Listening to the Conversations, Part Two: Energy and Materials

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The first report on the CCNES Conversation Forum (Conversations Conferences on Nebraska Environment and Sustainability) in the December 2011 issue of Prairie Fire covered conversations on water and food; the third report in February 2012 will cover land as the essential resource and public policy recommendations.

By W. Cecil Steward

Energy

Energy is the great equalizer—permeating every facet of our lives in Nebraska and on the planet. Energy heats our homes, powers our buildings, computers and vehicles. Energy grows our food and is the force behind mining and manufacturing raw materials into products for human consumption. Energy is everywhere.

The ancient Greek philosopher Democritus said, “Only atoms and space are real, everything else is merely opinion.” Energy is real; everything we have accomplished, or attempted, since the Industrial Revolution has been energy dependent. How we capture, generate, conserve and use energy is opinion.

Through consensus opinion, Nebraskans have developed a unique public policy that says, “Energy belongs to all the people,” and we now know that we are blessed with unique natural resources for future energy generation. In order to maximize our opportunities we must ask some tough questions. Do we waste energy? Are we too dependent upon limited fossil fuels with price volatility? Do we depend on one or two sources of energy or do we have a diverse energy mix? Do we only measure energy efficiency through economic lenses? And might we become a net exporter of energy?

How we use energy is ultimately dependent on how we understand energy. And how we understand energy is dependent on the conversations we have about energy.

The conference conversations about energy across the state of Nebraska were both hopeful and surprising. We all learned in the lively exchange among experts and informed participants about the energy challenges and opportunities in Nebraska. Surprisingly, there was a contingent of participants who seemed to know little about the fundamentals of energy in Nebraska, reminding us of the opportunities ahead—to provide relevant knowledge and information to expand energy awareness among Nebraskans.

Two major themes were present in the conversations about energy as a potential resource. The first was guided by Nebraskan’s understanding of the nature of public power and the charge of the utilities to provide the “least cost service.” This charge is understood to have an effect in two related ways. First, there is a narrow definition of “cost” that seems to privilege short-term service rates over long-term investment. Second, this definition, therefore, necessarily privileges existing sources and technologies for energy production in lieu of necessary research, development, implementation and testing for new generation technologies.

The second major theme from the conference can be described as the myth of technology as the fix. The myth hides reflection about consumption practices in favor of better technologies for production and distribution. Time and again, conversations about technological advancement would lead to a realization that technologies alone are not necessarily the best solution for energy concerns.

Energy Resources in Nebraska

Currently, Nebraskans rely primarily on nonrenewable, fossil-fuel-based energy—coal, natural gas, oil and a small percentage of nuclear. Due to the public power policies and management, we benefit from relatively low-cost electricity. Gasoline and natural gas prices in Nebraska fluctuate according to global supply and demand patterns. The price of gasoline is on the rise; currently natural gas is experiencing a significantly lower cost than in the recent past.

When looking at the Nebraska energy situation in the context of the global energy picture, it appears that electricity prices will rise as demand for fossil fuels increases, given that supplies are increasingly more costly to mine.

At some point in the future it is likely that the true cost of fossil fuels will be accounted for in the form of a carbon fee and rebate system, carbon tax, cap and trade or other, yet undetermined mechanisms. Accounting for environmental, waste management and health costs of fossil fuels will likely increase the cost of gasoline and electricity and have minimal impact on natural gas prices.

Natural gas prices and availability depend on supply of gas in shale formations. Historically, natural gas goes through cycles of boom and bust. New discoveries lead to a drilling frenzy, which creates a market glut and falling prices. Low natural gas rates encourage use and discourage drilling wells in high-cost fields, which eventually creates a supply shortage, and natural gas prices steadily go up.

Right now we are experiencing low natural gas prices which may last one to three years. For mid- and long-term planning, assume the price of natural gas will increase.

Gasoline prices fluctuate based on crude oil prices. Global oil has reached a production plateau, while worldwide demand continues to increase. The anticipated $4-plus-per-gallon gas prices have not yet materialized due to the global recession. As the economy begins to recover, however, the price of gasoline will no doubt increase. Given that current gas prices in Nebraska are in the $3.12–$3.69 range (www.nebraskagasprices.com), we can expect them to go up, with some short-term drops, quickly followed by a secondary increase.

In short, we are experiencing reasonably stabilized prices of energy tied to fossil-fuel energy sources for now. However, there is nowhere for the price of fossil-fuel-based energy to go other than up in the long term. Nebraskans face a choice: to do nothing and react to high energy prices when they hit our economies across the state or act now to mitigate the risk of rising energy prices by expanding our renewable energy resources. To be effective, this choice must be made early within a global supply, demand-cost context to avoid driving past the gas pump watching the prices slowly increase.

Nebraska has great solar and wind resources that are barely being utilized today. Solar as a renewable energy can’t be beat for cost when looking at passive solar and solar hot-water heating. Solar electric (photovoltaic) and wind generation is not currently cost-competitive because of the cost of some technologies and the low electricity rates in Nebraska coupled with the net-metering law that allows distributed energy providers to keep only a fraction of the value of a kilowatt produced.

