The Eisenhower Energy Project

I’m tired of reading about the coming horrors of climate change without seeing options to handle them. I’m tired of climate change deniers acting like abundant, cheap, clean energy would somehow be damaging to the economy. This plan is something I believe we can actually do, and that we can afford to do. Let’s stop nay-saying and doom-casting and start pushing for real solutions and progress.

Let’s take a cue from the Eisenhower Interstate Project: a very large, lengthy, and beneficial public works project that had as part of its goals remaining revenue neutral. We’ll budget 500 billion per year towards this, but the money should be reimbursed totally to the government over the following years. The Ike system did this via gas and diesel taxes, but we’ll do it via loan repayment from private entities or payments for energy provided. The end product of this plan should be a sustainable system that will provide cheap, clean energy to the citizens of the United States for decades to come, and a bedrock of infrastructure to keep our economy competitive.

I want to be clear on my biases from the start: I do believe man-made global climate change due to greenhouse gas emissions is the greatest threat the modern human civilization at this moment. So of course I think this project would be important. I also think, however, that individuals who do not think climate change is as important can still see value in the ideas I’m outlining below.

I propose three major pillars of the project.

  1. Rebuild and enhance our electric grid, including building significant numbers of non-greenhouse-gas (GHG) emitting power plants
  2. Dis-incentivize the use of GHG-producing fuels with a simple break-even tax, and eliminate fossil fuel subsidies
  3. Invest in carbon capture, climate change impact mitigation, and geo-engineering solutions.

Part I – Clean Up the Grid

Our current greenhouse gas emissions are primarily due to electricity use – 32% according to he EPA. As such, focusing our energy (no pun intended) on this sector will yield the biggest results.

Power Plants

Around 16% of energy is supplied by nuclear or renewable sources already, so we don’t have to worry about that. We just now have to replace the remaining 84% of the United States’ energy supply with nuclear or renewable power. No problem! That’s around 78.1 quadrillion BTUs of annual energy use from GHG-emitting fossil-fuel sources; or, in a number not in the quadrillions, 22.89 billion megawatt-hours (MWh) / year to replace. Yes, that’s a lot, just as much as it sounds like.

Of our proposed yearly outlay of 500 billion, we’ll allot 400 billion per year for power plant construction. So which type of plants should we build? I don’t particularly care, as long as it doesn’t produce CO2 in excess amounts. Each plant type has positives and negatives, from nuclear’s great baseline power to wind’s extraordinarily cheap operating costs. Arguing about which one is best is an odd distraction from that fact that any non-fossil-fuel power source is superior to the status quo. These loans would be given out with priority to projects that are “shovel-ready”, and followed by the ones that can produce the most capacity. Each year we can re-asses which plant types and plans would be best to invest the money in.

At the moment, construction costs per plant vary, and the cost per kilowatt-hour (kWh) can vary further by location and the capacity factor (roughly what % of the time the plant can generate it’s maximum capacity). Also, the technology is very rapidly changing and improving. Without diving into too much minutia, the costs range from $2213 per kW for onshore wind all the way up to $6230 per kW for offshore. But we have to include the capacity factor in order to get a useful number for our purposes. As simply as I can put it, the capacity factor is the percentage of the time you can actually use the power plant. So for wind, it may be low, say 20% to 35%, depending on the are, and for nuclear it’s quite high, around 90%.

Right now the best bang for our buck in buying capacity is nuclear, but I expect these values for cost and capacity factor to change as technology advances. I include them only to get us a rough estimate of what our $400 billion a year in replacement power plants will get us. Buying only the most efficient option at the moment, nuclear, would give us 1.42 MWh / year per 1000$ spent, or 570 million MWh. That’s 11.40 billion MWh over 20 years, or roughly half the total 22.89 we wanted to replace. More conservatively, we could expect a minimum of around 7.79 billion MWh of replacement using less cost-efficient (at the moment) wind and solar options as well.

