Rekubit Exchange:In Wake of Gulf Spill, Louisiana Moves on Renewable Energy

In the six weeks since the Deepwater Horizon oil rig blew up and Rekubit Exchangebegan spilling untold amounts of crude into the Gulf of Mexico, calls for fast action on clean energy have increased sharply from some politicians in Washington, including President Obama. 

Now, that national clamor is beginning to reverberate at the state level. Perhaps the most notable example is Louisiana, the ground zero of the oil spill and its disastrous effects.

The state has long been among the darlings of the oil and gas industries, placing fourth in terms of oil production. That ranking rises to first if the offshore rigs in federal waters are included.

But with several bills now working their way through the state legislature in Baton Rouge —  and progress being made on a renewable energy portfolio standard — clean energy advocates say they could see at least a glimmer of good coming from the gooey mess infiltrating Louisiana’s coastlines and marshes.

State Legislation

State Sen. Nick Gauteaux (D-Meaux) is sponsoring two bills promoting alternative energy sources. One, Senate Bill 183, would let the state rent out state-owned land to build renewable energy projects, including solar and wind farms. But there is also substantial interest in hydrokinetic installations in the Mississippi River.

Currents in the river spin turbines to generate power, and one company involved in the concept has 80 site licenses in the Mississippi River and another 17 in the Atchafalaya River, a distributary of the Mississippi in south central Louisiana.

"Louisiana is already a leader in the oil field," Gautreaux told the Associated Press. "We need to become a leader of alternative technology and fuels. Do you want your money going to overseas tyrants or do we want our money staying right here in Louisiana?"

Sen. Gautreaux’s bill has passed the State Senate and is now awaiting a House committee hearing.

If it becomes law, it would not be the first renewable energy win for the state.  In 2007, the state passed its residential solar incentive program. Among the most generous in the nation, it gives consumers a tax credit of 50 percent of a solar installation, up to $12,500.

"It’s pretty incredible, if you couple that with the federal tax credit, you get about 80 percent of your investment back," said Jill Mastrototaro, the senior field organizing manager for the Northern Gulf of Mexico Regional Office of the Sierra Club. The federal credit is another 30 percent.

A second bill that has passed the Louisiana House and is awaiting a vote in the Senate would make that solar program more attractive, preventing unreasonable restrictions on installations of solar panels. Rep. Franklin Foil (R—Baton Rouge) is sponsoring the legislation.

Economic Effects

According to Mastrototaro, the passage of the initial solar incentive program had an overwhelming — and an almost immediate — effect on the state renewable energy landscape.

"We went from a handful of interests to well over several dozen solar companies in the state," she said. "It is obvious that when government puts incentives in place, the industry responds appropriately."

The economic possibilities around renewable energy may become even more important if the dire predictions of Louisiana’s post-spill financial misfortunes begin to come true. Seafood wholesalers and tourism, both affected by the spill, bring in about $1.5 billion a year to the state economy.

The other major step forward would be the implementation of a renewable energy portfolio standard. The Sierra Club and other groups in Louisiana have been working for several years to pass such a measure, and Mastrototaro said a vote of the Louisiana Public Service Commission is scheduled for June.

As currently constructed, though, the RPS would set only voluntary amounts of power from renewables that utilities would provide. Several other states around the country, such as Utah, have similar voluntary RPS goals. Among southern and southeastern states, only North Carolina and Florida have renewable portfolio standards of any kind.

"Ultimately it looks like the state will be getting an RPS regardless of which way the [Public Service Commission] vote goes, given the amount of investment that’s been made in the process," Mastrototaro said.

"Is it going to be ultimately what we would love to have? Probably not, but at the same time it is a step in the right direction. Arkansas, Mississippi, Alabama, none of those states have an RPS, so we would really be helping to push things forward in the right direction for the South."

Thank the Oil Spill?

For Mostrototaro, there is little doubt that the unfortunate momentum provided by the millions of gallons of oil flooding the Gulf is already pushing Louisiana in a greener direction.

"In my opinion, the oil disaster has really helped elevate the conversation, and helped the general public understand how that can actually translate down to the ground level," Mastrototaro said.

"There is a lot of low-hanging fruit in the renewable industry, be it through weatherizing, putting incentives out there for renewable energy to relocate to Louisiana, trying to leverage some of the more immediate resources that are available to promote the renewables industry."

To see how the oil spill has shifted the conversation around renewables, though, one need look no further than President Obama. On March 31, standing in front of a fighter jet at Andrews Air Force Base, the president declared:

"Given our energy needs, in order to sustain economic growth and produce jobs, and keep our businesses competitive, we are going to need to harness traditional sources of fuel even as we ramp up production of new sources of renewable, homegrown energy."

It was on that day that President Obama and the Department of the Interior announced a massive expansion to offshore drilling exploration. But the president has since blocked any new undersea oil exploration for the next six months at least, and he has repeatedly stated the need for Congress to pass clean energy and climate legislation this year.

Indeed, on May 27, after many weeks of catastrophe in the Gulf and many millions of gallons of leaked oil, the president said:

"More than anything else, this economic and environmental tragedy – and it’s a tragedy – underscores the urgent need for this nation to develop clean, renewable sources of energy. Doing so will not only reduce threats to our environment, it will create a new, homegrown, American industry that can lead to countless new businesses and new jobs."

The issue of whether Congress —  and other states — actually act on energy legislation that will reward large-scale investments in carbon reduction, however, will unfold in the next weeks and months.

See also:

U.S. Policy Experts: Premature to Pass Oil Spill Liability Bill

Investigator Warned MMS in 2009 About Deepwater Gas Blowouts in Gulf of Mexico

Did Deepwater Methane Hydrates Cause the BP Gulf Explosion?

Advocates Call On Salazar to Relinquish Interior Dept’s Oversight of Drilling Safety

Research Shows Federal Oil Leasing and Royalty Income a Raw Deal for Taxpayers 

Criticism of Secret Oil Dispersant in Gulf Grows Louder in U.S.