[Congressional Record Volume 155, Number 157 (Tuesday, October 27, 2009)]
[Extensions of Remarks]
[Pages E2640-E2641]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              PUTTING THE PRICE OF GOING GREEN IN CONTEXT

                                 ______
                                 

                           HON. ED WHITFIELD

                              of kentucky

                    in the house of representatives

                       Tuesday, October 27, 2009

  Mr. WHITFIELD. Madam Speaker, I rise today to highlight an article by 
Dr. Kurt House entitled, ``Putting the Price of Going Green in 
Context.'' The following column was coauthored by Benjamin Urquhart, a 
research associate at Harvard University's Center for the Environment, 
and Mark Winkler, a Ph.D. student at Harvard's School of Engineering 
and Applied Sciences.

       Over time, the global energy infrastructure must change 
     because the continued combustion of fossil fuels is altering 
     Earth's climate in potentially dangerous ways and because the 
     large wealth transfer from mostly democratic oil-importing 
     countries to mostly autocratic oil-exporting countries is 
     propping up repressive regimes worldwide. So, we know that 
     the world's energy infrastructure must change. But, the 
     interesting questions are: how big an investment are we 
     willing to make to bring about that change and how fast are 
     we willing to make that investment?
       Many groups have tried to answer these questions. In the 
     last year alone former Vice President Al Gore, Google, oilman 
     T. Boone Pickens, Greenpeace, and the International Energy 
     Agency all have published hypothetical scenarios for how the 
     United States could transform its energy infrastructure over 
     the next two decades. Gore's ``Repower America'' calls for 
     generating 100-percent renewable electricity by 2020. 
     Google's ``Clean Energy 2030'' would eliminate coal- and oil-
     burning power plants by 2030, while retaining natural gas 
     power plants to maintain grid stability. Greenpeace is 
     strongly anti-nuclear, while Pickens promotes wind power and 
     natural gas as alternatives to foreign oil.
       The quantity of new electricity-generating capacity 
     proposed in the Gore and Google plans has led to criticism 
     that they are unrealistically expensive. We try to place such 
     commentary in a more quantitative context by comparing the 
     industrial and financial commitments necessary to achieve the 
     Google and Gore plans to two large-scale, government-led 
     efforts from the twentieth century--the industrial buildup 
     that accompanied World War II and the construction of the 
     Interstate Highway System. These massive projects serve as 
     tangible benchmarks for the magnitude of financial commitment 
     and public support that will be required to rebuild the U.S. 
     power sector.
       Let's start with a bit of history: The U.S. industrial 
     commitment to World War II was staggering. At its peak, the 
     war occupied almost 40 percent of the nation's total economic 
     capacity, and it required massive quantities of raw 
     materials--at least 100 megatons of steel to build among 
     other things more than 80,000 tanks, 250,000 planes and 
     helicopters, and 15 million tons of munitions. The inflation 
     adjusted annual cost of the war effort averaged close to $700 
     billion between 1943 and 1945, while the total cost of the 
     war effort topped $2.5 trillion (in 2006 dollars).
       In comparison, constructing the Interstate Highway System 
     demanded a less intensive effort--but one of far longer 
     duration. With the majority of its 47,000 miles covered by 11 
     inch-thick concrete--and weighing an impressive 700 
     megatons--it remains the largest public works project in U.S. 
     history. During its peak years of construction, from 1970 to 
     1980, 17 megatons of concrete were used annually to create 
     1,100 miles of roadway a year, at a real annual expense of 
     almost $11 billion, or about 0.3 percent of the nation's 
     annual economic output over that time. The project--from its 
     start in 1956 until its symbolic completion in 1995--cost the 
     nation close to $350 billion (again, in 2006 dollars).
       How do current energy transformation plans compare to these 
     massive governmental efforts?
       To determine the answer, we calculated the overnight 
     capital cost--the cost of a project without interest 
     payments, as if it were finished in one night--as well as the 
     requirements in steel and concrete for the Gore and Google 
     plans. We also calculated expenditures for the U.S. Energy 
     Information Agency's (EIA) Annual Energy Outlook, the 
     traditional policy-neutral, business-as-usual scenario. We 
     then compared the total and annual expenditures of capital, 
     steel, and concrete using World War II as a baseline for 
     capital and steel consumption, and the highway project as a 
     baseline for concrete consumption. (Note: Although the cost 
     of steel and concrete also are included in the total capital 
     numbers, we wanted straight comparisons for the total mass of 
     steel and concrete to complement the more traditional capital 
     comparisons.)
       The results are summarized in two charts we have generated. 
     The first chart shows that achieving Gore's vision of 
     removing fossil fuels from electricity production by 2020 
     will require 50 percent of the capital and 60 percent of the 
     steel required to wage World War II as well as 25 percent of 
     the concrete that was used to construct the Interstate 
     Highway System. (Google's requirements are a bit higher 
     because its forecast assumes a higher U.S. growth rate for 
     electricity consumption.) The other chart shows that the 
     annual expenditures required to achieve the Gore and Google 
     plans would require 60 and 90 percent, respectively, of the 
     concrete used annually for the highway system and about 20 
     percent of the steel consumed annually during the peak of war 
     spending.
       Take a moment to consider these numbers. Achieving either 
     plan would require both an annual investment of concrete 
     equal to the amount used to build the Interstate Highway 
     System and an annual steel investment equal to one-quarter of 
     that required to defeat the Axis powers. This is a massive 
     industrial investment! Furthermore, these are only the steel 
     and concrete requirements; the quantity of photovoltaic 
     panels, for example, required to achieve the Gore or Google 
     plan would be 28 and 74 times current global production, 
     respectively.
       The material requirements to achieve the Gore plan are 
     significantly lower than those required to achieve the Google 
     plan primarily due to their radically different estimates for 
     the growth in electricity production. Google estimates that 
     U.S. electricity production will grow by 4 percent to roughly 
     1,024 gigawatts by 2020, which essentially matches the EIA's 
     forecast. The Gore plan, on the other hand, assumes that U.S. 
     electricity production will decrease by a staggering 27 
     percent! That decrease--Gore claims--will result from huge 
     increases in energy efficiency, but the EIA forecast already 
     includes significant efficiency improvements.
       We should note that the energy plans would last longer than 
     World War II, making the annual rate of spending about 15 
     percent of the peak annual war expenses ($100 billion-$124 
     billion versus $800 billion per year). Also, because the U.S. 
     economy is about six times larger today than it was in the 
     1940s, these costs represent a much smaller fraction of the 
     country's total economic output (about 1 percent of gross 
     domestic product). Put another way, the economic demands of 
     the war effort were equivalent to diverting two days of every 
     worker's five-day work week, the energy plans--over their 
     lifespans--would demand only about 24 minutes from every 
     worker's week.
       Although each plan has other aspects that merit critical 
     analysis (e.g., estimated capacity factors, load growth 
     rates, and balance of peak and base-load power) our analysis 
     yields an interesting conclusion regarding the required 
     financial and industrial investments. Specifically, we have 
     identified two precedents for large-scale, governmental 
     projects with industrial and financial investments that 
     exceed the total requirements of both the Gore and Google 
     plans. When measured against historical extremes, the cost

