As the war in Ukraine grinds on, a look at the economic battlefield and how the conflict might permanently reshape the global economy. Diane talks to Sebastian Mallaby, senior fellow for international economics at the Council on Foreign Relations.
Ten years ago American natural gas fields were thought to be on the way out. American oil production was falling fast. Coal was king, and wind and solar energy production plans were barely underway. Much has changed. According to recent government projections, in September the U.S. will produce more oil than it imports for the first time in almost 20 years. The discovery of massive natural gas reserves and advances in fracking techniques are forcing a dramatic rewrite of America’s energy future, but what has not changed, so far, is our overall reliance on fossil fuels.
- Christine Todd Whitman CASEnergy Coalition co-chair, former EPA administrator (2001-03) and former governor of New Jersey (1994-2001).
- Rhone Resch President and chief executive officer of Solar Energy Industries Association.
- Coral Davenport Energy and environment correspondent for National Journal
- Robert Gramlich Senior vice president of public policy at American Wind Energy Association.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. America's domestic oil production is soaring. Producers of U.S. natural gas are gearing up to become exporters. While these supply upticks will boost GDP in the next few years, the promise of a low carbon future remains elusive.
MS. DIANE REHMJoining me to talk about America's energy future: Christine Todd Whitman of the CASEnergy Coalition, she's former governor of New Jersey and former administrator of the EPA, Rhone Resch of the Solar Energy Industries Association and Robert Gramlich of American Wind Energy Association, also Coral Davenport of National Journal. I hope you'll join in our conversation. Give us a call at 800-433-8850. Send us an email to email@example.com. Follow us on Facebook or Twitter. Good morning to all of you.
MS. CHRISTINE TODD WHITMANGood morning.
MS. CORAL DAVENPORTGood morning.
MR. RHONE RESCHGood morning.
MR. ROBERT GRAMLICHGood morning.
REHMGood to see you. Gov. Whitman, let me start with you. You recently wrote a piece titled, "Dash to Gas." You wrote that the shale gas revolution is a mixed issue with this country in both the short and long term. Explain why.
WHITMANWell, the problem is -- with it -- it's a challenge. I mean, it clearly offers us low-cost energy. It does offer the potential, as you said in the intro, of exporting fuel for the first time. But it is a carbon producer. It does release greenhouse gases. It's cleaner than coal, without a question, but the concern that I think all of us have is that we don't want to put all our focus on one source of energy. And we can lose sight of the fact that we have all these others. We have the other forms of green energy.
WHITMANAnd we also don't want to lose sight of conservation of energy. I mean, we need to be more efficient on how we use our energy, and we need to be more open to having a diverse nature. So we're not quite as subject the vicissitudes of whether taking out any one source or another. We don't have a problem with sudden price spikes that you can get with natural gas. It's low now. It's very low and very attractive now, but we've been here before, and we've seen it go up. So, really, the concern is not to lose the focus of having an all-of-the-above strategy.
REHMAnd, Coral Davenport, domestic oil production is way up.
DAVENPORTIndeed. The fracking revolution that has lead to this boom in natural gas production has also led to a boom in U.S. oil production. And amazingly, North America is now on track to be the largest oil producer in the world over the next 20 years, a scenario that seemed unimaginable just five or 10 years ago. And there's a lot of great news with that. It means that the U.S. will be far less dependent on imported oil, particularly from the Middle East, from Venezuela, from Africa. That's good news for our foreign policy stance.
DAVENPORTBut as the governor pointed out, one of the concerns is, you know, about five or six years ago, there was sort of a left-right coalition on the need to reduce dependence on oil because the U.S. didn't have enough. And, you know, so there was sort of a foreign policy element of, you know, from the right with foreign policy hawks as well as environmentalists joining forces on this.
DAVENPORTNow you see less pressure, particularly in Congress, particularly from the right to reduce that use of oil because the argument is, you know, the U.S. has an abundant supply. We don't need to focus as closely on reducing it. So I do see in Washington, on the Hill, definitely less pressure to focus on reducing oil dependence because there's less of that urgency.
REHMAnd meanwhile, Rhone Resch, where is solar energy?
RESCHYou know, we'd like to talk about oil and natural gas as being these booming industries, but in fact, the solar industry is the fastest-growing source of new energy in this country. This last year, we grew by 76 percent, and we now provide enough electricity to power 1.2 million homes. And looking forward, this year, we expect to install a little over 5.2 gigawatts of new solar. Again, we're seeing the solar industry ramp up as we've scaled up manufacturing. We've scaled our installer base. We've lowered our costs.
