This week, Congress is holding hearings on oil production and pricing. Mixed in with deliberation on alternative fuels and technology, the session has turned into a witch-hunt against the record profits of big oil companies.

The last two months have been one for the records. In February, big oil companies reported record profits. Chevron’s year-over-year profits rose 9 percent, while Royal Dutch Shell was up more than 23 percent. The biggest buzz came from Exxon’s announcement of $40 billion of profits (up 3 percent). Less than a month later, the price for a barrel of crude oil set inflation-adjusted price records three times, topping at $111.80 per barrel on St. Patrick’s Day.

The capitalist in me struggles with the political showboating that is occurring in the Capital. Don’t we want American companies to be profitable? I’ve always thought that 10 percent profits (net income over revenue) was a strong, but not outlandish result. The oil companies are simply performing right now. I’ll admit that $40 billion in net income is a huge number, but Exxon is a HUGE company.

I favor the momentum that is building in Congress to reduce the $18 billion in tax incentives for oil and natural gas producers. It is high time that taxpayer funds are used to help develop new technologies – as long as we quit throwing money at the inefficient corn-based ethanol!

Another thing that hasn’t been discussed widely during this period of time is that our country is a victim of our own behavior. The US experienced a full generation of low cost fossil fuels. During that time, the general public put very little thought into the environmental impact of fossil fuel consumption.

Yesterday in Florida there was another glaring example of the instability of the nation’s electrical grid. Airports shutdown, traffic snarled and kids were stuck at their schools. A fire in a FPL transmission substation caused a domino effect that led to several transmission lines, substations and two power plants to shutdown.

Today, the WSJ reported that the Florida Reliability Coordinating Council has begun an investigation that will be reported to the Federal Energy Regulatory Commission which could levy fines of as much as $1 million on each violation for every day of the blackout if they find breaches of new reliability rules prompted by a major U.S. blackout in 2003.

While this should be a lesson in the importance of further research and development into distributed generation and fuel cell technologies, it appears that policymakers are taking a different approach. Currently, many states, including Ohio, policy makers are discussing increased focus on maintenance of the electrical grid. Some states are even putting into place power quality and reliability standards.

My hope is that we will move towards a more efficient distributed generation model as up to 69 percent of generated energy is lost during the transmission and distribution across the country.

A few weeks ago, I attend an interesting lecture titled “Resilience and Sustainable Development” by Dr. Joseph Fiksel of the Center for Resilience at The Ohio State University.

Dr. Fiksel defines resilience as “the capacity of a system to survive, adapt, and grow in the face of unforeseen changes, even catastrophic incidents.”

I thought Dr. Fiksel was succinct when he presented that it is difficult to immediately understand the tradeoffs associated with making multi-faceted decisions or creating policies. He made a not-so-subtle swing at corn-based ethanol which was generally well-received by the scholars in attendance. Later in the lecture, Fiksel introduced a few sample projects his organization is working on in modeling industrial ecology and life cycle analysis. Overall, it was refreshing to hear someone with a scientific background, present such practical and achievable ideals.

In a trend as troubling as the further proliferation of inefficient corn-based ethanol in the United States, over the last year, coal has become a fossil fuel pariah.

Last week, the WSJ reported that investment banks are requiring utilities seeking funding to build new power plants to provide economic analysis on the viability of projects under future carbon tax or cap-and-trade legislation. While I agree that Congress will likely enact legislation in this space in the next few years, I believe it is a little insane to require utilities to model a theoretical future. Nobody has the crystal ball that will predict the outcome of legislative processes’ give-and-take nature.

The following day, the NYT reported that American utilities are moving away from building new coal-based power plants and toward more costly and carbon-friendly natural gas plants. This trend is due to the increasing opposition utilities have received from environmental groups, oversight bodies and local court rulings on GHG emissions.

My hope is that this is just a short-term trend and that the future is not this bleak for our energy supply. In the long-term, if utilities truly run from the lowest-cost fuel, consumers already rocked by a slowing economy will pay the ultimate price. Worse yet, a slow down the planning for expanded generation in key geographies such as the southwest and east coast could quickly spin the country into an energy supply-demand imbalance.

Earlier this month, Business Week highlighted a Dutch firm, Ooms Avenhorn Holding’s Road Energy Systems^®. This cool technology is yet another example of Europe being light years ahead of the U.S. in all areas of energy conservation and energy management. The firm’s system has been assisting four office buildings with summer cooling and winter heating since October 1, 2000.

Ooms Avenhorn Holding’s research has shown that Road Energy Systems^® cuts CO₂ emissions by 50% compared to conventional heating systems and minimizes chloride use (salt for icy roads).

Sustainability blog TreeHugger reported that 18 months ago a similar system was installed in Scotland, but that as far West as I have found a similar technology being implemented.

