Thank you, Mr. Rogers

Once again, Duke Energy CEO Jim Rogers is calling for Democrats to pass legislation that includes putting a price on carbon. The link below will take you to a Bloomberg article covering his latest comments.

http://bit.ly/dljCTA

Are we there, yet?

I recently had the opportunity to hear Jim Rogers, Chairman and CEO of Duke Energy Corporation, talk about his company and his views on carbon legislation. Mr. Rogers is a vocal and ardent supporter of legislation that addresses carbon emissions. His rationale is quite rational. Set aside the arguments for legislation that are rooted in the hotly debated climate change research and science and Mr. Rogers is still a supporter. Why? Power companies, like Duke Energy, need guidance. Over the next 50 years, Duke Energy will need to retire and replace its entire fleet of power generation facilities, representing billions of dollars of investment. They are ready to start now and need guidance from the government on how to allocate these dollars. If Duke Energy is going to be required to decarbonize its fleet, they need to begin planning for that now.

Mr. Rogers characterizes the various fuels for power generation (coal, natural gas, nuclear, hydro, solar, wind, and biomass) with three qualities: affordability, reliability and environmental impact.

• Coal, which fuels 50% of electricity in the US, is affordable and reliable, but has a tremendous negative impact on the environment.
• Natural gas has had a storied past with respect to affordability and is a reliable fuel source. Its environmental impact is debatable. From a carbon standpoint, it has 50% of the carbon footprint of coal, but the new technologies for extracting natural gas have yet to be fully vetted. New drilling techniques have opened up enormous potential supply of natural gas, but those techniques may have adverse impacts on another precious resource, aquifers. Additionally, while the carbon footprint is substantially smaller than that of coal, under the proposed legislation, the carbon reduction offered by switching to natural gas would fall short of the required reductions.
• Nuclear energy is reliable and clean, from a carbon footprint standpoint, but is very expensive. It also presents security risks and you still have to deal with its by-products.
• Solar power, as with other renewables, is clean, but is very expensive and not reliable.
• Wind power is clean, very expensive and not reliable.
• Biomass is clean, somewhat expensive and fairly reliable.

With this backdrop, a possible path to a cleaner power generation infrastructure is migrating to cleaner coal plants in the short run, supplementing that base load generation with renewables and natural gas. Ultimately, we could power our nation through a mix of nuclear, natural gas and renewable power sources. It won't happen over night. If it is going to happen, there must be guidance and leadership in Washington D.C. to compel the change. We'll see what happens with the latest rumor/news that a utility-only version of the energy bill will be introduced to the Senate in the coming weeks.