TCS Daily


Blowing in the Wind

By Duane D. Freese - October 18, 2005 12:00 AM

Green Mountain Energy Co. has a deal for you.

For just $9.95 a month -- or a discount of $99.95 for a full year, the renewable, clean power company out of Austin, Texas, promises to deliver 500 kilowatt hours of electricity a month of pure, renewable wind energy. This amount of wind energy, according to Green Mountain, will offset approximately 8,000 pounds of carbon dioxide (CO2) produced by driving the average car 9,000 miles.

How about that? For between 1.66 and 1.99 cents a kWh -- or about half to a third the cost of regular electricity from a coal or natural gas fired plant -- you can get pure wind power, saving the planet from global warming. Pretty good deal, huh?

Only there's a catch. Green Mountain won't deliver that wind energy to you. It is giving up its retail business, at least in Pennsylvania where it is making this offer. All it is promising its soon-to-be-former 30,000 customers is that it will deliver that amount of wind power to the national grid. Those former customers will have to pay the prevailing rate of between $38 and $66 a month for the 1,000 kWh of electricity the average household uses a month, only from one of those coal or natural gas fired electric companies.

So, what's the real deal? The "subscription" actually amounts to a donation to Green Mountain, a subsidy that it can add to the 1.9 cent kWh tax credit the company gets (along with its not having to pay most state and local taxes) to produce wind power.

The deal reflects the false promise of renewable energy, one that as a side effect has contributed to the spiraling prices for gasoline and home heating and pretty soon electricity. Renewable energy is, for the most part, not ready for prime time. If it were, Green Mountain wouldn't have closed up its retail shop in the face of higher costs and prices for competing energy sources. It would be grabbing new customers instead.

Higher prices for oil, electricity and gasoline, after all, were what were supposed to give a boost to companies such as Green Mountain and technologies such as wind and solar power, and hybrid electric cars and SUVs.

Rather than applauding the higher prices for putting us on a renewable energy course, some politicians are merely doing the usual bit about bashing oil and auto companies.

For example, the Senate Minority Leader Harry Reid of Nevada has spent much of his time since hurricanes Katrina and Rita running around his state in a three-vehicle entourage, including a 16 mpg SUV, blasting away at oil companies, demanding an investigation of their profits and condemning U.S. auto makers for not signing on to starkly higher CAFE (Corporate Average Fuel Economy) standards for SUVs.

Sen. Hillary Rodham Clinton likewise also has called for yet another investigation of oil company profits and, at a Capitol Hill rally last month, denounced the notion of drilling in the Alaskan National Wildlife Refuge for its 11 billion to 30 billion barrels of oil as a "diversion."

"Some might say, 'Well, senator, we have gas prices going up -- don't we need to drill in the Arctic Wildlife Refuge?'" Mrs. Clinton said. "And of course the answer is that we do not. The answer is that that is a diversion. The answer is that we need to break our addiction to foreign oil."

How? "The answer isn't drilling for oil in ANWR, the answer is in the minds of ingenious Americans."

Massachusetts Sen. John Kerry echoed his colleague from New York. He wants to tax oil companies' "windfall profits." After all, we really don't need or want their oil. As he told the ANWR rally, "Instead of allowing a few oil companies to drill their way to windfall profits," the nation needs to understand "we can't drill our way to energy independence, we have to invent our way there together."

Sort of like Green Mountain -- inventing an energy product people can subscribe to, but can't depend upon to be delivered directly to there home.

There is a reason that wind power supplies only 2% of the nation's electricity, even after having tripled its output since 2000. It has a 30% annual load factor, meaning it's down more than two-thirds of the time. It is in no position to replace coal or gas or nuclear powered plants.

Yet, politicians such as Reid, Clinton and Kerry continue to refuse to face up to that reality, a fact made starkly apparent by every speaker at the ANWR rally.

The dais was filled during that event by Robert F. Kennedy Jr., Sen. Joseph Lieberman, Rep. Edward Markey as well as Kerry and Clinton all going on at length about how rapacious oil companies were out to despoil one of America's last natural wonders, frighten away the caribou and other wildlife and thus destroy the culture of native peoples there.

To make their point, they had to diminish the amount of energy that would be recoverable from ANWR, claiming it would amount to no more than could be saved by Americans pumping up their tires, which would save 4 million gallons of gasoline a day. That pump 'em up savings is nothing to sneeze at, but it is a drop in what the United States Geological Survey says can be produced from ANWR's Coastal Plain region -- which amounts to between 460,000 million gallons to 1,300,000 million gallons. It would daily pump as much oil to the United States as we get from Saudi Arabia -- more than 50 million gallons a day.

The speakers also had to inflate the environmental footprint that would result from ANWR drilling, indicating it would affect all of the 19 million acre expanse of ANWR, when in fact exploration, drilling and development would be limited to some 1,600 acres within a 1.5 million acre area called section 1002 that already has a human and technological presence, the Defense Early Warning System.

They had to intimate that the development in these areas would frighten away the caribou, when in fact previous experience in Alaska has demonstrated that caribou are not so weak-kneed as to be frightened by oil rigs.

And the speakers had to pretend that all native peoples found such development abhorrent, when in fact the native Alaskan population that lives there, the Inupiat Eskimos in the town of Kaktovik favor opening the area for drilling.

Most of all they have to pretend, as Sen. Clinton did, that all that stands in the way of a non-oil future is the oil industry -- not physics, not economics, or the nation's needs for reliable and abundant energy supplies.

So, they go after the oil companies for "windfall profits," despite a report by the Congressional Research Service in August that indicate that the oil companies' "record profits" are barely above average for American industry. It warned: "If oil and petroleum prices are to decrease, supply will likely have to increase relative to demand. Expanded supply results from investment in the various stages of the oil industry production process. ... If the underlying parameters and the regulatory environment are not encouraging, investment might not be undertaken. Historically volatile prices and profit levels coupled with a tight regulatory environment contribute to industry uncertainty."

Or maybe that's their aim -- to increase uncertainty in investment in energy here, by keeping, as the Government Accountability Office has pointed out, most federal lands off limits for oil and exploration, discouraging the creation of refinery capacity, and opposing nuclear power development so there's been no new plant since the 1970s.

That way we may all want to seek more wind power, for which they may earn a subscription just like Green Mountain's of $9.95 for every 500 kWh of hot air they blow about the evils of oil, gas and the auto industries.

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