final inputs to Senate climate bill

Tomorrow (Thursday) will be the last day of fact-finding hearings at the Senate

Environment and Public Works, which will then proceed to debate and vote the

first really official climate change bill from the US Senate.

Today and yesterday, I heard about 40 people (including about a dozen senators) give

their views of all these issues. So many things to think about!

A few days ago, I posted a message "climate deniers and Adam and Eve."

One of you quietly noted that there are true believers on the left, not just the right.

That is absolutely true. I have spent a lot of time on the delusions which threaten useful action from well-meaning people concerned about global warming. I felt I needed to say something about other delusions, simply as a matter of balance.

Should I say that the crazy left is just as much a threat to competent action as the crazy right?

It is not quite so simple. After all, is the Natural Resources Defense Council (NRDC) to the left of the Friends of the Earth (FOE)? Many of my friends would be horrified to hear -- I actually feel more in harmony with the recent actions of Friends of the Earth than of NRDC, on the climate change bills. When Lord Monckton and FOE agree on the need to try to prevent dangerous financial manipulation, who is left and who is right?

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I have been pleased to see that more people in Washington understand a key point I have been trying to make:

NET JOB creation in the next 1-3 years depends a whole lot on how much money gets spent on investment in the electric

power sector. That, in turn, depends a lot on CERTAINTY. I have worked with electric power people involved in planning decisions; bnefore making big investments, they have simple models, which lay out future streams of costs and revenues.

IF THEY DON'T KNOW what the numbers are, or what the best technologies are, it's hard to invest. The basic theme seems to be that the greatest job creation would be with a DEFINITE carbon price (combined with eliminating

other EPA and state regulation of CO2); next best a simple cap-and-trade with a narrow hard price collar; worst of all,

nothing passes at all in the Senate this year.

Regarding the collar...

I've had a chance to think still more.

There is still a lot of debate about "technology." To cut CO2 by 80% in electric power and manufacturing (let alone transportation), does the technology exist today to do it, at no more than $30-50? The EPA forecasts basically say no;

they predict that CO2 porices have to rise to $177 per ton by 2050 to meet the targets. I am far more optimistic.

In particular -- I have seen technology from new companies like Calera and Aurotra, which I have great faith in (even being a VERY tough skeptic on unproven individual new technologies, as trained by NSF and sad experience) which could

recycle ALL of our flue gas within the $30-50 rpice range.

IF SO -- why would I support a hard price collar so much?

Several reasons.

One is "political" -- an honest kind of politics where we respect teh fact that other people have other knowledge bases, and we have some obligation to consider their viewpoint/base -- especially when we need their votes. If we can do the job within $30 or $40, why not simmply have a firm permanent simple cap on allowance prices at that level?

(Shoud it be $30 or $40? I hope.. an unconventional idea... that the majority leader could

get unanimous consent to vote on the bill first, and let majority rule choose betwen two collar ranges.

BUt if $30 is all we can get, why not? NOT TO RISE in future, except maybe to $40 over 20 years.)

We lose nothing in the real market... but we suddenly are able to place simple hard upper bounds on the total cost of the

system, which people can verify in simple arithmetic. Baucus yesterday said "we need to limit the potential damage of

global warnming, but also the potential damage of the bill itslef." Exactly. Why not, when we have every reason to believe that $30 or $40 is enough to do the job -- in industry and electric power? (In tranbsportation, even Waxman would not be enough to do much, which is why we need to get past this stuff and move on to www.werbos.com/oil.htm as soon as we can.

Or, better, find a way to do it in parallel.)

There is another reason.

The sad fact is that unbounded government programs have a tendency to create "Jurassic Park" inefficient

systems, which get in the way of the new efficient ways of doing things. And even big companies will often go for

big obsolete nonsense, if hey've been too close to the government trough, if the the nonsense is at least well known,

and if they can get someone else to pay for it. If we don't have a price collar, it may limit the growth of the low-cost safer new alternatives, which we really need to take over the entire market here. Especially if we want China to

have reduced emissions too. Without that, any pretense of sincere environmentalism is phony.

