This is good news for a global economy that remains dependent on fossil fuels, but it’s terrifying to climate scientists.
‘‘If we’re willing to go down this road of squeezing whatever petroleum we can out of the earth, we can easily get carbon dioxide levels up to unfathomable levels and put in motion what would be dramatic or catastrophic changes in our climate system,’’ says Michael E. Mann, a geophysicist and director of the Earth System Science Center at Penn State University.
RENEWABLES PROGRESS, BUT NOT FAST ENOUGH
Renewable technologies have had their successes. The average cost of a solar power system has fallen by 31 percent in the last two years. Solar now generates six times more electricity in the U.S. than it did a decade ago, and wind produces 14 times more. Most major automakers offer some type of electric vehicle.
And this success has come despite the fact that renewable energy’s major benefit — that it doesn’t pollute — is given little or no value in the marketplace because most governments haven’t adopted taxes or penalties for fossil fuel pollution.
But the outlook for wind, batteries and biofuels is as dim as it’s been in a decade. Global greenhouse gas agreements have fizzled. Dazzling discoveries have been made in laboratories, and some of these may yet develop into transformative products, but alternative energy technologies haven’t become cheaper or more useful than fossil fuels.
Solar, wind and geothermal sources together accounted for 4.8 percent of U.S. power generation last year. Ten percent of U.S. gasoline demand was satisfied with corn ethanol, but ethanol and other fuels made from non-food sources have yet to hit the market.
‘‘In many cases, renewables aren’t ready for primetime yet,’’ says George Biltz, vice president for energy and climate change at Dow Chemical, which continues to work on a host of renewable technologies.
Likewise, electric cars have not enjoyed the success many expected. The battery alone in an electric car costs as much as a new gasoline-powered car, and electric vehicles are not selling nearly as fast as once projected. General Motors expected to sell 60,000 Chevy Volts globally last year, but sold just half that many. Sales of Nissan’s all-electric Leaf grew 22 percent around the world last year to 26,000, short of Nissan’s projected 50 percent growth.
The cost of wind and solar power has declined, but the price of electricity made with newly cheap fossil fuels has fallen too, making it harder for wind and solar to compete.
‘‘Renewables are now under scrutiny. They haven’t made the kinds of quantum leaps we have seen in the oil and gas industry,’’ says First Reserve Corp.’s Santiago, who now shuns investments in alternatives.
David Aldous, the former Shell executive, learned that lesson while trying to turn wood chips into ethanol at Range Fuels. The system that fed the chips into a gasification chamber didn’t work well, and the project failed.
‘‘Things don’t always scale from the petri dish to the demo plant and then to the commercial plant. It’s just part of building up a new industry,’’ Aldous says.
Range went out of business in 2011, and it was hardly alone. Dozens of biofuel, battery and solar companies failed even though federal and state governments supported alternatives with loans and grants, and mandated their use. Others are limping along.
Pacific Ethanol, which traded near $300 per share in 2006, now trades for 28 cents. Amyris, an advanced biofuels company, traded near $34 a share as recently as last year, but now trades at $2.74. The battery maker A123 was forced to file for bankruptcy protection last year, three years after going public. An index of clean energy companies that was first traded in March 2005 is down 69 percent since then. A similar index of traditional energy companies is up 75 percent over the same period.
THE NEXT 10 YEARS
This dark period for alternative energy could last for years. With government debt soaring and no more worries about running out of oil, many renewable subsidies are being scaled back.
‘‘The world is completely different now,’’ MIT’s Greenstone says.
But there are still hundreds of companies, including fossil fuel giants, working on new renewable-energy projects. ExxonMobil is investing in Synthetic Genomics, a company started by the geneticist J. Craig Venter to try to create strains of algae that will produce fuels. BP and Shell continue to work on ways to turn plant waste into fuels.
California, meanwhile, set the nation’s most ambitious renewable energy goals and is on track to meet them. One-fifth of the power delivered by the state’s three biggest utilities now comes from renewables, not including large hydroelectric dams. By 2020, that portion will rise to one-third.Continued...