Executive Summary

A national panel of experts moderated by Deborah Potter, included Christine Ervin, Assistant Secretary for Energy Efficiency and Renewable Energy, U.S. Department of Energy; Amory Lovins, Director of Research, Rocky Mountain Institute; Roger Sant, Chairman and CEO, AES Corporation; and S. David Freeman, Chairman, Sunlight Power International.

They reported that presently energy causes more environmental damage to the U.S. than any other economic activity. Yet the use of natural gas and renewable sources would save money and the environment and greatly reduce America's dependence on vulnerable sources of foreign oil (presently 50% of US oil is imported). One panelist reported that annual "subsidies of $46 billion make fossil fuel energy look less costly than it really is. Persian Gulf oil would cost $100 per barrel, if we included the costs of the military to defend the Gulf."

Emissions from the dwindling supplies of petroleum and coal combustion are endangering public health. However, renewable energy sources such as hydroelectric, geothermal, biogas, wind and solar are inexhaustible and pollution-free. Such renewable sources have provided a third of all new US energy sources in the past two decades. New buildings could save energy by using passive solar and efficient lighting and heating technologies. Hypercars that ultimately could cross the country on one tank of gas are just a few years away. The combination of energy efficiency and using natural gas instead of coal and oil could cut U.S. carbon dioxide (CO2) emissions 20% below 1990 levels, reducing our impact on global warming.

California was held up as the model for electric utility de-regulation. All states were urged to follow what California has done to allow the consumer to choose the source of power, and also have a transmission line surcharge to fund research programs for renewables. California also will buy back excess electricity from home solar cells at the same price they charge the consumer for power.

The local panel of experts, which was moderated by Terrence McNally, included Chris McDonald, Cal Poly University at Pomona, Center for Regenerative Studies; John L. Jurewitz, Southern California Edison; Robert Zweig, M.D., President of Clean Air Now; and Thomas Zambrano, Director of the Aero Sciences Division of Aerovironment.

They described how on January 1, 1998, all consumers will be able to choose their source of electric power, whether it be coal, gas, nuclear, wind or solar, or some combination. The problem is that fossil fuels will likely be cheaper than renewables.

Both local and national panels agreed the key challenge is the education of the public, about the true costs and impacts of energy sources, about how energy efficiency can save money and the environment and about how the large corporations have such strong influence over state and national legislators.

Environmentally Sustainable Energy

A National Town Hall Meeting, February 19, 1997

Introduction by Christopher Reeve: Renew America facilitates the exchange of information for problem-solving across America through its annual awards program, teleconferences, web site and other materials. Renew America (1-800-922-RENEW) has an index of 1600 environmental remedies ($35 in paper). It is also available free on the web at www.crest.org/environment/renew_america/

The global community faces critical choices. Energy demand is almost certain to outstrip current supplies. Emissions from petroleum and coal combustion are endangering public health. However, renewable energy sources such as hydroelectric, geothermal, biogas, wind and solar are inexhaustible. They now provide 8% of US energy needs. If the US chose energy conservation and renewable energy, we could save billions of dollars each year, have a cleaner environment and reduce dependence on imported fossil fuels. Each of us can make a difference, whether we ride a bike or take public transit. As Margaret Mead said, "Never doubt that a small group of committed people can make a difference. Indeed it is the only thing that ever has."

Deborah Potter, moderator: This is the third Renew America Teleconference with downlinks to more than 100 sites in 37 states.

Christine Ervin, Assistant Secretary for Energy Efficiency and Renewable Energy, U.S. Department of Energy: Energy causes more environmental damage to the U.S. than any other economic activity. Sustainable development will save money and the environment. Royal Dutch Shell predicts that by the year 2050 renewables will meet over 50% of the world's energy needs. The US leads the world in renewable energy technologies now.

