Jeremy Rifkin: "The Third Industrial Revolution" - The Diane Rehm Show ; Paul Krugman

Jeremy Rifkin: "The Third Industrial Revolution"

Tuesday, September 27, 2011 - 11:06 a.m. The Diane Rehm Show 

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DO –

why the third industrial revolution ? See  http://www.nytimes.com/2008/06/27/opinion/27krugman.html  Fuels on the Hill, PAUL KRUGMAN

http://www.nytimes.com/2008/04/21/opinion/21krugman.html  Running Out of Planet to Exploit, PAUL KRUGMAN

why Germany is way ahead of other states, including the US, in this game plan ? See

http://www.nytimes.com/2008/05/19/opinion/19krugman.html Stranded in Suburbia, PAUL KRUGMAN

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MS. DIANE REHM

Jeremy Rifkin argues we're missing the real threat to the world economy. He's a best-selling author. He's advisor to the European Union on climate change, and energy security. In a new book titled "The Third Industrial Revolution," he says the global economy will face more meltdowns followed by shorter and weaker recoveries as long as it relies on fossil fuels. He joins me in the studio to describe a new economic development plan based on the merger of internet technology and renewable energy.  

MR. JEREMY RIFKIN11:08:23

Nice to be here, Diane, thank you.

You're talking about the democratization of energy. What do you mean?

We have been living under two industrial revolutions, the first in the 19th century, the second in the 20th century. And, you know, the great economic changes in history as you said leading into the show occur when new energy revolutions converge with communication revolutions. When they come together, it changes the whole way we live.

In the 19th century, print technology became very cheap. We introduced public schools. We created a mass workforce with the literacy skills to organize the complexities of a coal and steam-powered revolution. In the 20th century, the telephone was absolutely essential, and radio and television later to become the communication medium to organize a very complex auto oil and suburban age.

Those two industrial revolutions provide us a little bit of a framework of the problem we face now, and if I may, let me just spend a little moment on the crisis.

We've missed the real crisis here. The real economic crisis occurred in July 2008. When oil hit $147 a barrel that July, you remember what happened.

Prices went through the roof for every other product, pesticides, fertilizers, construction materials, pharmaceutical products, synthetic fiber, power, transport, heat and light, because our whole civilization is either made out of and/or moved by fossil fuel. So when the price of oil starts to go over 80 a barrel, all the other prices go up on the supply chain, and at 147 a barrel in July 2008, people stopped buying.

The prices were through the roof, and the whole engine of the global economy shut down. What I'm suggesting, that was the economic earthquake.  The collapse of the financial market 60 days later, that was the aftershock.

We're not going to the crisis. And the reason this is happening, Diane, and it's really peaked globalization.  At least in the business communication, we now know the outer limits of how far we can actually globalize this economy based on fossil fuels.  It's about 150 a barrel and we'll hit the wall. The reason is something called peak oil per capita, which is related to global peak oil production, but a little bit different.

Peak oil per capita occurred in 1979, and there's no controversy about this.  If we had distributed all the crude oil that we had at that point to everyone alive on the earth, that's the most each person could have if we shared it.  Of course, we found more oil since then, but population rose quicker. So if we distributed all the oil we have to 6.8 billion people, there's simply less to go around.

So when China and India made a bid in the 1990s that at any 10, 12 percent growth rate to bring a third of the human race into the game, the demand pressure against the supply of crude oil was overwhelming, and we bottomed out at 150 a barrel, and here's the proof this morning. You remember after the crisis in 2008, the economy stopped and oil went down to $30 a barrel because there was no economic activity.

In 2010, we started to replenish inventory around the world. We started to grow again. We tried to turn back the engine on and what happened? Oil shot from 30 up to 100 a barrel.

It's 106, crude oil today, and what's happening? Once again, all the prices are going up for everything else and purchasing power is plummeting and the engine is shutting off again. So here's the message.

Every time we try to regrow the economy at the same rate we were growing before July 2008, we will see this terrible, terrible attempt to rejuvenate it, and within three-year cycles, every time we try to rejuvenate it, oil prices go up, all the other prices go up, purchasing power goes down, we collapse.

So we're in a very dangerous period over the next 30 years of growth and collapse, growth and collapse. This is an end game, so we really need to address this and figure out how we move to a new energy regime and new economic paradigm.

Again, it's based on the premise that the great revolutions occur when communication revolutions emerge to actually organize the complexity of new energy regimes. You know we've had this very powerful Internet communication revolution, Diane, in the last 15 years. And what's so interesting for me as an older person, is I grew up on centralized electricity communication top down.

What's interesting about the Internet is it's distributed and collaborative in nature, and the power is lateral, which sounds like an oxymoron, lateral power, but -- because we think of power as pyramidical. But a later power suggests side by side power.  What we're beginning to see in Europe in the last 24 months is emerging of this very powerful communication medium, the Internet, which is distributed in collaborative with a new energy regime, renewable energies, which by nature are distributed in collaborative.

So when distributed Internet communication starts to organize distributed energies, we have a very powerful third industrial revolution that could change everything, and here are the five pillars as we've laid them out. This is the formal plan of the European Union. I was privileged to develop the plan, it was endorsed by the European Parliament in 2007, Germany is leading by far in this plan, the leading exporting power in the world, and here are the five pillars quickly.

