Innovation in the electricity market does not occur as it would in other markets. For starters, most areas of the country are served by monopoly providers. This means there is very little incentive to seek new ways to create electricity. Secondly, most providers are heavily regulated, often compounding risk-reluctant utilities with risk-averse regulators. In fact, according to a recent report from the American Energy Innovation Council, electric utilities spend a paltry 0.1 percent of their revenue on research and development, far below the U.S. industrial average.

The upside of this conservativeness has been the creation of ubiquitous, reasonably priced, reliable service. This has served our society well for the last hundred years, but unfortunately the future is unlikely to be like the past. Many parts of our electric system are facing the end of their useful lives and need to be replaced. In addition, the fuels we use to power the electric system are subject to risky and disruptive price volatility.

A new set of environmental considerations is forcing us to rethink the industry’s nearly complete reliance on traditional fuels. If we are going to “win the future,” we will need an electricity sector that is more 21st century and less 19th century. The challenge is how to innovate without jeopardizing the widely available, affordable, reliable service consumers have depended upon.

That’s where renewable energy standards can come in to play. The basic principle is similar to a fundamental concept in financial planning – build a diverse investment strategy that can weather changes. Renewable energy standards introduce diversity by lowering market barriers and creating an opening for renewable technologies that have different attributes and risk profiles than traditional fuels. Colorado’s experience shows that this approach has led to impressive results.

In six years, Colorado has diversified its electricity mix and built a thriving renewable energy industry while maintaining stable electricity bills. We have seen the cost of renewable energy credits for large photovoltaic solar projects decline by 75 percent, and wind in Colorado is now a least-cost energy resource.

In 2004, the voters of Colorado passed the renewable energy standard ballot initiative. This was the first voter-approved renewable energy standard in the country – and with legislative support it evolved over time to become one of the most progressive. The initiative set a requirement that Colorado’s investor-owned utilities generate 10 percent of their retail sales from renewable resources by 2015.

Economic Development
As it became apparent that the state’s largest utility would meet the renewable requirements years ahead of schedule, the Colorado General Assembly has increased the standard twice to the now-existing 30 percent by 2020. Finally, the voters and the General Assembly both mandated the entire program be halted if it increased utility bills by more than 2 percent. You get the picture: Innovate but contain the risk.

In 2004, Colorado’s IOUs had negligible amounts of wind and solar power. Today, 12 percent of their electricity comes from these resources. Colorado’s utilities have integrated these variable resources with only minor costs and have led the country in techniques to integrate intermittent resources on the grid.

On the economic development side, Colorado is now home to one of North America’s largest concentrations of wind turbine and tower production facilities. Our solar manufacturing cluster includes breakthrough thin-film technology that is revolutionizing the production of PV. As a first mover, Colorado is also home to many of the research, support, production and sales operations that are driving renewable energy expansion.

While Colorado’s largest utility, Xcel Energy, has exceeded its goals, it has stayed within the 2 percent cap set by the legislature. In fact, despite Xcel making the major capital investments in its Colorado system, the average residential electricity bill has failed to keep up with inflation over the last five years.

Colorado’s renewable energy standards proof is in the pudding. We have a much more diverse, robust, modern energy portfolio. We have seen significant economic development. We have kept costs reasonable. What else could you want?

Published In: EnergyBiz Magazine November / December 2011

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The Commission for Environmental Cooperation (CEC) has released a report which profiles the air emissions of greenhouse gases emitted by North American power plants that burn fossil fuel.

In its report, North American Power Plant Air Emissions, the CEC finds that North America’s 3,000 fossil fuel plants produce two-thirds of the continent’s electricity while generating more greenhouse gases than any other industry.

Research from the report shows power plants contribute 33% of the region’s greenhouse gas emissions, and the majority of those emissions can be tied to the combustion of coal.

Although the study found that “a relatively small percentage of facilities across the region account for much of the sector’s sulfur dioxide (SO2) emissions,” when it comes to mercury emissions burning coal is the number one contributor. For the U.S. and Canada, coal-fired power plants alone are responsible for 98% of all mercury released from fossil-fuel electric generation and 88% in Mexico.

Created as part of North American Agreement on Environmental Cooperation (NAAEC) alongside the North American Free Trade Agreement (NAFTA) in 1994, the CEC is comprised of representatives from Canada, the United States and Mexico.  The organization’s mandate is to address regional environmental concerns and to promote the enforcement of environmental law. The report is the second released by the CEC — the first was released in 2004.

The release of this study comes in the last week of the United Nations Climate Change Conference, or COP17, in Durban, South Africa where delegates are debating, among other things, an extension to the Kyoto Protocol. The CEC’s findings are particularly revealing considering earlier this year the U.S. National Oceanic and Atmospheric Agency’s Earth Systems Research Laboratory released data showing the highest levels of carbon dioxide emissions the laboratory has ever recorded in its 50 year history.

Additionally, the report comes a week before the deadline for the U.S. Environmental Protection Agency’s Mercury and Air Toxics Standards to be finalized.

