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The Future of Clean Energy
Who Wins and Who Loses as the World Goes Green
By Gary Schwendiman AuthorHouse
Copyright © 2015 Gary Schwendiman
All rights reserved.
ISBN: 978-1-4969-4043-8
CHAPTER 1
The Clean Energy Bowl
What if I told you I had a system that could accurately predict which team would win the next Super Bowl? You'd want to place a bet immediately, wouldn't you? I know I would. Well, the odds makers can relax. I don't have such a system for football. But I think I do have a system that will accurately predict the winner in what I like to call "The Clean Energy Bowl."
With global warming and the environment being such hot topics today, there is a push to make America's future energy "clean." I put the word "clean" in quotes because "clean" is a relative term. There are many considerations that factor into whether and how you can deem an energy source "clean." For now, however, I'd like to concentrate on the two factors that will make an energy source the most likely to win in the next 20 years and beyond: (1) its ability to reduce particulate pollution and the emission of greenhouse gases, and (2) its positive impact on the world economy.
The environmental factor should be obvious. If the future of energy is indeed "clean," then the sources for energy that produce the lowest amount of particulate pollution and greenhouse gases should (should) be favored. But economics, as with anything in the United States, plays a huge role here too.
When I say positive impact on the world economy, I'm referring to many factors, but for now let's focus on the cost of producing and distributing energy. While it would be great if the cleanest energy sources were the most cost effective to implement, that's simply not always the case. As nice as it would be to say that we should just go with the cleanest technologies, the old adage remains true: money talks. So any reasonable examination of the future of clean energy must take into strong consideration the economic factors at play, as well.
Many people who speak about clean energy (or any energy) do so in a way that misrepresents its meaning. It's not unusual to hear a politician say something like, "We need more wind energy and solar energy so we don't have to import so much oil from other countries." But it's just not that simple. We're actually talking about two entirely different kinds of energy, and those different kinds of energy aren't directly related to one another. They belong to totally separate discussions.
One kind of energy is called electricity. This is the energy we use to power our homes and businesses and plug in all of our electrical equipment. The United States uses several sources to produce its electricity, including nuclear, wind, solar, water (which we sometimes refer to as hydroelectric power), geothermal, coal, and natural gas.
The other kind of energy is fuel. This is the energy we use to propel our cars, trucks, buses, trains, planes, and other vehicles. In the United States, the most common fuels are gasoline, ethanol, natural gas, diesel, and oil. Of that list, oil might stick out to you as one that doesn't necessarily belong. I place oil in with our discussion of fuels because a full 70% of the oil consumed in the United States is used for transportation fuel. This makes it particularly important to evaluate within this category.
I digress. Back to the discussion about the difference between electricity and fuel. Think about it this way: when you plug your laptop into the wall, you're dealing with electricity. When you go to the gas pump to fill up your tank, you're dealing with fuel. Both of these things are kinds of energy, but they are almost completely unrelated to one another. Keep that distinction in mind, because it underlies the very framework of what we're going to be discussing in the pages to come.
Here's another important point: despite what some politicians might have you believe about their campaign platforms, the United States has already achieved energy independence when it comes to electricity. We can produce electricity from all the above-mentioned sources right here at home. All the coal, all the natural gas, all the nuclear, and so on, are produced right here on the continent and delivered to the end user by our own independent electrical grid. When people talk about the United States becoming energy independent, if they mention anything about coal, natural gas, wind, solar, water, geothermal, or nuclear power, then they're either confusing the issue or simply talking about the wrong things. We can make all the electricity we need without having to import it from other countries.
By deductive logic, we know that if a person is talking about energy independence, and if the United States is already electricity independent, then what that person is really talking about is fuel independence. We do indeed import much of our fuel from foreign countries, so we are not fuel independent. We are, however, electricity independent.
It is important to note that the participants in and eventual winner of the Clean Energy Bowl might not necessarily be dominant forces in the energy discussion today. But, based on the trends emerging from my research, I believe they will be the primary providers of electricity and fuel during the decades to come.
Now that we've taken care of all the housekeeping, let's move on to some football.