RESCHAnd today, in 10 states across the country, solar is the cheapest form of electricity for retail customers. We see that expanding in that within the next five years, solar will be the cheapest source of electricity in all 50 states. So very rapidly, this source of energy, which is our largest domestic source of energy, solar energy, is quickly becoming a very popular and very cost-effective technology in the United States.
REHMAnd, Robert Gramlich, what about wind energy?
GRAMLICHWind energy has grown dramatically. Actually, wind energy was the number one source of new electrical generation capacity last year, in 2012 and over the last five years has made up about 35 percent, over a third of U.S. new electrical generation capacity. So we're growing very strongly, steadily. About 70 utilities, just last year, brought new wind energy onto their system. So it's very much a mainstream power source now for utilities. And with that growth, cost has come down. So their costs have fallen by 90 percent since the '80s and by a third just in the last four years.
REHMAnd, Gov. Whitman, you're here representing nuclear power.
REHMTell us how nuclear power is fairing, especially after what happened in Japan.
WHITMANActually, what's really interesting, Diane, is in this country, the reaction to Fukushima Daiichi was a lot less traumatic than it was in the rest of the world and particularly Europe. I think Americans understood that it wasn't the tsunami, it -- I mean, it wasn't the earthquake, it was the tsunami and it was because how they had set up the facilities there and the reactors, and that we have taken so many steps in this country to protect our nuclear industry. And the Nuclear Regulatory Commission regulates it.
WHITMANIt's the most highly regulated industry that we have that even after Fukushima Daiichi, there was a better than 50 percent support for nuclear in this country overall. And we have now four new reactors being built. It's -- the nice thing about what we're talking about today is all of these things need to happen together. It's not one or the other. And none of these industries, to my mind or our mind at CASEnergy, are fighting one another.
WHITMANIt is how do we provide the best mix going forward, understanding that there are places in the country where solar isn't as good an option or wind isn't as good an option. And we still need until -- and we will figure out how to store renewable power. We don't have that yet. We'll get there someday. But right now, you still need to have base power as a backup 24/7 power, and that you look at, OK, which -- how do you do that? And you get back to the fossil fuels.
WHITMANAnd as you look at nuclear, nuclear is the only one that doesn't release greenhouse gases or other regulated pollutants while it's producing power and has an enormously safe track record in this country. So it's a part of an overall mix. It's not the solution. It's about 19 percent of the power that we use today in this country, and I sort of think it ought to stay there.
REHMRhone Resch, how do you respond to the notion that solar power simply cannot be as available across the country?
RESCHLook, it is our largest domestic source of energy today in the United States...
REHMBut in certain areas?
RESCHWell, I think you need to look at what solar offers. It's scalable, right? So you can put solar on one panel at a time. You can put 30 on your home. You can put 100 on your business or you can put a million as a utility scale power plant in the Southwest. What we have found is that solar is more cost-effective in New York, upstate New York than it is in Arizona, and the reason why is because retail electricity rates in New York are so high.
RESCHAnd so the economics tend to prove to be much better for solar on rooftops in those populated areas in the Northeast, which we tend to think of as a little bit cloudy or not having as much solar resource. The reality is, though, these areas still get about 60 to 70 percent more sunlight than they do in Germany, and Germany today is the largest market for solar energy in the world.
DAVENPORTI just wanna point something out about the solar and wind picture in particular. You know, Rhone and Rob have accurately painted a great picture of the extremely rapid growth that we've seen in solar and wind. But it's very important to remember that they still only make up about 5 percent of, you know, the U.S. total electricity picture. So these are sources of energy that are growing very rapidly. The price is sinking. It's becoming more accessible. But it's a tiny, tiny, tiny fraction.
DAVENPORTYou know, as the governor said, nuclear makes up 19 or 20 percent. Coal makes up about 30 percent. Natural gas makes up about 30 percent. These are still, you know, the main forms of electricity generation...
REHMLeaving lots of room for growth then, clearly.
DAVENPORTThere's room for growth, but it's just -- it's important to remember people get excited about these rapid growing, you know, these rapid growth numbers.
DAVENPORTBut it's a tiny, tiny fraction.
REHMHere's what I want to understand in this very small portion of the overall energy picture: What kinds of inducements are wind and solar getting from the federal government?
GRAMLICHSure. So wind energy gets the production tax credit as the main policy incentive driving our technology. There are state policies as well. But, of course, all energy sources receive some form of federal incentive, whether it's insurance related or loan guarantees or, you know, drilling costs, et cetera. For wind energy, it's the production tax credit, which is a great incentive. The only problem is for all these new technologies, the way the budget works is they only give these tax credits for one or two years at a time.
