequestered until
someone burps.
THE ENERGY CHALLENGE | EXOTIC VISIONS
How to Cool a Planet (Maybe)
Photos: 1. Dr. Kenneth Coale/Moss Landing Marine Laboratories; 2. Victor Habbick Visions/Photo Researchers; 3. Left, Rina Castelnuovo
for The New York Times; right, David Nunuk/Photo Researchers; 4. Diller & Scofidio
PROBLEMS AND EXPERIMENTS 1 Before-and-after images of plankton in an experiment that
increased iron in the Pacific. 2 A large mirror that would shield Earth from the Sun. 3 A reservoir
in a Palestinian village that is now covered with algae, potentially capturing carbon dioxide from
the atmosphere, and a crater lake caused by a volcanic eruption. 4 An example of cloud
production, the Blur Building by the architects Elizabeth Diller and Ricardo Scofidio, at the Swiss
Expo in 2002.
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By WILLIAM J. BROAD
Published: June 27, 2006
In the past few decades, a handful of scientists have come up with big,
futuristic ways to fight global warming: Build sunshades in orbit to
cool the planet. Tinker with clouds to make them reflect more
sunlight back into space. Trick oceans into soaking up more heattrapping greenhouse gases.
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Graphic: Science Fiction? Maybe Not
Related
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not, moving toward a more energy efficient, environmentally benign future.
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Their proposals were relegated to the fringes of climate science. Few
journals would publish them. Few government agencies would pay for
feasibility studies. Environmentalists and mainstream scientists said
the focus should be on reducing greenhouse gases and preventing
global warming in the first place.
But now, in a major reversal, some of the world's most prominent
scientists say the proposals deserve a serious look because of growing
concerns about global warming.
Worried about a potential planetary crisis, these leaders are calling on
governments and scientific groups to study exotic ways to reduce
global warming, seeing them as possible fallback positions if the
planet eventually needs a dose of emergency cooling.
"We should treat these ideas like any other research and get into the
mind-set of taking them seriously," said Ralph J. Cicerone, president
of the National Academy of Sciences in Washington.
The plans and proposed studies are part of a controversial field
known as geoengineering, which means rearranging the earth's
environment on a large scale to suit human needs and promote
habitability. Dr. Cicerone, an atmospheric chemist, will detail his
arguments in favor of geoengineering studies in the August issue of
the journal Climatic Change.
Practicing what he preaches, Dr. Cicerone is also encouraging leading
scientists to join the geoengineering fray. In April, at his invitation,
Roger P. Angel, a noted astronomer at the University of Arizona,
spoke at the academy's annual meeting. Dr. Angel outlined a plan to
put into orbit small lenses that would bend sunlight away from earth
— trillions of lenses, he now calculates, each about two feet wide,
extraordinarily thin and weighing little more than a butterfly.
In addition, Dr. Cicerone recently joined a bitter dispute over whether
a Nobel laureate's geoengineering ideas should be aired, and he
helped get them accepted for publication. The laureate, Paul J.
Crutzen of the Max Planck Institute for Chemistry in Germany, is a
star of atmospheric science who won his Nobel in 1995 for showing
how industrial gases damage the earth's ozone shield. His paper
newly examines the risks and benefits of trying to cool the planet by
injecting sulfur into the stratosphere.
The paper "should not be taken as a license to go out and pollute," Dr.
Cicerone said in an interview, emphasizing that most scientists
thought curbing greenhouse gases should be the top priority. But he
added, "In my opinion, he's written a brilliant paper."
Geoengineering is no magic bullet, Dr. Cicerone said. But done
correctly, he added, it will act like an insurance policy if the world one
day faces a crisis of overheating, with repercussions like melting
icecaps, droughts, famines, rising sea levels and coastal flooding.
"A lot of us have been saying we don't like the idea" of
geoengineering, he said. But he added, "We need to think about it"
and learn, among other things, how to distinguish sound proposals
from ones that are ineffectual or dangerous.
Many scientists still deride geoengineering as an irresponsible dream
with more risks and potential bad side effects than benefits; they call
its extreme remedies a good reason to redouble efforts at reducing
heat-trapping gases like carbon dioxide. And skeptics of humaninduced global warming dismiss geoengineering as a costly effort to
battle a mirage.
Even so, many analysts say the prominence of its new advocates is
giving the field greater visibility and credibility and adding to the
likelihood that global leaders may one day consider taking such
emergency steps.
"People used to say, 'Shut up, the world isn't ready for this,' " said
Wallace S. Broecker, a geoengineering pioneer at Columbia. "Maybe
the world has changed."
Michael C. MacCracken, chief scientist of the Climate Institute, a
private research group in Washington, said he was resigned to the
need to take geoengineering seriously.
"It's really too bad," Dr. MacCracken said, "that the United States and
the world cannot do much more so that it's not necessary to consider
getting addicted to one of these approaches."
Martin A. Apple, president of the Council of Scientific Society
Presidents, said of geoengineering at a recent meeting in Washington,
"Let's talk about research funding with enough zeroes on it so we can
make a dent."
The study of futuristic countermeasures began quietly in the 1960's,
as scientists theorized that global warming caused by humangenerated emissions might one day pose a serious threat. But little
happened until the 1980's, when global temperatures started to rise.
Some scientists noted that the earth reflected about 30 percent of
incoming sunlight back into space and absorbed the rest. Slight
increases of reflectivity, they reasoned, could easily counteract heattrapping gases, thereby cooling the planet.
Dr. Broecker of Columbia proposed doing so by lacing the
stratosphere with tons of sulfur dioxide, as erupting volcanoes
occasionally do. The injections, he calculated in the 80's, would
require a fleet of hundreds of jumbo jets and, as a byproduct, would
increase acid rain.
By 1997, such futuristic visions found a prominent advocate in
Edward Teller, a main inventor of the hydrogen bomb. "Injecting
sunlight-scattering particles into the stratosphere appears to be a
promising approach," Dr. Teller wrote in The Wall Street Journal.
"Why not do that?"
But government agencies usually balked at paying researchers to
study such far-out ideas, and even ones that were more down to
earth. John Latham, an atmospheric physicist at the National Center
for Atmospheric Research in Colorado, told how he and his colleagues
had unsuccessfully sought for many years to test whether spraying
saltwater mists into low ocean clouds might increase their reflectivity.
"We haven't found a way in," Dr. Latham said of government
financing. "It's been a bit dispiriting."
Other plans called for reflective films to be laid over deserts or white
plastic islands to be floated on the world's oceans, both as ways to
reflect more sunlight into space.
Another idea was to fertilize the sea with iron, creating vast blooms of
plants that would gulp down tons of carbon dioxide and, as the plants
died, drag the carbon into the abyss.
The general reaction to such ideas, said Alvia Gaskill, president of
Environmental Reference Materials Inc., a consulting firm in North
Carolina that advocates geoengineering, "has been dismissive and
sometimes frightened — afraid that we don't know what the
consequences will be of making large-scale changes to the
environment."
Dr. Gaskill said small experiments would let researchers quickly pull
the plug if such tinkering started to go awry.
Critics of geoengineering argued that it made more sense to avoid
global warming than to gamble on risky fixes. They called for
reducing energy use, developing alternative sources of power and
curbing greenhouse gases.
But international efforts like the Kyoto Protocol — which the United
States never ratified, and which China and India as members of the
developing world never had to obey, freeing the current and projected
leaders in greenhouse gas emissions from its restrictions — have so
far failed to diminish the threat. Scientists estimate that the earth's
surface temperature this century may rise as much as 10 degrees
Fahrenheit.
Geoengineering's advocates say humankind is already vastly altering
the global environment and simply needs to do so more intelligently.
Dr. Angel, the University of Arizona astronomer, told members of the
science academy of his idea for an orbital sunshade, calling the
proposal less important than the goal of encouraging bold thought.
"This could engage a whole generation," he said in an interview. "All
I'm saying is, let's start thinking about these kinds of things in case we
need them one day." Such visionary plans are still far from winning
universal acclaim. James E. Hansen of the NASA Goddard Institute
for Space Studies in New York, who attended the talk and strongly
advocates curbing emissions, belittled the orbital sunshade as
"incredibly difficult and impractical."
Dr. Crutzen, the Nobel laureate from the Max Planck Institute, has
also drawn fire for his paper about injecting sulfur into the
stratosphere. "There was a passionate outcry by several prominent
scientists claiming that it is irresponsible," recalled Mark G.
Lawrence, an American scientist who is also at the institute.
The stratospheric plan called for fighting one kind of pollution (excess
greenhouse gases like carbon dioxide) with another (sulfur dioxide),
though it appeared that any increase in sulfur at the earth's surface
would be small compared with the tons already being emitted from
the smokestacks of coal-fueled plants.
Dr. Cicerone of the science academy helped broker a compromise: Dr.
Crutzen's paper would be published, but with several commentaries,
including his own. They will appear in the August issue of Climatic
Change. The other authors are Dr. Lawrence of the German chemistry
institute, Dr. MacCracken of the Climate Institute, Jeffrey T. Kiehl of
the National Center for Atmospheric Research, and Lennart
Bengtsson of the Max Planck Institute for Meteorology in Germany.
In a draft of his paper, Dr. Crutzen estimates the annual cost of his
sulfur proposal at up to $50 billion, or about 5 percent of the world's
annual military spending.
"Climatic engineering, such as presented here, is the only option
available to rapidly reduce temperature rises" if international efforts
fail to curb greenhouse gases, Dr. Crutzen wrote.
"So far," he added, "there is little reason to be optimistic."
Andrew C. Revkin contributed reporting for this article.
THE ENERGY CHALLENGE
Boom in Ethanol Reshapes Economy of
Heartland
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By ALEXEI BARRIONUEVO
Published: June 25, 2006
Enlarge this Image
David Bowser for The New York Times
In Hereford, a small town in the Texas Panhandle's cattle country, two companies are
rushing to build plants to turn corn into fuel.