It's not phony to pass a US law, but it is phony to design US actions and international negotiations without

aiming as hard as we can for a situation where US and China pay teh same carbon price, and small efficient US

companies help China process its flue gas inexpensively, far better than our government-based fat cats could ever do.

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Dan Reicher of Google testified today that we need BOTH a clear, simple carbon price (worldwide as soon as possible),

ALONG WITH "sectoral measures." I'm glad that that message has been more and more understood and respected.

The kind of "sectoral measures" which make most sense are efficiency standards and such,

special encouragement of renewables (most notably R&D), and really effective action on transportation.

For transportation, Google praised the kind of MPG standards EPA is now putting through... and the cap-and-trade bill..

but said we need new action on (1) incentives; (2) battery research; and (3) smart grid, so that new plug-ins can

interface well with the grid.

Google doesn't know all the most cutting edge technologies I have seen at NSF and such... but they are a whole lot closer to reality than some of the things we hear in Washington! At www.werbos.com/oil.htm, I do include exactly the kinds of incentives which Toyota and flexible vehicle people have asked for. I was glad to hear google and others try to explain

to Washington -- tax incentives renewed every other year simply don't cut it, when it's industry whose investments you are trying to stimulate. IF oil gets permanent incentives, why not the stuff we need most to get new action on?

As a long-time IEEE guy, who worked hard to get the message on plug-ins to DC many years ago...

iI find it embarrasing when people say "why don't we just go all-electric, and make life simple?

Don't you respect those electrical engineers?" That's a weird accusation for an IEEE guy to try to

cope with .. and it really is embarrassing when electrical people, like conservatives and leftists, have to contend with people

out of touch with reality even within our community. We all have to control our true believers.. for even OUR truth can bnecome a lie when it is pushed too far.

In my view, electricity really will take over 75-100% of the market for miles, in time, if we just have a level playing field.

So why fight for a level playing field? Why give equal play and encouragement to biofuels, to shale gas... and even

such odd things as hydrogen fuel cell cars and new coal liquids (the latter subject to some constraints)?

Several reasons.

First, there is some honest politics. Not the politics of a coalition of robbers, trying to divvy up taxpayer money to give gifts to preferred groups. More like a coalition of knights of the Round Table, who support an honest, chivalrous competitoin, where "may the best man win" -- each believing they can prove they are the best man or woman.

Second -- to get the most security and environmental benefit for whatever economic price we pay...

the optimal trajectory between now and 2050 or 2100 is actually quite complex. In a century,

the US shale gas will run out... but in the meantime, it can hjelp us a whole lot to do better with our problems

with the Middle East and the risks of $4 or $8 gasoline. A well-designed market can calculate that trajectory better than even the best of us algorithm people could. Picking JUST ELECTRICITY starting nw is almost certainly not

the optimal trajectory. Energy markets have always been complex ecologies, with many niches, and that's what we should expect EVEN IF we go full speed ahead to minimize OPEC dependency.

Likewise with nuclear, wind and solar.

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There was a WHOLE lot more said.. worthy of further comment...

but it's been a long day, and tomorrow will be long too. And who reads this far anyway?

Best of luck,

Paul

P.S. www.werbos.com/oil.htm DOESN'T say much about Google's intelligent grid point...

but it gives a link to a paper which goes 'way beyond what Google is doing there.

But that requires a totally different kind of action. If we can get a carbon price, AND do what's in oil.htm,

maybe then we'd be ready for the totally new set of regrouping and surge needed to reach what we

need in the brain-like intelligent grid area. Not this year, sadly... except for some background engineering eforts and some related prerequisites which are far from sufficient.

Peter Brehm of Infinia had a genuinely interesting talk on the most important source of renewable electricity -- solar thermal using "dish" reflectors and Stirling engines to convert heat to electricity. www.werbos.com/energy.htm has some further information about this technology, which has more hope than anything else to really beat small natural gas units for the daytime peak power market worldwide. I did have some contact with the NASA Glenn people he got teh Stirling from... but I wonder if he knows about the patents out there for preventing hydrogen embrittlement in the engine, key to using new materials to double the efficiency of the Stirling itself and cut costs in half yet again? Sandia claims that their 30.1 percent efficiency in a Stirling is the world's record for solar, so I would imagine we could still benefit from getting it up to 55.