Under the new standard, coal- and oil-fired power plants will be required to install pollution controls to cut mercury emissions. The electricity sector has been fervently pushing against the new standards claiming that both the cost to install pollution controls and also the time frame the EPA has mandated are unrealistic and will effectively cause an electricity shortage and spike energy costs.  Last Friday, however, the Department of Energy released a report rejecting the notion that the standards will create deficit in power supply.

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For Republicans, the EPA ranks up there with the IRS as one of the most-reviled agencies in Washington, calling it a ‘jobs killer.’ The record of the Obama EPA, though, is more nuanced.

Newt Gingrich and Michele Bach­mann want to abolish it. Rick Perry vows that he would declare a moratorium on all its activities the moment he becomes president. Herman Cain wants it replaced by an independent commission.

The Environmental Protection Agency (EPA), clearly, is not on many Republicans’ Christmas card list. In their debates and in speeches, the GOP presidential candidates have crystallized conservatives’ charge against the agency: Its regulations kill jobs.

Under a Democratic president – and at a time of economic turbulence – the EPA faces harsh criticism from the political right for being heavy-handed. But unraveling its actual impact on the economy suggests that its influence is more nuanced, according to several economic analyses.

To be sure, President Obama’s EPA has undertaken several key environmental initiatives, such as ozone and greenhouse-gas regulation. But attempts to paint these new rules as economic game changers often overstate their importance, say several independent economists.

“There’s certainly a lot of use of this phrase that ‘new environmental regulations are job killers’ or the flip side: We can ‘grow the economy by focusing on green jobs,’ ” says Wayne Gray, an economist at Clark University in Worcester, Mass. “But either perspective misses the scale of the cost of environmental regulations, which just are not a very large scale of costs for most in the economy.”

Among the moves by the Obama EPA that businesses say are most damaging:

•It proposed in January 2010 to tighten standards for smog-forming ozone, though Mr. Obamabacked off on Sept. 3, bowing to the “importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover.” The proposal could be reimplemented in 2013 if Obama is reelected.

•It is expected to unveil next month a “toxics rule” under the Clean Air Act that would require power plant operators to filter out mercury and other pollutants.

•Its studies found that greenhouse gases were a danger to public health, meaning that it must regulate them, according to a US Supreme Court ruling.

•It revised a rule put in place by the George W. Bush EPA but overturned by the courts that reduces permissible smokestack emissions of sulfur dioxide and nitrogen oxide in Eastern states. The rules are scheduled to go into effect Jan. 1, 2012.

Scores of power plants and as many as 1.6 million jobs would be lost between 2012 and 2020 if the EPA proceeds with air- and water-quality regulations, according to a recent study by the American Coalition for Clean Coal Electricity.

“In the area of energy, EPA has been very, very aggressive, much of this based on their global-warming campaign, and the effect is troubling on the energy sector,” says Diane Katz, a research fellow with the conservative Heritage Foundation. “If coal plants are closing down because they can’t meet standards EPA is setting, well, those are jobs lost.”

That could be true, some economists say. But others say that industry-paid studies (as is the one cited above) often include questionable assumptions and economic models not validated by broad peer review. They also note that jobs could also be created, not just destroyed, by regulation. The EPA’s rules are required to undergo a transparent cost-benefit analysis that is peer reviewed by others. But business groups, like the US Chamber of Commerce, say the EPA analysis is flawed.

An economic analysis of the “toxics rule” by the Economic Policy Institute, a Washington think tank that studies policy effects on low- and middle-income workers, suggests that it “would have a modest positive net impact on overall employment, likely leading to the creation of 28,000 to 158,000 jobs between now and 2015.”

A February report by University of Massachusettseconomists came to similar conclusions. Investments driven by the EPA’s new air-quality rules on ozone and toxics “will create nearly 1.5 million jobs, or nearly 300,000 jobs a year on average, over the next five years.”

Some business executives acknowledge that regulations can spur hiring. “We have to hire plumbers, electricians, painters, folks who do that kind of work when you retrofit a plant. Jobs are created in the process – no question about that,” Mike Morris, chief executive officer of American Electric Power, recently told The Washington Post.

But most business leaders reject the notion that EPA regulations have benefits. John Engler, president of the Business Roundtable, said that “establishing these new ozone standards would be tantamount to putting ‘not open for business’ signs in counties across the country at precisely the wrong moment, when unemployment is high and on the rise.”

Republicans in the GOP-controlled House of Representatives agree, seeking to undo the actions of the Obama EPA. Since 2010, the House has weighed 17 measures to reduce or restrict environmental controls, approving 10, according to the League of Conservation Voters.

Most will have no effect because the Senate won’t pass them. But the trend shows Republican fervor. In the Senate on Nov. 10, a resolution to roll back the EPA’s smokestack emissions regulations failed, 41 to 56. Its sponsor was Sen. Rand Paul (R) of Kentucky, whose state produces a lot of coal. The EPA, he argued, was issuing “radical, extremist regulations” that kill jobs.

Many economists reject such language as overstatement. Though environmental regulation has become more stringent, US manufacturers have faced only a moderate increase in their spending on pollution controls, says Dr. Gray of Clark University. Those costs, for instance, have risen from roughly 0.3 percent of total manufacturing shipments in 1973 to 0.4 percent in 2005.

