Minnesota's Energy Future?©

Dell Erickson

Minneapolis, MN
October 20, 2003


Part V:  Minnesota Needs & Government Response


 

Part V:  Minnesota Needs & Government Response

260

 

 

       Minnesota Energy Sources, Uses, & Needs

260

       Minnesota's Future Energy Demands

265

            Table 16: Minnesota Energy Inputs by Source, 1998

265

            Table 17: Minnesota Energy Growth by Consumer Class & Source 1970 – 1998

266

            Table 18: Minnesota Energy Use by Economic Area, 1998

267

            Table 19: Household Energy Sources for Space Heating, 1997

268

       Minnesota’s Energy Growth & the Price Tag

270

            Table 20: Population Growth & Projected Energy Demand

270

             Table 21: Projected Construction Costs & New Generation Under the Status Quo Growth Scenario

271

             Table 22: Projected Construction Costs & New Generation Under a Sustainability Scenario

274

 

 

       The Government & Environmentalists’ Response: “Smart Growth”

277

 

 

Concluding Comments

281

Epilogue

284



Minnesota Energy Sources, Uses, and Needs

What apparition turns on the lights?

This section begins with a brief outline of Minnesota's looming energy predicaments and proposed remedies as provided in state energy reports.  It then combines current Minnesota energy patterns with Minnesota population projections in order to discover future energy possibilities.  Because these matters were discussed earlier, little additional comment will be made at this point other than to say the state proposals are a version of the Holland lad at the dike, temporary at best.  Worse, the California model the Minnesota process is duplicating will intensify long run energy difficulties.

Consistent with the Olduvai Theory, Minnesota and U.S. energy issues appear to have evolved from one of designing programs to better living standards to questioning what lower level will be sustainable.

Selective energy interruptions (“brownouts”) are a California development that will become commonplace nationally within a few years.  Minnesota, for example, has near zero capacity cushion at this time, and the system was forced to reduce energy output requesting the shutting down of businesses and residential electrical use in the summer of 2001.  A precarious energy status will soon become a way of life.  For example, the winter of 2002 – 2003 experienced the initial national episode of inexorably deteriorating natural gas supply.  The coming winter of 2003 – 2004 will continue the progression.  Within one or possibly two years, Minnesota will have at least a 5% overall negative electricity energy balance.  The result will be spreading brownouts and possibly rolling blackouts.  Obviously, the greater the Minnesota growth the more disturbing the coming energy realities.

Legislative proposals to remedy Minnesota's energy predicaments are found in two research reports, “Quadrennial Energy Policy & Conservation Report 2000” and “Keeping the Lights on: Securing Minnesota’s Energy Future.”  The Minnesota Department of Commerce, Energy Division, prepared both reports.  Information from these reports and state demographic data are presented in this paper and used to develop the growth related energy projections.1

In October 2001, the Minnesota Department of Commerce released the initial report in the energy series, “Minnesota Energy Planning Report”.  The second report was issued December 15th 2001 and the final report in the series was completed December 15, 2002.  The final report builds on the information from the previous two reports.  It develops additional details and notes some of the approaches which have been implemented at least in part, but which were only proposed previously.  The approaches and strategies seen in the earlier reports are essentially identical in the final report.

The report was first made available on the “Sustainable Minnesota” website.  This is puzzling because the state energy report does not affirm in any measurable way the idea of Minnesota sustainability.  Indeed, the “Sustainable Minnesota” network is the grouping of organizations promoting the oxymoronic “smart ‘population’ growth” program.  As discussed later in this segment, smart growth translates into “more growth” without limit.2

The initial Minnesota energy report began and ended with an August 2000 quote from Michael Kahn, Chairman, California Electricity Oversight Board, stating that, “California's electric system is no longer consistently reliable.”  Attempting to use fear to promote its position, the suggestion is made that unless the state proposals are followed, Minnesota will soon duplicate today's alarming California energy situation.  If one has read the preceding sections of this paper one would conclude that following the California strategy will result in the California outcome.

Mirroring statements made regarding the California energy situation, lack of infrastructure primarily transmission lines is said to be at the root of Minnesota's looming energy problems.  However, the state report concludes that within five to six years (2005 – 2006) —in less time required to construct a single baseline generating facility— the region will be short 5.4 gigawatts (gWh) of energy.  3 gigawatts of that are in Minnesota with another 15% increase due in 2007 when Prairie Island is scheduled to close.  This mind-boggling energy requirement is almost the equivalent of one-third of today's total electrical energy use.  It is equivalent to about five Prairie Island nuclear generating plants.  Given that 5.4 gWh are needed soon implies that an extraordinarily rapid build or sharp reductions in consumer use are just around the corner.

The use of the California reference may have another purpose as well— to frame thought.  According to the state's energy proposals, the fundamental issue is the reliability of Minnesota's energy system.  The use of the term “reliable” implies adequate energy supplies are available, only that its delivery is questionable.

Despite the wordsmithing, the fact is an energy short (people long) nation or state is very different from a problematic delivery system.  North America has exceptionally far reaching energy transmission and distribution systems.  An attempt to literally duplicate the energy systems constructed to accommodate the massive population growth of the post WW-II “Boomers” in order to accommodate an equal or larger population boom today will be prohibitively expensive.  Some of the costs involved increasing existing natural gas and electrical infrastructures were discussed previously.  For government or industry to have a strategy of doubling or tripling (or more) existing natural gas, oil, or coal energy delivery systems is a political chimera.  Indeed, a primary reason for the program to construct numerous smaller generating facilities in areas adjacent to users is an effort to help minimize the transmission and distribution expense associated with additional electrical energy.

Population growth as a topic of concern is dismissed in a state prepared chart contrasting population growth and gasoline consumption.  Its purpose appears to be to seed in the viewers mind that growth is of little matter, that gasoline use increased over this period at a greater rate than population.  As discussed under “managing data” in Part IV, the use of this chart communicates more about the state's reporting methods than resource requirements.  A discussion of Minnesota's rapid population growth is strangely absent in all state energy reports, even those projecting energy use!

Evidently, state authorities believe an apparition is responsible for turning on the lights!  Perhaps, it would be more accurate for the state to say an apparition is responsible for turning off the lights.

Three profound defects of the state reports are a failure to:

1.)       Examine petroleum, natural gas and coal reserves;

2.)       Integrate energy reserves and use with population levels; and

3.)       Examine the practicality and reasonableness of alternative energies.

The short-term outlook of state policies is partially responsible for the energy and growth myopia.  The foreseeable future described by state studies is a significantly shorter period than judicious planning would suggest.  Implementing their definition of the foreseeable future, state budgets are for five years and the Minnesota Commerce Department allows long run energy planning to be less than 15 years.  Fifteen years is less than the time required to propose, permit, and construct a baseline energy unit.  The October 2001 Minnesota energy report's planning horizon is a brief nine years.  Because there are no long run explicit state population policies, the default policy falls to a hazardous and unsustainable one: unlimited growth.

For example, long run natural gas supply appears to be of little concern.  In the text and a conspicuous colorful sidebar the report says “despite the existence of adequate natural gas supplies for the foreseeable future, gas production levels have not yet geared up to meet the new levels of demand.”  As documented in this paper under the heading of “natural gas”, this statement is only partially true; natural gas supply is unlikely to match demand.  “Reliability” according to the state is connected only with the aggregate size of the natural gas delivery system not the supply of natural gas.  The irony is that government and environmentalists promote the use of natural gas, but appear unable to comprehend that its use implies drilling in environmentally sensitive areas.

Emphasizing infrastructure over long run natural gas reserves, state reports indicate that even with average temperatures there are insufficient natural gas pipeline volumes to provide for the construction of an adequate number of summer electric peaking generating facilities for summer cooling.  The natural gas pipeline crisis will be unmistakable on the most uncomfortable days of summer and winter!  Concentrating on natural gas for additional electricity appears to be an unwise practice.  Reminding one of the California pattern and of spiking prices, the summer supply constraint has been exacerbated by the recent construction of three natural gas peaking facilities.  The crisis will be intensified by the planned conversion to natural gas of Xcel Energy’s coal burning Riverside (north Minneapolis) and Black Dog Power Plant (located on the Minnesota River just south of Minneapolis).  As discussed previously, the winter of 2003 – 2004 —and subsequent years— will demonstrate the state’s misunderstanding of natural gas and the incorrectness of any proposed conversions.

