JUICE: The Ghost of Dick Cheney

By Published On: June 19, 2009

In researching a piece I penned, “Loss & Loathing on the Cheney Trail,” I traveled to the Rocky Mountains to track the fall out of former Vice President Dick Cheney’s efforts to streamline environmental permits for oil and gas drilling. There were palls of air pollution hanging over rural valleys. I found drilling rigs in farm fields next to rows of crops crushed by Halliburton trucks. I visited a small community whose water supply was a casualty of contamination from nearby natural gas drilling. Wildlife biologists told me that wells and pipelines would disrupt the migration paths of the last remaining range animals in the lower 48. Native Americans complained that the oil and gas boom had not improved their lives. Drilling progressed. Soon oil and gas companies enjoyed record profits. But that’s history. Or is it? With the 2008 Presidential election, renewable energy now has friends in high places. A wind turbine adorns the Department of Interior web site. From the President on down the word is out: Move forward on renewable energy. It’s about time. Renewable energy is the key to long-term sustainability and getting a handle on climate change. That’s because using renewable power has a fraction of the environmental impact of using fossil fuels. The public knows this, so it views the renewable energy industry akin to a modern-day Paul Bunyan, a big man hero. Yet, it’s undeniable that renewable energy--like Paul Bunyan, who chopped down forests--has a local environmental impact. As the history of oil and gas under Dick Cheney shows, that impact depends upon whether environmental regulations are administered tightly or whether politicians intervene to cut developers some slack. Another issue is whether utilities may use renewable energy as an opportunity to maximize profits. Just like with some oil and gas companies, this could come at the expense of consumers. That’s why in the rush to the green revolution it’s increasingly important to ask how government will safeguard the rights of the individual in renewable energy zones where projects are built, as well as protect consumers’ pocketbooks. Open debate on these questions is needed now. Renewable energy in the minds of most people connotes energy independence, not just for the nation but also for the individual with a solar panel on every roof, and a plug-in hybrid in every garage. But there are some disturbing indications that history may be about to repeat itself: that one big industry is about to be replaced by another. Like with oil and gas, many of the actual producers of renewable energy are small or medium-sized companies that are wholly dependent upon large utility companies to get their product to market. In short, what ExxonMobil is to domestic oil and gas drillers, large utilities are to renewable energy producers. They have significant control over which producer can enter the market. Because of their market reach and the relative inelasticity of demand for power, they have the ability to pass along any cost increases to consumers as they buy more renewable energy. So like Elvis at an endless Vegas buffet, they seem to want to develop renewable energy in the most capital-intensive way possible because it fattens their profits. Only the California Public Utilities Commission can stop them when their over indulgence in renewable energy deals has the potential to hurt consumers. However, while big companies dine amid the glow of the green revolution’s LED chandeliers, like domestic oil and gas drillers many renewable energy producers struggle as commodity producers in the dusty back country competing fiercely against one another for cost advantage. They have reason to seek relief from regulations when it comes to permitting. Democrats have heard their complaints. In Washington, Interior Secretary Ken Salazar issued a mandate to the federal Bureau of Land Management to move quickly to permit renewable energy projects on federal land. The bureau is using federal economic stimulus money to fund environmental studies that can act as an umbrella for pushing renewable energy forward quickly by limiting the need to study the particulars of any given project. Don’t let that mask potential impacts of big solar, geothermal, and wind projects. Take geothermal--where brine can be full of toxic metals. In Southern Nevada, the National Park Service warned that the water required by utility-scale solar projects may be insufficient in the desert. Big solar and wind projects disturb square miles of land, with footprints much larger than modern-day oil and gas wells. Finally, like oil and gas before, lawmakers are eager to subsidize the renewable energy industry with taxpayer dollars. There’s the 30 percent tax investment credit--now being given out as a cash grant for a limited time. In Washington--like in California and other states--Congress appears poised to adopt a renewable energy standard that will mandate a market for renewable energy. There are incentives for manufacturing renewable energy equipment too, plus tax-free bonds, loans, and research and development grants. These policies may be good, but let’s also hear about how government will protect the environment, individuals near renewable energy projects, and consumers in the shift to renewable energy. Here are policy proposals: -There should be no breaks on environmental analysis for renewable energy projects. Otherwise, the state and the nation will be denied the chance to fully understand the implications of shifting from one energy paradigm to another. -Congress should extend the availability of federal cash grants for renewable energy projects beyond 2010. This would relieve pressure to cut short crucial environmental impact analysis. -Government should blunt the power of utilities in the renewable energy market. This can be done by establishing a feed-in tariff under which utilities would have to pay any producer of renewable energy, large or small, a fixed and publicly known price for their output. As a backstop, both California and Congress should establish public power agencies that help finance, purchase, and market renewable energy to check the power of utilities. These public power agencies should focus on helping cities, counties, state agencies, public schools, and federal facilities become energy producers, which would enhance their fiscal outlook in the long-run. Under this three-point strategy, investment in renewable energy would flow to the optimal environmental location, be it rooftops on homes, condos, apartments, warehouses, factories, schools, hospitals, city buildings, brownfields, or deep in the desert. The footprint of renewable energy would be minimized. Will renewable energy bring true energy independence? Or will it bring continued dependence on big centralized systems operated by a few corporations, acting not too different from oil and gas in our economic and political systems?

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