Some highly polluting and highly regulated industries do face higher pollution-control costs. But even oil refining spent only about 1 percent of its shipments to comply with environmental regulations in 2005, Gray explains.

The numbers aren’t big enough to cause serious economic hardship. “The idea that environmental regulations would wipe out an industry or have a serious impact is implausible,” Gray says. “Early estimates of cleanup costs are invariably wildly overstated.”

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October 7, 2011

Dear Madame Secretary:

As the Executive Director of the Great Plains Alliance for Clean Energy (GPACE), I write to you regarding the proposed TransCanada Keystone XL project and the process of administrative assessment related to the National Interest Determination (NID) and Presidential Permit review process for the project.

Briefly, GPACE is a Kansas non-profit organization formed in 2007 to support a clean, secure, prosperous energy economy benefiting Kansas businesses, farms, communities, and all future Kansans.  We have coordinated grassroots education and outreach and legislative lobbying with a diverse alliance of partner organizations and communities, including private companies, other non-profit groups, student organizations, and religious congregations around Kansas and the Great Plains region.  GPACE has approximately 2,000 active members and a direct, opt-in communications network of over 10,000 citizens.

In addition to our commitment related to current energy policy action, our diverse membership is united by an expectation of ethical conduct in the public interest on the part of our representatives in government, and by a commitment to the well being of future generations of Kansans when enacting policies that will determine their energy and economic realities.  If results from multiple statewide, non-partisan polls conducted over the past four years are considered credible, the general views of GPACE reflect those of a majority of Kansas citizens.  Of course, I write to you today representing the shared values of our organization and its members.

While we are a regional organization, based in and focused primarily on Kansas, we share the concerns expressed by hundreds of thousands of our fellow citizens around the country regarding the proposed Keystone XL tar sands pipeline project.  Those concerns relating to the threat from the project to local communities, precious ecosystems, and critical shared resources (especially fossil and groundwater sources) are in our view legitimate and should in themselves be grounds for at least a revision of the current project EIS, which we consider inadequate.

Added to these concerns are the issues of questionable relationships, influence, and decision-making in the context of governmental ethics and statutory regulations put in place to protect the public interest in just such instances.  Without further investigation into and resolution of these legal and ethical issues, we do not see how the Department of State or the President can make a legitimate or binding NID decision regarding the project.

Weighing upon all these credible concerns are significant questions of domestic energy and economic policy, and especially of national and international efforts to address the threats from anthropogenic global climate change.  Jobs and economic development assertions in support of the project have been characteristically inflated, in some cases dramatically so, and as such they should not be the basis for credible expectations from or justifications for the project.  The ultimate foreign destination of much or most of the refined product of the transported tar sands is a blatant refutation of assertions that the project will meaningfully enhance the national or energy security of the United States.  And the direct and devastating contribution to greenhouse gases and subsequent global warming resulting from the extraction and use of dirty tar sands (not to mention the degradation of biomass resulting from mining and pipeline construction and maintenance) completely undermines any commitment or contribution on the part of the United States to prevent or mitigate the significant and unaffordable climate and hydrological disruptions caused by global climate change.

In particular, individual GPACE members (some of whom are landowners and residents living in counties in which the Kansas section of the project is already operational) have expressed the following concerns:

