Washington, DC is currently overrun with meetings, conferences, panels, and summits on this or that new federal initiative, program, or plan. The elation—no, make that joy—of policymongers, lobbyists, and activists reaching at long last to grasp and fondle the levers of power is palpable. One such forum was the Clean Energy Summit, held yesterday at the swank facilities of that ultramodern shrine to journalism, the Newseum on Pennsylvania Avenue.
The summit was convened by Senate Majority Leader Harry Reid (D-Nev.) and John Podesta, President Bill Clinton's White House chief of staff, co-chair of President Barack Obama's transition team, and president of the Center for American Progress Action Fund. Moderated by former Sen. Tim Wirth (D-Colo.), the panel featured 28 notables including Clinton, Speaker of the House Nancy Pelosi (D.-Calif.), Nobelist and Secretary of Energy Steven Chu, Nobelist and former Vice President Al Gore, and oilman T. Boone Pickens.
The stated goal of the summit was to discuss the policies needed to construct a national smart grid to support new renewable energy generation and transmission, as well as how to best wean America off of foreign oil. In reality, the summit was a made-for-media event designed to show the breadth of the coalition pushing for a comprehensive federal green energy policy. Other participants included AFL-CIO President John Sweeney, Service Employees International Union President Andy Stern, Wal-Mart Chairman Lee Scott, American Wind Energy Association CEO Denise Bode, National Rural Electrification Cooperative Association CEO Glenn English, Sierra Club CEO Carl Pope, Owens Corning CEO Michael Thaman, Robert Kennedy from the Natural Resources Defense Council, American Electric Power CEO Michael Morris, and National Association of Regulatory Utility Commissioners President Fred Butler.
But just because the special interests are having fun doesn't mean that they are all wrong—at least, not when it comes to bringing America's national electric grid into the information age. This "most anesthetizing of issues," as Wirth dubbed it, involves complex changes in regulatory procedures, new cost allocation formulas, and the setting of technical standards among power generators, transmission companies, and equipment manufacturers.
The current balkanized regulatory system, which is divided among 50 different state public utility commissions, offers few incentives for utilities and transmission companies to invest in a smart grid. State utility regulators don't want to antagonize their residents by approving ugly long-distance transmission lines that cross through local communities to deliver power from outside the state to businesses and homes in yet another state. More transmission capabilities also means that power generators in any given state could start selling power to other states at higher prices. Naturally, state utility commissioners have little interest in approving projects that would tend to increase the wholesale price of electricity for their own residents.
Sen. Reid noted bluntly that the new federal energy legislation he will introduce later this week will effectively trump the parochial concerns of state regulators. The feds will soon have a much bigger role in the planning and siting of transmission facilities. Ideally, the federal government might bring all of the stakeholders together to create a set of standards ensuring the interoperability of the smart grid. Even more useful, Congress could repeal some of the onerous environmental regulations that have tied up proposed energy projects for years.
Summit attendees were reminded several times that the $787 billion stimulus package just passed by Congress allocates $11 billion to the electricity transmission system. This includes upgrading 2,000 miles of transmission lines and putting 40 million smart meters in homes. But this sum is regarded as just a small down payment.
Part of Reid's new energy bill will create national renewable energy portfolio standards mandating that utilities produce a specified percentage of their electricity by means of wind, solar, or geothermal sources. The draft version of the energy bill backed by Reid would reportedly require utilities to increase the energy they produce using renewable sources by 4 percent by 2012, then 8 percent by 2015, 12 percent by 2018, 16 percent by 2020, and 20 percent by 2039. The summiteers know that without a smart grid, it will be impossible to vastly expand the production of electricity from renewable sources such as wind and solar. The current grid simply cannot manage such intermittent sources.
Reid's fellow summiteer, T. Boone Pickens, is pushing a plan that would require utilities to replace the 20 percent of our electricity that they currently generate burning natural gas with wind energy over the next 10 years. The natural gas would then be used to fuel much of our transport fleet and thus reduce our imports of foreign oil. At the summit, Pickens made an entertaining and insightful point when he shared the advice his daddy gave him in his sophomore year in college: "A fool with a plan can beat a genius with no plan." I am not sure what conclusion Pickens meant for us to draw about his plan.
Can wind power produce that much of our electricity? Technically, it does seem possible. Last year, the U.S. Department of Energy released a study that found that the country could produce 20 percent of its energy using wind by 2030. A 2008 study by the transmission industry offered a ballpark figure of $1 trillion for building the generation capacity to meet a national renewable energy portfolio standard of 20 percent wind energy by 2024. It would cost $80 billion just to upgrade the grid with extra-high voltage transmission lines to transfer this renewable electricity from our windy prairies to East Coast cities. These figures stand in contrast with the assertion made at the summit by Robert Kennedy that the U.S. could obtain 100 percent of its energy from renewable sources for only $750 billion.
As noted, Reid will introduce an energy bill mandating national renewable energy portfolio standards this week, but he is waiting until the heat of summer arrives before introducing a climate change bill that would ration carbon dioxide emissions. That is a policy puzzle. During a post-summit press conference, I tried unsuccessfully to ask Reid the following questions: If Congress and the Obama administration are going to set a price on carbon dioxide emissions from conventional power plants, why wouldn't that be enough to encourage utilities, consumers, and innovators to develop and switch to low carbon renewable fuels? Why does Reid think we need his proposed panoply of tax credits and mandated renewable energy portfolio standards? More pointedly, why does Reid think that Congress knows just what the right mix of energy sources is? I would still like to know the answers to those questions.
Ronald Bailey is Reason magazine's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books. This column first appeared at Reason.com.