mark hertsgaard

Independent Journalist & Author


Kicking the Oil Habit

Port Sulphur, Louisiana – Captain Pete, as everyone in
town calls him, has been an oysterman nearly his entire life. He started
as a boy, learning the trade from his father, who had learned it from
his father. Working fourteen-hour days from leased oyster beds in
Barataria Bay, forty miles south of New Orleans, Captain Pete’s family
supplied the city’s premier vendor, P&J Oyster Company. When P&J closed
its doors on June 10, it was front-page news in New Orleans—one
more in a string of casualties of BP’s deep-sea oil catastrophe.


“It took fifty days for BP’s oil to reach our beds,” Captain
Pete tells me as he steers a flatboat out to survey the damage one
steamy afternoon. Video he shot a few days before showed streaks of oil
the texture of jello staining the marsh grasses that shelter his oyster
beds. “Those grasses will shrivel and die,” he says in an
accent so thick I struggle to comprehend him. With time, and a respite
from additional oil, the grasses could grow back and oyster harvesting
resume, he adds. But this year’s harvest is a total loss, and since BP’s
gusher clearly isn’t going to be plugged anytime soon, much more oil is
certain to slather those grasses.

So it makes sense that Captain Pete would welcome President Obama’s
moratorium on deep-sea drilling. Except he doesn’t. The captain lost his
house in Hurricane Katrina five years ago, and now the BP disaster may
bankrupt the family business, which was helping to put his son through
college. But the moratorium? To Captain Pete, it’s one more lunacy
imposed on coastal Louisiana by outside “experts,” a group he
neither trusts nor respects. Invoking an analogy I heard countless times
during a week of reporting there, he asks, “When a airplane
crashes, do you ground every plane in the country? No. You find out what
caused the problem and fix it. You don’t punish the entire
industry.” He points a well-muscled arm toward the dozens of other
shrimp and fishing boats docked nearby. “Sixty percent of these
guys work on oil rigs, or they service rigs, during the [seafood]
off-season,” he explains. “The economy here was just getting
back on its feet after Katrina. This moratorium will kill us.”

Anyone who is serious about the United States kicking its oil habit in
the wake of the BP disaster must confront the realities of Louisiana, a
state whose economy, politics and self-image have been saturated in oil
for more than a century. They must have an answer for Captain Pete and
other locals who are cursing BP even as they wonder how they will
support their families if the oil and gas industry—widely regarded
as the source of the best-paying blue-collar jobs in
Louisiana—goes under. “We see the same reaction from people
in the coal country of Appalachia and the timber lands of the Pacific
Northwest,” says Michael Brune, executive director of the Sierra
Club. “They may criticize the corporations doing the resource
extraction, but they still want the extraction to continue because it’s
the only jobs they know. The only way to approach these folks with
integrity is to offer them a prosperous alternative. If you support a
drilling moratorium, which the Sierra Club does, you also have to
support a massive shift toward green jobs.”

Plotting a green energy future for Louisiana, however, has been too
daunting a task for most environmental groups. “Our side hasn’t
made a blueprint for Louisiana because this state is seen as so proâ¬oil
and gas,” observes Jerome Ringo, a former Louisiana oil worker who
has been chair of the National Wildlife Federation and president of the
Apollo Alliance. “To be honest, I doubt Louisiana will ever get off
oil completely. But we do need to diversify our energy mix. We need to
think about where our state goes ten years from now and invest in the
green jobs of the future.”

But Louisiana can surprise you. Who knew that this petrostate boasts by
far the strongest solar tax credit in the country? Passed in 2007, the
50 percent credit cuts the cost of installing a solar system in half.
Combine that with Obama’s 30 percent federal tax credit and a Louisiana
homeowner gets an 80 percent discount to go solar and live off the
grid—not a bad choice in a region where storms regularly knock out
the conventional power supply.

Even parts of the Louisiana business community—long a bastion of
the oil and gas industry—may be seeing the light. With great
fanfare, Greater New Orleans, Inc. in May launched its GreenN.O.
coalition, which recognizes “the double bottom line of diversifying
the economy while sustaining the environment.” A study by the
global consulting firm McKinsey estimates that pursuing sustainable
business opportunities could create 90,000 jobs in Louisiana. Beth
Galante, executive director of the New Orleans office of the nonprofit
Global Green USA, sees this shift within the business community as
“winning a major battle in the war” to sway local public
opinion. “To get a chamber of commerce that is dominated by one of
the most conservative oil and gas industries in the country to invest
time and money in green energy is huge,” she argues. “The
political philosophy of many Americans, especially in the South, is that
whatever makes money is good. This will help people realize there are
great opportunities in green energy.”

