Good Corporate Citizens: Five Major US Companies Call for Climate, Clean Energy Solutions

Nike, Starbucks, Levi Strauss, Sun Microsystems and Timberland Challenge Lawmakers to Raise the Bar for U.S.Climate and Energy Policy; Call for CO2 Emission Cuts, Clean Energy Investments, Coal Plant Limits

Cross-posted from WattHead - Energy News and Commentary...

Today, five leading US companies joined Ceres investment group to launch a new coalition of corporate citizens calling on Congress to quickly enact strong U.S. climate and energy legislation that will spark a new clean energy economy and reduce global warming pollution. The new coalition issued several key principles for climate policy today, including proposals to stimulate renewable energy, promote energy efficiency and green jobs, cap global warming pollution and auction 100% of pollution allowances, and limit new coal-fired power plants to those that capture and store carbon emissions.

The group, which includes Nike, Starbucks, Levi Strauss, Sun Microsystems and Timberland, calls themselves Business for Innovative Climate and Energy Policy, or BICEP for short, and aims to flex some lobbying muscle to support climate and clean energy action.


The coalition’s goal is to work directly with key allies in the business community and members of Congress to pass meaningful energy and climate change legislation consistent with the following eight core principles:

Set greenhouse gas reduction targets to at least 25 percent below 1990 levels by 2020 and 80 percent below 1990 levels by 2050.

Establish an economy-wide GHG cap-and-trade system that auctions 100 percent of carbon pollution allowances, promotes energy efficiency and accelerates clean energy technologies.

Establish aggressive energy efficiency policies to achieve at least a doubling of our historic rate of energy efficiency improvement.

Encourage transportation for a clean energy economy by promoting fuel-efficient vehicles, plug-in electric hybrids, low-carbon fuels, and transit-oriented development.

Increase investment in energy efficiency, renewables and carbon capture and storage technologies while eliminating subsidies for fossil-fuel industries.

Stimulate job growth through investment in climate-based solutions, especially “green-collar” jobs in low-income communities and others vulnerable to climate change’s economic impact.

Adopt a national renewable portfolio standard requiring 20 percent of electricity to be generated from renewable energy sources by 2020, and 30 percent by 2030.

Limit construction of new coal-fired power plants to those that capture and store carbon emissions, create incentives for carbon capture technology on new and existing plants, and phase out existing coal-based power plants that do not capture and store carbon by 2030.

Recognizing that climate change will ripple across all sectors of the economy BICEP members aim to offer new business perspectives on climate solutions to balance the sometimes narrow viewpoints offered by some of the more engaged members of the business community.

BICEP members also apparently recognize that being a good corporate citizen requires more than just purchasing carbon offsets and building more sustainable products. Like individual citizens, a real commitment to a new energy future requires more than personal actions, it requires active participation in the political process.

“We can voluntarily change our own behavior in the hopes of mitigating impacts and are doing so," said Hilary Krane, senior vice president of corporate affairs at Levi Strauss & Co., "but we also believe that U.S. government leadership is essential if we are to create an environment in which every U.S. company recognizes the role it must play in addressing climate change."

"Nike understands the value of investing in innovative solutions to address the challenges of sustainability," added Sarah Severn a corporate responsibility director with the company, "so we are proud to be part of a coalition of companies that believes legislative action on climate change and clean energy is not only urgent but imperative to creating positive, long-term change."

As a native Oregonian, I can't help but contrast Beaverton, OR-based Nike's active commitment to good corporate citizenship with Oregon's other major employer: Intel. The microprocessor giant is Oregon's largest private employer, and while it launches ads touting their efficient processor designs and issues press releases about renewable energy purchases, Intel quietly lobbies to block progressive energy and climate policy at the Oregon legislature.

Intel is a key member of the Industrial Customers of Northwest Utilities group, a state lobbying organization that represents large electricity and natural gas users in Oregon and Washington. ICNU has consistently been on the wrong side of good energy policy - from the Oregon Renewable Energy Act of 2007 to the state's efforts to lead on climate policy - and is now forming a front-group called something like Oregon Industries for Balanced Climate Policy, gearing up to block progressive legislation in the 2009 Oregon legislature.

Unlike Nike, who puts it's lobbying muscle behind it's clean energy commitments, Intel tacitly and at times actively supports ICNU's efforts to stand in the way of Oregon's transformation into a clean energy leader. Intel should take queues from fellow Oregonians, Nike, and their semiconductor competitors at Sun about what good corporate citizenship means, and actively distance itself from ICNU's dirty deeds.

Until then, bravo to Nike and the BICEP members for leading the way.

Oregon Governor Ted Kulongoski Unveils Clean Energy Agenda for 2009

Cross-posted from WattHead - Energy News and Commentary

Oregon Governor Ted Kulongoski unveiled the ambitious clean energy agenda he hopes to see implemented by the 2009 Oregon Legislature on Monday. Following up on a landmark 2007 legislative session that saw the Beaver State enact an ambitious renewable energy standard, expand tax credits for clean energy, and enact new standards for energy efficiency, Governor Kulongoski isn't resting on his laurels.

"Climate change is the most important environmental and economic issue of our time," Kulongoski said as he laid out his proposal for new clean energy tax incentives and ambitious goals he wants the 2009 Legislature to adopt.

On Monday, Governor Kulongoski said it's time to redouble the state's commitment to a clean energy future. "In 2009, we must be bolder, more comprehensive and even more visionary," Kulongoski said. Right on!

