Although it is the second-smallest state in the country, Delaware is trying to position itself as a renewable energy leader in the United States. During today's OnPoint, Collin O'Mara, secretary of Natural Resources and Environmental Control in the state of Delaware, discusses his state's efforts on clean energy and emissions reduction. O'Mara also explains how federal action on climate and energy will affect Delaware's clean energy plan.
Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. Joining me today is Collin O'Mara, secretary of Natural Resources and Environmental Control in the State of Delaware. Secretary O'Mara, thanks for coming on the show.
Collin O'Mara: Thank you for having me.
Monica Trauzzi: Secretary, Delaware is the second smallest state in the U.S., but you're trying to be a leader on renewable energy. Your governor recently signed an executive order setting clean energy targets and mandating environmental practices. What are the core principles of that effort?
Collin O'Mara: The bottom line is that before we ask the private industry to make significant changes to the way that we operate in the state, we believe it's important for state government to lead by example. And so, this is everything from demonstrating best energy efficiency practices, we've already adopted statewide legislation requiring a 15 percent private-sector mandate in the next five years. We believe we can do 30 percent in the same timeframe and for the state government and we have a 20 percent RPS at the state level. We believe we can get to 30 percent in the state within the next couple years. Similar practices for recycling, for green building practices, including LEED Silver standards, and also looking at the way that we use our vehicles and trying to reduce vehicle miles traveled. We're really trying to lay a foundation for what we believe sustainable behavior should be and really model those best practices.
Monica Trauzzi: Why does Delaware though believe it can serve as an example for the rest of the U.S.? I mean like I mentioned, you're the second smallest state, there are also many differences in terms of the types of energy you have access to, your access to the shores in terms of offshore wind power. So, why are you able to set the standard almost?
Collin O'Mara: Despite its small size, Delaware really is a microcosm of the entire East Coast. We have some of the most innovative companies in the world, companies like DuPont and that W.L. Gore and Echelon and Hercules that are on the forefront of scientific frontiers in chemistry and in biotechnology. We also had a fairly thriving auto industry, but in the last 18 months we've had two major plants close. We also have a lot of leadership in the financial sector. And when you look at the skill sets that Delaware has, they're actually skills that are very well suited to the renewable energy industry. And so taking some of the best practices from - well, also it's the entire clean tech economy, looking at some of the best practices in the auto industry. Rather than going out for another fossil fuel type vehicle, Governor Markell really went out to try to bring Fisker Automotive, which is one of the leading plug-in hybrid technologies in the world and the recent recipient have a large loan guarantee from the Department of Energy through the stimulus package, to Delaware, to fill one of these two vacant auto plants. We've also turned the other plant into basically an incubator, a center of excellence if you will for energy and biotechnology research for the University of Delaware. And so we're trying to, as we're struggling through the challenge of the current economic recession, we believe we can make investments that will lay the foundation for the next 30 years of growth, 50 years of growth, by investing in the technologies that are going to be necessary to fight climate challenge.
Monica Trauzzi: One of the primary concerns we hear about clean energy investments and cap and trade is the cost. So, what are the steps that your state is taking doing to the economy of your state?
Collin O'Mara: And I think one of the challenges that we've done a fairly poor job nationally is talking about the cost of inaction and so we're trying to take all those things into account. The current fuel mix in Delaware, you know being primarily coal, has massive impacts on health care costs in this state. And so, obviously, Delaware was the first state in the nation to execute a power-purchase agreement for offshore wind. But 250 megawatts, up to 450, that will supply about 8 percent of the total energy in the state, about 30 percent of all the households, and we believe that that investment, at a very reasonable price, kind of a 9 to 15 cent a kilowatt hour kind of cost with an escalator, is actually as competitive as the fossil fuels that it will be replacing and even more so when you're looking at the costs that are hidden in the fossil fuel mix between the health and environmental costs that aren't considered in our current pricing structure.
Monica Trauzzi: Let's talk about what's happening on the federal level and how that can impact your state's efforts. What does the government need to be doing in order to help companies succeed in their clean energy projects and initiatives?
Collin O'Mara: I think the biggest challenge that we face right now is that the stimulus package was incredible, the largest investment in environmental technology in the history of the country. Where we need to take additional steps is making sure that we're promoting American manufacturing. Now, for us, this isn't an environmental initiative, this is a jobs initiative and this is a way for us to rebuild the middle class in the State of Delaware. We've provided great incentives on the demand side. You know, if you put up a large wind farm or a large solar system, you get your 30 percent ITC, now it can even be a grant. We're not doing enough on the manufacturing side. We actually provided fairly unlimited incentives on the ITC side, yet we capped the 30 percent tax credit for companies that are trying to manufacture these goods and we're behind. You know, our governor was recently in Germany looking at companies that have been making offshore wind turbines for years. There's 800 in the water in Europe, there's none in the US. And so the challenge is how do we build up the capacity to manufacture those products locally? And so we really need to focus on the job elements, not just the energy side, but the entire supply chain and making sure we're maximizing the economic opportunities for residents.
Monica Trauzzi: What concerns do you have about the impacts of EPA regulation of emissions on your state and your state's projects?
Collin O'Mara: Delaware has always struggled with air quality and I was actually just testifying on the Hill before Senator Carper's subcommittee on this topic. And Delaware is in a position, because there's so much pollution coming from other states adjacent, because of its small size, we have the importation of so much pollution that we can't actually achieve air quality standards even if all of the units in the state were fully regulated. And so we see EPA as a partner in this effort and we think that that determination is extremely important to have that regulatory ability. You know, our preference would be to see a legislative solution, but, in the absence that that, we believe that's important to create these market conditions that will allow these technologies to flourish. And without that downward pressure, as we've seen in California and other markets that have adopted bold greenhouse gas goals, we don't see the same amount of innovation. And so we're doing everything we can at the state level, but this isn't a problem that adheres to state boundaries. This is a national -- it's a global problem and we need to act at the national and international level.
Monica Trauzzi: So, if the cap and trade doesn't pass this year or some from of a cap on emissions, is there a certain level of uncertainty that your state will feel or are you sort of shielded from that because you've already done so much to cap your own emissions?
Collin O'Mara: I mean the Northeast states, the 10 Northeast states as part of the Regional Greenhouse Gas Initiative have basically voluntarily entered into a partnership to actually cap their greenhouse gas emissions and we have a cap-and-trade system that's already working, that not enough people know about, but it's been working well. And so we believe that we are well shielded from it and we believe that having an economy wide approach makes a lot more sense for really growing these new industries, whether it's the transportation or building or energy supply, because at the end of the day energy is that the crux of the entire economy and we see this as a great opportunity to really revitalize the entire manufacturing sector.
Monica Trauzzi: OK, we'll end it right there. Thank you for coming on the show and thanks for watching. We'll see you back here tomorrow.
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