American Electric Power (AEP) is shelving plans for the largest Carbon Capture and Sequestration (CCS) project in the country due to the uncertain status of U.S. climate policy and the continued weak economy.  "We are placing the project on hold until economic and policy conditions create a viable path forward," said Michael G. Morris, AEP's Chairman and Chief Executive Officer.

A significant part of the problem is the federal government's failure to require all power generators to lower their carbon emissions.  With such a requirement, AEP and its partners would have a competitive advantage by developing cutting edge technology to reduce carbon emissions from existing coal-fired power plants.  That competitive advantage would inspire others to invest in competing CCS and related technologies to lower their carbon emissions as well. 

Without such a requirement, however, innovation stops.  The industry stays at the lowest common denominator -- i.e., the highest allowable carbon emissions -- to avoid the time and expense of creating new solutions to carbon and other forms of pollution. 

Another significant part of the problem is a century-old, state-by-state regulatory structure that does not allow utilities to recover the costs of technologies that reduce carbon emissions.  As AEP's Chairman and CEO explains, "We are clearly in a classic 'which comes first?' situation.  The commercialization of this technology is vital if owners of coal-fueled generation are to comply with potential future climate regulations without prematurely retiring efficient, cost-effective generating capacity.  But as a regulated utility, it is impossible to gain regulatory approval to recover our share of the costs for validating and deploying the technology without federal requirements to reduce greenhouse gas emissions already in place. The uncertainty also makes it difficult to attract partners to help fund the industry's share."

Until this announcement, AEP was working with the U.S. Department of Energy (DOE) and others to install a commercial-scale CCS system at AEP's Mountaineer coal-fueled power plant in West Virginia. The system would have captured at least 90 percent of the carbon dioxide (CO2) from 235 megawatts of the plant's 1,300 megawatts of capacity. The captured CO2, approximately 1.5 million metric tons per year, would have been treated and compressed, then injected into geologic formations for permanent storage approximately 1.5 miles below the surface.

Plans were for the project to be completed in four phases, with the system to begin commercial operation in 2015. AEP has informed the DOE that it will complete the first phase of the project (front-end engineering and design, development of an environmental impact statement and development of a detailed Phase II and Phase III schedule) but will not move to the second phase.

Whether or not CCS is the right technology to reduce carbon emissions is not the point.  The point is this:  If the government requires utilities to reduce their carbon emissions, it will set off competition between the utilities to come up with the most efficient and cost-effective technology to reduce the emissions.  That competition will lead to investments, job creation, and innovation that will make our country a technological leader in carbon reduction technologies.  As Germany is demonstrating right now with the healthiest economy and the highest employment rate in modern history, becoming a technology innovator is the way to compete against lower-wage, developing countries.

On the other hand, if the government requires nothing, then the utilities will do nothing.  No investment in new technologies.  No new jobs for scientists, engineers, and other high paying professionals.  No technological advantage over lower-wage, developing countries.

John Howley
Woodbridge, New Jersey

Does your organization appreciate and understand the value of integrating sustainability in its strategic plan, as well as the very tangible benefits it creates for the organization and its community?

Today sustainability is not just a catchphrase.  For many businesses, colleges and universities, and communities, sustainability is an integral part of their strategic plans and ongoing operations.  By aligning sustainable strategies and initiatives with their core values and mission, these organizations are able to:

• create competitive advantages, revenue growth, and long-term value
• improve operational performance, increase efficiencies, and reduce costs
• reduce greenhouse gas (GHG) emissions and other environmental impacts
• manage regulatory and market risks
  
• enhance the organization's reputation
  

Integrating sustainability into your organization's strategic plan and ongoing operations requires a four-step process:  Sustainability Assessment, Strategic Planning, Implementation, and Performance Evaluation and Reporting.

Sustainability Assessment

The purpose of a sustainability assessment is to help your organization identify risks, challenges, and opportunities.  This involves an analysis of existing initiatives, resource allocations and staff capabilities in the context of industry-specific best practices.  It also includes the development of reliable baselines of energy and water consumption, waste generation, greenhouse gas (GHG) emissions, and related costs.  From there, your organization can begin to consider existing and alternative sources of energy, water, and other critical resources.  You can identify and apply appropriate benchmarks.  And you can develop measurement and verification plans to evaluate progress over time.

Strategic Planning

Sustainable strategic planning is a matter of making sustainable choices that will promote and enhance your organization's core values, mission, and aspirations.  This requires looking at best practices within your specific industry, proven and emerging technologies, and government policies and incentives.  To be effective, your organization must incorporate this knowledge and information into its strategic plan, establish realistic targets and timetables, and calculate the initial and ongoing resources and staffing that will be required to meet those targets and timetables.