According to the Oregonian, Kulongoski's proposals include:

• Greenhouse gas reduction: Authorizes regional cap-and-trade system for carbon emissions; sets limits on emissions from the state's largest sources; sets low-carbon standards for all new electricity generation

• Energy efficiency: Establishes energy performance certificates for new homes or commercial buildings, similar to MPG ratings for new cars; sets goal of zero-emission new buildings by 2030; allows 50 percent tax credit for large-scale energy efficiency projects, up to $20 million

• Renewable energy: Sets up pilot program to pay for energy produced from solar projects; establishes tax credit for residents who donate to a renewable energy incentive fund

• Transportation: Offers $5,000 credit for purchase of new plug-in hybrid or all-electric car; authorizes new low-carbon fuel standard similar to those in Washington and California

His plans to implement a cap and trade program, joining with other states in the Western Climate Initiative, will likely draw the most opposition. Groups representing industrial energy consumers are already lining up in opposition. But it's clear that Governor Kulongoski, who faces his last legislative session as Oregon's governor, has decided to pin his legacy on efforts to make Oregon a clean energy leader and tackle global warming.

More on Kulongoski's clean energy plans at the Oregonian

WSJ Says: Don't Bet on LNG to Reduce US Natural Gas Prices

Econ 101 taught us increased supply = lower prices. That's the main argument for new liquefied natural gas import terminals. Unfortunately, the Wall Street Journal warns things are a bit more complicated than that and we shouldn't bet on LNG to reduce North American natural gas prices. This is Econ 202 stuff at least...

Amidst concerns about a potential North American natural gas supply crunch, several energy developers are betting big on new terminals to import liquefied natural gas into the United States market. Three terminals are proposed in Oregon, and they have generated considerably controversy and strong opposition from local communities.

There are many reasons to be concerned about imported liquefied natural gas, or LNG, natural gas that has been supercooled to -260 degrees F in order to turn it into a liquid ready to transport on specially-designed tankers from LNG exporting countries like Indonesia, Russia, Iran and Qatar. From increased dependence on foreign fossil fuels to increased greenhouse gas emissions, seized farmland for new pipelines and health and safety concerns, citizens of potentially impacted communities have found plenty of reasons to rally against LNG terminals and pipelines.

The principle argument to forge ahead with new LNG terminals despite these concerns is the assumption that increasing North American natural gas supplies with LNG imports will reduce prices. It's a simple "laws" of supply and demand that increased supply will reduce prices, right? That's what we all learned in economics 101, right?

Unfortunately, a recent front page article in the Wall Street Journal (April 18) warns us that the economics of LNG is a bit more complicated than that. This is economics 202 stuff at least (the online copy is here, sub$cr. required).

The gist of the story is that we shouldn't be betting on increased LNG imports to help lower natural gas prices in the US. Read on to find out why...

Unlike oil, which is easily shipped globally and has been a globally traded commodity for some time, natural gas has developed more regional markets separated by delivery constraints, each with different gas prices. LNG changes the game, and increased global LNG capacity is making natural gas a global commodity with a global price. That's bad news for the United States, where natural gas prices are about half what Japan is willing to pay for a shipment of LNG, for example.

According to the WSJ article: "Today, a tanker of liquefied natural gas, or LNG, pulling into port in Japan can command close to $20 per million BTUs, roughly double the price of the U.S. benchmark."

As with any globally traded commodity, the marginal price sets the price for everyone. If Japan is willing to pay $20 per million BTUs (mmBTU) for LNG, prices globally will float up towards this price, and that's about what we should expect to pay here in the Northwest if an LNG terminal is built. We'll essentially be linking our mostly regional market to an intensely competitive global market for LNG, where the price is set by the highest bidder.

It'd be foolish then to bet on LNG, for which international competition can drive prices up to around $20/mmBTU, to help lower Northwest (or North American) natural gas prices, which are now in the vicinity of $6-8/mmBTU. In fact, the very opposite could occur. If LNG prices set the marginal supply cost for LNG in the Northwest, domestic natural gas prices may even rise to this new marginal cost. That's how commodity markets work, isn't it (told you this was Econ 202 kind of stuff)?

In short, the main argument for new LNG terminals in North America (and here in the Northwest) is that they will help reduce natural gas prices regionally by increasing supply. Problem is, that's not how this competitive global market works. Instead, we'll merely be hooking ourselves up to another global market for a foreign fossil fuel and put ourselves in a competitive bidding war with Japan, Korea, India, China, Spain, and others to see who lands that next shipment of LNG. Not exactly a competition I'd like to get into.

Oh, and did I mention that there's talk of forming a new cartel of LNG exporting countries, just like OPEC, to manipulate the markets to exporters' advantage. The Department of Energy's Energy Information Administration cautions:

"One risk that cannot be ignored is the likely formation of an LNG cartel, given that so few countries control such a large portion of the world’s stranded natural gas reserves, and its power to affect LNG prices."

This was new stuff for me - I thought the old Econ 101 argument seemed pretty sound - and I didn't expect this kind of warning to come from the Wall Street Journal of all places. Seems like we've got yet another reason to be cautious about proposed LNG terminals in Oregon and elsewhere.

[Graphic credits: LNG terminal map from MSNBC; LNG tanker and terminal from LNGWorldwide.com]