A President only an Oil Man could Love

by Jeff Siegel

The House of Representatives made history last week. Not only did it pass legislation calling for a 40 percent increase in fuel economy standards, but it passed what would be the country's first federal renewable portfolio standard.

The standard, known as an RPS, would require that utilities generate a percentage of their power from renewable sources like wind and solar. In this case, the bill would force utilities to get 15 percent of their power from renewables. The president had a fit, calling the RPS and a $10 billion tax hike on five of the world's biggest oil companies to pay for the legislation blasphemy: "Their proposal would raise taxes and increase energy prices for Americans."

Silly me. How could I forget I was in the same tax bracket with Exxon/Mobil?

The energy bill is far from perfect. It pushes ethanol and biofuels to an extreme, which benefits almost no one except corn farmers. It dabbles in energy conservation, but save for the mileage standards and the RPS, it doesn't do nearly enough to cut energy use or reduce greenhouse gas emissions. But even John Dingell (D-MI), the auto industry's point main in the House, said it was a "major and important step."

Still, the bill is almost certainly dead in the Senate, even without President Bush's veto threat. Almost 90 electric utility groups donated $4.4 million to elected federal officials in the last year, which gives them a nice toehold. Utilities hate an RPS, because it forces them to do something other than burn coal or natural gas, which is the easiest thing for them to do. Renewables also require investment in infrastructure like transmission lines, and utilities hate building infrastructure. (What they don't mention is that they usually get the money back from consumers after the work is done in the form of higher rates.)

They also claim that renewables are more expensive than coal and natural gas, and they want to protect us from higher rates. There is some truth to this, depending on whether your state regulates electricity prices and if your electricity comes mostly from coal or natural gas. In regulated, coal states, wind is often twice the price per kilowatt hour. But in deregulated, natural gas states, wind is sometimes cheaper. In Texas, I pay less for wind-generated electricity than I used to pay for power from natural gas, with some coal and nuclear thrown in.

But the rate argument is a sham, an attempt to enlist consumers (many of whom would agree to pay more for green power) to do the utilities' work for them. New Mexico, hardly one of the most affluent states in the country, has one of the most sophisticated and efficient wind energy programs in the country.

And the fact that wind and solar are cleaner and ultimately better for everyone? The utilities usually skip over that one. In fact, wind does work – Texas gets four percent of its power from wind, and it's only been making an effort to use wind since 2001. A national RPS could spur the same sort of development across the country.

Too bad we won't get a chance to find out.

(Political graphic from BloodForOil.org, which offers its graphics for free, using a Creative Commons License.)

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Anonymous said...

I saw a great graph that showed the volume of finite energy resources that the world consumes every year compared to how much of that resource exists.

A second graph showed how much energy the sun puts out every day.

when you compare those graphs all but the most crazy anti environment nut would have to admit that solar energy needs to be developed as an energy source.

I know many German families who use solar panels to provide basic energy into their house, this technology therefore exists and is commonplace in countries with progressive leadership.

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