The Clean Energy League
Think of what you know about the National Football League (NFL). In its simplest description, it's a crowded field of 32 football teams. Those 32 teams are divided into two equal conferences, the National Football Conference (NFC) and the American Football Conference (AFC). Over the course of a long season and the playoffs, the two conferences each produce a champion. These two champions then square off against one another in the big game, the Super Bowl.
How these two teams get to the Super Bowl depends on a number of factors. Good teams must possess an efficient offense as well as a reliable defense. Team owners, general managers, and coaches also play a major role, as does the league commissioner.
Considering all these variables, it is virtually impossible at the start of the season to accurately predict which two teams will play in the Super Bowl. But thanks to advanced statistics, payroll allocations, and past performances, one can usually make an educated guess as to which teams have the best shot. The teams with the most dominant offenses and defenses often win. They get those dominant offenses and defenses by spending wisely on facilities, coaches, and players. And of course it always helps if they find themselves in a conference with weak competition.
Turns out, you can say many of the same things about clean energy. So let's imagine each clean energy source as we would an NFL team. There is Team Coal, Team Ethanol, Team Gasoline, Team Geothermal, Team Natural Gas, Team Nuclear, Team Solar, Team Water, and Team Wind, and they are all competing against one another in their respective conferences. Then, the winner of each conference plays in the Clean Energy Bowl. I'll discuss what it takes to win the Clean Energy Bowl in a moment, but for now, keep in mind that each team competes within its own conference first before earning that opportunity to become the overall champion.
Much like the NFL, our Clean Energy League divides into two conferences. That's because, as I mentioned in the introduction to this chapter, whenever we talk about energy in America, we're really talking about two separate and completely different categories. One category is electricity, or all the energy that the United States needs to power its millions of homes, factories, and businesses. The second category is fuel, or all the energy that the United States needs to power its millions of cars, trucks, and other vehicles. Whether solar wins the contest to provide electricity to the majority of US homes has no bearing on whether gasoline continues to be the primary provider of fuel for US vehicles, and vice versa.
For the purposes of our Clean Energy League, we must therefore place all energy sources that deal only with electricity into one conference and all energy sources that deal only with fuel into another. Aligning them in this way will allow us to better predict which team makes the strongest case to be champion of America's future fuel needs and which team will provide the majority of America's future electricity needs. From there, one of those teams will emerge as the winner of the Clean Energy Bowl, and hence the energy provider that will make the most positive environmental and economic impact over the coming decades.
The Two Energy Conferences: Electricity Conference and Fuel Conference
As the title of this section suggests, we'll call the first conference the Electricity Conference. Each team in the Electricity Conference competes to become America's primary future source for powering homes and businesses. This conference is a crowded field with many strong teams. These include Team Wind, Team Solar, Team Water, Team Geothermal, Team Coal, Team Natural Gas, and Team Nuclear. Competition in the Electricity Conference has always been fierce, but recent trends suggest that one team may just be ready to start crushing the rest of the field.
We'll call the second conference the Fuel Conference. Each team in the Fuel Conference competes to become America's most environmentally sound and economically advantageous source for propelling its millions of vehicles. Unlike the Electricity Conference with its many strong teams, the Fuel Conference has always been dominated (and will continue to be dominated) by two exceedingly talented teams: Team Gasoline and Team Ethanol. There are other small teams in the field, certainly. For instance, some large buses and trucks use natural gas to power their engines. Some of the more adventurous car drivers have turned to natural gas, as well. This is because lately there's been a great deal of vertical and horizontal drilling and fracking to produce natural gas in large quantities. Natural gas as a fuel source does show some potential, but my ultimate conclusion is that it has too many flaws to compete long-term with Team Gasoline and Team Ethanol. In this conference, the data suggests that it would be foolish at this point to bet on anyone else.
Deciding Factors: The Electricity Conference
There are a few trends within our two conferences that will allow us to more easily determine the most logical choice for champions. For the electricity conference, they include:
1. Substantial competition exists.
For the purposes of our study, I intend to analyze seven potential sources for America's future electricity needs. With seven strong teams competing against one another, it will be difficult to predict a winner in this conference. Fortunately, some recent trends provide helpful insight as to the strongest teams.
