Guest essay, George M. Perry: Environmentalists squawk, but money talks

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Environmentalists squawk, but money talks

If you have been following the Keystone Pipeline imbroglio (and most of us aren’t) you may be puzzled by the paucity of cogent arguments in favor of its completion. Virtually no permanent jobs will be created, and the resulting gas products are destined for foreign markets. The environmentalists are near apoplexy about the possibility (probably rather remote) of damage to our aquifers, the populace is generally unenthusiastic, or oblivious to the issues, but the oil industry has almost unlimited funds for persuasive purposes. Advantage: oil industry. It will probably get the pipeline.

Painful though our environmental issues may be, Canada, the poster country for farsighted democracy, is near crisis with the venture into tar sands oil extraction. Scientists have been muzzled and all environmental laws suspended, as big oil has demanded. The Canadian government has been compliant, so National Public Radio tells us.

In these examples, environmentalists squawk, but money talks. Attempting to contain, outspend, outlegislate or outshout big oil is futile. The only hope is in the marketplace. Eventually, alternate energy sources, especially solar, must replace fossil fuels.

Denying Keystone would signify the beginning of the real war against fossil fuels. But it must be won on economic grounds.

If the president’s mandated improvements in auto miles per gallon succeed (to around 50 miles per gallon), and the solar boom grows exponentially, our use of oil will drop significantly, as will the price of gasoline. If gas drops below $3 a gallon, tar sands extraction, an expensive process, will be uneconomic. A lull in tar sands development will give solar the time needed to become dominant and result in a permanent loss of enthusiasm for tar sands oil.

The greatest boon to the solar effort may well be the introduction of low-cost, giant storage batteries. EOS Corp. is leading a consortium of domestic and European electric utilities in a major test of this technology. EOS has developed a large battery, about the size of a refrigerator. The test involves coupling many of these “fridges” together.

Hoping for a successful test in late 2014, EOS would then sell enormous batteries to local utilities, who realize that 40 percent of electricity generated is never used. Produced when it is not needed, excess electricity would be stored in the battery and when demand peaked, the utility could draw from the battery until demand subsided. In this manner, excess sunny-day solar electricity could be saved for use at night. Thus the cost of solar would drop precipitously. Coal and gas fired generation plants would gradually sit idle, the cost of liquid fossils would drop, and the environmentalists would win the war.

The prospects for utilities would seem excellent except for unexpected consequences that might temper their enthusiasm. Consider the following: Outfits like SolarCity lease solar facilities to homeowners, who pay nothing up front, and are promised considerable monthly power savings. For example, a homeowner currently paying the power company about $150 a month leases the solar system for about $50 a month. The solar company sells energy produced to the family for about an additional $50. This is possible because the solar company can feed excess energy they produce back to the utility (“reverse metering”), and are credited at high time of day rates. The family reduces their energy costs about $50 a month. Remember, the solar company assumes the initial costs.

The solar company does well until the public utilities succeed (they eventually will) in changing the laws to reward reverse metering at a much lower wholesale rate. The solar company’s secret weapon could well be a single unit of the EOS “refrigerator size” battery installed in each customer’s home. Excess energy generated during the day would be stored in the battery, to be used at night to power the home and, significantly, recharge the family’s electric car.

Commuters accustomed to $40-$50 weekly gas bills would need only purchase a dollar’s worth of electricity each working day from the solar company.

To recap: the homeowner had spent about $350 a month for fuel ($150 electricity, $200 gas) would now pay $50 for solar lease, $25 for EOS lease, and about $100 for solar electricity; potentially saving $175 a month! The local utility may lose many customers because of the giant batteries that had been hailed for improving the economics of their business. But they should eventually adjust and survive. They will continue to dominate in northern states, which tend to be sunshine-challenged, where wind generation of electricity could be the preferred alternate source of energy.

Everyone benefits except the fossil fuel people. No amount of cash and influence can alter their eventual demise unless they choose to buy many of the solar companies!

© 2013 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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