1. High pressure, tar sands crude pipelines threaten groundwater supplies in the Ogallala aquifer and shallower groundwater supplies.  Sensitive groundwater areas should be avoided and pipeline path changed.  Water contamination is an avoidable and many cases irreversible risk from this project – and therefore an inexcusable outcome.  TransCanada’s record to date related to pipeline safety and protection of water resources is cause for concern, in addition to the many recent high-profile spills and accidents that indicate widespread planning and compliance problems within the industry.
2. In rural areas of pipeline construction, Keystone has been allowed to use thinner wall pipe than in more densely populated areas.  Pipe thickness should be uniform and of maximum pressure rating for design pressures to insure safe operation for every environment and community along the pipeline.  There have already been leaks detected in rural Kansas sections of the pipeline.
3. Pipeline construction should bore under all perennial flow streams and rivers to preserve sensitive riparian areas and maintain bank integrity.  Already, residents are seeing erosion and degradation of areas where the pipeline and related construction cross streams.
4. Pipeline construction is disruptive to native fish, animal, and plant species, and potential leaks or spills could also devastate agricultural and ranching assets.  Pre-construction surveys of fish and animal populations and habitat, as well as agricultural production assets, should have been required with subsequent mitigation plans and post-construction monitoring surveys in place.  This has not occurred.
5. Pipeline impact on the local economy should be honestly evaluated and reported.  “Backroom deals” that result in local property tax giveaways and starve the communities along the pipeline corridor should be disallowed and reversed if in place.  In Kansas, Keystone successfully obtained state incentives from the Department of Commerce, and then successfully lobbied state legislative leadership (though not all legislators representing the citizens in communities directly impacted by the project) to obtain long-term incentives in the form of local tax abatements on top of the state incentives.  The local tax abatements were accomplished in secret and without any input from or notice to the local governmental entities, and the deals were secured under threat from Keystone that the project would be redirected without such incentives.  In particular, the local revenue giveaway to TransCanada/Keystone undercuts assertions of long-term economic benefit from the project.
6. Cardno ENTRIX has been working on behalf of the State Department to evaluate Keystone XL since the Bush Administration, and is the company that conducted the State Department’s inadequate environmental review of the Keystone XL pipeline, which was finalized by the State Department a few weeks ago, despite the EPA raising numerous concerns and warning that the review was “insufficient.”  Cardno ENTRIX has previously worked on projects for TransCanada, and also worked for BP to conduct the environmental review of the Deepwater Horizon oilrig that exploded in the gulf last year.  According to numerous reports, the Cardno ENTRIX representatives running the public hearings have consistently created or contributed to unfair conditions and bias against project opponents and “manufactured” public support for the project.  On the heels of a corrupted permitting process for a proposed coal plant in Kansas, and intense pressure and financial expenditures by the out-of-state company that would own that plant and its power, our members are highly suspicious of the influence of special interests on this project, and therefore dubious about its true value to our national interest.
7. Documents released recently reveal a cozy relationship between State Department officials and lobbyists for the Canadian pipeline company TransCanada.  These documents include emails from a TransCanada lobbyist named Paul Elliot, who previously served as your Deputy Campaign Manager during the 2008 Presidential campaign. State Department officials appear to have coached Elliot and other TransCanada staff about how to build their case for approval, and even how to respond to questions and concerns about pipeline safety and environmental impact.  It even appears that Mr. Elliot may have been lobbying illegally — failing to register as a lobbyist for over a year while working on behalf of TransCanada — a potential violation of the Foreign Agents Registration Act.   We have had our fill of unethical misconduct by those sworn to fairness in the public interest, and our members are deeply concerned and disheartened by the ongoing apparent disregard for due process and the rule of law that seems to be occurring as part of the Keystone XL project.

As the State Department reviews a Presidential Permit for the Keystone XL pipeline, I ask you to consider the gravity of the risks associated with a pipeline that dramatically threatens our ability to combat climate change. Further expansion of a fuel that releases 17% more carbon pollution than conventional oil will push our climate system past the tipping point and beyond human control.

Keystone XL poses a direct threat to America’s land, air, and water as well as the health and livelihoods of our communities.  This pipeline would put at risk sensitive land and water, including the Ogallala aquifer, which provides 30% of our agricultural water and drinking water to 2 million Americans.  Allowing TransCanada, a foreign company, to profit from a dirty and dangerous tar sands oil pipeline at the expense of Americans’ drinking water, food supply and economy is not in our national interest.

Our nation has experienced the real impacts of our addiction to fossil fuels, in the multitude of oil spills still affecting communities today, in the rising gas prices across the country, and in the daily threats posed to our troops overseas.  Keystone XL would deepen our dependence on oil.  Proposed new vehicle fuel economy standards alone will save more than twice the amount of oil the pipeline is projected to deliver. Building the tar sands pipeline would undermine our progress in transitioning America to a clean energy future, send the wrong message to the world, and imperil our children’s future.

As you consider the NID related to the Keystone XL project, on behalf of current and future Kansans, and with respect for the many difficult priorities and objectives you undertake on our behalf, we ask you to consider the impacts of this decision upon our health and well-being, our economic and civic vitality, efforts to protect our natural resources and our economy, and the need for fiscal and environmental responsibility concerning long-term energy investments.

We understand that the current administration must take us in a new direction.  Most of us are doing all we can to contribute and succeed in the current moment, but you have a legacy opportunity in this instance to provide our children and grandchildren a better chance to contribute and succeed when their moment comes.  We ask you to show bold leadership by denying TransCanada the Presidential Permit.  Keystone XL is not in our national interest.

Respectfully,

Scott Allegrucci, Executive Director

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Gov. Sam Brownback endorsed continuation of a federal tax credit for renewable power Tuesday to complement the state’s unwavering reliance on oil, coal and natural gas to meet energy demands.

He told participants at the governor’s ninth economic development summit in Wichita that Kansas had to create a balanced “all of the above” energy portfolio. This policy approach requires collaboration among energy-sector insiders rather than feuding that distorts public debate, he said.

“Can’t walk away from any,” the governor said. “Unity creates. Division destroys.”

Brownback, a Topeka Republican, said he was enthusiastic about the potential of wind energy development given BP Wind Energy’s proposal to build Kansas’ largest wind farm across 60,000 acres in Barber, Harper, Kingman and Sumner counties.

The $800 million Flat Ridge 2 wind farm is projected to have a power capacity of 419 megawatts when finished in 2012. Three-fourths of the electricity will be sold to Springfield, Mo.-based Associated Electric Cooperative.

Brownback said state also was witnessing a surge in the oil and gas fields as horizontal drilling draws out reserves beyond reach of conventional rigs. Kansas has the lowest ethanol production cost in the nation, he said.

“You’ve got three big plays developing right before your eyes,” he told about 250 people at the summit meeting. “We’re going to do it safely and environmentally.”

The governor said the federal production tax credit due to expire at the end of 2012 should be renewed by Congress. The credit has been targeted by budget-cutting Republicans in Washington, D.C.

