Alternative Energies

Germany is one of the countries leading the world in the switch to renewable energies. And like other countries that have seen large-scale switches to clean energy, the utilities are taking it in the shorts and crying “uncle.” This includes not only private homes but also the industries in Germany, 16% of which are now off the grid — double the percentage of the previous year. This is cutting into the profits of the utilities, Germany’s mega-utility company, RTE, claiming to have lost $3.8 billion lat year alone. The Swedish utility company Vattenfall, which has large investments in Germany, claims to have lost $2.3 billion last year.

Declining demand for electricity from the grid in Germany

Declining demand for electricity from the grid in Germany

Needless to say, this doesn’t disturb the clean-energy advocates one bit but, more to the point, it should have been seen coming by the energy companies. Germany has been shifting its energy priorities for some time now and it is inevitable that the utility companies would see their profits fall. As a recent story tells us:

When unveiling today’s dismal earnings, RWE’s Terium admitted the utility had invested too heavily in fossil fuel plants at a time when it should have been thinking about renewables: “I grant we have made mistakes. We were late entering into the renewables market — possibly too late.”

To which I simply add: Duhhhhh! One can only ask when Big Oil and Big Coal in this country will climb aboard the clean energy train. In its small way, alternative energies like wind and solar are already making inroads into the profits of the utility companies — in places like Hawaii, for example, as reported recently. And this despite the absence in this country of a clean energy policy and very little Federal support.  In fits and starts the switch to clean energy will continue to happen, despite the unwillingness of the Congress to get behind alternative energies and the necessity for private investors like T. Boone Pickens and Warren Buffet, and a few of the states, to lead the way. It will happen. This country will eventually follow Germany’s and China’s lead into the 21st century and if the corporations that blindly push for fossil fuels continue to ignore the handwriting on the wall, their overpaid CEOs will echo the cries of “foul” we now hear from Germany. It’s not rocket science, it’s just good business. One would think that American businessmen who are supposed to be among the best and brightest in the world would realize where their own long-term best interest lies. But, then, business doesn’t teach us much about the long term; it’s almost always about short-term profits. Brace yourself for the coming outcry! Relish it when it comes.

Money Talks Loudest

Those of us who have been beating the drum relentlessly about alternative energy wonder if there’s any likelihood that Americans will finally wake up and realize that we simply must tear ourselves away from fossil fuels — which are, after all, finite. We can, however, take some hope from a recent article about the rising costs of oil that makes the following point almost in passing:

With oil potentially getting that [expensive], we need to seriously consider the potential of seeing another energy source replace oil demand. In the past 23 years, gasoline prices and the price for a barrel of West Texas intermediate [oil] in the U.S. have traded at a multiple of roughly 33.1. Based on the OECD’s projections, this could mean that gasoline in the U.S. would cost somewhere in the range of $6.05 to $10.85. With current prices already causing a consideration of alternative fuels, $10 a gallon certainly would tip the scales in the favor of alternative sources.

What this means is that the factor which might finally wake people up to the folly of depending so much on oil at the risk of catastrophic damage to the environment is not the damage to the environment, per se. It’s the damage to the pocketbook. Americans are apparently willing to have their children breathe dirty air and choke on toxic water resulting from techniques such as fracking to get at the oil and gas and burning such make-believe substances as “clean coal.”  But they won’t stand for increasing prices at the gas pump. The major impetus for the development of alternative fuels in the end will almost assuredly be anger at rising oil and gas prices. These rising prices will lead Americans finally to electric or hybrid cars that burn less fuel and might even propel these folks to solar and wind energy in their homes when the price of heating and cooling fuels goes through the roof.

While one would like to think that people will do the right thing for the right reasons, in the end what matters is that they do the right thing — even for the wrong reasons. But given a self-absorbed population that refuses to modify its “life-style” in order to conserve precious resources and protect the earth one can find solace in the fact that at some point, before much longer, people will demand alternative fuels simply because they can’t afford to put gasoline in their cars or pay their heating bills. And I predict that at that point Big Oil and Coal companies will invest heavily in clean energy and claim it was what they wanted all along!