Sustainable development was defined by the World Commission on Environment and Development as development that "meets our present needs without compromising the ability of future generations to meet theirs."
According to the UN Division for Sustainable Development, "the major cause of the continued deterioration of the global environment is the unsustainable pattern of consumption and production." William Ruckelshaus, U.S. EPA Administrator, stressed that economic activity must account for the environmental impacts of production in a 1989 article in Scientific American. Environmental resources are capital. As we deplete them to create wealth, we are stealing from our descendents. Now, it is even worse in that we are literally mortgaging our children's' futures with our growing national debt.
To address these sustainability issues, we need to carefully phase in a greater use of renewable resources, coupled with other activities such as increased conservation. The depletion of our non-renewable energy resources, environmental impacts, and the increased use of renewable resources is strongly influenced by government policies and subsidies. To provide a feel for the magnitude of such subsidies, the U.S. Energy Information Agency (EIA) attributed $932 million to the coal industry, $2,370 million to refined coal, $2,149 million to natural gas and petroleum, and $4,875 million to renewables in 2007 for total US federal subsidies. This means wind and solar (both renewable) received less than 1.5 times as much as coal and less than 2.3 times as much as oil and natural gas. The 2007 federal subsidies combined with support for coal-based synfuels (refined coal) used for electricity production were greater than that for wind or solar both in absolute dollars and dollars per MWh.
More importantly, if one considers the cumulative subsidies from 1950 through 2006, coal received $93 billion, oil and natural gas received $436 billion, nuclear received $65 billion, and renewables (including wind and solar) received $44 billion in 2006 dollars, according to a 2008 report prepared for the Nuclear Energy Institute. So coal, oil, and natural gas received more than 12 times as much in federal subsidies as wind and solar. Roughly 45 percent of the total federal energy subsidies were for tax policy and about 20 percent each for regulation and research and development.
Such subsidies are important in helping technologies achieve commercial status. With the maturing of wind power technology, the need for subsidies and the subsidy per kWh will decrease, as it did for nuclear. With the imposition of a carbon tax or similar policy in the future, not to mention the finite nature of fossil fuel resources, it is important that we continue to develop our renewable resources. A kilogram of petroleum will produce about 3 kilograms of carbon dioxide when combusted in air.
Even though wind makes up around 2 percent of our electric generation capacity, its installed capacity grew at 29 percent per year from 2002 to 2007, and 50 percent in 2008, according to the American Wind Energy Association. The actual cost of wind generated electricity from large scale modern wind farms has been lower than $0.05/kWh. Meanwhile, the use of coal for electric power in the US grew at less than 2 percent per year according to the EIA.
I am not against continuing to depend heavily on fossil fuels and nuclear for the next several decades as we transition towards alternative sources. This is especially true in much of Alaska where the wind regime is not suitable for wind power and the solar intensity is minimal during a period of high space heating demand. Plus, there is a need for capacity to supply the load when the renewable resource is insufficient (the wind doesn't always blow and the sun doesn't always shine.) Moreover, a community like Barrow has a good reserve of natural gas nearby. It is worth recalling that 150 years ago, the US depended heavily on renewables (biomass.)
As the world depletes its premium fossil fuel supply (petroleum and NG) we will have to move toward some combination of coal, nuclear, and renewables. Population growth worldwide, conservation measures, increased efficiency, cogeneration of heat and electricity, development of better energy storage technologies, and increasing per capita energy consumption in the less developed world will be key factors in determining our options. For example, my biking or walking to work for 20 yrs saved the equiv of almost 2 years worth of heating oil for our house. Other low-tech examples are using the sun for clothes drying, or a manual lawn mower.
Just as in the rest of the country, energy is subsidized in Alaska. Ginny Fay wrote a report on Alaska's Mega Projects in 2003 that looked at large scale infrastructure projects, mainly agriculture and energy projects. She estimated these projects cost the State $1.3 billion with five energy related-ones (Susitna, Four-Dam Pool, Bradley Lake, Railbelt Interties, and Healy Clean Coal) costing $960 million. In 2002 dollars, the total was $2.4 billion.
The total cost of the Healy Clean Coal project is about $300 million for 50 MW, of which $117 million is a federal grant. The project began in 1991, with construction and testing completed in 1999. After 10 years of negotiations between various interested parties, an agreement was reached to proceed with upgrades such that commercial operation may begin in 2010.
Meanwhile, smaller utilities (villages) have benefited from a Power Cost Equalization (PCE) program in which the State now subsidizes the residential electricity rates that are above around 13 cents/kWh up to a maximum of $1/kWh. Each household can receive this subsidy for the first 500 kWh per month. Disbursements totaled about $25 million for fiscal year 2007. An ISER study prepared by Steve Colt et al in 2001 concluded that the community rates plus PCE paid for about 45 percent of the total and government grants 54 percent. They concluded that "Overall, customers in PCE communities pay about twice the average rate of about 10 -12 cents per kWh paid by Anchorage or Fairbanks residents."
In addition to the above, each Alaskan received $ 1200 from the state in 2008 as an energy rebate, and 77 projects received grants from the $100 million Alaska Renewable Energy Fund in early 2009.
One Alaskan success story is the installation of 17 wind turbines at the Kotzebue Electric Association, Inc. (KEA) starting in 1997. Brad Reeve, the General Manager, said the total cost of electricity for the first three wind turbines was 13 cents/kWh (excluding any grants.) The current cost of power adjustment (i.e. part due to fuel) is 21 cents/kWh. The wind power plant produced 5% of all the communities' energy in 2007, and has provided over 60% of Kotzebue's power on an instantaneous basis. KEA plans to add another 1.8 MW to the 1.1 MW of installed wind turbine capacity in the near future. (Average load is 2.4 MW and the diesel electric generator capacity is 11 MW.) According to Reeve, every gallon of diesel avoided is money that stays in the community to help build the local economy.
We look forward to building on this success to help our villages become less dependent on fossil fuels. Development of large wind projects such as the one proposed for Fire Island or a large hydro project such as Susitna can help the Railbelt utilities. Many well-motivated individuals in Alaska are working on various energy projects. Having a diversity of energy sources can help provide price stability in the long term.
Ron Johnson was a faculty member at the UAF School of Engineering (now the College of Engineering and Mines) from 1976 until his retirement in 2009. He has served as Dept. Chair of Mechanical Engineering, as well as Director of the UAF Energy Center. Prior to this, he was a staff Scientist at AVCO Systems Div. in Massachusetts. He received his PhD in Aerospace Engineering from Cornell in 1969.