If I Ruled the World (or maybe just the State)

by Bruce Goodman, Energy Lawyer

Five elements to include in an energy policy for Michigan:

BIOMASS ENERGY: Make use of the energy in biomass that is going to waste in this state. The BTU content of the “unused biomass” in the state of Michigan is enormous. 

ENERGY EFFICIENCY/CONSERVATION: Make better use of our existing energy resources. Because our energy costs are so low, citizens and industry are not very aggressive in avoiding the “waste” of electricity and fuels. Increasing the price of energy (a carbon tax would be a start with a redistribution of the revenues to accomplish energy efficiency) is an option that deserves serious consideration.

DEREGULATION/CUSTOMER CHOICE ON ELECTRICITY: Reintroduce competition into the purchase and production of electricity. The deregulation of Michigan’s electric industry which was begun in 2000 was reversed in 2008. Just as competition in the telephone industry drove down prices and fostered innovation, the same competitive effect could drive Michigan’s electric industry.

ENCOURAGE ELECTRIC VEHICLES: Make electric cars work in Michigan. The state has placed a huge bet on the success of the electric vehicle industry; it is time to lead the nation in electric vehicle ownership. State government should fill its fleets with electric vehicles and the infrastructure for electric vehicles needs to be built out. Consider tax incentives for vehicle purchases.

BE A MODEL FOR RENEWABLE ENERGY: Made-in-Michigan renewable products and technology could lead the world. Michigan already is a leader in the solar energy field with Hemlock Semiconductor and  United Solar Ovonics; we need to demonstrate how this technology can be adapted for integration into buildings, the electric grid, and society. Similarly, Michigan has fledgling biofuels, biomass, wind, and geothermal industries and technologies that need to be strongly encouraged, whether with grants, tax incentives, or other assistance. To make Michigan a showcase for the implementation of these technologies, we need a larger renewable portfolio standard (from 10 percent to 25 percent) and the removal of barriers to self generation (i.e.  unreasonably high standby rates and unreasonably expensive interconnection charges).

These may not be the top five, but they deserve to be near the
top of the list.

President Gerald R. Ford had an Energy Vision

 by Bruce Goodman, Energy Lawyer

On his last day in office, January 19, 1977, President Gerald Ford issued a clarion call on energy: 

“America cannot permit the excessive delays associated with the commercialization of unconventional energy technologies.  New production is essential.  Our national security and economic well-being depend on our ability to act decisively on energy.”

More than three decades have passed since President Ford and his energy czar, Frank Zarb, worked to develop the nation’s first comprehensive energy policy and put the United States on the rocky road to rethinking energy technology.  At the time the first energy policy was developed, Ford’s administration was responding primarily to the oil embargo crisis of the early 1970s.  A major goal was to drive the amount of imported oil used for transportation down from the then-current 35 percent of national consumption.  Despite the President’s warnings, and the recognized negative influence that oil dependency has on foreign policy and defense policy options, current statistics show that 49 percent of our oil consumption is from foreign sources.

As to the production of electricity, since Ford’s call to action some of the “unconventional energy technologies” have matured, and some have not.  While unlimited fusion energy remains a far-off dream, renewable energy technologies are being deployed.  Wind energy has gained a strong foothold in our nation’s energy portfolio, and solar energy is finally on the brink of becoming a major energy source.  Bioenergy, in a variety of forms, has both near-term economic applications and long term possibilities, such as airplane fuel from algae.

Under President Ford’s leadership and Frank Zarb’s foresight, the Energy Research and Development Administration was created as part of the Energy Reorganization Act of 1974. This agency, which was replaced three years later by the Department of Energy, was an important step in bringing together the diverse energy activities across the federal government.  It produced a series of national energy plans that advocated experimentation and energy leadership to stimulate private-sector commercialization.

So where are we on President Ford’s vision thirty-four years later? The alternative energy effort had plodded along with the help of National Renewable Energy Laboratory (another offspring of the Ford Administration’s pioneering efforts) and a mixed bag of partial governmental energy policies still aiming for the “commercialization of unconventional energy technologies.”  No one can doubt the government’s role is critical.  As with many new technologies that have yielded benefits across the nation over time, such a large undertaking requires “encouragement”.  The Union Pacific and Central Pacific railroads were given twenty square miles of land plus mineral rights for every mile of track built as the encouragement that ultimately led to the interstate railroad system (and tangentially to the development of the steel industry).   The fledgling airline industry was able to grow due in large measure from the U.S. post office paying to carry the mail at rates which allowed the growth of passengers carrying capacity.  Oil and gas companies lease federal lands at rates intended to encourage these industries.  Who can argue that these governmental policies have not been important to the nation’s overall economic development and ultimate strength and well-being?  

Electric utility companies are not going to voluntarily adopt renewable energy technologies merely because they will improve air quality (and thus national health) or because they will utilize abundant, locally available, and free resources (such as the energy of the wind and the sun) or because they will improve national security (through distributed generation and providing transportation alternatives to imported oil).  No, a national energy policy, such as the one envisioned by President Ford, is needed to further encourage and drive renewable energy technologies.  Just as seat belts and air bags would likely not have reached the marketplace without governmental requirements, and gas mileage improvements were not on the horizon until governmental standards were devised to drive innovation, a national energy policy is needed to finally realize the goals of unconventional energy technology implementation envisioned by President Ford.