Energy Conversation Themes

The energy problems and opportunities are complicated and interdependent.

Participants agreed on some points and expressed divergent views on others.

Cost of Energy
  • Everyone agreed that the price of energy has been rising consistently over the past 10 years
  • There was general consensus that energy prices will likely continue to rise into the foreseeable future
  • Most want cheap energy and are unwilling to pay more than the current pricing the market requires; others indicated a willingness to pay higher energy prices reflecting the true cost of producing energy—including national security, environmental and social costs

There are certain factors that are out of Nebraskans’ control when it comes to determining the cost of energy: global supply and demand in the market and total nonrenewable resource availability. However, we can manage our vulnerability to rising energy prices by managing our own energy demand, implementing conservation policies and diversifying generation.

Energy Conservation
  • Everyone agrees we need to use energy more efficiently; however, Nebraskans have different ideas about how to do this
  • Some think we need to change our behaviors to conserve energy such as driving less, building right-sized homes and being more conscious consumers
  • Others believe technological advancements will allow us to do more with less energy and that technological breakthroughs will find alternative energy sources that will keep the price of energy low and the supply sufficient to continue our current lifestyle
  • Still others think the only way to gain significant efficiency across the state is to assign a higher value to energy, reflected by a higher price, to encourage efficient use of our energy resources

Most likely energy savings will come from a combination of technological advancements and behavioral change, both of which will be driven by the cost of energy. The more expensive energy becomes, the more we are apt to modify our behavior to use less energy and the more new technologies will become financially feasible.

Renewable Energy
  • Most everyone wants more renewable energy sources, whether active solar, passive solar, wind, hydro, biomass or plant-based biodiesels
  • There is general recognition that there are costs and challenges associated with any source of energy whether it is nonrenewable or renewable
  • Some see renewables as the long-term answer and want to rapidly expand the renewable generation capabilities within our state
  • Others see the cost and current energy storage challenges as too large of a hurdle to invest a great deal of time, resources and money into the rapid expansion of renewable energy generation in Nebraska

Renewable energy generation will increase in Nebraska, but there is not one clear source rising to the top of the list, given a variety of factors including up-front costs, market uncertainty and policy barriers at local, state and national levels and within public utility organizations.

Utility Companies
  • Some participants saw public utilities doing the best they can, given their constraints, and seemed willing to accept the current constraints impacting distributed generation, net-metering and renewable energy sources
  • Other participants tend to think the utilities are doing too little and not thinking big enough or far enough into the future, and they need to adjust their business models and policies to include distributed generation and responses to the changing landscape regarding energy generation, distribution and use by consumers

The public utility system in Nebraska is based on public ownership and a locally elected governing board. Decision makers consider changes on behalf of their customer/owners very carefully, seeking to minimize cost and perceived risk, while holding to their mandate to provide Nebraskans energy and energy services at the lowest possible cost. (The average electrical rate in Nebraska is low, 7.21 cents per kilowatt hour, compared to the national average, 9.83 cents per kilowatt hour; www.neo.ne.gov/statshtml/204.htm).

Transportation

Participants were less able to articulate the rate paid on their utility bills for their homes and businesses than they were able to quote current prices of gasoline.

Recommendations and Commitments for Action
  • Many participants committed to saving energy in their homes because that seemed a manageable place to start for them; however, many expressed doubt that the required skills and services are either available or affordable
  • Very few committed to driving less unless gas prices forced them to
  • Many participants wanted the utilities to broaden the definition of “cost” from purely economic terms and to investigate the opportunities of exporting renewably generated public power beyond state boundaries as a means of economic development
  • Nearly everyone seemed empowered with new information and understanding about energy and committed to sharing information whether informally with their friends and relatives, or formally in schools or existing organizations
  • Business professionals left with a better understanding of the future cost of energy and made commitments to look at their businesses for energy-saving opportunities
  • Participants committed to supporting local economies with energy efficiency planning and by patronizing local businesses

Materials

The breadth and scope of conversations to be had about materials made these discussions the least coherent for discovery and understanding. This was not because of the participants’ inability to engage in conversations. Rather, the nature of the topic is inclusive of a full range of concerns including sourcing, production, distribution, consumption, products, building supplies, infrastructure, as well as design processes including the notion of waste and designed obsolescence. This resource, justly included in the CCNES, is also unique in that the others (food, energy, water, land) are all abundant in Nebraska. A discussion of materials, on the other hand, is primarily one of importing what is needed, required and desired.

The principal challenge in the materials sector is “how do we maximize the value and sustainability while minimizing waste and consumption.”