Continuing the avoidance theme, state energy reports offer a cautionary note regarding the availability of petroleum products yet immediately attempts to dispel supply anxiety.  Making what appears to be a nearly senseless statement, the reports state that “eventually petroleum will be depleted” because the world uses much more oil than “are created” each year.  There is little reason for genuine concern, the report continues, because it “may be possible to find or manufacture new sources and substitutes for these products”.  The research previously cited in this paper supports a different point of view and outcome.

In planning what amounts to be the most optimistic of possible viewpoints, authorities are placing the state and its citizens in a position of maximum uncertainty and vulnerability.

The Minnesota situation is reminiscent of the statements made by Matthew Simmons in discussing the impending national energy status.  Providing 80% of Minnesota's supply, Northern Natural Gas has no additional capacity available for the winter heating season.  In other words, there is no pipeline capacity reserve and demand for additional generators or needs of growth will only further strain existing infrastructure and reserves.

Perhaps the reason Northern Natural Gas company has not constructed additional pipelines is because they have planning insights lacking at the government level —owners and investors understand the future and risks involved.  Construction of additional pipelines is an extremely expensive and time-consuming proposition.  Owners and investors understand that capital investments will decline in value as the use of purchased assets declines.  U.S. natural gas reserves will be nearly depleted long before the assets are fully depreciated.  Bonds and securities used to finance construction will remain outstanding.  As a consequence the government will likely purchase and nationalize natural gas assets in an acute energy crisis (the California model).  The bottom line of a government takeover is that the taxpaying public will be left holding company assets lacking useful future use: an industry bailout of some magnitude.

 

The state proposes a three tiered energy program:

·         Conservation of existing energy sources;

·         Construction of additional sources of energy, natural gas peaking plants, and renewable and alternative energies, primarily windpower; and

·         Increasing prices to ration consumer use.

Recall that in prior years these same concepts (increase supply, efficiency, and conservation) were favored as reasons to promote growth, “more is better” was the refrain (“smart growth” is the current slogan).  The three state proposals help explain why economic research concludes that each additional person in Minnesota cost $15,000 more than any alleged benefits.3

 

In addition, there are other less publicized state energy proposals:

·         Eliminating property taxes on new or currently taxed energy facilities;

·         Granting “eminent domain” condemnation property rights to related firms;

·         Streamlining the construction process by removing “barriers” to construction such as environmental compliance review, even going so far as to discontinue important aspects of the Certificate of Need process; and

·         The establishment of a supra-government organization which will have complete authority over state and regional energy matters.  The North American Electric Reliability Organization (NAERO) will require mandatory compliance and involves the inclusion of other industry interested parties, including non-utility.

Although a cornerstone of state policy, conservation or increasing energy efficiency as shown in the miles per gallon example, has only limited usefulness in an energy program.  Increasing energy efficiency has the effect of reducing per capita use, shifting growth curves slightly lower, but does not permanently change the growth rate or direction of energy consumption.  State studies acknowledge these facts stating that higher prices may reduce demand temporarily, but “would not significantly reduce the 2 percent annual [electric] growth”.

 

Conservation is a temporary expedient and its inference, pricing, is a reallocation of existing supplies; as discussed earlier under “pricing economics”, pricing does not significantly increase supply.  As common sense and previous public response to higher prices demonstrate, use initially slows, then after a brief period of adjustment continues on the prior trendline moving resource failure forward in time.

 

Jevons’ Paradox implies state conservation and efficiency proposals are less a means of reducing energy consumption to a sustainable level than to accommodate and encourage additional growth.

 

A significant component of the state plan is an attempt to reduce consumer use by increasing prices during peak use periods.  This method compels the consumer to re-allocate his pocketbook or his life style.  In other words, when it's cold the state proposes to charge more for heating and when hot, to charge more for cooling.  With a plan apparently designed by the utility industry, the purpose is to encourage long run demand and population growth by leveling rates of use throughout the year.

Assuming average weather, peak-pricing programs postpone brownouts or blackouts until consumption and growth equals the level that would have been the energy peaks reached in previous energy programs.  On a graph it is represented by the peaks and lows around a straight-line average of an undulating trendline —a sine-wave on an oscilloscope.  The brownouts or blackouts would occur near the high peaks of the chart.  The function of peak pricing is to compress the highs and lows —ideally making use vary little around the straight-line average.  And, as stated several times, it permits populations to grow to levels where options are reduced and vulnerabilities increased.  Finally, it implies that the citizens of Minnesota are being coerced by government action to significantly lower standards of comfort.  Minnesotans are being compelled to be uncomfortably hot in summer and cold in the long Minnesota winter with the principal underlying reason to provide for more Minnesotans.

The use-leveling “peak pricing” plan is unrealistic because it assumes completely average weather and no delivery problems.  Authorities trust that in energy use and weather, Minnesota citizens are the same as in that most famous of Minnesota towns, Lake Wobegon, always merely average!

Furthermore, the reports state that as supply surpluses disappear wholesale fuel prices will increase.  Because supply surpluses do not exist even at this time, the consequences of a rising price policy were amply demonstrated during the winter and summer of 2001 and 2002 and continues into the summer of 2003.  Combining the quadruple whammy of the expense of constructing additional baseline generating and peaking facilities, consumer use pricing, and higher commodity costs of fuel supply, suggests that consumers will experience ratcheting higher prices in lock-step with increasing population driven demand —the California model is the Minnesota model.  Similar to the California model, the peak demand periods will be the period of highest prices and potential for supply disruptions.

Increasing prices and expanded restrictions on use are an expansion of government control and by any other name a reduction in freedoms and living standards.  State proposed energy policies, notably by the Department of Commerce and the Utilities Commission (the State proposal for NAERO) are excellent examples of the loss of freedom and control at a variety of levels.  Moreover, the construction of numerous small generating plants (natural gas) with limited siting review, a short-circuited approval process, and limiting environmental evaluation or public involvement are all indicators of the novel government approach.

Minnesota's (misdirected) attack on the automobile is another example.  The anti-automobile program is evident in reduced road building budgets relative to the needs, proposals for “car-free” days, and proposals for issuing expensive special licenses to drivers of single occupant automobiles but not commercial vehicles.  State policies are clearly evident today in such telltale disorder as increasing traffic gridlock.  Apparently, the goal is for congestion to become a permanent way of life in order to discourage automobile use.  Today, this practice is seen in the conversion of highway lanes into exclusive car-pooling or bus lanes (mandatory carpooling), government demands for “light rail transit” and toll road proposals.  Sadly, current state energy plans like the State Demographer's report, suggests the depth of state actions in order to maintain the status quo.

A simple and effective method of facilitating traffic flow would be to sequence traffic signals so that vehicles traveling the posted speed would not be stopped at every traffic signal.  California has had this practice for decades, functioning extremely well to enhance traffic flow.  It has an important additional benefit of significantly improving gasoline mileage.  The present “bunch and stop” method of traffic control wastes enormous amounts of energy.

With untold irony, “growing pains” was the descriptive term used to describe these developments in one state energy report.  These “growing pains” include reduced living standards and increasing restrictions on freedoms.  Further, it suggests that the California model will be the energy roadmap followed in Minnesota and that current proposals appear to begin with the de facto, if not actual nationalization of energy and authoritarian powers over consumer use.

The paper now examines the numbers involved in energy production and consumption and integrates growth projections with Minnesota energy requirements.
 

Minnesota's Future Energy Demands

In 1998 Minnesota produced a total of 1,419 trillion BTUs of energy and consumed a total of 1,261.3 trillion BTUs.  The difference between production and consumption are due to infrastructure losses.  Production and transmission losses are important because they indicate the total generation facilities necessary to produce the energy demanded.  Calculating the losses, the 1998 ratio is 12.5% (1.0 – (1,419 ÷ 1261.3) = 12.5%).

Table 16 depicts Minnesota energy production by source.  It demonstrates that about 92% of Minnesota energy is derived from non-sustainable sources, coal, natural gas, and oil.  More than two-thirds of Minnesota’s energy sources are in significant reserve decline (alarmingly so in the case of natural gas and oil) and increasingly dependent on foreign sources for supply.