GRAMLICHSo it's very sporadic and unpredictable, very hard for our -- we have now 550 manufacturing facilities for wind energy in the country. It's very hard for them to operate in that unpredictable environment whereas the more conventional resources that have been around for a long time have very often permanent incentives.
REHMSo why should that be, Coral? Shouldn't the government be looking with greater interest and greater support at these newly forming sources?
DAVENPORTWhen it comes to the government subsidizing or paying or giving tax breaks to any kind of energy, I think all forms of energy need to be on the lookout. You know, any kind of government spending is under scrutiny now. The wind production tax credit has been a political target for quite a while.
REHMAll right. And we'll take a short break here. Your calls when we come back.
REHMAnd we're back talking about various forms of energy likely to play an even larger role in this country's energy future. Here in the studio with me: Former Gov. Christine Todd Whitman, Rhone Resch, president and chief executive officer of Solar Energy Industries Association, Robert Gramlich, he's with the American Wind Energy Association and Coral Davenport of National Journal.
REHMHere's an email from sunny Florida, where she says -- or Paul says, "I'm baffled by the fact that there are no incentives to incorporate solar energy into new construction on homes. Considering the thousands of acres of roofs that receive abundant sun, it would seem that's the natural way to go."
GRAMLICHYou know, Paul is exactly right. There is a federal tax credit for both homeowners and businesses to install solar on homes or buildings or, frankly, large-scale solar projects. But there isn't an incentive for new builders -- or a mandate for new builders to put solar on. And it's really a shame because you're putting, you know, a brand new building up, you're putting a roof up, and it's just gonna bake in the sun. It could be turned into a power plant, especially in a state like the Sunshine State of Florida...
RESCH...and other areas recently.
WHITMANWell, the one thing I was gonna say a lot of that, particularly from where this call -- or the email came from, Florida has no statewide incentives whereas New Jersey, for instance -- New Jersey is second to California in solar energy. We just put a bunch of solar on our place, on our barns. And, yeah, right, we're...
REHMGood for you.
GRAMLICHGood to go.
WHITMAN...getting a thumbs up here.
REHMGood for you.
WHITMANBut we did that because of the SCRECs program we have in the state of New Jersey that made it financially feasible to do it. And that made a big difference, whereas Florida, you don't have that. And that's key. I mean, yes, you can get the federal.
REHMWhy don't you have that? Is that purely political?
WHITMANIn Florida, that's a decision of the...
DAVENPORTIt's -- in some ways, it's political. There has been an effort in Washington for several years to pass a national renewable electricity mandate. It had bipartisan support several years ago. President Obama has tried to push it. It's actually separately passed the House and the Senate at different times. Given the current partisan divide on The Hill, I don't see prospects for it at any time. So it means that what we have is a patchwork of states.
DAVENPORTThere's 28 states that have some form renewable electricity standard or mandate, and those are very effective in different states. But they're not all the same, and they're not nearly as effective as a single federal state.
GRAMLICHAnd on those state policies, I think it's worth noting that the states often compete over these renewable policies as they often do in many ways. And the states are looking for often renewable technology manufacturing. And if they have a good, robust state incentive policy in whatever form -- the renewable portfolio standards are our favorite -- then they will be more likely to attract those manufacturing facilities.
GRAMLICHAnd just as the state legislative sessions come to a close now, literally the last -- over the week, it looks like the many attacks on these standards have all failed across the board. So renewable energy policies have remained intact. Our side is undefeated, basically. And, in fact, in a couple of states, they have expanded.
REHMAnd speaking of manufacturing, do I understand correctly that solar panels continue to be manufactured in China and not in this country? And if so, why?
GRAMLICHChina is the largest manufacturer of solar panels today in large part because the government made a strategic investment in this industry and allowed the -- allowed them to scale up their factories from, you know, a typical factory in the U.S. is about 100 megawatts, and they're now 1,000 megawatts in scale in China. The U.S., however, still maintains the most advanced manufacturing technologies.
GRAMLICHWe manufacture the lowest-cost panels in Perrysburg, Ohio and the most efficient panels through sun power in the country. So we really maintain what I would call the intellectual property or the technological advancement in solar energy although the cheaper kind of average, middle-of-the-road panels are still manufactured both in China and Korea and really around the world.
REHMI want to ask you, Coral Davenport, about the political landscape in regard to each of these forms of energy: the oil lobby, the gas lobby, the wind lobby, the solar lobby, the nuclear lobby. How do they compare in terms of strength and money?
