"Energy and Global Warming News for January 21: Over 80 U.S. companies call on Obama & Congress to enact comprehensive climate and energy legislation; Toyota secures long-term lithium supply for batteries"
More than 80 leading CEOs from U.S. businesses, including Exelon, Virgin America, NRG Energy, eBay and PG&E, sent a letter to President Obama and members of Congress today calling on them to move quickly to enact comprehensive climate and energy legislation that will create jobs and enhance U.S. competitiveness.
Saying that the U.S. is “falling behind” in the global clean energy race, the letter calls for forceful leadership to achieve legislation that will unleash innovation, drive economic growth, boost energy independence and decrease our carbon emissions. The letter comes just one week before President Obama delivers his State of the Union address on January 27th.
“American businesses recognize this challenge and have already begun to respond and innovate. However, today’s uncertainty surrounding energy and climate regulation is hindering the large-scale actions that American businesses are poised to make,” the letter states. “We need strong policies and clear market signals that support the transition to a low-carbon economy and reward companies that innovate. It is time for the Administration and Congress to embrace this policy as the promising economic opportunity that will empower American workers to compete and American entrepreneurship to lead the way.”
The letter was signed by 83 CEOs from some of the nation’s largest electric power, manufacturing, clean tech, technology and consumer facing companies. To view the full text and the list of signatories please go to: http://www.wecanlead.org
“The United States can’t afford to fall behind in the global race to lead the new energy economy,” said Jonathan Wolfson, CEO of Solazyme, a leading renewable oil and bioproducts company. “American businesses have a history of leadership and innovation and are poised to do that in a new clean energy economy.”
“Power companies need and want to be part of America’s clean energy transition,” said David Crane, president and CEO of NRG Energy Inc., which owns and operates more than 24,000 megawatts of electricity generation capacity in the U.S. “But we need the certainty of clear rules and strong policies that will help us invest in that transition while also addressing climate change and keeping power affordable.”
“The same inventive solutions that will help the environment will also help move the airline industry forward,” said David Cush, president and CEO of Virgin America, a U.S. commercial passenger airline. “Big challenges have historically propelled more innovation and greater efficiencies. Strong climate and energy policies can be that challenge one from which we will all emerge stronger.”
“Smart businesses can only do so much on their own to address climate change,” said Stonyfield Farm CEO Gary Hirshberg. “At this point, the rules need to change: there needs to be a price or tax on carbon. This incentive for genuine innovation needs to be firmly in place in order for the US to compete effectively in the global race to a clean energy economy.”
Peter A. Darbee, Chairman, CEO and President of PG&E Corporation said, “As the country looks to ways to support job creation, promote economic growth, and improve energy and national security, it’s clear to leading businesses that smart, sensible energy and climate policies can and should be part of the solution. We are asking leaders to recognize this opportunity and make it a reality.”
Toyota Tsusho Corp., a key supplier for Toyota Motor Corp., secured loans for a stake in an Argentina-based lithium project, with production planned for 2012.
The investment, valued at $100 million to $120 million, would give Toyota and Japanese battery makers a steady supply of lithium, used in hybrid and electric car batteries, rather than leave them at the mercy of producers as global supplies dwindle. The move is a first in the global search for electric-car age resources.
Toyota Tsusho will pay for a feasibility study and then take a 25 percent stake in the Australian-listed Orocobre Ltd. project. Lithium is only found in a few locations where weather and geography make extraction easy, and Orocobre’s supplies are located near the rich deposits in Chile.
But like with oil fields, rapid extraction to increase short-term production can harm long-term productivity, said James Calaway, Orocobre chairman.
Japanese electronics makers already control the majority of the lithium-ion battery market. Toshiba Corp., Hitachi Co. and NEC Corp. all have invested in automotive uses, while Panasonic Corp. owns a majority stake in Sanyo Electric Co., the world’s top supplier of lithium-ion batteries
T. Boone Pickens, the Texas billionaire, got his first car, a 1942 Ford, in 1946. But in an interview today at The New York Times, he made it plain that the national romance with the automobile was beyond his reckoning. “America is nuts about cars,” he said. “I don’t quite understand this thing about horsepower. Cars are not a big deal to me, but they are a big deal to a lot of people.”
Nevertheless, the Pickens plan he began in 2008 seeks to transform the way Americans drive by powering vehicles with what he calls our “abundance of clean, cheap, domestic natural gas.” But, in New York, Mr. Pickens said he was refocusing the plan, not only de-emphasizing wind energy, but also turning his natural gas focus from cars and pickup trucks to big commercial vehicles, including buses and the 18-wheelers that move American freight.
