Here’s Herron:

“Four Greenpeace protesters had attached themselves to the bottom of the rig, halting drilling operations for around 40-hours. They abandoned the protest Thursday due to freezing weather conditions by climbing aboard the rig, where they were arrested.

“‘Last night was freezing and now the sea below us is churning and the wind is roaring. It’s time to come down,” said Sim McKenna, one of the protesters, in a statement shortly before abandoning the protest. “We’re proud we slowed the mad rush for Arctic oil, if only for a couple of days.’”

Roaring winds, churning seas and freezing temperatures — nobody can blame the not-so-intrepid protestors for ending this one.  Maybe next time they’ll get the “living in a California treehouse” protest duty.  Maybe they’re rookies.  Or maybe there’s some sort of Greenpeace lottery.

While it’s easy to make fun, the government of Greenland, which takes environment and safety seriously, also took the protest seriously, condeming it as ’a very grave and illegal attack on Greenland’s constitutional rights.’

“‘It is highly disturbing that Greenpeace in its chase on media attention with all measures breaks the safety regulations put in place to protect people and the environment,” the government said in a statement.”

It takes all kinds, one supposes, but it sure would be more helpful if Greenpeace could channel some of its energy into constructive activities — like say helping come up with a sensible path forward to a clean enery economy that could garner widespread political support?  Just a thought . . . .

If Murkowski is defeated, it leaves an opening for new Republican leadership on the Energy and Natural Resources Committee.  The Hill reports that Senator Richard Burr (D-NC) could be next in line: “‘If, unfortunately, Sen. Murkowski were to lose, Sen. Burr would have some really viable options,’ said Ron Bonjean, a Republican strategist and former House and Senate GOP leadership aide. Bonjean noted that energy ‘is a very prestigious committee and very high-profile at a time when our country is dealing with energy and environmental crises.’”

Although Senator Burr refused to comment on this speculation, this week again proved that future for energy legislation is anything but clear.  In Greenwire, Representative Ed Markey puts forth a very optimistic view: “Rising gasoline costs and environmental disasters will continue to pose problems that lawmakers ‘are going to have to deal with in the months and years ahead, so it’s not a question from my perspective of whether Waxman-Markey is ultimately going to pass in the Senate. It will; it’s just a question of time, not a question of if it is going to happen.’”

In West Virginia, many Democrats are not so sure.  Greenwire reports, “‘West Virginians feel that the national Democratic Party abandoned them,’ said Curtis Wilkerson, campaign manager for Mike Oliverio, the Democrats’ candidate for West Virginia’s 1st District. ‘West Virginia voters see a huge difference between West Virginia Democrats and national Democrats. It’s not [West Virginia Democrats'] fault that some people in the party have tried to take it to these extreme ends.’”

Environmental groups are also lacking confidence in the possibility of passing meaningful cap and trade legislation, turning instead to the EPA to regulate carbon emissions.  Greenwire reports, “Their strategy amounts to a two-pronged campaign: fending off efforts in Congress to handcuff EPA regulatory power while prodding the Obama administration to mandate deep emission cuts.  ‘There is sort of a two-fold fight,’ said Sara Chieffo, deputy legislative director at the League of Conservation Voters. ‘One is fighting off legislative attacks to hamstring, weaken or delay EPA’s ability to move forward with reductions from our nations’ largest emitters.’ The second is ‘pushing EPA to be ambitious on the direct greenhouse gas rules.’”

The environmentalist approach is not, however, a plan of attack that is supported by all Democrats.  Senator Jay Rockefeller (D-WV), in the same article, states that he “plans to seek a vote this year on a bill that would prohibit the agency from regulating stationary sources’ emissions for two years. Rockefeller said this month that Senate leadership had agreed to allow him to seek a vote on the bill as part of an energy package the Senate plans to take up in September, but a spokesman for Senate Majority Leader Harry Reid (D-Nev.) said the schedule has not been finalized.”

