The cost paid by the user plus the externalized costs equals the all-in cost.  If you were to ask the residents of the Montcoal, WV, the all-in cost of coal is about $50 per ton plus the loss of their husbands, sons and fathers.  For a Louisiana shrimper the all-in cost of oil is $80 per barrel plus the loss of his income for years. 

There are externalized costs associated with every source of energy whether it is coal or solar, wind or oil, nuclear or cow dung.  The only universal reducer of externalized costs is “to consume less energy” either through energy efficiency or frugality.  As a society we will be better able to make rational decisions about energy production and use if we have a clearer vision of the externalized costs associated with the various sources of energy.

I am at odds with the climate change deniers and with the strict environmentalists.  However, I would no more attempt to change them than I would try to persuade a Red Sox fan or a Yankees fan to switch allegiance to their rival.  It just isn’t going to happen.  What the Bostonian and New Yorker have in common is their love of the game.  What I share with the climate change deniers and the strict environmentalists is a belief that there are consequences to our choices of energy sources.  Clearer information about the externalized costs of all the energy options will bring all parties closer together. 

To climate change deniers I say that it is not inconsistent for them to maintain their skepticism while at the same time embrace those changes which will encourage the shift away from fossil fuels.  Let’s give everyone the information to make decisions on an apples-to-apples basis.  The explosion of just one oil rig in the Gulf of Mexico generates an externalized cost to our economy and to those of us who pay taxes that is huge.  The cost and fines paid by the rig operator, BP, will be a small fraction of all the externalized costs to the region, our economy and the ecosystem.  (FYI.  The number of oil platforms in the Gulf of Mexico is in the thousands). 

If we locked a climatologist, an economist and an actuary in a room for a few days they could generate a rough model of some of the externalized costs associated with drilling in the Gulf of Mexico.  Insurance companies already have the data about the probability of loss from fire, hurricanes, etc.  Those costs are built into the price of oil.  Using those same probabilities we want to model what the externalized costs which are not expressed in the barrel price of oil.  Over time what is the cost of oil production which is not paid for by the user of the oil?  Is it $3 per barrel or $30 or ?  Of course it’s a projection and all projections are guesses, but wouldn’t a wild-guess be more useful than what we currently have, which is zip.  I am not suggesting that off-shore drilling is inherently good or bad.  I just don’t know how high the all-in cost might be.

My message to environmentalists is the same.  Let us focus on shared beliefs.  In my adult lifetime the population of the United States has increased by 100 million people.  Locate a 21 year-old and ask him or her to think about adding the equivalent of another dozen cities the size of New York City during the next 30 or 40 years.  Energy frugality and efficiency will help, but the demand for energy will increase year-over-year. 

A more thoughtful examination of externalized costs can guide us to decisions which are quicker and more insightful.  Some birds and bats are killed by wind turbines (and also by tall buildings, semi-trucks and power lines).  My guess is that the recent event in the Gulf of Mexico will kill more wild life in the next few months than all the wind turbines in the United States will over the next several years.  If we had a better measure of the externalized costs we would be enabled to make better decisions.  Obstructionists who block the construction of large scale wind and solar energy projects may be unintentionally advancing the growth of fossil fuel alternatives which are substantially more harmful to the very creatures they seek to protect.  The only way we can address the issues logically is to have the true costs, the all-in costs, as the basis for our judgments.

McDermott noted that wind power represents about 75% of the renewable energy produced in the United States.  Currently wind is a close second to natural gas for newly installed production capacity.  Like all projects which are capital intensive, wind power construction suffered with the collapse of credit markets.  Some deals are now being done, but on more conservative terms.  Key hurdles continue to be the on-again, off-again government support in the form of tax credits and loans as well as the onerous delays caused by environmentalists. 

Intermittency is the renewable energy term to describe the uneven production of power by both wind and solar.  Dr. Walker stated that as wind power becomes a larger portion of total energy production it should be considered part of the base load with natural gas as the go-to energy to fill in the gaps.  He noted that the bulk of wind energy production in the United States is concentrated in a short list of utilities.  Except for the very largest users, most utilities struggle with understanding how to manage an intermittent supply.

Although the established global wind energy market is huge, the panel felt that it was not mature and therefore there were significant opportunities for new business creation and growth.  Their opinion was that there were vast improvements which will be made in blade design and the mechanics of wind turbines.  They felt that there was a great opportunity for innovation and invention to originate from outside the research departments of the large manufacturers.  As the number of wind turbines proliferates they see an opportunity for companies in the “nuts and bolts” aspects of service and maintenance in a more organized manner than currently exists.

Energy storage in its various forms is a response to the problem of intermittency as well as integral part of an effective smart grid.  James Sahagian said that Sempra Generation has a strong interest in compressed air strorage in spent oil and natural gas wells as a viable means to store energy during those times when wind energy production is greater than immediate demand.

In addition to enXco and Helix Wind, there are 22 other wind power companies listed in CleanTECH San Diego’s database of cleantech companies include Cannon Power, Knight & Carver and Padoma Windpower. 

The networking hour before the CleanTECH San Diego Showcase is a unique opportunity to get face to face with the captains of industry, futurists, venture capitalists and propeller heads who play in the clean tech space.  Click here to make your reservation.

This past week I participated in a two day Discover Imperial County tour organized by the San Diego Regional Economic Development Council.  For most of us, we rarely have any contact with the sources of our food and energy.  Food comes from an aisle at Vons and electricity from a wall plug.  Just two hours from the center of our box is a different world where every resident has an up-close view of innovative technologies which make our food and energy available and affordable. 

The Imperial Valley is an energy cornucopia.  I doubt if there is any comparable space in the world that can harvest energy from solar, geothermal, water, wind, algae, biomass and piped-in natural gas.  Their ability to add new electrical production is only tempered by the timing of construction of new transmission lines.

The first stop on our tour was at the east edge of San Diego County at the Kumeyaay wind farm on the Campo Indian Reservation.  Three square miles of tribal land adjacent to Interstate 8 are home to 25 giant Gamesa wind turbines rated at 2 megawatts each.  The winds which cross the Tecate Divide provide electricity sufficient to serve more than 12,000 homes while saving 110,000 tons of green house gas emissions annually. 

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By the numbers:  Towers 70 meters (230 feet).  Blades 41.5 meters (136 feet).  The area swept by the blades of each tower = 1 1/3 acres.   Total swept area for the 25 towers = 33 1/3 acres.  (Swept area refers to the area in square feet of the rotor. It is also called the ‘capture area’.  pi x Radius² = Area Swept by the Blades).

Many of the story threads of the clean technology take on proportions that are almost beyond comprehension.  The UK’s role in wind energy has a plethora of gee-whiz facts. 

Airtricity, a division of Scottish and Southern Energy is developing two of the world’s larger wind farms.  One is off the Suffolk coast of England (540MW).  An onshore wind farm is located in the Upper Clyde Valley in Scotland (456MW).  Last week the British government announced grants for the construction of the largest wind turbine blades ever built.  Designed for offshore towers 574 high, each blade will be 230 feet long.  With a combined maximum sweep height of over 800 feet the wind turbines will be 300 higher than the tallest building in San Diego.  Each blade will weigh about 67,000 pounds which is equivalent to 22 Toyota Prius hatchbacks or a couple of Rolls Royce Phantoms.