The Energy Challenge
A Modern Day Gold Rush
Articles in this series are examining the ways in which the world is, and is not,
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Interactive Graphic: Fuel on the Cob
Correction Appended
This article was reported by Alexei Barrionuevo, Simon Romero
and Michael Janofsky and written by Mr. Barrionuevo.
Dozens of factories that turn corn into the gasoline substitute ethanol
are sprouting up across the nation, from Tennessee to Kansas, and
California, often in places hundreds of miles away from where corn is
grown.
Once considered the green dream of the environmentally sensitive,
ethanol has become the province of agricultural giants that have long
pressed for its use as fuel, as well as newcomers seeking to cash in on a
bonanza.
The modern-day gold rush is driven by a number of factors: generous
government subsidies, surging demand for ethanol as a gasoline
supplement, a potent blend of farm-state politics and the prospect of
generating more than a 100 percent profit in less than two years.
The rush is taking place despite concerns that large-scale diversion of
agricultural resources to fuel could result in price increases for food for
people and livestock, as well as the transformation of vast preserved
areas into farmland.
Even in the small town of Hereford, in the middle of the Texas
Panhandle's cattle country and hundreds of miles from the agricultural
heartland, two companies are rushing to build plants to turn corn into
fuel.
As a result, Hereford has become a flashpoint in the ethanol boom that
is helping to reshape part of rural America's economic base.
Despite continuing doubts about whether the fuel provides a genuine
energy saving, at least 39 new ethanol plants are expected to be
completed over the next 9 to 12 months, projects that will push the
United States past Brazil as the world's largest ethanol producer.
The new plants will add 1.4 billion gallons a year, a 30 percent increase
over current production of 4.6 billion gallons, according to Dan Basse,
president of AgResources, an economic forecasting firm in Chicago. By
2008, analysts predict, ethanol output could reach 8 billion gallons a
year.
For all its allure, though, there are hidden risks to the boom. Even as
struggling local communities herald the expansion of this ethanolindustrial complex and politicians promote its use as a way to decrease
America's energy dependence on foreign oil, the ethanol phenomenon is
creating some unexpected jitters in crucial corners of farm country.
A few agricultural economists and food industry executives are quietly
worrying that ethanol, at its current pace of development, could strain
food supplies, raise costs for the livestock industry and force the use of
marginal farmland in the search for ever more acres to plant corn.
"This is a bit like a gold rush," warned Warren R. Staley, the chief
executive of Cargill, the multinational agricultural company based in
Minnesota. "There are unintended consequences of this euphoria to
expand ethanol production at this pace that people are not considering."
Mr. Staley has his own reasons to worry, because Cargill has a stake in
keeping the price of corn low enough to supply its vast interests in
processed food and livestock.
But many energy experts are also questioning the benefits of ethanol to
the nation's fuel supply. While it is a renewable, domestically produced
fuel that reduces gasoline pollution, large amounts of oil or natural gas
go into making ethanol from corn, leaving its net contribution to
reducing the use of fossil fuels much in doubt.
As one of the hottest investments around, however, few in farm country
want to hear any complaints these days about the risks associated with
ethanol. Archer Daniels Midland, the politically connected agricultural
processing company in Decatur, Ill., and the industry leader that has
been a longstanding champion of transforming corn into a fuel blend,
has enjoyed a doubling in its stock price and profits in the last year.
One ethanol producer has already sold shares to the public and two
more are planning to do so. And the get-rich-quick atmosphere has
drawn in a range of investors, including small farm cooperatives, hedge
funds and even Bill Gates.
For all the interest in ethanol, however, it is doubtful whether it can
serve as the energy savior President Bush has identified. He has called
for biofuels — which account for just 3 percent of total gasoline usage —
to replace roughly 1.6 million barrels a day of oil imported from the
Persian Gulf.
New Jobs, New Life
To fill that gap with corn-based ethanol alone, agricultural experts say
that production would have to rise to more than 50 billion gallons a
year; at least half the nation's farmland would need to be used to grow
corn for fuel. But that isn't stopping out-of-the-way towns looking for
ways to pump life into local economies wracked by population loss, farm
consolidation and low prices from treating the rush into ethanol as a
godsend.
"These projects are bringing 100 new jobs to our town," said Don
Cumpton, Hereford's director of economic development and a former
football coach at the high school. "It's not as if Dell computer's going to
be setting up shop here. We'd be nuts to turn something like this down."
That the United States is using corn, among the more expensive crops to
grow and harvest, to help meet the country's fuel needs is a testament to
the politics underlying ethanol's 30-year rise to prominence. Brazilian
farmers produce ethanol from sugar at a cost roughly 30 percent less.
But in America's farm belt, politicians have backed the ethanol
movement as a way to promote the use of corn, the nation's most
plentiful and heavily subsidized crop. Those generous government
subsidies have kept corn prices artificially low — at about $2 a bushel —
and encouraged flat-out production by farmers, leading to large
surpluses symbolized by golden corn piles towering next to grain silos in
Iowa and Illinois.
While farmers are seeing little of the huge profits ethanol refiners like
Archer Daniels Midland are banking, many farmers are investing in
ethanol plants through cooperatives or simply benefiting from the rising
demand for corn. With Iowa home to the nation's first presidential
caucuses every four years, just about every candidate who visits the state
pays obeisance to ethanol.
"There is zero daylight" between Democrats and Republicans in the
region, said Ken Cook, president of Environmental Working Group, a
nonprofit research policy group in Washington, and a veteran observer
of agricultural politics. "All incumbents and challengers in Midwestern
farm country are by definition ethanolics."
The ethanol explosion began in the 1970's and 1980's, when ADM's chief
executive, Dwayne O. Andreas, was a generous campaign contributor
and well-known figure in the halls of Congress who helped push the idea
of transforming corn into fuel.
Ethanol can be produced from a number of agricultural feed stocks,
including corn and sugar cane, and someday, wheat and straw. But
given the glut in corn, the early strategy of Mr. Andreas was to drum up
interest in ethanol on the state level among corn farmers and persuade
Washington to provide generous tax incentives. But in 1990, when
Congress mandated the use of a supplement in gasoline to help limit
emissions, ADM lost out to the oil industry, which won the right to use
the cheaper methyl tertiary butyl ether, or MTBE, derived from natural
gas, to fill the 10 percent fuel requirement.
Past Scandal
Adding to its woes, ADM was marred by scandal in 1996 when several
company executives, including one of the sons of Mr. Andreas, were
convicted of conspiracy to fix lysine markets. The company was fined
$100 million. Since then, ADM's direct political clout in Washington
may have waned a bit but it still pursues its policy preferences through a
series of trade organizations, notably the Renewable Fuels Association.
Some 14 months ago the company hired Shannon Herzfeld, a leading
lobbyist for the pharmaceutical industry. But she is not a registered
lobbyist for ADM and said in an interview that the company was
maintaining its long-held policy that it does not lobby Congress directly.
"Nobody is deferential to ADM," contended Ms. Herzfeld, who says she
spends little time on Capitol Hill.
But ADM has not lost interest in promoting ethanol among farm
organizations, politicians and the news media. It is by far the biggest
beneficiary of more than $2 billion in government subsidies the ethanol
industry receives each year, via a 51-cent-a-gallon tax credit given to
refiners and blenders that mix ethanol into their gasoline. ADM will
earn an estimated $1.3 billion from ethanol alone in the 2007 fiscal year,
up from $556 million this year, said David Driscoll, a food
manufacturing analyst at Citigroup.
[And the company may be concerned by the recent statement by Energy
Secretary Samuel W. Bodman, who suggested that if prices remain high,
lawmakers should consider ending the ethanol subsidy when it expires
in 2010. "The question needs to be thought about," he said on Friday.]
ADM has huge production facilities that dwarf those of its competitors.
With seven big plants, the company controls 1.1 billion gallons of
ethanol production, or about 24 percent of the country's capacity. ADM
can make more than four times what VeraSun, ADM's closest ethanol
rival, can produce.
Last year, spurred by soaring energy prices, the ethanol lobby broke
through in its long campaign to win acceptance outside the corn belt,
inserting a provision in the Energy Policy Act of 2005 that calls for the
use of 5 billion gallons a year of ethanol by 2007, growing to at least 7.5
billion gallons in 2012. The industry is now expected to produce about 6
billion gallons next year.
The phased removal of MTBE from gasoline, a result of concerns that
the chemical contaminates groundwater and can lead to potential health
problems, hastened the changeover. Now, government officials are also
pushing for increasing use of an 85-percent ethanol blend, called E85,
which requires automakers to modify their engines and fuel injection
systems.
In the ultimate nod to ADM's successful efforts, Mr. Bodman announced
the new initiatives in February at the company's headquarters in Illinois.
"It's been 30 years since we got a call from the White House asking for
the agriculture industry, ADM in particular, to take a serious look at the
possibilities of building facilities to produce alternative sources of
energy for our fuel supply in the United States," said G. Allen Andreas,
ADM's chairman and Dwayne Andreas' nephew.
Now, ADM is betting even more of its future on ethanol, embracing a
shift from food processing to energy production as its focus. In April, it
hired Patricia A. Woertz, a former executive from the oil giant Chevron,
as the company's new chief executive.
While ADM has pushed ethanol, rivals like Cargill have been more
skeptical. To Mr. Staley, ethanol is overpromoted as a solution to the
nation's energy challenges, and the growth in production, if unchecked,
has the potential to ravage America's livestock industry and harm the
nation's reliability as an exporter of corn and its byproducts.
Threat to Food Production
"Unless we have huge increases in productivity, we will have a huge
problem with food production," Mr. Staley said. "And the world will
have to make choices."
Last year corn production topped 11 billion bushels — second only to
2004's record harvest. But many analysts doubt whether the scientists
and farmers can keep up with the ethanol merchants.
"By the middle of 2007, there will be a food fight between the livestock
industry and this biofuels or ethanol industry," Mr. Basse, the economic
forecaster, said. "As the corn price reaches up above $3 a bushel, the
livestock industry will be forced to raise prices or reduce their herds. At
that point the U.S. consumer will start to see rising food prices or food
inflation."