“We have to target the heavy-duty vehicles, which is where you can get the volume,” Mr. Pickens said. He said he had been meeting with large trucking companies, hoping to persuade them to switch at least part of their fleets to natural gas. Mr. Pickens said he once explained to Al Gore that battery propulsion was not likely to work well for large trucks. “Natural gas is 130-octane fuel, and it is 25 percent cleaner than diesel,” he said.
Mr. Pickens drives a natural gas-burning Honda Civic GX, he said, but he appears to be backing away from trying to put its equivalent in American driveways. Mr. Pickens, who has met with President Obama about his plan, likes the idea of requiring large freight haulers to run on domestic fuel. And he’s not talking about ethanol. “Ethanol is a stupid fuel,” he said.
Mr. Pickens is a supporter of legislation introduced last April that, among other provisions, offers new and stronger tax credits for purchasers of natural gas cars and the companies that produce them. The legislation, H.R. 1835, would also require 50 percent of new federal government vehicles bought before the end of 2014 to be capable of operating on either compressed or liquefied natural gas. “It has 127 co-sponsors,” he said.
The sector includes high-flying start-ups and heavily regulated utilities. Technology giants like Google Inc and Microsoft also are moving to the area.
“This is changing. It’s going to take some time … It’s the first inning and we got to make sure these early projects are really flawless,” said Scott Lang, president and chief executive at Silver Spring Networks, speaking at the Clean-tech Investor Summit being held this week in Palm Springs.
The privately-held Silver Spring Networks is smart grid networking company and is often cited as a candidate for an initial public offering.
The smart grid will allow two-way communications between utilities and their customers. Analysts have said it will marry clean power, electric vehicles, advanced meters, and power storage into a seamless network, modernizing thousands of miles of outdated power lines and allowing for more efficient energy use.
Increased momentum for smart grid technology helped push power storage and energy efficiency stocks to perform the best on the WilderHill New Energy Global Innovation Index in 2009, which tracks the performance of 86 global clean energy stocks.
The sector also has seen a boost from the Obama administration, which announced a $3.4 billion package in 2009 to help build a smart electric grid meant to trim utility bills, reduce blackouts and carry power generated by solar and wind energy.
“The scale is even bigger than the Internet … but the speed of adoption is still going to be slow,” said Adrian Tuck, chief executive at Tendril, a Boulder, Colorado-based smart grid company that GE recently acquired a stake in.
Yet risk-averse utilities and still emerging technologies pose challenges to the smart grid, often likened to the Internetization of how energy is moved and managed.
“There is very little tolerance for problems in this industry and I think that’s what distinguishes it from the telecom industry,” said Anne Pramaggiore, president and COO at Exelon Corp’s ComEd.
Pramaggiore explained that in the early days of cellphones consumers tolerated dropped calls, but consumers of electricity might not be so tolerant of problems with new smart grid technology.
The Democratic president came to office promising to seek comprehensive energy and environmental reforms, including the passage of a cap and trade bill to reduce carbon dioxide emissions blamed for global warming.
But the U.S. Senate — historically a burial ground for many presidential initiatives — hasn’t yet responded to Obama’s call.
Here are some possibilities for Obama regaining momentum:
* ONE PIECE AT A TIME
Senator John Kerry has been working with Republicans and independents in the Senate on a grand compromise bill that would include cap and trade, expanded domestic oil and gas drilling and added incentives for nuclear power.
But cap and trade has many opponents. It would require industry to reduce its carbon pollution over the next 40 years and require companies to hold permits for every tonne they emit. Those permits could be traded on a regulated market. Opponents say it will drive jobs abroad and raise U.S. consumer prices.
Some Democratic leaders are now raising the possibility of passing just part of a comprehensive energy policy — the less controversial part, such as incentives for utilities and others to use more alternative fuels such as wind and solar power.
That would leave the door open for possibly debating cap and trade, or another approach to lowering carbon emissions, for another time.
* SCORE A VICTORY, ANY VICTORY
A special election on Tuesday resulted in Republicans picking up a seat in the Senate and robbing Democrats of the supermajority of 60 that they needed to overcome roadblocks.
As a result, Obama is staring down the possibility that his leading initiative, healthcare reform, may not pass.
Some Congress-watchers think that as a result, Obama and his fellow Democrats in Congress should try to regain momentum in Washington by scoring a quick victory on something, such as an energy/environment initiative that recent polls show the public supports.
“If healthcare is not dead, it’s awfully close to sleeping for a while and the agenda is going to have to focus on someplace they can win. They need to post some points and quick, no matter what. Time is running out,” said Kevin Book, an analyst at ClearView Energy Partners in Washington.
As the year wears on, Democrats’ hopes of getting major bills passed diminish as the November congressional elections further politicize debates.