Can the cost of energy be cut while reducing emissions? During today's OnPoint, Richard Munson, senior vice president of public affairs at Recycled Energy Development, explains how recycled energy can help boost profits and lower the cost of energy for businesses. He also discusses a new campaign to include industrial energy efficiency incentives in an energy or tax package.
Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. Joining me today is Dick Munson, senior vice president at Recycled Energy Development. Dick, thanks for coming on the show.
Richard Munson: Thanks for having me.
Monica Trauzzi: Dick, nearly 90 business, labor, environmental and government organizations sent a letter to Congress this week requesting new tax policies for industrial energy efficiency. Talk about who's involved and, specifically, what types of provisions you're looking for on the energy efficiency front.
Richard Munson: Well, I think the important part here is that the president and congressional leaders have recently been talking about energy efficiency as being a key component of any climate and energy bill and that's great. Unfortunately, most efficiency advocates tend to focus just on the residential and the commercial sector and they've been ignoring the manufacturing sector, which is the largest consumer of electricity. So, we were able to bring together a large group of companies and labor unions and environmental groups to sort of say don't forget the industrial sector, because if, in fact, you want to tackle climate change and you want to also increase manufacturing productivity, that's where your opportunities are.
Monica Trauzzi: So in terms of jobs numbers, how would this impact those numbers and what kinds of incentives might we see as a result?
Richard Munson: Well, the Oak Ridge National Laboratory did a report that looked at the potential for combined heat and power and recycled energy in the manufacturing sector and they were looking at numbers like 20 percent of U.S. electricity would come from these efficient combined heat and power or clean recycled energy and it would also generate about a million new high-tech jobs. So, the potential is really high. If I might give you just an example, because I think the whole climate debate gets skewed because we often hear that if we're going to tackle climate change it's going to hurt the economy. We're doing a project in a silicon manufacturer in West Virginia, in Alloy, West Virginia. To make silicon you basically have really high temperatures and melt quartz rock. The company has been spending millions of dollars to try to cool down the high temperatures coming off the furnace because it would burn up the back house or the pollution control equipment. We look at that heat, about 3000 degrees coming off the furnaces, and think opportunity. Let's make a profit by capturing the waste heat out of manufacturing sectors. We're going to capture that waste heat and make 65 megawatts of clean power. And so I think if you realize that not only are we going to cut greenhouse gas emissions, but that company is going to be able to increase its output by 20 percent, increase its jobs and bring silicon manufacturing back from China to the United States, that, I think, is the story because I think by tackling climate change we can also increase manufacture and productivity.
Monica Trauzzi: So, then how does that fit into an overall cap and trade, which is now being discussed on the Hill?
Richard Munson: Well, cap and trade is simply let's put a price on carbon. And then the question is, how do we ensure that, in itself, will move innovators to think about ways to save energy and develop new, clean technologies? I think there are a variety of the other incentives that can be provided to ensure that clean technologies, not just limited to solar and wind, which are clearly important and we need to advance, but let's think more broadly about what ways are being clean? I would argue at the silicon manufacturer if we capture that waste heat it's not unlike the sun and the wind, if we don't capture it, it's lost. In this case, we're capturing waste heat and producing clean power without burning any additional fuel or emitting any additional pollution.
Monica Trauzzi: Why hasn't this type of energy efficiency received more attention up until this point?
Richard Munson: Well, two things. One is I think incentives have been focused, you know, when you think alternative most people think solar and wind and we've given large tax incentives to those and that's quite justified. I also think we have a history in this country of utility regulation where we have incentivized the utilities to only generate electricity and not think about capturing the waste heat coming off of their production facilities. You have to realize that the efficiency of power generation in this country is stuck at 33 percent. That's a dismal record, well below our international industrial competitors and it has not improved a single percentage point since Dwight Eisenhower was in the White House. That's got to change.
Monica Trauzzi: So, where would you like to see this type of package? Which bill? Would it be the energy package that we're expecting at some point?
Richard Munson: Well, you tell me as to what's going to move, but I think there will be an energy tax package that will either be part of a jobs bill or it will be part of an energy/climate piece of legislation. There's a couple of pieces of legislation that we're, this coalition, is quite excited about. There's a bipartisan piece in the Senate by Senators Snowe and Bingaman and a similar bill by Mr. Inslee on the House side and then Representative Tonko has done a bill that would provide a 30 percent investment tax credit for a highly efficient combined heat and power and recycled energy projects. I think with that the industry would just boom and you would see not only the capture of greenhouse gases at manufacturing facilities, but like at that silicon manufacturer you'd find increased production, real clean jobs because we'd be increasing the activity and competitiveness of our American manufacturing base.
Monica Trauzzi: What's the reaction been so far to this campaign?
Richard Munson: Well, it just went out yesterday and I've gotten several e-mails from congressional staff that said it was a very impressive gathering of companies, unions, and environmental groups. We've got Dow Chemical, we've got PPG, we've got American Chemistry Council, we've got the Sierra Club, we've got the boilermakers and the sheet metal workers, so it's a nice, broad coalition. The initial response is, whoa, that's a pretty nice variety of individuals that have come together to support looking at how to advance manufacturing efficiency and productivity.
Monica Trauzzi: All right, we'll see if it makes its way into the bill.
Richard Munson: I hope so.
Monica Trauzzi: Thanks for coming on the show.
Richard Munson: Thanks for having me.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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