The new Frontline documentary, Heat, aims to investigate what big business is doing to address the climate change problem. "As I've traveled through America's energy landscape this past year, it's become increasingly clear that the big energy corporations are not about to tackle climate change on their own. It's going to take a big push from government," concludes Frontline correspondent Martin Smith. But in Heat, Smith details, without apparent irony, the failure of many past government "pushes," such as the Clinton administration's Partnership for a New Generation of Vehicles and the Bush administration's corn-based ethanol subsidies. Given these fiascos, Smith fails to make clear why he thinks that a "big push" from government will succeed in dealing with climate change now. In fact, Heat ends up showing viewers that the energy policies of our two major party presidential candidates are in thrall to parochial interests, opinion polls, and the price of gasoline.
Heat opens with correspondent Smith recounting the litany of woes that man-made global warming may visit upon the planet. He travels with mountaineer David Brashears to the Himalayan Mountains, which lie between China and India, to gaze upon their rapidly shrinking mountain glaciers. The Rongbuk glacier photographed in 1921 by explorer George Mallory, for instance, has since lost 40 percent of its ice. Melting glaciers are a problem because they store water that is released every summer to the vast rivers that supply hundreds of millions of people in China, India, and Southeast Asia. Once the glaciers are gone, some rivers may not flow year round.
Smith reprises other dangers posed by man-made global warming as well, including rising sea levels, ocean acidification, more violent storms, and more frequent droughts. Interestingly, Smith interviews Joseph Romm, a former Clinton Administration Energy Department official and now a senior fellow at the Center for American Progress, who says, "I think it's important for people to understand global warming is not the sole cause of everything that happens." Why interesting? Because Smith includes concerns such as failing fisheries and expanding deserts on his list of global warming horrors.
While global warming may contribute to the decline of some fisheries, the chief reason that fisheries fail is overfishing due to a lack of property rights. With regard to the expansion of deserts, the trends are not at all clear. In fact, recent reports find that the world's largest desert, the Sahara, has been shrinking. In addition, some climate models suggest that further global warming could turn much of the Sahara green by significantly increasing the amount of rainfall it receives. Despite his caveat, Romm clearly is alarmed by man-made global warming, arguing that it may push the climate over certain thresholds that will produce irreversible deleterious changes.
In order to avoid the damage caused by climate change, Heat reports that the vast majority of climate scientists warn that the world will have to "dramatically reduce its emissions of greenhouse gases, cutting them by 60 to 80 percent by mid-century." But can humanity actually reduce emissions that much? Smith travels to India and China, two countries whose rapidly expanding economies are using vast amounts of energy and producing increasing amounts of greenhouse gases. Chinese and Indian people want to enjoy the good life, including cars for increased mobility, electronics for work and entertainment, and climate-controlled houses.
Smith talks to the CEO of China's largest privately owned carmaker, Geely Automobile, who plans to more than quadruple production from 160,000 to 700,000 cars in just two years. The CEO of China's biggest electric utility, Shenhua Energy, forthrightly tells Smith that shareholder profits trump concerns about climate change. China builds two new coal-fired electric generation plants per week and is now the world's biggest emitter of greenhouse gases. India will also be emitting significantly more greenhouse gases as it strives to bring electricity to its 350 million or so citizens who are still without it. Economic growth is the priority of poor countries, not dealing with climate change.
What about reducing emissions in the United States? Both major party presidential candidates, Sen. John McCain (R-Ariz.) and Sen. Barack Obama (D-Ill.) are promising to dramatically cut greenhouse gas emissions. And both are big enthusiasts for carbon capture and storage from coal-fired electric plants—so-called clean coal technologies. Why? "In order to run for President in this country in 2008, you have to be for clean coal," explains former Fortune managing editor Eric Pooley. "You can't go to Indiana and Ohio and say, you know, ‘I want to do away with coal.' There's an amazing correlation between being a swing state and being dependent on coal."
