Energy industry executives, researchers, policy makers and educators from across the nation are gathered in San Antonio this week for the Texas Renewable Energy Industry Association conference which ends tomorrow.
The national and global energy dialogue suggests a bleak future for fossil fuels – inherently non-renewable – and it’s no secret that energy companies and utilities, including CPS Energy, are scrambling to get their eggs out the fossil fuel basket. At conferences, meetings, laboratories and luncheons around the world, we – as a species – are ultimately planning for a future without non-renewables; coal, oil, natural gas and nuclear energy.
But it’s a tough dependence to shake. We’re so good at inventing new ways to find, use, and exploit fossil fuels. The return on investment of many fossil fuel options – for now – is far greater than that of most renewables, even with subsidies and tax rebates.
The carbon tax, cap-and-trade carbon credits and efficiency standards have emerged as mechanisms to reduce carbon emissions. While these approaches create an incentive for renewable technological research and conservation, they all essentially mean the same thing – the cost of complying with a tax, the cost of higher standards and the cost of carbon credits used in a cap-and-trade model (or the fees associated with non-compliance) – will be passed on to the consumer. And consumers vote.
Another concern, of course, lies in the common theory against stifling any market or economy lingers: the more taxes companies have to pay, the less jobs they can provide.
A few U.S. states have introduced carbon taxation with mixed results, but here’s a quote from a recent New York Times article for perspective:
Among economists, the issue is largely a no-brainer. In December 2011, the IGM Forum asked a panel of 41 prominent economists about this statement: “A tax on the carbon content of fuels would be a less expensive way to reduce carbon-dioxide emissions than would a collection of policies such as ‘corporate average fuel economy’ requirements for automobiles.” Ninety percent of the panelists agreed.
Australia’s carbon tax, established in 2012, is currently under threat of repeal. It’s an example of the heated politics that can arise around the “t” word. Read the BBC’s coverage of the tax’s launch here and about the repeal efforts this week here.
No one wants to talk about a carbon tax – to say it’s politically sensitive is an understatement, even during a panel discussion of industry leaders addressing their peers.
A panel of industry leaders that included Valero Senior Vice President Jim Gillingham, Microsoft Director of Energy Strategy Brian Janous, CPSE Executive Vice President Cris Eugster and S&C Electric Company Director David Veach, fell awkwardly silent when an audience member raised the issue of incorporating the external costs of carbon causes when released into the atmosphere into the price of coal – a tax.
Microphones were passed like poisonous snakes.
CPSE President and CEO Doyle Beneby spoke at the TREIA’s Tuesday luncheon and addressed the issue with more candor.
“I think at some point we’ll have to land on a price on carbon,” Beneby said. “It will probably not be called a tax,” but will operate as such. “That will really be the catalyst to increase the value of renewables.”
Acutely aware of the political battles surrounding carbon taxes, Beneby also spoke of CPSE’s struggle to remove political ideology from the energy conversation and look at practical ways to sustain and reduce San Antonio’s energy consumption.
“We (as a utility) produce a product that pollutes the air,” he said. “And so if you can find a way to find a low-carbon approach … why wouldn’t you do it? This pursuit (of sustainability) is just the right thing to do. The question then becomes the pace of (this pursuit) … I do have a personal political point of view, but as a CEO of a large utility that is irrelevant.”
The emergence of natural gas as a cheap and abundant source of energy has brought it to the forefront of the domestic energy debate.
“Many (natural gas companies) don’t like to think (it),” Beneby continued. “But natural gas is really a bridge fuel … to (dependence on) renewables.”
Much of the conversation and presentations were centered around the state’s unique opportunity to take advantage of natural gas and combine it with renewable energy deployment – Texas leads the nation in installed wind capacity with 12 gigawatts at the end of 2012.
San Antonio and Bexar County have ambitious goals to increase solar-generated energy. Beneby cited the utility’s recent deal with OCI Solar Energy to purchase 400 megawatts of solar electricity, which will make San Antonio one of the nation’s Top Five solar cities.
“We don’t want to take anything off the table that’s economical and allows customers to make the right choice,” Beneby said.
CPSE is on its way to achieving its 2020 goal of 20% renewable generation, Beneby said.
“Once that’s up and running, we’ll focus on commercial, industrial and residential (solar) … we think we are ready to begin some very interesting options,” he said, alluding to talk of a possible community solar program. “We are on the right path – clearly an aggressive renewable approach outweighs some of the risks out there.”
Full disclosure: The Arsenal Group conducted a four-month review of CPS Energy communications for the utility starting in June 2012. Monika Maeckle, a former member of the The Arsenal Group and wife of Robert Rivard, now works at CPSE as its Director of Integrated Communications.