In my last column, I suggested that we address a few of the barriers to the sustainability revolution in Michigan. So let’s do that right now. The biggest barriers I know of have generally to do with energy, fossil fuels, money and history – lots of knotty problems.
Since 1900, more than $350 billion in Federal subsidies have been directed toward the fossil fuel industry, according to the Public Interest Research Group. I will leave you to guess how many of these dollars were ever reflected in the pump price of gasoline, or the cost of a ton of coal. We didn’t necessarily see it, but we paid it all the same.
Hidden subsidies made fossil fuels seem cheaper and more appealing. By the latter half of the twentieth century, we were so dependent on petroleum that we were willing to accept increasing economic and security risks for it, and provide unprecedented benefits to the industries that supplied it to us.
Personally, I think the $350 billion figure is probably low. It doesn’t take into account the lowball prices of oil leases on public lands; or the regulations that have allowed oil and gas deposits on these lands to enter the asset column of mining and drilling companies; or the subsidy implied in tumbling a mountaintop into a riverbed in Appalachia or flooding the atmosphere with ozone precursors.
The point is that everything that translates into a subsidy for the fossil fuel industry adds to their size and profitability, and translates into greater political influence for that industry. The record of government support for fossil fuels accounts in large measure for its importance today, and for the influence it has over government at every level.
An Emerging Industry
Alternative energy companies, by contrast, have benefited little from government subsidization of any sort. They employ few persons and have little political influence. Yet, as a class of investments, they are growing and are potentially very profitable, and their political influence is starting to grow. They provide a lot of different potential strategies for energy production, storage, and supply; new synergies and creative opportunities. They make progress because they show promise, the promise of huge new efficiencies.
Push comes to shove: alternative energy industries have become just important enough that they could benefit enormously from an expression – almost any concrete expression – of government commitment. So far, unfortunately, that commitment has not happened federally, or inside the state of Michigan – all the tough talk notwithstanding.
Michigan business groups like the Sustainable Energy Coalition continue to call on state leaders to adopt a Renewable Portfolio Standard (RPS) to encourage, statewide, a wave of new 21st century investment in alternative fuels. The move would provide the expression of commitment entrepreneurs and financiers are looking in the state.
The RPS is designed to require energy suppliers to provide a gradually increasing percentage of their product from new renewable energy sources. States that wish to compete for these new investments rely on the RPS to stimulate investors to act. Pennsylvania, New York, even Texas have RPS policies in place and are reaping the benefits: in 22 states, over $475 million in new energy projects.
Michigan, by contrast, has no RPS, too few projects demonstrating the potential of alternative sources, and pays energy providers in other states and nations for most of its energy use.
Taming the Energy Lions
And where does the opposition to RPS come from? If you guessed the state’s existing utilities and fossil fuel providers, you are correct. Consumers’ Energy, the state’s largest utility, favors a voluntary approach that ensures Michigan will fall farther behind in the race to be the epicenter of alternative energy.
Electric utilities and coal producers are generally credited with turning back attempts at the Congressional level to legislate a national RPS. It is not that they have done nothing at all – more than 5 percent of Consumers’ electricity comes from renewable sources. Rather it reinforces a business model that makes the traditional, politically leveraged and subsidized fossil fuel industry into the very gatekeeper and arbiter of growth in the alternative energy sector.
So now we come full circle, back to the system of selective subsidization, political influence, historic privileges, and an unleveled playing field that places near-impossible demands on innovation, while rewarding the slow and inefficient technologies of the 20th century.
All this translates into big questions about how future residents in Grand Rapids and across West Michigan will get their energy, how reliable the sources are, and at what prices. It asks how our homes will be built and equipped or what kind of cars we will drive. The approach we choose directs where public and private money is destined to go, into what nations, states, and communities; or whether some of it might stay right here to enrich ourselves; it determines whether our energy sources will be friendly, and whether we buy them with dollars only, or have to pay with diplomacy, risk, and military might.
I have talked in this space already about the advantages held by West Michigan as it positions itself for success in the sustainability revolution. Energy, unfortunately, is one area in which we are not leading and, in fact, falling behind many other locations. We will need to work at it if we intend to truly become a sustainable society.
In a future column we’ll take a look at what the City of Grand Rapids specifically is doing to tame the energy lions.
Photographs by Brian Kelly - All Rights Reserved
Image description:
Three views of a power plant in Grand Haven along the Grand River