Great opportunities but also great challenges. It’s not only apoliticals
like Captain Pete who oppose Obama’s moratorium. The legislator who
sponsored the solar tax credit (and numerous other green energy
measures), State Senator Nick Gautreaux, condemns the ban. So does
Representative Charlie Melancon, the Democrat hoping to oust Republican
David Vitter from his Senate seat in November. Melancon’s district is
ground zero for the BP disaster—he broke down weeping during a
Congressional hearing while describing the devastation of its
ecosystems, jobs and way of life—but a great many jobs in his
district derive from the oil and gas industry.

It may be shocking to read in The Nation, but a blanket moratorium on
new deepwater drilling may not be the best policy to pursue in the wake
of the BP disaster. No state in the union is more addicted to oil than
Louisiana; the oil and gas industry is responsible for roughly 25
percent of the state’s economic activity. If you abruptly cut off a
hardened heroin addict, you can kill him; there is a reason physicians
prescribe methadone rather than cold turkey. Louisiana absolutely needs
to kick its oil habit; but it must do so through a planned, orderly
transition or it will not work.

The transition must begin immediately, however, because the oil is
running out. This fact is not much known or acknowledged in Louisiana,
to put it mildly, but it comes from a source that even Chris John,
president of the Louisiana Mid-Continent Oil and Gas Association (and a
former Louisiana Congressman), concedes is a world-class

Matthew Simmons, an investment banker, has operated at the highest
levels of the oil industry for more than thirty-five years. No liberal
tree-hugger, he briefed vice presidential candidate Dick Cheney during
the 2000 campaign. In 2004, in a remarkable feat of investigation,
Simmons analyzed hundreds of obscure engineering reports to reveal that
Saudi Arabia’s oil reserves, commonly assumed to be all but
inexhaustible, were much smaller than claimed and were declining
precipitously. Simmons’s book, Twilight in the Desert, made him a
leading proponent of “peak oil”—the theory that humanity
has now extracted half of the earth’s oil and large future production
increases are unlikely. At first derided as fringe, peak oil is now an
open secret among specialists. “The battle is over, the peakists
have won,” James Schlesinger, the former energy and defense
secretary, said in 2007.

Simmons says the BP disaster demonstrates that “we’re out of viable
oil in the Gulf of Mexico.” The remaining oil can be reached only
with “ultra-deep vertical wells” that extend more than 18,000
feet under the sea floor—even deeper than BP was drilling. Chris
John counters that companies have spent $8 billion since 2007 to lease
deepwater fields in the gulf that “contain huge finds.”
Simmons, however, doubts such oil can be recovered, explaining,
“The pressures and temperatures are enormous down there. BP’s
blowout preventer was state of the art, but it wasn’t designed for that
depth. It could handle 15,000 pounds of pressure per square inch, but it
confronted probably 40,000 to 60,000. We just can’t do this kind of
drilling anymore.”

“We should leave oil before it leaves us,” a statement the
chief economist of the International Energy Agency made in 2008,
encapsulates the challenge facing Louisiana. Yet even proponents of
green energy warn that launching a direct assault on oil is not the way
to go.

The reason Louisiana’s legislature passed the extraordinary solar tax
credit is precisely that “it wasn’t a threat to oil and gas,”
says Wade Byrd, a former official with the state’s natural resources
department who helped draft the bill. State Senator Gautreaux, who
sponsored the bill, implicitly concurs: “A lot of solar companies
wanted to testify in support, but I said no because that would draw
attention. That bill passed with one minute left in the [legislative]
session, and I think it did because nobody lobbied for or against it, so
it was inconspicuous.”

The results have been impressive, though. “In two years, we went
from having a handful of solar companies in Louisiana to having more
than a hundred,” Gautreaux says. “The biggest installer of
solar systems has a backlog of more than a year.” And solar’s
momentum will likely accelerate, thanks to a second victory by Byrd and
Gautreaux. In 2009 the legislature approved their call for solar
financing districts, which allow municipalities to sell bonds to cover
the up-front costs of installing solar systems—often the biggest
hurdle for property owners who want to go solar. The owners repay the
municipality over time. “If you combine solar financing districts
with the 50 percent tax credit, the cost just plummets,” says

Louisiana could reap similar benefits with wind, geothermal, biomass and
other alternative energy sources, advocates say, if it joins the
twenty-nine other states with renewable portfolio standards. An RPS, as
the standard is known, requires electricity providers to supply a
stipulated percentage of a state’s power from renewable sources by a
certain date. Illinois, for example, requires 25 percent renewables by
2025; California, 20 percent by the end of 2010. The idea is to
encourage private investment in renewables by assuring an ongoing

The Louisiana Public Service Commission took a step in this direction on
June 23, when it authorized a pilot program to create up to 350
megawatts of renewable electricity generation within the next three
years. Forest Bradley-Wright of the Alliance for Affordable Energy, the
leading green consumers organization in Louisiana, calls the vote
“a positive step.” But he urges the commission to take the
next step and establish an RPS that is mandatory, ambitious and includes
only genuine renewable sources (an earlier draft RPS had defined nuclear
power and “advanced coal technologies” as renewables).