Pillar one - the EU is committed to 20 percent renewable energy by 2020. That's a mandate. Every one of the 27 states has to fulfill that.  That's a third of the electricity of Europe has to be green by 2020.  Pillar two, and this is an interesting one, how do we collect these distributed renewable energies, because the sun and the wind and the geothermal heat and the garbage and the ocean tides and forestry waste, they're found everywhere.

You can find some renewable energy in every square inch of the world. So how do we collect them? This got us to pillar two, and our first idea in Europe was okay, let's go to the Mediterranean, they've got a lot of sun. The Irish have the wind, the Norwegians have the hydro, centralize it and put it in a high voltage line and ship it out. Now, we're smiling now because we were thinking 20th century energies which are centralized because they're only found in a few places like coal, oil, gas, and uranium. Old ways of thinking

And we began to ask a question two years -- no, four years ago, that seems ridiculously simply now. If renewable energies are found in every square inch of the world in some frequency or proportion, why would we only collect them in a few central points?

Big solar parks, big wind parks, geothermal parks. We don't oppose that. They're essential, but not sufficient, and they're a small part of this third industrial revolution. So pillar two lead us to buildings. The number one user of energy in the world is buildings. The number one cause of climate change is buildings. By the way, I should say, Diane, I always feel I need to, the number two cause of climate change is beef production and consumption, and related animal husbandry. Nobody mentions it. Number three is transport. So in EU, we have 191 million buildings there. The goal is to convert every (building) single office, home, and factory into your own micro power plant over the next 30 years so that you collect the sun on the roof, the wind off the side walls, the heat under the ground, et cetera.

But who's going to pay for that?

Germany has an interesting plan, because Germany is way ahead of the game here, and pillar one they just reached last month, 20 percent renewable energy.  Ten years ahead of time, and they're heading to 35 percent renewable for electricity in nine more years.

Here's the way they did it. They put in feed in tariff, which means you get premium -- if you convert your facility to renewable energy, and you want to sell your energy back to the grid, you get a higher price than the normal energy.  It's paid for in this way.

The electricity bill is raised just slightly, so small you don't even notice it, but then the money that's available is used for early adopters to put solar on their roof or winds next to the building, et cetera.

And so all over Germany, and now across Europe, buildings are being converted. The new buildings, Diane, are actually positive power. They create so much energy that they can use it and surplus back to the grid. Olivia (word?) Construction has a beautiful office complex in Paris, just went up next to the OECD headquarters. It's positive power.

Pillar two jump starts the European economy, that's the idea. Millions and millions and millions of jobs. Thousands of small and medium-sized enterprises have to convert 190 million buildings to power plants over the next 40 years. So I think, Diane, the best way for the listeners to think of it is, think mainframe computers 1970s, now you have your own desktop.  Think centralized power in the 20th century, now you have your own power.

Pillar three, that's the tough one, storage. The sun isn't always shining in Germany, or in Europe, or here, and the wind isn't always blowing when you need the electricity. These are intermittent energies, so we have to store them. So the EU has committed to all the storage technologies, batteries, flywheels, capacitors, water pumping, but we're putting the big Euros into hydrogen.

Eight billion Euro commitment of public/private funds in the next few years, because, you know, hydrogen is the basic element of the universe. It's the stuff of the stars. It carries other energy. It's modular so you can use it for small homes and big factories. So here's how it works. You put photovoltaic solar panels on your roof, you generate electricity.

If you have some electricity you don't need for the moment, you put the electricity in the water. Hydrogen bubbles out of the water into a tank. It's real simple. When the sun isn't shining on your roof, you turn it and the hydrogen goes from the tank back to electricity. A very small thermodynamic loss.

All right. Pillar one, renewable energy. Pillar two, your buildings become your own power plants. Pillar three, you have to store it with hydrogen.  And then Pillar four, that's the most interesting. This is where the internet communication revolution completely merges with new distributing energies to create a nervous system, an infrastructure for a new economic paradigm.

We actually use off-the-shelf internet technology and convert the power lines of the United States, Europe and the world, the transmissions lines into an energy internet that acts exactly like the internet. So when millions and millions of buildings are collecting their own green energy on site, storing it in hydrogen like you store digital in media, if you don't need some of that electricity, the software can connect you and you can share it across entire continents. Just like we now produce our own information, store it in digital and share it online.

And it's interesting, in Germany, they have six test sites that have been set up by the federal government and they are actually testing the most interesting things. They're connecting every appliance -- every appliance to the transmission central grid -- to the distributed grid. So we will know what every washing machine is doing across an entire region, every thermostat, every air conditioner. So if there's too much demand for energy and the price is going up, the software can direct a million washing machines to say, forget the extra rinse. If you, the consumer, bought that particular program you'll get a credit and a check from the utility company.

They're even testing weather conditions on the software so each homeowner or business will know moment to moment the change in weather conditions and how that would affect how they use their energy.  And you'll have a dial that will tell you the price of electricity moment to moment so that your software can tell you when to get off the grid, sell back to the grid, et cetera. It's just beginning, just beginning.

Pillar five is electric plug-in transport.  The electric vehicles came out this year. Fuel cell hydrogen vehicles are coming out -- this is a done deal -- in mass production by Daimler, General Motors and the other car companies in 2014.  So you'll be able to plug your vehicles in anywhere on the grid, get green electricity. Then anywhere you travel, you can connect up to a plug, parking garages, whatever, and either get green electricity from the grid or if your computer says sell 'cause the price is right, you can sell yours back.

