Letters From The Earth

Chorus: A clean energy future

May 24, 2011

Tai Chi Quang is a Chinese form of mental and physical exercise. It can become an esoteric spirituality. At its highest level, the practitioner can cause a kinetic energy that acts as a continuum uniting body and mind. There have been reports that the ultimate masters of Tai Chi Quang can walk into a room and, with a glance, knock a person down with spiritual energy.

I wonder if US President Barack Obama is feeling Tai Chi Quang energy as the pressure to respond to rising gas prices mounts. Let's hope he doesn't get knocked down, because the plethora of solutions is overwhelming. One of his endorsements is a plan backed by one-time oil man T. Boone Pickens. Pickens has switched from oil to domestically (Texas and Pennsylvania) produced natural gas. Obama said in a speech at Georgetown University that his goal was to reduce US oil imports by a third by 2025. This, of course, is in the face of rising energy demand and that the fact that he will be out of office 10 years before that date! "There are no quick fixes � and we will keep on being a victim to shifts in the oil market until we finally get serious about a long term policy for a secure, affordable energy future," he said.
There are two ways our industry can become more energy efficient. The first is reducing energy consumption in our plants. The second is using the high caloric value of our by-product as a feedstock for making renewable energy.

The president has backed a bill to encourage wider use of natural gas as a fuel for cars and trucks that appears to be supported by both parties, thanks to the lobbying of our friend Pickens. (We never learn, do we!)

Obama has already recommended a tax credit of $7,500 for individuals who buy electric vehicles. Plus, he has a proposal that the US adopt a clean energy statement requiring that 80 percent of our electric energy be generated by clean sources by 2035. Clean energy, as defined by Obama's administration, is nuclear power, natural gas and clean coal, as well as renewable sources such as wind and solar. Interestingly, the administration reconfirmed its commitment to nuclear energy, despite the disaster at Japan's Fukushima Daiichi nuclear facility. Obama also said that the government will use existing loan guarantees to support new commercial scale cellulosic or advanced biofuel refineries to produce ethanol. I won't give my views on corn for ethanol versus corn for food. That's a subject for an entire column.

I was reminded of all of this (Tai Chi Quang and the usual Washington rhetoric) when I read two annual shareholders reports by energy companies. It is that time of year, you know, and I do enjoy reading the various CEOs' letters to their shareholders (even more than owning actual shares). They remind me of my own Letters from the Earth, reporting on all the machinations that occur on this tiny planet of ours. The two that stood out were letters from Exxonmobil and Exelon. Both report unprecedented earnings, record dividends to shareholders, and a continuing commitment to "green clean" energy. The similarity of the letters to one another and to the president's energy plan is scary. Is this the cynic in me? I hope not.

Rex Tillerson of Exxonmobil talks about the commitment "to meeting the world's energy needs with the ongoing development of new energy technologies that expand the supply of traditional fuels, develop new sources of energy, and allow us to use energy more efficiently." And, of course, there is the annual reference to "high ethical standards" and "commitment to safety and risk management," this in the wake of the BP disaster in the Gulf of Mexico. Boy, what a chance to drive a stake into an archrival.

John Rowe of Exelon (funny how both companies start with "ex") talks about "capturing value from the transmission system and preparing it for a clean energy future." Even though we don't have a national policy on climate legislation, Rowe continues, Exelon is positioned to operate a company that provides a clean energy future, with reduced pollutants such as sulfur dioxide and nitrogen oxide, mercury, hydrochloric acid, arsenic, and other harmful gases. "No company in this industry is better able to benefit from the drive for clean energy." To be sure, Exelon has the largest capital investment in nuclear energy of all the US energy companies. And it is committed to developing and using natural gas as well as growing its renewable energy portfolio with the purchase of John Deere's wind power company. However, it still burns a lot of coal, which means it continues to contribute to acid rain, which is sulfur dioxide.

Both companies are using invasive harvesting procedures to extract oil and gas. Exxonmobil has a significant investment in oil sand production in Western Canada. I've written about this in the past and am highly critical of the process. Exelon uses another controversial manufacturing process – hydrofracking – to capture natural gas. I have written about this as well and consider the process to be a significant environmental risk. Both hydrofracking and extracting oil from sand use a huge amount of water, a commodity that will eventually be in short supply.

Over the next several issues of Label & Narrow Web I'd like to explore how our industry can become more energy efficient. In my view there are two ways. The first is reducing energy consumption in our plants. This includes offices, machine efficiency, manufacturing and warehousing areas, and even requiring more energy efficient transportation for the movement of our finished product to our customers. The second is using the high caloric value of our by-product as a feedstock for making renewable energy. In other words, since we generate large volumes of high energy content by-product, let's commit to finding an application that takes advantage of this source of energy. Let's use our by-product in a positive way, and divert it from the landfill into energy.

In reading the letters to their respective shareholders from the CEOs of Exxonmobil and Exelon, and the energy plan proposal by President Obama, there is no mention of using waste, or by-product as I like to call it, to create energy. I believe we have an excellent opportunity as an industry to create large volumes of renewable energy.

During my next two issues, I'll focus on energy efficiency and alternative solutions to landfilling our by-product. I already feel that esoteric energy and I don't even practice Tai Chi Quang.

Another Letter from the Earth.

Calvin Frost is chairman of Channeled Resources Group, headquartered in Chicago, the parent company of Maratech International and GMC Coating. His email address is
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