The statements and views expressed in the postings on the Ocean & Offshore Energy Projects and Policy Blog are my own and do not reflect those of Nixon Peabody LLP. This Blog does not provide specific legal advice. Reading or visiting this Blog does not create an attorney client relationship. This Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Tuesday, February 23, 2010

Obama and Climate Change Legislation: Call and Response

Yesterday, my colleague Shari Shapiro, posted a blog piece entitled "Getting to Yes". She argued that the current energy/climate change legislation being backed by the Obama administration should be scrapped because it is both weak and toothless. I agree that the proposed bill does not offer anything resembling a comprehensive approach to climate change mitigation. Nevertheless, I believe that congressional dithering has gone on long enough and we must get something-- even a paper tiger-- on the books ASAP.

Check out Shari's position here.

And then see my response.

What do you think?

Monday, February 15, 2010

Nuclear Power and Wind Energy: Why Choose?

Lately, there have been a lot of white papers, scientific papers, and industry documents that argue (exclusively) in favor of either nuclear power or some renewable energy source (wind, solar, biomass). Typically, these articles paint the preferred energy resource as a panacea to all the world’s energy problems while decrying the imminent devastation that will result if another resource is selected.

The pro-nuclear power articles assert that nuclear is the only possible solution because nuclear is the only option for reliable, non-carbon emitting base load power generation. The pro-nuclear folks then denounce renewable generation from wind and solar as too “intermittent” to provide a viable alternative. Likewise, renewable resource advocates disparage nuclear power plants for environmental, political, economic and social reasons including allegations that nuclear power still causes substantial environmental harm as a result of uranium mining, transport and storage. The renewable advocates then gloss over intermittency issues with vague references to (as yet un-built) smart grids and (as of yet undeveloped) energy storage solutions.

See, e.g. Travis Madsen and Tony Dutzik, et al., Generating Failure: How Building Nuclear Power Plants Would Set America Back in the Race Against Global Warming (Env’t New Jersey Research and Policy Center, Nov. 2009) (available here: http://bit.ly/cirRIR); see also, The Future of Nuclear Energy to 2030 and It’s Implications for Safety, Security and Nonproliferation (Centre for International Governance Innovation, 2010) (available here: http://bit.ly/aPAmcb).

The truth is that both the nuclear folks and the renewable energy people are correct. Nuclear power does not emit carbon or other greenhouse gases or dangerous particulates into the atmosphere at the plant. But there is no question that uranium mining presents problems—including (but not limited to) the standard environmental consequences of most mining operations as well as the fact that most uranium reserves are not located on domestic lands. And, it is also true that wind and solar generation is intermittent—the sun does not always shine, and the wind does not always blow (although offshore wind farms suffer less intermittency issues than onshore wind farms)—and we don`t yet have a smart grid or the technological ability to store vast quantities of electricity for use during non-sunny, non-windy times.

Nuclear power is ideal for providing base load energy needs. Remember, base load represents the floor of our energy requirements—basically, what the demand centers require in the middle of the night when the weather does not require lots of people to run air conditioners or heating units at full tilt. Nuclear power plants provide constant, uniform wattage. They cannot easily be powered down or powered up, which means nuclear power plants need to be run more or less constantly—perfect for base load. Alternatively, renewable energy generation is often at its best during the types of weather events that place higher-than-base-load demands on electricity producers. People use more energy during daylight hours (solar!) and during stormy weather (wind!).

So what about having a mixture of both types of energy generation? Both nuclear power and renewable energy generation projects are capital intensive, so the project advocates must compete for funding. Could it be that the advocates, in decrying their alternatives, have simply created a Mexican showdown preventing either type of project from going forward? As I have complained in this blog before, no offshore wind farms have yet been built. Moreover, the ambitious 2002 U.S. Nuclear Power 2010 program has resulted in the start of not a single construction project.

So maybe the renewable energy people and the nuclear people should stop fighting and start talking about how these resources can compliment each other. Or am I totally off the grid here?

Monday, February 8, 2010

Renewable Energy and International Competition

Among the panoply of reasons why the United States must invest in and develop an alternative renewable energy industry is the oft-touted call for energy independence. As we all know, reliance on fossil fuel and oil is environmentally costly. But even for those remaining holdouts who insist that the causes of global climate change are not anthropogenic, there is no denying that the middle eastern oil states have more leverage and power over us than we are comfortable with as a result of our insatiable thirst for oil. In short, whether our reasons are environmental or political, we must find a way to end our foreign energy dependence.