Material consumption is very much at the heart of American culture and economy. While Nebraskans hold strong conservation values, dating back, perhaps, to the state’s indigenous heritage followed by the influence of pioneer settlers through the 1890s, stretching into the populous movement of the 1930s and 1940s, we are not immune to the patterns of material consumption practiced in the U.S. Recent Black Friday mania is an example of the extent to which consumption is engrained in our culture’s psyche. We are encouraged to consume by government leaders to revitalize a slumping economy. We are bombarded by clever, provocative advertising to establish and reinforce the consumption “habits” beginning at an early age. A recent study (Rifkin, 2009) determined that consumption motivated by 4–12 year-olds alone reached the $30 billion mark in 2009, up from $6.1 billion in 1989. We’re teaching our children to become consumers (aided by a U.S. child’s exposure to an estimated 40,000 commercials annually, with 3.5 hours per day of television viewing).

An overarching characteristic of the materials conversations was that people became far more aware of the extent to which all of us perpetuate the cycle of material consumption (and the use of energy and water needed to process or transport materials for consumption), thereby contributing to waste and diminishing natural resources.

Material Conversation Themes

Material Waste

It didn’t take long for participants to draw the link between material consumption and waste. In fact, they determined landfill use to be a significant measure of our society’s wasteful habits. In 2010 Americans generated about 250 million tons of solid-waste material and recycled or composted nearly 85 million tons. Landfills have limited capacity, are expensive to build and operate, are highly subsidized by local governments and require significant land that then is no longer viable for wildlife habitat or residential, commercial or recreational development. Though in some parts of the state where land is available, a few participants believe it to be cheaper to use (and build additional, if necessary) unregulated landfills than it is to set up a recycling program and restrict certain materials.

In general, participants concluded that they and other Nebraska citizens must take steps to reduce landfill waste. Some focused on policy restrictions and increased tipping fees to reduce or discourage landfill use to incentivize reduction of their waste streams. Others explored cultural consumption habits and the extent to which each individual, family, business and enterprise is responsible for questioning old habits, rethinking and relearning new habits that reflect a need for fewer material goods to live productive lives. Collectively, participants concluded that efforts to reduce material consumption will require individual awareness and action as well as business, government and civic group leadership through demonstrable action and policy changes.

Building Materials

The EPA estimates that 30 percent to 40 percent of municipal solid waste is building related. An estimated 9 percent is construction waste, 38 percent is renovation waste and 53 percent is demolition debris. (EPA and National Institute of Building Sciences, 2009)

This fact did not go unnoticed among conference participants. Discussions centered on how to use fewer materials, as well as more sustainable, recycled or reused materials in the design and construction of new and refurbished buildings. Some noted the need to adjust approvals for building permits in some municipalities in order to accommodate green construction features.

Participants learned about Nebraska organizations that make used building materials available for purchase, e.g., Lincoln’s EcoStores Nebraska, accepts donations and sells building materials for reuse and deconstructs old buildings using methods that salvage materials. Omaha’s Habitat for Humanity Restore accepts donations of used building materials and organizes them for resale to builders.

Availability of Materials

Participants agreed that the cost (both dollars and CO2 emissions) of transporting raw materials and processed/manufactured goods into the state requires Nebraskans to think carefully about what materials they need and why and to seek quality and durability for long-term use.

Participants shared information about green (recycled, nontoxic, safe, durable) materials they had known of, or used, including such things as recycled wood products, alternative concrete, green cleaning and pest removal products and radiant heating of flooring and bridge surfaces. They concluded that, while technological advancements in material use/product development are important pieces of the sustainability puzzle, technology improvements will have less impact than reducing material consumption among the citizenry.

Some noted concerns that rural communities lack access to environmentally friendly materials and products in part due to the cost of supplying for a limited demand.

Knowledge and Information

The familiar mantra “Reduce, Reuse, Recycle” carried deeper meaning for conference participants after exploring challenges and prospective solutions in the materials conversations. Participants were teaching and learning from one another as they sought to expand their base of knowledge.

Given the growing trend for marketers to use popularized sustainability language (“green,” “natural,” “sustainable,” “future” and so on), participants expressed the need for accurate, reliable information on product labels to know exactly what they are buying and what they can expect from the product, e.g., does a product contain volatile organic compounds (VOCs) or toxic material? Energy Star or Water Sense labels are seen as valued product label notations for discerning buyers. In general, participants suggested a sense of product stewardship and responsibility shared by producers, retailers and consumers with the aid of accurate product labeling.

All would agree that the materials sector offers unlimited opportunities for a concentration of more knowledge and dependable information, if conservation is our goal.

The CCNES Conversation Forum is still available on the web at conversations.nslw.org. Please log on to add your voice to the conversation about Nebraska’s future.

 

The CCNES conferences were sponsored by the Nebraska Environmental Trust Fund, the Nebraska Investment Finance Authority, the Nebraska Department of Environmental Quality, the Lincoln Electric System and the Nebraska Humanities Council. Assistance with the writing of this Prairie Fire report has been generously provided by JISC staff, Katie Torpy and Diane Wanek, conference facilitators Mary Ferdig and Jay Leighter and resource specialists Nathan Morgan, Daniel Lawse and Debra Hansen.

 

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