Archive Hosted by the AFL-CIO

Tuesday Talk: How should MN approach sustainable energy policy?

March 20, 2012 By John R. Van Hecke, Executive Director & Fellow

Gas is selling for $3.69 a gallon. Experts predict that it will reach $4.25 this summer. This creates hardship and opportunity. If we do nothing, costs will continue to rise simply because we’re using 20th century technology and policy to solve a 21st century problem.

What should Minnesota do differently to use less energy while producing it affordably and sustainably?

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  • Dan Conner says:

    March 20, 2012 at 8:41 am

    Get oil producers out of the speculative oil futures market.  They have too much a vested interest, including political ones, to be in that market. 

    Also, eliminate ALL oil subsidies and tax incentives.  They are profitable enough without them.

  • KJC says:

    March 20, 2012 at 8:42 am

    We’ve been waiting for “the market to decide” our energy policy since 1973, when the first oil crisis hit us.
    Yes eventually the gas lines and Sunday closures abated… it was a wake-up call.  Were we listening?
    You could point to that at the time, the beginning, of when things started to got tougher here.  Everybody wanted to think it was a fleeting event… but here we are 40 years later, having done very little.  And nearly all suffering mightily for that collective inaction.
    The incentive for OPEC and industry is?  To just slowly drive the price up, testing how high we’ll tolerate, yet try to keep it so that alternative energy sources just aren’t quite viable… and to do just enough research on that to be able To Make the Move, if that trend finally turns/reverses.
    This is why government exists… to put the thumb on the scale and say The Trend Will Turn, for the good of the people. 
    There are so many good ideas:
    1) Thorium for smaller, and much safer, nuclear power.  (Why did we go the uranium route way back in the 40’s? Because of the weapons potential that thorium does NOT have….)
    2) Solar
    3) Wind
    4) Combine technologies such as?
    Use solar power in an algae process to make diesel and gasoline fuels. 
    5) Cellulosic Ethanol.  Using your food chain for fuel (corn ethanol) was a poor long-term idea… you need to use waste.
    If we’d had a “Manhattan Project” for one of more these, we wouldn’t be on the path to $5/gallon gas now. 
    And nothing stops our great country when we pull together… history proves it. 
    The oil industry loves things just as they are… and actually gets billions in subsidies to help them with that… we despise this situation. 
    I conclude?  The drive has to come from US, from everyday citizens like you and me… while using their resources to resist all the way, industry isn’t going to invest and plan until they see it’s inevitable.  Why? They’re making way, way too much money the way it is now to want change.  (Global oil companies have the biggest profits of any industry on the globe right now.)   
    When will we learn?  That globalization changed everything.  How?  It changed inside of the most basic human principle of all, that of Skin in the Game.
    The days when big business was national in nature and outlook, and (by default) applied its resources to make things work better here?  Gone.  (Until we declare differently.) 
    That leaves it to the citizens, and we do have the votes (unless thrown away by cynicism and resignation) to be the fundamental drivers of necessary change. 
    Since 1973 we’ve been waiting for “somebody else” to do something.  Are you willing to admit that’s not working and that you might have to take as stand?  Think about that WE THE PEOPLE Declaration every time you fill up…

  • Mike Downing says:

    March 20, 2012 at 9:01 am

    Our Representatives & Senators in Congress should
    1)promote Flex Fuels in new cars such as Compressed Nat Gas. Nat Gas would be $16/barrel (CNBC 3/20/12)compared to $107/barrel for Oil. That would be equivalent to <$1.00/gallon if we had compressor units in our garages.
    2) Eliminate the Dept of Energy since it has been an utter waste of money & time since it was created by Carter!

  • Bernice Vetsch says:

    March 20, 2012 at 9:58 am

    If your windows face downtown, you’ll see two plumes of clean white smoke rising from St. Paul’s District Energy system.  Created as a public-private enterprise under the leadership of Mayor George Latimer in 1983, the system now heats over 185 buildings and 300 single-family homes in downtown St. Paul and the Capitol area and cools 100 buildings. It has greatly reduced the pollutants that the city would have accumulated had this system not replaced coal as an energy source.