So Diane, these five pillars together is a -- they are a new technology platform. They're the infrastructure we keep talking about in America. We keep saying we need infrastructure, infrastructure. But the key is not to mend the old 20th Century infrastructure alone because those energies and technologies are pretty well exhausted, but to create the new infrastructure for a 21st Century third industrial revolution.

What happens to nuclear power in all of this?

I've been advising the EU for a long time and the chancellor of Germany -- after Fukushima, I got a call from the chancellor's office saying would I join Chancellor Merkel in September to talk about how we grow a sustainable economy in the 21st Century. And Germany is certainly leading in all these five pillars.

I think nuclear's -- it's really over.  I think Fukushima was just the last point of departure. I notice that this week Siemens, the great German company, announced they're out of nuclear power.

Let me give you the business reason why it's over. And people can argue about the ideological reasons. Nuclear was dead until the 19 -- in the 1980s because of Three Mile Island and Chernobyl. It's come back in the 1990s, was at -- least nuclear is clean. It doesn't emit CO2.  It can play a role in averting climate change. That was the whole rationale for its comeback.

(1), The problem is this. There's about 400 nuclear power plants in the world. They're very old. They only make up 6 percent of our energy mix, that's all. But our scientific community says to have a minimum impact on climate change, minimum, you'd have to have 20 percent nuclear in the mix of energy. That means you'd have to have 4,000 nuclear power plants. That means you have to replace the existing 400 and build three nuclear power plants every 30 days for the next 60 years. That's not going to happen.

(2),  the second problem is we simply don't know how to get rid of the nuclear waste.  I'm not going to spend a lot of time on it, but we spent $8 billion to build that failsafe vault at Yuka Mountain to put the nuclear material in. We can't open it up because it's already leaking.  

(3),  Number three, uranium costs go up right now with the existing power plants. We could recycle the uranium to plutonium like the French want to do, but then we've got problems with security issues around the world.

(4),  And here's the final thing your listeners should know. We don't have the water.  Forty percent of all the water consumed in France last year went to cooling nuclear reactors.  And when it comes back, the water's heated and it's dehydrating eco systems for agriculture.  So from a business point of view, I'd be surprised if we build more than 50 nuclear power plants. I think the old ones are going to go. I just don't think it's part of the equation.

All right. So in the midst of all this planning for the future you have oil companies and gas companies pushing for new exploration. What do you say to them?

It's kind of sad. In the opening chapter of the "Third Industrial Revolution" I quote a petroleum institute study because, you know, former vice-presidential candidate Sarah Palin and others are saying drill, drill, drill as if that's going to get us out of the crisis.

the petroleum institute did a study and showed that if we opened up every potential oil reservoir that we have, the Arctic, the Gulf of Mexico, the Rocky Mountains, the east and west coast to complete drilling, and this is the petroleum institute that represents the industry, we might be able to get 10 percent more oil out of the ground. That's infinitesimal in 20 years from now in a global aggregated market. So...

And what about gas fracking?

Gas fracking is problematic, too. Of course, remember, there's CO2 emissions there.  Secondly, there is a lot of potential gas, but the environmental consequences are potentially enormous.  That's why France, which is very, very fastidious about its power, has outlawed fracking already. And there's a big global discussion going with it.

You know, Diane, there's lots of other fossil fuels.  We have tar sands from Canada. And the government here in Washington has to decide whether that pipeline should send that tar sand down to Houston. We have heavy oil in Venezuela.  We have coal deposits around the world, but they're dirtier. They emit more CO2. They bring us into climate change even quicker. So we're trapped.

On the one hand, we have a dying fossil fuel second industrial revolution. And every time we try to re-grow it, it's going to collapse because of the price of oil.  On the other hand, we have the entropy bill for the industrial aid, the CO2 we put into the atmosphere, which is now affecting agriculture and infrastructure.  So we're stuck with this, but we have to find a way to make sure the old system doesn't collapse, keep it on life support. But we have to vest our funds, our knowhow, our talent into laying down this five-pillar infrastructure for a third industrial revolution to grow millions of jobs, create a new business model and make it sustainable.

But you've got lobbyists, members of congress all locked in to that second industrial revolution with fossil fuels as its basis.

That's true and the energy industry's a very powerful lobby in Washington. They received, even today in their sunset period, they're receiving tens of billions of dollars of subsidies every year. But you know what? I think we have a more powerful lobby here, not in the traditional sense.  But when you take a look at these five pillars the industries that are represented are pretty impressive. It's the renewable energy industry. But the construction industry, the real estate industry, the IT industry, the logistics and transport industries.

And so when we begin to look at the possibilities of taking a stagnant American economy and laying down this new infrastructure, we're talking about thousands of new businesses and millions of new jobs to lay down the infrastructure itself. And it starts immediately. As soon as you commit yourself to this revolution in each city, in each state and begin to create public private partnerships to do this, the jobs start right away at day one.

So we hear President Obama talking about the prospect of a green economy and how it could create new business and jobs. So why are you critical of his efforts?

we looked at him as a transitional president to a new generation, the internet president. And he said the worst thing is losing his Blackberry. So I assumed when he came into office that he would understand the potential of joining internet communication to organize distributed renewable energy.

The problem with the Obama Administration is not the will. They do want to have a green economy. And to be fair, this administration has spent billions and billions of dollars in introducing various technologies and initiatives. But he doesn't have a narrative. He doesn't have a game plan. There isn't a coherent cohesive roadmap on how you do this.