If that occurs, the battleground is likely to shift to some 35 million acres
of land set aside under a 1985 program for conservation and to help
prevent overproduction. Farmers are paid an annual subsidy averaging
$48 an acre not to raise crops on the land. But the profit lure of ethanol
could be great enough to push the acreage, much of it considered
marginal, back into production.
Mr. Staley fears that could distract farmers from the traditional primary
goal of agriculture, raising food for people and animals. "We have to
look at the hierarchy of value for agricultural land use," he said in a May
speech in Washington. "Food first, then feed" for livestock, "and last
fuel."
And even Cargill is hedging its bets. It recently announced plans to
nearly double its American ethanol capacity to 220 million gallons a
year. Meanwhile, the flood of ethanol plant announcements is making
the American livestock industry nervous about corn production. "I think
we can keep up, assuming we get normal weather," said Greg Doud, the
chief economist at the National Cattlemen's Beef Association. "But what
happens when Mother Nature crosses us up and we get a bad corn
year?"
Beyond improving corn yields, the greatest hope for ethanol lies with
refining technology that can produce the fuel from more efficient
renewable resources, like a form of fuel called cellulosic ethanol from
straw, switchgrass or even agricultural waste. While still years away,
cellulosic ethanol could help overcome the concerns inherent in relying
almost exclusively on corn to make ethanol and make the advance
toward E85 that much quicker.
"The cost of the alternative — of staying addicted to oil and filling our
atmosphere with greenhouse gases, and keeping other countries
beholden to high gasoline prices — is unacceptable," said Nathanael
Greene, senior policy analyst at the Natural Resources Defense Council
in New York. "We have to struggle through the challenges of growing
and producing biofuels in the right way."
But the current incentives to make ethanol from corn are too attractive
for producers and investors to worry about the future. With oil prices at
$70 a barrel sharply lifting the prices paid for ethanol, the average
processing plant is earning a net profit of more than $5 a bushel on the
corn it is buying for about $2 a bushel, Mr. Basse said. And that is before
the 51-cent-a-gallon tax credit given to refiners and blenders that
incorporate ethanol into their gasoline.
"It is truly yellow gold," Mr. Basse said.
Alexei Barrionuevo reported from Chicago for this article, Simon
Romero from Hereford, Tex., and Michael Janofsky from Washington.
Correction: June 29, 2006
A front-page article on Sunday about the development of ethanol
plants gave an incorrect spelling in some copies for the surname of the
chief economist at the National Cattlemen's Beef Association, who is
concerned about how the production of the biofuel could affect corn
supplies. It is Gregg Doud, not Dowd. Because of an editing error, the
article referred imprecisely to plants in Fulton, N.Y., and Savannah,
Ga., in some copies. They are in the planning stages; they are not yet
operating.
A Range of Estimates on Ethanol's Benefits
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By ALEXEI BARRIONUEVO
Published: June 25, 2006
Would using ethanol save energy?
That question, it turns out, is not easy to answer. Ethanol's enthusiasts
point to the potential benefits of replacing gasoline with a renewable
energy source that they contend will reduce America's reliance on
foreign oil and cut greenhouse gases produced by fossil fuels. But the
benefits of ethanol, particularly when it is produced from corn, are not
so clear cut.
A number of researchers who have looked at the issue have concluded
that more energy now goes into making a gallon of ethanol than is
contained in that gallon. Others, however, find a net benefit, though
most see it as relatively modest.
Those who question whether ethanol is as "green" as advertised say that
supporters ignore or downplay the large quantities of natural gas used to
produce ethanol, as well as the diesel fuel used to transport it from
plants to markets. Moreover, growing corn requires heavy use of
nitrogen fertilizers, made from natural gas, and requires extensive use of
farm machinery, which burns fuel refined from crude oil.
Given the complexities of the calculations, there is a wide range of
estimates of the benefits of ethanol.
On the positive side, analysts at the Agriculture Department concluded
in their most recent assessment that ethanol offered a substantial gain,
producing a positive output 67 percent greater than the energy inputs.
But others who view ethanol favorably are more conservative, with
several estimating the net energy benefit at about 20 percent.
David Pimentel, a professor of agriculture and life sciences at Cornell
University, is one of several researchers who has challenged the
Agriculture Department's conclusion. He has estimated that ethanol
requires 29 percent more energy from fossil fuels than it delivers in
savings from not using gasoline.
Dr. Pimentel, along with Tadeusz W. Patzek, a civil and environmental
engineer from the University of California at Berkeley, published
research finding that the Agriculture Department's analysis excluded the
energy required to produce or repair farm machinery, as well as the steel
and cement used to build the plants.
The Agriculture Department counters by noting that the professors
failed to consider the energy benefit of certain ethanol byproducts,
including corn oil and corn gluten, and said they were using old farm
machinery data.
"They put all the energy on the ethanol," said Roger Conway, director of
the department's office of energy policy and new uses.
The Agriculture Department also points to increases in corn yields, and
efficiency improvements in the fertilizer and ethanol industries, which
add to ethanol's energy benefit.
Dr. Pimentel acknowledged the omissions of some byproducts, saying
they might have boosted the energy balance to as much as break even.
But he said that even a best-case scenario, using his calculations, did not
justify a heavy investment in ethanol. He called the push into ethanol a
"boondoggle" motivated by farm-state politics and big profits.
Dr. Pimentel, who first began criticizing ethanol as an energy alternative
about 25 years ago, said that he has never been supported by the oil
industry. Dr. Patzek has worked as a researcher for an oil company in
the past but said that his biofuels research had received no support from
the industry.
Several environmental groups that support ethanol concede that the
energy savings from corn-based ethanol may be limited, but they say it
will serve as a crucial bridge to more efficient sources like switchgrass, a
type of prairie grass that could potentially be used to produce ethanol.
The choice of what fuel to use to run an ethanol plant will also play a
role in determining its ultimate energy efficiency. In Hereford, Tex.,
White Energy expects to use natural gas to power its ethanol plant, while
another Dallas-based company, Panda Energy International, plans to
use Hereford's ample supplies of cow manure as fuel.
Driven by the high cost of natural gas, about 10 of 39 ethanol plants
under construction are being designed to run on coal, according to
Robert McIlvaine, who runs a market research firm in Northfield, Ill.
Mr. Conway of the Agriculture Department called the move to cheaper
and more abundant coal to run ethanol plants "preferable."
But Nathanael Greene, senior policy analyst at the Natural Resources
Defense Council, which has supported ethanol's use, disagreed, pointing
out that burning coal normally produces twice as much greenhouse gas
as natural gas.
"This is going to significantly increase the local air pollution," Mr.
Greene said, "and diminish the benefits of using ethanol."
More Articles in Business »
THE ENERGY CHALLENGE
Europe's Image Clashes With Reliance on
Coal
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By MARK LANDLER
Published: June 20, 2006
SCHWARZE PUMPE, Germany — In the shadow of two hulking boilers,
which spew 10 million tons of carbon dioxide a year into the air, the
Swedish owners of this coal-fired power station recently broke ground
on what is to be the world's first carbon-free plant fueled by coal. The
German chancellor, Angela Merkel, presided over the ceremony.
Enlarge this Image
Matthias Rietschel for The New York Times
The power plant in Schwarze Pumpe, Germany, operated by Vattenfall. The company is
building a carbon-free plant, but only as a demonstration model. Germany plans eight new
coal-fired power plants over the next five years.
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Sooty Future
Articles in this series are examining the ways in which the world is, and is not,
moving toward a more energy efficient, environmentally benign future.
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Graphic: Generating Electricity and Emissions
"We accept the problem of climate change," said Reinhardt Hassa, a
senior executive at Vattenfall, which operates the plant. "If we want a
future for coal, we have to adopt new technologies. It is not enough just
to make incremental improvements."
But the new plant, which will be just a demonstration model, pales next
to the eight coal-fired power stations Germany plans to build for
commercial use between from now to 2011 — none of them carbon-free.
"That is really a disappointing track record," said Stephan Singer, the
director of climate and energy policy at the World Wide Fund for Nature
in Brussels. "Just replacing old coal plants with new coal plants won't
enable Germany to meet stricter carbon emission targets."
Europe likes to think of itself as a place that has moved beyond its sooty
industrial past, with energy that comes from the windmills that dot the
Dutch countryside and the Danish coastline or the carbon-free nuclear
plants that dominate France's power industry.
But with oil prices soaring and worries rising about the reliability of gas
piped from Russia, Europe must depend heavily on that great industrialage relic, coal: a cheap, plentiful fuel, but one that emits twice the
carbon dioxide of natural gas. Coal-fired plants generated half the power
in Germany and Britain during the chilly winter just past.
While Europeans stand out for their commitment to controlling global
warming gases, some of their largest energy companies are reluctant to
invest in technologies that could further protect the environment, like
equipment in the demonstration plant here that will trap carbon dioxide
and pump it into underground storage areas. Only a handful of carbonfree plants are planned in the European Union.
There is another downside to coal, evident barely a mile from the plant
here. Bulldozers have begun demolishing a 450-year-old mill town,
which blocks the path of the open-pit mine that supplies coal to the
plant. The last residents are being forced to pack their belongings and
abandon their homes for a new settlement nearby.
Such uprooting is an unavoidable cost of Europe's hunger for coal,
executives here say. They also say the technology to capture carbon
dioxide is too costly, at a time when they are already spending billions of
euros to replace Europe's aging power plants. Finding places to store the
carbon dioxide is a headache in countries like Germany, which are
densely populated and have a history of protesting against the storage of
more troublesome pollutants like nuclear waste.
In Europe, where power companies say they have cleaned up the visible
pollutants — like sulfur dioxide -- from their coal plants more diligently
than their American counterparts, some executives are suspicious of
current proposals to convert to "clean coal" technology.
