HL: Look at the recent proposal to put LNG terminals up and down the west coast in order to supply natural gas so we can build more natural gas power plants. The cost of that is already higher than wind and many of the solar technologies. We just haven't woken up. Now, you can debate whether we should keep running historic old plants and what I would argue is that we should bring on efficiency which is cheaper than just the running cost of the old historic plants, and we should do it with war time urgency.
MJ: Can you talk about clean coal?
HL: It is less dirty than historic plants and you could argue that if the Chinese are going to build a coal plant every couple of days, the West ought to pay them to do it with the cleaner technology. It is probably a cheaper way of cutting carbon emissions than everybody buying these little offset things for their car or that's where the little offset money ought to be going is to pay the Chinese to clean up their coal.
MJ: What's the most overhyped new technology?
HL: Nuclear. Again, it is not clean in carbon terms. If you count the entire fuel cycle of nuclear̶digging the stuff up, enriching it, transporting it, building the very concrete intensive reactors which as they cure release CO2—nuclear is not carbon neutral.
MJ: If you had a million dollars in which to invest in some type of energy source, I am assuming it would be in renewables.
HL: As a matter of fact I have considerably less than that and I'm putting renewables on the roof of my reasonably new house. Before I did that I hired people in to bring caulk guns and blower doors to weatherize the house. It is silly to invest in putting lots and lots of renewables on an energy inefficient house. You just pay a lot more money.
So, efficiency first, then renewables. In my particular area, we don't have reliable wind so I am putting up solar photovoltaics. And solar thermal. So yeah, I am investing in renewables. Now as to which renewable, there is a man named Marty Lagod, with Fire Lake Capital. If I had an investment grade chunk of money I would call Marty and say okay, where do I put it, because he follows this technology on a daily basis and is actually smarter about this stuff than I am.
MJ: And so are you putting solar on your roof with the thin-film technology?
HL: That's another question I haven't answered. I am very tempted to do that. Very tempted.
MJ: Is it much more expensive?
HL: It is, well particularly with the recent nano shipment, it is potentially less expensive but it is less efficient and therefore you need more of the panels and we haven't finished running the numbers on it but I also like the idea of purchasing the next generation technology. People have been working on thin film applications for decades, I was hanging out with a guy at a company called Amitech back in 1975 and the company was working on, what was it, gallium arsenide thin film. This is not new. Thin films are going to sweep the market.
HL: But lipid algae. That's very fun.
MJ: What would it take for renewable energy to go mainstream?
HL: Well, there are several ways of doing it. My personal favorite is to de-subidize the competitors. The conventional technologies from the world are given each year at least $240 billion to make them cheaper than they really are so cut all those subsidies out and you can imagine what you can do with $240 billion by way of low income weatherization or investment into the clean tech sector or pick your favorite worthy charity. I'm a big fan of markets, and if you give markets half a chance, amazingly enough they work.
HL: So that would be my favorite, but that's not going to happen. So then you can go the reverse route which is what Germany is doing which is a big tariff or you directly pay producers of renewable energy for the energy they produce. For every kilowatt hour you deliver from a wind or solar facility the government buys it from you at say. $.25 per kilowatt hour. Surprise. Germany is on its way to being 100% renewable energy while last year they hit 14%.
MJ: So ideally you would love to see the competitors de-subsidized but in a practical world you would like to see an incentive for renewables?
HL: Well, smart incentives, you can elicit a lot of stupid technologies by doing what the Department of Energy typically does which is to give research money to any noncommercial technology that looks like it's going to be big and centralized. This is really dumb. Renewables are inherently decentralized. There is another measure that you can do and Berkeley just did it. You put in place special assessment taxing districts that allow individuals who want to implement renewables or efficiency to do so. You go to the city, get paid, they implement the efficiencies and renewables and then they pay that back as part of their property tax which now runs with the property. It's not a personal loan.
MJ: And it addresses the issue of if you move in five years...
