BY: BRIAN A. HOWEY
Publisher

Friday, July 16, 2010

ZIONSVILLE - Think back a century. After Elwood Haynes had rolled his horseless carriage out into the dusty streets of Kokomo, American society was transformed. But it came with a cost.
 
America would spend trillions of dollars to retool wagon and bicycle shops to build these carriages or "cars." We would pave our streets, put up stoplights, create interstates in the ensuing six decades. Life changed in dramatic ways just as the skyline along Interstate 65 and State Road 43 has changed over the past year in Northwest Indiana as hundreds of wind turbines have popped up.
 
That’s what we are facing today as the U.S. Senate takes up landmark energy legislation. There is an extremely narrow window - the next two weeks - that provides the dramatic scenario for the best chance of a landmark energy bill to emerge from the U.S. Senate. It is an opportunity that may not present itself again for years if not decades.
 
But multiple Senate, utility and environmental groups tell me that bills by U.S. Sen. Dick Lugar and Senate Energy and Natural Resources Chairman Jeff Bingaman are unlikely to pass. Any bill debated will likely not include the carbon cap President Obama sought.
 
“The number of votes for Cap-and-Trade are slipping,” said John Goss, who heads the Indiana office of the National Wildlife Federation. “It’s nowhere near the 60 votes,” particularly after the death of U.S. Sen. Robert Byrd, D-W. Va.
  
“This is our best chance in a decade,” Goss said.
  
Andy Fisher, spokesman for Sen. Lugar was skeptical anything will pass. He said that if Majority Leader Harry Reid gets a bill to the floor, “There will be debate and some consensus. But I just don’t see how the process will get 60 votes. I don’t think this is in Reid’s agenda due to a number of factors, including Reid’s own reelection.”
 
Fisher agrees that “change is going to happen in every part of the energy spectrum.” He added that there is more chance of a bipartisan bill next year. “I think there is actually strong bipartisan interest in an energy bill. There is not bipartisan interest in a climate bill.”
 
Beyond the Senate, Fisher said there would be a huge gap between anything the Senate passes and the Waxman-Markey bill that passed the House. “Just given the political climate right now, a conference with Waxman-Markey would not be popular in the House. Most don’t want that vote to come up.”

What happens in the Senate (or doesn’t) could have an impact on the way Indiana powers itself as well as what consumers (industry and homeowners) pay for power.
 
One utility source told me that consumers could easily face energy cost increases in the 25 to 40 percent range due to the legislation. The source, however, acknowledges that it already faces increasing demand and the need to refit or rebuild most of its generation stations. NiSource, for instance, counts its newest generation plant at 25 years old. Before the days of Obama, industry sources were saying that Hoosier consumers were facing daunting rate increases.
 
Indiana utilities warn of the costs associated with transforming the state’s aging power generation plants into clean coal technologies, scrubbers, or conversion from coal to natural gas. The state and investors have already anted up for ethanol and wind power, neither of which would exist without heavy government subsidy and have the reliability of coal. Utility sources say that studies have shown wind power to have about an 8 percent reliability standard, compared to 85 percent for a coal fired plant.
 
What Indiana does have is a lot of biomass - particularly hog and cow manure that could represent what was once deemed waste turning into brown gold.
  
Gov. Mitch Daniels has been critical of Cap-and-Trade, saying that capping carbon wouldn’t “lower the thermometer by a half a degree in 50 years.” He has said the cost of businesses like high-energy-using steel plants and foundries could put them out of business or force them to move.
  
Goss says that is shortsighted and cites “overwhelming scientific evidence” that Indiana and the rest of the world are facing climate change dilemmas. He said that cold water fish such as trout and salmon may be gone from lakes and rivers over the next 30 years in Northern Indiana and Southern Michigan if current climate trends continue. The Audubon Society is reporting “dozens of species of birds new to areas north of the Ohio River.” Gardening, planting and frost tables are changing, with seed companies placing Indiana in southern climates.
 
With wrenching change comes opportunity. An electric utility that may be forced to spend hundreds of millions to switch from coal to natural gas fired plants or clean coal could also find hundreds of thousands new consumers with thousands of cars and trucks that will be plugged in at night instead of visiting a gas station once or twice a week.
 
If Congress doesn’t act, the EPA will. Change in energy is inevitable.