by Sinclair Noe
The
stock and bond markets in New York were closed today; that's the
first time that's happened since Hurricane Gloria hit New York in the
80's. The markets will be closed tomorrow; that's the first time the
market has been closed for 2 days due to weather since 1888, when a
blizzard hit New York; of course it was closed following 9/11. Areas
around New York's Financial District were part of a mandatory
evacuation zone. The storm surge is already pushing water over
seawalls in the southern tip of Manhattan. And the hurricane is just
now hitting New York head on. It already flooded Atlantic City. Much
of the East Coast was at a standstill as the storm approached. The
storm, 900 miles across, shut the federal government in Washington
and state offices from Virginia to Massachusetts. Schools were
closed, planes and trains tried to get out of the way; delays are
affecting transportation around the nation. You can't get there from
here.
Economic
losses could ultimately reach $20 billion, only half of it insured.
Some estimates put the property damage as high as $90 billion; we'll
see. Ten states have declared a state of emergency; 60 million people
are in the path of the hurricane; there will undoubtedly be some
tragedies. Keep those people in your prayers.
It
is estimated millions of people will lose electricity for an extended
period. Federal inspectors have been dispatched to 11 nuclear power
plants from Maryland to Connecticut; trying to avoid a repeat of the
Fukushima Reactor meltdown in Japan. Hope the backup generators
work.
Last
Friday, we opened the phones and for some reason, the conversation
centered around global warming. So, I think I'll talk about green
energy today.
Clean
energy has become a dirty word in presidential politics. In their
second debate, Mitt Romney and Barack Obama each tried to outdo the
other’s love of fossil fuels: Obama extolling his record on oil and
natural gas production, Romney vowing to take “advantage of the oil
and coal we have here.” The Republican candidate has ridiculed the
administration’s $535 million loan guarantee to Solyndra, the
bankrupt California-based solar panel maker, and accused Obama of
living “in an imaginary world where government-subsidized windmills
and solar panels could power the economy.”
The
candidates’ coolness to renewable energy comes at a time when the
domestic supply of traditional energy sources, such as oil and
natural gas, is at an all-time high. And yet this failure to make the
promise of renewables a keynote in the debate is a huge missed
opportunity. In particular, it ignores the dramatic reduction in the
cost of photovoltaic solar power worldwide and the considerable
benefits to consumers and the environment.
The
untold story of this campaign is that what killed Solyndra may turn
out to be a boon for the nation. Over the past five years the price
of photovoltaic panels has plummeted 75 percent, due largely to a
glut of Chinese-made panels. The fall in prices rendered technically
advanced photovoltaic panels, like those produced by Solyndra and
other US companies, too expensive to compete. But cheap panels have
been a godsend for consumers.
Nationally,
the average cost of residential installations—including hardware,
permits, and labor—has plummeted from $9 a watt in 2006 to $5.46.
Averaging in commercial industrial installations, the national
installed price drops to $3.45 a watt, (says the Solar Energy
Industries Association, a Washington-based trade group.) For
consumers, the economics are compelling; it's a hedging strategy for
energy consumption, something like locking in $1-dollar-per gallon
gas for the next 20 years.
The
result: almost 52,000 residential rooftop systems were installed in
the US last year, up 30 percent from a year earlier. Total rooftop
installations, including on commercial buildings, grew 109 percent
from 2010 to 2011. Total photovoltaic installations are projected to
grow an additional 71 percent this year from 2011 levels. In less
than four years we have tripled solar energy to 5,700 megawatts
installed.
Worldwide,
the picture is even more positive. Australia projects that 10 percent
of its 8 million houses will have rooftop systems within the next 12
months; most of that growth coming in the past three years. European
rooftop installations continue to outpace those in the U.S., even as
some countries begin to pare subsidies that have helped spur a
continental rooftop boom. Including residential, commercial, and
industrial-scale projects, the world had installed about 67 gigawatts
of photovoltaic power at the end of last year—up from just 1.5
gigawatts in 2000.