2. Government subsidy is a fickle thing.
In this conference, the influence of the US government makes arriving at an accurate prediction even more difficult. To change the way the United States manages its electricity production would require a great deal of money, and it is often national, state, or local governments that supply that money. Different governmental leaders have different opinions on which electricity sources should receive that money at any given time.
For example, sometimes they favor wind power, and when that happens, Team Wind makes substantial gains in the standings. But then as soon as the next administration takes office, Team Wind might find its subsidies taken away and given to Team Nuclear. Its advantage is therefore lost.
For this reason, we must consider subsidies as advantages during certain times and as losses of advantage when they disappear. This means that, during the next 20 years, our best bet is to assume at least a relatively level playing field in regards to subsidy.
3. Global warming is very real.
Before we dive in, let's clear the air on a common misconception. There are two terms people use when they discuss the possibility that our planet has gotten warmer over the past several decades: global warming and climate change. Many people use these terms as if they are interchangeable, when in fact they mean different things.
Climate change refers to the long-term changes we can observe in the earth's average climate — and when I write "long-term," I mean thousands of years. When I write "changes we can observe," I mean increases or decreases in average temperature. Climate change can refer to the slow, natural drift in the earth's climate toward an ice age (when it gets so cold that much of the planet winds up covered in glaciers) or toward an interglacial age (like the one we've been experiencing for quite a long time).
The climate change phenomenon is caused by natural factors like an increase or decrease in solar radiation reaching the earth, plate tectonics, and even volcanic activity. There are many technical details, but the important takeaway message is that climate change is a natural occurrence that leads to prolonged periods of either warmer or colder average temperatures. This is why, when someone calls the rapid increase in average global temperatures that we have observed over the past century climate change, they're not calling it the right thing. The correct term is global warming.
Global warming refers to the ongoing rise in the planet's average temperatures. Many people suggest that global warming is entirely manmade. This is because the rise in the planet's average annual temperatures has been unprecedented and rapid, and the only thing we know of that can account for such a drastic change are all those greenhouse gases mankind pumps into the atmosphere. The latest data appears to render the rather fiery recent debate about global warming moot. Because the evidence is so compelling, we're going to accept that global warming is very real.
At some point in another hundred years or less, the situation may become catastrophic. Of course, because we're not looking at anything that will adversely affect the majority of people in the immediate future, it's going to be quite difficult to get people to do anything to solve the problem. Think about it. How often do you spend money on something you know won't impact you personally for many years to come?
Take Christmas, for example. Because you know it's coming every year, you probably make preparations ahead of time to buy gift s for your loved ones. But what about retirement? You know it's coming, but because it is so distant and uncertain, you might be less inclined to save money for it right now. Maybe you do save for retirement. Maybe you're one of the people who acts on what you know is coming in the more-distant future and puts enough money away every month to expect a stable retirement. Good for you. Make no mistake, though: you're in the minority. We've all heard about the importance of saving for retirement, but most people would prefer to spend the money on things that affect them immediately.
So how do we overcome this common human phenomenon? By preaching the importance of doing something about global warming? Preaching to people always sounds good to those doing it, but the impact it has on their audience is much, much less than if something actually happens to them. To paraphrase a famous line by President Lyndon Johnson, giving a speech is like peeing your pants. "It seems hot to you, but it never does to anyone else."
When it comes to preaching the impact of global warming to the masses, you can call it similar to peeing your pants. You might have all the data in the world, but until global warming impacts everybody directly and immediately, it's unlikely that the average person will make any major lifestyle changes to combat it.
That's why it's so important to examine both the environmental and the economic impact of each team in this conference. The winner will cut down on pollution while providing affordable electricity to the mass market.
While most of the global warming figures forecast a bleak long-term scenario, the good news is that we can still head it off before it becomes a catastrophic problem, as long as we make some changes to the ways we consume electricity and fuel. Those changes are coming. Through our examination of each team and each conference, we'll figure out exactly which technologies will dominate that change effort.
(Continues...)
Excerpted from The Future of Clean Energy by Gary Schwendiman. Copyright © 2015 Gary Schwendiman. Excerpted by permission of AuthorHouse.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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