Implementation

Strategic plans, energy audits, and other forms of assessments and goal setting are too often wasted because of inadequate implementation or execution.  Developing an effective strategic plan will help in this regard, but the targets and timetables established in the plan must be supported with an action agenda that specifies who will be responsible for executing the plan and how (both in terms of staffing and funding) they will meet expectations.  Outside facilitators can often assist an organization at the implementation stage by providing both expertise and objective, focused attention on achieving results.

Performance Evaluation and Reporting

You cannot manage what you do not measure.  Accordingly, your organization should have well-designed performance evaluation tools to measure and verify progress towards targets and objectives.  The tools can include report cards and dashboards summarizing progress and gaps to promote accountability and continuous improvement.  These tools also ensure effective governance and oversight.  Your organization should also consider the recognition and competitive advantages that may result from submitting data to the Carbon Disclosure Project (CDP), the Global Reporting Initiative (GRI), the Walmart Sustainability Survey, and industry specific indexes and reports.  After all, if you've already done the work and achieved the results, you might as well get credit for it.

John Howley
Woodbridge, New Jersey

A father and son team has set off from New York City in a human-electric hybrid vehicle that will take them across the country using the energy equivalent of just two gallons of gas to travel 4,000 miles.  Pierce Hoover, an inventor and journalist, came up with the idea to teach his son the value of turning off a single 100 watt light bulb.  That is the amount of energy they will use each day to travel across the United States.

Hoover and his 13 year-old son have embarked on this trip to publicize the energy we can all save by turning off unneeded lights and appliances.  In addition to reducing our electric bills, we can also help the environment.

The idea for the trip came about when Hoover was trying to figure out how to persuade his son to stop leaving lights on around the house.  He brought his son to a local gym, where exercise bikes measure energy output in watts.  When his son tried to pedal fast enough to generate enough energy to power s single 100-watt bulb, he realized how much energy was needed to power even simple household devices.

This led to a bigger idea.  One that would demonstrate how much could be done with the energy saved by turning off just one light.  They set a goal of crossing the country on the power of one 100 watt light bulb per day.  Then they worked with a team of engineers to design and build a human-electric hybrid vehicle with a 100-watt motor fueled by battery power and the kinetic energy of pedaling.

John Howley
Woodbridge, New Jersey

A new paper from the American Academy of Arts and Sciences, Game Changers for Nuclear Energy, considers different scenarios for nuclear power that take into account a wide range of factors such as new technologies, accidents, nuclear terrorism, and climate change policy.  The Academy previously published papers on The Global Nuclear Future in two-volumes of its quarterly journal, Dædalus, in 2009-10.  The newest paper on "game changers" takes into account developments since then and changing perceptions of nuclear power, including the recent Fukushima Daiichi nuclear power plant accident.

As the paper's authors point out, "The public perception of nuclear power has changed and continues to change. Once viewed as a miracle of modern technology, nuclear power came to be perceived by many as a potential catastrophe; now it is viewed as a potential, albeit potentially still dangerous, source of green power."  This evolving interaction between public perception and energy policies is just one of the potential game changers discussed in the new paper.

The paper was authored by Kate Marvel and Michael May.  Marvel is the William J. Perry Fellow in Science and International Security at CISAC.  May is Professor Emeritus (Research) in the School of Engineering at Stanford University, where he is also a Senior Fellow with the Freeman Spogli Institute for International Studies.  They predict that over the next 50 years, growth of nuclear power "will be very strong in China and India, significant in Japan, South Korea, and Russia, and sluggish in the United States and Western Europe."

Founded in 1780, the American Academy of Arts and Sciences is an independent policy research center that conducts multidisciplinary studies of complex and emerging problems.  Its 4,600 elected members are leaders in the academic disciplines, the arts, business, and public affairs from around the world.

The American Journal of Epidemiology has published a report finding a dramatic correlation between spikes in air pollution and hospital admissions for heart attacks, suggesting that high-pollution days may trigger heart attacks in some people.

The study examined data on more than 10,000 heart attacks between 2002 and 2005.  When the heart attack data were correlated with changes in air pollution levels, researchers in Italy found that an increase of 10 micrograms per cubic meter of fine particulate matter in the air correlated with a 0.01 percent increase in hospitalizations for heart attacks over the next two days.  The researchers found a similar correlation between heart attacks and increases in carbon monoxide and nitrogen dioxide.