Table 16:  Minnesota Energy Inputs By Source, 1998

Source

        BTU's

          Percent

Petroleum

641

45.70%

Natural Gas

322

22.69%

Coal

248

17.48%

Biomass*

98

6.91%

Nuclear

93

6.55%

Hydro

14

0.99%

Wind/Solar/Other

3

0.21%

Total

1,261

100.0%

Trillion BTUs. *Includes wood and burning of wastes. Data from Minnesota Energy Planning Report.
 

Indicating Minnesota's future energy demands, the following are historical rates of Minnesota growth for a variety of energy items (“real” means adjusted for inflation):

Table 17:  Minnesota Energy Growth by Consumer Class & Source 1970 – 1998

Energy Source

Percent

1970 – 1998

Normalized residential electric consumption

1.8%

Residential natural gas consumption

0.6%

Total MN natural gas consumption

(0.1%)

Normalized residential natural gas consumption

(0.2%)

Total MN petroleum consumption

0.8%

Real residential electric prices

(0.6%)

Real residential natural gas prices

1.2% 

Real total MN natural gas prices

0.5%

Real gasoline prices

(0.4%)

 

 

1987 – 1998

Total MN natural gas consumption

4.1%

Total MN petroleum consumption

2.5%

Data from or calculated from Minnesota Energy Planning Report.


The central theme underlying Table 17 is that prices have bottomed and are now in uptrends.  It is also evident from the growth tabulations that sometime in the 1980s a tidal change occurred; consumption increased at higher rates than previously and the apparent slack in energy reserve systems began to dwindle.  In some measure, Table 15 seen earlier (p258), reflects this growth.  With basic resource supply beginning to trail demand, energy prices rose, and sharply in some instances.  Discussed in Part I, few are aware or acknowledge that the substantial increases in use paralleled population increases, slow then rapid.

The fundamental energy pattern over the 1970 to 1998 period was that in spite of increasing demand, increasing rates of population growth, consumption was able to increase without price increases.  This was the sublime period for energy.  Chief among the price developments was the inflation adjusted price declines in primary energy sources (gasoline and electricity) and, until very recently, only nominal changes in natural gas prices.

The decline in the inflation-adjusted price of gasoline is consistent with the oil graph and descriptions seen earlier (Figure 5, p56).  More than any other single element, the decline in the real —the inflation-adjusted price of gasoline explains why gasoline consumption increased over the period.  Suggesting a range of possible prices today, if gasoline prices had increased at an inflation rate of 3% from 1970 to 2001 its price would be about $3.50 per gallon.  Even at the unheard of hypothetical price of $3.50 per gallon it would merely equal actual consumer prices paid three decades earlier.

Similar increases are likely in store for natural gas.  The price of natural gas has been inexpensive because of plentiful supply and competition between suppliers, primarily Canada and pipelines traversing the southern U.S. heartland and the Northern Natural, Viking, and Great Lakes pipelines.  Because the Viking (7% of Minnesota supply) and the Great Lakes (3% of Minnesota supply) pipelines are connected to Canadian sources it is likely these two companies will soon be confronting an uneconomic natural gas situation.  Due to unfavorable domestic natural gas supply, competitive pricing will soon diminish.  Of more immediate concern, Canada may be set to revise export policies and substantially raise prices and or actually limit exports of natural gas.

Because of the low historical price baseline and now rapidly increasing use of natural gas for generation of electricity (especially peaking facilities), the coming increases in Minnesota natural gas prices could be well above the national average.

The same low baseline price situation applies to the price of electricity.  Until recently, the substantial increases in inexpensive natural gas used to generate electricity forestalled substantial consumer electric price increases.  It also avoided the environmental consequences of using other fossil fuel based generating facilities (if pollution controls were downplayed).  Reflecting natural gas limitations, local prices could rise steeply depending on the relative contribution of natural gas to the local economy, local electric grid.  Because there is no local system-wide excess capacity to moderate costs and any additional generating capacity will come online at higher costs, Minnesota electricity price increases will be above historical trends and the national average.

In summary, the decades long period of flat or declining real prices encouraged use and masked the burgeoning Minnesota and the nation's population growth.  It also masked  implications of developing a sustainable society.  More recently, reality is asserting its inexorable omnipotence and as researchers foretold decades earlier, the large population increases and resource realities are now resulting in rising prices.  In the near future public discontent is likely.

The relative impact of rising prices and resource supply will parallel the use of energy by economic sector.  The potential for economic impact is demonstrated in Table 18 outlining consumer energy use by Minnesota economic area.  Not directly identified in the table is that the very large service sector of the economy will likely be as, or more, impacted than the commercial sectors.  Many of the service sectors are discretionary, thus consumers may chose to do without, reduce use, or do themselves.  Reductions in service sector activity will channel those funds into higher priced energy, savings, or into the purchase of goods.

Table 18:  Minnesota Energy Use by Economic Area, 1998

Economic Area

BTU's

Percent

Commercial

137

10.9%

Residential

212

16.8%

Industrial

450

35.6%

Transportation

462

36.7%

Total

1,261

100.0%

Trillion BTUs EIA data. See at < http://www.eia.doe.gov/emeu/recs/tables/enduse_consump.html >.


It is clear from the table that Minnesota’s transportation and industrial sectors will carry the burden of resource changes.

State and federal conservation and energy efficiency programs, however, focus primarily on residential consumer use.  It is unclear from Table 18 why residential consumers would be the focus of energy programs.  According to government data, overall residential consumers use approximately 17% of total annual energy consumption.  Therefore, targeting non-residential use will extend the life of reserves substantially more than targeting residential use.  If non-residential use assumed a higher, even disproportionate percentage of price increases then the effects would impact demand across a broad economic spectrum.  A phased in elimination of the tax deduction (20% each year) for energy, would be step leading to a sustainable economy.  It would place large energy users on par with the small residential consumer.  In this manner the economy would more effectively allocate reductions in consumption and energy use than a direct hit at the residential consumer.  A more effective energy cost reallocation would, for one illustration, be reflected in such items as overpackaging.

Moreover, the elimination of the energy tax deduction is an extension of Jevons and the conservation paradox (discussed in Part III) on an international scale.  Thus, reducing and re-allocating U.S. resource use creates a strong economy in the long-run; in the short-run it provides increased supply at less expensive prices to competitor nations.  Other than the initial transition years, this will have insignificant economic impacts over time.  Indeed, as the oil and natural gas production peaks and rolls over, those nations preparing early will have access to markets and options no longer available to late-comers.

The following table illustrates that natural gas is the preferred energy source for residential space heating.

Table 19:  Household Energy Sources for Space Heating, 1997

Energy Source

Percent

  Natural Gas

64.0%

  Fuel oil

19.0%

  Electricity

7.5%

  Propane

7.5%

  Other

2.0%


Competing directly with residential cooking and space heating, natural gas is also the state and nation's preferred source for electricity generation.  Because non-residential energy use greatly exceeds residential use (Table 18, previous page), increasing use of natural gas for non-residential purposes is a program that has not been carefully evaluated.  Although an energy transition must soon begin, an alternative to residential natural gas heating must be considered as improbable.

Due to rapidly accelerating demand, future supplies of natural gas will be less certain and, following the recent pattern of petroleum, price changes and supply disruptions will become pronounced.  Internalizing the full —or disproportionate— energy cost increases facilitates the economic adjustments toward a sustainable economy.  Unless existing pricing arrangements are changed the non-commercial user will be compelled to absorb a disproportionate share of coming price increases.  With residential natural gas prices already up to 225% higher than for other users, the public may consider different resource allocations and price priority important.

Because of its minor energy contribution and unreliability, the growth of windpower is not presented in the list.  In 1999 Minnesota produced about 800,000 megawatts (MW) of wind generated electricity.  Despite the considerable investments, the full current capacity of windpower is substantially less than the output from a single baseline generating plant.  Contrary to the script exalting its importance, windpower produces a miniscule fraction of Minnesota's total electric use.

Discussed under alternative energies, the rapid development of windcommerce is not consumer or market based.  Large-scale subsidies to existing utilities are involved in developing alternative energies.  Currently, windcommerce is being promoted by a 1994 law requiring Xcel Energy (Northern States Power) to obtain 425 MW of wind power and the Minnesota Public Utilities Commission has required another 400 MW of wind developments.  In addition to the earlier comments, it should also be said that the best available Minnesota sites are now in commercial development.  The development of these premier sites will make windpower comparisons as favorable as possible when studies of appropriate wind locations document that it seldom will be the case.

