May 29 2013

Ocean Renewable Energy: a Financial Perspective

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The need to transition to clean renewable energy source is a daunting yet pressing challenge facing the entire globe. As society continues to become more industrialized our demand for energy only increases. Throughout the entire 20th century our solution to rising demand for energy was a heavy reliance on fossil fuels. Today, in the context of the energy structure of the United States of America, coal, oil, and natural gas comprise the backbone of our energy portfolio. As time passes, we continue to observe the devastating effects of climate change on our natural and man made surroundings.

Rising sea levels, brought about largely by the environmental impacts from our excessive burning of carbon emitting substances, threaten to wash away entire island nations like the Maldives. Increasingly powerful hurricanes continue to strain our protective resources like levees and sea barriers; we observed this tragedy through the devastation that hurricane Katrina wreaked upon American soil. National Geographic investigated the effects of climate change on Hurricane strength and stated that it is “directly related to the heat of the water where the storm forms. More water vapor in the air from evaporating ocean water adds fuel to hurricanes—also called cyclones and typhoons in different parts of the world—that build strength and head toward land.”(Daniel Stone) This correlation between rising temperature and storm strength must force us to confront the challenge of transitioning away from dangerous fossil fuels and propel us toward creating a modern and forward thinking portfolio of renewable energy sources.

Although this shift may seem obvious to those who are well educated in climate science and energy, major political and financial hurdles stand in the way. Because our global reserves of fossil fuels are not nearly depleted, and are far cheaper than unsubsidized renewable energy, many who dangerously ignore the threat of climate change see no reason to transition away from them. This lack of public interest in clean energy is supported by an incredibly vast amount of capitol from traditional energy corporations. The amount of financial capital held by the titans of the modern energy industry leads to political clout that must not be ignored.

The table below highlights this power by illustrating the overwhelming amount of financial pressure exerted on officials by major energy corporations:

OIL MONEY

Renewable energy must be federally subsidized on all levels. It is the financial responsibility of the federal government to educate the American taxpayer about the need to transition away from fossil fuels and towards a clean energy future. The financial reserves of traditional energy corporations can and will only be met equally by the fed because the renewable industry, in it’s infancy, simply can not match their financial or political clout. Only by instating a dramatic public awareness campaign will the American people be swayed into supporting the transition to clean energy.

http://news.nationalgeographic.com/news/2013/03/130319-hurricane-climate-change-katrina-science-global-warming/

3 responses so far




3 Responses to “Ocean Renewable Energy: a Financial Perspective”

  1.   racheldlon 29 May 2013 at 11:49 pm

    It’s essential yet scary. Germany estimates that their Green Revolution will cost at least one trillion Euros. The biggest problem with this is that companies in Germany do not have to pay subsidies for renewable energy and, thus, the one trillion Euros will have to come from tax payers. They’re afraid that, if they do ask companies to pay for renewable energy subsidies, that they will choose to leave Germany and go elsewhere. It is quite expensive in Germany but it works. I’m not entirely sure how Americans would react to these improvements. It’s difficult just to get even the simplest of climate bills passed in the State legislature. It seems as though the American federal government sets goals and then, when states choose not to meet them, simply keep extending the deadline instead of trying to ensure compliance (Rachel Davis).

  2.   braidon 31 May 2013 at 8:12 pm

    A few points Peter…

    If you’re going to criticize ideological opponents as poorly-educated, it may help not to call for “the fed” to educate the populace. (Public education is probably a bit beyond the mandate of our central bank.)

    Hanging your climate change argument on North Atlantic cyclone strength is a poor choice. The full report is behind a paywall, but at this link:
    http://rogerpielkejr.blogspot.com/2010/02/updated-wmo-consensus-perspective-on.html there’s a summary of the conclusive debunking of the hurricane myth. Long story short, there is no uptick in hurricanes or hurricane devastation in the latter half of the 20th century going into the 21st.

    These are the top ten spenders on lobbying in 2012, also via OpenSecrets.org:
    US Chamber of Commerce $136,300,000
    National Assn of Realtors $41,464,580
    Blue Cross/Blue Shield $22,489,532
    General Electric $21,120,000
    American Hospital Assn $19,230,200
    National Cable & Telecommunications Assn $18,890,000
    Pharmaceutical Rsrch & Mfrs of America $18,530,000
    Google Inc $18,220,000
    Northrop Grumman $17,540,000
    AT&T Inc $17,430,000

    You’ll find that, while oil companies do occasionally grace this list, there are none here. Big Oil, while a substantial political contributor, really isn’t all that large when you consider the massive sums spent by other organizations to influence American elections. You suggest that the Federal government should combat this by engaging in lobbying/issue advocacy/education of its own. This is illegal, for reasons that should be glaringly obvious.

    And Rachel…corporations are owned by their stockholders. By far the largest of these are institutional investors: pension funds and mutual funds. You may want to ask yourself who might purchase these financial instruments/receive pension payments before you start thinking of corporations as discrete entities that can be taxed.

    There’s one very simple solution to all this, choked off by the same regulatory zoo that we saw in Cape Spin: nuclear power. Nothing else in the renewable portfolio comes close. But I’m hardly worried. I’ll direct you to Charles Mann’s excellent article in the Atlantic Monthly

    http://www.theatlantic.com/magazine/archive/2013/05/what-if-we-never-run-out-of-oil/309294/?single_page=true

    TL:DR: “So bright are the fracking prospects that the U.S. may become, if only briefly, the world’s top petroleum producer.” If you listen carefully over the howling and gnashing of teeth in America’s toniest zip codes, you’ll hear a slight vibration. That’s the sound of hydraulic fracturing, and an energy boom providing good jobs for good wages to millions of Americans. All without a single dime of government subsidies.

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