March 26, 2010
Ken Silverstein
EnergyBiz Insider
Editor-in-Chief
When asked if America is the 21st Century version of ancient Rome, author Cullen Murphy responds in the Atlantic Monthly that "maybe" it is. Whether the country is in permanent decline or whether it is in perpetual rejuvenation is an idea worth exploring.
With Washington stalemated, utilities have an uncommon chance to lead by fostering the growth of clean-energy technologies. Electricity, of course, is the building block to economic prosperity. The goal then is to ensure access, abundance and cleanliness. Toward that end, the United States must diversify its resources and train the next wave of workers to meet near-term challenges. Indeed, power companies are ground zero in the effort to bring the country into a new era of vitality. But they need their elected representatives to be more willing to search for common ground.
"We need to rethink energy policy," says Ralph Izzo, chief executive of PSEG in New Jersey, who spoke at the EnergyBiz Leadership Forum. "One cannot overlook green energy. It is the growth engine to stay globally competitive. Utilities are uniquely equipped to help and industry has an unmatched opportunity. There will be a long-run cost to society for not being environmentally sustainable."
The subject of what befalls this nation and what can actually be done about it is addressed by James Fallows in an Atlantic Monthly story How America Can Rise Again. In the piece, Fallows references not just Murphy, who has written the book Are We Rome, but also a multitude of others who have taken on some variation of the question. It's an issue that Fallows says has been around since the country's inception and one he most vividly recalls during his days as a speech writer for former President Jimmy Carter -- during the age of "malaise" and the unforgettable "Crisis in Confidence."
Today the concern is rooted in a severe recession that has instilled fears of joblessness and pushed some into financial despair. Blame has quickly spread and has manifested itself through unbending politicos and immovable coalitions. While the ideologies that prevail seem to be more pure, they are also more polarized. The result has been 119 filibusters in the U.S. Senate in 2009, more than any on record.
Democracies are no doubt messy. And while they may seem to be unmanageable, the mere freedoms that they allow have the potential to move societies forward. But such governance also has the ability to stir chaos and to unravel political structures.
This country, though, is not complacent and has persevered for more than two centuries. With its wealth of human, intellectual and financial resources, the essential elements are in place to continue a long tradition of prosperity and charity. As Fallows says, "America is always in decline and is always about to bounce back."
Modern Renewal
The discussion then turns to what responsibilities power and gas companies have in a revival and whether such a recovery is even possible at a time of economic dogpaddling and political squabbling. Industry stalwarts say that they stand ready but that legal and regulatory certainties must be established before they take risks.
Investments in wind and solar power are capital intensive, for example, necessitating policies that encourage investors to come forward. Utility leaders complain that while the United States has spearheaded much of the innovation, many of the products and services that have earned a global following now emanate from overseas.
Instead of forming a cohesive national energy policy that will require a mix of energy sources, the partisans have pitted various interest groups against one another. And many of the advocacy organizations, in turn, are determined to vilify competing technologies. With the demand for energy expected to rise as much as 30 percent in 20 years, it is crucial to bring forth not just sustainable resources but also cleaner base-load generation that involves modern nuclear and coal gasification with carbon burial.
"There are enough people of goodwill on both sides," says Denise Bode, chief executive of the American Wind Energy Association. Energy security and job formation will trump the entrenched and partisan interests.
While the tax benefits allocated to renewable energy have traditionally been held political hostage, once enacted they have proven to be effective. Consider that the United States has 35,000 megawatts of wind capacity -- up from about 17,000 two years ago, making it the fastest growing generation source. Solar capacity, meanwhile, stands at 1,500 megawatts, which is up from 400 megawatts 6 years ago.
Nuclear energy producers have also been hard at work, not just conceiving the most advanced plants ever but also making the current fleet extremely efficient. This country generates more electricity from nuclear power than either France or Japan, according to the Nuclear Energy Institute. In a carbon-constrained world, those facts cannot be ignored.
And carbon capture and sequestration is also vital, given that coal provides more than half of this nation's electricity generation. Dr. Julio Friedman with the Lawrence Livermore National Laboratory says that it could be done and it should be done, noting that it is an emissions control technology and not a coal technology. Meantime, natural gas is plentiful here with more than a century's worth of reserves.
"The biggest challenge today is bringing energy to people without ruining the planet," says John Gilleland, chief executive of TerraPower. The rise from poverty to prosperity has one common link: access to electricity.
Here at home, Washington's intransigence coupled with financial constraints will inhibit progress. But the utility industry now has a chance to step up and to facilitate the spread of critical technologies that could energize all economies. It's a distinct position -- one that could ease the nation's discontent while ushering in a new era of promise.
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