There are other areas of subsidy in the State proposals.  One seldom mentioned is the Renewable Development Fund paying Xcel Energy (NSP) $500,000 every year for each cask of waste nuclear fuel stored at the Prairie Island facility.  Although investors will potentially reap a windfall, these are not investor provided funds, but storage costs passed on to ratepayers through utility bills.  The money collected was to be placed into a special fund for the development of additional renewable energies.  The misallocation of funding sources and that none of that money has been spent or interest accrued requires legislative review.

State funding of alternative energies using utilities as the intermediary is a tool used to direct patterns of alternative and renewable energy development and may promote the interests of the utility rather than interests of the market or the public.  Because no state sustainability or sustainable energy study has been performed, the state is likely following the policy recommendations of special and vested interest groups.

Utilities and the Minnesota Dept. of Commerce promote the notion that it is more cost effective and sustainable to construct large natural gas peaking plants, windcommerce, and additional infrastructure than homeowner solar or wind developments.  Yet, homeowner solar power was successfully promoted by 1980s legislation operating to overcome market disadvantages.  The advantage of solar over windpower is that the days when it is most needed are the days it is most available, the coldest winter days.  With technology it can also be used on those suffocating hot summer days when windpower is less available to cool homes.  On the other hand, because non-residential use greatly exceeds residential electricity use it may be an unsuspected means of subsidizing the non-residential user.  It appears to be a means of maintaining the current status of utility companies as exclusive providers of energy.

Net energy studies indicate that neither wind nor direct solar power is an efficient use of resources.  Moreover, the full energy capacity available from standard baseline generating units is immediately available at any point in time.  In contrast, wind energy is measured over a period of time (and unavailable much of the time).  This is especially noteworthy when considering the energy payback relative to energy invested (energy returned on energy invested).  With typical oil and gas generating facilities the return ratio has been in the 20 to 40: 1 range.  Windcommerce returns, because of lower efficiencies, output has an energy return ratio in the 3 to 4 : 1 range.  Moreover, when considering all factors, the net energy produced is frequently negative.
 

Minnesota's Energy Growth & the Price Tag

If Minnesota (and the U.S.) are to have a bright energy future, it will be necessary to replace some forms of current energy sources at this time, with the certainty of substantially replacing energy systems within 10 to 15 years.

Assuming no growth of the current Minnesota population, 963 trillion BTUs of energy will require replacing, 641 trillion BTUs of oil and 322 trillion BTUs of natural gas.

45% of total Minnesota energy types —oil based— require substantial replacement within ten years.  Over less than a 20 year span, the replacement of two-thirds of Minnesota's current energy sources (oil and natural gas) will be necessary given the population and use as of 1998.  Three years have elapsed since that data was compiled and the population has increased by over 200,000 and energy use by another 5% or more.  The implication is that either the Minnesota standard of living will decline commensurately or proportionately more facilities constructed and consumer price rises accordingly.  Because the underlying issue is energy resource availability, increasing construction of new plants and infrastructure exacerbates use, brings forward in time the critical nature of resource reserves, and reduces resources for future generations.  Similarly, conservation programs have proven counter productive and under current practices, overtime serve to increase consumption.

 

In 1998 Minnesota's 4,782,745 inhabitants required a total production of 1,419 trillion BTUs of energy, an average of 29.67 million BTUs per person.  Table 20 illustrates the energy replacements necessary based on 1998 average consumption.  The table uses Census and the author's population projections —recall from Part I that these projections have a high probability of understating actual growth.  Using the Census Bureau's Series B “higher” projection (left side of Table 20) and the growth projections presented in this paper (including modest illegal immigration) produces the energy requirements illustrated in Columns C and F in megawatt hours (Ex.: 2010: 5,414,000 x 29.669 = 1,606 million BTU's).

Table 20:  Population Growth & Projected Energy Demand

Year “B” Census Population Energy1

(MW)
Yearly  Change Projected Population Energy1

(MW)
Yearly  Change
 A B C D E F G
2005 5,014,000 1,488 0.69% 5,299,676 1,572 1.54%
<2010 5,414,000 1,606 1.59% 5,709,256 1,693 1.54%

2015

NA

 

 

6,150,490

1,825

1.56%

2025

5,778,000

1,714

0.44%

7,137,895

2,118

1.61%

2050

NA

 

 

10,356,695

3,073

1.80%

2100

NA

 

 

21,803,355

6,469

2.21%

2150

NA

 

 

45,901,348

13,619

2.21%

1. Based on 1998 energy use, million BTUs (MW). Definitions: gWh: 1 billion watts; MW: 1 million watts; kWh: 1,000 watts.
 

The average yearly change to 2005 is from the year 1998 while the other time period changes are from the 5, 10, 15, 25 or 50 preceding year periods.  The overly conservative Census projections are equally reflected in overly conservative future energy demands.  Using the Census numbers in Columns B, C, and D implies that the rate of Minnesota's energy use will increase an average of approximately 0.7% per year to 2025 —less than a third of actual trends.  Recall state energy studies confirm that Minnesota averages growth in annual energy use of approximately 2.2%.  Thus, a reasonable yet conservative projection of energy use is apparent in the rightmost columns, F and G.

Using the energy inputs by source in 1998 produces the additional construction cost by energy source in Table 21.

Table 21:  Projected Construction Costs & New Generation
Under the Status Quo Growth Scenario ($000,000)

 

Year

2005

2010

2015

2025

2050

2100

2150

1

MW Required

1,572

1,693

1,825

2,118

3,073

6,469

13,619

2

Petroleum

NM

NM

NM

NM

NM

NM

NM

3

Natural Gas

707

500

NM

NM

NM

NM

NM

4

Coal

236

254

538

659

NM

NM

NM

5

Coal/gasification

236

289

537

200

NM

NM

NM

6

Biomass

79

150

250

300

?

NM

NM

7

Nuclear

157

NM

NM

NM

NM

NM

NM

8

Wind/Solar/Other

157

500

500

500

NM

NM

NM

9

Total Cost

$1,568

$1,899

$2,586

$2,366

$690

NM

NM

10

MW Deficiency

0

0

0

(459)

(2,773)

(6,469)

(13,169)

NM: Not Meaningful. (Cost = $0.xx/kWh or BTU). Construction cost estimates per MW of generation in Table 20 (p270), Column F: Petroleum: $1,050; Natural Gas: $475; Coal: $1,200; Coal/gasification: $1,425; Nuclear: $1,550; Biomass: $2,200; Wind/Solar/Other: $1,200.


The table was developed using a computer model optimizing construction at minimum costs, given resource constraints.  The original 2005 optimization included 79 MW of petroleum.  The computer program was manually overridden to add this amount to natural gas because no petroleum fired generating facilities are appropriate for the mix of boiler fuels and the forecasts of natural gas construction appeared to understate actual estimated and budgeted construction.  The remaining periods were rounded and modified to better match resources and demands.

Table 21 represents the energy investment costs of growth.  Replacement of retired plants, operations and maintenance are excluded to reduce complexity.  Also not considered is a safety reserve margin ―normally 20%.  Thus actual expenditures will be much higher than these figures and increase as indicated.  Nationally, with more than 100,000 MW of electrical generation facilities over 40 years old, the costs of replacing aging generators will approach 50% of the cost of new construction.  Construction costs are not equal to consumer costs, but certainly are a significant cost factor.  Embedded in the calculations are existing consumer conservation programs and cost efficiencies.  Increasing productivity is assumed to equal construction inflation.

It is important to understand that these amounts are for construction of additional generating facilities exclusively due to growth in Minnesota.  The Mid-Area Continent Power Pool (MAPP) is larger, composed of the states of Minnesota, Iowa, Nebraska, South and North Dakota, the western half of Wisconsin, and a small area of eastern Montana.

