Legislators Can Learn Lessons Too

If the recent Minnesota Environmental Initiative Legislative Forum is any indication, the upcoming session will require due diligence from citizens to demand common sense leadership from their elected officials on energy and environmental issues. A recurring comment made during two legislative panels at the forum was that legislators should not undo nonrenewable fuel laws and greenhouse gas policies passed in the Next Generation Energy Act because it passed with overwhelming bi-partisan margins in 2007. However, when the new legislative session begins in 2011, Minnesota’s predicament and base of experience will be markedly different than it was in 2007. 

Christina Pierson,Fellow

Christina Pierson,Fellow

What is not so different is the propensity for legislators to overextend themselves when the general public is not familiar with new policy concepts being introduced into the public realm. Consider the pre-session debate that took place at the forum over the question of “supplant or supplement” in regard to the Outdoor Heritage Fund.

Outdoor Heritage Fund

Recall in 2008, voters passed the constitutional Outdoor Legacy Heritage Constitutional Amendment that increased the state sales tax by three-eighths of one percent for a span of 25 years from 2009 until 2034. As state government figures out how to deal with the $6.2 billion deficit for fiscal years 2012-13, leaders are also pondering whether the $160,000,000 raised every two years from the three-eighths of one percent dedicated sales tax is enough to support natural habitat, arts and culture and water resource programs, or do these programs get another source of funds through the state general budget account.

In these tough economic times, it is likely that prudent, common sense leadership means that the general fund budget allotment for natural habitat, arts and culture, and water programs are substituted with $160 million dollars from a dedicated tax every two years instead. In this way, general fund dollars could be diverted to core functions—or even (heaven forbid) lowering the tax burden. A different leadership position might be taken in times of budget surpluses.

The question is not whether these projects deserve additional funding:  The question is with limited resources and a $6.2 billion deficit, what is the pecking order of priorities. Be assured that some citizens will be calling legislators to double-dip from the general fund and dedicated tax fund on spending for natural habitat, arts and culture, and water programs.  Will you contact your legislator on this issue?

Electric Energy Fuel Choices

The contrast in viewpoints at the Minnesota Environmental Initiative forum could not be clearer. Some advanced the green mantra that all nonrenewable fuel sources are bad and all renewable resources are good. While others expressed the more reasonable notion that we need all fuel resources to support a strong, viable economy that attracts all kinds of jobs, businesses and capital investments.

When dealing with energy and environmental laws at the legislature, pragmatism sometimes loses out in the quest for command and control legislation about fuel resources for electric generation and related industries. The state’s balance for reliable, low-cost, environmentally-sound electric system in Minnesota began to unravel in 1994. To support the renewable energy industry and cap the amount of nuclear waste from electric generation, the legislature passed a nuclear power plant ban and mandated NSP, now Xcel Energy, to buy a pre-determined amount of renewable energy over a certain time period

In 2007, to eradicate greenhouse gas emissions to stop global warming, the legislature passed an 80 percent goal to reduce greenhouse gas emissions by the year 2050. To accomplish this, it established a moratorium on in-state and imported coal generation that went into effect in 2009. Additionally, since natural gas has half the carbon emissions of coal based power and no technology exists to eliminate carbon emissions from fossil fuel combustion, full use of natural gas can no longer occur after the year 2025 if the state is to meet its 80 percent reduction goal.

The commercial/industrial, agriculture, forestry and waste, transportation and residential sectors await further instruction from the legislature in regard to reductions for an expensive, job-killing state-only or regional cap and trade scheme. The goal is an 80 percent reduction in greenhouse gases by the year 2050. The net result:  a possible interstate commerce lawsuit by the State of North Dakota and a BIG OL’ “CLOSED FOR BUSINESS” SIGN ON MINNESOTA.

Also in 2007, the state passed the Minnesota Renewable Energy Standard of 25 percent by 2025, passed as the nation’s most aggressive standards. Proponents bragged that green jobs and green manufacturers galore would flock to the state if only the legislators would pass the renewable energy standard and greenhouse gas laws.

