Renewable Energy Isn’t Just For Tree Huggers


renewable energy

hydroelectric waterfall © by grendelkhan

What to write for your inaugural post on a site that is based around sustainability when you don’t really know all that much about sustainability?  I decided on the idea of, “You don’t need to be a tree-hugger to love renewable energy.”  This basically describes my feelings when talking about solar-, wind-, and hydro-based energy strategies.  I’ll be quite honest, I have no idea who to believe on the reality of just how bad burning fossil fuels are for the environment.  I have read so much propaganda coming from both sides that I’m not certain who to believe, or to what extent anything is true.  I do know this much however, our fossil fuels will “soon” (soon being a relative term) be depleted.  There are various estimates, but most people agree that by 2030-2040 much of the world’s oil reserves will be drained.

You could fill a library with all the material that has been written about the scenarios that might occur when we begin to run out of oil, but the basic idea is that it will likely change the way we live, and whomever has the energy infrastructure needed to replace the precious liquid gold is going to be quite wealthy.

Renewable Energy – The Great Uniter?

So we want to have the infrastructure in 20 years, on that most people can agree.  I would argue that we should want it right now.  The energy industry in Canada is our bread and butter (as in, “Without the energy industry we couldn’t afford bread and butter”).  About 40% of the entire TSX is energy companies.  The fact that this industry has a finite lifespan is a little scary.

If you are a country other than Canada and have a trade imbalance when it comes to energy, then there should be even more motivation there to alter that obvious structural drain right?  The fact we are so dependent on oil for so much of our infrastructure is a very scary fact just from an  economic, or even security-based viewpoint.

It stands to reason that developing as much of a self-sustaining energy infrastructure as possible would be in the best interests of countless countries.  Yet instead we argue about how much effect fossil fuels have on global warming, I don’t mean to belittle the issue, but it is actually pretty irrelevant to a pragmatist like myself.  I want renewable energy to ensure my living standards stay nice and high (nothing like selfish capitalists and hippy tree-huggers coming together for a lovefest eh?) for the foreseeable future.  If I happen to positively affect the climate on some level as well, great.

No One Ever Called The Government Efficient and Nimble

So where do we begin?  Environmentalists would have us believe that we simply need to pump government tax dollars into subsidies for solar power technologies programs and place large taxes on gasoline, and the problem will fix itself.  I don’t believe this is true at all.  Absolutely any time the government tries to mess with the free market it ALWAYS ends up doing it inefficiently and wastes a lot of money.  Yet I’m not sure if waiting for big businesses to pass on the increased cost of fossil fuels over the next two decades is an effective method either.

In the recent book, That Used To Be Us authors Thomas L. Friedman and Michael Mandelbaum explain that China has already built a lead in certain areas of renewable energy.  They realize that their dependence on something as essential to their growth as energy is not a good thing, and they have the ability to massively act on that realization.  Friedman and Mandelbaum then go on to explain that ceding the innovative edge to other countries will be extremely costly for the USA.

No Wammy, No Wammy, STOP!

Canada would actually be hit by a double wammy in twenty years if we don’t start looking down the road.  Our fossil fuel-driven economy would cool down fairly quickly and we would need to start importing technologies from other countries to set up our new infrastructure.  This could result in a huge hit to our trade balance and GDP.  On the other hand, we have a massive energy-gobbling neighbour to our south who would assuredly buy any surplus energy of any kind we can produce (Keystone XL aside).  We have seen the benefits of this with hydroelectricity in my home province of Manitoba.

Is Renewable Energy Worth It?

But the question remains, at a time when economies are sputtering, and the Western World is dealing with a shrinking of their power is relative terms (if not absolute terms), is an investment in green energy worth it?  I believe it is.  The advantages to be gained from being in on the ground floor of new technologies are too numerous to be discussed here, but they are definitely considerable to say the least.  While the benefits may look miniscule right now, the consequences of not having some sort of clearly defined energy policy are even more scary in my opinion.  It doesn’t matter if you look at it from an economic, self-defence, or environmental standpoint, there are many disadvantages to sticking our proverbial head in the sand on this one.

Aren’t We Supposed To Be Good At This Stuff?