The Mid-Continent Area Power Pool, as mentioned in Part II, estimates the Upper Midwest region could have a shortage of 5,000 Megawatts of generating capacity within three years, before summer 2006.  This is equal to five large baseline generating plants.  Only about 2,000 MW of the 5,000 MW (5-gWh) need are considered in the above table, or approximately two intermediate sized generating facilities.  The 3-gWh balance is for replacement of aging generating plants and due to construction is in phases with large generators built at each stage.4

Over the next 20 years MAPP anticipates that regional electrical generation will climb at an annual rate of 1.4%.  Table 20, Column G shows Minnesota average increases greater than the average MAPP increase.  On the one hand, it likely indicates overly optimistic (understated) average demand growth.  On the other, it likely reflects Minnesota’s faster rate of growth compared with the MAPP region.  MAPP projects that consumer sales at the same time are expected to grow at a 1.5% annual rate with much of the increase in transportation use with commercial sales also a significant factor.  Of some interest, the EIA forecasts declining prices over the 20 year time period.  Consistent with the EIA, MAPP projects electricity costs for transportation will decline at a rate of 1.2% per year with other uses declining about two-thirds that rate.  With the U.S. population projected to increase by more than 80 million over this period and the MAPP area growing commensurately, the MAPP data are clearly inconsistent with resource and growth trends.5

Nationally, no significant baseline coal unit is scheduled to be retired in the next 20 years.  The national data includes the MAPP region and its several antiquated coal plants.6  Because of the lack of momentum, the generation of electricity from coal cannot ramp-up sufficiently to satisfy demands.  However, because of looming natural gas constraints, the construction of coal-gasification facilities will help bridge the natural gas requirements.  The importation of LNG or tar-sands conversion or other alternative source of natural gas must be considered minor, expensive, and unsustainable contributors to meeting energy demands.  Coal-gasification plants may be the lifeline of the energy transition to a sustainable society.

Under the growth-as-usual scenario seen in Table 21, natural gas assumes an increasing role for as long as possible.  Replacement and maintenance of the substantial generation capacity from natural gas over the past decade is not evident in the tables, but will be significant.  Providing a rapidly diminishing fuel source explains why no additional natural gas plants are possible within this decade.  The projected use seen above is worrisome; however, it substantially understates current generating plans discussed earlier under “natural gas”.  Thus, further reliance on natural gas will lead to a somewhat surprising and unsatisfactory conclusion.  Although much more severe and earlier under the growth-as-usual scenario, there will be a natural gas squeeze under either scenario.  The coal-gasification plants in the tables are a recommended means to moderate the natural gas crunch and relieve some of the tensions of residential heat and industrial consumer needs.  A prudent alternative would be to halve the proposed natural gas generating facilities and replace them with coal-gasification plants.  The change would add energy flexibility and greatly facilitate the necessary energy transition.

Biomass is an unknown.  All current forms, ethanol and biodiesel in particular, are expensive and significant users of energy resources —net energy sinks.  Because of land and energy resource constraints, biomass utilization will likely peak before 2025.  Thus, the quantity of energy from biomass subsequent to 2025 is uncertain.  Although the table reflects an increase (due to implied technological improvements), in reality biomass energy may peak before 2020, then decline.  The suggestion is that it can only play a minor energy role.  Biomass should be a major contributor to a sustainable society.  However if its potential is to be realized, technological breakthroughs equal to solving the fusion question of nuclear power must be discovered to overcome the physics of processing losses.

Throwing money at ethanol and biodiesel compounds the difficulties.  A significant percentage of those sums are more appropriately invested in biomass research.  Recall from discussions on alternative energies that an energy sink wastes energy, is expensive, and by definition and practice, non-renewable.  Nevertheless, there is considerable political momentum in place.  The biomass energy increases seen in the more distant years are due to anticipating significant improvements in biomass energy efficiencies ―improved energy returns for energy invested.  It may turn out to be an overly creative expectation.  Similar arguments hold for windcommerce.  Significant windcommerce developments are now underway and the projections in the table continue the trend.  Again, the presumption is made that higher overall efficiencies will develop.  Without the increase in coal generation and significant increases in wind generating efficiencies, windcommerce will not be possible.

Perhaps the most significant aspect of Table 21 are the “NM” notations.  They represent factoring-in available resources over the life of the generating facility.  It is clear that petroleum as a source of boiler fuel is no longer practical; the same holds true for nuclear energy.  Within ten years, natural gas will no longer be an appropriate source of electrical generation as well.  Indeed, to provide for future generations, several current natural gas facilities should be decommissioned before 2010.

The other outstanding feature of the growth-as-usual scenario is the bottom “deficiency” line.  Within 10 to 15 years available resources will begin to significantly restrain energy production; a substantial energy deficit is unavoidable under existing growth patterns, technology, and programs.  The decline picks-up momentum thereafter.  As the table implies, believing that a miraculous technological “fix” such as improvements in productivity will overcome the decline is more an article of faith than science.  The decline may be moderated, but is irreversible without a magic formula.  Population growth will overwhelm magic as well.  In the very near future, at the latest between 2010 and 2015, the Minnesota standard of living will be severely impacted.

Not only will additional generating facilities not be constructed, but for the same reasons, replacement of existing facilities will generally be forgone.  Replacement of existing facilities is a monumental task: all existing windturbines, natural gas, and nuclear power plants will require replacing before 2020 —many before 2010― as well as the replacement of several coal fired plants in the same time frame.  The lack of replacement facilities will likely be in proportion to the construction increases seen in Table 21 (p271), line1.  In other words, the necessary cost of construction under the current growth plan is not $1.6 billion within five years, but twice or three times that sum.  Likewise for 2010, in addition to the $1.9 billion cost of new construction will be an equal or greater cost of replacement of current generators.

In order to maintain Minnesota's living standards under the current growth scenario, between $250 and $500 million, or more, of power generation construction is required every year for the foreseeable future.  The mind's eye has extreme difficulty comprehending that the staggering construction needs in the near term, as lines 1 & 9 demonstrate, actually increase over time.  Unless a magic wand is discovered that could provide the resources and funding for this level of construction, it would be difficult to conceive of a plan that could come remotely close to matching the needs.  Under the growth scenario, widespread “brownouts” are closing in at this time, with summer blackouts and winter heating allocation restrictions just around the corner.

In other words, the programs and generating facilities underway in the next approximately 5 to 15 years, will be the mainstay of the Minnesota economy and standard of living for a considerable period of time, for generations.  The table makes transparent the consequences of the growth scenario and how awesome are the energy and living standard effects even based on 1998 data.  Looking out less than 50 years to the year 2050, substantial resource and energy deficits are evident.  In addition to replacement energies not included in Table 21, the substantial energy deficits in new construction will have grave implications for living standards well before 2050.  The state and Metropolitan Council’s promotion of growth out to the year 2030 is ill considered.  The date 2050 reminds us that stopping population growth and energy demands generally requires a minimum of 50 years.  Minnesota and the U.S. are nearly four years into that period, yet continue to promote growth as usual.

Finally, based on the very conservative (low) growth estimates used in the projections and consumption data based on the year 1998, these construction and demand estimates are generous in their understatement.  Following the Precautionary Principle implies that all of the above periods should be shifted five years earlier.

Whereas Table 21 illustrates the effects of current policies, Table 22 adjusts current policies and growth assumptions in order to describe a road leading to sustainability.  Table 22 applies actual per capita average year 2000 Minnesota electricity use with the low Minnesota population projection from Figure 2 (p20).  The adjustment process then removes 100,000 illegal aliens estimated in Minnesota and reduces annual immigration by 20,000.  The 20,000 figure eliminates a significant portion of legal immigration and attempts to deal with a reasonable percentage of illegal immigration.  As discussed earlier, 20,000 may be too low an estimate by more than 50%.  Reductions in fertility given in the low population projection are consistent with recent fertility of Americans excluding immigrants.  In other words, Table 22 projects Minnesota residents including lawful immigrants and their offspring and their energy demands from the year 2000.  Most Minnesotans would agree that this projection is reasonable and surprisingly uncomplicated; indeed once Minnesota residents are fully informed —as the nation realized in the early 1970s— citizens may further reduce fertility if the future for their children appears to warrant the change.
 

Table 22:  Projected Construction Costs & New Generation Under
a Sustainability Scenario
($000,000)

 

Year

2005

2010

2015

2025

2050

2100

2150

1

MW Required1

751

1086

1,208

779

(4,943)

(9,543)

(10,706)

2

Petroleum

NM

NM

NM

NM

NM

-

-

3

Natural Gas

200

NM

NM

NM

NM

-

-

4

Coal

300

400

500

300

NM

-

-

5

Coal/gasification

-

300

350

279

NM

-

-

6

Biomass

50

150

150

100

NM

-

-

7

Nuclear

NM

NM

NM

NM

NM

-

-

8

Wind/Solar/Other

201

236

208

100

NM

-

-

9

Total Cost

$811

$1,536

$1,693

$1,108

NM

-

-

10

Deficiency2

-

-

-

-

(4,943)

(9,543)

(10,706)

1 Assumes average Minnesota kWh use: 12,711. Calculated as follows: 62,533 gWh used in the year 2000 with Minnesota population of 4,919,479; then 62,533 gWh ÷ 4,919,479 = 12,711 kWh. 2 “Deficiency” is positive here; capacity not needed.


