Brilliant (30 page)

"We simply must balance our demand for energy with our rapidly shrinking resources," insisted Carter in an address to the nation in April 1977.

By acting now we can control our future instead of letting the future control us.... Our decision about energy will test the character of the American people and the ability of the President and Congress to govern. This difficult effort will be the "moral equivalent of war"—except that we will be uniting our efforts to build and not destroy.... The 1973 gasoline lines are gone, and our homes are warm again. But our energy problem is worse tonight than it was in 1973 or a few weeks ago in the dead of winter. It is worse because more waste has occurred, and more time has passed by without our planning for the future. And it will get worse every day until we act.... The world has not prepared for the future. During the 1950s, people used twice as much oil as during the 1940s. During the 1960s, we used twice as much as during the 1950s. And in each of those decades, more oil was consumed than in all of mankind's previous history.

As part of this effort, Carter signed the National Energy Act into law, a component of which, the Public Utility Regulatory Policies Act (PURPA), marked the first significant legislation to affect the power grid since the New Deal. PURPA permitted independent power producers that met strict fuel efficiency standards to enter the electricity market—previously the sole domain of the utility companies. Carter hoped that such legislation—and the competition it might engender—would encourage the construction of more efficient coal plants and the development of alternative energy sources such as wind, solar, and biodiesel. PURPA didn't succeed in fostering the significant development of alternative energy sources, but it did open the way for more deregulation of the energy industry.

The Energy Policy Act of 1992, signed by President George H. W. Bush, encouraged further deregulation of the electricity industry at the state and federal levels and broadened the types of competitive companies allowed to produce energy for the grid. It brought energy trading companies such as Enron, Dynegy, and Reliant Energy into the mix. These companies were essentially unregulated power brokers that might not own any generating facilities at all. They bought and sold electricity on the open market and also traded in derivatives, betting on supply and demand as with any other commodity, such as corn or pigs. Enron CEO Jeffrey Skilling claimed the development would be a boon to consumers: "We're working to create open, competitive, fair markets," he remarked. "And in open, competitive, fair markets, prices are lower and customers get better service. We are the good guys—we are on the side of angels."

Decisions concerning the deregulation of power grids rested largely with state governments, and during the late 1990s—a time of fervent support for deregulation in general—a number of states, including California, passed legislation that deregulated their power industries. California's electric rates were historically high, and its power grid was plagued by problems. For one thing, no new generating plants had been built in recent years, but demand for electricity had soared. As a consequence, California had grown heavily dependent on out-of-state hydropower from the Pacific Northwest, and state legislators hoped that competition fostered by deregulation would strengthen in-state electricity generation and also bring down the cost of electricity for households and businesses.

California's deregulation laws were complex. Indeed, the buying and selling of electricity is endemically complex: it still can't be stored, the control of supply and demand needs to be exquisite at all times, and each set of transmission lines has limited capacity, which means that in a high-demand, high-volume market, the supply routes for all customers need to be charted out ahead of time to avoid congestion in the lines. To handle the buying and selling of electricity in the deregulated marketplace, California created an agency that set hourly prices for electricity, which could be bought at auction the day before or on the day of delivery. Another agency managed the transmission lines and conducted real-time auctions, which were meant to take care of last-minute, unexpected changes in supply and demand and guarantee adequate power reserves.

Initially, deregulation did reduce the cost of power. But the winter of 1999–2000 was a dry one in the Pacific Northwest, and the low snowpack meant that come spring, there would be less available hydropower from Oregon for the California utilities. In May 2000, unseasonably warm weather caused the demand for air conditioning to soar, and already scarce power sources became even scarcer. Within this tight market, some of those in a position to take advantage of unfavorable conditions did. Enron and other energy trading companies exploited loopholes in the California laws to create an appearance of even greater scarcity in the face of high demand. The energy traders weren't interested in simply acquiring energy; they made much of their money by "flipping" it—buying and then selling in order to make a profit on the trade. Their primary goal was not to provide better service to customers at a reasonable profit for themselves, but to make money.

The traders created artificial shortages by reserving energy for which they had no need and by inducing generators to shut down for maintenance even when maintenance wasn't necessary. They also scheduled large loads of electricity for limited transmission lines so that actual delivery of the electricity would be impossible. All these practices tied up supply and forced California utilities to buy energy at emergency prices during the real-time auctions. Wholesale prices of electricity increased more than 500 percent from the year before.

Retail prices during this time, however, were fixed, so utilities, including the state's largest—Southern California Edison and Pacific Gas and Electric—had to buy energy from the trading companies at a cost much higher than they could charge their private customers. The utilities, without the resources to purchase the electricity, pleaded for energy conservation and at times resorted to "rolling blackouts" in order to alleviate high demand they could not meet: one neighborhood after another went dark for an hour or two during the day.

Jeffrey Skilling blamed the shortage on poorly written legislation. "You probably couldn't have designed a worse system," he insisted. And while speaking at a conference in Las Vegas, he took the opportunity to joke about the dire situation in California: "You know what the difference is between the state of California and the
Titanic
?" he asked. "At least the lights were on when the
Titanic
went down." No less callous were the Enron energy traders, one of whom was recorded as saying, "They should just bring back fuckin' horses and carriages, fucking lamps, fuckin' kerosene lamps."

The crisis, which was alleviated only by state and federal intervention, ultimately cost California billions of dollars, and it induced other states to pull back from deregulating their power grids. Enron eventually failed spectacularly, Jeffrey Skilling ended up in jail, and new federal legislation aimed to reign in energy traders, but the California debacle served as proof that power greater than a million disciplined, unquestioning men was no match for greed.