DAVENPORTThe oil -- the energy lobbies are really shifting right now, is -- alongside the changing energy picture. The oil lobby has been one of the most powerful lobbies in Washington for a long time. It has deep ties with the Republican Party. Traditionally, it has given major campaign donations to the Republican -- to both sides, but about 90 percent of its donations go to the Republican Party. But they do donate to whichever side. So they always have ties to whoever is in power.
DAVENPORTAnd thus far, the oil lobby has been very effective at making sure it gets what it wants, access, tax breaks. Now that we see this new boom in natural gas, it's kind of changing the picture. For one reason, natural gas has contributed to a real surge in manufacturing, in job growth. It's helping bring the economy back.
DAVENPORTAnd for that reason, the Obama administration is forming new ties to natural gas companies, companies like Halliburton, which is the top fracking company in the U.S., certainly, you know, traditionally has long had associations with Republicans. So those are kind of shifting alliances.
REHMSolar and wind, how powerful are they?
DAVENPORTWind has a lot of friends in Washington. Something that was very interesting is during the 2012 campaign, Mitt Romney made a specific point of going after that wind tax credit. It turns out that didn't sit well with a lot of Republicans. Many, many Republicans have not just wind energy but wind manufacturing jobs in their districts. A stat that I think is really interesting is the top 10 congressional districts with the most wind energy, nine of them are held by Republicans, including Republicans in leadership positions.
DAVENPORTSo as wind energy starts to expand in rural areas like Texas, rural California, Colorado, wind is developing more friends in the Republican Party. Solar is an interesting story as well because during the 2012 campaign, Solyndra, the federally backed solar company, went bankrupt, had an FBI investigation, kind of became this political target for Republican campaigns. And so, you know, solar, politically, is sort of something that Republicans have gone after. We've seen a lot of ads.
DAVENPORTQuietly, though, you know, behind the scenes, I also hear Republican saying, I have solar in my district. I think solar got hit pretty hard, though, by the Solyndra situation. But we see, you know, Obama is making friends with the natural gas industry. Republicans on the Hill are saying, hey, don't go after our wind. So there's a lot, you know...
DAVENPORT...as the energy picture changes...
DAVENPORT...the politics are shifting in really interesting ways too.
RESCHThis Solyndra issue was a political issue. It was not about Republicans against solar energy. It was about Republicans targeting a policy of the Obama administration. And that led into the election cycle. So you had a lot of conservatives using Solyndra as an example of the loan guarantee program or of Recovery Act provisions that were advanced by the Obama administration. What we have found is that the solar industry enjoys strong bipartisan support and that we are more of a grassroots industry.
RESCHWe are made up of 5,600 companies around the country. Most of these companies are small businesses, 10, 12, 15 people. And so as they grow -- as congressmen learned that they got these small businesses growing in their district, you're seeing a lot more political support for solar energy.
REHMGov. Whitman, is there a residue of concern in this country in regard to nuclear power?
WHITMANOh, there is, of course. There are questions that are brought up and, I think, very legitimate questions. But the thing -- the nice thing about them is there are very good answers to all of them. And as CASEnergy, the Clean and Safe Energy Coalition that I co-chair, is able to get out to places and talk to people and give them answers so they don't just get their information on nuclear from "The Simpsons," people understand and say, OK, I'm good with this.
REHMThey do remember Three Mile Island.
WHITMANOh, they absolutely do. And actually, there is going to be a film release soon called "Pandora's Promise" that was previewed at Sundance. And it's something that talks about -- it goes right at the issues that drive up people's concerns and talks about five people who -- follows five people who were adamantly against nuclear, who, as they have said, look, I've got to be intelligent about this. I care about climate change, I care about clean air, I want clean, green, reliable, affordable energy, that's what we should be after.
WHITMANAnd it's their kind of conversion that, you know, when we get to see it -- and it'll be previewed, I guess, before the end of this month -- it'll be an interesting thing for people to see that transition in people's thinking because, again, we're looking at a 28 percent increase in power electricity demand by 2035.
WHITMANThat is yesterday as far as utilities are concerned in making a determination of what kind of investment, capital investment, to make. We've got to start thinking about these things.
REHMBut do you see coal, gas, oil maintaining their large leverage?
WHITMANWell, coal is already down. It's below 50 percent for the first time. And if the EPA regulations or the air regulations are -- stand in this court battle that they're going through now on the clean air, it'll be much more difficult to bring coal on board. Coal will always be a part of our future. You know, you don't have another source that's going to be able to take up 49 percent of the slack in anytime of short span.
WHITMANHopefully, over the years, we're gonna see less and less and less of that 'cause it is the dirtiest form of power, and that's something that we should all want. But we need Congress to send the message that what we want is clean, green, reliable, affordable energy and not to pick the winners.
