December 12, 2008

Chu's Choices
When Steven Chu of the DOE's Lawrence Berkeley National Lab was first announced as Secretary of Energy, Matt Yglesias' joy was somewhat muted. After acknowledging the benefits of Chu's appointment, Yglesias pointed out a certain reality:
Unfortunately, the Department of Energy isn't actually the policy juggernaut one might think it is. In the real world, the department's responsibilities are pretty limited, and a lot of them relate to our nuclear weapons arsenal rather than energy policy as such.
All of which is true. But I would respond with an answer to Andy Revkin's question as to whether this country needs a Department of Innovation. We don't need one because we already have one - it's called the Department of Energy. And that fact has everything to do with why Steven Chu may soon become the most important scientist in America.

Just look at what the DOE has given us so far. Joe Romm runs the numbers and they are stunning. He quotes from a National Academy of Sciences study on the return on investment from:
... 17 R&D programs in energy efficiency and 22 programs in fossil energy funded by the U.S. Department of Energy (DOE). These programs yielded economic returns of an estimated $40 billion from an investment of $13 billion.

Three energy-efficiency programs, costing approximately $11 million, produced nearly three-quarters of this benefit. Most significant were advances made in compressors for refrigerators and freezers, energy-efficient fluorescent-lighting components called electronic ballasts, and low-emission, or heat-resistant, window glass. Standards and regulations incorporating efficiencies attainable by these new technologies ensured that the technologies would be adopted nationwide, thus dramatically compounding their impact.
Now that's bang for the buck. And his impact in guiding DOE research will probably be further amplified given the expected drop in corporate R&D dollars during this recession. As an aside, it's worth mentioning that the low-e windows referred to above were developed in the late 1970s at the Lawrence Berkeley National Lab. It cost $3 million to develop the underlying technology while their use has saved close to $1 billion in energy costs over the last 30 years (a detailed history is here). And it was something that private industry had no interest in working on. Not bad for a bunch of government scientists. Innovation indeed.

This may explain why energy efficiency is already atop Chu's wishlist. But what about all the money spent on fossil fuel projects? Aside from coal-related projects, spending on fossil fuel research is being slowly supplanted by alternative energy projects.

But which of the various alt energy paths should Chu have the labs take? Stanford scientist Mark Jacobson provides a helpful list. He studied the cumulative benefits of various forms of alternative energy. The result has wind, solar thermal, geothermal and waves at the top and, surprisingly, ethanol of all types (corn and cellulosic) at the bottom - below even coal and nuclear. USDA take note. It turns out that when you start to take account of land use issues along with the risk of deforestation, ethanol simply can't compete. Wind on the other hand is surprisingly efficient in its use of land. For example:
The entire U.S. vehicle fleet could be operated on power produced by 3 square kilometers of land planted as wind farms, he claimed. Getting the same amount of energy from corn or cellulosic ethanol would take 30 times the amount of land.
Thanks to Tom Philpott, we already know that Chu is not a believer in corn ethanol. But he does seem very supportive, along with Obama, of cellulosic ethanol (his lab has received major funding for their cellulosic research). Ideally, Chu will put more effort into things like the DOE's potentially breakthrough wave power research rather than into billion dollar ethanol plants. But even so, Chu represents a chink in the armor of corn ethanol, which is a very good thing. After all, he'll be in charge of one of the two major ethanol subsidy programs. While the USDA pays growers for the raw materials (i.e. the corn), the DOE pays the companies that make it into fuel. If he reduces DOE support for corn ethanol, the USDA will have to follow. Depending on Obama's USDA pick, it could make for some interesting cabinet meetings.

All this focus on innovation is, in my view, doubly important because it's becoming clear from what's going on in California and Europe, that implementing a cap-and-trade system is going to be a nightmare. Congress, the EPA and the Commerce Department (along with the DOE) are going to have their hands full trying to put one together. Given the complexities, cap-and-trade can't be relied on to be one of the magic bullets for climate change. Those may very likely be supplied by Dr. Chu.

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