With the need for 60 votes to pass any bill and publicized disagreement within the majority party, many news outlooks are already prepping their next energy bill eulogies.  However, this week’s news could actually represent an opportunity for compromise on an energy package.  Energy has remained a key issue in the minds of voters, and there is a clear opportunity to act when Congress returns to Washington in two weeks.  Now free from election politics, Senator Murkowski – one of six Republicans to support electrification in committee – could be more apt to support a compromise energy package on the Senate Floor.    Even the mention of “cap and trade” in Washington begins divisive political attacks from both parties.  If the Senate is able to stick with points of agreement – Mitch McConnell recently mentioned electrifying cars and trucks as a bipartisan issue – energy may not be dead yet.

Visitors to ANWR regularly note that there seems in their experience no better place to put an industrial energy development complex (doesn’t that sound better than “drill for oil”?) than that remote and desolate place.  And Arctic Greenland is no vacation spot either, of course.

But Serdarevic makes the even more interesting point that “the environmentalists’ outrage at taxpayer money financing oil drilling bizarrely stops with the Arctic. Drilling in Rajasthan – where Cairn in fact gets most of its oil – doesn’t seem to be a problem. Yet why is it less acceptable to drill near barely-populated frozen landmass than in the middle of India, where actual people may be affected by the drilling operations?”

And then he answers his own question:

“Maybe because polar bears are much cuter than people?”

Well, yes, but isn’t the point really that blocking drilling anywhere anyhow is truly the far left agenda?  Start with blocking production in a “pristine wilderness” (aka desolate wasteland) and then bring in “environmental justice” concerns to block development near people as well. 

And in a democracy, the “professional left” can mobilize support, contribute money to politicians, and seek to advance their agenda — and the fact that it’s by misleading the public gets lost in the noise.  Globally, however, the market works its will, as Serdarevic notes:

“The whole protest is futile, mainly because it misses the crucial point. Why is all this is happening? Because consumers want oil, and they want it more than they care about the arctic or any other part of the world except their back yard.”

Whether these protests are futile or not is debatable.  But the real issue is that until alternatives exist that approach conventional energy in price and performance, the clearly correct answer is to continue producing conventional energy — with appropriate health and environmental safeguards — while taxing its use to help advance those cleaner alternatives.

However, wasted fuel is but the smaller cost. The value of lost time is what really bites: approximately $80 billion in 2007. Therefore, eliminating congestion is actually worth close to $88 billion annually nationwide.

Congestion is caused by “[too] many people, too many trips over too short of a time period on a system that is too small” according to the TTI. This suggests that there are three solutions to congestion: (1) reduce the number of vehicles/trips, (2) spread those trips over longer periods of time, and/or (3) increase the size of the road system.

In this country, transportation administrators have traditionally sought to alleviate congestion by building more capacity. It seems fairly intuitive: double the capacity and you will halve congestion. However, a closer look at the factors that drive people to congested roads reveals a counterintuitive result: congestion is unlikely to be reduced in the same proportion that capacity is expanded.

When deciding whether to go out driving at peak time, a driver compares two costs:

1. Direct and indirect costs of congestion in the form of wasted fuel and time respectively, and
2. Opportunity costs of staying home and not doing (at least in person) whatever it is that was going to be done.

If the direct and indirect costs of congestion were higher than the opportunity costs, then a rational driver would stay home, and vice versa. For example, commuters who drive to work generally face a higher opportunity cost (being unable to interact directly with colleagues, or potentially losing their job) relative to the direct and indirect congestion costs (fuel wasted and time that could have been used in more valuable activities) , and therefore decide to go out and suffer the congestion.

Initially, increasing road capacity effectively lowers the costs of driving (less time and fuel wasted in congestion), thus drawing more drivers onto the roads. In other words, this lower cost meets the driving demand curve at a lower point, where the volume of traffic (demand for roads) will be higher. The new capacity encourages travelers who had previously avoided congestion through alternative modes of travel (such as mass transit) or travel times to take the highway, a phenomenon called “induced demand.” Over the long run, this induced traffic is estimated to fill up at least 40 percent of added urban road capacity. Thus, un-priced highway lane miles will have diminishing long term effects on congestion levels.[1]

Alternative policy tools focus on addressing the first two causes of congestion by either reducing the number of people/trips, or spreading those trips over longer periods of time.

