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Love him or hate him, Bill Gates does have influence. In this new Wall Street Journal video of an on-stage interview at WSJ’s recent “ECO:nomics” conference, Gates discusses several key points, including:

• Energy is what enabled civilization to evolve dramatically over the most recent centuries.

• People in “poor” nations pay more for energy than anyone because there is no grid, so they basically are paying for diesel power.

• People, including knowledgable scientists and engineers, underestimate how hard it is to develop and change a global energy system so that we can get to the point where fossil fuels provide only half of the energy needs in 50 years. People tend also not to look deeply at subsidies or appreciate the energy needs of developing world.

• The potential for innovation in the 20-year range can be dramatic. If one looks at the 75-year range, there is a chance to set some aggressive goals and see substantial reductions in CO₂.

• People overestimate what can be done now. There are limits because of what has already been installed or what will be installed over the next 20-30 years. But by 2050, however, we could have all new energy generation plants in the “rich” world built with zero CO₂ emissions. Nevertheless, we would still need much more time to have significant reductions in CO₂ because of dependency on previously installed bases.

• The ability to run digital simulations and models in energy-related work is much more advanced than people appreciate, but the IT experience over the last two decades also tends to make people overly optimistic about the possible speed of innovation in the energy field.

• Gates discusses the need to have at least one of five “miracle” things to happen, such as 1) dramatically increase reliance on natural gas and be aggressive about related carbon capture during gas processes at 90+ percent level or 2) signficant adoption of Gen IV Nuclear energy with full “passive safety” design (doesn’t require human intervention), or 3) address the special storage and transmission needs of energy sources that require “farming” (solar, wind or biofuel).

• Gates says that for every one of these energy innovation paths, we need 200 “crazy” people who think their idea alone can provide the solution, “some of who we will declare ’sane’ in the future.” He says, “It’s what should happen because it drives both conservation and innovation.”

• For society’s future, he says we need to fund basic energy research at at least twice the level we do right now. That would increase the probability of success for achieving one of the miracles.

• Gates says the greatest energy failure of our energy policy is to not have a carbon tax being imposed or rolled in at some point in the future that incentivizes power industry into reducing CO₂ emissions.

• He says the division of financial support for intermittent energy (such as wind) is wrong, with only 2% going to R&D and most of the rest going in various forms of subsidies, tax credits, etc.. for manufacturers and wind farm investors. Gates says he isn’t really talking about things like DOE’s budget, which he believes is just modest, but things that are hidden or not obvious to the public in the form of tax credits, etc. When all that is aggregated, it should seem obvious that we are spending the money foolishly, he says.

• Gates predicts that the lack of political will or good policies in the US over time will be strongly influenced when energy prices in other countries (he suggests China, for example) becomes less expensive in the US.

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Matthew L. Wald and Tom Zeller Jr. in the New York Times report on a disturbing phenomenon that I haven’t seen written about before:

“Even as many politicians, environmentalists and consumers want renewable energy and reduced dependence on fossil fuels, a growing number of projects are being canceled or delayed because governments are unwilling to add even small amounts to consumers’ electricity bills.”

…

“Similarly, in Kentucky this year, the public service commission voted down a contract for a local utility, Kentucky Power, to buy electricity from NextEra Energy Resources in Illinois.

“According to the commission, Kentucky Power argued that the contract would position the utility ‘to better meet growing environmental requirements and impending government portfolio mandates for renewable energy’ and that it would benefit customers.

“But Kentucky’s attorney general, Jack Conway, joined by business and industrial electricity users, opposed the deal, contending that it would have increased a typical residential customer’s rates by about 0.7% and was ‘a discretionary expense’ that the utility’s customers could ill afford.’”

Obviously, this could be the start of something that could send a nasty ripple throughout the research-engineering-manufacturing-installation chain. Without long-term iron-clad purchase agreements, development of renewables, including nuclear, is going to shut down in the U.S. (and those researchers/projects/investors will go elsewhere).

My guess is that the amount of fiduciary leeway varies quite a bit from state to state, and the officials and commissions/boards making these decisions will, to greater and lesser degrees, try to wrap themselves up in fiduciary defenses. And get away with it. Given that utility commissions nearly always play in a land of make believe when it comes to the real costs of energy, these decisions to defend “customers” however seems to be a laughable but probably legal.