Amory Lovins, Director of Research, Rocky Mountain Institute: In the past 20 years we have gained 3 to 4 times as much energy from conservation and efficiency as from new sources, yet we are still wasting hundreds of billions of dollars in energy expenditures every year. Renewable sources have provided a third of all new energy sources in the past two decades. We could save more capital costs by sustainably designing new buildings by using passive solar and efficient lighting and heating technologies that are available now. We are designing hypercars that ultimately could cross the country on one tank of gas.

Roger Sant, Chairman and CEO, AES Corporation: The least cost energy strategy is energy conservation. Natural gas turbines are very efficient, and can produce electricity now at half the cost of any of the renewable sources. The combination of energy efficiency and natural gas could cut U.S. carbon dioxide (CO2) emissions 20% below 1990 levels. By 2010 we could replace 80% of the coal powered plants with natural gas turbines and greatly reduce pollution.

S. David Freeman, Chairman, Sunlight Power International: We're moving out of the era when the oil and utility companies made the decisions about energy sources to a time when the consumers can assert their values in the marketplace, by asking for fuel efficient cars and light bulbs, and choosing the source of their electric power We are now in a very vulnerable position because we are importing over 50% of our oil.

Potter: What are the obstacles to sustainability?

Lovins: We reward the opposite of the desired results, because utilities make more profit by selling more electricity and architects are rewarded by what they spend on buildings rather than what they save in utility bills. We separate capital and maintenance costs to our detriment. For example, landlords own the buildings, but tenants pay the utility bills.

Potter: There is a public perception that there is no crisis.

Sant: Most people are busy with the mundane aspects of their lives, but when people get knowledge they tend to act. Our leaders need to speak out more.

Ervin: A market depends on information. We have energy labels for refrigerators but not for houses. We should give buyers of energy-efficient houses breaks on their mortgages.

Freeman: The companies in oil and gas are much bigger than those in renewables and overwhelm the public with advertising and presence in the marketplace.

Q. from St. Paul, MN: The President's Council on Sustainable Development suggested a comprehensive review of costs of energy sources. What is happening to implement that?

Freeman: We found $46 billion of subsidies make fossil fuel energy look less costly than it really is. Persian Gulf oil would cost $100 per barrel, if we included the costs of the military to defend the Gulf.

Ervin: This administration is promoting programs to develop alternative fuels to petroleum. We are also in a partnership to develop a new generation vehicle with triple the fuel efficiency of current autos.

Sant: We need a much higher tax on gasoline to reflect its true costs.

Lovins: Yes, it is silly to have gas cheaper than bottled water.

Freeman: The tax system is full of inequities, which will continue until the people get interested and start to make their influence felt. We are in danger with our dependence on Persian Gulf oil. What if there were a revolt and all the oil in Saudi Arabia and Kuwait were controlled by people allied to Iran and Iraq? We would be at their mercy.

Q. from Tampa, FL: The U.S. Departments of Transportation, Energy and Defense support research in alternate fuels, and vehicles. When will these technologies be on line?

Ervin: The prototype of the new generation vehicle is geared for demonstration in 2004.

Lovins: There is now about $2 billion committed to producing ultra-light cars, the first of which should enter the market around 1999.

Q. from Colorado: Utility restructuring seems to be slowing development of renewable energy sources.

Freeman: All states should follow what California has done to allow the consumer to choose the source of power, and also have a transmission line surcharge to fund the research programs.

Lovins: California will continue to reward utilities for cutting consumer bills. They also will buy electricity from your solar cells back at the same price they charge you for power.

Potter: How do we address the issues around utility restructuring?

Ervin: The administration is developing legislation to support consumer choices, but we are concerned about the transition period.

Freeman: Electric power is an environmental issue. There are millions of people that belong to environmental organizations, who can express their values in choosing their source of power. Make sure there are charges on the wires to support renewables.

Ervin: The administration is involved in analyzing claims for green power and green pricing. How do you determine emissions and ensure a source of power is cleaner?

Q. from Chicago: Energy efficient affordable housing is important for inner city communities. How can we bring together energy efficiency and job creation?

Ervin: Home weatherization programs for low income people help provide both jobs and energy efficiency.

