Less government meddling could unlock green energy’s power

Here’s a mind-bending thought: The United States can wean itself from oil and coal by 2050 — and without action by presidents or Congress.

“It’s refreshing to think that we needn’t wait for Washington,” Amory Lovins told me recently. The founder and chairman of the Old Snowmass, Colo.-based Rocky Mountain Institute, Lovins has been a leader in the science of energy efficiency for decades.

His institute’s latest book, “Reinventing Fire,” is a manifesto for a new approach to converting the U.S. to an economy based on renewable energy sources such as wind and solar power while enhancing the efficiency of everything we use energy for, whether it’s running our cars, manufacturing plastics and pharmaceuticals or heating our offices.

The centerpiece of the book is a call for a new approach to the generation of electricity and its distribution over a nationwide grid that, as Lovins suggests, stands both as perhaps the greatest engineering achievement of the 20th century and a straitjacket hampering progress in the 21st.

As the Gospels say of the poor, questions about energy policy are always with us. But lately they’ve been getting an intensified workout, possibly because of our heightened sense of urgency over the cost and impending scarcity of oil.

“Reinventing Fire” deserves a place alongside other recent books on the history and economics of our reliance on oil, including Daniel Yergin’s worldwide survey “The Quest” and Andrew Scott Cooper’s compelling chronicle of America’s involvement with Middle East petroleum states, “The Oil Kings.”

Albeit in different ways, all deal with the hidden costs of oil addiction. These include the economic shocks delivered by its volatile price, the cost of pollution and global warming, and what Lovins calls the damage to America’s “moral authority” caused by our involvement in international conflicts that can seem to be mostly, or only, about oil. (See war, Iraq.)

Lovins’ book is different in that it’s also prescriptive, outlining what consumers and industries need to do to make energy independence a reality. Much of his vision involves standing aside and allowing market forces and innovation to work their magic.

Implementing currently available technologies and removing bureaucratic obstacles, he argues, could produce savings for industry over business-as-usual worth $5 trillion in today’s dollars.

In this context, government’s role is to enhance these tendencies, through a sort of judo in which natural forces are leveraged to work even more effectively.

Consider the history of congressional meddling with the on-again-off-again wind production tax credit, which is designed to subsidize the capital costs of installing energy-producing wind turbines.

The tax credit dates from 1992 and has typically been extended by congressional action (including as part of the 2009 stimulus program), but it’s always a political football; when Congress dithered over an extension in 2010, new installations of wind power fell by more than half.

Complicating the economic case for wind, Lovins explains, is that other forms of energy — nuclear, coal and natural gas — also receive government subsidies, explicitly or otherwise. In other words, in his view, the government has been placing its bets on technologies that it should be phasing out, while shortchanging one that should be encouraged.

Nevertheless, he argues, the fundamental economic case for efficiency and renewable generation is becoming obvious to the more farsighted companies in the field.

“We’re working with utilities to see opportunities, not competitive threats,” in new energy sources and technologies, he writes in his book. “Oil companies no longer control their own destinies.” In part because of the emergence of serviceable electric vehicles, he says, worldwide oil demand may peak in the next decade.

Meanwhile, oil supplies are becoming ever more uncertain. “The hydrocarbon industry is not a business you’d want to be in for the long term,” Lovins says. “It’s capital-intensive and high-risk. If you’re an exploration and production company thinking of going to the ends of the earth for oil that may not be there, maybe you should be investing in energy-efficient cars as a lower-risk option.”

Some oil companies are following that path by expanding their portfolios beyond fossil fuels. Chevron, for example, claims to be the world’s largest producer of geothermal energy and is investing in solar, biofuel and fuel cell technologies.

A similar choice between old thinking and new opportunities confronts the utility industry.

Lovins says he has been working with the industry to show that their traditional assumptions about the practicality of wind and solar power are outdated. The standard calculation has been that wind and solar could never reliably account for 2% to 3% of supply, he observes.

But “Reinventing Fire” makes the case that with geographically distributed sources and incentives for consumers to time their demand more flexibly, the real figure could be 50% or more.

The wind may be calm in one place but gusting elsewhere; the skies might be cloudy all day over one solar farm but blue over another.

Smart meters allow utilities to offer time-of-use incentives to encourage homeowners to shift some consumption to off-peak hours. (For years I’ve had time-of-use billing at my home, which effectively pays me to run my laundry appliances and dishwasher before 10 a.m. and after 6 p.m.)

Put those factors together, and managing the variability of renewable energy sources doesn’t look much more challenging than managing that of conventional power plants. After all, fossil fuel generation plants are taken offline for planned maintenance or unexpected failures 10% to 14% of the time, on average.

Utilities manage those interruptions the same way Lovins foresees them dealing with the variability of wind and solar — by diversifying their sources.

In Lovins’ view, the main obstacle to a future unchained from oil is the old thinking of vested interests. He cites a recent rate filing by San Diego Gas & Electric Co., which proposes to charge customers who install their own solar units higher rates to use its power lines when they return rooftop-generated electricity to the utility’s grid. Consumer advocates say the charge could make residential solar uneconomical for the utility’s customers.

“There are half a dozen ways a utility could respond” to customer use of renewable energy, Lovins says, “but the ostrich approach isn’t one of them.”

SDG&E’s rate proposal will be ruled on by the state Public Utilities Commission, providing an opportunity to demonstrate government’s proper role in America’s natural transition away from oil and ensure that anachronistic thinking doesn’t stand in its way.

“Business logic makes this inevitable, over time,” Lovins says. “But it would be smart not to keep shooting ourselves in the foot or the head on our way there.”

Michael Hiltzik’s column appears Sundays and Wednesdays. His latest book is “The New Deal: A Modern History.” Reach him at mhiltzik@latimes.com, read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.