But Entergy, the electric utility that is the only Fortune 500 firm
headquartered in New Orleans, opposes a mandatory RPS. Wayne Leonard,
Entergy’s CEO, has long urged putting a price on carbon, a stance
critics attribute to the company’s heavy reliance on nuclear power. But
Leonard argues that a mandatory RPS would actually retard the fight
against global warming by forcing expensive renewable energy into
production while leaving coal-fired power plants—the largest
single source of US greenhouse gas emissions—untouched.
Bradley-Wright responds that an RPS says nothing about removing existing
power plants from supply; it only mandates the creation of new,
renewable sources. Besides, he adds, the real answer is to increase
energy efficiency, which could reduce Louisiana’s electricity demand by
30 to 50 percent, thereby making coal and other dirty energy sources
unnecessary. Meanwhile, Byrd and Gautreaux challenge the claim by
Entergy’s vice president for regulatory affairs, Mark Kleehammer, that
Louisiana lacks good enough solar resources to produce competitively
priced electricity. “Louisiana averages five hours of sun a
day,” Byrd says. “Germany averages four, and Germany has a
strong solar program.”

As Louisiana examines the potential of better energy efficiency, it has
the good fortune not to be starting from zero. Byrd drafted efficiency
codes for commercial buildings that were implemented in 1995; a
residential code passed in 2007. But those codes should be strengthened,
he says, and integrated with renewable-energy advances to create
zero-energy buildings. Buoyed by $20 million of investment from HRI
Properties, a national housing developer based in New Orleans, Byrd aims
to construct 250 zero-energy houses for low-income residents in
Louisiana—”hopefully all in one place, to show municipalities
what’s possible,” he says. Equally important is to reform utility
regulation. At the moment, Entergy and other electricity providers in
Louisiana face the same perverse incentive structure that prevails in
most of the country: their profits increase according to how much
electricity they sell. If Louisiana instead emulated California and
rewarded utilities for reducing rather than increasing electricity
consumption, both the environment and the utilities would benefit.

Efficiency is also the key to reducing the burden oil and gas production
imposes on Louisiana, says Amory Lovins, the co-founder and chief
scientist of the Rocky Mountain Institute in Colorado. The vast majority
of oil produced or processed in Louisiana—and bear in mind, much
of the latter is imported from abroad—is not consumed within the
state. It ends up in cars, trucks and furnaces across the United States.
Thus reducing America’s consumption of oil is a prerequisite to reducing
Louisiana’s reliance on the oil industry. By far the fastest way to do
that, argues Lovins, is “efficiency, efficiency, efficiency.”
In his book Winning the Oil Endgame, he outlines a strategy to end oil
imports by 2040 and kick oil entirely by 2050. His strategy relies in
part on expanding government procurement of super-efficient vehicles to
drive down market prices of same. He also advocates so-called feebates:
buyers of more fuel-efficient models in a given vehicle class would get
rebates, financed by fees paid by buyers of less efficient models.
France introduced feebates in 2008, says Lovins, and sales of less
efficient vehicles fell by 42 percent while sales of efficient ones rose
by 50 percent. “Louisiana may not be the best place to pilot
something like this,” he says, “but it’d be a good

Transforming Louisiana’s energy system is not an impossible dream but an
economic and environmental imperative, not least because the state’s oil
is fast disappearing. Louisiana can’t turn green overnight, which is all
the more reason to get started right away. It’s only fair that the
federal government assist in this task, for the nation as a whole has
demanded the oil and gas Louisiana has supplied all these years. But
primary leadership belongs at the state and local levels, shared among
activist, business and political figures engaged in constructive
dialogue with one another and the public at large. The solar tax credit
and other innovations already undertaken show there is an appetite and
capacity in Louisiana for blazing a new path.

Winning over regular people like Captain Pete and his dock mates is
essential. That requires plain talk that respects and broadens local
sensibilities, as well as bold actions that deliver concrete
benefits—in a word, jobs. “Liberals like to talk about green
jobs, but conservatives don’t like that term,” says State Senator
Gautreaux. “I’m neither liberal nor conservative, so I just say
‘good-paying jobs.’ Why do jobs have to have a color?”



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About Mark

Independent journalist Mark Hertsgaard is the author of seven books that have been translated into sixteen languages, including Bravehearts: Whistle Blowing in the Age of Snowden; HOT: Living Through the Next Fifty Years on Earth; and A Day in the Life: The Music and Artistry of the Beatles. He has reported from twenty-five countries about politics, culture and the environment for leading outlets, including The Guardian, Der Spiegel, Vanity Fair, The New Yorker, Time, Mother Jones, NPR, the BBC and The Nation, where is the environment correspondent. He lives in San Francisco.