So when he introduces his green economy, it's all a hodgepodge of individual projects that seemingly don't tie in, a battery factory over here, an electric car over here, a solar factory over there. And what he hasn't done is put these disparate parts into a comprehensive story that tells us about a third industrial revolution. He doesn't have these five pillars. And if you don't put them together, Diane, you can't create the new economic paradigm we're talking about.

If you've been meeting with Angela Merkel, why haven't you met with President Obama?

Well, that's a good question. In the book, there's a little chapter there in my discussions early on with some members of the congress over the years. And certainly they're aware of what we're doing in the European Union. But it hasn't blown back here in any significant way. But I think it's going to open up really in a major way in the next 24 months. You're going to see developments in Texas, California's already moving along, and northeast and other parts of the country.

Let me give you one example. When we first introduced this into Europe, the power and utility companies weren't very thrilled because they're kind of attached to the big energy companies. And they're saying, well, wait a minute. We're going to have to give up controlling energy and sell less electrons? This doesn't make sense. Then we began to introduce a new business model to the power and utility companies on how they make more money in shifting to this third industrial revolution.

I said, get used to it. In the future, millions of people in homes, offices and factories are going to produce their own energy. The new technology, solar, wind, geothermal, they're getting cheaper and cheaper. And they're going to follow the same line that the cell phones and computers did, going from very expensive to so cheap you can give them away. And once that technology becomes cheaper and cheaper to collect the energies -- the energies themselves are free, Diane. It's the wind, the sun, the heat under your ground, the garbage you collect, so in the future, millions of people are going to really provide their own energy.

What's the role of the utility companies? They'll be able to run the energy internets, 'cause that's technical. And the way they're going to make money is they're going to do the IBM shuffle.  You remember IBM was in trouble in the '90s. They were making no money selling computers.  So they decided that they had to rethink their business. And they came up with the idea that their real business is managing information.  So now every company in the world has a chief information officer.

The power and utility companies' new business is to set up relationships with thousands of corporate clients and homeowners to manage their energy flows, to keep their energy costs down and their productivity up. And here's the key for anyone in the business community listening to this. The key to survival in the next 30 years is not labor costs, it's energy costs to the extent that any business can keep its energy costs low, its productivity high and its margins there it survives. And the utility company can share those savings with the companies.

Diane, I think there's a generational problem here. The old guard in the business community, they think centralize, they think top down. The young generation in the business community and in the public thinks distributive and collaborative and lateral.  The music companies, they didn't understand distributed file sharing of music. They didn't understand it and then they went down in five years. They just tumbled. And the newspapers didn't understand the distributed computing power of a blogosphere. And now newspapers are hurriedly trying to create blogs.

But when the internet connects with energies and we create a democratization of energy, it's 100 times more powerful. Because then it means we begin to create all sorts of new business models and new ways of relating to each other.

The key is, how you get the loans. How do you finance getting a $30,000 photovoltaic on your roof? The way they do it in Europe is green loans. It's now starting in Italy and Germany. Now Italy has its problems with bureaucracy, so listen to this one, Diane. There are companies in Italy who have lined up the big national banks. You, a homeowner, can go and get a green loan. You sign a paper.

Sixty days later, the photovoltaic power plant's on your roof. Sixty days later. And the reason the banks are willing to finance this, because of the feed-in tariff, they know you're gonna save electricity on your bill and you're going to be able to pay as you say. And so they automatically know you're a good risk. In Germany they're starting green loans. In North America, only Ontario has the feed-in tariff.

Obama to Open Offshore Areas to Oil Drilling for First Time

March 30, 2010, NYtimes

By JOHN M. BRODER

WASHINGTON — The Obama administration is proposing to open vast expanses of water along the Atlantic coastline, the eastern Gulf of Mexico and the north coast of Alaska to oil and natural gas drilling, much of it for the first time, officials said Tuesday.

The proposal — a compromise that will please oil companies and domestic drilling advocates but anger some residents of affected states and many environmental organizations — would end a longstanding moratorium on oil exploration along the East Coast from the northern tip of Delaware to the central coast of Florida, covering 167 million acres of ocean.

Under the plan, the coastline from New Jersey northward would remain closed to all oil and gas activity. So would the Pacific Coast, from Mexico to the Canadian border.

The environmentally sensitive Bristol Bay in southwestern Alaska would be protected and no drilling would be allowed under the plan, officials said. But large tracts in the Chukchi Sea and Beaufort Sea in the Arctic Ocean north of Alaska — nearly 130 million acres — would be eligible for exploration and drilling after extensive studies.

The proposal is to be announced by President Obama and Interior Secretary Ken Salazar at Andrews Air Force Base in Maryland on Wednesday, but administration officials agreed to preview the details on the condition that they not be identified.

The proposal is intended to (1) reduce dependence on oil imports, (2) generate revenue from the sale of offshore leases and (3) help win political support for comprehensive energy and climate legislation.

But while Mr. Obama has staked out middle ground on other environmental matters — supporting nuclear power, for example — the sheer breadth of the offshore drilling decision will take some of his supporters aback. And it is no sure thing that it will win support for a climate bill from undecided senators close to the oil industry, like Lisa Murkowski, Republican of Alaska, or Mary L. Landrieu, Democrat of Louisiana.

The Senate is expected to take up a climate bill in the next few weeks — the last chance to enact such legislation before midterm election concerns take over. Mr. Obama and his allies in the Senate have already made significant concessions on coal and nuclear power to try to win votes from Republicans and moderate Democrats. The new plan now grants one of the biggest items on the oil industry’s wish list — access to vast areas of the Outer Continental Shelf for drilling.