They describe them as mainly public relations ploys championed by the
Bush administration and American power companies, even as only a few
plants that capture and sequester carbon dioxide are actually planned
for the United States. They suspect the Americans are trying to
circumvent mandatory cuts in carbon emissions and avoid making
steady improvements in the efficiency of their plants.
"There's a lot of media-driven talk," said Alfred Tacke, chief executive of
Steag, Germany's fifth-largest power generator, which has eight coal
plants scattered in the Rhine, Ruhr and Saar regions.
"In the United States, you defer all investments, because in the future
maybe you have the perfect solution," said Mr. Tacke, who was deputy
economics minister under the previous German chancellor, Gerhard
Schröder. "I would prefer a solution that improves the situation now."
By that, Mr. Tacke means using existing technology like raising the
temperature or pressure of the steam that turns the turbine, to make
conventional coal plants more efficient. Steag is building such a plant in
the Ruhr city of Duisburg — a $1 billion project that, he says, will be
more efficient than any rival in the United States.
The debate over coal in the European Union has to be seen within the
context of the Kyoto Protocol, a global climate-control agreement that
commits Germany and 34 other nations to measurable reductions in
emissions of carbon dioxide and several other greenhouse gases.
With a legal imperative to cut emissions by up to a fifth within the next
six years, power companies here face a clearer challenge than those in
non-Kyoto countries, like the United States or China.
Yet while the Kyoto pact has focused minds, environmental advocates
say it has not yet pushed companies far enough. In 2005, without any
extraordinary effort, emissions of carbon dioxide in Germany, Britain
and other countries actually came in below the caps set by national
governments in the first phase of the Kyoto process, which runs from
2005 to 2007.
This, critics said, suggests that the reductions were not tough enough;
much of the improvements were simply a natural outgrowth of slow
economic growth and the closing of outdated coal operations. Britain
and Germany both pledged to impose deeper cuts in the next phase,
which starts in 2008 and runs through 2012.
"It's true that the first phase of emissions reductions are not that
challenging," said Daniel Lashof, deputy director of the climate center at
the Natural Resources Defense Council in Washington. "Europe can
make its targets with only incremental improvements."
Though Europeans are united in their concern about global warming,
they have a patchwork of energy policies. Some countries, like Germany
and Poland, remain heavily dependent on coal, while others, like France
and Finland, are redoubling their investment in nuclear power. Italy and
Spain use a lot of oil and gas, though Italy is converting some oil-fired
plants to coal.
The recent spike in the price of oil has thrown the spotlight back on coal,
even in places like Britain, where the industry had been in a death spiral
for decades. Richard Budge, a longtime British coal executive, has
announced plans to reopen a colliery in South Yorkshire. With financing
from Russian investors, he also hopes to build a $1.5 billion power plant
on the site, equipped with technology to capture and store carbon
dioxide.
After years in disrepute, coal is still struggling for public acceptance in
Britain. The government is drafting a new energy policy that is expected
to stress windmills and other renewable energy sources.
But economic and geopolitical realities, Mr. Budge said, make a bigger
role for coal inevitable. "Wind farms only work one day in three, and
nobody knows which day," he said, with only a hint of exaggeration, in a
telephone interview.
Coal, he noted, is not a hostage to politics. When Russia abruptly
switched off its natural gas pipeline to Ukraine in January over a pricing
dispute, gas supplies dwindled all over Western Europe. To Germany
and other gas importers, it was a chilling reminder of their vulnerability.
"Fifty-eight percent of the world's gas is owned by Russia, Iran and
Qatar," Mr. Budge said. "Coal is on every continent."
Here in eastern Germany, vast deposits of brown coal, also known as
lignite, lurk beneath the table-flat countryside. There are similar
deposits in the Rhine and Ruhr valleys in the west. Though Germany
has been mining in these regions for decades, the supply is far from
exhausted.
So great is the demand that the government allows companies to
forcibly resettle villages that lie in the path of their excavators. The
process is costly and litigious and can take more than a decade.
"This is a very difficult issue for us," Mr. Hassa said, noting that
Vattenfall has begun negotiating with 230 residents of a village next to a
mine, for a relocation that would not happen until 2018.
Haidemühle, the village being swallowed by the Schwarze Pumpe mine,
acquiesced to relocation fairly quietly. Among the few holdouts was
Heinz Attula, 84, who said Vattenfall did not pay him enough for his
property. But even he was ready to move to a new home provided by the
company.
"It's not an easy step," Mr. Attula said, as he walked his dog past
deserted houses and a ghostly schoolyard recently. "I've lived my whole
life in this town. But I know the mining must go on."
The economic forces are getting harder to resist. Coal is Germany's main
generator of electricity, and the government plans to phase out the next
largest source, nuclear power, by 2021. Though use of natural gas is
growing — Germany and Russia are jointly building a pipeline under the
Baltic Sea — last winter's cut-off left a bad taste in Berlin.
"This really changed the thinking of politicians and economists," said
Johannes F. Lambertz, a member of the management board of RWE
Power, the No. 1 electricity generator in Germany and No. 3 in Britain.
"People now talk about competitiveness and security together."
Coal is the bedrock of RWE's business, and its strategy illustrates the
tension between environmental progress and the status quo. The
company is expanding its huge BoA plant in the Rhine valley, which uses
brown coal, and it plans a new black, or hard, coal plant, east of the
Ruhr valley. Neither, at least initially, will be equipped to capture and
store carbon dioxide.
Long viewed as a holdout, RWE recently surprised competitors by
announcing its first carbon-free plant, scheduled to go into service in
2014. The $1.2 billion project would have a capacity of 450 megawatts,
more than ten times that of the pilot plant in Schwarze Pumpe.
"We have to be prepared for a scenario in which carbon emission
reductions are much greater than today," Mr. Lambertz said in an
interview at RWE Power's headquarters in Cologne. "We have to keep all
our options open since we face an uncertain future."
With so few details and such a long timetable, critics said the
announcement was a public relations maneuver, at a time when the
German government is setting the next stage of emissions reduction
targets.
"Last year, RWE said it was skeptical about a carbon-free plant before
2015," said Brian Ricketts, a coal industry analyst at the International
Energy Agency in Paris. "It's a game between industry and government."
While Europe's longer-term reductions in emissions are still undecided,
there is a general agreement that they will have to be radical — if only to
compensate for the additional greenhouse gases being generated by
China and India, to say nothing of the United States.
The plant at Schwarze Pumpe shows how European industry is adapting
to this future. Originally built in 1955 by East German Communists, it
was equipped with the best technology then available. But it still
contributed to East Germany's reputation for horrendous pollution.
The town's name translates as "black pump," and outsiders regularly
assume it refers to its pollution record. Actually it stems from a tale that
in the Thirty Years' War of the 1600's, townspeople painted their pump
black to trick invaders into thinking the water was infected with the
plague.
After German reunification in 1990, the government opted to replace
the Schwarze Pumpe plant. The new one, opened in 1998, is equipped
with filters and scrubbers that reduced sulfur dioxide emissions by 91
percent, nitrogen oxide by 61 percent, and almost completely eliminated
dust. Carbon dioxide emissions were reduced only 31 percent, however.
Vattenfall's carbon-free plant will burn the coal in an atmosphere of
pure oxygen and recirculated gas. Three quarters of the carbon dioxide
produced by the burning is recycled back into the boiler. What remains
is pressurized into a liquid-gas mixture and injected underground. Mr.
Hassa said it was no accident that a Swedish company was on the
vanguard of this effort. "The Swedish philosophy is different than the
German philosophy," he said. "Climate change and environmental
protection are more deeply rooted in Swedish society than in German
society."
Vattenfall concedes it will not be able to produce carbon-free electricity
on a large scale until at least 2015. Still, it says it has little choice but to
start now. "In the long run," said a spokesman, Martin May, "we'll have
to reduce emissions by 60 percent to 70 percent."
THE ENERGY CHALLENGE
Pollution From Chinese Coal Casts a Global
Shadow
Chang W. Lee/The New York Times
Coal has given parts of China a Dickensian feel, with miners coated with black soot and air that is
thick with pollution.
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By KEITH BRADSHER and DAVID BARBOZA
Published: June 11, 2006
HANJING, China — One of China's lesser-known exports is a dangerous
brew of soot, toxic chemicals and climate-changing gases from the
smokestacks of coal-burning power plants.
The Energy Challenge
The Cost of Coal
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Video: China's Dark Clouds
Graphic: Future Shock
Enlarge this Image
Chang W. Lee/The New York Times
Coal-burning factories like the Gu Dian steel plant have given Shanxi Province in China a
Dickensian feel.
Enlarge this Image
Chang W. Lee/The New York Times
The Er Pu coal mine in Shanxi Province, China. Coal use in China exceeds that of the United
States, the European Union and Japan combined.
Enlarge this Image
Chang W. Lee/The New York Times
Wu Yiebing, seated left, with his wife, Cao Waiping, right, their daughter, Wu Caoying, far
left, and a family friend, center. Coal has given the family as much electricity as it needs, but
a smog of sulfur particles hovers above their small town.
Chang W. Lee/The New York Times
In Shanxi Province houses are coated with soot, miners' faces are smeared almost entirely
black, and air is thick with the smell of burning coal.
Chang W. Lee/The New York Times
Pollution from China will contribute to a big increase in global warming.
In early April, a dense cloud of pollutants over Northern China sailed to
nearby Seoul, sweeping along dust and desert sand before wafting across
the Pacific. An American satellite spotted the cloud as it crossed the
West Coast.
Researchers in California, Oregon and Washington noticed specks of
sulfur compounds, carbon and other byproducts of coal combustion
coating the silvery surfaces of their mountaintop detectors. These
microscopic particles can work their way deep into the lungs,
contributing to respiratory damage, heart disease and cancer.
Filters near Lake Tahoe in the mountains of eastern California "are the
darkest that we've seen" outside smoggy urban areas, said Steven S.
Cliff, an atmospheric scientist at the University of California at Davis.
Unless China finds a way to clean up its coal plants and the thousands of
factories that burn coal, pollution will soar both at home and abroad.