    Under the current Mayor Coleman, the city has installed a huge array of solar panels on the RiverCentre that will provide energy to that building and the existing District system downtown.


  • KJC says:

    March 20, 2012 at 10:10 am

    I think CNG would be a particularly good “fleet” fuel.  Cabs, buses, delivery trucks, etc.  Indeed some of that is to happening.  We need a new distribution infrastructure for this as a transportation fuel… and those with lots of vehicles on regular routes stand to gain the most with the least front-end cost (pain.)  Good way to prove this out, on that scale, first.
    I think Honda still sells a Civic with CNG, but the cost of the home filling station (“Phill”) is also thousands and thousands, and that has been a clear deterrent.  The one-user, one station is such an inefficient model…unless that is a very big, multiple, user!
    For mass public use, we need a community/large scale effort, instead of all of us having to buy home filling stations.  The government could put it’s finger on the scale at any time… but the oil industry lobby is against it, of course… and our citizen voices tend to be?  So often silent when it counts.
    Abolishing the Department of Energy is not going to fix this.  They do things that any American finds desirable. Such as?  They are the ones that go around the world locking down “loose” nuclear material.  Check into it, without our DOE there would be lots more dangerous nuclear material floating around the globe… and no good would come of that.
    How many knew that it was the D.O.E. that did that crucial work?  As usual, get the facts before heading down the slippery slope of glib opinion…

  • Frank Hawthorne says:

    March 20, 2012 at 10:29 am

    As others as pointed-out, we are doing some things better/smarter than was true a decade ago; but much needs to be done, and more could be initiated by government.
    Rather than mindlessly granting tax breaks to affluent folks who don’t need them, we should be offering a variety of point-of-purchase incentives for consumers to make environmentally “smart” choices; e.g. whether it’s installing solar water-heater panels on their houses, or buying flex-fuel vehicles (or other transportation/commuting options) to get to their workplaces in.

    Since the political reality, at present, points to LE$$ government, we need to get creative in finding ways around the politically-motivated false equivalencies being preached re “Cheaper Gas = Greater Growth.”

  • Ginny says:

    March 20, 2012 at 10:43 am

    I know you are right on both of these recommendations, but how do we get oil producers out of the speculative oil futures market? Do most people even know this or are they being hornswoggled by our gas and oil companies and by our politicians?
    And absolutely, stop the subsidies.

  • KJC says:

    March 20, 2012 at 11:37 am

    Good observations, Frank.  And the “false choices” narrative just might be the single most important contribution in it.  I’ll apply that a couple of different ways, for those who want to “try it on.”
    Diverting attention by a false-choices narrative is a common disinformation- and-division tactic.  Hitler was a master at it.
    An example from another important public concern?  Since 9/11, one of those false choices has been?  Between “freedom” or “security.”  So we should all give up our privacy etc…and accept nearly “permanent” war, and have all our personal communications automatically data-mined. (According to WIRED magazine, the telecoms have already negotiated, and gotten, a “free pass” for their participation, without what were the required FISA court orders.) 
    Back more to energy, and Frank’s direct observation…a cheap gas “do nothing” policy has just not lead the USA to (automatically) higher growth. Those are just the self-serving terms of the “debate” that one side wants to cause into the primary public conversation.   
    It reminds me of the Keystone XL pipeline.  They want to cause the same old “jobs vs. environment” debate.  (With the desperation for jobs, they figure they’ll win this one that way.)  An important issue to be sure, but hardly the total picture of this.  Oh?
    A crucial feature of the XL pipeline is the extension to an ocean port (to Texas, instead of it stopping at Cushing, OK like it does now, and where there is now a modest oil glut.)  Why everybody assumes we will be entitled to this Tar Sands oil (once you see that new terminus) is beyond me.  If it’s just for the USA, why would it need to go to an ocean port?  Go check, and you’ll find out?  That Chinese state-owned oil companies have already spent $16 BILLION on the Alberta Tar Sands to get control at the source.  Now they’re lacking only one thing: an easy and cheap way to get this oil back to China.  Go west over rugged mountain terrain to the Pacific (British Columbia) ... or go south: down our Great Plains to the US Gulf Coast?  Guess which way is cheaper?  Does any of this sound like the end-game for this oil is here in the USA? 
    Yes, This was never about us, and our energy independence… it is about China looking for the cheapest way to get the oil onto tankers headed for the Far East.  And whomever here will help them do that (for money.) We in the USA are so used to being at the center, we get so easily blind-sided in the global economy age by that dated view. 
    How far do you think a debate (here) about whether we all want to be a “pass thru” of this tar sands oil from Canada to China would last?  People would say?  What’s in it for me?  It’s worse than they think…because, if anything, it appears that gas prices will go up here in the Midwest when they can get this oil completely off the continent (that current big supply at the existing terminus in Oklahoma is why the Midwest is about 50 cents a gallon cheaper than the coasts right now.)
    So? A “false choices” narrative must be started… and there’s nothing like the old “jobs vs. environment” debate to get old emotions revved-up and keep people diverted from seeing the even bigger, and onerous, picture. When I ask, the populace here doesn’t even seem to have noticed that they aren’t automatically going to get this oil… they have not noticed the new ocean-port terminus for XL, and it’s likely implications…  yet?     
    Oh, it’s only about “jobs vs. environment” I forgot….