RESCHSo just to summarize, what we've heard is that coal, in the last four years, has gone from 52 percent of our electricity down to about 40 percent. So we're very quickly displacing and getting rid of coal. It's gonna be a much smaller part of our energy mix because it is so polluting. And as the governor's pointed out, we're gonna increase our demand by 20 percent in the next 20 years, and what you're gonna see is most of that demand is gonna be filled by wind and solar energy and also natural gas.
RESCHNatural gas is gonna displace that coal, but much of that new demand is gonna be filled by solar and wind because it's clean and because you can build it. You can finance it, and you can build it rapidly.
REHMI have an email here from David, who says, "Why is there not more focus on hydrogen alternatives?" Coral.
DAVENPORTHydrogen is looked at as a form of energy for transportation. Hydrogen fuel cell batteries would -- are looked at as a form, an alternative for oil, an alternative for petroleum for cars. And David brings up an interesting point, which is a huge part of the energy equation and a huge part of the climate change equation is not in electricity, you know? It's in transportation. And right now, the vast majority of our -- you know, of the way we drive is fueled by fossil fuels, is fueled by petroleum.
DAVENPORTAnd if there's going to be a fundamental change in consuming less oil, producing less carbon emissions from petroleum, there needs to be -- and this is a huge change -- a change in our entire transportation system. What kind of cars are coming out of Detroit, what kind of infrastructure, you know? If -- we have to -- if we switch to hydrogen fuel cells, that completely requires, you know, a different kind of infrastructure.
DAVENPORTIf we switch to electric cars, that's a whole different story. So that's a huge piece of the energy puzzle that needs to be addressed that's sort of -- is a whole other debate on its own.
REHMAnd you're listening to "The Diane Rehm Show." We're going to open the phones now, 800-433-8850, first to Sarasota, Fla. Good morning, Christopher.
CHRISTOPHERGood morning, Diane. How are you doing today?
REHMI'm good. Thanks.
CHRISTOPHERGood, good. I had a question, you know, talking about the energy today and knowing we wanna get away from fossil fuels. Down here in Florida, we have Florida Power & Light, and they charge us every month for a power plant, for a nuclear power plant that hasn't been built yet. And how is that right without our permission?
WHITMANThat is something that is -- that prepayment approach is something that a number of boards of public utilities has done at the state level, have adopted as a way to avoid a cliff for ratepayers when the new nuclear reactor actually does come online. The plans are still going forward with that. Three Mile -- sorry, Three Mile -- Turkey Point is one of the places that they're looking at to expand.
WHITMANAnd so it's a pre-funding way to avoid a cliff, a sudden increase in rates to -- for the ratepayer. It's a defraying cost, basically. And what happens is that it gets reviewed all the time, and if they don't go forward with the plan, at the end of the day there's going to have to be an equalization. And they're going to have to come back to the ratepayer and figure out a way to make them whole again if they don't go forward with the new reactors.
REHMAll right. To Houston, Texas. Good morning, Roland.
ROLANDGood morning, Diane. I mean, I've been listening to your program for many years...
ROLAND...and I decided to call in today because none of your guests has mentioned thorium nuclear energy. There is a clean nuclear energy that's been in existence since the 1950s, developed by our government at Oak Ridge, Tenn. Thorium nuclear produces next to no waste. Uranium, as we know, produces plutonium waste, which we cannot get rid of.
REHMAll right, sir. Let's see if Gov. Whitman can address that.
WHITMANI wish I were smart enough to be able to talk with any intelligence about thorium nuclear. But there are a number of new approaches to producing nuclear energy in this country, and, well, we got out of the business in the '70s. So it's been really happening in other parts of the world. And -- but there are...
REHMJapan has been using it.
WHITMANJapan and France, particularly...
WHITMAN...have been -- have made huge investments on this. For instance, we're moving toward and starting to see much more investment in small modular reactors, things that can be built inside, moved to a site and fuel a small city, making them more efficient, less costly, a lot safer for management, although our nuclear reactors are really extremely safe. There are a lot of different technologies using less water. We need to invest.
WHITMANThe problem is that we've been out of the business, and there's been this reluctance to make a major investment in research and development, and I will say this administration has been quite good about that. They have embraced nuclear. The Department of Energy has provided some funds for research and development for some of these new technologies and hopefully revisiting things like these, which -- done in the Oak Ridge labs, just probably pretty far along and done pretty well and would warrant some further look. I just don't know enough from a...
WHITMAN...nuclear science point of view to answer that.