Despite
such breakthroughs, the U.S. economy is harnessing only a fraction of
solar’s potential benefits. Based on U.S. Census Bureau data, about
100 million U.S. residential units could physically hold rooftop
systems one day, generating by one estimate 3.75 trillion kilowatt
hours of electricity a year. In 2011, total U.S. electrical
generation from all sources was about 4 trillion kilowatt hours—42
percent of that from coal, according to the U.S. Energy Information
Administration. The trouble is, many of the big,investor-owned
utilities that provide about 85 percent of America’s electricity
see solar as both a technical challenge and a long-term threat to
their 100-year-old profit models. And the lack of a national energy
policy means regulation of solar is up to states, public service
commissions, and a wealth of local governments and bureaucracies—many
of whom have a vested interest in maintaining the status quo.
We
are starting to see a shift in pricing power and in political clout.
Today solar is cost effective without local subsidies for 300
utilities in 30 states representing 21% of electricity solar in the
USA. That is a market opportunity of over $1 Trillion. We now
have more than 100,000 solar energy jobs at more than 5,600 companies
in the US, double the number from 4 years ago.
In
fact, the Department of Defense, the largest single energy consumer
in America, is bullish on solar. Whether it is the 1.45-megawatt
solar project at the Burlington, Vt., Air National Guard Base or the
14-megawatt project at Nellis Air Force Base, Nev., the military
recognizes the value of solar. America is now home to the largest
operating solar photovoltaic plant in the world, the 250 megawatt
thin-film plant in Yuma. That plant can provide electricity to
100,000 homes.
Photovoltaic
technology is not the only significant solar development. In
California, construction is underway for the largest concentrated
solar thermal plant of its kind in the world, the 392-megawatt
Ivanpah project in California that created 2,100 construction jobs.
When completed in 2013, this concentrated solar plant will power
140,000 homes. And a 280 megawatt concentrated solar plant in Gila
Bend, will be the first in the US with energy storage, providing
power even when the sun goes down. That project created 1,600 jobs.
The
story is much the same with wind energy. At the end of 2008 we had
about 25,000 megawatts of wind energy, but today we have doubled wind
energy capacity to over 50,000 megawatts. We have added more new wind
energy capacity over the last five years than nuclear and coal
combined. We now have 75,000 Americans working in wind and over 470
plants in America manufacturing wind products. The upshot: the cost
of wind energy dropped from 8.4 cents per kilowatt hour in 2008 to
about 5 to 7 cents per kilowatt hour today. States like Iowa and
South Dakota have achieved the milestone of getting 20 percent of
their electricity from wind. And the Shepherds Flat wind farm in
Oregon, one of the largest in the world at 845 megawatts, created 400
construction jobs and is powering 235,000 homes.
Energy
efficiency is the low-hanging fruit. Every day we are paying more for
energy than we should due to poor insulation, inefficient lights,
appliances, and heating and cooling equipment -- money we could save
by investing in energy efficiency. In the past 4 years, more than 1
million homes have been weatherized. Given the fact that over 90
percent of the products used in weatherization are manufactured in
the United States, we are creating jobs not only in construction but
also in manufacturing. This is a win-win-win situation.
I
wish I'd heard more about green energy during this election cycle. I
think it is probably the biggest growth story in the economy. I think
it's a national security issue.
A
hurricane or a earthquake could do serious damage to a nuclear plant.
Even if you don't believe the ever-growing mountains of evidence
supporting global warming being human caused, there is no doubt that
there are dangers from nuclear; there are dangers from oil, nat gas,
and coal. There is no question that coal is a pollutant, and can
cause serious health issues, same with the pollution from oil
products.
If
you choose to disregard the scientific evidence that these pollutants
are a part of global warming, that is your choice. There is clear
evidence that we are seeing warming. The arctic ice caps are melting,
glaciers are melting, Iceland isn't all Ice any more, and there are
hurricanes in New York at the end of October. What is causing the
warming? The vast majority of scientists say we are the cause. You
are not compelled to believe in science. However, I'll tell you one
reason I believe. If we can clean up the air and water, we'll have a
cleaner, healthier planet; that's a good thing; and if the scientists
are right, we'll avoid the destruction of the planet and ourselves.