The increase in global-warming gases from China's coal use will
probably exceed that for all industrialized countries combined over the
next 25 years, surpassing by five times the reduction in such emissions
that the Kyoto Protocol seeks.
The sulfur dioxide produced in coal combustion poses an immediate
threat to the health of China's citizens, contributing to about 400,000
premature deaths a year. It also causes acid rain that poisons lakes,
rivers, forests and crops.
The sulfur pollution is so pervasive as to have an extraordinary side
effect that is helping the rest of the world, but only temporarily: It
actually slows global warming. The tiny, airborne particles deflect the
sun's hot rays back into space.
But the cooling effect from sulfur is short-lived. By contrast, the carbon
dioxide emanating from Chinese coal plants will last for decades, with a
cumulative warming effect that will eventually overwhelm the cooling
from sulfur and deliver another large kick to global warming, climate
scientists say. A warmer climate could lead to rising sea levels, the
spread of tropical diseases in previously temperate climes, crop failures
in some regions and the extinction of many plant and animal species,
especially those in polar or alpine areas.
Coal is indeed China's double-edged sword — the new economy's black
gold and the fragile environment's dark cloud.
Already, China uses more coal than the United States, the European
Union and Japan combined. And it has increased coal consumption 14
percent in each of the past two years in the broadest industrialization
ever. Every week to 10 days, another coal-fired power plant opens
somewhere in China that is big enough to serve all the households in
Dallas or San Diego.
To make matters worse, India is right behind China in stepping up its
construction of coal-fired power plants — and has a population expected
to outstrip China's by 2030.
Aware of the country's growing reliance on coal and of the dangers from
burning so much of it, China's leaders have vowed to improve the
nation's energy efficiency. No one thinks that effort will be enough. To
make a big improvement in emissions of global-warming gases and
other pollutants, the country must install the most modern equipment
— equipment that for the time being must come from other nations.
Industrialized countries could help by providing loans or grants, as the
Japanese government and the World Bank have done, or by sharing
technology. But Chinese utilities have in the past preferred to buy cheap
but often-antiquated equipment from well connected domestic suppliers
instead of importing costlier gear from the West.
The Chinese government has been reluctant to approve the extra
spending. Asking customers to shoulder the bill would set back the
government's efforts to protect consumers from inflation and to create
jobs and social stability.
But each year China defers buying advanced technology, older
equipment goes into scores of new coal-fired plants with a lifespan of up
to 75 years.
"This is the great challenge they have to face," said David Moskovitz, an
energy consultant who advises the Chinese government. "How can they
continue their rapid growth without plunging the environment into the
abyss?"
Living Better With Coal
Wu Yiebing and his wife, Cao Waiping, used to have very little effect on
their environment. But they have tasted the rising standard of living
from coal-generated electricity and they are hooked, even as they suffer
the vivid effects of the damage their new lifestyle creates.
Years ago, the mountain village where they grew up had electricity for
only several hours each evening, when water was let out of a nearby dam
to turn a small turbine. They lived in a mud hut, farmed by hand from
dawn to dusk on hillside terraces too small for tractors, and ate almost
nothing but rice on an income of $25 a month.
Today, they live here in Hanjing, a small town in central China where
Mr. Wu earns nearly $200 a month. He operates a large electric drill
600 feet underground in a coal mine, digging out the fuel that has
powered his own family's advancement. He and his wife have a stereo, a
refrigerator, a television, an electric fan, a phone and light bulbs, paying
just $2.50 a month for all the electricity they can burn from a nearby
coal-fired power plant.
They occupy a snug house with brick walls and floors and a cement
foundation — the bricks and cement are products of the smoking,
energy-ravenous factories that dot the valley. Ms. Cao decorates the
family's home with calendar pictures of Zhang Ziyi, the Chinese film
star. She is occasionally dismissive about the farming village where she
lived as a girl and now seldom visits except over Chinese New Year.
"We couldn't wear high heels then because the paths were so bad and we
were always carrying heavy loads," said Ms. Cao, who was wearing
makeup, a stylish yellow pullover, low-slung black pants and black
pumps with slender three-inch heels on a recent Sunday morning.
One-fifth of the world's population already lives in affluent countries
with lots of air-conditioning, refrigerators and other appliances. This
group consumes a tremendous amount of oil, natural gas, nuclear
power, coal and alternative energy sources.
Now China is trying to bring its fifth of the world's population, people
like Mr. Wu and Ms. Cao, up to the same standard. One goal is to build
urban communities for 300 million people over the next two decades.
Already, China has more than tripled the number of air-conditioners in
the past five years, to 84 per 100 urban households. And it has brought
modern appliances to hundreds of millions of households in small towns
and villages like Hanjing.
The difference from most wealthy countries is that China depends
overwhelmingly on coal. And using coal to produce electricity and run
factories generates more global-warming gases and lung-damaging
pollutants than relying on oil or gas.
Indeed, the Wu family dislikes the light gray smog of sulfur particles and
other pollutants that darkens the sky and dulls the dark green fields of
young wheat and the white blossoms of peach orchards in the distance.
But they tolerate the pollution.
"Everything else is better here," Mr. Wu said. "Now we live better, we eat
better."
China's Dark Clouds
Large areas of North-Central China have been devastated by the
spectacular growth of the local coal industry. Severe pollution extends
across Shaanxi Province, where the Wus live, and neighboring Shanxi
Province, which produces even more coal.
Not long ago, in the historic city of Datong, about 160 miles west of
Beijing, throngs of children in colorful outfits formed a ceremonial line
at the entrance to the city's 1,500-year-old complex of Buddhist cave
grottoes to celebrate Datong's new designation as one of China's
"spiritually civilized cities."
The event was meant to bolster pride in a city desperately in need of
good news. Two years ago, Datong, long the nation's coal capital, was
branded one of the world's most-polluted cities. Since then, the air
quality has only grown worse.
Datong is so bad that last winter the city's air quality monitors went on
red alert. Desert dust and particulate matter in the city had been known
to force the pollution index into warning territory, above 300, which
means people should stay indoors.
On Dec. 28, the index hit 350.
"The pollution is worst during the winter," said Ji Youping, a former
coal miner who now works with a local environmental protection
agency. "Datong gets very black. Even during the daytime, people drive
with their lights on."
Of China's 10 most polluted cities, four, including Datong, are in Shanxi
Province. The coal-mining operations have damaged waterways and
scarred the land. Because of intense underground mining, thousands of
acres are prone to sinking, and hundreds of villages are blackened with
coal waste.
There is a Dickensian feel to much of the region. Roads are covered in
coal tar; houses are coated with soot; miners, their faces smeared almost
entirely black, haul carts full of coal rocks; the air is thick with the smell
of burning coal.
There are growing concerns about the impact of this coal boom on the
environment. The Asian Development Bank says it is financing pollution
control programs in Shanxi because the number of people suffering
from lung cancer and other respiratory diseases in the province has
soared over the past 20 years. Yet even after years of governmentmandated cleanup efforts the region's factories belch black smoke.
The government has promised to close the foulest factories and to
shutter thousands of illegal mines, where some of the worst safety and
environmental hazards are concentrated. But no one is talking about
shutting the region's coal-burning power plants, which account for more
than half the pollution. In fact, Shanxi and Shaanxi are rapidly building
new coal-fired plants to keep pace with soaring energy demand.
To meet that demand, which includes burning coal to supply power to
Beijing, Shanxi Province alone is expected to produce almost as much
coal as was mined last year in Germany, England and Russia combined.
Burning all that coal releases enormous quantities of sulfur.
"Sulfur dioxide is China's No. 1 pollution problem," said Barbara A.
Finamore, a senior attorney at the Natural Resources Defense Council's
China Clean Energy Program in Washington. "This is the most serious
acid rain problem in the world."
China released about 22.5 million tons of sulfur in 2004, more than
twice the amount released in the United States, and a Chinese regulator
publicly estimated last autumn that emissions would reach 26 million
tons for 2005, although no official figures have been released yet. Acid
rain now falls on 30 percent of China.
Studies have found that the worst effects of acid rain and other pollution
occur within several hundred miles of a power plant, where the extra
acidity of rainfall can poison crops, trees and lakes alike.
But China is generating such enormous quantities of pollution that the
effects are felt farther downwind than usual. Sulfur and ash that make
breathing a hazard are being carried by the wind to South Korea, Japan
and beyond.
Not enough of the Chinese emissions reach the United States to have an
appreciable effect on acid rain yet. But, they are already having an effect
in the mountains in West Coast states. These particles are dense enough
that, at maximum levels during the spring, they account at higher
altitudes for a fifth or more of the maximum levels of particles allowed
by the latest federal air quality standards. Over the course of a year,
Chinese pollution averages 10 to 15 percent of allowable levels of
particles. The amounts are smaller for lower-lying cities, like Seattle,
San Francisco and Los Angeles.
China is also the world's largest emitter of mercury, which has been
linked to fetal and child development problems, said Dan Jaffe, an
atmospheric scientist at the University of Washington.
Unless Chinese regulators become much more aggressive over the next
few years, considerably more emissions could reach the United States.
Chinese pollution is already starting to make it harder and more
expensive for West Coast cities to meet stringent air quality standards,
said Professor Cliff of the University of California, slowing four decades
of progress toward cleaner air.
Nothing Beats It
China knows it has to do something about its dependence on coal.
The government has set one of the world's most ambitious targets for
energy conservation: to cut the average amount of energy needed to
produce each good or service by 20 percent over the next five years. But
with an economy growing 10 percent a year and with energy
consumption climbing even faster, a conservation target amounting to
3.7 percent a year does not keep pace.
All new cars, minivans and sport utility vehicles sold in China starting
July 1 will have to meet fuel-economy standards stricter than those in
the United States. New construction codes encourage the use of doubleglazed windows to reduce air-conditioning and heating costs and hightech light bulbs that produce more light with fewer watts.