Four years later, where are the jobs and the economic boon from Minnesota’s renewable energy standard and greenhouse gas cap and trade leadership, what are the measurable benefits for the cost of our environmental regulations, and what lessons can be learned?

Job creators and homeowners are not only concerned about how much energy costs; they are just as concerned about how much it costs if we do not have adequate electricity for a digital economy.  

Nevertheless, some legislators insist that the state’s renewable energy policies still do not go far enough and that the legislature should establish feed-in tariff rates (guaranteed prices at or above the retail rate) for wind and solar energy sources. They scoff at other legislators’ suggestions to lift the bans on new nuclear and coal generation resources within the first two weeks of the 2011 session. Those legislators will insist that the state absolutely not roll-back the greenhouse gas goals and cap and trade provisions in state law because it originally passed by a wide margin. They suggest that legislators cannot change their minds after further research or after hearing their constituents’ stories of the inability to conduct commodity, manufacturing, shipping or construction business with the financial and operational barriers imposed by carbon reduction and cap and trade policies.

We disagree and here’s why.

While renewable energy technologies have made tremendous advancements, they are still not a viable alternative for reliable and secure base load coal and nuclear sources. Electricity must be used when produced. For every megawatt of unreliable wind and solar energy brought on the electric grid, an equal amount of fossil fuel energy has to be available for back-up simultaneously. 

Minnesota’s renewable energy standard has not offered robust job growth as promised. In fact, the increased cost of electricity due to the integration of renewable energy during an economic recession has been detrimental to the growth of all industries, including green industries.

For diversification, our state needs to continue the quest for both renewable and nonrenewable energy sources that are reliable, low-cost and have as little environmental impact as possible. After all, new nuclear plants produce less waste per megawatt of electricity generated and coal plants generate power that is 70 percent cleaner than ones built in the 1970s.

Energy Efficiency

In 2007, the Next Generation Energy Act also tinkered with energy efficiency and conservation improvement laws and went from mandating energy spending to an energy savings emphasis by electric and natural gas utilities. Voluntary economic conservation should be supported, but political conservation is wasteful government-directed energy measures that would not be taken voluntarily.

Like virtue, energy conservation and efficiency are their own reward, but do not expect it to necessarily slow the growth in the demand for energy. Energy efficiency creates more disposable income that allows for more purchases of products powered by energy. Larger screen televisions, hot tubs, leaf blowers, iPads, you name the electronic device—- Minnesotans of all ages want it.  

Energy efficiency could equate to more power plants, not less. And what is so offensive about robust growth?

Environmental Permitting

With all of the easily available human and quality of life resources, one would think Minnesota would be a terrific place for a business to start and thrive. Instead, it is one thing after another that discourages economic development. Often times the final nail in the coffin pertains to environmental permitting.     

More often than not, economic growth and change require a permit of some type. A business or entrepreneur’s ability to get permits in a timely fashion has consequences. A December 2009 Minnesota Pollution Control Agency Environmental Review Streamlining Report said projects evaluated by state government took anywhere from 44 to 1,825 days with 228 days the median. The speed depends largely on the project’s location, technology being employed and public interest.

In general, what takes months in other states can take multiple years in Minnesota. These delays have sent new ideas to other states and/or forced Minnesota businesses to chase instead of lead their competition. A start for a simple change suggested by the Minnesota Chamber revolves around restructuring the state’s permitting process so permits are “deemed issued” if a final decision has not been made within 180 days of filing a complete application. They are not asking to throw out the baby with the bath water:  All they are asking for is a little more speed in the process and some updates along the way so they don’t get all the way to the end, only to find they could have fixed something during the process.

Conclusion

Minnesota’s spending habits, tax, energy and regulatory policies have given our state’s legacy companies such as 3M, Hormel, Marvin Windows, Polaris, Cargill and others legitimate reasons to expand their revenue-generating, job-creating industrial facilities outside the state. Appearances are not deceiving. When our own world-renown legacy companies flee the state, legislators and citizens need to ask how we can reverse this decades-long trend.

Common sense leadership evolving from lessons learned is required. If you agree, you better let your legislator know.