A Nuclear Aside

Yes, I’ve included nuclear in the list of non-GHG emitting power plants we’d build under this plan. Yes there are issues with safety and waste storage. Yes the plants can be expensive to build. Yes they can take a long time to build. No, I don’t think any of these issues make nuclear such a bad option that it should be ignore in favor of wind and solar or other clean energy sources.

  1. Newer plant designs are far safer than older ones.
  2. Waste storage can be mitigated by creating reactors that use the “waste” as fuel and leave it far less radioactive, or by using new reactor designs that don’t create the same types of dangerous waste.
  3. The expense and build-time of nuclear plants are inflated because of regulatory requirements as well as lack of expertise – since we don’t build them, we’re not efficient at building them. We can pre-approve a small number (1 to 3) of the safer generation III or III+ reactor designs to speed regulatory approval, and by building a bunch of them, we’ll get very good at doing cheaply and quickly.
  4. No other renewable power source can generate the base-load, consistent power of nuclear. Technology for energy storage might catch up and mitigate this, but at the moment, nuclear is the best option to replace coal and natural gas plants.

The Grid

Aside from the climate change reasons to rebuild the grid, we have to rebuild it anyways. Our current nation power grid is old and patchwork. It’s not setup to handle the types of variable-load electricity that wind and solar provide, and the sooner we correct that the better. This is a nationwide piece of infrastructure we all rely on, and I think in this case a centrally-planned, federal system would yield the best results. Other people agree. Not just that the grid needs a centrally-planned revamp, but also that this is a mega-scale project on par with the Eisenhower Interstate System.

The good news is that the grid rebuild is relatively cheap. We’re looking at costs around 5-10 billion per year over 20 years for a full refresh. A smarter grid might actually also start coming out ahead of its costs in energy savings over the old version, but for simplicity I’m omitting any of those calculations here.

Back to Work

You may have heard, but we’ve got tons of American’s looking for work. Creating a surge of skilled construction, engineering, and operations jobs over the next 20 years seems like a good idea to me. This isn’t meaningless pork-barrel stimulus; this is a practical program with a specific, urgently needed end product.

Part II – Transit and the Break-Even Tax

The second biggest emitter of GHG emissions is transportation at 26%. In this case, since we’re dealing with many, private individuals rather than a nationwide system, I believe we’d be better served by dis-incentivizing the fuels that produce greenhouse gasses rather than centrally planning a better transportation method. If it’s simply cheaper for people to own electric cars instead of gas-burning cars, then they’ll switch that much faster.

So we’ll include the break-even carbon tax endorsed by numerous conservatives as a pillar of our plan. The idea is fairly simple, start taxing all carbon-emitting fuels. Instead of the government keeping that revenue, though, redistribute it back to the citizens of the US by given them an equivalent income tax break. So if the tax brings in $20 billion dollars in a year, the next year’s total income taxes will be reduced by $20 billion – each person getting essentially a refund amount of $65. The end result is that people will have the same cash in their pockets, but GHG-emitting fuels start to look a lot less attractive in the market. The tax will start small and grow until fossil fuel use is no longer a critical world problem.

It’s a clever trick – get people to switch by making the alternatives more attractive. I like it because you don’t force people towards a single solution – as with subsidizing – the market can still come up with whatever non-GHG-emitting solutions it wants, and they will naturally be cheaper than the GHG-emitting item already in use. We also don’t differentiate in GHG sources – coal, gas, oil, or wood, anything emitting them would get the tax applied relative to the amounts of GHG’s generated.

This step is critical for three reasons:

  1. Keep cost of fossil fuels high to reflect their true external impacts – this is particularly crucial since the cost for such fuels would likely plummet if demand is significantly reduced as per the project’s goals.
  2. Encourage switch from gas to electric transit modes without using direct government subsidies.
  3. Further encourage non-government led power plant development and carbon sequestration

Also, this tax would encourage more rapid development of useful sequestration technologies. Tax breaks could be given to companies that actually reduce the emissions of their fossil fuel power-plants, although I’d like to see those breaks only really apply to very, very heavy reductions (90%+).

I’d extend this tax to any fossil fuel exports as well – to prevent a glut of fossil fuels in the United States market from being unloaded to other countries to be burned there instead. It’s hard to account for all unintended consequences of a tax, but this one seems fairly obvious and easy to put in check.