Fine particulate matter impacts human health because the particles are small enough to be inhaled deeply into the lungs, causing inflammation of blood vessels and irritation of nerves in the lungs.  The primary source of fine particles are petroleum, coal, and other fossil fuels that are burned in cars, trucks, power plants, industrial plants, and furnaces used to heat homes and offices.

While the correlations in the latest study do not prove a specific causal link, they do add to a growing body of evidence suggesting that increases in fine particulate matter contribute to an increased risk of heart attacks, strokes, and lung disease.  According to the American Heart Association web site:

• A 2007 study published in Circulation: Journal of the American Heart Association suggested that long-term exposure to air pollution from a nearby freeway or heavily trafficked streets is associated with a hardening of the arteries that could raise the risk of heart disease and stroke.
• A 2007 study presented at the American Heart Association's Annual Scientific Sessions indicated that increased roadway pollution produced by diesel fuel in vehicles is leading to a cascade of conditions that could result in heart attack or stroke.
• A 2007 study published in Stroke: Journal of the American Heart Association found that breathing fine particle pollution during warm weather months can increase stroke risk.
• A 2005 study published in Circulation: Journal of the American Heart Association suggested that inhaling diesel exhaust at levels typically found in large cities may disrupt normal blood vessel and clotting activity.

The American Heart Association recommends that the elderly and people with diabetes, high blood pressure, heart disease or lung ailments should avoid congested roads and should stay indoors on days when the air quality is poor.  Almost half a million Americans die from heart attacks every year.

John Howley
Orlando, Florida

The International Energy Agency (IEA) announced plans to release 60 million barrels of oil from emergency stocks over the next 30 days.  Half will come from the US strategic petroleum reserve, while the other half will come primarily from emergency reserves controlled by Japan, Germany, France and Spain.  There are rumors that China also may participate.

Those who argue that this is a political move by a US President seeking re-election are missing the point completely.  Japan, Germany, France and Spain are not conspiring to help an incumbent US President.  They are very afraid of a global economy that seems incapable of recovering from the Great Recession.

The 60 million barrels that will be released onto the market over the next 30 days constitutes the largest release of oil from emergency reserves since 1991, when the Persian Gulf War disrupted supplies.  The only other release was after Hurricane Katrina disrupted supplies in 2005.

The alleged "major disruption in oil supplies" this time around is the loss of oil exports from Libya.  But that tells only part of the story.  Equally important was OPEC'S failure to reach agreement on increased production targets earlier this month, despite efforts by Saudi Arabia and Kuwait to push more oil onto global markets.

The IEA did little to hide the fact that weakness in the global economy was a significant factor in the decision to release oil onto the market now.  IEA Executive Director Nobuo Tanaka said, "I expect this action will contribute to well-supplied markets and to ensuring a soft landing for the world economy."    US Energy Secretary Steve Chu also noted the "impact on the global economic recovery” as a reason for releasing more oil onto the market.

John Howley
Orlando, Florida

Biofuels may be powering airplanes sooner than you think.  ASTM International, formerly known as the American Society for Testing and Materials, has given preliminary approval for airlines to use a renewable jet fuel blend that includes algae and other plants. 

The new ASTM annex to the alternative jet fuel specification D7566 (Standard Specification for Aviation Turbine Fuel Containing Synthesized Hydrocarbons) details the fuel properties and criteria necessary to control the manufacture and quality of a renewable fuel to ensure safe aviation use.

The preliminary approval effectively concludes the technical review process for a “hydroprocessed renewable jet” (HRJ) fuel that will will allow hydroprocessing of plant oils as another pathway for production of alternative jet fuels.  Once formally issued by ASTM, the revised specification will enable use of HRJ fuels from biomass feedstocks such as camelina, jatropha or algae, in up to a 50/50 blend with conventional jet fuel.  Formal issuance fo the new standard is expected by August of this year.

Formed in 1898 by chemists and engineers from the Pennsylvania Railroad, ASTM is one of the largest standards-development organizations in the world.  Today, ASTM provides standards setting expertise to diverse industries ranging from metals to construction, petroleum to consumer products, and nanotechnology to additive manufacturing.

The Air Transport Association of America, Inc. (ATA) issued a statement congratulating the ASTM International Committee on Petroleum Products and Lubricants for approving the new jet fuel specification that will further enable the use of sustainable alternative fuels in aviation.  ATA was one of the co-founders of the Commercial Aviation Alternative Fuels Initiative® (CAAFI),  a collaborative effort among airlines, engine and airframe manufacturers, airports, universities, the Federal Aviation Administration, the military and others to develop and promote pathways for processes that convert sugars and lignocellulosic feedstocks to jet fuel.

