EnergyBiz - September/October 2007 - (Page 41) rogErs Politicians operate within a four-year cycle. We build power plants that last 50 years. Different time frames. The voters are not looking for strong point of view on energy and environmental issues, except on the margin, and for the most part they don’t envision that they have a crisis to deal with. stErBa The tactics that we may use with one administration versus another are going to be different, but the fundamental economics are what we’re going to have to deal with. We just need to keep doing as much on the awareness education front as we possibly can. BurKE The elected representatives have so many issues on the table. It would be a challenge for all of us in this room to come up with one solution. It’s even a greater challenge for people in the state legislatures or in Washington. They don’t have the time to spend on these issues that they deserve. Politicians operate within a four-year cycle. We build power plants that last 50 years. JaMEs rogErs, DuKE EnErgy Dennis, you’re in Washington. What is your analysis? I’m immune to the frustration because I see it every day. In addition to the inaction at the federal level, the states are often ill informed. They’re making decisions for emotional or political reasons and not based on economics. We’re seeing it in the small state of Delaware requiring us to build or to buy 600 megawatts of wind power to supply a 400-megawatt load because of environmental reasons. The District of Columbia has its renewable portfolio. There’s a lot of wind in the district but I don’t think we can harness it. (Laughter) I really am much more concerned, operating in five states, seeing individual states each take actions which collectively become extremely uneconomical, I’m much more concerned about what happens on the state level than I am the federal. EnErgyBiz Wr a asE something that I don’t think most people are ready to bear. It’s going to be very, very expensive. rogErs But, you know, we have to have a policy that keeps coal in the mix and allows it to grow as the generation pie gets bigger in this country. Some have left the impression in Congress that carbon capture and sequestration are done. It’s technically possible, but it’s not commercially scaled. My fear is that Congress will create a carbon cap and trade program that is based on carbon capture and sequestration technology that is 15 years out. That would be a huge mistake. EnErgyBiz Bill haRvey, alliant eneRgy gaRy R ainWateR , aMeRen dennis WR aase , PePco holdings ADDRE SSING GLOBAL WARMING EnErgyBiz Let’s turn to carbon sequestration. Is it going to be available when everybody hopes it will be? stErBa It is an enormous challenge that our country hasn’t really wrapped its head around. Can we really take it to scale? We’ve got years to go to perfect how we’re going to actually store carbon dioxide and build the transportation infrastructure and determine what role the states will have versus the federal government. We have to move more quickly. KElly We’re quite a ways down the road on studying IGCC, integrated gasification combined cycle generation, with carbon sequestration. We’ve done a lot of the geology work that needs to be done in Colorado. The technology is there. But the costs are stErBa We will end up with a cap-and-trade system. The question is when and how will it be structured. I don’t think enough people understand the complexity of these systems. I would be surprised if there is a system in place before 2012. r ainWatEr 2012 would be the very earliest. It took five years to get the SO2 trading system in place. 2012 is a compelling date because that’s the end of the Kyoto Protocol. I worry most about the allocation of allowances. It’s not going to be easy at all for those of us who are very dependent on coal, and 85 percent of our generation is fueled by coal. The cost could be terrific for our customers if we don’t get a reasonable allocation of allowances. BurKE One of the big issues is going to be whether the program focuses on particular industries, like the utility industry, or whether it is economy wide. That’s going to be a very significant issue for us. r atcliffE And if it is economy wide, which it should be, it adds to the complexity of defining the regime, and implementing the regime. KElly How much are we going to get versus the autos? rogErs At the risk of making it more complex, we need to keep an eye on the worldwide framework on climate to make sure we’re synced up with what’s going on around the world. This is particularly true with respect to China, India, Brazil and the EU. States? Is carbon cap and trading imminent in the United 42 E n E rgyB i z September/October 2007
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