But even as Mr. Obama curries favors with pro-drilling interests, he risks a backlash from some coastal governors, senators and environmental advocates, who say that the relatively small amounts of oil to be gained in the offshore areas are not worth the environmental risks.

The Obama administration’s plan adopts some drilling proposals floated by President George W. Bush near the end of his tenure, including opening much of the Atlantic and Arctic Coasts. Those proposals were challenged in court on environmental grounds and set aside by President Obama shortly after he took office.

Unlike the Bush plan, however, Mr. Obama’s proposal would put Bristol Bay, home to major Alaskan commercial fisheries and populations of endangered whales, off limits to oil rigs.

Actual drilling in much of the newly opened areas, if it takes place, would not begin for years.

Mr. Obama said several times during his presidential campaign that he supported expanded offshore drilling. He noted in his State of the Union address in January that weaning the country from imported oil would require “tough decisions about opening new offshore areas for oil and gas development.”

Perhaps in anticipation of controversy, the new policy has been closely held within the administration. White House and Interior Department officials began briefing members of Congress and local officials in affected states late Tuesday.

It is not known how much potential fuel lies in the areas opened to exploration, although according to Interior Department estimates there could be as much as a three-year supply of recoverable oil and more than two years’ worth of natural gas, at current rates of consumption. But those estimates are based on seismic data that is, in some cases, more than 30 years old.

The first lease sale off the coast of Virginia could occur as early as next year in a triangular tract 50 miles off the coast that had already been approved for development but was held up by a court challenge and additional Interior Department review, officials said.

But as a result of the Obama decision, the Interior Department will spend several years conducting geologic and environmental studies along the rest of the southern and central Atlantic Seaboard. If a tract is deemed suitable for development, it is listed for sale in a competitive bidding system. The next lease sales — if any are authorized by the Interior Department — would not be held before 2012.

The eastern Gulf of Mexico tract that would be offered for lease is adjacent to an area that already contains thousands of wells and hundreds of drilling platforms. The eastern Gulf area is believed to contain as much as 3.5 billion barrels of oil and 17 trillion cubic feet of gas, the richest single tract that would be open to drilling under the Obama plan.

Drilling there has been strongly opposed by officials from both political parties in Alabama and Florida who fear damage to coastlines, fisheries, popular beaches and wildlife. Interior Department officials said no wells would be allowed within 125 miles of the Florida and Alabama coasts, making them invisible from shore.

The Interior Department and the Pentagon are discussing possible restrictions on oil and gas operations in some areas off Virginia and Florida, home to some of the nation’s biggest Navy and Air Force facilities. States are also likely to claim rights to the revenues from oil and gas deposits within 3 to 12 miles of shore and to some portion of lease proceeds, officials said.

Mr. Salazar developed the offshore drilling plan after conducting four public meetings over the past year in Alaska, California, Louisiana and New Jersey. The Interior Department received more than 500,000 public comments on the issue.

Mr. Salazar has said that he hoped to rebalance the nation’s oil and gas policy to find a middle ground between the “drill here drill now” advocacy of many oil industry advocates and the preservationist impulse to block oil exploration beneath virtually all public lands and waters.

He has called the offshore drilling plan a new chapter in the nation’s search for a comprehensive energy policy that can open new areas to oil and gas development “in the right way and in the right places,” according to an aide.

In many of the newly opened areas, drilling would begin only after the completion of geologic studies, environmental impact statements, court challenges and public lease sales. Much of the oil and gas may not be recoverable at current prices and may be prohibitively expensive even if oil prices spike as they did in the summer of 2008.

At the Wednesday event, Mr. Obama is also expected to announce two other initiatives to reduce oil imports, an agreement between the Pentagon and the Agriculture Department (1) to use more biofuels in military vehicles and (2) the purchase of thousands of hybrid vehicles for the federal motor pool.

U.S. nuclear revival gathers pace; Federal loan guarantees aim to prod skeptical firms to build reactors

U.S. nuclear revival gathers pace; Federal loan guarantees aim to prod skeptical firms to build reactors The International Herald Tribune December 24, 2009 Thursday

December 24, 2009 Thursday
MATTHEW L. WALD

ABSTRACT

Thirty years after the American nuclear industry abandoned scores of half-built plants because of soaring costs and operating problems, the pendulum may be swinging back as the country moves toward reining in carbon dioxide emissions linked to global warming.

FULL TEXT

When experts on the U.S. power grid asked themselves recently what a cleaner energy future might look like, seven of eight regional councils imagined how their systems would work with 10 percent wind power.

Only one, representing the southeastern United States, chose a radically different option: doubling nuclear power capacity.

Thirty years after the American nuclear industry abandoned scores of half-built plants because of soaring costs and operating problems like the Three Mile Island meltdown, skepticism persists that the technology is worth investing in.

Yet the pendulum may be swinging back. The 104 plants now running have sharply raised their capacity, emboldening utilities across the country to make a case for building new ones.

And the industry is about to get a big boost. In the next few days, the U.S. Department of Energy is to announce the first of $18.5 billion in loan guarantees for building new reactors.

The guarantees were authorized by a bill passed by Congress in 2005. It took four years for the Department of Energy to set up a system to evaluate applications.

