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Tuesday, August 25, 2009

Pursuing Sustainability Through Economic Adversity

A commentary by
by Michael Vickerman, RENEW Wisconsin
August 11, 2009

Continuing a trend that began in 2008, America’s energy appetite will continue to decline through 2009, according to the U.S. Energy Information Agency (EIA). The reductions are cutting across all primary energy sources: petroleum, coal, and natural gas. These projections appear in the July edition of EIA’s Short-Term Energy Outlook.

In the same document, EIA anticipates a 2% decline in this year’s electricity use, following a 1.6% dip in 2008. The ongoing reduction in electricity demand is having a particularly pronounced effect on coal consumption, which is projected to drop by 5.2% from year-earlier totals. Between the sharp pullback in industrial demand for electricity and low natural gas prices, the current market for coal is very weak.

Needless to say, as fossil fuel consumption goes, so go carbon dioxide emissions. Given EIA’s expectations that the ongoing pullback in energy demand will persist through this year, there should be a continued slackening in greenhouse gases discharged into the atmosphere. If you add this year’s projected reductions to last year’s recorded decline, the overall drop in annual CO2 emissions from 2007 could be as much as 5%. That’s a far larger reduction than what would be accomplished under any of the various cap-and-trade proposals being debated in Congress.

While energy efficiency spending and stricter building codes are good policies for moderating demand, their effects are modest compared with the consequences of a full-blown economic downturn. The current situation raises an important question: what is the value of displacing a ton of CO2 when economic conditions are sufficiently bleak to guarantee future declines in emissions regardless of new climate change policy initiatives?

From a climate change perspective then, current economic conditions present a kind of a good news-bad news situation. On the plus side, Americans are driving less, flying less, buying fewer disposable items made in foreign countries, and building fewer energy sinks like houses, hotels, and megamalls. This slowdown provides us with an opportunity to conserve fossil fuel supplies over a longer period of time, reduce our vulnerability to traumatic events occasioned by human disturbance of the atmosphere, and deploy capital to build up more localized and less high-maintenance economic arrangements that can be sustained over the long haul.

Indeed, out of this contraction could emerge a slower-paced and more sustainable America, one less dependent on the kindness of Middle East petrostates and hail Mary legislation from Congress. A broad-based movement to invest in community-based sustainable energy would in turn have a far more positive and lasting effect on our energy economy than would a Green New Deal that extends the presumption that the American way of life is non-negotiable, as former Vice President Dick Cheney would have us believe. Energy sustainability is an easier goal to achieve when everyone takes part in the project.

But there’s no denying the substantial loss of investment capital available for sustainable energy development. As spending is curtailed and debt is paid down, dollars that could underwrite wind, solar and bioenergy installations are bring taken out of circulation. Moreover, the prices of competing fuels like coal, natural gas and liquid propane have fallen substantially from their 2008 highs, as has the wholesale price of electricity. Many of the renewable energy proposals that looked good on paper 12 months ago are now in hiatus, waiting for the economic headwinds to subside.

These headwinds notwithstanding, there remain a few businesses that are pressing forward with projects that will enable them to reduce their energy overhead and/or diversify their revenue sources. One of the more intrepid of these companies is Organic Valley Family of Farms, which recently installed three pole-mounted photovoltaic arrays in front of their $4 million headquarters building in LaFarge.

For this farmer-owned cooperative, the idea of capturing renewable energy on-site to serve its main building was a logical extension of their commitment to organic agriculture and environmental stewardship. The 8.4 kilowatt installation is expected to produce about 14,200 kilowatt-hours a year, which is about one-and-a-half times the electricity that a typical Wisconsin residence uses per year.

But Organic Valley’s sustainable energy agenda does not stop there. The cooperative is investigating the feasibility of a solar hot water system to serve its cheese-packing facility, also in LaFarge. Even more ambitious is the community wind energy project that Organic Valley and two La Crosse-area partners--Western Technical College and Gundersen Lutheran--have been working to get off the ground. These three entities have formed a for-profit limited liability corporation for the purpose of owning and operating a two-turbine project near Organic Valley’s distribution center in Cashton.

Measurements taken so far indicate that the Cashton location is one of the windiest areas in western Wisconsin.

Even though Organic Valley is a profitable enterprise, it is doubtful that any of these investments in sustainable energy would be going forward without state and federal incentives. As a for-profit cooperative in a rural area, Organic Valley is uniquely positioned to tap into two sources of federal funds: the U.S. Department of Agriculture’s Renewable Energy in America Program and the solar Investment Tax Credit. Complementing these funding sources is Focus on Energy, which is co-funding a portion of Organic Valley’s solar electric array and its wind monitoring expenses.

The combination of these funding sources enables businesses like Organic Valley to pursue a proactive approach towards sustainability and invest in systems that will pay off over the long haul. As long as these public policy initiatives remain in effect, rural Wisconsin businesses can grow while conserving fossil fuel use and reducing their impact on the atmosphere, even in these trying times.

Michael Vickerman is the executive director of RENEW Wisconsin, a sustainable energy advocacy organization headquartered in Madison. For more information on what Wisconsin is doing to advance sustainable energy, visit RENEW’s web site at: www.renewwisconsin.org and RENEW’s blog at: http://renewwisconsinblog.org.

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