HL: That's correct. It stays with the property so it enhances the property value and stays with the property. It's very brilliant. Probably my overall favorite is the Batinovich plan, named after Bob Batinovich who was a California public utility commissioner back in the late 80s and he did to simple things. One, he decoupled the utilities so that they no longer get paid based on how much power they produce. Most utilities in the country only get paid if they generate electricity and they get paid for construction work in progress and various other incentives to build more power plants but because they are rate-based and incentivized they want to build more power plants. So you decouple them. And then the next thing you do is you give them a share of the money they save their customers by investing in energy efficienc and increasingly in renewables to the extent that those are cheaper than the existing technologies. You turn the utilities into rat terriers after energy efficiency. Now they want energy efficiency.
MJ: And so what is your personal favorite energy-saving trick or tip?
HL: Turn off the lights when you leave the room. Stop doing stupid things. Stop throwing money away. And if you look around you as you go through your day you will see hundreds of these. Leaving your car running while you sit there, turn the darn thing off.
MJ: There are so many myths associated with those things.
HL: And they are all wrong.
MJ: Switching gears. It seems like the Pentagon is leading the way with federal agencies in the battle for energy efficiency. Why is that?
HL: They are very interested in it, and for good reason. If what you care about is the security of the homeland, renewable energy and energy efficiency is one of the best ways to guarantee it.
MJ: So it's less of a cost-saving measure and more about being independent?
HL: Well, it's all of the above. It's like how people say Wal-Mart's goal of being carbon neutral and 100% renewable energy is just a way to save money. So? And you object to this because? They are self interested, yeah, of course they are. They are doing a smart thing. This is why markets work.
MJ: So what lessons can private companies take away from this or potentially the rest of the federal government?
HL: The rest of the federal government should be doing exactly the same darn thing. Again, it's just a better way of stewarding taxpayer dollars and achieving the mission of government.
MJ: But why isn't the rest of the federal government jumping on this bandwagon?
HL: You know the answer to that question is… I was in London last November with a meeting of some of the biggest institutional investors on the planet and folks like Al Gore and the Prince of Wales and the Europeans were asking those of us from the United States, "What is going on?" And the head of one of these major institutional investors just sort of put his hands in the air and said, '14 months.' We are going to have a new president. Why is the federal government being stupid? Look at the top.
MJ: And so what lessons should private companies take away from the Pentagon's foray into renewable energy?
HL: The stuff is here, it works, it delivers a higher quality of service; it's more reliable. But I think the real lessons for business are from other businesses. If you can see somebody who is just like you making boatloads of money...
MJ: Right, it resonates. So what kind of car do you drive?
HL: I drive a Mitsubishi Spider. 33 miles to the gallon. I was just thinking about buying a Prius but my existing car works well enough that the embodied energy of going out and buying a whole new car. I looked at getting a Smart car but they are actually not that efficient. They only get in the high 30s low 40s. And to be such a tiny little thing like that, shucks, I'm going to drive my high performance sports car.
MJ: What is your guilty electrical pleasure?
HL: Oh, I've got to have one. Oh, stock tank heaters in the winter for my horses.
MJ: There you go. So what kind of electricity waste goes on there?
HL: That's a good question. My recent bill was about $120. That's before I put the solar on. Once I put the solar on, heck, we can heat force water as much as we want to.
MJ: So are you going to transition to solar thermal?
HL: Yeah, well in this case it will be solar electric and well, and solar thermal.
MJ: Would you rather live next to a nuclear power plant or a coal burning plant?
HL: The nukes. Coal plants spew out mercury and the nuclear safety record is actually not that bad. The real harm is the entire fuel cycle.
MJ: When do you see the last gasoline-powered Hummer being a think of the past?
HL: Gasoline powered Hummer? God, I hope it's soon. Well, in existence? I'm sure somebody will save them as museum pieces.
MJ: Right. And sell them on eBay.
HL: But being commercially sold—within five years. Because the speed with which carbon constraints are coming at us, I mean, we are in a planetary climate crisis.