Q. from Salt Lake City: What kind of new technologies should architects include?

Freeman: There is a roofing material made of photovoltaic (PV) cells to power your house and you will be able to sell the excess to the utility company. With fuel cells you can be independent of the grid.

Lovins: Our electricity bill is $5 per month for a 4000 sq. ft house, because with a passive solar design we don't need to use a furnace or air conditioner, and we use efficient lighting.

Ervin: A smart house starts with a good design to make maximum use of natural daylight.

Potter: Are renewable technologies hard to sell to the utilities?

Sant: Yes, they are very difficult. It's hard to get technologies into the marketplace.

Sant: We started our company with a total commitment to renewables, but we have found coal and gas to be cheaper. We have done coal as clean as possible, and planted trees to mitigate the CO2. It is hard to be an advocate for renewables when you have to make a profit.

Q. from Yorktown Heights, NY: How can you get more people to pay attention to this issue?

Ervin: Use the bully pulpits to inform people. Our Center of Excellence for Sustainable Development in Colorado has energy efficiency tool kits you can request. There is a lot of interest -- we got 94,000 hits on our web site in December: www.sustainable.doe.gov/

Lovins: Some high school kids went around their community to ask businesses if they wanted to be in a directory of sources of energy saving products. Many said, "Come back in a few weeks," and they hurriedly stocked up.

Freeman: We should have "truth in energy" by putting a picture of Saddam Hussein on every gas pump to indicate where the oil is coming from.

Lovins: Or you could put a picture of a pile of coal on your refrigerator to indicate where the power is coming from.

Sant: The polls show people are concerned about the "environment" but not about energy. They also don't seem interested in energy security.

Lovins: Osage, Iowa, introduced energy efficiency throughout the entire community. It not only cut their energy bill, but it kept hundreds of thousands of dollars from leaving the community (to pay for oil). The result is an additional $1,000 per household per year that is circulating in the community, increasing their standard of living and enticing new businesses to locate there.

Q.: Can renewable energy sources compete without subsidies?

Sant: Nothing can compete with natural gas. Fifteen years ago the marginal generation cost was 7cents per kilowatt, but now it is down to 2.5cents. Efficient fuel cells are a ways off.

Ervin: Now it is hard to compete with natural gas, but you can find places where photovoltaic is less expensive if you are not already on the grid.

Freeman: People will pay 15% more for renewable energy sources.

Sant: But will they pay a 50% premium?

Lovins: When you include the cost of the delivery (and losses) through the transmission lines of centralized power, solar on your roof is economical.

Ervin: A survey has shown consumers will pay an extra $5 per month to have 10% of their energy from photovoltaic facilities.

Q. from Buffalo, NY: Nuclear fusion could generate vast amount of electricity, is the DOE looking into this?

Freeman: Nuclear fusion is a expensive welfare program for physicists. If we put that research money into alternate sources we would be far better off.

Q. from Eugene, OR: Tell us more about hydrogen as a fuel.

Lovins: Hydrogen can be made either from low cost off-peak electricity or reforming natural gas. There are safe tanks to store it in. In a car, the hydrogen powers a fuel cell which makes electricity on board with 60% efficiency (far greater than a gasoline engine which is only 20% efficient). It could also be used to heat buildings. We could move to a hydrogen economy. Currently Chicago is testing hydrogen fuel cell powered busses. They produce no pollution out the tailpipe. The very efficient hypercar needs small fuel cells and reasonable-sized tanks.

Sant: However, there is still the problem of the increase in vehicle use and resulting highway congestion.

Lovins: The best way to solve that problem is better land use where people don't have to travel, they just send electrons to have virtual access through computers, videophones, etc. as alternates to physical mobility.

Freeman: Hydrogen is the most ideal form of energy, but it is not a primary source. There still needs to be energy from either electricity or natural gas to produce the hydrogen.

Q. from Univ. of Illinois: How should we do the utility restructuring legislation? It seems competition is based on short term costs, rather than long term benefits.