[[Page E2641]]

     and physical requirements of these ambitious energy plans are 
     within the country's reach.
       That doesn't mean they'll be cheap. After all, fighting 
     World War II was incredibly expensive--the modern economic 
     equivalent would be passing a $700 billion stimulus package 
     every eight weeks for the next three years. Furthermore, 
     defeating the fascist powers was of utmost importance as 
     those powers represented a material and immediate threat to 
     every living person in the free world. Although we strongly 
     believe that the world's energy infrastructure must change, 
     we don't believe that either climate change or energy-driven 
     trade imbalances are remotely as scary today as Hitler was in 
     1941; and thus, while we could rebuild the energy system as 
     we rebuilt industry for the war effort, the impetus to do so 
     is far smaller today than in was in the 1940s.
       Rather than waging war, rebuilding our energy 
     infrastructure according to these plans would be more like 
     keeping the peace: Consider that were the government doing 
     all of this spending, it would require an annual budget of 
     about one-third the average peacetime budget of the Defense 
     Department. When we recall that Defense employs more than 3 
     million people, includes a massive research, design, and 
     procurement system, and maintains a system of facilities 
     worldwide, we get a sense of the magnitude of these proposed 
     energy plans.
       Another important fact to consider is that neither the Gore 
     plan nor the Google plan assumes that the government will pay 
     for everything transforming the U.S. power sector entails. 
     Rather, both groups believe--admirably, in our opinion--in 
     the endless capabilities of the American entrepreneur. In 
     other words, these plans are betting that free enterprise 
     will spring into action with the necessary capital. (With one 
     proviso: Said entrepreneurs are given the proper policy 
     incentives such as a stiff price on carbon emissions.) While 
     we also believe in the power of individual initiative coupled 
     with enlightened policy, we are cognizant of the fact that 
     both World War II and the Interstate Highway System were 
     entirely funded by U.S. taxpayers. So taking on an industrial 
     transformation similar in scope to either the war effort or 
     the highway system with mostly private capital is--to put it 
     modestly--a challenging proposition.

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