Is the Clean Energy Revolution Under Way?

October / November 2009 Volume 7 Number 5

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The 2009 MIT Energy Conference brought together leaders in the fields of technology, policy, industry, finance and entrepreneurship to develop solutions for the energy challenges of today and tomorrow. Discussions focused on the most promising approaches to accelerating changes on the global energy landscape. With panelists and attendees representing a diverse mix of backgrounds, disciplines, and experience, the conference attracted the necessary stakeholders to develop practical, fact-based solutions to global energy challenges. A keynote speaker was Representative Jay Inslee of Washington State, a long-time advocate of clean energy, protecting the environment and addressing global warming. Excerpts from his remarks follow.

I am here to say that it is time for Congress to sweep away old ways of thinking, old laws, old statutes. I thought I would address three issues:
1. What role you can individually play in this clean-energy revolution
2. Why I believe the clean-energy revolution will succeed
3. What Congress can do to assist you in your efforts to bring this new economic revolution to America, and eventually, to the world

Let me tell you what I think you can do in this revolution. And I note that you, the students here at MIT, the venture capitalists, the business leaders who are developing these scientific new breakthroughs, are the people who are important in this revolution, not the politicians. We know we need new technology to solve this problem. We also know we have twin challenges before us that are very daunting, that hit us as two tsunamis at the same time. We have had this economic collapse at the very moment we have had this climatic collapse, and they both necessitate immediate attention. They both necessitate a revolution to grow green-collar jobs and to save the planet's atmosphere.

Why do I believe we will be successful in this regard? Harken to a son of Boston who recognized a fundamental principle of American character. On March 21, 1961, John F. Kennedy went in front of the Congress and said, "We are going to put a man on the moon in 10 years." At the time, a lot of people thought that was just a nutty thing to say. If you will recall, the Russians were killing us. Our missiles were blowing up on the launch pad. We had nothing but a rudimentary computer. We were way, way behind the curve.

John Kennedy recognized a fundamental tenet of the American character, which is that we have an energy source here that is unrivaled in Saudi Arabian oil fields, Chinese coal fields, anywhere on the planet Earth; that is the American intellect and the American engine of dynamic creativity and economic growth. As a result of his recognition, he rallied this country to this project and succeeded, and inspired people at MIT, whose graduates designed the computer control system for the Apollo Lunar landing.

Now we have the same situation facing us. And we now have another leader who is calling us to the same challenge, and I am proud to report that in Barack Obama's first Non-State of the Union Speech—€”we are still searching what to call it—€”the very first thing he mentioned is America's commitment to clean energy. And he is putting muscle and dollars and strategy and energy behind it. We have a new revolution. We have a new inspiration and we have a new cause. I think it's very applicable to the original Apollo project and we are ready to rock and roll.

How are we going to accomplish all of this? I'll just note some things that we need to do to get there. In adjusted dollars, when you compare the energy R&D budgets for the World War II Manhattan project, the Apollo moon project and our recent efforts to save the planet Earth and grow a green-collar economy, the last figure is down in the swamp of nothingness. We need to make a national commitment commensurate with the nature of this challenge. And Job One is to get that budget up to a level equivalent to the Apollo project. We are now heading in that direction, but that is Job One. Now, why do I think we're going to get there and why do I believe we are going to make these inventions? I just want to share some stories of the people I have been talking with in the last couple of weeks:

Three days ago Vinod Khosla, a big investor in clean energy research told me, "We just opened our first manufacturing plant for concentrated solar in the last two decades in Nevada. And we just made a major significant breakthrough in removing carbon dioxide from the flues of coal-fired plants and permanently sequestering the carbon dioxide in a cinder or cement-type building material like cinder block, so we do not have to have a negative geological cost for sequestration.

The next day Susan Petty of Green Lake, Wash., described to me her engineered geothermal system of pumping water down to hot rocks, turning it into hot water, bringing it up and driving a generator with that. What does she need to do this? A little geologic characterization and a pump that will work at 300 degrees in high pressure.

I just talked to a friend who is working at the A123 Systems battery company. A123 has the potential to stop America from exchanging an addiction to Saudi Arabian oil for an addiction to Chinese and Korean lithium ion batteries. I am pleased to report that we got $2 billion into the stimulus package for advanced battery research and deployment in this country, so that we can build lithium ion batteries here.

