Fossil Fools

A revolution in energy is coming, but Washington looks the other way

| September/October 2002

Byron Dorgan, a North Dakota Democrat, took to the Senate floor last winter with an impassioned plea to renew a small federal subsidy that helped fuel an explosion of activity in the wind-power industry. 'Congress is messing around back and forth, stuttering, and not getting it done,' Dorgan complained.

The so-called wind production tax credit Dorgan was championing is tiny as subsidies go: Over a decade it has cost roughly $55 million. But it has also been remarkably effective. Wind is the fastest-growing energy industry in the world, and last year was the U.S. wind-power industry's best ever, with a power capacity equal to roughly six new 300 megawatt coal-fired power plants-minus coal's pollution.

Nevertheless, the wind tax credit struggled for life on Capitol Hill. Late last winter, Congress finally approved a meager two-year extension, which wind's supporters tacked onto another bill. Most of our lawmakers then went back to reaffirming their commitment to gargantuan new subsidies to coal, oil, gas, and nuclear power. A Republican energy bill passed by the House in August 2001 would dole out an estimated $35.6 billion over 10 years-or about $125 per American-to the oil, gas, coal, and nuclear industries. By contrast, wind production tax credits have, to date, cost each American about 19 cents. The Senate passed a Democratic energy bill in April. Though it calls for a full five-year extension of the wind-tax credit, the Democratic plan is also larded with tax-funded giveaways to polluters. With the legislation that will shape the country's energy future on its way to being reconciled in a conference committee as we went to press, the only disagreement so far has been how obscenely enormous the industrial handouts will be.

The good news is that wind power and other kinds of renewable energy don't have to depend on the feds for their future. A revolution in sustainable energy is fast approaching thanks to farsighted engineers and entrepreneurs, supportive state governments, and new economic realities: Renewable energy has been steadily dropping in price for years and is now beginning to gain ground in the marketplace despite the huge subsidies to Big Oil and King Coal.

America is the Persian Gulf of wind. The Energy Department estimates that wind in the Dakotas alone could meet two-thirds of America's electricity needs; Texas could meet the rest. California, the current wind-power posterchild, comes in at a lowly 17th in a ranking of the top wind states. Germany, the world leader in wind, has harnessed 6,000 megawatts of wind power-roughly equal to 20 moderately sized coal-fired power plants-and plans to phase out nuclear power entirely by 2025. Ireland recently announced plans for what will be the world's largest offshore wind park. Eddie O'Connor, managing director of Ireland's utility Eirtricity, says offshore wind could provide two-thirds of Europe's electricity by 2020. Solar power is equally bountiful. The Union of Concerned Scientists says that 12,000 square miles in Nevada could produce enough solar electricity to power the nation.

Even bigger news is that wind and solar power can now be efficiently stored by using them to create hydrogen (see related story on page 63), a fuel that generates only drinkable water as waste. Lester Brown of the Earth Policy Institute envisions wind farms producing electricity by day and hydrogen for cars by night. 'None of this is as pie-in-the-sky as it sounds,' Fortune magazine reported in November 2001. 'Potent commercial forces are bringing the hydrogen economy along faster than anyone thought possible only a few years ago.' Hydrogen fuel-cell systems can already be found across America, from the Condé Nast building in New York to sewage treatment plants to a post office in Alaska. Automobile and oil companies have set up well-funded hydrogen fuel divisions, and a number of major automakers are racing to bring a hydrogen car to market.

Twenty years ago, a kilowatt hour from sunlight cost about $2.50. Now it's 20 to 25 cents-a tenfold drop in cost, but still expensive. This is the reason solar power is still dependent on government support, usually from innovative local government agencies, especially in energy-anxious California. The Sacramento Municipal Utility District, for instance, leads the nation with 10 megawatts of solar power installed. San Francisco voters last November approved a $100 million bond issue to install 40 megawatts of clean power from solar as well as wind generation on city-owned facilities and land.

Wind is more competitive than solar; it once cost 40 cents per kilowatt hour but is now routinely under 5 cents, about the same as energy from new coal and natural gas plants, and cheaper than a new nuclear power facility. But these cost-per-kilowatt-hour comparisons are deceptive on many levels. Oil, coal, and nukes seem cheaper than they really are because the economic, environmental, and human costs of pollution-created problems are not figured in. The environmental costs are similarly staggering. The government has spent $1.48 billion just on cleaning up uranium mine tailings-mounds of radioactive slop left behind by the nuclear power industry. Energy-related health problems range from the lung diseases and cancers suffered by coal miners and uranium workers to the illnesses triggered among the wider public by air pollution.

Consider the country's asthma problem, which now affects every 20th American, including 5 million children. The Centers for Disease Control estimates the direct and indirect national cost of asthma to Americans in 1998 at about $12.7 billion. In 1999 the disease killed 4,657 people and put a half-million in hospitals.

The cheapest and safest alternative is using less energy. Vice President Dick Cheney says we will need 1,300 new 300-megawatt power plants over the next 20 years. Had Cheney spent less time listening to Enron and more time listening to the best government scientists, he'd know that a comprehensive study found that an energy efficiency program could cut projected electricity demand by 20 to 47 percent-the equivalent of many energy plants. Bill Prindle, a buildings and utilities expert formerly with the Washington-based Alliance to Save Energy, compiled a list of proven efficiency measures that could slim Cheney's 1,300 plants even further, to just 170.

