Rocky Mountain Institute/volume xviii #1/Spring 2002 newsletterRMIRMISolutionsSolutions TIME FOR A SWITCH RMI Helps Reframe U.S. Energy Policy At Airlie House in Warrenton, Virginia, on 1–3 February, RMI convened two dozen of America’s most distinguished and thoughtful energy experts from the private and public sectors (but not including advo- cacy groups or serving public officials). Their deep experience embraced all energy sectors and phases—supply, delivery, con- sumption, technology, R&D, competition, and regulation. These politically diverse luminaries came NEP Initiative facilitator Larry Susskind, far right, leads the Expert Group together to rethink U.S. energy policy at a through a discussion of transportation. Photos: Norm Clasen time when Congressional debate has become so polarized that agreement on By Cameron M. Burns but-narrow constituencies promoting their favorite energy technologies. Largely absent continued on next page hat kind of world are we is a clear sense of what nearly everyone leaving for our children, agrees about, and how to incorporate those Wgrandchildren, and great- consensus elements into a balanced port- grandchildren? Will it be better, safer, and folio that can deliver to the American CONTENTS fairer? And will U.S. energy policy help get people (and help to deliver to all people us there? everywhere) desired energy services in SUSTAINABLE SETTLEMENTS ....page 4 Today, all but the terminally uninformed ways that are secure, reliable, healthful, MAYOR BROWN INTERVIEW .....page 8 realize that the number of miles per gallon affordable, fair, durable, flexible, and inno- our SUVs achieve and how we power our vation-friendly. DRIVING CHINA ..........page 12 factories and homes is directly related to Throughout those three decades, RMI and RMI NEWS ...........page 14 the health of our planet—the science is no its founders have been helping steer energy EAR OCKY ..........page 19 longer an argument; how best and soonest policy, warning of the consequences of D R to stabilize the climate, preferably at a poor energy choices and explaining the GREEN DEVELOPMENTS 2.0 ....page 20 profit, is the new debate. And relying more strength of efficient use, diversified supply, on dwindling oil from fewer places looks and truly competitive energy markets. In CHOOSING PAPER .........page 22 unwise in a dangerous world. We should February 2002, these efforts achieved a DONOR SPOT:DOUG LINNEY ....page 26 chart a course, as energy innovators new level when RMI and the Cambridge, remarked a quarter-century ago, “between Massachusetts-based Consensus Building BOARD SPOT:RUTH ADAMS ....page 27 a forecast and a fantasy” and “between the Institute (CBI) assembled the Expert Group WHAT ARE YOU DOING? ......page 29 unavoidable and the miraculous.” of our National Energy Policy Initiative, or For three decades, U.S. energy policy has “NEP Initiative”—possibly the single most THANKYOU DONORS ........page 31 been driven by battles between powerful- important project in RMI’s 20-year history. TRIBUTETO FARLEY ...... page 38 The NEP Initiative ‘Dream Team’ meeting at Airlie House (Warrenton, Va.), included, from left to right, Gary Simon,Tom Casten, Jim Sweeney, Jack Riggs, Henry Kelly, Jack Gibbons, Rose McKinney-James, Dan Kammen, Bill Nitze, Jack Edwards, Amory Lovins, Mike Davis, Stephen DeCanio, Bill Moomaw (staff), Mike Ming, Peter Bradford, Ernie Moniz, Larry Susskind (facilitator), Reid Detchon, Victor Gilinsky and (not pictured) Bruce Smart, Sandy Thomas, and Bill White. effective solutions seems difficult or impos- Arctic National Wildlife refuge—options whole policy framework has typically been sible; yet a frustrating gridlock would leave largely unattractive to the public and to opaquely designed by Washington players serious problems unresolved. The NEP Wall Street. (See RMI Solutions, Spring whose self-interests do not always coincide Initiative therefore seeks to articulate a and Summer 2001.) with the public’s desires. hidden consensus and fresh ideas that can Several concerned individuals asked RMI if The NEP Initiative began with two main command wide support and whose adop- we could help create a new energy policy steps. CBI’s Initial Assessment, based on in- tion would make contentious issues less for the country—one that built on the past depth off-the-record interviews with 75 important. It seeks to build a coherent and 30 years’ experience, could command diverse constituency leaders, identified balanced policy framework from clear wide support, and would strengthen com- points of consensus. Those then informed objectives and principles, rather than petitive markets and grassroots democracy. the Expert Group’s deliberations, producing adopting competing constituencies’ wish- After consulting with many advisors, RMI a succinct-but-direct 22-page statement on lists. And its process is inclusive and trans- partnered with CBI, obtained foundation U.S. energy policy for delivery to bipartisan parent: by design, its sponsors (including funding (see box), and launched the NEP political “customers.” The statement’s