RESCHWhat I think Roland points out, though, is that we are making incredible technological advances in all segments of the energy industry. We certainly see it in solar, and the cost has come down by over 85 percent in the last five years alone. You're seeing new applications of these technologies. And just because, you know, we have four people sitting around this table now talking about, you know, these energy technologies, it doesn't mean these are the energy technologies we've been talking about in 20 years.
RESCHSo I think the continued technological advancement of all of these are going to very rapidly increase the amount of carbon-free technology in this country, and that's critical.
REHMRhone Resch of the Solar Energy Industries Association. Short break here. When we come back, more of your calls and email.
REHMAnd welcome back. As we talk about the evolving forms of energy that we'll be using here in this country and around the world. We'll go right back to the phones. To Syracuse, N.Y. Good morning, Dave. You're on the air.
DAVEGood morning. My comment is that I'm not so sure it matters so much but we do here in the United States with regard to the energy policy. So it really matters what China and India do because we're overwhelmed. All we have to do is have a small rise in their standard of living. And the number of cars and the amount of pollution will overwhelm what we produce because they have three billion people versus three hundred million people.
REHMAll right, sir. Coral.
DAVENPORTThe caller is absolutely right, you know, and I wanna point out one fact that we haven't brought up yet which is we recently clocked a measurement of 400 parts per million of carbon dioxide in the atmosphere which is the highest level recorded in human history.
REHMAnd it has risen rather sharply.
DAVENPORTIt's gone up sharply basically since the industrial revolution.
DAVENPORTAnd this is something that had scientists deeply alarmed, you know, it's sort of seen as, you know, yet another signs that economies around the world need to act together to curb carbon emissions. And as the caller points out, no one economy can do it. The U.S. is historically the largest emitter of carbon pollution. Recently, it's been surpassed in that distinction by China. Certainly, India is on track. I think it's set to triple its rate of carbon emissions in the coming decades.
DAVENPORTIf carbon -- if global energy systems are going to change, if carbon is going to come down or if -- just if the rate of carbon in the atmosphere is going to be slowed down, it can't happen unless all the major players are making…
DAVENPORT...fundamental changes, specifically to their energy economies. They have to work together.
GRAMLICHI certainly agree with that, but certainly, one should not discount the technological leadership of this country for the climate solutions. The real solutions over the long term for climate globally are technology related. What this country is doing to learn from deployment and bring costs down of these technology alternatives through deployment is gonna be extremely helpful for these other developing countries. There's a lot wind development in India and China, and that's helping. Give them some options. They need some alternatives.
REHMHere's an email from Munich, Germany. Let's see. Gerald says, "I don't believe that long term, we have any other choice but to go for solar, wind, water as energy sources. Gas, oil, nuclear all have long-term consequences." Gov. Whitman.
WHITMANSure. Well, what he has to be talking about on nuclear and long-term consequences is the rods and the spent fuel. And I -- when I -- you have this discussion, I always like to put in in perspective, which is if you take all the rods from 104 nuclear reactors we have in this country that had been functioning for over 50 years and laid them end to end, they'd fill up one football field to the height of the goal post.
WHITMANNow, those are rods that continue to have between 95 and 97 percent fissionable material left in them or used energy. If you reprocess that, the way they have in France and Japan, you can reduce that to two to 3 percent. Now, that's highly enriched plutonium. But in both Japan and in France, they have come up -- and I'm not a nuclear scientist, so I can't tell you how they have come up with ways to ensure that never weapons grade could never be used for weapons.
WHITMANAnd the shelf life of that is much less. So there are ways of dealing with that. The big challenge we have in this country, where it's always brought up, is we don't have a central repository. Congress recognize that was a problem. They identified Yucca Mountain in Nevada as being the site. We, as taxpayers and rate payers, have spent literally billions of dollars to get that site ready, and yet, we have not a scientific obstacle, we have a political obstacle.
WHITMANAnd that's from the delegation in Nevada, which of course, is headed by Harry Reid, who is president of the Senate, and he just -- will not see it happen. So the administration formed a blue-ribbon committee and that came back and said there should be at least a couple. We should look at other sites. And that's fine. As far as the nuclear industry is concerned, just come up with a decision. As a personal rate payer, I'd kind of like to see where we've already put all our money get used.
REHMAll right. To Goshen, Ind. Good morning, Glenn.
GLENNGood morning. I'm a utilities manager and sustainability coordinator at Goshen College in Goshen, Ind. And six years ago, our college joined with scores of other schools to sign the American College and University Presidential Climate Commitment with a mandate to develop a strategy to make our institutions carbon neutral, meaning that at some point, we'll not be adding green house gases to the environment.