A number of recent studies published by the National Renewable Energy Laboratory and the American Wind Energy Association demonstrate that the United States hosts a wide array of accessible renewable energy resources including solar, biomass, and on and offshore wind. One of the more obvious benefits of using these renewable resources is that the fuel sources are cost free. However, the turbines, photovoltaic films, and other renewable energy infrastructures are not free and the companies that make these things are still profit-seeking businesses who must seek out welcoming regulatory environments in which to develop and flourish.

Right now, we are at a crossroads. The United States can either decide that it wants to encourage a renewable energy industry or it can decide to dither around in the regulatory morass in which we have been stagnating for the last decade and more. But the longer we wait, the more likely it is that once we do decide to get in the game, the industry will have taken root elsewhere, and we will once again find ourselves dependent on foreign nations whose markets and political policies are not in tune with our own. One of the biggest threats to the United States renewable energy industry is China:

"China vaulted past competitors in Denmark, Germany, Spain and the United States last year to become the world's largest maker of wind turbines, and is poised to expand even further this year."

"China has also leapfrogged the West in the last two years to emerge as the world's largest manufacturer of solar panels. And the country is pushing equally hard to build nuclear reactors and the most efficient types of coal power plants."

"These efforts to dominate renewable energy technologies raise the prospect that the West may someday trade its dependence on oil from the Mideast for a reliance on solar panels, wind turbines and other gear manufactured in China."

See, http://blog.algore.com/2010/02/china_in_the_lead.html

The European Wind Energy Association 2009 annual report states:

• 199 offshore wind turbines were installed and grid connected totalling
577 MW during 2009, up 54% from the previous year-- a total of 828 offshore
turbines have now been installed (and interconnected) offshore in nine European
• Turnover in 2009 was approximately €1.5 billion, and is expected
to double in 2010 to
approximately €3 billion;
• 1,000 MW expected to be
installed during 2010, a 75% market growth compared to 2009;
• 17 offshore
wind farms under construction, totaling over 3,500 MW and a further 52 offshore
wind farms have been fully consented, totaling more than 16,000 MW;
• More
than 100 GW of offshore wind farms currently being planned by project
and utilities.

According to Offshore Wind China (www.offshorewindchina.com/english/index.aspx), in addition to a 56% average growth rate per year over the last five years for the wind energy industry generally, China is also making concrete progress with offshore wind projects:

China is regarded as one of the richest countries in offshore wind resources,
whose mainland coastline is about 18,000 kilometers – the fourth longest
coastline in the world. At 10 meters’ height, the offshore wind resource is
estimated to be 750 million KW, among which 100 million KW is in the 10 meter
depth waters. With the nation’s 40% population, the coastal area is the most
developed area in China and also the largest consuming market for
electricity. The first Chinese offshore wind farm in Shanghai went online
in 2009 as a demonstration project, followed by further ambitious plans to build
more offshore wind farms in the costal provinces of Jiangsu, Zhejian, Fujian,
Guangdong and Shandong. It is estimated that Jiangsu province will
establish the offshore wind farm with the total capacity of 7GW and Zhejiang
province of 2.7 GW by the year of 2020. The development of offshore wind power
has a huge potential in China.

As of this post, the United States has not fully permitted-- nevermind installed-- a single offshore wind turbine.

For the domestic Offshore Wind Industry, many are looking to Secretary Salazar's imminent decision on the future of the proposed Cape Wind project as a canary in the coalmine. DOI Secretary Salazar has indicated that he will issue a decision as to whether the Cape Wind project may be sited in Nantucket Sound by the first week of April. Although the project has proven that its benefits will significantly outweigh any environmental detriments (as demonstrated by the final Environmental Impact Statement issued in 2009), several Native American tribal groups, including the Wampanoag, have challenged the project and requested that the National Parks Service identify Nantucket Sound as a protected historic site. Nearly all offshore industrial interests have rejected the NPS's determination that Nantucket Sound is eligible for this status because it would likely impart a "chilling effect" on nearly all offshore development projects. This decision is the final federal regulatory hurdle that Cape Wind must overcome before the project is able to obtain a site lease.

Secretary Salazar has requested comments from the general public to inform his decision. Hopefully, Secretary Salazar will recognize that his decision and the impact that decision will have on the renewable energy industry in the United States generally will resonate far beyond the clean energy and climate change communities. This is a decision with enormous import for the United States position in world politics and in the international economy.