RMI) and its funders cannot affect the Initiative last autumn. unique features could enable it to exert a outcome. The average American, of course, cares salutary influence as Congress debates com- peting energy bills for several reasons. THE NEP INITIATIVE STORY little about energy, let alone energy policy. We flip a switch, a light goes on. We twist First, as mentioned, the policy statement is The NEP Initiative started to take shape in a knob to heat up dinner. We spin a dial to a consensus document. It was not negoti- the spring of 2001. In California, black- enjoy hot showers. We drive to the pump ated by horse-trading between constituency outs, soaring wholesale electricity prices, and tank up. And at the end of each representatives. Rather, it was crafted by spiking gasoline prices, and spot shortages month, we pay the bills. For most diverse and deeply experienced energy of natural gas were expected by many to Americans, this is all simple and accepted. policy experts working in an open forum, presage similar problems nationwide. Less obvious, most of the time, is that the each with an equal voice. The document President George W. Bush’s National physical systems that supply our energy are was written collaboratively during the 1–3 Energy Plan, released in May, strongly vulnerable to terrorism and accidents, the Feb. meeting in Virginia, then fine-tuned by emphasized supply expansion, chiefly from regulations that govern energy supply and and with the consent of the entire group. fossil fuels and nuclear power. It called for distribution often entrench self-interested 1,300–1,900 new power plants (more Second, the ideas presented in the NEP monopolies, the consumer can’t choose than one a week for 20 years), plus 38,000 Initiative are usefully specific on strategy how energy dollars get spent, many energy miles of gas pipelines and 255,000 miles of but don’t try to overspecify the tactics that sources are polluting or unreliable, and the powerlines, as well as oil drilling in the policymakers will need to tweak. page 2 Third, the Expert Group reasoned from each area, it lists overarching long-term clear objectives and principles to craft its policy aims and suggests short-term goals Spreading the Word policy recommendations, rather than and policy instruments. In recent months, RMI has made available on our starting with desired outcomes and then website some important pieces of energy-related The centerpiece of the NEP Initiative’s material, which we recommend to readers. First grafting on post-hoc justifications. suggestions for transportation (which con- published in The American Prospect, RMI co- Fourth, rejecting the conventional view sumes 27 percent of U.S. energy—97 per- CEOs Amory Lovins and Hunter Lovins’s two-part “Mobilizing Energy Solutions” is a compelling, that cleaner and safer energy services will cent of it as oil) is much more efficient contemporary overview of U.S. energy policy and cost more, the Group found practical “an vehicles, including aircraft. The document the nation’s exciting energy opportunities. (See energy system that is much more secure, suggests tools ranging from revenue-neu- www.rmi.org/sitepages/pid171.php#LibEnergyPol.) much more affordable, and much less envi- tral feebates (which encourage buying effi- Second, Brittle Power, the ground-breaking 1982 Pentagon study on domestic energy vulnerability ronmentally damaging”—simultaneously. cient and scrapping inefficient vehicles) to by Lovins and Lovins, has been loaded onto our And fifth, while reading public policy allowing high-efficiency vehicles to use website, at www.rmi.org/sitepages/art7095.php. high-occupancy-vehicle lanes, regardless With current concerns about energy security and papers is usually for the recreationally chal- terrorism, Brittle Power is a compelling read. lenged, and the consensus process is the of passenger load. The NEP Initiative also enemy of perfect prose, the NEP Initiative* supports the ongoing shift to hydrogen to deliver energy services [, possibly at is refreshingly bold compared to previous fuel-cell vehicles, cellulosic biomass fuels, lower cost] … A prudent public policy attempts. It announces: “The United internalized costs, and land-use reforms to would start now to address the problem ... States, and the world, must begin a achieve better access with less travel. Over time, we need to make a systematic, decades-long transition to an energy Electricity generation was perhaps more orderly, and fair transition from a carbon- system that won’t run out, can’t be cut off, straightforward, and the NEP Initiative’s dominated energy system to a significantly safeguards our health and the climate, many specific recommendations would less carbon-intensive system”—one far stewards our world, and supports a vibrant uproot the United States’ centralized more reliant on hydrogen and renewables. economy. Today’s patterns of energy pro- powerplant mentality. It urges that all The NEP Initiative may prove very impor- duction and consumption will not deliver ways to make and save electricity, and to tant.