WABASH, INDIANA – Off the Southwestern coast of Norway in the North Sea, there is a tiny dot of an island called Utsira. In 2004, the community there initiated a project resulting in something that plausibly looks like sustainable energy self-sufficiency. At that time, Norsk Hydro built a power plant that runs on a combination of wind, an abundant resource in the North Sea, and hydrogen. Wind, captured by two 600-kilowatt wind turbines, is now a primary source of energy for 10 residences on the sparsely-populated island; and when the wind provides excess capacity, that capacity is used to generate clean-burning hydrogen by electrolysis, which can then be stored in fuel cells and used when the wind dies down.
In Curitiba, Brazil, beginning in the 1970s, local leaders implemented several key changes that, over the last 30 years, have resulted in a greener, less oil-dependent city. They created an inexpensive, financially self-sustaining integrated rapid bus transport system, with routes along corridors of growth projected in accordance with the city’s master urban plan, while simultaneously restricting car traffic in certain areas of downtown and discouraging car-oriented new development. Buses on the system run one per minute at key stops during rush hour – at least as often many municipal subway systems — and the system’s bus stations are connected to nearly 100 miles of minibus routes and bike paths for easy access by outlying passengers. The result has been that, despite an unusually high level of car ownership among cities in Brazil, people in Curitiba now use their cars less. Two-thirds of all trips into the city are made by bus; and car traffic in the city has declined by 30% percent since 1974, at the same time that the population in Curitiba has doubled. By using existing buses and existing infrastructure, Curitiba managed to transform its citizens’ transportation habits at 1/80th of the cost of the construction of a light rail system, and it is estimated that the reduction in car traffic saves over 7 million gallons of gasoline per year. And, the best part is that the ten participating bus companies are privately-owned, and they operate at a profit.
In Congress, even as we speak, lawmakers are debating the merits of a Senate energy bill that would give some money to some companies doing research on efficient batteries and hybrid automobile technology; raise some fuel efficiency standards for new cars; and increase the production of ethanol for motor fuels by seven times the amount that was processed last year. Provisions that didn’t make it into the new bill included a requirement that utility companies produce at least 15% of their electricity from wind, biomass or other renewables, and a tax hike on oil and gas producers.
Setting aside the inherent inefficiencies of corn-based ethanol as a substitute for gasoline – it takes 29% more fossil energy to turn corn into ethanol than the amount of energy the process ultimately produces – the production of ethanol is a competing use for corn that will always, inevitably, be in constant conflict with the uses of corn as food. That fact makes President Bush’s call for the production of 35 billion gallons of ethanol by 2017, a level that would account for 100% of today’s domestic corn crop, just about impossible. If we think we’re worried about oil prices today, wait until we would have to worry about the fast-rising price of food staples that contain corn products, including frozen orange juice, instant coffee and most breakfast cereals.
So, instead of transformative plans such as those we see in Utsira and Curitiba, Congress is preparing to give us a few little tweaks at 50,000 feet above the problem, and a set of grand yet unworkable solutions. I don’t think our lawmakers do so with a harsh cast of mind, however. I would prefer to believe that our lawmakers are simply at a loss for ideas. I would prefer to believe that the problem in Washington is one of exasperated resignation, rather than a veiled conspiracy to keep petroleum companies fat and happy. I would prefer to believe that no one in a position of doing something about our collective fate could be that malicious. Short-sighted, maybe.
In that regard, however, our lawmakers have been no more short-sighted than the international auto, aerospace, oil and manufacturing industries. To the extent that such industries have publicly recognized the necessity for energy independence they have reacted slowly, if at all, in response. One can hardly blame them either, however – the commodity markets have remained relatively stable, or at least financially bearable; people are still buying the product; and everyone is still making money. There is no reason why anyone would change a thing. When you’re playing poker, and the pot has gotten so big and everyone’s having such a good time, why on earth would you want to stop and switch to playing Blackjack?
Except in this case, you know, for the obvious, albeit attenuated, reasons … even if you don’t believe in peak oil theory, there’s the global demand for oil, especially in the emerging industrial nations, that is outpacing supply, potentially driving prices toward the point where no economy is sustainable; there’s the increasingly life-threatening effects of fossil-fuel-burning on our atmosphere; and there’s a constant kink in the sacroiliac of American diplomacy, a pelvic tilt that causes us to lurch spastically toward the Middle East and its rich petroleum reserves with our every oil-thirsty step on the world stage … Today, oil prices are hovering around $73 per barrel, and Iran is announcing that it will break international custom and now ask the Japanese pay for its oil using Japanese yen instead of the American dollar. Energy independence is a lynchpin issue like no other.