  • Dan Conner says:

    March 20, 2012 at 11:49 am

    It is difficult, but much like Glass-Steagal got banks out of the stock/equity markets, the same could be done with oil companies. 

    Oil companies would not be allowed to trade in the commodity markets, particularly with their own oil.  In too many cases now, oil companies intentionally park supertankers in international waters withholding the commodity until a market price is met.  Then, they bring it in.

    The Keystone XL project is intended to bring Canadian crude to TX to be refined and the fuel shipped to China and other nations - not here.  Also, the Keystone XL will RAISE gasoline prices in the midwest (us) by shipping a disproportionate amount, including some of the oil piped to the Midwast, of Canadian crude to TX.  It is of no benefit to the US.  It will raise the price of gas for millions of people and transfers $billions of dollars to TX.

  • KJC says:

    March 20, 2012 at 11:50 am

    Jinny:  There are legitimate reasons for end users to be in the oil futures market.  If you’re an airline, for example.  Right now the CFTC has the authority to make rules about that… but? It doesn’t. 
    I’d?  Just put a real transactions tax, on those who are not end-users, buying futures.  Disincentives are needed. Revenues are needed.  Viola!  That would dampened the source of the excess speculation, and restrain the extra drive-up in oil price.
    Once upon a time 70% of the futures traders were end-users… probably a workable number.  Now it is?  30%.  yes, it’s completely reversed.  Now it’s 70% that’s pure speculation.  Are the results any surprise, if you realize that? Is it any wonder that the price rises on pure emotion (like the drum beat of war, this time not with Iraq, but with Iran,) not with the supply-and-demand facts alone?
    Huge pushback from any new regulations, from Wall Street of course, has kept the CFTC (Commodities Futures Trading Commission) from doing anything new.  Until there a hundred voices from us mere citizens, to their one (OCCUPY!) not much is likely to happen. 
    Can we just sit our hands?  Sure.  That will also ensure that we all just keep paying through the nose… including for the very nice mega-millions bonuses to our friends on Wall Street.

  • KJC says:

    March 20, 2012 at 12:02 pm

    Dan:  I’m obviously just agreeing with you, especially on the likely macro-economic results of various policies will be. If we just continue down this same tired-old path?  “Do what you always did, get what you always got.”  Are we, as a people, really willing to do that genuinely something new, so we can get better results?  Or, will we continue to complain, while mostly just sitting on our hands?  We’ve been “Waiting for Godot” since ‘73…

  • Ginny says:

    March 20, 2012 at 12:15 pm

    I’m impressed by all the useful information on this post. I plan to file the whole post, and keep it in mind as this year unfolds.
    I live in St. Paul’s inner city only a couple of miles from downtown and less than half a mile from Grand Avenue. I love it here and plan to stay (I’ve been here for nearly 30 years) because I can walk to almost everything I need—co-op, dry cleaners, hardware store, my church, restaurants, drugstore—dang near everything.
    I plan to get involved in the Occupy Movement when it starts again and also to write my senators and representatives, Franken, McCollum, and Klobuchar (whom I no longer trust to do the right thing).
    What else? Other ideas?