The money will flow amid a credit crunch and intense jockeying among the nation's wind, solar, geothermal and nuclear sectors. Each is trying to cast itself as an ideal ''clean'' energy option as the United States moves toward reining in the carbon dioxide emissions linked to climate change.

All of these sources could potentially benefit under a cap-and-trade system that is being considered in Congress as part of climate change legislation. Such a system would set a ceiling on carbon dioxide emissions and allow trading of pollution permits, handicapping the carbon-intensive coal and natural gas sectors.

Historically, Republicans have been more enthusiastic about nuclear power than Democrats have. So as the climate bill winds its way through the Senate, some Democratic members are seeking to add new help for the nuclear industry, including more loan guarantees, to attract enough votes.

Some of the foremost congressional climate change campaigners are unenthusiastic.

Representative Edward Markey, a Massachusetts Democrat who has hounded the nuclear industry for decades over safety questions and cosponsored the House bill, does not favor direct aid to the nuclear industry. He argues that a cap-and-trade system would give the nuclear sector the only lift it deserves.

If that system comes into effect, he said, nuclear power ''will be able to compete more effectively in a new marketplace. How effectively they can compete is going to be the question.''

Others see combining a cap-and-trade system with a nuclear aid package as a sensible tactic to get Congress to address environmental problems.

''One can argue it certainly is bringing about an unusual marriage of interests here,'' said Philip R. Sharp, an Indiana Democrat who served in the House of Representatives from 1975 to 1995 and led a House committee overseeing the electric system.

''It is one of the potential paths for actually getting real action and real legislation, '' said Mr. Sharp, who now heads the nonpartisan group Resources for the Future.

Economic issues have helped scramble alliances on the state and local level, too. Because new reactors create so many jobs and big tax receipts, the Democratic governors of Maryland and Ohio are working hard to get them built in their states.

State legislatures from Louisiana to South Dakota and local governments from Port Gibson, Mississippi, to Oswego, New York, are also on record favoring new reactors.

Peter A. Bradford, a former member of the Nuclear Regulatory Commission who is now vice chairman of the Union of Concerned Scientists, questions the wisdom of direct aid to the industry.

Unlike cap and trade, in which industries buy and sell the right to emit in a market-oriented system, he said, the loan guarantees finance projects that the private sector deems too risky.

The government would be ''picking some winners and bestowing a lot of taxpayer support on them,'' he said.

By Mr. Bradford's count, of 28 reactors that the Nuclear Regulatory Commission now lists as planned, half have had major delays or major increases in estimated cost or have been canceled.

If new plants built with government guarantees prove a commercial success, the program costs taxpayers nothing; if they prove too expensive to finish or are completed but cannot earn enough to repay the loans, the taxpayer is on the hook.

Complicating the challenge, the forthcoming loan guarantees amount to only $18.5 billion, and the nuclear industry says it needs tens of billions more.

Steven Chu, the U.S. secretary of energy, acknowledged that the sum was small. He said it could finance at most perhaps one plant per each new reactor design, making it hard to determine which design is most viable.

''If I were a power company, maybe one of each would not be helpful,'' he said. He suggested that the nuclear industry would need to build two or three of each.

But Dr. Chu insists that nuclear power will be an important piece of any climate solution.

''We have a dormant nuclear industry,'' he said. ''We have to start it up in a way that gives the people who are going to make investments the confidence that this is economically viable.''

Mindful of the challenges posed by climate change, some environmentalists are cautiously evaluating their positions on nuclear power.

''There is an increasing number of people who have spent their lives as environmental advocates who believe that carbon is such an urgent problem that they have to rethink their skepticism about nuclear power,'' said Jonathan Lash, the president of the World Resources Institute, who puts himself in that category.

''But there are many people who are passionate environmentalists who are also passionate opponents of nuclear power, and remain so,'' he said.

LOAD-DATE: December 23, 2009

Deal Suggests Bright Solar Future In China

January 15, 2010

This is SCIENCE FRIDAY from NPR News. I’m Ira Flatow.

The Chinese government has promised that by 2020, 15 percent of its energy will come from renewable sources. And to that end, China announced one of the biggest, if not the biggest, solar project in history last week. A solar thermal start up called eSolar from Pasadena landed a contract to build a 2000- megawatt solar thermal complex in China. China will spend five to $6 billion for the project. It sounds like a lot. But my next guest says it’s just a drop in the bucket of - on what China will spend or likely spend over the next few years on renewable energy.

My guest is Bill Gross. He's CEO of eSolar, Incorporated in Pasadena. Thanks for being with us today, Bill.

Mr. BILL GROSS (CEO, eSolar): Thank you very much for having me.

FLATOW: How did you land this deal?

Mr. GROSS: Well, we built a power plant here in Southern California, in Lancaster, California about a year ago. And China started looking aggressively around the world for technology they could bring to China that would be the most cost effective. And they looked at technology from the United States. I think they looked at technology from Israel, from Spain, from all over. They chose this technology because it’s very scalable. It’s very cost effective, and it has the potential to compete with fossil fuels with no subsidies, eventually. And that’s really the endgame, to try and make solar energy actually less expensive than traditional fossil-based energy.

FLATOW: And the plant will be built in China, with Chinese workers.

Mr. GROSS: Absolutely. Well, the great thing about solar projects is they create jobs wherever they’re built. So if you build plants in California, you make jobs here. You build plants in New Mexico, you make jobs there. We’re working on some plants in New Mexico right now.

FLATOW: Mm-hmm.

Mr. GROSS: You build plants in China, you make local jobs. All the plants have to build with local (chinese) labor.