Nevertheless, if the commissions want to represent public interests, let’s take a look at what the public wants:

• 75% of Americans agree that is it time to take steps for renewable energy and to get on the path to energy independence. Nineteen percent disagree with this position and 6% do not know. Among those age 18-34 agreement with this statement is as high as 80%, the highest of any age group.  (Source: Clean Energy & Climate Issues Survey (PDF), Oct. 26, 2010, conducted on behalf of the Civil Society Institute.)

• 74% agree that “(a) national energy strategy based on a ‘phasing in’ of new technologies and a phasing out of carbon based energy sources would require specific actions. America should commit to a five-year moratorium on new coal-fired plants and, instead, focus on aggressive expansion of wind, solar and other renewable energy sources. Tax and other incentives should be provided for all new construction to help reduce energy consumption. Homeowners should get incentives to make their homes more energy efficient to help reduce energy demands.” (Source: Clean Energy & Climate Issues Survey, Oct. 26, 2010, conducted on behalf of the Civil Society Institute.)

• 68% see the U.S. as weak or very weak on “practical, problem-solving solutions” and leadership in relation to “energy independence and dealing with climate change or global warming.” (Source: Clean Energy & Climate Issues Survey, Oct. 26, 2010, conducted on behalf of the Civil Society Institute.)

• “Fully 87% of Americans favor including a provision in comprehensive energy legislation to require utilities to produce more energy from wind, solar or other renewable sources. More than three-quarters (78%) favor tougher efficiency standards for building and major appliances.” (Source: National Survey, Oct. 27, 2010, conducted by Pew Research Center for People and the Press.)

• “In general, the public thinks that protecting the environment should be a more important priority than keeping energy prices low (by 56% to 37%). (Source: Congressional Connection Poll, June. 14, 2010, conducted by Pew Research Center for People and the Press/National Journal.)

At least someone is being honest. Again from the Times piece:

“One of the problems in the United States is that we haven’t been willing to confront the tough questions,” said Paul Gipe, who sits on the steering committee of the Alliance for Renewable Energy, a group advocating energy policy reform.

“We have to ask ourselves, ‘Do we really want renewables?’ ” he said. “And if the answer to that is yes, then we’re going to have to pay for them.”

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Deep-sixed four years ago by the Bush administration, the DOE’s Secretary of Energy Advisory Board will soon surface again after the agency today announced the formation of a new panel of 12 members from science, academia, government, military and industry.

The SEAB, formed to provide independent advice and recommendations, was axed in 2006 in a controversial move that was widely interpreted as an effort to hold energy experts at arms length from politically-motivated decision making. For example, a story in the Chemical & Engineering News at the time quoted Edwin Lyman, a senior staff scientist at the Union of Concerned Scientists, as saying the decision to disband the advisory panel is “a symptom of an Administration that doesn’t like to hear any kind of contrary view, that simply likes to talk to itself. The notion that the Energy Department has all the information it needs on scientific and technical issues is ludicrous.”

The SEAB was initially created in 1990 to provide the DOE secretary “with timely, balanced, external advice on issues of importance to the Secretary… The mission of the Secretary of Energy Advisory Board is to provide advice, information, and recommendations to the Secretary of Energy on the Department’s basic and applied research activities, economic and national security policy, educational issues, laboratory management, and on any other activities and operations of the Department of Energy as the Secretary may direct.”

A news release from DOE says the new SEAB, “will provide advice and recommendations to the Secretary on the Department’s basic and applied research, economic and national security policy, educational issues, operational issues and other activities as directed by the Secretary.”

The release says will be meeting at least semi-annually or more frequently,  as needed. Previously, the SEAB did much of its work through subcommittees and its anticipated that the new board will do likewise.

Here are the new SEAB members and their affiliations:

• Norman Augustine, former chair and CEO, Lockheed Martin; former Under Secretary for the Army
• Ralph Cicerone, president of National Academy of Sciences
• John Deutch, MIT chemist; former Under Secretary of Energy
• Nicholas Donofrio, former EVP of Innovation and Technology, IBM
• Alexis Herman, former Secretary of Labor
• Chad Holliday Jr., former CEO of Dupont
• Michael McQuade, senior VP of United Technologies Corp.
• William Perry, former Secretary of Defense; Stanford University Professor
• Arthur Rosenfeld, former commissioner of California Energy Commission
• Susan Tierney, managing principle of Analysis Group
• Steven Westly, managing partner of Westly Group
• Daniel Yergin, president of Cambridge Energy Research Associates

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