Tomorrow, some potentially good solutions to my on-line storage problems, and perhaps yours. Today, two even bigger problems to solve:
AN ENERGY SOLUTION
Here’s something interesting: In 1900, the American industry was able to deliver electricity with 6% efficiency. Meaning that 94% of the theoretical energy that could be derived from burning fuel was lost along the way. This being America, we got better at it every year. By the end of the Eisenhower administration, in 1959, efficiency had climbed to 32%. Two-thirds of the energy potential was still being wasted, but it was still an awful lot better than it had been, and the upward trend was inexorable.
Except that then it stopped. As my friend Tom Casten asks – his Recycled Energy Development group recently raised $1.5 billion – ‘Can anyone name another industry still operating at 1959 efficiencies? Does any other industry throw away two thirds of its raw materials?’
We could be doing a lot better, he argued in the Albuquerque Journal last week, if only the Senate does not cave to the interests of the electric utilities as it completes work on its energy bill this month. The final bill needs to lift the impediments to energy recycling.
. . .Energy recycling works by using energy that would normally be wasted. For instance, when manufacturers create energy-intensive products like metals and glass, they emit loads of waste heat, resulting in smokestack after smokestack of untapped power. Converting that heat into clean electricity or steam – that is, recycling it – would dramatically improve efficiency, simultaneously reducing our country’s energy prices and carbon footprint.
Another form of energy recycling occurs when manufacturers and large institutions install small power plants on site that recycle excess heat to produce both electricity and steam. These facilities are typically more than twice as efficient as conventional power plants.
Indeed, the potential in energy recycling is an order of magnitude beyond anything else being proposed in the global warming debate. Recycling waste energy could provide 200,000 megawatts of new, clean power, cutting our country’s greenhouse gas pollution by over 20 percent. That’s more progress on global warming than we’d achieve by taking every car in the country off the road.
Moreover, energy recycling belies the claims of those who insist we can’t do anything about climate change without wrecking the economy. As energy efficiency rises, costs fall, resulting in a bigger bang for the energy consumer’s buck.
Sound too good to be true? Tell that to Denmark, which produces more than 55 percent of its power capacity through energy recycling. The U.S. rate, by contrast, languishes in the single digits. As a result, we use more than twice as much energy to produce a dollar of GDP as Denmark does.
If recycling energy is so efficient, why isn’t more being done? The answer is simple: government regulations protect monopoly utilities. In today’s energy system, power is generated mainly by large plants that state-regulated, regional utilities control. By law, these utilities are protected from competition and have no incentive to be efficient.
Little wonder that the efficiency of the U.S. power industry has stagnated at about 33 percent since the 1950s. That means three units of fuel are required to produce one unit of power; the rest is wasted.
In a free market, manufacturers could harness waste energy and reduce their dependence on inefficient utilities. Indeed, recycling waste energy is so efficient that it often produces more electricity than manufacturers need, allowing them to sell the excess to neighboring businesses.
But in the real world, government regulators have largely insulated utilities from such threats. Manufacturers that recycle are discouraged or even prevented from selling their excess power. And, unlike utilities, they don’t have their capital investments guaranteed by the public.
Amid such obstacles, Congress has a golden opportunity. Tucked away in the energy bill the House of Representatives passed earlier this year is a provision that would galvanize energy recycling. Among other things, it would give manufacturers incentives to recycle, allow energy recycling projects to qualify for federal grants, and create a federal standard to promote renewable energy initiatives such as energy recycling. That’s the good news.
The bad news is the Senate’s energy bill includes no such provisions- and utilities are now pressuring Congress to drop energy recycling from the final legislation.
With the scientific community certain the global warming threat is real and catastrophe imminent, Congress has no more excuses.
[New Mexico Senators] Bingaman and Domenici, the chair and the ranking Republican on the Senate energy committee, should make sure energy recycling is included in the final energy bill.
☞ Know anyone in New Mexico who could call their Senators and put in a good word for energy recycling?
A SUBPRIME SOLUTION
Jeff H.: ‘My sister (50 yrs old) bought her first home (Brentwood, CA) with a sub-prime mortgage three years ago. The first three years were principal only and then it bumped to principal and interest. Her payments went from $2,200 to $3,700. Her modest income couldn’t cover the payments. We discussed for several months what she should do. Finally, she wrote a letter to Chase showing her current budget and explaining that if they didn’t help, she would be forced to abandon the house. Chase responded by converting the remainder of her mortgage to a fixed rate at 5.008. Her new payment is $2,700. This is good news for her. I hope others fare as well.’
☞ A useful example for someone you know, perhaps – and a guidepost to the sort of wider solution that it will be a challenge, but important, to try to work out. (Treasury Secretary Paulson and Congress are working on it.)
On the one hand, it makes perfect sense for those least able to pay to be charged the highest interest rates (because the risk to the lender is the greatest). On the other hand, it is a paradox that, in many cases, if only those struggling were charged the same rate as those not struggling, they could pay.
However all this plays out, the lenders will clearly lose money. Multi-billion-dollar write-offs are already underway.
The lenders’ money-losing choice, at least with loans like those to Jeff’s sister, is between losing part of the interest that had been anticipated – or potentially losing a lot more by sitting on a vacant home, accruing basic tax, utility and maintenance expenses (homes show better when the lawn is mowed and the electricity is on) and ultimately recouping only, say, two-thirds of the money they lent. If that.
Years ago, I was able to buy a 3,200-square-foot waterfront luxury Miami condo from a bank that had loaned $250,000 against it in better times. Now, after months and months and months and months, the bank was just fed up. And not just with this particular condo. ‘Get that stuff off the books before year end!’ the order apparently had come down from headquarters. And so, when I offered $82,000, they took it. And netted, after all those vacant months’ taxes and condo fees and closing costs and whatever else, perhaps $50,000 on a $250,000 mortgage. This is an extreme example; but lenders really don’t want to foreclose on homes if they don’t have to.
Quote of the Day
One definition of retirement: Twice as much husband and half as much money.~Unknown
Request email delivery
- May 7:
Money You Can REALLY Afford to Lose – A Tale Of Two Barry’s
- May 6:
“Think About That For A Second”
- May 4:
Slouching Toward Authoritarianism
- May 2:
The Man In The Center Of It All
- Apr 30:
Ladies And Gentlemen . . . The President of the United States
- Apr 29:
The Lower Courts, Too . . .
- Apr 28:
Let Them Eat Meat . . .
- Apr 27:
- Apr 26:
Apocalyptic Pessimism — Or A Big Beautiful World?
- Apr 23:
Unpack The Court
- May 7: