The 2011 energy elimination games

By Hal Brill

I’m not much of a football fan, but around playoff time I perk up and start rooting for underdog teams to dethrone the champs. With all the problems that Big Energy has been having lately, the odds of upsets in the energy games have been steadily increasing.

Japan is on everyone’s mind. Despite the shocking destruction caused by the massive quake/tsunami, our attention has been on the radiation leaking from Fukushima Daiichi. We’re all praying the damage to the environment and human health can be contained, but it’s too early to know. This event has made it impossible to ignore the consequences of nuclear accidents, and has already had in impact on the future of nuclear energy.

HB energy choices

Socially responsible investors have long had this on their radar. In our 1992 book Investing from the Heart, Jack Brill wrote that “most SRI investments are screened for nuclear energy. The reasons are not exclusively environmental, because nuclear power plants have also proven to be financial black holes for the utilities that built them.” Twenty years later nuclear is still a standard negative screen for SRI funds, though recently some former opponents of nuclear power have become converts. Nuclear plants do not emit CO2, so many people who are deeply concerned about global warming have reluctantly embraced nukes as a necessary path towards stabilizing the climate.

NI continues to recommend avoiding investments in nuclear power. Accident safety hasn’t been adequately addressed, and the lack of safe, permanent solutions for radioactive waste has been a deal killer for us. I’ve always felt it was a wacky way to boil water, but I’ve tried to keep an open mind. President Obama surprised progressives with his vision of a new generation of smaller, safer nuclear plants. Still, private investors have been unwilling to invest in nuclear power, despite huge government subsidies and limitations on liability for accidents.

If nuclear power is eliminated from our near-term future, how exactly will we meet energy demands without cooking the planet?

One answer may be turning in the wind. A few kilometers from the nuclear disaster, the 23 turbines at the Takine Ojiroi wind farm behaved much better. They got jostled around, stopped themselves, checked their systems, then re-started. It is within the nuclear evacuation zone, but engineers are able to monitor and control the turbines remotely. The nuclear plant produces 100 times the power of this wind farm, but in this matchup it looks like the underdog will be advancing.

Of course nuclear power is not the only behemoth that is tottering. We are risking entire marine habitats in our quest to procure oil from ever more remote and risky sources. Deep sea oil drilling took a turn in the doghouse after spewing a gazillion barrels of oil into our beloved Gulf of Mexico, but now the U.S. government has resumed issuing deep water drilling permits. Apparently one disaster wasn’t enough to stop Big Oil, so we can’t eliminate them from the game yet.

Coal didn’t have a great year either. Twenty-nine miners were killed in a West Virginia accident last year, reminding us how dangerous the work is that supplies about half our country’s electricity. But coal has been playing defense for many years because burning it results in high carbon emissions. Carbon sequestering technologies are a hot research topic, but have yet to mature. Natural gas only produces half the carbon emissions of coal, but its “hydraulic frac’ing” technology has encountered a growing cadre of opponents (including SRI investors) who are alarmed about the chemical stew that must be injected into the ground to release the gas. It’s too soon to call this one.

So sports fans, I’ll close with a tip I got from NPR (also an underdog these days, but that’s another story), saying that midsize solar installations are the “sweet spot”. Large solar installations are challenged by the need for transmission lines and can disrupt natural habitat, while home rooftop systems lack the economies of scale. In Sacramento a company called Recurrent Energy built a modest (8 acre) solar array that supplies electricity for 750 homes. It’s structured as “community supported solar,” allowing customers to subscribe to the electricity. As the cost of panels continues to fall, more innovative players will emerge from the minor leagues to challenge today’s dynasties. Here at NI, we’re placing our bets!

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Hal Brill

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