Meanwhile, other sources of energy have problems. Oil is at about $70 a
barrel. Natural gas is in short supply in most of China, and prices for
imports of liquefied natural gas have more than doubled in the last three
years. Environmental objections are slowing the construction of
hydroelectric dams on China's few untamed rivers. Long construction
times for nuclear power plants make them a poor solution to addressing
blackouts and other power shortages now.
For the past three years, China has also been trying harder to develop
other alternatives. State-owned power companies have been building
enormous wind turbines up and down the coast. Chinese companies are
also trying to develop geothermal energy, tapping the heat of
underground rocks, and are researching solar power and ways to turn
coal into diesel fuel. But all of these measures fall well short. Coal
remains the obvious choice to continue supplying almost two-thirds of
China's energy needs.
Choices and Consequences
China must make some difficult choices. So far, the nation has been
making decisions that it hopes will lessen the health-damaging impact
on its own country while sustaining economic growth as cheaply as
possible. But those decisions will also add to the emissions that
contribute to global warming.
The first big choice involves tackling sulfur dioxide. The government is
now requiring that the smokestacks of all new coal-fired plants be fitted
with devices long used in Western power plants to remove up to 95
percent of the sulfur. All existing coal-fired plants in China are supposed
to have the devices installed by 2010.
While acknowledging that they have missed deadlines, Chinese officials
insist they have the capacity now to install sulfur filters on every power
plant smokestack. "I don't think there will be a problem reaching this
target before 2010," said Liu Deyou, chief engineer at the Beijing SPC
Environment Protection Tech Engineering Company, the sulfur-filter
manufacturing arm of one of the five big, state-owned utilities.
Japan may be 1,000 miles east of Shanxi Province, but the Japanese
government is so concerned about acid rain from China that it has
agreed to lend $125 million to Shanxi. The money will help pay for
desulfurization equipment for large, coal-fired steel plants in the
provincial capital, Taiyuan.
The question is how much the state-owned power companies will
actually use the pollution control equipment once it is installed. The
equipment is costly to maintain and uses enormous amounts of
electricity that could instead be sold to consumers. Moreover, regulated
electricity tariffs offer little reward for them to run the equipment.
In 2002, the Chinese government vowed to cut sulfur emissions by 10
percent by 2005. Instead, they rose 27 percent. If Chinese officials act
swiftly, sulfur emissions could be halved in the next couple of decades,
power officials and academic experts say. But if China continues to do
little, sulfur emissions could double, creating even more devastating
health and environmental problems.
Even so, halving sulfur emissions has its own consequences: it would
make global warming noticeable sooner.
China contributes one-sixth of the world's sulfur pollution. Together
with the emissions from various other countries, those from China seem
to offset more than one-third of the warming effect from manmade
carbon dioxide already in the atmosphere, according to several climate
models.
But the sulfur particles typically drift to the ground in a week and stop
reflecting much sunlight. Recent research suggests that it takes up to 10
years before a new coal-fired power plant has poured enough longlasting carbon dioxide into the air to offset the cooling effect of the
plant's weekly sulfur emissions.
Climate experts say that, ideally, China would cut emissions of sulfur
and carbon dioxide at the same time. But they understand China's
imperative to clean up sulfur more quickly because it has a far more
immediate effect on health.
"It's sort of unethical to expect people not to clean up their air quality
for the sake of the climate," said Tami Bond, an atmospheric scientist at
the University of Illinois at Urbana-Champaign.
The Hunt for Efficiency
The second big decision facing China lies in how efficiently the heat
from burning coal is converted into electricity. The latest big power
plants in Western countries are much more efficient. Their coal-heated
steam at very high temperatures and pressures can generate 20 to 50
percent more kilowatts than older Chinese power plants, even as they
eject the same carbon-dioxide emissions and potentially lower sulfur
emissions.
China has limited the construction of small power plants, which are
inefficient, and has required the use of somewhat higher steam
temperatures and pressures. But Chinese officials say few new plants
use the highest temperatures and pressures, which require costly
imported equipment.
And Chinese power utilities are facing a squeeze. The government has
kept electricity cheap, by international standards, to keep consumers
happy. But this has made it hard for utilities to cover their costs,
especially as world coal prices rise.
The government has tried to help by limiting what mines can charge
utilities for coal. Mines have responded by shipping the lowest-quality,
dirtiest, most-contaminated coal to power plants, say power and coal
executives. The utilities have also been reluctant to spend on foreign
equipment, steering contracts to affiliates instead.
"When you have a 1 percent or less profit," said Harley Seyedin, chief
executive of the First Washington Group, owner of oil-fired power
plants in Southeastern China's Guangdong Province, "you don't have the
cash flow to invest or to expand in a reasonable way."
A New Technology
The third big choice involves whether to pulverize coal and then burn
the powder, as is done now, or convert the coal into a gas and then burn
the gas, in a process known as integrated gasification combined
combustion, or I.G.C.C.
One advantage of this approach is that coal contaminants like mercury
and sulfur can be easily filtered from the gas and disposed. Another
advantage is that carbon dioxide can be separated from the emissions
and pumped underground, although this technology remains unproven.
Leading climate scientists like this approach to dealing with China's
rising coal consumption. "There's a whole range of things that can be
done; we should try to deploy coal gasification," said Dr. Rajendra K.
Pachauri, chairman of the United Nations-affiliated Intergovernmental
Panel on Climate Change.
The World Bank in 2003 offered a $15 million grant from the Global
Environment Facility to help China build its first state-of-the-art power
plant to convert coal into a gas before burning it. The plan called for
pumping combustion byproducts from the plant underground.
But the Chinese government put the plan on hold after bids to build the
plant were higher than expected. Chinese officials have expressed an
interest this spring in building five or six power plants with the new
technology instead of just one. But they are in danger of losing the
original grant if they do not take some action soon, said Zhao Jian-ping,
the senior energy specialist in the Beijing office of the World Bank.
Another stumbling block has been that China wants foreign
manufacturers to transfer technological secrets to Chinese rivals,
instead of simply filling orders to import equipment, said Anil Terway,
director of the East Asia energy division at the Asian Development Bank.
"The fact that they are keen to have the technologies along with the
equipment is slowing things down," he said.
Andy Solem, vice president for China infrastructure at General Electric,
a leading manufacturer of coal gasification equipment, said he believed
that China would place orders in 2007 or 2008 for the construction of a
series of these plants. But he said some technology transfer was
unavoidable.
Western companies could help Chinese businesses take steps to reduce
carbon-dioxide emissions, like subsidizing the purchase of more
efficient boilers. Some companies already have such programs in other
countries, to offset the environmental consequences of their own
carbon-dioxide emissions at home, and are looking at similar projects in
China. But the scale of emissions in China to offset is enormous.
For all the worries about pollution from China, international climate
experts are loath to criticize the country without pointing out that the
average American still consumes more energy and is responsible for the
release of 10 times as much carbon dioxide as the average Chinese.
While China now generates more electricity from coal than does the
United States, America's consumption of gasoline dwarfs China's, and
burning gasoline also releases carbon dioxide.
An Insatiable Demand?
The Chinese are still far from achieving what has become the basic
standard in the West. Urban elites who can afford condominiums are
still a tiny fraction of China's population. But these urban elites are role
models with a lifestyle sought by hundreds of millions of Chinese. Plush
condos on sale in Shanghai are just a step toward an Americanized
lifestyle that is becoming possible in the nation's showcase city.
Far from the Wu family in rural Shaanxi, the Lu Bei family grew up in
cramped, one-room apartments in Shanghai. Now the couple own a
large three-bedroom apartment in the city's futuristic Pudong financial
district. They have two television sets, four air-conditioners, a
microwave, a dishwasher, a washing machine and three computers.
They also have high-speed Internet access.
"This is my bedroom," said Lu Bei, a 35-year-old insurance agency
worker entering a spacious room with a king-size bed. "We moved here
two years ago. We had a baby and wanted a decent place to live."
For millions of Chinese to live like the Lus with less damage to the
environment, energy conservation is crucial. But curbing that usage
would be impossible as long as China keeps energy prices low. Gasoline
still costs $2 a gallon, for example, and electricity is similarly cheap for
many users.
With Chinese leaders under constant pressure to create jobs for the
millions of workers flooding from farms into cities each year, as well as
the rapidly growing ranks of college graduates, there has been little
enthusiasm for a change of strategy.
Indeed, China is using subsidies to make its energy even cheaper, a
strategy that is not unfamiliar to Americans, said Kenneth Lieberthal, a
China specialist at the University of Michigan. "They have done in many
ways," he said, "what we have done."
Keith Bradsher reported from Hanjing and Guangzhou, China, for this
article and David Barboza from Datong and Shanghai.
The Greener Guys
Timberland
Efforts to combat global warming include these solar panels at a Timberland plant.
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By JAD MOUAWAD
Published: May 30, 2006
When Timberland, the outdoor clothing company, studied ways to
reduce its carbon emissions four years ago, it weighed several options:
building a wind farm in the Dominican Republic, buying power
generated by renewable resources and setting up a vast bank of solar
panels at one of its distribution centers in Ontario, Calif.
The Energy Challenge
Extra Credit
Related
The Energy Challenge: 2 Industry Leaders Bet on Coal but Split on Cleaner Approach
(May 28, 2006)
A Greener Way to Cut the Grass Runs Afoul of a Powerful Lobby (April 24, 2006)
Forget Computers. Here Comes the Sun.
(April 14, 2006)
Automakers Use New Technology to Beef Up Muscle, Not Mileage
(March 30, 2006)
It chose to do all those things, but that was the easy part. When Jeffrey
B. Swartz, Timberland's president and chief executive, considered how
much carbon dioxide was produced in making leather for the company's
famous boots, the answer came as a surprise.
"As it turns out, the vast majority of the greenhouse gases associated
with manufacturing leather comes from cows in the field," Mr. Swartz
said. "Yes, methane."
While Timberland figures out how to reduce these emissions — it is
examining ways to change the feed for cows — the company has already
cut its greenhouse gases by 17 percent from their 2002 level and aims to
become carbon-neutral by 2010 by offsetting its emissions through
renewable or alternative energy sources.
