Energy in America: Renewable Energy Study Guide Produced by Intellectual Takeout

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1 1 Energy in America: Renewable Energy Study Guide Produced by Intellectual Takeout The final study guide in this series examines the renewable energy industry. Many people have urgently pushed for a rapid adoption of renewables for various environmental and economic reasons. There are basically five viable forms currently expanding in the United States: solar, wind, hydroelectric, biomass, and geothermal. Each of these emerging sectors of the energy industry has shown some potential; in 2010 renewable energy accounted for almost 10% of the total energy consumption in the country. Yet there is great concern over the financial viability of these energy sources. Critics argue that these forms of energy could never replace fossil fuels, and significant government assistance will only serve to worsen America s national debt and struggling economy. Forbes highlighted this point by estimating that it would take 4.2 billion solar rooftops or 300 million wind turbines to replace the energy which Americans currently get from oil, natural gas, and coal. The rest of this study guide will briefly look at each of the main renewable energy sources. It includes charts and graphs, quotes and several questions for discussion in a group or simply to consider on your own. Background The cost of energy is going up. Gas prices continue to hit record highs. Solutions to these problems are not easy to come by. America has strained relations with some of the world's top oil producers, which presents a security risk. Domestic drilling raises environmental concerns, such as the pipeline in Alaska, and the BP oil disaster in the Gulf of Mexico. Natural gas and coal are abundant, but the process of extracting them can be dangerous. The public's perception of the safety of nuclear power has always been a deterrent to building new power plants. Alternative energy technology is still very young and faces severe criticism, particularly since it has begun to receive more and more federal assistance. As our energy use continues to rise, along with higher prices, it is crucial that we look for alternative sources or methods, whether it be to cut costs, protect the environment, or foster the growth of an energy independent nation.

2 2 Renewable Energy in America What does renewable energy currently contribute to America s energy needs, and what role does the government have in this? In 2010, renewable energy accounted for 8% of the production of the total energy used in the United States. Biomass and hydropower contributed the majority of this, while wind, solar and geothermal energy only produced a combined 1.5%. In 2010, the United States produced 24.7% of the world s total renewable energy. Renewable energy, though still a very small part of the total energy produced in the United States, has recently begun to grow more quickly. Some predict that it will expand much more rapidly over the next several decades as technology improves.

3 3 Throughout all of human history people have used these resources to create energy. The biggest obstacle currently is to use them to create energy on an incredibly large scale. In order to promote increased production, the federal government has heavily subsidized renewable energy, along with all other energy industries.

4 4 Following the American Recovery and Reinvestment Act (ARRA), renewable energy began to receive even greater funding. This has become quite controversial. Recent instances of failed start-up energy companies that had received large amounts of federal and state money left local taxpayers to foot the bill. The following are a few factors which make the subsidy situation even more confusing and controversial. o There is debate over exactly what a subsidy is. Federal and state governments can offer cash grants, loan guarantees, market shares, below-market interest rates, and tax breaks. Some have claimed that the huge tax breaks the fossil fuel industries enjoy are a form of subsidization, while others claim that the breaks are something any company or manufacturer can receive, and therefore it is not a type of subsidization. o Confusion comes from looking at the total amount of subsidies. These numbers are often examined without any context. They must be looked at in light of the total value and production of each particular energy source, and how much energy each resource provides America per subsidy dollar. For instance, even though oil and natural gas received a larger amount of total subsidies than solar, the former s production was astronomically larger, making it far more productive per subsidy dollar. Below are two graphs with very different implications.

5 5 What forms of renewable energy have the most potential, and what areas of the United States provide the best environment for this? Biomass and hydropower have been the largest sources of renewable energy in the United States, but have also come under the most environmental criticism. Dams can have disastrous effects on surrounding freshwater ecosystems. The foresting industry, which provides the majority of our biomass power, can deplete large swaths of forest. Of the remaining sources, wind has been the most productive and economically sound. Construction costs are far less than those for solar or geothermal energies. Though it is still quite expensive to produce, many experts expect wind technology to become a major source for America s electricity. In fact, several European countries have larger and more productive wind energy systems.