Direct road pricing, for example, is a highly underutilized and proven near-term tool to reduce congestion. It provides a visible signal regarding the costs drivers are imposing on roads and other users, and influences driver behavior. Critically, road prices can capture the different costs imposed at different times of day. Prices can be varied to incorporate the costs of providing, maintaining, and operating the infrastructure as well as congestion impacts. This, in turn, can better inform individuals about the true costs of their travel choices. Travelers will then be able to make better choices about how and when they use existing transportation infrastructure. This should result in reduced wasted fuel and time, in addition to helping tackle U.S. oil dependence.

In 2009, the Breakthrough Institute published a study documenting that the United States already lagged China, Japan, and South Korea in the production of all clean energy technologies and that, over the 2009-2013 period, the governments of these nations will out-invest us three to one. This large public investment gap will allow the Asian nations to attract a major share of private sector investments in clean energy technology, solidifying their competitive advantages over us.  The report also claims that if such investment breach persists, we will end up importing the majority of clean energy technologies we use.

The use of renewable energy sources is also a key element of energy policy in Europe. As early as November 1997, the European Union (EU) Commission published the Community Strategy and Action Plan for renewable energy. Later, in March 2007, they also set a binding target which requires that 20 percent of their energy needs be sourced from renewables by 2020. To meet this objective, an EU Directive set individual targets for each Member State, while compelling all EU states to present their National Renewable Energy Action Plans by June 2010.

So far the EU strategy seems quite effective, as renewable energy accounts today for 18.4 percent of primary energy production and it is their second larger energy source (the first one is natural gas, with 19.3 percent). In fact, the EU statistics agency reports that, from 2008 to 2009 alone, the use of renewables increased 8.3 percent, while the production of energy from coal showed a decrease (9.2 percent).   

Perhaps the most admirable case of Europe’s advance in the area is Portugal, where aggressive government planning and lots of private investments increase the renewable share of electricity production from 17 percent to 45 – in just five years. This comes mostly from hydro and wind resources, and they are currently developing other sources such as wave energy.

In the United States, some clean energy and climate advocates proposed a national renewable electricity standard (RES), requiring utility companies to produce a set amount of electricity from renewable sources. Such a measure could actually get the 60 votes in the Senate this fall, as many consider a moderate proposal like this to “…be an important step towards a cleaner energy future, but without the job-killing provisions that come with cap and tax” (Republican Senator Sam Brownback, Kansas). 

Renewable clean and cost-effective energy must become a more critical part of our energy mix if we want to compete against the “Clean Asian Tigers” and Europe. Continued technological development, targeted investment and an effective regulatory environment will be vital for this development. We do not need a cap and trade, but rather a wide-ranging clean economy strategy.

As discussed in our recent post, rare earths are a collection of seventeen chemically similar metallic elements that due to their versatility have acquired high importance in key clean energy and defense technologies. Concerns over the supply of rare earths have heightened recently because approximately 97 percent of world production occurs in just one country, China. Furthermore, partly due to China’s accelerating consumption of their own rare earth resources, its government announced plans to substantially cut export quotas.

However, while current production occurs almost exclusively in China, it is important to realize that “rare earth ore deposits are geographically diverse” according to a presentation by the Government Accountability Office (GAO), with resources “identified in Australia, Greenland, Canada and the United States.” In fact, China holds only about a third of the world’s rare earth reserves according to U.S. Geological Survey data in the GAO presentation. The United States contains approximately 13 percent.

Most of the countries where rare earth deposits are found have the knowhow, technology and access to capital required to jump start production. The decision of the Chinese government to restrict supply, coupled with the rapidly rising world demand for these minerals – by around 15 percent annually for magnets and 20 percent for alloys –  pushes their price up, thus increasing the incentive to produce rare earths elsewhere. Actually, “U.S. industry previously performed all stages of the rare earth material supply chain, and the Mountain Pass mine in California produced the majority of the global supply of rare earth materials” but opted to import Chinese supplies since the 1990s due to cost. Moreover, “[a]ccording to industry, rare earth deposits in the United States, Canada, Australia and South Africa could be mined by 2014”.

It is true that recovering/developing the production capability along all the stages of the supply chain may take longer – 7 to 15 years to bring a property fully online – especially in new mining sites. However, the transition to a clean energy economy will not happen overnight, and the faster it happens, the stronger the incentive to develop these new resources will become.