Now, a little more than a hundred years after the first long-distance transmission lines at Niagara Falls sent power to Buffalo, more than 300,000 miles of lines capable of carrying more than a million megawatts of power form a caul over the country. And for all the blackouts and anxieties of the past half century, most of us still take our power on faith, for by now we might feel that we cannot see—or even think!—without it, and its humming is not only the music of our spheres but also a kind of cathedral tune. To cartographer Steven Watt, who studied aerial photographs as he worked on new maps to be used with GPS technology, the transmission lines that cut across the country took on the appearance of leaded strips supporting panes of glass:

I used contemporary satellite and aerial imagery to help me correlate the position of roads with other features in the landscape. For maps in the United States, I worked one county at a time, within which I redrew the position of every road and intersection.... I looked for a fixed reliable set of points independent of the roads, which I could use to subdivide each county, and I decided to use the electric power lines, which, for the most part, are straight and clearly visible in overhead imagery. Because trees must be cleared beneath them, they often appear lighter in color than their surroundings. They cross roads, rivers, and towns, dividing the land into sharp-edged polygons that become smaller as population density increases....

As I finished my work within each polygon, I drew a line along the edge of the power lines until it closed the polygon, which I would then fill in with color. Then I'd reemphasize the power lines by drawing over them in black. As I continued working, this process had the unexpected and beautiful effect of creating a pattern reminiscent of a medieval stained-glass window.

Yet this enormous accomplishment, which the National Academy of Engineering has designated "the most significant engineering achievement of the 20th century," is also in dire need of reimagining. Not only is the grid no longer adequate for the increased demands of our times, but it suffers from age and neglect. The generating plants and transformers are old —many are working beyond the natural end of their thirty-and forty-year life spans. Power companies routinely fail to attend to necessary maintenance, including tree trimming, along the lines. It's no coincidence that there have been five massive blackouts in forty years, and three of them have occurred in the past decade. Most significantly, in the United States coal constitutes the greatest single electricity fuel source, powering more than 55 percent of our electric plants (oil now accounts for less than 3 percent of the fuel used to produce the nation's electricity), and further exploitation of fossil fuels isn't tenable in a time of climate change.

The grid of the future, still more imagined than real, may take the shape the U.S. Department of Energy envisions: a system that relies on renewable power sources in the heart of the country. Large solar farms in the desert and wind farms on the Great Plains could produce power that would be delivered as far as the Atlantic and Pacific coasts, where the demand for energy is highest. In such a scenario, transmission lines will need to carry much heavier loads than existing ones can bear, and they will have to be much more efficient than the lines of today, which lose up to 7 percent of power during transmission. As far back as the 1990s, Richard E. Smalley, Nobel laureate and former director of the Carbon Nanotechnology Laboratory at Rice University, suggested that new transmission lines could be built of carbon nanotubes. These tubes are smaller than a blood cell, resilient, and capable of conducting electricity quite efficiently—more efficiently than copper or aluminum—which means that more energy can be transmitted over fewer lines with far less loss along the way. Still, the practical application of nanotube technology is not yet feasible, and the cost of building such a grid would be enormous.

The construction of such a system faces other challenges as well. For one thing, a grid that depends on solar and wind power needs to be able to compensate for the natural fluctuations of these energy sources. Proponents of a stronger national grid imagine that it will be a smart grid, with sophisticated monitoring systems that could match supply to demand across large areas. At times when the wind died down on the plains, the system could instantaneously redirect demand to, perhaps, solar generators elsewhere.

The smart grid would eventually be able to monitor home use and would work in concert with energy storage. Although electricity, except in very small quantities, still can't be stored effectively, Smalley imagined that all homes and businesses would have systems that could store a short-term supply of it—twelve to eighteen hours' worth. Such storage capability would be coupled with a system of real-time pricing, meaning that electricity would cost the most at the hours of greatest demand, so customers would have an incentive to avoid purchasing power during peak times. They could buy it as they slept to even out the demand on the system.

The national grid would also be accompanied by a strengthened localized system of energy production. In a smart grid, the meters would spin both ways, which would enable surplus from small local sources of power, even backyard windmills and solar rooftop panels on private homes, to be instantaneously sold back into the system.

Other energy specialists, including environmental writer Bill McKibben, envision a different grid of the future. They put greater store in applying smart grid technology almost solely to local power sources. There would then be little need to develop expensive long-distance power lines. Each area of the country would exploit the renewable sources—wind, tides, sun, falling water—that it had in abundance. McKibben envisions a decentralized, scaled-back, localized grid that would be seamless, intricate, finessed: "Imagine all the south-facing roofs in your suburb sporting solar panels. Imagine a building code that requires all new construction to come with solar roof tiles and solar shutters. Imagine windmills scattered around town in gustier spots and heat pumps for extracting energy from the earth. Imagine all these pieces linked in a local grid, supplemented with small-scale fuel-burning power plants that produce not just electricity but heat that can be pumped back out to local buildings."

It's one thing to recognize that the grid is no longer adequate, another to build a viable alternative. The development of nanotube technology, energy storage, and smart grid technology will require large-scale research-and-development projects and investment in science education, both of which will take considerable private and public funding. Smalley, before his death from leukemia in 2005, commented:

Energy is at the core of virtually every problem facing humanity. We cannot afford to get this wrong. We should be skeptical of optimism that the existing energy industry will be able to work this out on its own.... America, the land of technological optimists, the land of Thomas Edison, should take the lead. We should launch a bold New Energy Research Program. Just a nickel from every gallon of gasoline, diesel, fuel oil, and jet fuel would generate $10 billion a year.... Sustained year after year, this New Energy Research Program will inspire a new Sputnik Generation of American scientists and engineers.... At best we will solve the energy problem within this next generation; solve it for ourselves and, by example, solve it for the rest of humanity on this planet.