  • goodhughes says:

    March 21, 2012 at 1:05 am

    As far as auto gas prices are concerned, who cares.  The Republicans refuse to fund repairs to our infrastructure.  No roads, high gas, who cares?

  • William Pappas says:

    March 21, 2012 at 6:19 am

      One type of infrastructure that fights high gas prices and expensive congestion in our cities is commuter rail.  Transit systems insulate ordinary Citizens from the shocks of spiking energy prices.  As long as oil is the basis of our economy those shocks will continue.  Providing transportation options apart from the auto is money in the bank for consumers.  This includes the regional rail systems that Republicans have united to oppose as part of their short sighted tax cutting policies.  Minnesota must continue to invest in alternative renewables in the short term.  More power from wind and advanced solar technologies on a local and individual level will further insulate us from the shocks of oil energy price fluctuations.  Diverting almost all of our resources to support petroleum based energy systems will increase our dependence on gasoline and link us even tighter to the price of a barrell of oil.  Continuing to heavily subsidize oil companies and highway infrastructure is horribly short sighted and promotes companies already swimming in profits and cash.  This must be reversed immediately to support renewables and public transit options.

  • Dan Conner says:

    March 21, 2012 at 9:05 am

    Right on William!!

  • KJC says:

    March 21, 2012 at 9:46 am

    I am for an increase is public transit.  This is an issue that I find loaded with assumptions (that often aren’t true.)  First one?  Most seem to assume that the cost of their ticket covers the real cost of their ride.  Not even close.  One of the real problems in building this out always is?  Who’s going to “eat” the operating losses.  Otherwise, since the Feds are willing to pay half, wouldn’t we be building them like crazy? Answer: nobody wants to be the one to be eating the significant operating losses.  Translation: the ticket prices have a huge subsidy built into them.  I know that roads do, too. 
    I often find that each “side” in this debate likes to pretend that it’s only the “other side” that is getting big subsidies, and they’re the “good” ones.  When it’s both that are getting on-going taxpayer funds.  You can’t have a rational discussion in the face of that.
    You have to face a lot of math questions, tough choices, and long-term policy issues, etc ... that don’t make for easy or convenient answers.
    I also have another assumption that I’d like to adjust.  That?  Cars ruin the roads.  Mostly they don’t.  It’s the big trucks that do the vast majority of the damage to our roads.  And while they pay taxes, it isn’t nearly enough to cover their damage to our roads.  (They weigh sooooo much more than a car, that’s why.)
    So?  Long-Haul Trucking is getting a huge subsidy… and it always pressing to make for even bigger “trailer trains” and higher weight limits.
    We do all need our goods moved around, so what are we going to do about this?  Our rail system is also dilapidated, so that all this freight can’t just be pushed onto RR’s and be workable.
    This is the cost of years of cumulative “stay-the-course” inaction.  Which if you’re fair, you have to admit is pretty much how industry has wanted it.  As I’ve reminded: “Do what you always do, get what you always got.” 
    If you think industry is going to fix this?  Well, they’re mostly happy with it…and making lots of money…just like it is.  The push for change will have to come from: We The People.  Have we had enough of?  Selling out the future to have life be more “pleasant” today?  As usual, per the Founding Fathers, it’s up to all of us…     

  • Dan Conner says:

    March 26, 2012 at 9:48 am

    I agree with you KJC, except that our country has the capacity to do more than one thing at once.  In addition to improving mass transit, we need to develop energy from renewables, sun wind and geothermal.  The object should be to get off carbon fuels.

    In addition to better conserving a increasingly scare natural resource, it will curb the obscene profits and oligopoly of the oil industry.