Regarding the foreign dependency assertion, a subtle yet powerful difference between oil and rare earths tends to be overlooked: we need oil to run the existing economy and energy system, but we only need rare earths to build additional goods. This distinction is crucial because it means that once we have an electric vehicle fleet, solar panels or wind turbines, we are immune to the trade policies that China or others implement because we can continue to run our economy with domestically sourced energy. This is in sharp contrast to the way oil shocks can damage the U.S. economy and impact our daily lives.

In addition, rare earth elements are recyclable, though currently at relatively high cost because the amounts of rare earth used in any given product are often inconsequential. Over the longer term, however, exploitation of known deposits, discovery of new sources (e.g. Russia, Africa), and improved recycling capability will likely suffice to meet demand.

Therefore, substituting oil with other technologies that rely on foreign resources, such as rare earths, does not equivalently exchange one foreign dependency for another.

Greenwire reports that, “American Petroleum Institute kicks off what it dubs ‘citizen rallies’ on Sept. 1 with events in Houston, Corpus Christi and Beaumont, Texas. Partnering with local energy groups and other business organizations, the trade group wants to drive support that can translate into calls and letters to Congress members.”  On the other side of the aisle, “Clean Energy Works, an alliance of about 60 groups that want congressional action on climate will hold a ‘Carnivoil’ event in 25 cities this month. Modeled after a traveling carnival and featuring the subtitle ‘The Greatest Addiction on Earth,’ it aims to show the oil industry as a sector run amok and with too much political power.”

Jack Gerard, president of API, continued his organization’s pushback against the drilling moratorium in an op-ed in the Houston Chronicle.  He states, “We at API understand that April 20 has changed the landscape for our industry. But we are also keenly aware that America still needs oil and natural gas, and will need it for decades to come. We believe that our nation’s long-term energy security is too important to be decided on short-term political considerations. That is our motivation for demanding reasoned responses to what happened in the Gulf.”

In a guest blog on Monday in The Washington Post, John Hofmeister–former president of Shell Oil–seems to agree.  He states, “The facts, which the oil companies know far better than politicians, are on the side of the drilling enthusiasts. Every morning as President Obama awakes to his duties, one of them is to see to it that America has the 20 million barrels of oil it needs to get through the day.  Like it or not, we burn through 10,000 gallons of oil per second in this country and nothing will change that during the president’s first and – because of likely high gas prices — only term. By choosing politics over energy production the president has planted the seeds of his administration’s demise.”

Although the jury is still out on the administration’s final spill response, Politico reports that the White House website has seen some major changes in the past few weeks, “Deleted items include a section titled ‘Closing the Carbon Loophole and Cracking Down on Polluters that offered broad-brush goals for ‘protecting American consumers’ and ‘promoting U.S. competitiveness.’  Also eliminated was President Barack Obama’s oft-repeated campaign call to spend $150 billion over a decade on ‘energy research and development to transition to a clean energy economy.’”

Although these changes signal very little in terms of actual energy policy, they do highlight the administration’s careful posturing before the final pre-election congressional session.  In another move, President Obama stated his desire for EPA standards on emissions limits for heavy duty trucks.  In a memo, reported by Greenwire, Obama writes, “Preliminary estimates show that large tractor trailers — which represent half of all greenhouse gas emissions from the sector — can slash greenhouse gas emissions up to 20 percent and boost fuel efficiency up to 25 percent by using existing technologies.”

As this week made clear, the congressional recess is no break for the energy debate.  In the next few weeks, we expect to see even more noise as policy proponents continue to push for their solutions to be addressed when Congress returns to Washington.

This morning’s Energy Daily (www.theenergydaily.com; subscription required) sheds some further light on this topic as it reports on the DOE Inspector General’s “dismal” assessment of $3.2 billion in energy efficiency block grants for states and municipalities that was included in the stimulus bill.  It turns out that while DOE has done a nice job of pushing the funding out the door — about $2.7 billion of the $3.2 billion was sent by formula to “more than 2,300 entities, including state energy offices located in 56 states and U.S. territories; 1,700 cities and counties, and 500 Indian tribes” and the rest ”directed to competitive grant awards and technical assistance activities” — less than 9% of the funds have actually been spent by grant recipients.