Dave Lucas, a vice president of energy sales for Siemens Wind Power, said the wind industry in Kansas would continue to expand with retention of the tax credit, construction of new power transmission lines and enforcement of the state’s renewable energy standard of 20 percent by 2020.

“It would establish a suitable planning horizon,” Lucas said.

Steve Rus, executive vice president at Black & Veatch, said the aging power industry infrastructure was a concern for utility companies serving Kansans. Coal can’t lose its footing as a baseload source of power in this state, he said.

He said water resource management in power production and smart-grid technology for electricity delivery will become increasingly important elements of Kansas energy policy.

“Transmission is essential for development in Kansas,” Rus said. “It’s important we invest in energy.”

Steve Johnson, spokesman with the Tulsa, Okla.-based natural gas supplier ONEOK, said the summit discussion of wind power neglected the necessity of reliable back up sources when the wind failed to blow.

“Hopefully, that will be done with natural gas,” Johnson said. “Natural gas is the answer.”

Tim Carpenter can be reached at (785) 295-1158 or timothy.carpenter@cjonline.com.

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A generator is being developed for large-scale wind turbines that its makers say will enable the production of clean electricity at or below USD $0.04 cents per kilowatt-hour – cheaper than fossil fuel-based generation.

U.S. based Boulder Wind Power is developing and commercializing a revolutionary direct drive, permanent magnet generator for utility scale wind turbines that will allow manufacturers to build wind turbines with a cost of energy 20% to 30% under existing geared and direct drive technologies.

Boulder Wind Power’s proprietary air-core stator contains no ferromagnetic material, which eliminates all magnetic attraction between the rotor and the stator. The company says the technology can produce the same torque with less than half the mass of similarly rated iron-core direct drive generators.

In July, the U.S. Department of Energy has announced a grant for the company under the DOE’s U.S. Wind Power Next Generation Drivetrain Development program and yesterday, Boulder Wind Power closed $35 million in Series B Preferred Stockfinancing; with the funding provided by rare earth producer Molycorp, Inc. and venture capital firm NEA.

Boulder Wind Power’s technology allows for the use of rare earth permanent magnets that do not require dysprosium, a relatively scarce rare earth and with Molycorp being the only producer of rare earth oxides (REO) in the Western hemisphere, the deal will ensure Boulder Wind Power a reliable rare earth materials supply.

Rare earth metals are becoming increasingly in demand in for all sorts of renewable energy components and with China controlling much of that market, fears have been raised about continual supplies being available to manufacturers based outside the country.

Boulder Wind Power’s first generator design is a 3.0MW direct drive generator optimised for low and medium wind speed environments The company expects the generator will be available for delivery and testing in prototype turbines in 2013 and commercial availability of the 3.0MW generators should occur in 2013-2014.

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Just three short years after Barack Obama’s campaign, “No We Can’t” is the new “Yes We Can,” and the vision of hope and unity that re-inspired a generation has been shattered.

In the aftermath of Washington’s fabricated debt-ceiling crisis, and amidst a looming double-dip economic recession, prospects for the United States look grim. Public disapproval of Congress has soared to the highest level on record, and a deepening sense of disillusionment has swept the country.

When future historians look back, they may conclude that 2011 was the beginning of a lost decade – when the U.S. descended into a decade or more of political dysfunction and economic malaise, and the American people concluded that the nation’s problems are largely insurmountable.

But it doesn’t have to end this way.

Instead, those future historians might conclude that 2011 and 2012 were watershed years that ignited a Great Renewal — when a generation of Americans realized how much is at stake if we fail to unite behind an optimistic vision for national revitalization, make essential investments in our future, and fight back against those who would tear the country down. For what is at stake today is nothing less than the foundation of American leadership and the international order.

The 20th century was the American century in large part due to our economic dynamism and innovation, which depended on unrivaled public-private partnerships to invest in the engines of progress: science, technology, infrastructure, and education. This dynamism positioned the United States to underwrite the most peaceful and prosperous global period in modern history.

These investments spanned across Democratic and Republican administrations alike. As one president declared in a national address, “I’ve urged Congress to devote more money to research… It is an indispensable investment in America’s future… Some say that we can’t afford it, that we’re too strapped for cash. Well, leadership means making hard choices, even in an election year.”

Jimmy Carter? No, that was Ronald Reagan.

He was no exception. President George Washington supported the development of interchangeable parts, which revolutionized U.S. manufacturing, as the Breakthrough Institute has documented. Lincoln delivered railroads and land grant universities, FDR oversaw the Manhattan Project, Eisenhower developed interstate highways and nuclear power, Kennedy advanced microchips and the Apollo Project, Nixon launched the quest to cure cancer, and both Clinton and George W. Bush helped triple the budget of the National Institutes of Health.

Unfortunately, in the mad rush to reduce deficits, our leaders have forgotten these fundamentals — even while countries like China are making epic investments to fuel their rise. Instead of strengthening our commitment to science and technology, the recent House Appropriations bill slashes budgets for energy innovation, NIST, NASA, and the Office of Science and Technology Policy, which was cut by over 55 percent. Some of the most draconian proposals were defeated, but the damage may already be done, and the debt-ceiling deal could result in even greater cuts.

