Bill Weak Without Energy Recycling Provision

November 29, 2007

Last week, the U.N. Intergovernmental Panel on Climate Change released a study suggesting the global warming threat is more dire than many had imagined. Now, New Mexico Sens. Jeff Bingaman and Pete Domenici have a chance to do something about it by ensuring this year’s energy bill promotes energy recycling—a little-known yet revolutionary technique that slashes greenhouse gases and energy costs at the same time.

What makes energy recycling so important is that it tackles the country’s largest source of global warming pollution: the energy industry. In fact, the production of power and heat accounts for 69 percent of our country’s greenhouse gas emissions.

Energy recycling works by using energy that would normally be wasted. For instance, when manufacturers create energy-intensive products like metals and glass, they emit loads of waste heat, resulting in smokestack after smokestack of untapped power. Converting that heat into clean electricity or steam—that is, recycling it—would dramatically improve efficiency, simultaneously reducing our country’s energy prices and carbon footprint.

Another form of energy recycling occurs when manufacturers and large institutions install small power plants on site that recycle excess heat to produce both electricity and steam. These facilities are typically more than twice as efficient as conventional power plants.

Indeed, the potential in energy recycling is an order of magnitude beyond anything else being proposed in the global warming debate. Recycling waste energy could provide 200,000 megawatts of new, clean power, cutting our country’s greenhouse gas pollution by over 20 percent. That’s more progress on global warming than we’d achieve by taking every car in the country off the road.

Moreover, energy recycling belies the claims of those who insist we can’t do anything about climate change without wrecking the economy. As energy efficiency rises, costs fall, resulting in a bigger bang for the energy consumer’s buck.

Sound too good to be true? Tell that to Denmark, which produces more than 55 percent of its power capacity through energy recycling. The U.S. rate, by contrast, languishes in the single digits. As a result, we use more than twice as much energy to produce a dollar of GDP as Denmark does.

If recycling energy is so efficient, why isn’t more being done? The answer is simple: government regulations protect monopoly utilities. In today’s energy system, power is generated mainly by large plants that state-regulated, regional utilities control. By law, these utilities are protected from competition and have no incentive to be efficient.

Little wonder that the efficiency of the U.S. power industry has stagnated at about 33 percent since the 1950s. That means three units of fuel are required to produce one unit of power; the rest is wasted.

In a free market, manufacturers could harness waste energy and reduce their dependence on inefficient utilities. Indeed, recycling waste energy is so efficient that it often produces more electricity than manufacturers need, allowing them to sell the excess to neighboring businesses.

But in the real world, government regulators have largely insulated utilities from such threats. Manufacturers that recycle are discouraged or even prevented from selling their excess power. And, unlike utilities, they don’t have their capital investments guaranteed by the public.

Amid such obstacles, Congress has a golden opportunity. Tucked away in the energy bill the House of Representatives passed earlier this year is a provision that would galvanize energy recycling. Among other things, it would give manufacturers incentives to recycle, allow energy recycling projects to qualify for federal grants, and create a federal standard to promote renewable energy initiatives such as energy recycling. That’s the good news.

The bad news is the Senate’s energy bill includes no such provisions—and utilities are now pressuring Congress to drop energy recycling from the final legislation.

With the scientific community certain the global warming threat is real and catastrophe imminent, Congress has no more excuses.

Bingaman and Domenici, the chair and the ranking Republican on the Senate energy committee, should make sure energy recycling is included in the final energy bill.

Thomas Casten is the chairman of Recycled Energy Development, LLC.

Contact us to discuss how energy recycling can help your organization.