Two features evident from comparing Tables 21 and 22 are that under a sustainability scenario program significant growth continues for decades, yet the benefits of reduced construction costs and resource consumption are immediate and lasting.

The demographic fact that Minnesota population growth has momentum is clearly evident in the growth of energy demands for almost 20 years after a sustainable population policy is implemented.  The identical situation would prevail for the nation.  In other words, those who argue that growth would quickly cease or go in reverse and present insurmountable economic or other problems, have no support in the data.  The analysis reveals that a prompt implementation would result in diminishing energy demands in the near term by one-third to one-half.  The savings in dollars of construction, higher consumer prices, and resources made available for future generations are clear from the table.  The beneficial effects of weakening demand become evident in approximately two decades.  Thereafter, demand growth begins to decline.  With other policy changes, society could be on the path to sustainability.

Unlike the previous scenario where replacement facilities are increasingly uneconomic and maintenance and other expenses rising, with the sustainable scenario the replacement of current generating facilities will be reduced and other expenses markedly lower as well.  The dollar and energy resource savings are greater than the additional construction costs illustrated in the Table 22.  Again, the reduction in prices and increase in resource savings will be proportionate to the demand declines seen in Lines 9 & 10.

The reason for increasing significance of coal generation is that coal is an efficient energy producer with adequate reserves.  With modern pollution technologies it can safely contribute to sustaining society for several generations.  Its consumer price however, will be higher than previously.7

The original 1999 construction cost data was adjusted to reflect the changing purchasing value of the dollar using the Gross Domestic Product (GDP) price deflator.  Because inflation adjusted cost data presents a more accurate picture of the actual cost or value of the physical good or service, the 1999 data was adjusted to reflect 1st quarter of 2001 prices and rounded to make reading easier.8  Rounding also considers the imprecision of future projections.  The use of a constant 2001 dollar was used to estimate future construction cost.  To make an estimate of inflation over the long period of construction would have added another layer of complexity without providing a matching increase in information.

Nor is present value analysis (PV) performed.  Unless the objective is to determine future or additional tax increases it is simply not appropriate in government circumstances.  PV takes the form of asking “what investment today will produce an estimated sum in the future”— construction of energy facilities in this case.  The calculation begins with the future amount and discounts it to the present using a discount factor as a percent.  Because it assumes compounding growth of today's investment its use is not appropriate.  There is no construction fund set aside today and no compounding possible.  To set aside (tax) money today would imply raising taxes (or issuance of bonds) at this time with the funds slated for use at a much later date.  The process would be a departure from the regulatory rule that users pay for their services.  With a fund-now-use-later device, future consumers would be subsidized by current rate and taxpayers.   Compounding is not possible, as any number of government programs testify to, because any assumed rate of return is fiction —the “return” is merely the compounding of taxes penciled into a state account and a growing liability which would be realized in additional taxes at the time of construction.

The state bond rating will likely be jeopardized as well.  If the state issues construction bonds for energy generation, the substantial dollars involved will tend to raise state interest rates, lower the state credit rating, and squeeze out funding for other public programs.  How seriously the state bond rating is compromised depends on which of the two scenarios are implemented.  From a financial perspective, it is relatively unimportant whether the bonds are issued incrementally as smaller projects or as large baseline facilities are constructed.  Although a larger plant may temporarily affect the Minnesota bond market, over any period of time the differences will be minimal.  The point is that with the potential magnitude of construction, the state interest rate and credit rating could come under review by bond agencies.

The Minnesota public and its policymakers should understand that current state energy proposals are less a down-to-earth solution than a continuation of the philosophy that there are virtually no limits to resources and that technology will prevail under any circumstances.  These assumptions are based on faith; policymakers are betting the future Minnesota against science.  Under the current growth model, the consumer pays for higher energy prices and higher taxes while receiving fewer benefits.

There appears to be two pricing methods at work —gradual and crisis.  OPEC, individual governments, and the oil industry appear to favor the gradual approach, the boiling frog approach, increasing prices slowly over a period of time.  The gradual approach minimizes the immediate economic consequences while allowing time to adapt to modest changes.  It also serves to limit the development of alternative energies.  Perhaps the most discouraging aspect of the gradual approach is that it tends to lull the public and policymakers into inaction.  The end result —like the frog metaphor— is to create the scenario they seek to avoid, a worsening crisis.

John Gever, et al, in a 1991 book, studied the consequences of delaying action.  The study concluded that the gradual approach ended in crises and untoward repercussions.  However well intentioned, conservation or efficiency is an insufficient and inappropriate approach unless the underlying demand drivers are constrained.  Because the existing energy infrastructure is completely built into the economy, it requires a considerable period of time and effort to forge a transition.9  In order for the “gradualism” approach to be effective, the time horizon for full policy implementation must be relatively brief.

Ironically, the gradual approach would be appropriate if the underlying energy drivers were targets of policy and prices were free to reflect changes in the underlying consumption factors.  The crisis method is the California example.  Policymakers take note: waiting for a crisis to drive change implies that the momentum of the underlying causes, primarily growth, will progressively negate the value of and limit the possibility of remedies.

If reallocating energy and other resources is accepted, implementing rigorous, if not unpopular, energy conservation practices will help provide the wherewithal to accommodate a meaningful transition.

The energy transition requires substantial amounts of energy to replace aging plants and to construct the additional plants to match consumer growth.  In addition to increasing trendline use, the replacement of existing plants requires additional energy prior to energy production from new facilities.  Delay is a double-edged sword, serving to increase the costs of construction of additional generating facilities and infrastructure while increasing the energy resources required accomplishing those projects.

Based on extensive roles played in prior decades, it is reasonable to believe that government planners, and environmental and resource based organizations would be in the forefront of the resources and growth movement.  However, their response today has either been muffled or like the Minnesota plan, is to promote growth, only that it be “smart”.  Thus, national environmental and the government's “smart growth” approach and its consequences is the final item to be discussed.  The conclusion of this paper is that the only “smart growth” is the slow-growth approach to sustainability.
 

The Government & Environmentalists’ Response: “Smart Growth”

Population growth is the most important environmental issue.
Senator Gaylord Nelson. Founder, Earthday, April 22, 1970.


In prior decades, the individuals and organizations engaged in environmental protection and preservation of biodiversity provided the vitality and sustainability research sought by policymakers and media.  Their programs were the vanguard to achieve a sustainable U.S. society.

Today, lack of environmentalist sponsorship implies that government policymakers, journalists, and the public receive little, if any growth related information and that avenues of communication within environmental organizations are restricted to peripheral issues.

Restricting information content implies that when mentioning U.S. “sustainability” environmental organizations and governments ignore half the environmental equation.  Indeed, major environmental organizations such as the Sierra Club, Audubon, and the Izaak Walton League assume the U.S. is sustainable at this time and will continue to be over the indefinite future —with its projected two or three more population doublings.  In part, it explains the observations seen under the “managing data” discussion.  It certainly helps explain why some find it difficult to integrate U.S. energy, environment, resource and other concerns with growth.  Unfortunately, the lack of information implies that environmental, resource, and growth decisions are frequently based on limited and often inaccurate perspectives.

Although research and informed essays are written and published, they receive little environmentalists’, government, or media attention.  When essays are reviewed or articles are published the reporting is often overly subjective in nature and data frequently mismanaged.  Yes, according to media researchers, a portion of the silence is conspiratorial in nature.  However, a more fundamental reason according to media research by Dr. T. Michael Maher (“How and Why Journalist Avoid the Population-Environment Connection) is that national environmental organizations made sudden policy reversals that left journalists and public policymakers without support or sources of information.10

Perhaps major environmental organizations are more similar to the corporations they often disdain than they care to admit: more growth implies more members, revenues and more prestige for their administrators.  Mainstream environmental organizations, one environmental analyst writes, “came to resemble the corporations they opposed.”11  A cynic might also think that growth also produces higher stock markets and, ergo increased foundation grants and donations to the large mainstream environmental organizations.