On Tuesday, September 20, Frank Zarb will in Grand Rapids to give a free lecture at 7:30 pm at the Ford Museum entitled:  Our Most Important Policy Failure – Energy. If you would like to attend, please contact the Gerald R. Ford Presidential Foundation at events@38foundation.org or call 616-254-0393 to reserve your seat.

Ford Energy Lecture Series Focuses on Policy – September 20

 by Bruce Goodman, Energy Lawyer

In 1977, President Ford stated “I am pleased that we have made a good start towards a comprehensive national energy policy.” Triggered by the aftermath of the 1973 oil embargo, gasoline lines and price spikes, energy security and energy independence became major themes of the Ford Administration. Legislation was introduced and passed that resulted in national plans for energy research, development, and demonstration of technologies which included fusion, solar, wind, geothermal, ocean thermal and photovoltaic energy. The Solar Energy Research Institute was established, which later became the National Renewable Energy Laboratory. And where is the nation thirty-four years later? The new President Gerald R. Ford Energy Lecture series will explore this question. The goal of the series, sponsored by Varnum, will be to provide various historical and current perspectives on U.S. alternative energy policies. The first free lecture will be September 20 at 7:30 pm at the Ford Museum in Grand Rapids and will feature Frank G. Zarb, appointed “Energy Czar” by President Ford in 1974. Come join the discussion.  www.tiny.cc/FordEnergyLecture-Varnum

Waiting for ARPA-E Conference to Commence

by Bruce Goodman, Energy Lawyer

The main events for the second annual Advanced Research Projects Agency – Energy (ARPA-E) Conference start tomorrow, March 1.  I have checked into the Gaylord National Convention Center Hotel and perused the agenda.  How exciting!  Topics ranging from rare earths to advanced fuels to zero carbon power will be discussion topics.  This is America ingenuity at its best.  Efforts to attract talent, both foreign and domestic, to the energy challenge.  Funding cutting edge research and development, knowing that some will fail miserably, but hoping a few ideas succeed spectacularly.  It is Sputnik time again for the United States.  Let’s hope we respond as successfully.

Michigan is Fourth in Solar Energy Jobs/Third in Alternative Energy

by Bruce Goodman

With Hemlock Semiconductor Group and United Solar leading the way, Michigan has the fourth-largest number of solar energy jobs in the county. In a census released by The Solar Foundation, only California, Pennsylvania and Texas are ahead of Michigan in the employment of the 93,000 people in the solar industry in the U.S. Separately, Business Facilities magazine ranks Michigan as third in the category of Alternative Energy Industry Leaders, behind Arizona and Iowa.

Energy Issues Aired on TV by DELEG

by Bruce Goodman

The Department of Energy, Labor and Economic Growth is producing a monthly 30-minute TV show designed to provide information about the latest initiatives and activities in state government related to renewable energy, green jobs, energy efficiency, and advanced energy technologies. Michigan’s Energy Future Today is hosted by DELEG Deputy Director Liesl Eichler Clark and can be seen on more than 80 cable stations around the state. The July 2009 episode featuring advances in solar energy was selected for an award from the 31st Annual Telly Awards, a national program recognizing outstanding achievement in the TV, commercial, and video industry. See http://michigan.gov/dleg/0,1607,7-154-51651-233579–,00.html

Michigan Saves: Energy Efficiency Retrofit Initiative Awarded $30 Million

by Bruce Goodman

In April Vice President Biden announced a $30 million Recovery Act grant to ramp up energy efficiency retrofits in Michigan homes, businesses, and public buildings. The Michigan Retrofit Ramp-up Initiative (MRRI) will target homes and commercial buildings across the state with energy efficiency incentives, along with affordable loans through Michigan SAVES and other innovative financing options. The MRRI proposal was developed by a coalition of key stakeholders, including state and local governments, the state’s electric utilities, educational institutions, and a number of public and private sector partners. Michigan’s award was the second largest award among the 25 retrofit ramp-up grants awarded to states and communities. See http://tinyurl.com/RecoveryActGrant

Energy Policy and Price Signals

 by Bruce Goodman

For some time there has been a cry for a comprehensive national energy policy.  Reliance on the free market to drive energy outcomes has led to a place the country does not want to be.  Clean power technology development has been left to others, principally Europe.  Oil imports to feed the nation’s transportation needs have driven foreign policy decisions and created economic insecurity.  Foreign automobile makers are ahead on energy efficiency and energy technology.  Climate change appears to be upon us whether we are ready or not.  The popular answers to these challenges are aimed at new and different price signals to the marketplace—gasoline tax, carbon tax, cap and trade, cash for clunkers, tax incentives, tax credits, tax rebates, grants, feed in tariffs–and some thought it difficult to solve an algebraic problem with only three variables.  Can there be a single “energy policy”?