Lovins: You should use the California model legislation. Make sure you count environmental and social costs. Allow wholesale competition. Make sure that utilities get rewarded for cutting your bill.

Ervin: The Clinton administration has not yet drafted legislation. Our goal is to retain the progress on renewable sources.

Q. from Sacramento: What actions do you recommend to local governments to respond to restructuring issues?

Freeman: Get the information out to the consumer to let them know competition is coming, but don't overwhelm them with details. A good public utility could promote its conservation methods to others outside its service area.

Lovins: Form a buyers cooperative to purchase power from renewable sources.

Q. from Univ. of Michigan: What are some creative solutions to get people downtown without using their cars?

Lovins: Dial-a-ride can be convenient, but the best solution is mixed land use. Another idea is to encourage employers to say that employees now have to pay fair market value of a parking space, but the company will pay them that amount in cash. This encourages the employees to use public transit or their bicycle and pocket the cash, and saves the employers from having to build more expensive parking spaces.

Ervin: Help consumers look at the hidden costs of driving, for example the average cost of auto insurance is over $1 per gallon.

Sant: Singapore requires you to stop and buy a ticket to drive downtown.

Q. from Tucson, AZ: If we agree our children's lives are at stake, what role will corporations and governments play in educating children?

Sant: We need to educate consumers, even if it affects our bottom lines, but we don't know how to educate people effectively.

Ervin: Clean energy is now reemerging as a bipartisan issue. We face the choice of more corporate welfare or energy efficiency. Inefficiency costs us money and jobs.

Sant: We should diversify our oil supply, and increase the petroleum reserve.

Freeman: A conservative person like George Schultz, head of a task force in 1971, said that if our oil imports exceeded 10% we should impose a tariff on foreign oil. Here we are at 50% and there is no tariff. We are vulnerable to being held hostage by the oil suppliers. Presidents Ford, Nixon, and Carter all agreed that it was an important issue, but nothing is happening.

Sant: I think we should focus on the environmental concerns of using oil.

Lovins: Renewables save money and lives and increase our security. Education of everyone, including individuals, communities, and corporations, is crucial. Remember the bumper sticker, "If you think education is expensive, try ignorance."

Q. from South Burlington, VT: Green Mountain Power has found consumers will pay a little more for renewables. We want to use less expensive renewable sources that have already paid off part of their capital costs, but they are tied up in long term contracts.

Freeman: The purpose of this process is to create additional renewable sources, not just move around the power from old ones.

Potter: What will be the top sources of energy in 50 years?

Ervin: There will be an increase in distributed power, using renewables in every new home and car.

Lovins: The main sources will be efficiency, and distributed renewables.

Potter: What are your final words?

Ervin: We need clean energy choices. The Department of Energy has many resources. Call 1-800-DOE-EREC.

Lovins: Get informed, get active, set a good example.

Sant: We need an educated public.

Freeman: Everyone should line up 10 friends to purchase cleaner energy sources.

Local Panel for Southern California

Terrence McNally, moderator: A recent issue of Mother Jones, Paul Hawken has an article on Natural Capitalism, showing how nature's efficiencies are becoming persuasive to the corporate world. The current Harvard Business Review, Jan.-Feb. 1997 issue, has several articles on sustainability.

Chris McDonald, Mechanical Engineering Dept., Cal Poly University at Pomona, Center for Regenerative Studies, Solar Park: We have a long road ahead to achieve sustainability. We need research, development, implementation, conservation (through both technology and behavior modification). We need changes in our lifestyles to increase conservation.

The Cal Poly Pomona College of Engineering sponsors renewable energy courses, research, demonstrations. Solar Park is an applied research laboratory to look at photovoltaics, wind, bio-mass, etc. The Center for Regenerative Studies is a living laboratory in sustainability.