FLATOW: But what I understand about this project is that the control of the solar panels will come from California.

Mr. GROSS: Yes. A unique part of eSolar's solution is that we use a software system to control all the many thousands of mirrors that are tracking the sun, that concentrate the sunlight, and we control that entirely remotely from our headquarters here in Pasadena. We put a lot of effort into making this software solution so we could control plants around the world remotely. And that way, we’ll still be making jobs even here in California for plants all over the world.

FLATOW: What’s interesting about this idea is that the Chinese are going into this knowing that the solar panels, because they don’t have enough sun all the time, will have to be augmented with something else. Right?

Mr. GROSS: Yes. Well, the main problem with all forms of renewable energy to date has been that you only get the energy when the wind blows or when the sun shines.

FLATOW: Right.

Mr. GROSS: And that means you can make sun - you know, make electricity, say, 25 percent of the day, but what about nighttime? What about cloudy days? So far, our energy needs are so great that any contribution from solar is beneficial. But in China, they’re thinking ahead to trying to make dispatchable renewable power that can give round-the-clock energy. So this unique plant that we’re building is a combination of solar, hybrid, biomass plant. So when the sun is not shining, we’ll be burning some, well, wood-husk or some other nonfood remnant biomass to produce the energy to turn the turbine that the sunlight will provide during the day. In that way, we can produce electricity round the clock from a renewable resource.

FLATOW: You know, there was a lot of excitement in California about building these same kind of solar plants in the Mojave Desert, and then these things sort of fell by the wayside because of environmental concerns.

Mr. GROSS: Definitely, if you’re going to build plants where there's good sunshine, the Pristine Desert is a great location. The problem is you impact lots of natural habitat for many different animals. We have chosen different path. We have made our plants smaller, so we don’t need tens of thousands or, you know, hundreds or square miles. We only need 200 acres. We’ve made our plant small enough to be modular(ph) - 200-acre size. And we locate them right – closer to population centers, on private land, already disturbed land, land that has already been farmed or used for something else, so there is no natural habitat to disturb.

And that is our technique and that is a way that I think we can actually build large-scale solar in California and still respect some of the pristine desert and natural habitat we have here in California.

FLATOW: Do you have enough land like that, to try to…

Mr. GROSS: Oh, there’s absolutely enough land like that. Just in the Lancaster, Antelope Valley, there are many, many square miles of private farmland that can be repurposed for this. We can actually power the entire State of California with a square only 23 miles by 23 miles. And it doesn’t have to be all in one spot, so you can break that up and put it all over the Central Valley, or anywhere in California. So there's easily enough land to power not only all of California, but the whole United States, just from California.

FLATOW: But you - it seems like you can do that in China very quickly and it would take who-knows-what to do that in California.

Mr. GROSS: Yeah. Well, it is faster to get things done in China right now. And that’s one thing that I think we should do in the United States, is maybe streamline some of the permitting for renewable energy plants. As one example, you have to go through the entire environmental impact report, study for emissions for a solar power plant, even though there are no emissions. And maybe we need to adjust the rules a little bit so that if there are no emissions, you don’t have to do that stage. That would be an example of some aspect of bureaucracy that I hope we can approve. But I think that’s going to happen. I think that as the price comes down - because I think people are more concerned about price than they are about that - I think we'll be able to speed up the deployment of solar throughout the United States.

FLATOW: And so you think there are enough areas outside of California and in other states where there…

Mr. GROSS: Oh, easily. To power - again, just to give you an example…

FLATOW: Yeah.

Mr. GROSS: …to power the whole country, the entire United States, all of its electricity needs, 91 miles by 91 miles. So you could find patches of land in California, Arizona, New Mexico, Texas. Basically, I’m just using the South West states…

FLATOW: Yeah.

Mr. GROSS: …but you could go everywhere, easily power the whole country with sunshine, taking a negligible, negligible percentage of the total land.

FLATOW: But do we have a grid that could hook all this together?

Mr. GROSS: We would have to build a super grid if we want to power New Hampshire from Texas.

FLATOW: Right.

Mr. GROSS: But to power the South West with the South West, very easy.

FLATOW: And you could find some place in New Hampshire for their own.

Mr. GROSS: Yes.

(Soundbite of laughter)

FLATOW: Or use the offshore area…

Mr. GROSS: Exactly.

FLATOW: …floating, or something like that.

Mr. GROSS: There definitely is renewable energy very widely distributed around the planet. Of all of the natural resources that are on the planet you think of, we have to go get copper from certain mines somewhere. We get diamonds from another place, they're all are very concentrated. Solar energy and wind energy, they're the most distributed national resource on the whole planet. It’s everywhere. So maybe Antarctica, you’re not going to build the solar plant. But other than that, you're going to build solar just about everywhere. So there really is a potential to build it close to the population centers, close to the people who want to use the energy.

FLATOW: But if you talk to people who believe in nuclear power, they’ll say, well, you can’t get - you know, you can’t build enough of them - or quickly enough, that nuclear is the way to go.

Mr. GROSS: Well, I think nuclear should be part of the solution, but I do agree you can’t build enough. I’ll give you some specific example on that. If we want to make up the multi-terawatt gap that the planet is going to need over the next 30 years, you pretty much would need to build a one-gigawatt nuclear power plant every other day for the next 30 years. And it typically takes about seven years to permit a nuclear plant. So you’re not going to build one every other day for the next 30 years. It doesn’t mean you shouldn't build as many as you can, because it is completely emission-free if you can make it safe enough. It’s absolutely a great way to contribute to the problem of needing enough energy to power the planet, but it’s not going to do it alone.