End Subsidies

It should be plainly obvious that if we’re going to tax fossil fuels we should also not be simultaneously subsidizing them. Calculations vary, but the current amount runs in the neighborhood of the tens of billions. Discontinuing subsidies for gas, oil, and coal will also help bring their prices closer to a valid market price. That money could even be used to help finance the third phase of this project.

Part III – Mitigation

The impacts of climate change are not limited to increased temperature and cannot be averted solely by changing our energy sources to be cleaner. These impacts do not have a private sector driving force for innovation, so I feel it’s appropriate and necessary for the government to sponsor this research. Simply put, there is no profit in climate change mitigation.

I propose increased R&D spending by the National Science Foundation, with the directive of investigating the most promising ideas in the below general areas. This is where the remaining 100 billion of our 500 billion will go. We’ll remain revenue neutral by paying for it out of loan interest from our new power plants, or from revenues derived from selling the energy on the market if the plants are government-owned.

In no particular order, here are some possible targets of the funding:

  • Trees are pretty good at carbon sequestration, since they inhale it and store it, but we probably can’t plant enough in the next few decades to have a large impact on the carbon we’ve already released. The recent IPCC report predicts as much as 40 percent of the CO2 we’ve emitted staying in the atmosphere for centuries, absent other solutions. As such, we’ll need research into both natural and artificial carbon sinks and sequestration to see if it can be economically accomplished.
  • Ocean acidification could cause the collapse of ocean ecosystems, and as such could have major impacts for the millions of people around the world who depend on having fish to eat for sustenance. We need immediate research in methods for reversing acidification, locally and globally. This is especially urgent because we don’t even have a good method to measure acidification globally, meaning there is a lot of work to be done here.
  • We should work on physical mitigation of the effects on human societies. How can we better protect people from the effects of drought, erratic and powerful storms, and rising sea levels? Research should be done into which climate change outcomes are most likely, what are the most cost-effective methods of mitigating those aspects, and packaging those recommendations and results into a format we can actually distribute nationally and globally.
  • While I’m doubtful that a global geo-engineering project could be totally safe or successful, I think it’s possible that there may be localized or regional solutions worth investigating.
  • For many, many reasons we cannot totally replace burnable, carbon-based liquid fuels. The largest of these is air travel. So we’ll need liquid fuel alternatives. I emphasize that any liquid biofuels must come from sources that aren’t food for humans or grown on land that can be used to grow food for humans. Using waste materials or scrub plants seem like much more logical choices, even if they may be less efficient than, say, sugarcane or soybeans.
  • We need improved power storage techniques, both to enhance the attractiveness of electric transit, as well as to improve the efficiency of our power grid. This is one of the few areas where the private sector does have a major incentive to innovate, but the government should push to make sure all possible advances are properly funded.

Impact and Conclusion

Twenty years from now we can be living in a country that has cheap, abundant, clean energy and a modern, efficient power grid. This redefined power grid would serve as the bedrock of our economy and progress for the next 50 years.

If we eliminate half the GHG-emitting power sources in the United States, we’ll be cutting CO2 by 34.5% and all GHG emissions by about 29%. This would more than meet the Kyoto protocol goals for a developed nation. We’d be a on a path to a permanent, sustainable culture instead of one based on a non-renewable resource. We’d no longer have to worry about making war or protecting despotic regimes in order to have easy access to plentiful oil.

Setting up a false choice between economics and environment needlessly causes strife and wastes time. We can instead view these threats of global climate change as a challenge to improve our national economic infrastructure. Investing billions of dollars and creating thousands of skilled jobs isn’t going to cripple us, it’s going to free us. We’re America, we can do this.

2 thoughts on “The Eisenhower Energy Project

    1. Mick,

      I do agree. Given the state of things, fundamental change may be hard. I think shifting the conversation is important, not letting people in power talk about what they want, but giving them solutions we, the people they are to govern for, would like to see.

      And nice cartoon! 🙂

      -Ogro

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