John L. Jurewitz, Southern California Edison: Economics teaches us that institutions matter, but individuals are also important to make changes. Electricity restructuring will facilitate individuals' choices to make a difference. Up to now, electric utilities have been vertically integrated on a monopoly basis to supply the power needs of all customers in a geographical area. The electric company centralized leadership decided how to generate electricity to supply customers. But on January 1, 1998, you will be able to choose where your electric power is coming from. The transmission lines will still be owned by utilities and controlled by an independent non-profit system operator. David Freeman's firm has been hired by the state of California to manage the transmission system.

This is an opportunity for consumers, but it is risky because large commercial customers will try to get electricity as cheap as they can, regardless of the environmental consequences. There is going to be a consumer education problem. We need to have the market structured appropriately so that you can really get solar energy. One idea is to have environmental organizations such as the Environmental Defense Fund (EDF) team up with suppliers to ensure consumers are really getting power from renewables. This is an opportunity for grassroots activism to directly make things happen, it will depend on you.

Robert Zweig, M.D., President of Clean Air Now: Clean Air Now started promoting hydrogen 25 years ago. Now the experts see hydrogen as a viable alternative fuel. We could use it in the niche market of Los Angeles, the smog capital of the US. It is a clean fuel, the only product is water vapor out of the "tailpipe." Fossil fuels produce much pollution, such as PM10, NOx, CO, etc.

We have a demonstration plant in El Segundo that makes hydrogen by using sunlight to produce electricity which does an electrolysis separation of water. We are utilizing hydrogen in stationary fuel cells to generate electricity that runs three vehicles. Ballard busses in Chicago and Toronto, Canada are using hydrogen-powered fuel cells on board to generate electricity to run the buses.

Thomas Zambrano, Director of the Aero Sciences Division of Aerovironment: We build solar-powered airplanes, design electric cars for General Motors, and do consulting on energy. In 1988 we were hired to build a sleek solar car for GM, the SunRacer, to race across Australia. More recently we designed the sleek GM electric powered Impact, a "cool" sports car that is now in Saturn dealers. My wife likes the fact that she can charge it at home, so she doesn't have to go to creepy gas stations at night.

Right now Edison is getting a lot of power from the windmills in San Bernadino, so all of us have a significant percentage of power from renewables.

Noel Godfrey: What are the external economics of hydrogen?

Zweig: Hydrogen can be produced from natural gas, reformed with steam. The result is hydrogen and CO2 (which is used for bubbly soft drinks). Hydrogen can also be produced through electrolysis, using electricity from an electric source, which could come from renewables such as photovoltaics, wind, or hydroelectric power. The bottom line is hydrogen is advantageous to the environment, compared to fossil fuels.

Marilyn Temple: How can you tell that your power is really coming from a renewable source? Can renewables compete without subsidies?

Jurewitz: Power goes into the grid and travels along according to physical laws, but advances in computers allow the tracking of millions of transactions on an hourly basis, so we can compensate the company that puts power into the grid for the power you take out.

Federal legislation in 1978 mandated that utilities pay regulated prices to be determined by the states. California said that renewable sources were important. The utilities failed to make good decisions for power generation. It turned out that power from the nuclear plants was about as expensive as the renewables. The California PUC supported renewables, but the electricity cost in California turned out to be 50% higher than the rest of the country, so businesses complained.

A retailer may just get the cheapest power they can find, or they could use power from a renewable source (providing this is verified). In addition to the cost of power, some money will be collected to support the grid, presently $140 million annually, with a percentage of that competitively bid out to aid renewables and conservation efforts. In addition, environmental entrepreneurs will be asking you to pay more for renewables. Wind power will be competitive, but not photovoltaic, unless there is not sufficient grid capacity in an area, so that a local power source is needed.

We will have hourly time of use meters, so there will be incentives to have consultants come out to help companies reduce peak period use.

Ron Ketcham, AQMD: The Center for Regenerative Studies is seeking technologies to get off the grid, can other small communities do this?

McDonald: The Center houses 20 students that try to be self-sustainable, such as producing their own food on site. We are looking at various power sources, such as biomass, wind and solar, but we lost our funding from the utilities so we don't know when we will do that.