As some general ideas going forward I think Canada should leverage some of our energy expertise in order to springboard our research going forward.  We have some great hydroelectricity programs, our research in safe models of fossil fuel extraction must have some crossover potential in other areas.  We should also look to work and trade ideas with our traditional allies.  As a counterbalance to Keystone XL, wouldn’t a headline-generating proposal about a joint project on hydrogen-based vehicles make a lot of sense on so many levels?  If we want to guarantee the level of prosperity we currently enjoy for the next generation, we must address the issue of energy production and do it quickly.  In case no one noticed, the Middle East isn’t getting any more stable, Venezuela isn’t looking so hot either, and apparently our oil is suffering from a case of the PR flu.  We need to accept this reality before we are trampled by it.

What are your thoughts about developing renewable energy technologies?

TM writes about all things personal finance over at My University Money. He intends to continue his quest for lifelong learning and hopefully help others along the way.

37 comments to Renewable Energy Isn’t Just For Tree Huggers

  • Thomas - Ways to Invest Money

    I dont know some times I wonder if they really want to make things better using renewable energy. BIllions of dollars get spent on what I would consider non sense but then you see things like this get pushed to the side. Its not like we cant create more fuel efficient cars or transportation. There has got to be a better way. I think its worth it.

  • I am always surprised at the crossover between people who care passionately about the environment and people who are cheap like myself. I am interested in renewable energy because it is cheap. Of course this is only on a personal level. It is nice to read about this industry on a larger level in regards to more than just what is good for the environment.

    • Renewable energy just makes so much sense (cents?) on so many levels. In terms of big picture thinking, do we believe the human race will really continue to be powered by finite fuels for much longer? It seems absurd to believe that in this day and age. So if that’s where we are heading, shouldn’t we be the leaders?

  • I don’t know all the facts, but I’m nearly certain that the oil industry is much more subsidized by the government than the renewable energies are in the US. I think that’s a shame if that’s truly the case.

    I think there needs to be more incentives for people to move to renewable energy solutions. A 5+ year wait to recoup your initial investment just isn’t good enough. We need to reduce the cost of renewable energy.

    • FG

      Yep, two wrongs don’t make a right. Neither should be subsidized.

    • Jeff, I guess it’s tough to say if the oil industry is truly subsidized. They do get certain tax breaks, but they generate an incredible amount of tax income and jobs within Canada. There is no debate there in terms of immediate jobs in the energy sector. In terms of incentives to invest, I think it will naturally come along soon. Being in on the ground floor of the next “Exxon” in terms of renewable energy could be incredibly lucrative right?

  • Renewable energy needs to be developed before the oil runs out which means that some projects won’t be worth the money at the time they are built. Building the projects after the oil is gone or when it is almost gone will be extremely expensive and some necessary materials will likely be difficult or impossible to procure. Governments need to plan ahead for peak oil but I don’t think that is going to happen here in the U.S.

  • FG

    Solar is seeing some massive gains. We don’t need governments promoting corporate corruption and greed by subsidizing renewable energy — consumers are going to choose it for themselves because it makes sense!

    • FG, aren’t we still waiting for that to happen at this point? Most new technologies usually require some initial push and support from the government if you want to develop a world leadership role (and I’m a pretty conservative thinker).

  • I am with Jeff. We need to make renewable energy affordable for the masses. Especially in these times with down economies. I agree with you though that the government subsidies can corrupt and aren’t the answer, however something needs to be done about the prices. Otherwise the renewable technologies are never going to take off.

    • FG

      I disagree that they will never take off. They are already taking off like mad, because in some areas solar panels are cheaper than coal! It has to be cost effective; no amount of subsidies will change that and no amount of government intervention can create the technologies and research needed to change that. At best, they can provide some improvement, but at the cost of damaging other sectors of the economy and creating more unemployment in other spheres.

      Anyways it doesn’t matter. Renewables are taking off now, and will be cost-effective in most of the world within a few years. It’s a great time to be alive if you believe in sustainable energy. :)

  • renewable energy investments

    The upside in renewable energy is huge. This is from both an investing perspective and a jobs-related perspective. Yes, the Canadian economy is heavily based on natural resources, but the renewable energy potential is certainly there. Just think of hydro power for example. The American electricity grid is quite overburdened and the export potential for hydro power to the States is great.

  • I think that on the whole renewable energy is a good thing, but it must be done carefully – not many people are going to buy it because it makes them feel better (see sales figures now) people will buy it if it’s cheaper or comparable to what they are paying now for their energy (most likely coal).