This is not about 'conservation'-that is, living without air conditioning or making other virtuous sacrifices. The key here is 'efficiency'-high-tech solutions like better lighting and appliances. Amory Lovins, co-founder of the Rocky Mountain Institute in Colorado, calls it installing 'negawatts,' the cheapest, cleanest, most quickly installed-and, by the way, the most terrorist-proof-of all energy sources. As Lovins has noted, a 0.4 mile-per-gallon improvement in the average vehicle would save as much oil each year as we would ever get from Alaska's Arctic National Wildlife Refuge.

Energy efficiency measures often pay for themselves over the long run. But before efficient practices can take hold on a wider scale, both businesses and citizens have to get over their fixation with low initial costs. An entrepreneur with a choice between wind for 3 cents and coal for 2.9 cents would buy coal. But a responsible society would look at the numbers in a different way. Solar power and efficiency do not have hidden costs that include thousands of deaths, millions of dollars in lost productivity, billions of dollars sent to the world's oil dictatorships, and tens of billions spent policing the Persian Gulf.

Consider the billions of tax dollars we give to polluters each year. This largesse is sprinkled throughout our tax code in ways that thwart easy analysis. The U.S. Energy Information Administration conservatively estimates that fossil fuels and nuclear power got $2.7 billion in subsidies in 1999. Others put the figure higher. In Perverse Subsidies: How Misused Tax Dollars Harm the Environment and the Economy (Island Press, 2001), authors Norman Myers and Jennifer Kent identified $21 billion the United States hands over every year to fossil fuels and nuclear power. 'If taxpayers were aware that a good chunk of their taxes were going down the rathole into these subsidies, they'd be marching on the Mall,' Myers said in an interview. 'But it's hard to get the message to the taxpayer because these subsidies are so numerous and so varied, and some are so covert.'

Myers and Kent also found that renewables get at best a 10th of the subsidies that the energy dinosaurs get. They calculate that the $90 million or so the United States spends on solar research wouldn't be enough to pave two miles of interstate highway.

Vermont's Independent Senator Jim Jeffords has introduced a bill calling for 20 percent of our energy to be from renewables by 2020, but that's one of the rare displays of leadership and vision coming out of Washington these days. The Senate energy bill that passed in April, led by Tom Daschle (D-SD) and Jeff Bingaman (D-NM), suggests a less aggressive 10-percent-by-2020 renewables standard but includes so many new subsidies for fossil fuels and nuclear power that the consumer advocacy group Public Citizen derides the bill as 'Enron-influenced, Exelon-tested, and Exxon-approved.'

This is a real shame because the federal government could play a key role in promoting the green energy of the future-perhaps an all-out national initiative to put a hydrogen fuel pump next to every gasoline pump. The Institute for Energy and Environmental Research suggests spending just $20 billion a year (which could easily come from cutting subsidies to dirty energy) to kick-start a renewable energy revolution through purchase of solar panels, fuel cells, and fuel-efficient vehicles for federal and local government use-as a way of pushing those technologies into true mass production.

Even if we don't decide to start building a new and better energy system, we should at least stop subsidizing the old and dangerous one. Then again, if we stopped the subsidies, who would bankroll the GOP? In 2000, oil and gas gave $13 to presidential candidate George Bush for every $1 to candidate Al Gore. Coal gave $9 out of every $10 to Republicans. And according to the Center for Public Integrity, Bush and Cheney aren't the only oil men. The top 100 officials in the Bush White House have sunk the majority of their personal investments, up to $144.6 million, in the old-guard energy sector.

The Green Scissors Campaign, an alliance of environmentalists and taxpayer watchdogs, outlines the giveaways in the energy bill backed by the Bush administration: $21.2 billion for oil and gas, $5.8 billion for coal, $5.9 billion for utilities, and $2.7 billion for nuclear power. On top of that, House Republicans worked furiously last fall on separate legislation that will make sure taxpayers will still foot the bill in the event of a nuclear catastrophe, by extending the Price-Anderson Act, the federal insurance program for nuclear power that expires this year. The Senate energy bill essentially renews the Price-Anderson Act as well.

Arguably, fossil fuels and nuclear power deserve no subsidy at all. But with the 'free market' Republicans leading and Democrats meekly following, we continue to shore up a dangerous, dirty, terrorist-friendly energy system (often in the name of security). With renewable energy showing its potential from California to Europe, it's time to ask, impatiently, how much longer Americans will be expected to overpay for energy-in health costs, environmental damage, and misdirected taxes. The people of America are being overcharged; it's time to ask for a refund.

Matt Bivens covers energy, environmental, and nuclear issues forwww.thenation.com. A former editor of the Moscow Times, he recently returned to the United States after nine years of reporting from Russia for publications including the Los Angeles Times and Harper's. Reprinted from the progressive weekly The Nation (April 15, 2002). Subscriptions: $39.97/yr. (47 issues) from Box 55149, Boulder, CO 80322.

For more ideas about energy, see Jay Walljasper's column on the promise of the eco-economy (p. 10) and Michael Klare's article on how oil interests guide U.S. foreign policy, 'Oiling the War Machine' (p. 32).