How to Persuade the Governors of the United States to Seize the Renewable Energy Opportunity in Their State
by Cecil T. Massie P.E.
All renewable energy is, at its source, sunlight. Since the sun shines in every state, there is renewable energy potential in every state. Furthermore, since it would take only 0.2% of the solar radiation striking North America each year to meet our energy needs, every state has solar energy in wild abundance over what is actually needed to meet their need. What is needed is the vision and the courage to seize the opportunity.
Sunlight, despite its abundance, is not concentrated in one place and a method to collect and store the sunlight is necessary. Agriculture is the business of collecting, storing and refining solar energy. It was only logical therefore that renewable energy would get its foothold in the portion of the country where agriculture predominates. There is no reason, however, for other regions not to participate in renewable energy but in a manner suitable to their climate and geography.
In the current land rush atmosphere of the ethanol industry it is easy to lose sight of why ethanol succeeded in Minnesota and what it teaches for other states. The idea of selling ethanol to the world is actually a recent development and one that produces little enthusiasm for ethanol and by extension renewable fuels outside the Corn Belt. For renewable energy to gain widespread support, renewable energy must return to the roots of the Minnesota Model. The three elements of the Minnesota Model being: local resources (corn) to meet local demand (transportation fuels) using local processing. It is a model that could be emulated in every state.
Nearly every state has a balance of trade deficit on energy. In our case, there is a cash outflow of nearly $15 billion annually for energy purchase. By bringing energy production inside their home state, every governor would return manufacturing jobs, tax base and economic stimulus to their constituents. Most economists believe that by circulating money inside a community, the real economic output increases by a factor from 2 to 6 times the underlying economic return. Minnesota has set the goal of 25% renewables by 2025 and I believe success on that front will add as much as $25 billion annually to the Minnesota economy. By any measure that is a pretty nice stimulus to a $235 billion economy.
Governors don’t need a national energy policy because the demand for the energy is within their own state. I have looked at a number of states and their current potential for renewable energy. Only Iowa with its high tillable acres and low population has shown even the potential to make more energy than it can use within its borders. Moreover, at current oil prices, renewable energy is head on competitive with fossil fuels so there is no need to think about this as a subsidy program per se. The reason for any state support is the economic benefits that follows producing your own energy.
I recently prepared an estimate of the jobs and tax base impact of the 25x25 goal on Minnesota for MnSCU as a guide for their curriculum planning. While I would not want to stake too much on the simple calculations I performed, the numbers I came up with are pretty revealing:
Additional capital investment (tax base): $20 billion by 2025 Construction labor: $8 billion for construction labor creating 2600 jobs Operating labor: 6000 full time jobs Support jobs: Assuming 2 to 3 jobs outside the plant for every job inside creates 12,000 – 18,000 additional jobs
To those concerned about the pressure renewable energy will put on the food supply my reply is twofold:
First, crops for energy and crops for food depend on the same solar energy gathering capacity and which is produced is going to be a matter of economic return to the farmer. Food and energy prices are now linked in a manner they never were before and that paradigm is here to stay. We will learn to work with it, mitigate its effects, but in the end, we must get used to it.
Second, the way to mitigate the effect on food prices isn’t to back away from renewable energy but rather to spread it further, faster. Right now the only renewable fuel source we have is corn and putting the weight of US energy demand on corn ethanol will have a terrible distorting effect. If other states begin to meet their energy demand from their own (non-corn) resources, it will reduce the pressure on food production.
In particular renewable energy must move away from corn fermentation. Other technologies, particularly the thermochemical route to ethanol, are able to convert a wide array of biomass types into liquid fuels and synthetic natural gas. Contrary to what you read in the paper, this technology is available today but awaits funding to demonstrate this in a commercial setting.
In my conversations with lending and financing people I have been told flat out that as long as attractive corn ethanol projects are available, no lending institution will take the risk of backing a thermochemical ethanol project. Therefore, federal and state support for one or more demonstration projects is needed.
In summary, to make renewable energy attractive to governors outside the Corn Belt their understanding of renewable energy must move beyond corn ethanol to the broader array of feedstocks and technologies available today. They need to understand that every state has the solar resource to participate in a renewable energy economy and that doing so is in the naked self interest of their constituency. Renewable energy has the potential to replace some of the manufacturing jobs lost to overseas manufacturing while stimulating the local economy and shoring up the tax base.
Cecil T. Massie P.E.