Senator Bingaman and panel debate US energy challenge

From the Hobbs Sun-News by Levi Hill--The past, present and future of renewable energy in the United States was the focus of a daylong conference in Hobbs Tuesday where leaders across the energy industry came together.

More than a dozen panelists and four panels were part of the second Energy Conference by the New Mexico Center for Energy Policy of New Mexico Tech. More than 400 people attended the one-day conference at the Lea County Event Center.

U.S. Rep. Harry Teague, D-N.M., set the tone for the day's importance by citing the nation's dependence on foreign oil sources and the nation's need for diverse energy sources.

"We need to dramatically widen our abundance of natural resources," he said. "The first obstacle is access to transmission infrastructure. Secondly, we must help renewable energy producers take advantage of the renewable energy tax credit. And we must get rid of the red tape and bureaucracy that gets in the way of producing energy in the United States."

Teague, a New Mexico oil man, also added a message that carried throughout the day's discussion, that oil and gas production is still important to the nation.

"We cannot turn our back on the energy source we will depend on for decades to come," he said.

In ending the day's conference, Van Romero, vice president of research for New Mexico Tech, pointed out that, while the nation's need for oil will not end, it will slacken with gains in technology.

"The stone age did not end due to the lack of stones and the oil age will not end due to the lack of oil," read a quote from Sheikh Yamani of Saudi Arabia that Romero presented to the gathering of more than 400.

Technology advancements

Technology was a big focus of the day's discussion.

Robert Brown, director of vehicle environmental engineering for Ford Motor Co., discussed the future of gasoline and electric powered vehicles, saying that Ford would add six-speed transmissions and electric power steering units to future vehicles, increasing fuel economy by 3-6 percent in each case.

He also discussed the company's Ecoboost injection system that turbocharges engines, giving a six valve engine the same power as an eight valve engine while increasing fuel economy by 20-30 percent.

Douglas Lynn, executive director of the Center of Excellence for Hazardous Materials Management, discussed a project close to home, the algae biofuel farm near Carlsbad.

The algae produce a fatty acid similar to Canola oil that can be used as a biofuel. The benefit of such projects is that while a hybrid Canola farm can produce 180 gallons of oil per acre per year, the algae can produce 4,000 gallons of the fuel per acre per year.

Lynn said the project is exploring ways to take advantage of non- potable water, such as oilfield produced water, to grow the algae.

Renewable energy opportunities

The potential for renewable energy has grown in the past decade as the price of renewable energy technology has dropped.

The nation built more than 8,000 megawatts of energy in the last year, enough to power 2 million American homes, said Larry Flowers, national technical director of Wind Power in America, a division of the National Renewable Energy Laboratory.

Wind energy projects in the United States have grown to a total of 25,400 megawatts of power, leading the world in wind production energy, he said.

"Natural gas was the dominant new generation source in the past decade, but wind was second at 42 percent in 2008," he said. "Wind is a serious new competitive generation source."

Flowers was quick to point out that wind energy is not the only solution for the future and it indeed has issues until a viable storage system for electricity can be found.

Rich Lordan, technical director for the Electric Power Research Institute, discussed the flaws of wind energy, namely that it is unpredictable and cannot be stored for use during peak load times or when the wind is not blowing.

That does not mean wind energy is not a desired source of energy. Flowers said the potential resource of wind energy in New Mexico is 300,000 megawatts.

That entire resource would never be tapped, but new projects in the state are ongoing and about 1,000 megawatts of power will likely be developed in the state in the next few years, adding $2.7 million in landowner payments from developers, $10 million in property tax revenues, 1,600 construction jobs and 250 full-time jobs to the state's economy.

David Eves, president and chief executive officer of Southwestern Public Service, said solar also has a strong future in New Mexico.

"I see the potential for New Mexico to be a major part of the development for new renewable energy," he said.

Challenges to renewable

There are many challenges to renewable energy development, from a lack of funds to a lack of new technology, and all stand in the way of progress.

The national transmission grid remains one of the main obstacles for developing renewable energy, especially in New Mexico, Eves said.

"This is ground zero for renewable development, but we are on the edge of the East and West transmission grids," he said. "There will be massive transmission development needed."

Transmission development is expensive, but costs only about 10 percent of what customers pay for energy, Flowers said.

"We are looking at $500 billion in wind generation and $60 billion in transmission development," he said.

Les Dillahunty, vice president of regulatory policy for Southwest Power Pool, said estimates have shown that for every $100 million spent in transmission upgrades, customers will see an increase of 9 cents in their electric rates. It has been estimated more than $80 billion is needed to upgrade transmission systems from the wind producing states along the eastern edge of the Rocky Mountains to the East Coast where renewable energy cannot be generated.

Another obstacle to renewable energy is funding. Daniel Fine, research associate for New Mexico Tech, said renewable energy projects were planned to be viable on $80 crude oil prices.

Following the fall of the global credit market many renewable energy companies went belly up, Fine said. He said 40-60 percent of renewable energy businesses survived on tax credit.

President Obama's 2009 stimulus bill contained funding for green projects, but much had to be spent within 120 days of the bill's signing in February. It has left many companies scrambling to develop projects, said Dillahunty.

The final piece of the energy crisis puzzle is a proposed cap and trade on carbon emissions. While some, like U.S. Sen. Jeff Bingaman, D-N.M., said it is needed and will ultimately help push renewable energy use up, there are problems with the legislation as it stands now.

The current legislation for cap and trade puts the price on carbon credits at $20 per metric ton, whereas cap and trade studies show $60 is required per metric ton, Fine said.

"We are at a very serious crossroads in the United States," he said. "The question is how to smooth it out and go to a renewable energy economy without excessive costs to the consumers."