In addition to the positive environmental benefits – I know that U.S. cities that don’t know how to plow snow (see Columbus, Cincinnati and Washington, D.C. to name a few) could benefit from this solution.

The green wave is swelling in the United States. The week of November 5th, NBC hosted its first “green week” in which each major show extolled the virtues of topics such as recycling, conservation and eco-awareness. A week earlier, ABC’s Extreme makeover: Home Edition aired its first green makeover.

Ironically, the Business Week that hit newsstands just one day after the ABC homebuilding special had Little Green Lies as a cover story. The magazine follows the professional frustrations of environmentalist Auden Schendler, who Time names a “climate crusader” last year for his efforts at the Aspen Skiing Company, peaking in his exasperated statement, “How do you really green your company? It’s almost f—— impossible.”

If only Mr. Schendler knew what a poor position he has chosen. Read the rest of this entry »

I will admit that I haven’t finished reading Goldsmith’s What Got You Here Won’t Get You There, but that does not mean that I haven’t heeded some of the author’s good advice. “Speaking when Angry” is one of the 20 habits that keep people from rising to the top… simple, yet profound. I found myself repeating this advice inside my head yesterday after finishing this article in The Columbus Dispatch. I am sure that the folks at the Natural Resources Defense Council (NRDC) are intelligent, well meaning individuals, but I think they are focusing too much on the tree rather than looking at the forest.

Have you heard of Adam Werbach? I was not aware of Mr. Werbach until he was featured in the September issue of Fast Company, but he is now on the short list of people I need to meet in 2008 (and could quickly become a member of my list of favorite people soon after that meeting). Adam is a smart guy – Ivy League educated and the youngest-ever national president of the Sierra Club. You may be asking yourself “why is Marty so excited about an environmentalist?” The answer is simple, Adam gets it. A speech he gave in December 2004 pointed out that environmentalists were not achieving their missions and he correctly challenged the leaders of environmental organizations to “go to a red state and try to explain environmentalism to the average American. If you don’t have a plan to activate the values we share with the majority of Americans, then you need to move on.” The bold speech cost him his job and several professional relationships. Read the rest of this entry »

American Electric Power continues to make significant moves to diversify its “green footprint” in anticipation for state and federal legislation that will target carbon emissions of electricity generation. This week, the company announced that it install at least 25 MW of batteries the size of double-decker buses on its system in the next decade. In a classic “buy low, sell high” scheme, the goal of the program is to charge the batteries at night with wind turbines and sell the low-cost power at the peak of pricing each afternoon.

I like the creativity the company continues to show in advance of legislation that is sure to cause additional environmental-related expenses and affect earnings in the next several years. AEP appears to be making small, strategic investments to vet new technologies before the market forces the company to make a hasty decision – planning qualities and foresight that is rare with investor-owned utilities. Read the rest of this entry »

The WSJ reported this week about an extreme energy conservation effort in Japan called “Cool Biz.” In order to use less energy, government and businesses have begun to keep office temperatures at 82 degrees Fahrenheit. To promote these higher temperatures, cooler business casual attire is permitted, but dressing “down” has been a difficult adjustment for the formal Japanese business community.

Program supporters contend that if all offices raised their temperatures to 82 from 79.2 degrees between June and end of September, when the hot season ends, the country could reduce carbon-dioxide emissions by up to 2.9 million tons over the summer.

I appreciate the enthusiasm for energy conservation and behavior change, but as the WSJ pointed out, some experts think there are consequences to employees:

“Kozo Hirata, a physiology professor at Kobe Women’s University in western Japan, has studied the interaction of clothes and skin and says 82 degrees can be comfortable only if you’re thin, naked and stay still. Any physical activity warms up the body, and even light clothing hinders the skin’s natural cooling mechanism. Because fat is an insulator, he says, just an extra millimeter under the skin makes a big difference. For overweight people, 82 degrees “is impossible,” he says”

A post on the WSJ’s Energy Roundup at the end of last week highlighted an AP report that in the next several weeks, the Nuclear Regulatory Commission expects to receive two dozen new fast-tracked combined construction and operating license applications for nuclear reactors at 20 sites, most in the South.

The director of the newly created NRC Office of New Reactors, Bill Borchardt was quoted as saying:

• “Growing electricity demand, energy supply security concerns and greenhouse gas emissions from fossil fuels are driving a nuclear revival in this country after a three-decade chill. Improvements in nuclear operating experience and efficiency have also played a role.”

• “Most (companies) want to begin construction in five to six years and be online by 2015 to 2020”

While I do not think this is a silver bullet for the looming energy supply crisis, I think this is a very positive first step to a diversified portfolio of generation options – especially since nuclear generation is carbon-neutral.