Monday evening, two energy business and environmental policy heavyweights duked it out at the Commonwealth Club of San Francisco’s presentation of Climate One, sparring over several economic and environmental issues involving the future of energy in California and beyond. In one corner stood Rhonda Zygocki, Executive Vice President of Policy and Planning at Chevron – in the other, Fred Krupp, President of the Environmental Defense Fund.
Both Zygocki and Krupp agreed business and government should collaborate to develop energy efficiency projects for existing infrastructure. However, they parted ways over the issues of hydraulic fracturing, or “fracking,” and the feasibility of cap-and-trade systems.
Acknowledging fracking’s economic potential, Krupp emphasized the need for regulations to guard against the release of fugitive emissions such as methane, a major contributor to climate change – while also protecting people living near fracking sites. Zygocki said energy companies are already doing enough on their own to ensure safety, citing as an example the eight layers of protection used to protect groundwater during the fracking process. Chevron has recognized the lack of solid metrics related to fracking’s environmental and public health risks and is looking to the government to bridge the information gap.
Krupp applauded Chevron’s proactive behavior, but said the industry is too fragmented to go unregulated – while 40 companies make up 50 percent of the country’s onshore production, there are closer to 2,000 constituting the other half. Even if the top 40 companies are behaving as Chevron claims to be, it still does not ensure universal protection – we need governments to take action at the federal, state and local levels to ensure fracking is pursued as safely as possible.
Zygocki said Chevron shares concerns over climate change and is spending billions of dollars to develop clean energy technologies such as cellulose biofuels. Stressing the importance of “solutions of scale,” she claimed renewable technologies like solar are too small in scope to meet the country’s energy demands. Rather than put a price on carbon, we should focus on energy efficiency, improving fuel economy of the passenger car and researching new technologies such as lightweight materials and more efficient batteries.
A federal cap-and-trade system would encourage private sector innovation and reduce greenhouse emissions, Krupp said. For example, low carbon fuel standards have led to significant improvements in fuel efficiency. At its core, putting a price on carbon is meant to unleash the profit motive to counter climate change. While the U.S. as a whole has lagged on this issue, countries like Brazil have already implemented such a system and reduced emissions more than any other place in the world. Australia is also introducing a carbon tax – the beginning of a cap-and-trade system.
Krupp admitted the current political climate in Washington, D.C. means a federal cap-and-trade system is unlikely to happen any time soon. However, he believes as more states like California and New York develop their own cap-and-trade systems, the rest of the country will follow.
New technologies are allowing us to influence demand, Krupp concluded. Modern refrigerators can be programmed to defrost during low-demand periods rather than the middle of the day at peak hours. Energy efficiency is also proving to be profitable, with an average 20 percent payback each year – a much higher rate of return than most traditional investments.
@mikehower is a freelance writer and communications consultant interested in telling the stories of companies and organizations engaged in sustainability, clean technology and social entrepreneurship. He also blogs about sustainable business and politics at SustySavvy.com.
Currently based in Washington, D.C, <strong>Mike Hower</strong> is a new media journalist and strategic communication professional focused on helping to drive the conversation at the intersection of sustainable business and public policy. To learn more about Mike, visit his blog,<a href="http://climatalk.com/" > ClimaTalk</a>.