The democratization of energy.

Author:Tomain, Joseph P.
 
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ABSTRACT

The electricity industry is changing in dramatic ways. Most significantly, as demonstrated by the Obama Administration's Clean Power Plan, the country is witnessing the merger of energy and environmental regulation. Historically, energy regulation was driven by the need to produce more power for economic growth. By contrast, environmental regulation attended to the pollution of the environment. Production of energy depends upon the use of natural resources, and throughout the fuel cycle from extraction and transportation to the burning and disposal of those resources, the environment is directly affected. Most dramatically, greenhouse gas emissions present climate change challenges. In order to effectively address those challenges and transition to a clean energy future, it is necessary that we rethink our energy and environmental politics. This Article argues that we are experiencing change in energy/environmental politics and as a consequence of that change, decisions are being decentralized and consumers have a greater input into their energy choices. This expansion of decision making constitutes the democratization of energy.

TABLE OF CONTENTS I. THE POLITICS OF ENERGY AND THE ENVIRONMENT II. MERGING ENERGY AND THE ENVIRONMENT A. Production and Delivery of Clean Energy B. Consumption and Control of Clean Energy C. Regulation and Enforcement of Clean Energy D. Governance and Legal Institutions of Clean Energy III. CONCLUSION Natural disasters such as Hurricane Katrina, (1) Superstorm Sandy, (2) and the typhoon that devastated Fukushima, (3) the technical weaknesses that caused the Northeast blackout in October 2003, (4) and regulatory failures that ended California electric industry restructuring efforts (5) share one commonality: all affect the energy system at enormous costs in economic losses and disrupted lives. (6) The reason the economic and social costs of such disasters are so significant is that the centralized structure of electricity generation and transportation guarantees concentrated losses upon such occurrences. Unfortunately, such costs can be expected to be incurred in the future (7) because "[electricity systems are increasingly expected to be prepared for more frequent and intense storms, to rapidly respond to any disruptions, and to minimize all kinds of environmental impacts of their operations." (8) One response to these risks is to restructure the electric system through greater decentralization as well as through increased competition and consumer participation.

These natural and human-caused disasters raise a large number and variety of concerns about our energy future. The energy sector constitutes approximately 8-9 percent of our country's gross domestic product (GDP). (9) Additionally, the United States has developed an approach to the production, distribution, and consumption of energy that has lasted well over a century. (10) Our energy history can be put into another perspective: significant financial and legal resources have been dedicated to designing and sustaining our current energy system. Consequently, any attempt to change a century-old system entails myriad political, policy, legal, and economic issues to mention a few. Nevertheless, the reality is that changed energy and environmental circumstances and policies demand our attention and demand new policies and a new politics.

The United States and large parts of the world are experiencing an energy transition. Even though the United States is decreasing its fossil fuel dependence because of increased domestic production, it may appear as if we are neither dramatically nor aggressively moving away from fossil fuels. Nevertheless, an energy transition is underway as we consciously add renewable resources and efficiency to our energy mix. At bottom, the scope and speed of that transition depend on a new politics of energy.

  1. THE POLITICS OF ENERGY AND THE ENVIRONMENT

    The word "politics" can be elusive and subject to several definitions. Those definitions range from the politically partisan to more broadly encompass political theory. If the country is to make the transition to a clean energy economy, then we must look at politics in its broadest sense in order to create a new narrative that fits more closely to the energy future that we envision. Simply, politics is an essential variable for our energy transition, as the conference fairly raises the issue in a particular and important way. The Fukushima nuclear disaster, given its magnitude and scope, can stand as a trope in our contemporary energy discussions, and it poses a very specific question: Should we continue down the hard energy path, including its nuclear component? The answer is no. The hard path has had its day. (11) Instead, a better and more desirable energy future is available.

    "Politics" is a difficult topic. The concept is elusive as well as plastic and susceptible to several definitions. Politics can be used to describe the partisan battles 12 we have between liberals and conservatives, red states and blue states, and Republicans and Democrats over such issues as the Keystone Pipeline, ANWR, and--not so long ago--"Drill Baby Drill." Today, politics rears its head as utilities assert that they are in a "death spiral," (13) as lobbying dollars seek to stall needed climate regulations, (14) as state legislators attempt to repeal renewable energy portfolio standards, (15) and today, most dramatically, as a variety of actors push back against the Environmental Protections Agency's Clean Power Plan. (16)

    In addition to partisan energy politics, a significant group of scholars also discusses politics in terms of energy federalism--that is, the federal, state, and local conflicts that occur over the production, consumption, and disposal of our energy resources. (17) As desirable as a national energy policy might be for a transition to a clean energy economy, existing institutions, case law, legislation, and regulations have created a web of energy governance at all levels of government that remains on the books and presents challenges as well as opportunities. A persistent challenge for the future, for example, is the siting of electricity transmission lines. (18) On the other side of the equation, opportunities are plentiful as states and local governments experiment with various ways to increase the use of renewable resources and energy efficiency. (19) In short, the politics of energy federalism is alive, well, and vigorous.

    Additionally, politics can refer to the shifting public opinions about any variety of energy and environmental topics including fossil fuels, nuclear power, (20) clean energy, (21) and climate change. (22) Each of these uses of the term politics is part of a national conversation on energy and the environment. It is necessary, however, to put politics into a broader, more normative context in order to more fully address our current energy transition.

    In brief, we discuss and regulate energy and the environment as if these two natural systems behaved independently of each other. More notably, both energy and environmental regulation have developed silos that not only keep them separate from each other but also regulate resources independently of each other. Nuclear power licensing, for example, is regulated by the Nuclear Regulatory Commission, while the rates charged for nuclear electricity is set by the Federal Energy Regulatory Commission and state public utility commissions. Indeed, energy resources such as solar, wind, natural gas, coal, oil, nuclear power, and energy efficiency are all regulated by separate agencies. So too are air, water, land, and ecosystems regulated by separate environmental agencies or divisions. Thus there is little coordination within the realms of energy and environmental regulation and there is no coordination between the two.

    This separation ignores physical reality because throughout the energy fuel cycle, environmental consequences follow. Energy and the environment are not separate realms of natural physical behavior. Therefore, it is better and more accurate to consider the energy/environmental complex rather than to treat them independently of each other. Consequently, the political assessment of the energy/environmental complex and the laws and policies attendant to that assessment must be considered as a whole. To date, though, the separation largely remains and is deeply entrenched.

    Consider and compare how energy advocates and environmentalists address the future. Energy advocates such as Daniel Yergin see a future of increased energy production, including fossil fuel development, as an "engine for job creation and economic growth." (23) In contrast, environmentalists such as Gus Speth, former Dean of the Yale School of Forestry and Environmental Studies and co-founder of the Natural Resources Defense Council, see a desirable future as one that embodies a steady-state economy in which environmental burdens are reduced within a "nongrowing GDP." (24)

    Environmentalists and energy advocates are speaking not only about different core topics but also in different languages using different vocabularies. Speth speaks in the language of the environment and Yergin in the language of energy. These separate languages create separate narratives, which, in turn, have the intent and effect of creating different and separate political agendas as well as policy programs.

    The language of the environment is about conservation, species protection, ecological sensitivity, and precaution. (25) The language of energy is about production, consumption, jobs, and, most importantly, economic growth. Both languages pay inadequate attention to the reality of the energy fuel cycle. From the environmental side, the energy narrative tends to downplay, if not ignore, the environmental effects that occur from exploration and extraction through production and transportation to consumption and disposal...

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