Recent reports that Saudi Arabia is actively considering ways to diversify their economy to be less dependent on oil for revenues suggests that the leader of the OPEC cartel have realized that the civilized world has tired of being dependent on these oppressive, uncaring tyrants and basically valueless residents of the planet and have redoubled their commitment to oil independence with near vigilante enthusiasm.
Getting the industrialized countries of the world to actually focus on making the fundamental changes necessary to move from petro-dependent energy to alternative energies has not been without its cost. By embracing our oil addicted status quo for the past 20 years, America and, to a lesser degree, Europe have inadvertently funded middle eastern countries that in turn have spawned, then funded global Islamic Fundamentalist terrorism.
By ignoring the warnings of an impending oil crisis and not responding sooner, we also managed to fund the rebuilding of the Russian military to the point where they have once again rattled their swords and ventured forth as the imperialists they have always been at heart.
Thankfully, the transformation is finally upon us. The signs of this change in attitude are becoming more commonplace and highlight that the world’s transition to alternative energy has shifted from being an unwelcomed “have to” to a genuine “want to” and a “must”.
The evidence is everywhere. American industry has historically dragged its feet in implementing mandated changes that are not supported by a bottom line payoff. In previous years, the EPA has had to drag corporations screaming and kicking into environmental compliance. By contrast, not only are corporations implementing alternative energy solutions toward powering their facilities through their own initiative, utilities throughout America have tossed aside their government mandated timetables for alternative energy conversion and implemented accelerated programs which will bring them into compliance with new standards well in advance of the deadlines.
Pacific Gas & Electric Company, (NYSE: PCN) is a company that has come under criticism as recently as 2007 for only producing 12% of its electricity from renewable sources. This is despite producing 24% of its power from nuclear plants and another 20% from hydroelectric generation. California has placed a mandate on electric utilities that they have contracts in place to derive 20% of their electricity from renewable sources by 2010. As recently as the first of the year, opinion was still split whether the company could meet these most challenging goals.
But times have changed. PG&E became more determined than ever to not only meet but to surpass the mandate. Their outreach program combined with the alternative energies’ renewed efforts to bring their technologies forward has had a significant impact on PG&E’s progress.
Last week PG&E announced that it had contracted with OptiSolar and SunPower Corporation (Nasdaq: SWPR) to buy a total of 800MW of power from huge solar facilities slated to begin delivering power in 2010 and at full power by 2012. This announcement brings the total renewable electricity PG&E has contracted to receive to 3600MW. This brings their total commitment to renewable resources to 24% of their projected energy sales. Rather than falling short as predicted, PG&E has already met their mandated requirements more than a year ahead of schedule.
I spoke with Jennifer Zerwer environmental news representative for PG&E. She told me that PG&E has been very aggressive in searching out renewable resources and it was this commitment to renewable energies coupled with significant advances in the various technologies that have allowed them to ink this many deals this quickly.
There is, however, one outstanding caveat which could upend this entire process. That would be Congress’ failure to renew the incentive tax credits for renewable energy. In PGE’s recent press release announcing the solar deal that caught the attention of the nation by virtue of its size relative to all previous developments, the most important sentence in the entire agreement was “Both projects are contingent upon the extension of the federal investment tax credit for renewable energy and processes to expedite transmission needs.”
America needs to be off the oil nipple and the American public wants to buy petro-free cars and trucks. At the same time, its evident that America’s utilities want to buy renewable energy. Still, as rapidly as these technologies are developing, many emerging companies could be irreparably damaged if Congress doesn’t renew the investment tax credits which help fuel development and will allow these technologies to gain economic parity in time to save our country.
This brings us to the one area in the United States where a sense of urgency regarding oil independence isn’t being demonstrated. The halls of Congress is where we see political posturing rating a higher priority than either the price at the pump or our national security. The Democrats in Congress adjourned on August 1st over Republican objections without extending the investment tax credits or approving offshore oil drilling.
Considering that the investment tax credits represent only $18 billion in lost tax revenues, it’s criminal to tie this bill to any clause that will hamper its passing in exchange for political gain. For example, attaching a windfall tax on oil companies will assure Republican opposition and allow one to reap political hay in the process but is totally counterproductive to America’s best interests; the loser here is America and the American people. Congress wastes more than that annually on pork barrel projects and earmarks to fund various meaningless programs like studying the sexual habits of a South African ground squirrels.
American’s must make it a national priority to advance alternative energy technologies as if our very lives depend upon it, because they do. At the same time we must aggressively push to produce more oil from every and any source available not only to bridge the gap of America’s conversion to a petro-free or petro-lite life, but to help drive down the price of oil and weaken our enemies in the process. America must be fully independent of foreign oil and the value of oil must be reduced to a pittance for America to be safe.
The shift is underway, it’s being read in the news on a daily basis now and it’s being lived in each of our lives as we change our driving habits and our taste in cars. We mustn’t let up, this crisis extends beyond the cost of gas at the pump and of our electric bills, this is about protecting the American way of life from petro-rich countries that wish us ill.
If asked what you can do, we have a very practical and simple answer. Invest in the alternative energy companies of your choice based upon your tolerance for risk and contact your Congress person and let them know you demand they put aside political posturing and do their job of defending our country and supporting our independence from foreign oil. Tell them to get back to work and to start supporting our transition to alternative energies by extending the tax investments credits now and by approving the offshore drilling package currently being held hostage by Nancy Pelosi, Harry Reid and the Democrats.