We cannot simply cut our way to fiscal solvency. Fiscal responsibility requires a long-term economic growth strategy, and cutting in areas like technology and infrastructure is penny-wise but pound-foolish. The 1990s are a good example. The federal government balanced its budget, not through drastic budget cuts, but through an economic boom that boosted federal revenue. Much of this growth was driven by information technology, especially the rise of the Internet, which was developed largely at the Department of Defense. Indeed, economists estimate that up to 80 percent of modern economic growth arises from technological innovation.

As we look beyond the debt-ceiling crisis, the U.S. should embrace a new, proactive growth strategy that is commensurate with our capabilities. The specifics are debatable, but the outlines are clear: rebuilding our infrastructure, reforming science and math education, and strengthening innovation and manufacturing in advanced industries. For example, the American Society of Civil Engineers has already identified $2.2 trillion in necessary upgrades. In energy technology, a broad group ofbipartisan experts have agreed on the target of $15 billion annually for federal investment. In advanced manufacturing, we need a public-private partnership and industry consortium to identify key hurdles and develop a national roadmap, similar to how SEMATECH revitalized U.S. semiconductor manufacturing in the 1980s. The list continues.

Fortunately, some of the country’s leading economists and private investors are beginning to voice similar perspectives. As Mohamed El-Erian, CEO of PIMCO and a leading global investment manager, wrote in the Washington Post last week, “fiscal solvency is not merely a function of deficits and debt… It is also highly sensitive to economic growth… the next step is equally important: to use the current political shambles as a catalyst for a renewed sense of common purpose and a better economic future.” Writing in Politico, the economist Jeffrey Sachs just called for a “a new economic framework for a new century,” which he described as “legislation to build advanced-technology job skills, invest in the health and education of our children, create an advanced energy system that taps our vast renewable resources, build a 21st-century transportation network and invest in scientific research to open new frontiers of knowledge and ensure U.S. leadership in 21st-century technologies.”

Of course, the pundits and DC insiders will dismiss all of this as impossible. Democrats and Republicans are too polarized and entrenched, they’ll say; the public, too weary and demoralized; the Tea Party, too radical and influential; our leaders, too small-minded and self-interested. And they will be right – if we allow ourselves to descend deeper into pessimism and shrink the realm of the possible even further.

The United States is at a crossroads, and the world is watching what we do. If we fail to rise to this moment, then the American era as we know it will end — not all at once, but slowly and surely — as will our ability to lead the world to overcome the defining 21st century challenges. But if our generation can embrace an aspirational vision for renewal and invest in the future – if we are willing to step up and fight for our future as so many before us – we can revitalize our nation’s greatness and global leadership for decades to come. The choice is ours.

–
Teryn Norris is a Truman Scholar, president of Americans for Energy Leadership, and former Project Director at The Breakthrough Institute.

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The controversial Sunflower coal plant in western Kansas may have caught a break Thursday when the state gave it an unusual extension on its construction permit.

The state order means the proposed power plant apparently will not have to face new and stricter pollution laws when the utility finally breaks ground.

Environmental groups immediately criticized the order by Robert Moser, secretary of the Kansas Department of Health and Environment, saying it was improper and perhaps unprecedented.

KDHE and Sunflower officials did not respond to questions, but in his order Moser said state law allowed him to issue the “stay.”

And when the permit was granted in December, the acting KDHE secretary described it as “the best permit possible for Kansas” and said the health of Kansans would be protected.

Sunflower Electric Co. had faced a timetable problem. Its permit required construction to begin within 18 months. But the utility has delayed construction while the Kansas Supreme Court decides a legal challenge to pollution limits for the plant.

And a court decision could still be a year or more away, some legal experts estimate.

Normally in such circumstances, a company will wait until the permit is about to expire and then request more time. Under that type of extension, the company’s project could be subject to new laws implemented since its permit was first issued.

But Sunflower’s stay allows it to remain under the pollution laws that were in place when it was issued in December. Since December, stricter air pollution standards have gone into effect, which would have added tens of millions of dollars to the price of the plant.

Under Thursday’s order, Sunflower will have one year to begin construction after the Supreme Court case is final.

“KDHE is giving Sunflower another free pass to pollute and doing so without even allowing the public an opportunity to comment on this unprecedented move,” the Kansas Chapter of the Sierra Club said in a prepared statement. Sierra Club officials, who have been leading the fight against the coal plant, said the decision was not a surprise — they expected KDHE would side with Sunflower.

“One has to question what else Sunflower will be excused from in the future,” Stephanie Cole, a Sierra Club spokeswoman, said in the statement.

Last month, The Kansas City Star published a story that reviewed hundreds of emails showing a cozy relationship between KDHE and Sunflower staff. The Star found the relationship was so close that the department allowed Sunflower to respond to questions from the public and then pass some of the answers off as its own. Those questions and answers were supposed to help shape the permit’s requirements.

A spokesman for the Environmental Protection Agency previously had said the request for a stay was very unusual. On Thursday, spokesman Rich Hood said he would withhold comment until a review of the order could be completed.