  • The upfront cost detracts a lot of frugal folks. It might be better for the long run, but the initial cost and the time to recoup the cost is still very high. For example in So. California, solar panels should be a no brainer, but it is SO expensive to install and if we wanted something that blends with the house the cost goes through the roof. So far among the people I know the only ones who have some sort of renewable energy is either staunch environmentalists or very rich. It is a shame it has to be like that.

    • Maybe those people are what we need though. That initial production should allow us to keep refining the product until it is truly available for mass consumption. The first cars weren’t bought by everyone right?

      • Great article TM! I think there are several different groups of people that need to be on-board with renewable energy for it to really take off in Canada. First, there are the homeowners as many of you have mentioned who need to install solar panels and such on their rooftops. Then there are the people in government who need to continue to try and find ways to make this affordable for these homeowners. However the biggest group that needs to support renewable energy infrastructure is all Canadians. See what we really need are more wind turbines and mass solar farms across the country but more importantly we need the infrastructure to carry the power that they produce. And this is where it gets difficult. Most people don’t want power corridors near their homes. However if you put them far out into the country side, you need to be sure you are not wreaking havoc on the habitats of Canada’s wildlife, many of which are endangered.

        • There has to be room through much of this great wilderness for small hydro lines to be placed though Mrs. SPF? I mean, really, we are talking about a few feet of tree line to cut right? In MB, our proposed hydroelectricity lines are being forced to take a much further route (indirect) simply because of concern about Aboriginal sovereignty and environmental impact. How bad can a 3 meter strip of forest cut actually hurt an ecosystem that is massive? I think these are the sort of compromises we need to look at in order to make this stuff viable.

          Wind turbines are definitely something I would like to learn more about. I have read a lot of spin-doctor stuff about why they are bad and why they are good. I know they make the drive through southern Manitoba a little more interesting! Holland seems to really like them.

          • The thing is TM, hydro lines are never small. The installation of them alone is very disruptive and then there is maintenance such as brush clearing so you need roads that get to the lines for maintenance crews. For some animals like caribou and geese, they have a certain migratory pattern and so this is why certain routes are off limits. And then even though it might seem like the wilderness to us it can be made up of wilderness parks or hunting grounds (sometimes for people who live off their harvest). Also most of that same wilderness is staked off by forestry companies and mining companies. So there are many, many stakeholders to contend with when planning any renewable energy project. Anyone who works on renewable energy project will tell you that whenever possible, compromises are made…it just can take a long time to figure out what they are.

  • The renewable energy companies are in trouble. Solar panels from China are too cheap for the US companies to compete. Natural gas and fracking are pretty nasty and has other ramifications. Fuel cell? I don’t know.

    What would you say if a company can turn waste water in to Hydrogen and natural gas with sunlight? check it out. Why are they having such a hard time getting off the ground?
    http://www.hypersolar.com/

    • I have talked to a lot of people that are far smarter than me, and they claim hydrogen is our best bet going forward. They claim that the best thing about natural gas in the USA is that the infrastructure could easily be converted to accommodated hydrogen in the near future.

  • I agree with UM. Here in Canada there hasn’t been the same momentum that there has been in other countries. In fact last year our government bowed out of the international energy committee. What does that say?! I too hope you’re right.

  • OMG YOURE EVERYWHERE TM!!

    As a province who loves renewable energy, more power to us!

  • Renewable energy makes sense from a national security standpoint as well. To be dependent on the middle east for the majority of the US crude oil demand makes no sense. To convert the US economy to hydrogen is cost prohibitive. Oil would have to get a whole lot more expensive to justify that kind of investment.

    • Great point on the national security thing Paul, I couldn’t agree more. This is another reason why stopping Keystone XL is not cool btw. I agree that the initial costs to go to hydrogen seem incredible, but just like any other technology, it will only get cheaper and more efficient from here. Think about how much money it costs the USA in trade deficit, and certain armed conflicts. Does hydrogen still look more expensive at that point?

  • Jana @ Daily Money Shot

    My husband works in renewable energy so clearly, I am for it and developing all the technologies. From talking to him, the one thing I’ve come to learn is that many people and places are oppposed to technologies like solar panels and wind turbines simply due to aethetics. They’re not pretty so people don’t want them. HOAs in particular oppose them (at least where I live)to the point that they tried to pass legislation to get solar panels and wind turbines banned (geothermal heating and technologies like that were not discussed).

    It’s hard to get people to understand that even though something may not be pretty, it’s going to be necessary in the near future. Let’s get ahead of the curve and worry about looks later.

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