JUICE Blurring Energy-Fuel Distinctions

By Published On: October 13, 2006

When Energy Circuit began publishing in 2003, we decided to focus on power plants, renewable energy, and natural gas. Three years ago, we made a distinction between power plant and gas-related energy and alternative fuels. Heck, back then we’d never heard of switchgrass. At that time, hydrogen fuel cells were academic, and plug-in cars were history. Even though we made that distinction, we’ve been watching the bigger energy landscape. With legislation to curb greenhouse gases and the burgeoning clean energy tech business, it’s become apparent that the gap between traditional energy policy/business and alternative fuels is disappearing. If Proposition 87 is voted into law next month, it promises to further blur the distinction between fuels and other energy production. Circuit’s editors are native Californians. As much as this diverse state can be considered a unified entity, we understand its whims and logic. California’s economy and environment are in constant flux – but there are some eternals in our lifetimes. One of them is the love affair with cars. Another is our love affair with technological progress. When I was growing up in Cucamonga (San Bernardino County), my entire tract house neighborhood would gather agape whenever someone bought a new car – most of which were used to commute to what was then the high-tech headquarters of Lockheed, Rocketdyne, and the like. There was this coral and cream-colored Galaxie with tail fins – that was my favorite. Some new or near-new heavy chrome and steel landshark would be purchased by my family every couple of years. Now, instead of landsharks, Californians have SUVs. We also have some hybrids, some electric cars, some natural gas-fueled vehicles, some hydrogen fuel cell-powered buses – and a myriad of future possibilities. Some valiant environmentalists fight the car-nation state, and I wish them well. But I’m not sanguine that we will all turn to public transportation and bicycles anytime soon – unlike my fearless, car-less co-editor, Ms. McCarthy, who grew up in an auto-loathing household. Given our changing environment and economy – as well as the growing pressure to curb air pollution and greenhouse gas emissions – the state’s policies on energy and fuel are becoming more entwined. We don’t need to depend on oil any more than we need to depend on coal for electricity. That is, we may depend on it to a limited extent while also embracing alternative fuels. The future relies on new sources and new technologies to conserve what we have and develop nonfossil, sustainable feedstocks. There will be an important expanding venue for creating energy policy: the California Air Resources Board (CARB). With pressures to curb global warming gases produced by traditional fossil fuels for both power plants and vehicles, CARB could end up being as important a regulatory body as the California Public Utilities Commission and the California Energy Commission. Air regulators are often crucial to power plants – as fossil-fueled facilities need to get pollution permits from them. Those permits – and the emissions credits needed to get them – may not be available and may be expensive. If they’re unavailable or too expensive, power plants cannot be built and operated. With anti-greenhouse gas legislation (AB 32) now law, the state air board will play a much bigger role in power plant regulation. It is charged with setting rules to reduce greenhouse gases and other types of pollution. In addition, if Prop. 87 is approved, a whole new agency will be created – the California Energy Alternatives Program Authority. New opportunities are bringing in new players to the energy business. They are not ones wearing suits and attending California Public Utilities Commission hearings. They are entrepreneurs with environmental thinking caps. Some are just enviros. Take musician Willie Nelson, for instance. His road-warrior band bus is fueled by biodiesel, and he proselytizes about alternative fuels at his concerts. (He was also recently cited in Arkansas for possessing a bag of marijuana. My sources sent me a statement of his after the misdemeanor: “Good thing it was a bag of marijuana. If it was a bag of spinach, I’d be dead by now.”) With Prop. 87, alternative fuel research and production will be given an oil extraction tax-supported boost. The ballot measure would pave the way for using $4 billion to underwrite non-oil-based fuel for cars. That could include using traditional energy sources to create hydrogen for fuel cells, or electricity for plug-in hybrids. It could also tap into the state’s agriculture to make biofuels (Circuit, Sept. 1, 2006). Four billion dollars could be squandered or used to start a massive new business. For comparison, that’s only slightly less than what Pacific Gas & Electric is asking for annually for its revenues from ratepayers. The proposition has been flagging in the polls as massive anti-87 commercials blanket television. The Yes on 87 folks brought out a secret weapon this week, however. Former vice-president Al Gore – star of the film An Inconvenient Truth – is now stumping for the measure. Prop. 87 supporters also claim the backing of former president Bill Clinton. Another initiative, Prop. 1B, would also channel state money to alternative fuels. If passed, this measure would allow the state to float $19 billion in bonds. It would earmark $3.2 billion for projects that reduce emissions. It is aimed at retrofits for the state’s ports and school buses. With or without Prop. 87, alternative fuels are poised to take off. The business will be a booming part of the state’s economy, much as the Internet fueled the state in the 1990s. We here at Circuit are excited by our expanded coverage of alternative fuels as California tries mightily to clean up its environment and hopes that the rest of the nation will follow. – J.A. Savage with Elizabeth McCarthy &William J. Kelly

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