Heat points out that more than half of our electricity is generated by 600 coal-fired plants. What are the prospects that carbon dioxide produced by burning coal be captured and stored safely underground? For one, no utility currently does it. Why not? First, because many generating plants are not near places that are geologically suitable for sequestering it. Burying power plant carbon dioxide would require building a massive new pipeline system at least equivalent in size to the one used to ship petroleum products around the country. As Southern Company CEO David Ratcliffe notes, "We haven't come close to defining what will be required in storage, what are the legal liabilities and what are the permitting requirements." Legal liabilities? Well, yes. As Jeff Goodell, author of Big Coal, reminds Smith, "The problem is carbon dioxide is an asphyxiant." Leaking carbon dioxide kills people. How much would it cost to capture and store carbon dioxide? Mike Morris, CEO of American Electric Power, suggests capturing carbon dioxide would add 20 to 30 percent to the cost of energy. Smith notes that neither Obama nor McCain mentions how much of carbon capture and storage would boost their constituents' electric bills.
Besides power generation, transportation is the second biggest generator of greenhouse gases. Smith claims that America's cars generate more greenhouse gases than all the cars in Europe, Japan, China, and India combined. Heat then makes something of a hero out of California's Gov. Arnold Schwarzenegger, who tried to mandate an average automobile fuel economy standard of 42.5 miles per gallon. The automobile companies furiously lobbied against it Washington, D.C. The details are murky, but the U.S. Environmental Protection Agency refused to grant California a waiver to vary its fuel economy standards from the new national fuel economy standard of 35 miles per gallon by 2020.
When someone criticizes cars, can Big Oil be far behind? Smith observes that the world's biggest publicly-traded oil company, Exxon Mobil, is "investing in less than one-tenth of one percent of its profits in renewable energy; much to the consternation of environmentalists." Why is that? Jeffrey Ball, The Wall Street Journal's environmental reporter, tells Smith that ExxonMobil and other oil companies "don't think that any of those [renewable energy] technologies have gotten to the point of economic viability." Another way to look at it is that oil companies are oil companies, not energy companies. Just as wagon companies did not generally become automobile companies, oil companies are unlikely to become wind or solar power companies. In the meantime, Ball gets it right when he says, "Exxon will do what Exxon knows best how to do, which is, run around the world trying to pull oil out of the ground." And why not? As Smith points out, Exxon Mobil made $40 billion in profits last year. Oil companies—and their record profits—will fade away if cheaper renewable energy sources are ever developed.
Smith goes after ExxonMobil's support for "climate change denier groups," specifically mentioning the Heartland Institute and the Competitive Enterprise Institute. The hapless Exxon Mobil spokesperson squirms and apparently accepts Smith's characterization.
Throughout the documentary, Smith follows the twists and turns of how energy and climate issues are affecting this year's electoral politics. As gasoline prices soared earlier this year, Sen. McCain came out strongly in favor of offshore oil drilling. After initially resisting calls to "drill baby drill," Sen. Obama conceded that more domestic oil exploration should take place.
The failure of ExxonMobil and other oil companies to invest as much as Smith thinks they should in renewable energy sources is what provokes him to conclude only a "big push" from government will work. But as a good reporter, Smith did look at some earlier "pushes" and found them "instructive." For example, the Clinton administration subsidized the Big Three automakers in a program called the Partnership for a New Generation of Vehicles. At its inception, the head of General Motors declared, "We've made a commitment to have a hybrid vehicle in production by the year 2001." That didn't happen. Gas prices hovered around $1 per gallon and Americans chose to buy SUVs. A GM spokeswoman tells Smith that Toyota beat GM to the hybrid car because Toyota didn't mind losing money on it for a while whereas GM couldn't justify building hybrids as a business case.
Another example of where government energy policies produced unintended bad consequences is the push to subsidize corn ethanol for transport fuel. The documentary notes that ethanol is now a huge business garnering more than $7 billion in annual government subsidies. There are only a couple of problems: corn-based ethanol marginally reduces greenhouse gas emissions and its production has contributed to the recent run-up in world food prices. "The corn-based ethanol program is going to be considered one of the biggest follies ever implemented in energy policy anywhere in the world in the history of energy policy," says Amy Jaffe, an energy expert at Rice University. Smith points out that Sen. McCain opposed ethanol subsidies and Sen. Obama supported them. Why? It's simple, really—Arizona is not a corn producing state whereas Illinois most certainly is. Obama has recently softened his stance on corn-based ethanol.
On the other hand, Smith rather likes European subsidies of solar and wind power. He points out that Germany produces six times more electricity using solar power than does the United States. Sounds impressive until Smith reveals that solar power supplies 0.6 percent of Germany's electricity while wind power provides 7 percent. While Smith fails to mention it, viewers might be interested to learn that Germans pay about double what Americans do for electricity.