It's kind of like believing in God. You live a better healthier life
for believing, while if you don't believe and you are wrong –
you're just damned.
A
report from the European Renewable Energy Council finds the European
Union could generate trillions of dollars in fuel savings by looking
beyond goals mandated for 2020. Greater investments for things like
wind and solar power, coupled with a slow move away from things like
coal, could make the region nearly carbon-free by 2050. On the other
side of the Atlantic, however, officials have expressed reservations
about being forced into a low-carbon economy, highlighting the green
divide among western powers.
The
European campaign groups, in a report highlighting
an "Energy (R)evolution," call on European leaders to move
in favor of renewables and energy efficiency instead of fossil fuels
or nuclear power. The group states that every time oil prices
increase by $1, Europeans wind up paying more than $500 per month.
That, they say, could drop by half by 2030 if leaders embrace a
comprehensive green energy future. EU member states have agreed to
cut their carbon footprint by 20 percent, improve energy efficiency
by 20 percent and get 20 percent of their energy from renewable
energy resources by 2020. In the U.S., meanwhile, a study on the
energy future finds state and federal governments could generate as
much as $124 billion by exploiting unconventional oil and gas plays
as part of an all-out push for energy independence.
Opponents
of low-carbon measures like Michigan's argue about high consumer
bills, while supporters point to the long-term consequences of a
carbon-intensive economy. The European argument, at least from the
other side of the ocean, seems to be that, while coal, oil and
natural gas are bountiful now, in the long run, you get what you pay
for.
Sandy
is now coming onshore across New Jersey right about at Cape May. As
the hurricane makes landfall our winds will begin to slowly subside.
As I write this we are probably at the peak of the storm. Shortly,
you may notice that the worst of the worst seems to be over and you
will be correct. This is not to say the storm is finished, it's just
that we are close to the apex in terms of winds increasing any more.
Trees can still come down and power outages will be an issue
throughout the night. Power outages will be a big problem. We'll see
in the next couple of hours how bad the flooding problem is.
The
storm forced the New York Stock Exchange to extend today's closing to
Tuesday -- the first unplanned shutdown since the Sept. 11 terrorist
attacks. Commodity markets traded electornically, with gold down 1.30
= 1710.80, silver down .33 = 31.86, crude oil down .74 = 85.54. The
Port of New York and New Jersey, whose terminals make up the
third-busiest container port in the country, also was temporarily
shuttered and evacuated. And a Phillips 66 refinery in Linden, N.J.
and a Hess refinery in Port Reading, N.J., shut operations, while
several others curtailed production. Although oil prices are expected
to drop due to less demand.
The
potential damage to homes from Hurricane Sandy-driven storm surges is
likely to be greater than it was last year for Hurricane Irene.
CoreLogic estimates nearly 284,000 residential properties valued at
almost $ billion are at risk for potential storm surge damage among
the coastal Mid-Atlantic states.
Now
is as good a time as any to remind people of who provides all those
detailed projections of where Hurricane Sandy is going to hit and how
strong it’s going to be: the federal government. No matter how you
get your weather news—local TV or radio, The Weather Channel,
AccuWeather, whatever—hurricane forecast information originally
comes from the National
Hurricane Center, which is part of the National Weather Service.
The raw data come in part from the Hurricane Hunters, the pilots who
fly planes into hurricanes, who are part of the Air Force Reserve and
the National Oceanic and Atmospheric Administration. The computer
models that predict where hurricanes are going to strike are
developed by the NHC.
There’s
a strong case to be made that hurricane research is one area where a
small amount of taxpayer spending has had huge public benefits.
The
Labor Department said it hopes to release October's unemployment
report on Friday as scheduled, despite the closure of the federal
government on Monday, and possibly additional days this week, because
of Hurricane
Sandy.
The
report on October's unemployment rate and the number of new jobs
added that month is the last major economic report before next week's
presidential election. And a delay in the report until after the
election would fuel conspiracy theories. The September jobs report,
released Oct. 5, showed the unemployment rate surprisingly dropped
to 7.8% from
8.1% the previous month, the lowest level since Obama took office.