GLENNRecently, our electric utility developed a way for us to purchase green energy with renewable energy credits, and our college agreed to purchase 100 percent green electricity. We tag conservation as the high priority mainly, for many years, because it made economic sense, but now, we've added the component of carbon reduction. So we're back to 1992 levels of consumption, even though it's increased our facilities by 60 percent in that same period.
GLENNMy question is, how do we establish, as a society, a new priority of carbon reduction for the sake of our environment instead of the old bottom line of just saving money and using whatever form of energy is the cheapest?
REHMI think that is just a great question. Rhone.
RESCHWe really have two different policies, Glenn, that can get you to that same level. The first is some type cap on the amount of carbon emissions that exist out there, and then you subsequently create a market-based mechanism that encourages reduction of carbon. The second of which is a carbon tax, and that's perhaps a little bit more equitable, a little bit more elegant and frankly, more functional in this country.
RESCHAnd what you do is you take the proceeds from the carbon tax and put it back into economic growth of carbon-free technologies, and most of those would be focused on small businesses. So you're creating a long-term economic stability. And this is a model that can be replicated truly around the world, and those counties where you do see a carbon tax are having not only economic growth from solar and wind and other technologies but they're substantially reducing the carbon emissions in achieving not only Kyoto Protocol goals but beyond that. And so...
REHMYou know, I...
RESCH...it's economic growth and carbon reduction together.
REHMI do want to go back to a point that Robert made about these countries being the leader. And if we do represent a move toward these alternative routes for energy production, will countries like India and China follow suit? Coral.
DAVENPORTI think part of this is the U.S. in these international negotiations on climate change has not been viewed as a leader. The U.S. has been globally viewed as a stumbling block. It is, you know, the place that it holds is as the largest historic carbon polluter, and also the country that went in 1997, you know, during the Kyoto Accords said, you know, Al Gore said, we're going to take the lead. We're going to create this treaty, went back and then the U.S. Senate passed a resolution saying, no, we're not.
DAVENPORTYou know, the U.S. will not sign on to this. And since then, the U.S. has not passed, has not put a price on carbon, efforts to pass a cap and trade, which Rhone talked about, have failed in the Senate. So when U.S. negotiators go and try to push the rest of the world to act on this, they don't have a strong hand. The rest of the world has said, you know, you need to take the lead on this, and the U.S. hasn't.
DAVENPORTAnd so what President Obama has declared now, he said this in his inaugural speech this year and then was more specific in his State of the Union, if -- he told Congress, if you won't act, if you won't put forth this legislation of price on carbon and cap and trades, then I will. What that means is that he is going to use kind of the third and least attractive option, which is using the EPA to do top-down mandated regulations. That's generally considered by economist to be far and away the least attractive option.
DAVENPORTNo one really wants it. It looks like it's what we're going to see. Without regulations like that in hand, the U.S. really doesn't have a point to argue from with the rest of the world.
REHMAnd with the abundance of fracking and gas, is that going to further diminish the kind of forward progress that the country could make using nuclear, solar or wind, Rhone?
RESCHNo. I don't think it is. I think that natural gas provides a bit of solution here, right? We're displacing coal very, very rapidly with natural gas. That is a good thing from a carbon perspective in the sense of making a bridge transition over a short period of time. The reality, though, is although we think we have an abundance of natural gas right now, it is still a finite resource, and we're gonna find it becomes increasingly expensive and highly volatile.
RESCHWhen you look at other technologies, like solar, there is no fuel cost. Once you install it, it is a fixed price for the next 30 years guaranteed. There's nothing else out there like it, and it comes carbon free. So I think very quickly, you're gonna find that consumers, when they have a choice of where their electricity is gonna come from, a big coal-fired power plant or natural gas power plant or they can generate solar from their rooftop of their home or their business, they're gonna choose self-generation each and every time.
GRAMLICHYeah. On the -- picking up on two comments Rhone made about the locked in fixed price nature of renewable energy, which really is unique, renewables are part of a diverse portfolio, and I would say with natural gas. As you said, all forecast show a lot of growth in natural gas for our electricity but also for renewables and energy efficiency. And that portfolio really works for the foreseeable future here.
GRAMLICHWhat you have is basically utilities, ramping up and down their gas plants to keep the overall grid balanced. So actually, wind and solar are part of a 24/7 reliable power source. We're not saying run the entire grid on wind. We're saying balanced portfolio where you have wind on that system. When the wind, you know, blows hard, then you turn down the gas and save on emissions and fuel costs. But that balanced portfolio does keep the lights on 24/7.
REHMAll right. To Athens, Ohio. Good morning, Geoff.
GEOFFHi. Good morning, Diane.
REHMHi there. Go ahead, please.
