Drill Baby Drill?

Last week an oil rig situated 50 miles off the coast of Louisiana near New Orleans and the Mississippi River delta exploded and sank, killing 11 workers. At first, BP said that the oil leaking from the well was insignificant, but new reports have confirmed that it is in fact leaking 210,000 gallons a day. The slick is now roughly the size of Jamaica and growing, and will begin reaching the coast line, including sensitive ecological preserves, by the end of the week.

There are no good solutions to this problem. Geologically, oil deposits are under enormous pressure, and once penetrated the flow cannot be simply stopped. Complicating this problem is the depth of the well, under 5,000 feet of water. All potential engineering solutions like caps or relief wells will take at least two months to put in place.

At the rate the oil is flowing from this hole, the total amount of oil released into the Gulf of Mexico will match the 11 million gallons spilled by the Exxon Valdez disaster within two months. This spill has the potential to be the largest US oil spill in almost 30 years, threatening nearly 40 percent of our nation's wetlands, which are situated along the Louisiana Coast. The only alternative solution is to burn the oil, which, considering the CO2 impact, would be a Pyrrhic at best (no pun intended).

With such intense clamour for offshore drilling to alleviate our nation's energy challenges, this incident is a tragically vivid reminder of the risks. While there is oil available on our coast, we have cleaner, more cost effective solutions on land. America is the Saudi Arabia of energy efficiency. By retrofitting our homes and businesses, we can save more energy than all of our offshore oil could possibly provide us, and in the process we would create new opportunities for American workers. Best of all, energy efficiency is resource we can tap without risking our other vital natural resources.

Drill baby drill? Let's think again.

What's next for America - Flash Forward

A couple days after Congress passed comprehensive immigration reform, I posted an entry entitled, "What's Next for America?" In the post I laid out a common sense approach to bipartisan consensus building on climate and energy, and warned against the divisive sparkle of immigration reform. While I do believe that immigration reform is a serious issue worth of serious attention, it will in all likelihood deepen political divides across the country and here in Washington.

Today, major papers are reporting that the White House is gearing up to make immigration reform their next big issue after financial reform, once again leaving energy and environmental legislation to the side.

While it's common knowledge in Washington that this issue can be used to split the Republican party as it tries to remain relevant to the fastest growing voter block in America, states like Arizona are perplexingly provoking democrats into what will most likely end up being a losing fight for the Republican party.

On another note, if you thought conservative anger was out of hand with the health care battle, wait until this fight comes to the hill. This will fan the flame of radical conservatism in America and will expose much of that tinder as race-based, but will either side be able to control the flame? The potential for this anger to get out of hand is a real and somewhat frightening unknown.

How long will Americans have to wait until they get real relief from the financial burdens of rising energy costs? How long will the business community have to wait until they can get a firm answer from the government on what market incubation measures will look like? These are problems that transcend political, geographic, and ethnic boundaries. Energy, environment, sustainability, and climate change are clearly not the answers to the question of what's next for America, and that is a real shame.

Incentivizing Residential Energy Efficiency - Common Sense Approaches to Commercialization

This very timely article discusses residential energy efficiency initiatives and really goes to show how mainstream some of these ideas are becoming. The three main take-aways from this should be:

1) Energy upgrades have a 10-to-1 multiplier effect when it comes to home values. People need more education to understand how well prioritized efficiency measures are an investment, not a cost

2) There are a a number of approaches to address market failures and incentivize energy efficiency, but there is no magic bullet. Every type of building and every community will have different strengths, weaknesses, and priorities that must be taken into account when crafting strategies and solutions that meet their needs within the confines of their local economic and political realities.

3) Banks and other private finance organizations have an incentive to get involved, but need more experience and familiarity with the investments before they will get fully involved

The bottom line of energy efficiency is to create value by increasing the economic/physical, social, and environmental sustainability of a property. However, a number of market failures, including education, financial, and technical issues are still inhibiting broad action. To solve these problems, there are a number of approaches being experimented with across the country. They include Propert Assessed Clean Energy (PACE), rebate programs like Home Star, Green Bank initiatives, tax incentives, loan guarantees, and grants. States, counties, and municipalities across the country are considering their options and beginning to implements strategies. The problem is communicating these often complex initiative to homeowners, policy makers, and financial institutions in a way that clearly identifies the market failure and how these can solve the problem.

Ultimately, any strategy to stimulate residential energy efficiency should accomplish the same fundamental goal: to save more money than it costs. Underlying all of these programs are homeowners, so we need to start there. On one end of the spectrum are people who want to save from day one, and at the other end of the spectrum are people that are willing to make longer-term investments that may not provide immediate benefit, but will be over loan/improvements lifecycle. Most homeowners are going to fall somewhere in the middle, but regardless of where your preference fall on the continuum, the bottom line should always eventually be satisfied.

The next problem is that homeowners rarely have the time or expertise to needed to ensure they are making the best decisions. In the commercial real estate market, project developers will provide turnkey services for a fee, but residential real estate's relatively small scale projects are rarely worth a developer's time. The best way to solve the 'business case' problem for developers who want to break into residential energy efficiency services is to aggregate homeowners into groups.

One way to aggregate homeowner is in a cooperative model where neighbors voluntary come together to pool their collective buying power for mutual benefit. While there are existing examples, particularly with renewables like solar, it is still untested for energy efficiency services and is not without an organizational burden.

The other way to aggregate homeowners is through property management companies. These organizations are arguably the most naturally inclines and able to develop larger-scale residential efficiency projects. One particular type of organization are the companies that focus on the management of common ownership communities such as HOAs, condos, and coops. Their mission is to maintain the collective property value of a community or building on behalf of the owners. In essence, their job is to serve as a community's agent for ensure the physical and economic sustainability of property.

Based on the ability of association management companies to aggregate large groups of homeowners, they can develop larger projects that take advantage of the economies of scale. Aside from providing time and expertise, these companies can consolidate buying power to provide home energy auditing, lending, and contracted services at prices more competitive than the homeowner would otherwise be able to obtain alone on the open market.

Ultimately, providing these turnkey services should be a win for everyone involved:

-Homeowners save money on their bills and increase the value of their property and its comfort

-Banks can offer lending to make investments in local communities that creates real value and strengthens the financial positions of their customers

-Property management companies find a new way to advocate for homeowners, servicing their physical and economic sustainability by addressing their environmental sustainability

-Services provides see increased demand for their work, creating green jobs and economic development

-We all share in the collective savings of a better environment.

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http://www.slate.com/id/2249412