Not much stimulative effect there, but does it call into question the value of energy efficiency?  Probably not, as the real issue appears to be related to two facts:  First, as the piece points out, “many cash-strapped states and cities” have been ”hamstrung by hiring freezes that prevented them from staffing up to implement their block grant programs.”

And second, though you wouldn’t know it from this article, even energy efficiency projects must jump through a variety of environmental and other hoops before progress can be made.  The WaPo made that point in a piece on Saturday entitled “Big chunk of economic stimulus yet to be spent by state, local governments”(http://www.washingtonpost.com/wp-dyn/content/article/2010/08/13/AR2010081306058.html), noting that once cash-strapped state and local officials developed their plans, the ”plans then went to the Energy Department, which decided, among other things, whether projects needed a full environmental review.”  And some get bounced back:  “ The department told Florida that several of its proposals did not pass muster, and until recently the state was still unsure how to redeploy $12 million.”  Energy efficiency retrofit plans can run afoul of not only environmental requirements, but also well-intended historic preservation laws.

Just another reminder that energy policy, whether intended to be stimulative or not, is usually more complex than meets the eye.

Transit. It’s that simple. Hop on a bus or a train, pay a minimal fee, and help reduce our country’s dependence on oil. Unsurprisingly, transit is a simple way to cut back on oil use, as: 1) it can enable mobility while using less energy per person; 2) it is relatively easy for transit’s fossil fuel sources to be converted to alternative forms of energy, and 3) most importantly for oil consumption, it can reduce congestion by getting drivers out of their cars.

According to a 2007 report by ICF International, an energy consulting firm, mass transit reduces national oil consumption by an estimated 1.4 billion gallons of gasoline each year, mainly because increased transit use reduces the number of cars on the road. Based on Department of Energy estimates of average gasoline prices, that shifting between modes saves Americans approximately $4 billion annually at today’s prices, half of which was going to foreign countries. The Metropolitan Transportation Authority (MTA), the New York City area transit system, claims to have singlehandedly taken an estimated 180,000 cars off their roads in the last year as many travelers switched from driving to riding.

In terms of mobility, there is the added benefit of providing options to the young, the elderly, and the poor who might not have regular access to cars. Of course the construction and operation of transit systems can also be an important source of job creation.  Although in some areas (and at certain times of the day) services are plagued by low load factors, planners continue to refine their methods to ensure that their transit fleets meet the needs of travelers in the most efficient way possible.  A consideration of energy use should of course be central to this effort. 

Transit also has the advantage of generally being a city or state-run program, so instituting mandatory changes is an easier task. No American can be forced to drive an oil-free car, but the state can do whatever it sees fit to its bus fleet. People will ride the bus irrespective of whether it runs on oil, natural gas, hydrogen, electricity or biofuels. Furthermore, transit has the added bonus of consisting of fewer vehicles. It is less costly to convert one 50-person bus to clean energy than it would take to convert 50 individual cars, making such a conversion easier for the city or state. This has enabled many cities to begin the transition of their fleets to alternative forms of energy. 

Numerous cities and states have also begun work or will soon begin working to make their transit systems more energy efficient. Over 800 New York City buses run on hybrid fuel cells, and the MTA is hoping to raise that number over the next few years. Similar buses are being used throughout Connecticut, and they are setting up a recharging station so buses can easily be returned to full power on site. New Jersey has plans for solar recharging parking lots for their metrorail riders’ cars. San Antonio’s transit system, VIA, is in the midst of switching all of its buses from diesel to electric fuel cells. Washington D.C.’s transit system, WMATA, plans to run only hybrid buses by 2014. Many of these projects have been made possible by grants from the federal government through the 2009 American Recovery and Reinvestment Act. Cities including San Diego, Chicago, Atlanta, Boston, and Portland all received grants and have been or will be in the near future making changes in their transit systems.