FLATOW: Could you build, let’s say, solar plants in that time, seven years, how many - could you get everything up and running much shorter than that?

Mr. GROSS: I believe you could scale solar plants faster because the only materials needed are steel and glass and steam turbines. And you need steam turbines for any kind of plant you make, so those are already made on a large enough scale, GE, Siemens, Alstom, all the big companies who make turbines for existing power plants can also be run off of solar steam. Basically, the only difference is the fuel. Do you make the steam from the sun, or do you make the steam from coal? That’s the only change. So there are enough turbines. There is enough steel and glass to go around. You don’t need to use any uranium. You don’t need to have any of the safety issues around a nuclear power plant. So you can scale it faster.

FLATOW: Well, can you get any of the money that the government's trying to pump back into the - you know, the federal money that’s out there?

Mr. GROSS: Oh, absolutely. There is a lot of incentive for all forms of renewables. There's a 30 percent investment tax credit now for solar plants and wind plants for the next seven years. There are other low-interest loan guarantees from the DOE.

FLATOW: What about – what I’m asking is about the stimulus money. We still have a lot of that in the bank, don’t we?

Mr. GROSS: Yeah. Well, lot of that has not been given out yet.

FLATOW: Yeah.

Mr. GROSS: And I would love to see that get deployed this year. I think the goal is to deploy that this year. I think that will create a lot of jobs and a lot of traction in the renewable space as that gets deployed.

FLATOW: And that's what Eisenhower, President Eisenhower did with the, you know, interstate highway system after World War II. Why can't we create an interstate solar system?

Mr. GROSS: Absolutely. Well, I would love to see those funds help accelerate this, but my real dream for this is solar energy should compete on an absolutely level playing field with fossil fuels.

FLATOW: And you think it can?

Mr. GROSS: I absolutely think it can. The sunshine is so strong, especially in California, that you can make solar electricity for as cheap as you can make natural-gas-fire electricity - in time, and that’s the way it should be. People should not have to pay more for renewable energy. The only stimulus should be to get these projects started so that we can get to scale so we can actually compete on a level playing field.

FLATOW: And considering the state that California is in, you'd think that people would want these things.

Mr. GROSS: Oh, I think people do. I think people do. I think the economy, the economic challenge right now just makes it harder to get the financing to build these things, but that's going to change, and these things are going to get built at very large scale.

FLATOW: And you think the same thing might be happening in the rest of the states.

Mr. GROSS: Definitely, the rest of the states and the rest of the world. I actually think the rest of the world is moving very quickly on this. Hopefully as the various countries get together and set some targets, the whole world will move quickly. But even China is moving very, very fast. I mean, from this - you think of China as not necessarily at the forefront of renewable energy, and yet they are very aggressive on this, and then of course, in all of Europe, and especially in Southern Europe, the Mediterranean, there's great ambition to get completely on renewable energy.

FLATOW: Well, China's making all our light bulbs now. Are they going to be making all of our solar panels?

Mr. GROSS: Well, I don't think they'll be making all our solar panels, but I do think they're going to help drive the industry along to help drive the price down for everybody.

FLATOW: And can we create our own industry here without having to go to China?

Mr. GROSS: Absolutely. Well, we feel we're proving that. Here we are in California. We're using lots of engineering resources from Southern California, from the aerospace firms, from JPL, from Cal Tech. We put together a great team of people. There's a lot of ingenuity in California.

California is a great place for innovation. I don't think this new technology could've been maybe invented anywhere else except California, and I think we can be a great exporter of this to the whole rest of the planet.

FLATOW: And how soon will the system in China be finished?

Mr. GROSS: Well, we finished our plant here in California last year. We're beginning construction on the first 92 megawatts in China later this year, and they'll be coming online in the ensuing years after that. Over 10 years, we'll be building out to full two gigawatts.

FLATOW: And are those two gigawatts going to be distributed in different places, not in one spot?

Mr. GROSS: Yes, they'll be in different places.

FLATOW: That's why you don't need that giant piece of real estate.

Mr. GROSS: Exactly. You want to build the power closer to where the consumers of the electricity will be so you have less transmission losses. You also have some benefits in security by having it distributed, by not having it all in one location.

FLATOW: Any fear that the Chinese may not, you know, cooperate with the software, that they might be trying to sneak into your software where you're controlling it, in California?

Mr. GROSS: I don't believe that we'll have a problem with that. We have very good protection on that front. But also, it's not their expertise. I really feel their expertise is in the rollout construction, the labor force required to build the plants. We feel that our core expertise is the control of the power plant, the manipulation of the mirrors and the ongoing software improvements there.

FLATOW: All right, Bill, good luck to you.

Mr. GROSS: Thank you very much.

FLATOW: Thanks for taking time to be with us today.

Mr. GROSS: My pleasure.

FLATOW: Bill Gross is the CEO of eSolar Incorporated in Pasadena, California. We're going to take a short break and switch gears and talk about race. Census is coming up this year. They're going to be asking you about race on there. Just what do we mean by race? Is it the wrong question? Is it useful? Is it useful in medicine? We'll talk about it, take your calls, 1-800-989-8255. Stay with us.

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Publish Post

FLATOW: I'm Ira Flatow. This is SCIENCE FRIDAY from NPR News.