GEOFFThanks, Diane. First off, I'm a big fan, and thanks a lot for focusing your show on this important subject.
REHMIndeed. You're welcome.
GEOFFYeah. So 14 years ago, we started Third Sun Solar. We're a solar company here in Ohio. We're what you'd call an installation business. We work on residential rooftops and commercial buildings across the Midwest. Right now, it's a beautiful sunny day here, and our crews are out on the job today building clean power plants and earning a great living. So these are the jobs that really can't be shifted overseas.
GEOFFThe part of the solar value chain that has to be local is on the rooftop and out in the solar, you know, field. So I'm wondering why we don't hear as much about this incredible opportunity for economic development and job creation that solar and wind power present.
RESCHWell, there's over 120,000 people employed in the United States today. And the great thing about solar, you create more jobs per megawatt than any other energy technology out there. So you really have a confluence of both energy policy, environmental policy and economic policy when you're growing the solar industry. And as Geoff points out, these are small businesses, right?
RESCHThese are the backbone of our economy. These are roofers, electricians, plumbers. But those were let go by the housing industry starting a new business. You know, Third Sun is a great example of somebody coming out of the housing and electricity industry and creating a solar business that's thriving in creating jobs.
REHMAnd you're listening to "The Diane Rehm Show." Gov. Whitman, you wanted to say something.
WHITMANWell, I just wanted to add to that, that's another one of the things that we talk about when we talk about nuclear because, again, those are jobs that are not gonna go anywhere. And once they're built, the average nuclear reactor has -- during construction can have up to 5,000 jobs. And permanent jobs are from 500 to 800 depending on the size of and the type of a reactor that you have.
WHITMANAnd they pay an average 36 percent more than the same job in that area. And this is not just for nuclear scientists, there are electricians. It's the whole supply chain.
REHMSo how many people does the nuclear power industry employ in this country today? Do you know?
WHITMANI don't have that number off the top of my head...
REHMYou don't know.
WHITMAN...but it's a large number because there are 104 reactors around the country operating today. And it's one of the largest employers of clean power. But it's not the reason I would ever tell anybody to say that's why you decide how much nuclear you have, but it's a legitimate part of the discussion because the jobs are so good, they pay so well, and there are so many of -- and they don't go anywhere.
REHMAll right. To Boston, Mass. Good morning, Rob.
ROBThank you, Diane. My comment has to do with the fracking boom has led to this big oversupply, which has plummeted the prices. And this is below the cost of production. So the whole industry has got this huge PR campaign to make us think that natural gas is gonna be our economic and energy savior. And what's gonna happen once we convert our homes and transportation, electricity and even export natural gas is that the prices are gonna go way up, and then we're gonna be stuck with that.
ROBAnd my other comment is that Anthony Ingraffea of Cornell University has done a study that suggest that natural gas may not actually be cleaner than coal once you factor in all of the whole life cycle production cost of releasing methane and the trucks and all of that stuff. So I'd like to -- I'll take my comments off the air.
REHMLots of folks have those worries, Coral.
DAVENPORTThe caller raises a valid concern about the economics of natural gas. For many years, natural gas was one of the most volatile forms of energy in terms of price, fluctuating price. And then when fracking unlocked this vast new supply -- as the caller said, the price plummeted -- now we're looking for a future where we will see increased electricity production. Potentially, we will see exports of natural gas. And so there will be pieces of the equation that probably will send the price of natural gas back up again.
DAVENPORTYou know, we're seeing a lot of convergence to natural gas, a lot of new construction of natural gas power generators, you know, manufacturers are relying more on cheap natural gas. So I think everyone is watching this with great care and concern that the price -- it's expected that the price probably will go back up. We may not see the extreme volatility that we had, but you don't know.
DAVENPORTAnd so there is a concern that, you know, we rely so much on natural gas and start exporting natural gas. And then 10 or 20 years down the line, we do see higher prices. So this is a valid concern.
REHMAnd we're also concerned about what natural gas development could be doing to the landscape. People who are living in those areas are still raising concerns. Gov. Whitman.
WHITMANWell, Diane, I'm now part of a group that is looking at that, at establishing standards for best practices of fracking in the Marcellus shale area. They've already come out with a series of standards for how you handle the waste water, what you do. There are more things I think that need to be looked at. And this includes both the industry and environmental groups. And it's funded 50/50. It's not a full thing but on price. That's why we need to have a diversity of energy sources.
REHMGov. Christine Todd Whitman, Rhone Resch, Coral Davenport, Robert Gramlich, thank you all so much.
WHITMANOur pleasure. Thank you.
REHMThank you. And thanks for listening all. I'm Diane Rehm.
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