Zambrano: In the past the utilities had to create a lot of excess power for a reserve margin with a giant central facility. Now gas turbines in local neighborhoods can generate power as needed.

LaRue Brewer, LWV: Will there be some way to enforce the regulations?

Jurewitz: The grid will continue to be a monopoly, overseen by the PUC regulatory service. Edison will own the local distribution wires, but it is not yet clear who will own the big transmission wires. There will be deregulation and competition at the generation and retailing levels, not distribution. I believe there should be some regulations to ensure that the customer gets the power they request.

Tom Jones, Postal Service: Do you see customers leaving PG&E because their power is more expensive?

Jurewitz: Some customers are going to change because of price. The question is when a customer leaves Edison, how much that is worth to us, how big is the retail margin?

Hank Weeda: If I want to buy power from a wind farm, how will I know I get that power?

Jurewitz: It's true the electrons from the wind generator are fed into a big transmission system, but when you take some out, we can measure that and charge the wind generator.

Zambrano: Enron Corporation is a big gas company that just purchased a lot of the wind generation capacity in Tehachapi and they will sell that power to you.

Mark vonWodtke, CalPoly: Paul Hawken says being environmentally smart requires putting the externalized costs into the price of energy. Then renewables are competitive.

Jurewitz: The AQMD RECLAIM program of tradable emission rights is one way to internalize the cost of pollution. It is having some impact.

Zweig: AQMD offers funds for emission reductions.

McNally: In the Rio follow-up conference this spring, Tim Wirth says the US will agree to binding numbers in reducing carbon emissions. That will require some adjustments. A proposal by Redefining Progress, a San Francisco group, to shift from payroll taxes to carbon emission taxes (staying revenue neutral), has been endorsed by 2000 economists.

Jack Gram, LWV: What are the total environmental burdens of electric cars vs. LNG cars?

Zambrano: Contact the National Renewable Energy Lab in Golden, Colorado.

Zweig: The California Air Resources Board is also looking at this question.

Jack Sullivan, LWV: We are talking about green energy costing more because the dirty energy guys are not paying their full costs. I don't pay the full costs of driving my car. I live in an unreal world. Those consuming green energy ought to be rewarded.

Jurewitz: We need legislation that taxes emissions or tradable credits that become a part of the costs of running a coal generator plant, but so far Congress and the State Legislatures are not willing to do it.

McNally: The government should be representing us in defending the interest of the commons, but it seems the legislators are bought by the companies.

What are the obstacles to moving to clean energy? What are the most exciting, and the most scary things you see ahead?

McDonald: The obstacles are the subsidies of fossil fuels, which are not paying their total costs, including the cost of the military to defend the Persian Gulf. We need more research in renewables. A fully competitive electric vehicle is 10-20 years away. However, we have good fuel cells in hybrids to compete with gas. We now have a system with 30% conversion efficiency from sunlight to electric power.

Jurewitz: The obstacles are lack of pricing externalities, problems of big institutional changes, and the lack of consumer information. I am excited by the creative entrepreneurs on the forefront, moving toward new technologies. I am scared by global warming (how do we activate people on this issue to accept a reduction in GNP, if necessary?), the short time frame for planning by business people, and the lack of effort to address the national security issue (foreign oil dependence) -- for example, a proposal for a small import tax of $1-2 per barrel was killed quickly in Congress.

Zweig: I agree with all above. The biggest problem is a lack of education of the public. Politicians don't vote for a tax on fossil fuels because the uneducated people don't pressure them. We need to educate ourselves, our children, and the politicians. Hydrogen is the most exciting fuel and it will replace oil in the next 25 years. We need to put a monetary value on externalities. Health costs in the South Coast Air Basin due to fossil fuel pollution are $8-12 billion per year, causing 4-5000 extra lives lost every year. I am scared by the lack of education. Our legislators put billions into fusion, and are spending 10 times as much to develop "clean coal" as to develop improved fuel cells.

Zambrano: I am most excited by micropower electronics, electric cars, electric bikes, and information technology. Nothing is scary when you have information and have a choice.

Audien