Americans are increasingly recognizing that the effects of carbon
emissions on global warming are a serious problem, but there are no
rules in the United States regulating heat-trapping gases comparable to
those that most other developed countries have adopted under the
Kyoto Protocol. Some United States businesses, though, are responding
for a variety of reasons anyway: to satisfy customers or shareholders
who worry about the environment, to improve their public image or to
drive down their energy costs. In addition, some states and local
authorities have stepped in to try to curb their contributions to global
warming.
For Timberland, while it shares the concerns over global warming, it's
mostly a matter of dollars and cents. As Mr. Swartz put it: "What idiot
will leave costs on the table? I hope it's our competitors. I get paid to
create value."
But reducing carbon emissions is no easy task.
Scientists, economists, environmentalists and a growing rank of
business leaders warn that corporate America needs to move more
quickly or it will face the consequences: higher energy prices, a potential
cost for carbon pollution and, eventually, products that will have trouble
competing globally because other countries are reducing emissions.
The United States is responsible for a quarter of all the carbon dioxide
sent into the atmosphere each year. It has not ratified the Kyoto
Protocol, the treaty on climate change that went into effect last year for
more than three dozen countries in Europe and elsewhere, that set
targets and timetables for cutting emissions.
If consumption of fossil fuels continues at today's pace, the Energy
Department predicts that carbon emissions in the United States could
rise to more than eight billion tons by 2030 — 38 percent above current
levels — as energy use keeps growing.
"This is a huge challenge for American businesses, particularly those
trying to compete internationally," said Adam Markham, executive
director of Clean Air-Cool Planet, an advocacy group in Portsmouth,
N.H. "Most of the rest of the developing world has a legislative mandate
to curb emissions, but in the United States, in many cases, there is no
real reason for companies to act."
Many analysts predict that the United States will eventually set rules
limiting greenhouse emissions. Then, carbon pollution will turn into a
cost of doing business.
In Europe, for example, companies that go over their emission limits
must buy carbon credits to comply. Under the continent-wide trading
system, the cost of a carbon credit reached a high of 30.5 euros for each
metric ton, or about $39, last month. (In the last month, prices have
dropped by half as many power plants reported much lower emissions
than expected.)
But only 86 companies in the United States, accounting for 8 percent of
domestic carbon emissions, have enrolled in Climate Leaders, the
Environmental Protection Agency's voluntary program to cut emissions.
Emissions in the United States have risen 16 percent since 1990, the
agency said.
"There is certainly a lot of inertia in the economy, and many companies
have their heads in the sand, wishing and hoping that somehow the
overwhelming consensus among scientists is going to go away," said
Alan Nogee, director of the clean energy program at the Union of
Concerned Scientists, based in Cambridge, Mass. But it's not. And
ultimately their shareholders and customers are likely to pay a price.
The reality is that carbon regulation is coming inevitably to the United
States, as it has to the rest of the world."
Freezing emissions at today's levels will not solve global warming.
Experts say that large reductions in global emissions — 50 percent or
more by 2050 — are needed to stop carbon concentrations from rising.
But reaching that goal requires a major transformation of how
economies and businesses operate.
"It's going to change everything we do," said Joseph J. Romm, an
analyst at the Center for Energy and Climate Solutions, a group that
helps businesses lower emissions.
Environmental regulations and energy saving are not new. Since the
1970's and 1980's, when energy saving policies became popular in
reaction to high fuel prices, the global economy has made huge strides in
efficiency.
But economic activity has grown at the same time, and carbon emissions
along with it.
"There is a lot that companies can do, especially in the area of energy
efficiency," said Ashok Gupta, an economist at the Natural Resources
Defense Council, an environmental group in New York.
Not surprisingly, the biggest strides have been achieved by corporations
with operations outside the United States. I.B.M. and DuPont, for
example, have long had programs to curb their energy use. In doing so,
they have managed to cut manufacturing costs while decreasing their
emissions.
At DuPont, the savings from energy projects has totaled $2 billion over
the last decade and a half. I.B.M. saved $115 million since 1998 by
avoiding 1.3 million tons of carbon emissions, or the equivalent of taking
51,600 cars off the road, according to the climate change program at the
World Wildlife Fund.
Other companies, like 3M, Advanced Micro Devices and the Gap, have
pledged voluntary reductions in their emissions. Wal-Mart, the world's
biggest retailer, announced a sweeping set of environmental goals last
October, including doubling its truck fleet's efficiency and improving
energy efficiency at its stores.
Johnson & Johnson decided in the late 1990's to meet the Kyoto
requirements globally. From 1990 to 2005, the company reduced carbon
emissions by 11.5 percent. Meanwhile, sales grew by 350 percent.
"We have not sacrificed business growth to meet our carbon emissions,"
said Dennis Canavan, the executive director for worldwide energy
management at Johnson & Johnson. "As Kyoto has recognized, the
environment only sees the absolute amount of carbon you reduce.
Allowing emissions to grow will take us to a bad place."
But some business areas remain averse to change. The transportation
sector and utilities account for more than 55 percent of all emissions;
they are mainly reluctant to commit to reductions without a federal
mandate.
Last month, the Senate Committee on Energy and Natural Resources
held hearings on climate change that led to a few surprises. Some
utilities, breaking with their trade group, asked Congress to set
mandatory limits on carbon emissions.
Exelon and Duke Energy, the nation's largest utility owners, said they
favored a mandatory cap on emissions. As big users of nuclear power,
they stand to benefit more than competitors that burn coal. But they
also note that firm rules would level the playing field for everyone.
"Customers and shareholders need greater certainty," Ruth G. Shaw, a
senior executive at Duke Energy, told the Senate committee. But Senator
Pete V. Domenici, Republican of New Mexico, said it would be
impossible to adopt any law this year because of election-year gridlock.
David G. Hawkins, who ran the air pollution program at the
Environmental Protection Agency in the Carter administration, said that
many utilities were not happy with the current lack of policy.
"At a minimum, the absence of a controlled program creates
uncertainty," said Mr. Hawkins, now the director of the Climate Center
at the Natural Resources Defense Council.
Local and regional governments have stepped in to fill the gap.
California and nine Northeastern states have drawn up plans to limit
carbon emissions, and so have many cities.
Automakers have also resisted changing. David Friedman, an auto
specialist with the Union of Concerned Scientists, said the average fuel
economy of vehicles in the United States today — about 25 miles a
gallon — had dropped by about one mile a gallon in the last 20 years.
Most of the improvements in engine efficiency, however, have been lost
because Detroit carmakers built larger cars and trucks.
"The automobile industry always feels it is difficult to make changes,
whether on safety regulation, on seat belts, on emission standards, on
smog and on global warming," Mr. Friedman said. "They always had to
be forced to make progress."
Bill McKibben, a resident scholar at Middlebury College in Vermont and
the author of "The End of Nature," a book about global warming, said
there was no single answer.
"What people don't get is the scale of what needs to be done," he said.
"Anybody whose solution includes the phrase 'in 20 years,' hasn't quite
caught on to where we are."
More Articles in Business »
THE ENERGY CHALLENGE
2 Industry Leaders Bet on Coal but Split on
Cleaner Approach
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By SIMON ROMERO
Published: May 28, 2006
WRIGHT, Wyo. — More than a century ago a blustery Wyoming
politician named Fenimore Chatterton boasted that his state alone had
enough coal to "weld every tie that binds, drive every wheel, change the
North Pole into a tropical region, or smelt all hell!"
Peabody Energy, left; Brendan McDermid/Reuters, right
Gregory Boyce, of Peabody Energy, left, and Michael Morris of American Electric Power
disagree on a new technology.
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The Complete Series
His words seem prophetic.
The future for American energy users is playing out in coal-rich areas
like northeastern Wyoming, where dump trucks and bulldozers swarm
around 80-foot-thick seams at a Peabody Energy strip mine here, one of
the largest in the world.
Coal, the nation's favorite fuel in much of the 19th century and early
20th century, could become so again in the 21st. The United States has
enough to last at least two centuries at current use rates — reserves far
greater than those of oil or natural gas. And for all the public interest in
alternatives like wind and solar power, or ethanol from the heartland,
coal will play a far bigger role.
But the conventional process for burning coal in power plants has one
huge drawback: it is one of the largest manmade sources of the gases
responsible for global warming.
Many scientists say that sharply reducing emissions of these gases could
make more difference in slowing climate change than any other move
worldwide. And they point out that American companies are best
positioned to set an example for other nations in adopting a new
technique that could limit the environmental impact of the more than
1,000 coal-fired power projects on drawing boards around the world.
It is on this issue, however, that executives of some of the most
important companies in the coal business diverge. Their disagreement is
crucial in the debate over how to satisfy Americans' energy appetite
without accelerating climate change.
One of those executives, Michael G. Morris, runs American Electric
Power, the nation's largest coal consumer and biggest producer of heattrapping carbon dioxide emissions from its existing plants. He is
spearheading a small movement within the industry to embrace the new
technology. His company plans to build at least two 600-megawatt
plants, in Ohio and West Virginia, at an estimated cost of as much as
$1.3 billion each.
The company says these plants are not only better for the environment
but also in the best interests of even its cost-conscious shareholders.
While they would cost 15 to 20 percent more to build, Mr. Morris says
they would be far less expensive to retrofit with the equipment needed
to move carbon dioxide deep underground, instead of releasing it to the
sky, if limits are placed on emissions of global warming gases.
"Leave the science alone for a minute," Mr. Morris said in an interview
at the Columbus, Ohio, headquarters of his company. "The politics
around climate issues are very real. That's why we need to move on this
now."
But most in the industry are not making that bet. Among them is
Gregory H. Boyce, chief executive of Peabody Energy, the largest
private-sector coal producer in the world thanks in part to its growing
operations here in Wyoming and with aspirations to operate coal-fired
plants of its own. Mr. Boyce's company alone controls reserves with
more energy potential than the oil and gas reserves of Exxon Mobil.