I love capitalism. Its constant whir and hum is, at its best, the essential soundtrack for all that is good about the American ideal: hard work, dexterity, cleverness, good service, pride of craft, savvy, moxie, chutzpah, etc. But, at the risk of alienating my good libertarian friends, I have to break it you: capitalism occasionally needs a swift kick in the ass.
Don’t tell me you didn’t notice how American capitalism was beginning to grow stale when World War II came along, and the government’s preparedness program injected new life into American industry. When we came out the other end of a period of the most extreme government intervention into the machinery of capitalism America had ever experienced, we were a new nation, in which war-time technologies were turned loose on an optimistic post-War populace, and we were all left to dream about driving our flying cars and our jet-packs to work every morning. We still don’t have flying cars or jet-packs, but I dare say we wouldn’t have even dreamed of them with any sense of conviction were it not for federally-funded wartime innovation.
Time for a new dream, and a swift kick in the ass of capitalism.
Saving the world from the rise of Fascism was, appropriately, a national effort with a national focus, but pretending that we can “do a Manhattan Project” with the problem of energy independence simply by throwing hundreds of millions of dollars around laboratory workbenches is the wrong way of looking at the problem at hand. If you live here in semi-rural Indiana, you use energy differently than you do if you live in San Francisco; you use it differently during the winter in Plattsburgh, New York than you do during the winter in Needles, California; a college campus has different energy needs, and potentially different energy solutions, from a Coca-Cola bottling plant or a residential subdivision in the suburbs of St. Louis; and the local “found” energy resources available to people living in Chandler, Arizona are substantially different from those available to people living in Marietta, Ohio. What works in Utsira or Curitiba won’t necessarily work in Buffalo or Peoria. There is no “one size fits all” solution to our energy quandary, and Washington has to stop pretending that there is one.
Taking my cue from the locally-devised and implemented solutions of Utsira and Curitiba, I would propose a federally-funded Energy Innovation Model City program – a modest step towards implementing new and existing technologies in the real life laboratory of up to fifteen model cities, handpicked from among American cities with populations under 100,000. Each city chosen for the program would be provided with a budget of federal funds, to be matched dollar-for-dollar by local private funds, and a mandate to form a public-private corporation to achieve two important missions: (1) an across-the-board reduction of 40% in the use of oil and gasoline within the city, and (2) a financially-sustainable model for meeting redesigned city energy capacity through the private sector, without additional federal aid.
Each corporation would be led by a proven local entrepreneur and staffed from the local brain trust, with special preference given to hiring recent engineering grads and from among the increasing class of seasoned ex-industry consultants who know their way around the practicalities of energy generation, use, storage and delivery, providing a good combination of passion and wisdom, in all. A visiting committee of local energy-using constituents would operate both as a focus group and as a repository of “answerabilty” for the progress of the corporation. Federal funds will be disbursed in stages based on the availability of matching local money as well as on the progress of local efforts, with a little bit of a competitive component, in part to keep the program visible to the rest of the nation: if Wilmington, North Carolina is outclassing Orem, Utah, for example, then Orem will need to get a move-on in order to keep receiving its funds on a timely basis. Heck, turn it into an Apprentice-style reality TV show, if you like. It might be the first time reality TV actually served some public good.
At any rate, with a combination of good business stewardship and the pressure of local, face-to-face accountability, by the end of four years we would hope to see up to fifteen models — warts and all — for profitable private sector reduction of local dependence on oil and gasoline, based on meeting local needs with locally-practical energy solutions. As a nation, we will have learned more about implementing energy solutions that have a demonstrable impact on the lives of 100,000 or so people, and with any luck we will have provided inspiration to entrepreneurs and capitalists in other regions of the nation to attack the energy quandary locally – for all the right reasons, including the almighty profit motive. We will have begun to break the problem of national energy independence down to smaller, bite-sized chunks, showing the way to use local talent and resources to chip away at a global issue.
Within the context of a program of practical local implementation, a federal policy that encourages better fuel efficiency standards in automobiles actually begins to make sense, as does a targeted, federally-funded alternative energy research program – especially one that ditches the “fuels made from food” approach in favor of encouraging synthetic biology to develop microorganisms that produce biofuels through the consumption of low-grade agricultural waste, such as the efforts that are under way at companies like SunEthanol and Amyris Biotechnologies. A highly-visible program of practical local implementation will help to focus our national research efforts on building tools that can actually be used today, instead of simply funding more blue sky research. We can create an environment of troubleshooting in which success is contagious, without turning U.S. energy policy into a lumbering, ultimately stale and fruitless entitlement program for American business.
If you sense a theme here, it is this — if we’re smart, we won’t expect Washington to wave its magic wand and legislate a panacea for the American energy quandary. Instead, we will let Washington kick capitalism in the ass and unleash the ingenuity in our own backyard to begin to make transformative changes in the way real people produce and consume energy – community by community, today.
I thank you for listening, and I’ll be seeing you along the trail.