6 6 Solar energy, despite decades of research and development, requires massive construction costs and subsidies. Also, China s heavily subsidized solar market has created almost insurmountable competition for American companies. The western half of the U.S. has the most renewable resources. Geothermal sources are abundant throughout Nevada, Arizona, Oregon, Utah and Idaho. The high plains in Montana and Wyoming are ideal for wind power. The sun s energy is strongest in the deserts of the Southwest, particularly California and Arizona. The nation s largest dams are located in the Pacific Northwest. Biomass sources are the most evenly spread throughout the entire country. (Hydro) (Biomass)

7 7 (Geothermal) (Wind) (Solar)

8 8 What are the arguments for and against alternative fuels? Proponents claim that: o It would reduce our dependence on foreign oil, which would improve our relations with the Middle East. o The emerging green industry potentially will provide millions of jobs across the United States. o Consider Europe as an example. Germany and Denmark have had very successful renewable energy projects that now power large portions of their countries. o It will greatly eliminate carbon emissions, reducing global warming and improving air quality. o The resources will never expire. Those opposed claim that: o It is far from being economically sound. The United States cannot afford such a massive project. o Our current carbon emissions are not creating global warming. Moreover, new technology in the coal and natural gas industries is helping to cut back on other toxic or dangerous emissions. o The federal government should not have the power to singlehandedly fund so many unproven companies. It leads to cronyism, corruption and harm to taxpayers. o The government cannot create an artificial market for something for which there is no real consumer demand. Once massive subsidies stop rolling in, the players in that particular market will quickly fail. o Alternative energy is too dependent on environmental conditions. Solar power can only be harnessed during daylight hours in very specific regions. Fossil fuels can be mined without ceasing. Quotes on Renewable Energy in America "Renewable energy has been subsidized to varying degrees over the last three decades yet wind and solar energy still constitute less than 1 percent of the electricity market and likewise wouldn t exist at all absent government intervention. Accordingly, subsidizing wind, solar, and nuclear power will do little to improve national security because those energy sources do not compete with crude oil and would not displace crude oil. Until plug-in cars are both available and economically attractive to consumers,

9 9 building 100 new wind, solar, and nuclear power plants won t reduce oil consumption by very much at all." - Jerry Taylor, Alternative Energy in the Dock, Ripon Society, June 12, 2007 We are a nation that has seen promise amid peril, and claimed opportunity from ordeal. Now we must be that nation again. That is why, even as it cuts back on the programs we don t need, the budget I submit will invest in the three areas that are absolutely critical to our economic future: energy, health care, and education. It begins with energy. We know the country that harnesses the power of clean, renewable energy will lead the 21st century. And yet, it is China that has launched the largest effort in history to make their economy energy efficient. We invented solar technology, but we ve fallen behind countries like Germany and Japan in producing it. New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea. Well I do not accept a future where the jobs and industries of tomorrow take root beyond our borders and I know you don t either. It is time for America to lead again. Thanks to our recovery plan, we will double this nation s supply of renewable energy in the next three years. We have also made the largest investment in basic research funding in American history an investment that will spur not only new discoveries in energy, but breakthroughs in medicine, science, and technology. We will soon lay down thousands of miles of power lines that can carry new energy to cities and towns across this country. And we will put Americans to work making our homes and buildings more efficient so that we can save billions of dollars on our energy bills. But to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy. So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America. And to support that innovation, we will invest fifteen billion dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America. - President Barack Obama, Address to Joint Session of Congress, February 24, 2009 The future of energy is going to be awesome. Everyone will drive an electric car, powered by the sun. We ll completely eliminate our need to burn coal or natural gas, and nuclear power will be thing of the past.

10 10 No, wait. The future of energy is going to be terrible. Peak oil will catch us off guard. Combating climate change will mean abandoning modern conveniences. Within a generation, we ll all be living like it s These two predictions couldn t be more different, but they do have one thing in common: They both make the future of energy sound awfully exciting. Whether you re pessimistic or optimistic, you get the feeling that everything is going to change, and fast. The truth is that, while the optimistic and pessimistic possibilities make for great science fiction, reality is often a lot more messy and banal. That s true today, and it was true the last time we totally changed our energy infrastructure. - Maggie Koerth-Baker, Our Incredibly Dull Energy Future, Slate, October 17, 2011 The government support which includes loan guarantees, cash grants and contracts that require electric customers to pay higher rates largely eliminated the risk to the private investors and almost guaranteed them large profits for years to come. The beneficiaries include financial firms like Goldman Sachs and Morgan Stanley, conglomerates like General Electric, utilities like Exelon and NRG even Google. - Eric Lipton and Clifford Krauss, A Gold Rush of Subsidies in Clean Energy Search, New York Times, November 11, 2011 Questions for Discussion 1. Should any one energy source receive greater subsidization than another? Why or why not? 2. America s national debt has been growing at an amazing rate for the last ten years. The federal government spends billions of dollars every year on renewable energy. Is it necessary and prudent to do so? Why or why not?

11 11 3. President Obama criticized China for subsidizing their solar industry too much. He argued that this is harming the solar industry in the United States. Do you agree? Why or why not? Since the U.S. subsidizes its solar industry, is there a double standard here? 4. Do you think the energy industry would be more successful and prosperous if there were no subsidies at all? Why or why not? 5. Do some research: Look into the ultra-modern space mining initiatives. Our universe contains a nearly infinite amount of the resources we need and use. Might space exploration be a viable option to provide us with energy resources in the future?