The policy about-face does not appear to be environmentally based.  The environmental tradition was that growth is both economically unsustainable and environmentally disruptive.  Environmental organizations beginning in the early 1990s unexpectedly began to avoid discussion of U.S. population growth.  The well-known population organization ZPG, “Zero Population Growth” (in 2001 renamed, “Population Connection”) was the first environmental organization to transition its U.S. objectives; not living up to its name, in a bizarre reincarnation, ZPG's policies were transformed overnight into promoting U.S. population growth —assuming a foreign perspective.  Likewise for the Sierra Club, Audubon, Izaak Walton League, and the National Wildlife Federation who almost simultaneously turned their backs on stopping U.S. population growth.  The Wilderness Society is under the gun by the same forces yet have, thus far, maintained an ecological and U.S. environmental focus.12

The Sierra Club best represents the essence of this change.  For many years the ecologically based Sierra Club was alarmed by the environmental implications of U.S. growth.  The Sierra Club's population policy in 1969 stated “the Sierra Club urges the people of the United States to abandon population growth … and to achieve a stable population no later than the year 1990.” [emphasis added]  Although the U.S. stance was still meaningful, in 1995 it was weakened and the policy broadened to include a specific statement about the world, “we must find, encourage, and implement at the earliest possible time the necessary policies …that will... bring about the stabilization of the population first of the United States and then of the world.”  Less than a year after the 1995 policy change, the Sierra Club began to eliminate any mention of U.S. population from all programs and internal operations.13

Indicating the depth of the revolutionary change and loss of democracy within the Sierra Club, in 1996 the Sierra Club issued its infamous “gag order” prohibiting any member of the Sierra Club acting on its behalf from promoting an immigration position.  In applying the revolutionary edict the Sierra Club eliminated its U.S. Population Committee and replaced it with a population committee focusing on global issues.  Staffing of its novel global population committee included a number of immigration rights activists —its new chair was the president of an immigration “rights” organization.  In addition, all Club sponsored Board of Director candidates were required to pass the litmus test of a global outlook for environmental issues involving population.  The same litmus test has been applied to screening prospective national Board of Director candidates selected by the Club. (See Beck, 2000 and CIS paper 18, 2001.)

The Sierra Club's extraordinarily novel position is that America's environmental predicaments and immigration driven population growth can be remedied by first fixing the “roots” of the world's problems, then the problems related to U.S. population growth will solve themselves.  ZPG (Population Connection), Audubon, National Wildlife Federation, and the Izaak Walton League are also following this peculiarly non-environmental position.  Equalizing living standards of the U.S. with the world, they now declare, will eliminate the economic “roots” driving people to move.  No mention is made why they should move to the U.S. nor concern for Americans (and Western nations) or their unique environments.

Major environmentalists’ (and government) U.S. growth program is threefold:

1.  Attack its symptoms, notably the distribution of growth, “smart growth”, rather than its numbers;

2.  Focus effects of growth on consumption (reduce the U.S. standard of living); and

3.  Distort U.S. involvement in global pollution.

Mainstream environmentalists now ignore the fundamental sustainability equation, the well known

Equation: Impact = Population x Affluence x Technology (I = PAT)

In a nutshell, the environmentalist and government “sustainability” plan has been truncated to I = AT.  The narrowed formula approach is also characteristic of the Governors’ and Minnesota plan: to increase population density without limit while ignoring many of the consequences.

The mechanism used by these organizations is to affiliate with civic, government, and industry development organizations involved in city planning.  The Sierra Club, for example, is now working in unison with its formerly bitter enemies, the National Association of Home Builders, Bank of America, and the Chamber of Commerce.

There are two aspects of “P” (population growth): the growth in numbers and its distribution.  The catchy name for continuing population growth and development has taken the appellation “smart growth” or sprawl control.  Is controlling sprawl or as it’s properly termed, population distribution, a credible approach to sustainability?

There is no doubt that financing interests are involved in the program’s design and implementation.  The McKnight Foundation, for example, is funding the “Green Space – Smart Growth Citizen Project”.  In this regard, the Sierra Club recently released its third sprawl report, “Sprawl Costs Us All”.14  In keeping with its non-U.S. population policy, the report again neglected the major component of sprawl —population growth.  In Minnesota, encouraged by the Sierra Club and local Audubon Society, the state established a far-reaching “smart growth” network to promote its agenda: the “NextStep” and “1000 Friends”.  The network has no natural resource specialists and few environmentalists, but is overrepresented by real estate and related developers, financial institutions, and social activists.  The Sierra Club and the State of Minnesota with its “smart growth” network has chosen the non-environmental approach, puzzling environmentalists and the nation.

Common sense argues that this policy is temporary at best.  Worse, it misses the overriding issues former environmentalists, the Sierra Club, and previous government studies understood and championed —the life scientist’s, ecologist's approach, that of achieving a U.S. population level in balance with the ability of resources to sustain it given acceptable pollution levels while maximizing biodiversity (other life forms).

Regarding the position of major environmental organizations and government planners toward regional planning, Dr. Albert Bartlett clarifies the quintessential elements of their thinking in stating,

Smart growth destroys the environment.

Dumb growth destroys the environment.

The only difference is that ‘smart growth’

Destroys the environment with good taste.

“It’s like booking passage on the Titanic.  If you are ‘dumb’, you go steerage.  If you are ‘smart’ you go first class.  But either way, the result is the same.”  Dr. Bartlett concludes with great insight and humor saying that “smart growth is a means of making unsustainability as pleasant as possible.”15

The irony of the Sierra Club's sprawl position is that the Club is headquartered in massively growing and sprawling California.  Interestingly, the findings of a California sprawl research report were released prior to the release of the Club's sprawl report —yet were ignored.  This research study concluded, like the increase in energy use discussed earlier, that 95% of California's sprawl is attributed to population growth.16

A similar research report evaluating Minnesota sprawl was released in November 2000.  The same researchers examined three periods, 1970 – 1990, 1970 – 1980, and 1980 – 1990 using data from the U.S. Census Bureau’s Delineation of Urbanized Areas from the related censuses (1990 is the most recent year available).  One trend discovered was that more sprawl was apparent in the 1970s than later periods.  In the 1980s, however, population growth was linked to increasing sprawl more than rising land consumption.

For example, the report found that during the 1970 – 1990 period, growth was not a contributor to sprawl in the Duluth area.  On the other hand, the entire amount of sprawl in St. Cloud from 1980 to 1990 was explained by population growth.  Consistent with changes in Minnesota's rate of population growth the study found that cities that were already urbanized in 1970, 54% of 1970 – 90 and 100% of 1980 – 1990 sprawl was associated with population growth.17

On March 19, 2001, a landmark national sprawl study was released, “Weighing Sprawl Factors in Large U.S. Cities”.  Confirming the prior research, this study reported that the Minneapolis/St. Paul area ranked tenth in sprawl of the hundred major cities examined over the 1970 – 1990 period.  The study concluded that even under intelligent planning, nationally on average, population growth accounts for half of sprawl with land use decisions the remaining half.18

In addition, another study examined the net costs (benefits less costs) of population growth in Minnesota.  This study found that on average each increment of Minnesota population cost approximately $16,100 more than received in financial benefits (environmental consequences, traffic gridlock, et. al are substantial but were not considered).  The costs in several specific cities were found to be $15,700 for Duluth, $16,100 for Rochester, and for Minneapolis/St. Paul, $16,600.19

Neither of these studies examined the relationship between energy, energy resources, and costs of growth.

Of course there is a better response to “smart” population growth.  Since the problem is one of too many people rather than a shortage of land or energy, the solution does not lie in compelling folks to live where and how the government chooses —New York's Manhattan Island apparently is their gold standard.

The first and best solution would take the form of a comprehensive sustainability study.  A comprehensive sustainability study offers policymakers and the public the demographic, ecological, and economic data which would be used to select policies consistent with Minnesotans' vision of a sustainable future.  What are sustainable agriculture, transportation, energy, and population policies?  This paper offers an energy approach and poses answers to these important questions.  With an approximate expenditure of $25,000, cost is not a factor.  Other states and cities have already conducted this crucial study.
 

Concluding Comments

I'm talking about something much more extraordinary than has happened in MY lifetime, which has included the birth of television, the splitting of the atom, space travel, and instant, global communication via the Internet.