EPA has oversight of KDHE’s enforcement of federal clean air laws and has raised concerns that the permit limits on certain emissions are too lax.

The battle over Sunflower’s coal plant began in 2006. The state denied the first permit in 2007. But in 2009 when Mark Parkinson became governor, he reached a legal agreement with Sunflower to allow one 850-megawatt coal plant to be built in Holcomb in western Kansas. The estimated cost could be as high as $3 billon or more.

The plant will be owned by Tri-State Generation, a Colorado utility, and operated by Sunflower. Electricity will be used by Tri-State’s customers.

But Tri-State has said its customers will not need any new generation through at least 2019 and possibly longer.

After KDHE issued the permit seven months ago, construction was held up in January when the Sierra Club challenged the permit’s pollution limits in the Kansas Supreme Court.

Moser wrote that if anyone disagrees with his order, they may file a motion with the Kansas Supreme Court.

Cole with the Sierra Club said its attorneys were still reviewing the order and had not made that determination.

Scott Allegrucci, with Great Plains Alliance for Clean Energy, an environmental group, said Kansas government was failing the people. “We should not pretend that there is any commitment to public service or the rule of law, or that the best interest of Kansans are being considered … with regard to this proposed coal plant project,” he said.

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An Exxon Mobil pipeline that ruptured, leaking oil into Yellowstone River, may have sometimes carried a heavier and more toxic form of crude than initially thought, federal regulators said on Thursday.

The U.S. Transportation Department’s Pipeline and Hazardous Materials Safety Administration spokeswoman Patricia Klinger said her office had learned that the pipeline may have been used to carry heavier crude.

“I just found out that apparently, and the regional folks just found out, there is an interconnect on the pipeline that possibly does carry some oil out of Canada,” she said in response to a question about tar sands crude in the pipeline.

That a pipeline thought to transport only “sweet,” low sulfur crude could have carried so-called tar sands crude from Canada raised concerns by health and environmental officials, even as Exxon officials said the heavier oil was not flowing through the Silvertip pipeline when it broke on July 1.

“The actual crude in the line at the point of the incident was a blend of crudes from Wyoming,” Exxon spokesman George Pietrogallo told Reuters in an email on Thursday.

Exxon was responding to a question about whether tar sands crude had ever flowed in the pipeline. Almost all the oil produced in Canada’s Alberta fields is from tar sands.

The chemistry of tar sands oil, derived from tar sands or bitumen and sweet crude is significantly different, said Ronald Kendall, head of the environmental toxicology department at Texas Tech University.

“Tar sands oil is in itself heavier oil and it contains more compounds that are toxic and may contain heavy metals like lead,” Kendall said.

In a July 6 email to Reuters, Exxon spokesman Kevin Allexon said the crude carried by the pipeline “does not originate from Alberta” but from fields on the Montana-Wyoming border. On Thursday, Exxon revised that.

“The pipeline carries a variety of different production fields in the U.S. and Canada,” Pietrogallo said in the email.

‘Hell No’

Tar sands crude may cause more wear and tear on pipes because of its chemical makeup, including corrosive and abrasive agents, said Tom Finch, the pipeline administration’s technical services director for the western regional office.

Federal inspectors were trying to determine if transport of tar sands crude could have triggered internal corrosion that may have played a role in the rupture, he said.

Montana Governor Brian Schweitzer faulted Exxon for failing to tell the state exactly what kinds of crude ran in the pipeline or spell out what hazardous chemicals were in the mix now contaminating riverside properties.

“Since they dumped that oil into the river that the state owns and manages, since they have spread oil in a film across 150 separate properties, since the film is over fishing access sites and state parks, we thought it would be appropriate to know what it is,” Schweitzer said.

Richard Opper, head of the Montana Department of Environmental Quality, said he was surprised to learn the pipeline buried in the streambed of the Yellowstone may sometimes have moved tar sands crude from Canada.

“If the question is, did we know it was carrying tar sands oil? Hell, no,” he said in an interview on Thursday. “If companies are changing the kinds of materials in pipelines to mixes that make them more likely they will leak or rupture, that raises huge concerns.”

Exxon has apologized for the spill, which it estimates at 42,000 gallons, and pledged to restore a river prized for its near pristine waters, scenic beauty and abundance of wildlife.

EPA officials are analyzing the chemical fingerprint of the oil which, depending on its source, could contain anything from benzene, a known carcinogen, to hexane, a toxin that can damage the human nervous system.

Preliminary testing by the EPA has shown no detectable levels of some hazardous compounds harmful to humans. But at least five residents were treated in hospital emergency rooms for symptoms like dizziness, nausea and respiratory distress, according to state environmental officials.

Environmentalists said on Thursday that questions about the grades of crude in the Silvertip should prompt a call by regulators for new pipeline standards and guidelines.

“The industry likes to say, ‘oil is oil’; it’s pithy but untrue,” said Anthony Swift, energy analyst for the National Resources Defense Council. “Some grades of tar sands oil are fundamentally more corrosive and dangerous.”