The Export-Import Bank of the United States (Ex-Im Bank) is facilitating the sale of solar panels from California to a private sector project in Belgium under the bank's "Renewable Express" project financing program.  The solar panels for the project will be supplied by Solyndra LLC, a manufacturer of photovoltaic systems headquartered in Fremont, California.

The Ex-Im Bank’s “Renewable Express” project financing program provides streamlined post-completion project financing to small renewable-power producers that meet the bank's credit standards.  The bank will consider project financing for small renewable power producers seeking loans of $3 million to $10 million. Renewable Express is available for both corporate balance sheet and limited-recourse transactions that fit within the program’s parameters and where the repayment is generated from the project’s cash flows.

Under most other programs, project financing is often unavailable for small transactions due to the high levels of
due diligence and advisory fees.  Under the "Renewable Express" program, the Ex-Im Bank employs a streamlined procedure to evaluate and underwrite the borrower’s credit.  Applications can be processed in as little as 60 days.

In the Solyndra project, the Ex-Im Bank is guaranteeing an 18-year euro 7.7 million loan (U.S. $10.3 million) provided by KBC Bank NV in Belgium to finance the sale of Solyndra's solar panels for a three-megawatt rooftop photovoltaic project. This is the company's first transaction with Ex-Im Bank and its largest rooftop solar project globally to date.

The solar panels are being used to provide energy for a distribution center of Delhaize, an international supermarket chain. The distribution center is in Zellik, a suburb of Brussels.

The Ex-Im Bank's guarantee is facilitating a longer loan term at a cost-effective interest rate that improved the project's commercial viability.  The Bank processed this "Renewable Express" transaction in just 41 days from the receipt of the completed application to approval.

Key qualifications and features of the "Renewable Express" program are:

• Both direct loans and guarantees are available. For expedited treatment, the Ex-Im Bank tranche will be
• the only debt financing.
• Local cost financing of up to 30 percent of the net U.S. export contract is available.
• Single take-out disbursement after completion of the project. Ex-Im Bank could consider pre-completion funding for widely used technologies with an experienced operator.
• Financing of up to 18 years is available, depending upon the project’s economics.
• The transaction must comply with Ex-Im Bank policies and procedures as required.

John Howley
Woodbridge, New Jersey

Royal Dutch Shell, the largest oil company in Europe, and Cosan Limited, the largest sugar and ethanol processor in Brazil, have formally launched a multi-billion dollar joint venture that will become the largest producer of ethanol made from sugar cane.  The joint venture, called Raizen, will operate in Brazil.

Cosan has invested $3.3 billion and Shell has invested $1.62 billion in the venture.  The investments include a 15.7 percent stake in enzyme producer Codexis Inc., a developer of "super-enzymes" for the faster conversion of plant waste into transport fuels, and part of Shell’s interest in Iogen Energy, which uses enzymes to break down plant waste into ethanol.

Raizen combines Shell's advanced technological and retail expertise with Cosan's experience in the commercial production of biofuels.  Raizen intends to distribute more than 2 billion liters of sugar cane-based ethanol and more than 20 billion liters of other transport and industrial fuels per year through 4,500 Shell-branded service stations.  Raizen also plans to export more ethanol to other key markets in the future.

Brazil is the clear leader in biofuels and projects that they will constitute more than 40% of its transport fuel mix by 2030.  Brazilians already have a choice of pure ethanol or a blend of gasoline and ethanol. Almost 90% of new cars in Brazil can run on either fuel type.

John Howley 
Woodbridge, New Jersey

The International Energy Agency (IEA) reports that carbon-dioxide emissions from burning fossil fuels rose to a new record level of 30.6 billion metric tons in 2010.  This is a full 5% higher than the previous record set in 2008.  Growth in China and India accounted for a large portion of the emissions growth last year.

Most troubling is the level of greenhouse gas emissions that are already "locked in" based on power plants that are currently operating or under construction.  These power plants alone will produce 80% of the greenhouse gas emissions that had been projected for 2020.

The IEA and many climate scientists estimate that global carbon emissions must be kept below 32 billion metric tons per year in order to avoid a rise of 2 degrees Celsius in global temperatures.  A rise in temperatures above 2 degree Celsius could result in severe heat waves, droughts, floods, and rises in sea levels.  Staying below 32 billion metric tons per year by 2020 means that emissions over the next 9 years cannot rise as much as they rose between 2009 and 2010.

John Howley 
Woodbridge, New Jersey