 

I mean something REALLY extraordinary.

 

During your lifetime, the people of our culture are going to figure out how to live sustainably on this planet ―or they're not.

 

Either way, it's certainly going to be extraordinary.
      Daniel Quinn, 2002
20


Traveling in one direction anywhere on earth, one returns to the starting point.  The Earth is a sphere, biologically and economically an ecosphere, a closed system that is sustainable when people and energy use are matched with the Earth's systems.  The sustainability and imbalances of these systems has been the subject matter of this paper.  Exhausting current energy resources with the faithful intention to replace them with alternatives avoids the overriding issues.  How society deals with these systemic issues is a matter of choice.  The choices are complex socially and technologically; but decisions must soon be made.

Alarmed at the population, resource, and environmental imbalances, in 1992 both the U.S. National Academy of Sciences and the Royal Society of London warned in a joint statement that “if current predictions of population growth prove accurate and patterns of human activity on the planet remain unchanged, science and technology may not be able to prevent either irreversible degradation of the environment or continued poverty for much of the world”.

Unmistakably echoing the Olduvai Theory, these renowned scientists a decade ago concluded that “... the next 30 years may be crucial.”  Ecologically based environmental organizations embraced that position ―all of the major environmental organizations promoted U.S. population stabilization.

The economies of the U.S. and all Western nations are based on abundant and inexpensive natural resources and energy.  However, those resources are in decline —oil, natural gas, coal, nuclear, and water.  Science and common sense suggests that without arresting growth in Minnesota and the U.S., domestic energy problems and social hurdles will began to mirror those commonly associated with less developed nations.  Unfortunately, mankind's ingenuity implies that resources will increasingly be consumed by current societies rather than modifying internal policies and practices to provide for future generations.  The social and political ramifications of this unwillingness or inability to change include levels of regulation not previously experienced in democratic societies.  In a generally free society with high lifestyle expectations, the uncommon environmental and economic repercussions will likely invite political instability.

As the world graph illustrated, the world situation is equally disturbing.  The earth will add another one to two billion inhabitants in the same time frame that essential energy resources will both absolutely and relatively be less than at any time in history.  World oil production is peaking and will soon commence its inexorable decline and natural gas will follow a steeper decline than oil in the very near future.

Alternative energies are the technological fix attempting to circumvent the growth issue.  Evidently unaware that formerly technology was viewed as a problem, environmental organizations are now allied with industry and government in promoting the “technological fix”.  The search for alternative energy requires focusing on the most energy efficient processes, selecting those that meet the efficiency test and that seamlessly merge into the existing infrastructure.  Alternative energies will assist in the transition to a sustainable society only if (and it's an important “if”) status quo policies and practices are redirected toward achieving a rapid transition to a sustainable society.

Coal may bridge the gap in the U.S. but at rising consumer costs; nuclear power is limited by basic resources and carries an insurmountable albatross —its wastes; the use of alternative energies will expand but nonetheless remain minor energy contributors ―this is true even at remarkably higher consumer prices.  From an energy policy viewpoint the population to resource imbalance signifies that future uses of coal, alternative energies, and especially the availability of natural gas, must be very carefully planned rather than left to the vagaries of short term market forces.21

Dr. David Pimentel sums up the U.S. situation stating,22

With a population of 40 to 100 million, the United States could become self-sustaining on solar energy while maintaining a quality environment, provided that sound energy conservation and environmental policies were in effect to preserve soil, water, air, and biological resources that sustain life.

The greater the number of people residing in Minnesota or the U.S., the greater the use of energy, the sooner problems develop, more intractable the solutions, and serious the consequences.  The arithmetic of growth conclusively demonstrates that even with existing and planned conservation efforts, a wildly imaginative doubling of all known and anticipated energy resources and construction of associated facilities would only extend current energy use patterns another ten or fifteen years at most.  If accomplished in unison with the implementation of a comprehensive U.S. sustainable population policy, enhanced conservation and efficiencies will provide greater short-term benefit than the construction of additional energy facilities.  Indeed, the construction of additional facilities will increase energy use today, decrease the life of remaining resource reserves, and subject the next generation to lower standards of living.

Unless policies are quickly altered, a child born today before entering middle or junior-high school will have to walk or ride a bicycle to a school that also requires its students to wear cold-weather clothing indoors.

It was Minnesota writer Lawrence Winans that said “as you sit in your next traffic jam, waiting for access to the highway, or in attempting to make it across town for that very important meeting, just think: Did anyone ever ask you if you wanted to share your community with another 500,000 people (in 20 years)?  More cars, more homes, more pollution, more strip malls, more traffic jams, more of just about everything.  Smartest growth for burgeoning Twin Cities would be no growth at all.  With less oil, we will be able to support a much lower population than we are currently capable of doing.”23

Adapting to the required changes, including a responsible slow-to-no-growth population policy, is an economically and politically difficult political decision.  However, the alternative is not a realistic option.  The public must be apprised of the situation. 

If a presumed lack of population growth is the underlying economic assumption, under current policies the U.S. (and Canada and Australia) are condemned to unrelenting population growth.  Common sense and the 2nd Law of Thermodynamics dictate that at some point stopping growth ceases to become an option —physics and nature have a readymade plan.  The folly of the unlimited population-economic philosophy is that it assumes economic growth requires ever-increasing numbers of people and that there can never be enough people.  Since technological optimists won't acknowledge a restraining point will be reached (“build more transmission lines; more generating plants”), it leaves Minnesota (and the U.S.) to grapple with the serious consequences of the situation only after going beyond a sustainable level —the California (and Easter Island) model.

These policies will terminate in a U.S. or Minnesota resembling China or India of today.

Demands for immigration are producing an unsustainable and destabilized U.S. and Minnesota.  Immigration must be considered a testimonial to outmoded government policies, foreign perspectives, company mismanagement, or ill-designed corporate policies based on unlimited population growth.  Indeed, statistically, the entire remaining U.S. energy resources will satisfy the energy requirements of only a few years of immigration.

Naively, immigration previously was assumed to be an economic plus.  (Note that due to different assumptions, almost all other nations have borders closed to outsiders.)  However, in the last several decades numerous government and private researchers have visited the issue and repeatedly chronicled either indecisive or compelling negative economic results.  California's energy dilemma is the shining example of the negative consequences of that growth.

Given present policies and stubborn momentum, rapid Minnesota and U.S. population growth will not cease until economic conditions in the U.S. equal that of emigrating countries, or environmental and social crises begin to dominate society and discourage or prevent entry, or at some point on the near horizon the resource base and society collapses.

Removing structural inefficiencies in some niches of the economy, providing increased job training and educational opportunities as government and college policy, and increasingly using the vast resource of educated and skilled elderly workers would be significantly more beneficial to Americans and their economy than current ill conceived population policies.

Stabilizing and eventually reducing the U.S. and Minnesota population to a sustainable level is ecologically and economically necessary and eminently possible using fair and humane policies.  Without eventual population reduction and wise consumption practices, Minnesota and the U.S. will eliminate various economic pathways, continue to reduce biodiversity and environmental quality, and increase cost of remediation, if possible.

Is there hope?  Yes!, there is time —a few short years— to effect the necessary changes.

The examples of Easter Island and Viking Greenland suggest that politics and human nature may be our most intractable adversaries.  The Easter Islanders and Greenlanders were fully aware of the limits of their islands, yet were unable to achieve a governing approach or social consensus to establish a sustainable society.  Easter Island is one of numerous historical examples of humans behaving less as sentient beings than simply another boom and bust life form.

Assuming responsibility for their situation and successfully implementing wise changes are also impressive human traits.  Society must now assume responsibility for its situation and successfully implement policies and practices altering current trends.

 

Epilogue

It has often been said that, if the human species fails to make a go of it here on Earth, some other species will take over the running.

 

In the sense of developing high intelligence this is not correct.  We have, or soon will have, exhausted the necessary physical prerequisites so far as this planet is concerned.  With coal gone, oil gone, [natural gas gone], high-grade metallic ores gone, no species however competent can make the long climb from primitive conditions to high-level technology.

 

This is a one-shot affair.  If we fail, this planetary system fails so far as intelligence is concerned.  The same will be true of other planetary systems.  On each of them there will be one chance, and one chance only.
        Sir Fred Hoyle, Of Men and Galaxies, 1964

______
Used with permission of Dell Erickson
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