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WASHINGTON — A major American utility is shelving the nation’s most prominent effort to capture carbon dioxide from an existing coal-burning power plant, dealing a severe blow to efforts to rein in emissions responsible for global warming.

American Electric Power has decided to table plans to build a full-scale carbon-capture plant at Mountaineer, a 31-year-old coal-fired plant in West Virginia, where the company has successfully captured and buried carbon dioxide in a small pilot program for two years.

The technology had been heralded as the quickest solution to help the coal industry weather tougher federal limits on greenhouse gas emissions. But Congressional inaction on climate change diminished the incentives that had spurred A.E.P. to take the leap.

Company officials, who plan an announcement on Thursday, said they were dropping the larger, $668 million project because they did not believe state regulators would let the company recover its costs by charging customers, thus leaving it no compelling regulatory or business reason to continue the program.

The federal Department of Energy had pledged to cover half the cost, but A.E.P. said it was unwilling to spend the remainder in a political climate that had changed strikingly since it began the project.

“We are placing the project on hold until economic and policy conditions create a viable path forward,” said Michael G. Morris, chairman of American Electric Power, based in Columbus, Ohio, one of the largest operators of coal-fired generating plants in the United States. He said his company and other coal-burning utilities were caught in a quandary: they need to develop carbon-capture technology to meet any future greenhouse-gas emissions rules, but they cannot afford the projects without federal standards that will require them to act and will persuade the states to allow reimbursement.

The decision could set back for years efforts to learn how best to capture carbon emissions that result from burning fossil fuels and then inject them deep under-ground to keep them from accumulating in the atmosphere and heating the planet. The procedure, formally known as carbon capture and sequestration or C.C.S., offers the best current technology for taming greenhouse-gas emissions from traditional fuels burned at existing plants.

The abandonment of the A.E.P. plant comes in response to a string of reversals for federal climate change policy. President Obama spent his first year in office pushing a goal of an 80 percent reduction in climate-altering emissions by 2050, a target that could be met only with widespread adoption of carbon-capture and storage at coal plants around the country. The administration’s stimulus package provided billions of dollars to speed development of the technology; the climate change bill passed by the House in 2009 would have provided tens of billions of dollars in additional incentives for what industry calls “clean coal.”

But all such efforts collapsed last year with the Republican takeover of the House and the continuing softness in the economy, which killed any appetite for far-reaching environmental measures.

A senior Obama administration official said that the A.E.P. decision was a direct result of the political stalemate.

“This is what happens when you don’t get a climate bill,” the official said, insisting on anonymity to discuss a corporate decision that had not yet been publicly announced.

At the Energy Department, Charles McConnell, the acting assistant secretary of energy for fossil energy, said no carbon legislation was near and unless there was a place to sell the carbon dioxide, utilities would have great difficulties in justifying the expense. “You could have the debate all day long about whether people are enlightened about whether carbon dioxide should be sequestered,” he said. But, he added, “it’s not a situation that is going to promote investment.”

His department has pledged more than $3 billion to other industrial plants to encourage the capture of carbon dioxide for sale to oil drillers, who use it to more easily get crude out of wells.

The West Virginia project was one of the most advanced and successful in the world. “While the coal industry’s commitment and ability to develop this technology on a large scale was always uncertain, the continued pollution from old-style, coal-fired power plants will certainly be damaging to the environment without the installation of carbon capture and other pollution control updates,” said Representative Edward J. Markey, Democrat of Massachusetts, co-author of the House climate bill. “A.E.P., the American coal industry and the Republicans who blocked help for this technology have done our economy and energy workers a disservice by likely ceding the development of carbon-capture technology to countries like China.”

A.E.P., which serves five million customers in 11 states, operated a pilot-scale capture plant at its Mountaineer generating station in New Haven, W.Va., on the Ohio River, from 2009 until May of this year. But the company plans to announce on Thursday that it will complete early engineering studies and then will suspend the project indefinitely.

Public service commissions of both West Virginia and Virginia turned down the company’s request for full reimbursement for the pilot plant. West Virginia said earlier this year that the cost should have been shared among all the states where A.E.P. does business; Virginia hinted last July that it should have been paid for by all utilities around the United States, since a successful project would benefit all of them.

Five years ago, when global warming ranked higher on the national political agenda, the consensus was that this decade would be one of research and demonstration in new technologies. A comprehensive 2007 study by the Massachusetts Institute of Technology concluded that global coal use was inevitable and that the ensuing few years should be used to quickly find ways to burn the cheap, abundant fuel cleanly. But with the demise of the Mountaineer project, the United States, the largest historic emitter of global warming gases, now appears to have made little progress solving the problem.

Robert H. Socolow, an engineering professor at Princeton and the co-director of the Carbon Mitigation Initiative there, said he was encouraged that some chemical factories and other industries were working on carbon capture without government incentives.

Mr. Socolow, the co-author of an influential 2004 paper that identified carbon capture as one of the critical technologies needed to slow global warming, said that there was a trap ahead. “Lull yourself into believing that there is no climate problem, or that there is lots of time to fix it, and the policy driver dissolves,” he said in an e-mail. He added that for companies like A.E.P., “business wants to be ahead of the curve, but not a lap ahead.”

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