TCS Daily

Where’s the Juice? Regulators Drain it Away

By Duane D. Freese - October 23, 2000 12:00 AM

The New Economy's primary interface with the old comes down to one thing - electricity. Computers and information technology are huge consumers of it. It is what turns on and off the switches in all those silicon computer chips. It's what makes telecommunications links and the Internet hum.

And this summer's brownouts and blackouts from San Francisco to Detroit expose how vulnerable the New Economy is to lack of production from the old. In such situations, government asks businesses to cut back, which most New Economy companies simply can't afford. The price to them can amount to millions of dollars an hour.

The answer, according to some New Economy thinkers, will lie in New Economy companies generating their own electric power on stand by. Peter Huber and Mark Mills, co-editors of Power Report, say this private generation will lead to hundreds of billions of dollars a year being invested in new technologies "to move, condition, store, and distribute electrons for the Internet Economy."

Maybe so. But expensive new technologies can't meet the entire nation's electricity needs, not for the foreseeable future. Their costs, as Huber and Mills point out, are on the multiple of 200 times current energy costs. Which for an economy built upon cheap energy means such technology is, at least for some years, likely to be used sparingly.

So from where is the rest of the juice for the Internet and general economy going to come? That's a huge question.

The Energy Information Administration sees the energy needs of the nation requiring the equivalent of 1,200 new power plants producing some 360 gigawatts of more power over the next 20 years.

But rather than building up the nation's power supply, regulators seem bent upon tearing it down.

As Energy Secretary Bill Richardson told Congress last March, "While demand for electricity is soaring. ... The reliability of our electric grid is, at times, faltering mainly because policymakers haven't kept pace with rapid changes in the electric-utility industry."

Indeed, one agency, the Environmental Protection Agency, seems ready to dismantle the existing system entirely without allowing anything to replace it.

Last fall, EPA sued seven electric utilities claiming that routine maintenance they performed on their plants violated the Clean Air Act. The agency wanted them to go through a review that would force them to retrofit their plants with the latest technology.

The courts have held up that action against private utilities, but EPA has thus far succeeded in stymieing improvements by the federal Tennessee Valley Authority.

Most of the EPA's ire has been aimed at coal-fired facilities. It sees them not only as affecting health but adding to greenhouse gases by their release of CO2.

One problem with that is that the agency has no authority from Congress to control for CO2. That common gas is vital to life on the planet. And no one knows how much of it would have to be cut back to have any affect on climate change, other than it would be many multiples of the reductions the Clinton administration and other nations agreed to at Kyoto three years ago.

Indeed, James Hansen, one of the leading scientific proponents of global warming, has said the world would be better off focusing on other greenhouse gases, such as methane and certain kinds of aerosols, because it could get more bang for the buck cleaning them up than CO2 from the burning of fossil fuels.

A second problem with what the EPA is doing is that it and state regulators have set up so many roadblocks and hurdles to building new clean-coal facilities that communities often have no choice but to keep their old dirtier plants running.

It currently takes almost 10 years to get approval to build a new power plant these days.

That is just plain foolish.

The fact is that for the time being this country is going to have to rely on coal- fired plants for the bulk of its power. Coal makes up 94% of the nation's proven energy reserves. Coal-fired plants provide 53% of the nation's electric power. With most nuclear plants set to be mothballed, there is nothing that can replace coal. Not wind, not solar, not hydroelectric, not conservation, not any combination of those things can meet the nation's electric needs. Not even private high tech power.

Coal, though, is not the environmental disaster many of its critics claim. Not anymore.

In the usual way government works in which one hand ignores what the other is doing, the Energy Department has promoted the development of clean coal technology even as the EPA has gone to war against the substance.

More than $5 billion has been invested. And an Energy Department brochure, "The Investment Pays Off," put out just as the EPA began suing utilities last fall, proclaimed: "The pioneer power systems introduced (in the Clean Coal Technology Program) have laid the foundation for a new generation of power systems responsive to worldwide concern about global climate change."

Someone needs to deliver that message to environmental regulators before the Internet goes blank and people start shouting: Where's the juice?

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