In a coffee shop on Bainbridge Island, a guy comes up to me and says, "Congressman, my name is Robert Nelson. My company is developing ways to produce chemically indistinguishable gasoline from algae at commercially viable rates using saltwater and no roof." I am always a little skeptical when people tell me these things, so I asked, "Do you have any money behind this, Robert?" "Oh yes, X millions of dollars." "Well, what's your personnel?" And he says, "Well, we just hired the chief refinery operating engineer away from British Petroleum." As of now, construction has started on their first prototype plant.
Three days ago, I read about a Seattle company that has developed a way to transport radium energy, the sun's rays, down deeper into the column of algae so you can now start growing it in at 3 feet or 3 meters rather than just a few inches.

I cannot get out of my door without meeting the fruition of intellectual genius in this country. It would be the highest shame if we do not use the current crisis to allow this intellectual ferment to blossom.

What can Congress do to help the situation? First, let's talk about the power of crisis. Some people have said that as the Dow Jones went down, so should our commitment to the future of clean energy. That is exactly backwards. The economic crisis we face is an event that should liberate America to break the chains of our own old investment practices and methods of using and wasting energy, and start anew. Why?

It is economically necessary to do this. Someone said yesterday, you see the stars best when it is dark. The economies that you, in this room represent, are the brightest stars on the job creation horizon. It would be a crime not to recognize and seize that in its highest dimension.

 An economic crisis creates the psychological conditions for change. People only change when there is a crisis. So I believe we need to seize this moment. President Obama's advisor Rahm Emanuel said it best: "You should never allow a crisis to go unused."

So in the next several months, the president and we in the House of Representatives and the Senate are going to be committed to turning this crisis into green. Not just green ecologically, but green monetarily. And I would like to talk to you about what we intend to do in that regard, the "seven samurai" of a clean energy economy.

1. Level the playing field for clean energy technologies. Right now, the game is rigged because fossil fuels are getting a free ride by using the atmosphere as their personal dumping grounds at zero cost. We have to fix the market system so that it sends the right signals to investors and purchasers of products. And that is why we intend to pass a "Cap and Invest" bill that will
—€ Cap the amount of carbon dioxide this nation puts into the atmosphere in a year.
—€ Use market mechanisms to determine who will have the rights to pollute via a system to auction those permits.
—€ Plow back, at least in significant part, the revenues from that auction into the industry so we can continue to generate capital and R&D dollars so these technologies can bloom.
Once there is a price on carbon, once clean energy recognizes that their competitor has a price associated with carbon, we will see more capital flows into this industry.

2. A renewable electrical standard and/or a feed-in tariff. Because the deck has been stacked for so long against clean energy technology, we need some demand-side pull for this technology. And we want to follow the 22 states that have adopted a renewable electrical standard with a variety of measures calling for increased measures of renewable energy in our electrical grid. The most recent bill that's been introduced is for 25 percent by 2025 by Ed Markey of Boston.

3. Improve our energy efficiency. Efficiency costs no money. It saves money, because it depends on an incredibly powerful new technology of almost infinite applicability and it's actually in my basement. It is a caulking gun, okay? If we caulk our houses, we can find megawatts of energy. McKinsey & Co. concluded that 40 percent of all the things we have to do to reach our 80 percent CO2 reduction targets involves stopping the waste of energy—€”net gains from an economic standpoint.

4. Decouple utilities. This would allow them to sell efficiency services, load-leveling services, demand management services, to try to reduce the generating requirements on the grid.

5. Adopt an efficiency standard not only for the automobile, but for utilities and for some other appliances that remain unregulated. If we do this, we will capture money that right now we are just wasting.

6. Tackle our grid system. We have a grid system that Thomas Edison would recognize: it is balkanized, it is localized, it is a wonderful machine, but it is not built for the national challenge that we have. We could never have built the federal interstate highway system by leaving it up to cities and counties. We clearly need a national response to a national problem.

7. Financing. Throughout this field we have huge, potentially productive investments without a model of financing the capital it takes to do it efficiently. And we are looking for models. Here is one idea I have. Right now the federal regulators have a rule that when they determine whether you can get a loan, they will look at some of the cost associated, but what they will not look at is your utility expenditures. So if you ask your bank for a loan to weatherize your house and reduce expenses, they will not give you any credit for that, which makes no sense whatsoever and should be changed.

My prediction is that all of the things I just mentioned have a good chance of happening this year. We do not have time to dither on this—€”we cannot delay creating the three million jobs that the economists who have evaluated this plan have determined it would create. And we do not have the luxury of ignoring America's contribution to global warming for another eight years.