"We're still not convinced that the technology or cost structure is there
to justify going down a path where we're not comfortable," Mr. Boyce
said.
Mr. Boyce's view has prevailed. No more than a dozen of the 140 new
coal-fired power plants planned in the United States expect to use the
new approach.
The decisions being made right now in industry and government on how
quickly to adopt any new but more costly technologies will be
monumental.
"Coal isn't going away, so you have to think ahead," said Gavin A.
Schmidt, a climate modeler at the Goddard Institute for Space Studies,
part of NASA. "Many of these power stations are built to last 50 years."
Promise and Perils
Michael Morris and Gregory Boyce, both kingpins in their industries,
have a lot in common. They do a lot of business together — Mr. Morris is
one of Mr. Boyce's largest customers. They are solid Republicans. And
they serve together on various industry initiatives.
They agree that energy from coal — the nation's most important source
of electricity — is cheaper than energy from oil and natural gas and is
competitive with the uranium used in nuclear power plants. And coal
could serve new uses: replacing petroleum in making chemicals, for
example, or even fueling vehicles.
But while sooty smokestacks are no longer a big problem in modern
coal-burning power plants, the increase in global warming gases is. A
typical 500-megawatt coal-fired electricity plant, supplying enough
power to run roughly 500,000 homes, alone produces as much in
emissions annually as about 750,000 cars, according to estimates from
Royal Dutch Shell.
Coal has no stronger evangelist than Mr. Boyce, who grew up on Long
Island, the son of a mining executive, and studied engineering in
Arizona. He argues that a way to reduce carbon dioxide emissions can be
found without having to switch from the existing cheaper coal-burning
technology.
Much in the way that Exxon Mobil influences discussion of climate
issues in the oil industry, Peabody is a backer of industry-supported
organizations that seek to prevent mandatory reductions in global
warming emissions and promote demand for coal.
Peabody's executives are also by far the coal industry's largest political
contributors to federal candidates and parties, giving $641,059 in the
2004 election cycle, with 93 percent of that amount going to
Republicans, according to the Center for Responsive Politics, an
independent research group in Washington that tracks money in
politics. And while Peabody says it expects contributions to Democrats
to increase, under Mr. Boyce the company has cultivated close contact
with the Bush administration.
Mr. Boyce was chairman of an advisory panel for the Energy
Department, organized by the National Coal Council, that produced a
controversial report in March calling for exemptions to the Clean Air Act
to encourage greater consumption of coal through 2025. The thrust of
the report, which Mr. Boyce outlined in an interview, is that
improvements in technology to limit carbon dioxide emissions should be
left to the market instead of government regulation.
By contrast, the environmental advocacy group Natural Resources
Defense Council, which has brought many lawsuits aimed at controlling
pollution, described the report as an "energy fantasy" that would
increase carbon dioxide emissions by more than 2 billion tons a year.
But it is Peabody's economic argument, not the environmental
opposition's, that is resonating throughout the electricity industry and
among energy regulators.
Led by Peabody, dozens of energy companies have embarked on the
most ambitious construction of coal-fired electricity plants since the
1950's.
Coal, as Mr. Boyce notes, is a bargain. Despite a doubling in domestic
prices in the last two years, a surge in prices for natural gas, the
preferred fuel for new power plants in the 1990's, has made coal more
attractive.
With coal so favorably priced, Peabody saw an opportunity to enter the
power-plant business itself, setting out to build two of the largest in the
world, the 1,500-megawatt Prairie State Energy Campus in southern
Illinois and the 1,500-megawatt Thoroughbred Energy Campus in
western Kentucky. Both are in areas where the St. Louis-based company
has substantial coal reserves.
Despite concern among some large energy companies over the liabilities
they face if global warming advances or legal limits on emissions
become a reality, Peabody remains loyal to its technology choice. Vic
Svec, Peabody's senior vice president for investor relations, said the
possibility of near-term caps on carbon emissions was not viewed as a
"material threat."
Mr. Morris, at American Electric Power, sees things differently. He cites
cost concerns in arguing for its move to cleaner technology. At the
request of environmental groups that hold shares in the company,
A.E.P. agreed in 2004, shortly after Mr. Morris arrived, to report on the
potential costs it would face if emissions rules were tightened. The
company recognized that its growth beyond 2010 could be limited if it
stuck with old technology.
The company has since won important allies in its push for cleaner coal,
including General Electric, which is pinning much of its hopes for
growth in the electricity industry on new technology and is working with
A.E.P. on designing its plants.
One vital element of A.E.P.'s ambitions, and by extension those of other
energy companies with similar projects, fell into place in April when the
Public Utilities Commission of Ohio allowed the company to bill
customers for a portion of the higher pre-construction costs for the plant
it is planning in the state. The company hopes to complete construction
of its first such plant by 2010.
Proponents of these plants, which turn coal into a gas that is burned to
produce energy, say they would also emit much lower amounts of other
pollutants that contribute to acid rain, smog and respiratory illness.
But for every small advance of the new technology, there are bigger
setbacks. Many within the industry argue that it would be a waste of
time and money to build such plants in the United States unless China,
which passed the United States several years ago as the largest coalconsuming nation, also moves to limit carbon dioxide emissions from its
rapidly growing array of coal-fired plants.
Will Government Act?
With widespread uncertainty in the state-regulated power industry, the
debate has moved to the federal level, where testimony by senior energy
executives before the Senate Energy Committee in April revealed a
sharp fault line within the industry.
On one side, A.E.P., lined up with Peabody and other heavy coal users
against mandatory limits on global warming gases if industrializing
countries like China and India are not included. Others that have less to
lose from carbon caps — like Exelon and Duke Energy, which rely much
more on nuclear power — spoke in favor of national limits that would
include coal consumers.
The Bush administration has rejected mandatory limits on carbon
dioxide emissions. Michele St. Martin, a spokeswoman for the White
House Council on Environmental Quality, said, "such regulations would
lead to higher energy prices, slower economic growth and fewer jobs for
the U.S. as industries move overseas where greenhouse gas emissions
are not similarly controlled."
But there is some support in Washington for such legislation. The two
senators from New Mexico, Jeff Bingaman, a Democrat, and Pete V.
Domenici, a Republican, are working on a bill that could require limits
on carbon dioxide emissions.
Ahead of the 2008 presidential election, two senators often mentioned
as candidates, Hillary Rodham Clinton, Democrat of New York, and
John McCain, Republican of Arizona, have endorsed mandatory cuts in
emissions. Mr. Morris of A.E.P. said such support has persuaded him
that limits might be imposed in coming years.
While Peabody supports some coal gasification projects, it remains
skeptical about departing from traditional coal-burning methods to
produce electricity.
The pulverized coal plants it wants to build, which grind coal into a dust
before burning it to make electricity, currently cost about $2 billion
each, or 15 percent to 20 percent less to build than the cleaner
"integrated gasification combined cycle," or I.G.C.C., plants, which
convert coal into a gas.
The hope among scientists is that I.G.C.C. plants could be relatively
quickly fitted with systems to sequester deep underground the carbon
dioxide created from making electricity. Without such controls, the new
coal plants under development worldwide could pump as much carbon
dioxide into the atmosphere over their lifetimes as all the coal burned in
the last 250 years, according to Jeff Goodell, who has written on coal for
several publications, including The New York Times, and is author of a
new book on the coal industry.
But state and federal regulators have been hesitant to endorse the
technology. Peabody and other companies remain skeptical that carboncapture methods, whether for pulverized coal or combined cycle plants,
will become commercially or technologically feasible until the next
decade.
Legal battles over this reluctance have begun, with the Natural
Resources Defense Council and the American Lung Association this year
challenging the Environmental Protection Agency for allowing electric
companies to move ahead with projects without evaluating the new
technology.
In one key decision on the state level, the Wisconsin Public Service
Commission rejected a proposal from WE Energies of Milwaukee in
2003 to build a plant with the new technology, saying it was too
expensive and would result in higher electricity prices.
Capturing the Gas
Engineers have known how to make gas from coal for more than a
century, using this method in the gaslights that first illuminated many
American cities. A handful of coal gasification plants are already in
operation in the United States, Spain and the Netherlands, built with
generous government assistance.
Selling the captured carbon dioxide from coal gasification plants could
make them more competitive with pulverized coal plants. One
gasification plant in North Dakota, though different from an electric
plant, already sends its carbon dioxide to Saskatchewan, where it is
injected in aging oilfields to force more crude from the ground. And the
oil giant BP announced a similar project in March for a refinery it owns
near Los Angeles, using petroleum coke as a fuel there instead of coal.
Scientists have developed numerous other plans to pump away carbon
dioxide, like shipping it to offshore platforms to inject it below the ocean
floor. These plans are not without risk, with some officials concerned
that carbon dioxide sequestration could trigger earthquakes. Yet, time
and again, the most limiting factor remains economics.
As they proceed with plans to build pulverized coal plants, Peabody and
other companies often point to their support of the alternative
technology through their participation in Futuregen, a $1 billion project
started three years ago by the Bush administration to build a showcase
275-megawatt power station that could sequester carbon dioxide and
reduce other pollutants.
Futuregen's 10 members include some of the world's largest coal mining
companies, among them Peabody and BHP Billiton of Australia, as well
as large coal-burning utilities like A.E.P. and the Southern Company.
One Chinese company, the China Huaneng Group, is also a member of
Futuregen, while India's government signed on in March. Washington is
financing the bulk of the project, more than $600 million, with about
$250 million coming from coal and electricity companies and the rest
from foreign governments.
But Futuregen is already behind schedule, with planners now hoping to
choose a site for the plant by the end of the year, with an eye on starting
operation by 2012. Environmental groups have criticized the project as
too little, too late.
"Futuregen is a smokescreen, since it's not intended to bring technology
to the market at the pace required to deal with the problem," said Daniel
Lashoff, science director at the climate center at the Natural Resources
Defense Council. "We don't have that kind of time."
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