The streets of the United States have become increasingly congested over the past 25 years. It is estimated that the average American commuter today spends 50 hours more driving per year, due to congestion, than he or she did in 1986. Not only does using transit shorten one’s travel time in the long run, but it also allows for additional work or leisure time that once had to be spent driving. Furthermore, congestion leads to wasted gasoline from having to sit in traffic with the motor running. An interesting recently announced idea is China’s plan for the “straddling bus” which runs on electricity partly sourced from solar energy and drives on the road on top of the other cars. With seating for 1,200 people in each bus, they are hoping that their new buses can be the solution to their ever-increasing congestion problem throughout their cities.

Nevertheless, the use of transit is insufficient to be the ultimate solution to our oil problems. As cheap, convenient, and energy efficient as using public transportation may be, people like cars—a vehicle that was born in the United States and is still one of our greatest prides. The entire country is set up for easy use of cars. Cars are personal and convenient; they can take riders from wherever they are to wherever they want to go. At present however, their attraction is being undermined by severe congestion in many places. This is something that must be addressed.  Moving more people onto energy-efficient transit services that helps reduce U.S. oil consumption is just one of many important tactics in our overall strategy, but definitely a step in the right direction.

Most treatment plants in the United States are currently using 1970s technologies, and are in need of repair.   According to Bruce Logan, a Penn State University environmental engineer, “If animal, food industry and domestic wastewaters were combined together, they could provide roughly 500 trillion British Thermal Units (BTUs) of energy,” which is about one half of one percent of our current annual energy use.  Thus, not only can water waste treatment plants in the United States become energy self-sufficient if the proper technology is employed, but they can also generate excess power that can be sent back into the grid.

Today, the two most widespread technologies for exploiting sewage as an energy resource are:  (a) Sludge Incineration, which often finds strong opposition due to fears about impacts on human health; and (b) Anaerobic Digestion, were bacteria degrade sludge in the absence of oxygen to produce biogas, a mixture of methane (65 percent), carbon dioxide (about 30 perfect), and other gases like hydrogen sulfide and water. Among other applications, biogas can be employed for heating, to generate electricity, or as a vehicle fuel. Also, the capture of these gases also prevents potent greenhouse gases from being released into the atmosphere

In some places in the world there are attempts to use a larger proportion of sewage as an energy generation source. According to The Economist, Germans already process about 60 percent of their sewage for such purposes, with the Czechs, Britons and Dutch close behind.  By the end of 2010, Britain expects to process about 75 percent of their wastewaters (enough to power 350,000 homes),  and in Spain, waste could soon supply about 7 percent of electricity demand. Even in the developing world (especially in India, Mexico and South America) villagers and farmers increased their use of simple technologies to convert animal and human wastes to biogas for cooking, heating and farming.

Several groups are testing ways of making the process of biogas generation much more efficient, many motivated by a desire to find renewable energy alternatives.

In Europe, Germany and Great Britain are far ahead in the development of new technologies.  GENeco, a subsidiary of a British utility company, uses a two-tank system were different strains of bacteria decompose the wastes, producing about 30 percent more methane than conventional methods. The Fraunhofer Institute in Stuttgart employs a pumped system which mixes the sludge, reducing the amount of time it takes to digest sewage from two weeks to one.  This system, already deployed in 20 water treatment plants in Brazil, Germany and Portugal, operates for few hours a day, thus not requiring for its use a large amount of energy.

In the United States, two Stanford University scientists are working on an energy-neutral/emissions-free sewage treatment process, bridging two very different fields — space propulsion and environmental biotechnology. The process consists of creating a low-oxygen environment in the treatment plant, and favoring the growth of nitrous oxide-producing bacteria while aerobic species die off.  This will increase the production of methane and nitrous oxide to power the sewage treatment plant and small rocket thrusters, respectively.

Also, Oregon State University engineers are using nanotechnology to develop electrochemical cells for sewage treatment.  By coating graphite anodes with gold nanoparticles, they have been able to extract 20 times more electricity than in previous similar laboratory experiments. Furthermore, according to the researchers the technology could also generate hydrogen gas.

A recent joint publication by Duke University and the University of Texas at Austin estimates that exposing wastewater to anaerobic digestion could save 628 to 4,940 million kWh annually in the United States.  And the potential gains seem even larger for the developing countries, where sewage often goes untreated and electricity generation capacities are frequently limited.