Fossil Energy Knows It’s a Full Contact Game – Does Cleantech?

Posted By mikec on December 6th, 2010

Cancun - When I started working on solar energy issues several years ago, I repeatedly heard: “Everyone loves solar.” Back then, many people in solar and other cleantech sectors saw long-term meritocracy in the energy business. Public demand, technological advances and an inevitable price on carbon were going to drive cleantech to dominance over time. “Renewable energy,” it was often said, “will soon become just plain ‘energy’.”

From the gridlocked global warming treaty negotiations here in Cancun, however, the picture seems starkly different. The Congressional climate bill fight ended in disaster, the recession tightened credit markets, and the coal and oil industries bought themselves a new Congress last month. And that global carbon market many were counting on? The most optimistic note offered by top U.S. treaty negotiator Jonathan Pershing was, “maybe next year.”

Still, cleantech possesses a great combination of assets that many industries spend considerable time and money trying to generate:

Policy momentum: California’s anti-cleantech Proposition 23 lost by a huge margin last month, and the offshore wind industry has been greenlighted by the Obama Administration.

Business success: Solar is now the fastest growing energy sector, creating jobs in all 50 states.

Wide and deep public support: Over 90% of Americans support solar energy, while 87% believe we should build more wind farms.

However, that asset combination has also moved solar, wind, battery storage, and energy efficiency technologies from being cute niceties to potentially serious market disruptors for traditional dirty energy players.

The dirty energy guys know that, and they are acting accordingly. I’m not sure clean energy can say that.

Cleantech investors, executives and leaders have a lot at stake, and they should pay attention to dirty energy’s increasingly aggressive attacks:

Virtually all of these attacks push three, interlocking memes about cleantech: 1) It’s not ready; 2) It’s too expensive; and 3) It’s unreliable. And the message discipline and sheer number of these attacks make it very likely they are being underwritten and coordinated by people with a vested interest in undercutting support for clean energy.

But if you invest or work in cleantech, should you really care? After all, customers and project financers make rational decisions, immune from a technology’s market position… don’t they?

Not according to a panel of cleantech communicators we convened during the recent Solar Power International (SPI) trade show. There, RenewableEnergyWorld.com founder and publisher Oliver Strube; pollster Jeff Levine of Gotham Research Group; Kimberly Kupiecki of Edelman; and Greentech Media editor-in-chief Michael Kanellos joined us to discuss two new polls and steps cleantech should take in the face of dirty energy attacks on cleantech.

These experts agreed:

  • Cleantech is now in a full-contact game with dirty energy, which is playing accordingly.
  • The attacks by dirty energy are serious, coordinated, and are beginning to get traction in public opinion research.
  • By generating, stimulating, or exacerbating customer concerns about readiness, cost and reliability, they are affecting the marketing and sales environment for large and small companies.
  • More than probably any other industry, cleantech has a strong interest in collective brand defense.
  • Individual cleantech businesses and investors can’t rely solely on their trade associations, much less on environmental groups or on simple public goodwill, for their advocacy. It’s in each cleantech player’s financial interest to help to mount a more concerted effort to push back against detractors.

Our panelists recommended at least three steps for cleantech to take.

1. Clean energy needs to capture peoples’ imaginations, not just their intellects

Emory University psychologist Dr. Drew Westen conducted groundbreaking research in 2004, finding that people make decisions first and foremost at the emotional level, and only then do they begin rational consideration. In fact, Westen found, humans are incapable of doing otherwise. The cleantech community should assume there’s a reason why deep-pocketed Chevron and the coal front group, America’s Power Army, have spent huge sums on advertising and marketing materials with a certain feel to them.

2. Individual companies should advocate for the cleantech industry – it’s in their individual interests

A great recent example of this is SPG Solar CEO Tom Rooney’s piece making the case why political conservatives should support clean energy. Mr. Rooney is busy running a company, but he took time to do a thoughtful, spot-on piece that generated a lot of traffic, comments and conversation. It also raised SPG Solar’s visibility and thought leadership, at very low cost.

We need more of that type of effort across the board. A lot more, in fact. At our panel, Edelman’s Kimberly Kupecki said, “One of the biggest challenges is helping solar companies talk about the context – why they matter and how they’re affecting their industry in the broader picture. It’s another way we can simply and cheaply be our own advocates.”

3. Welcome a conversation about cost

Cleantech voices need to frame the cost argument properly by relentlessly pointing out that fossil fuels’ supposed cheapness is underwritten by massive taxpayers subsidies.

The dirty energy lobby has proven highly sensitive to this counter-argument. On October 12, 2010, Solar Energy Industry Association CEO and President Rhone Resch called for cutting the “grotesque” subsidies to fossil industries. “Every year, the toxic fossil industries receive $550 billion in subsidies worldwide,” he said.

Just two weeks later, ExxonMobil ran a remarkably defensive ad in the form of an obfuscating quiz on subsidies (see below) at the bottom of the front page of the New York Times.

Our panelists were in full agreement that it’s time for the solar industry to wade into the cost conversation. If we aggressively frame that conversation accurately, we’ll win.

Bottom line: Cleantech managers and investors are busy trying to build thriving companies, but their growing victories have drawn the opposition of status quo players who don’t want them to succeed. That’s why the dirty energy industries are now spending significant resources to harden the marketing and sales environment against cleantech’s success. All the facts, figures and solid product offerings in the world won’t overcome that problem if this emerging threat isn’t faced.

Dirty energy is playing full contact. Are we ready to do the same?

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5 Responses to “Fossil Energy Knows It’s a Full Contact Game – Does Cleantech?”

Ron S.

Far be it from me to defend ExxonMobile, but neither are you representing the facts here about fossil-fuel subsidies correctly. You write:

Mr. Cohen’s multi-billion profit company is uncomfortably familiar with open-ended subsidies and their impact on consumers. So, he should know that if you’re given $550 billion a year to be “inexpensive,” you shouldn’t run your mouth about the cost of clean energy technologies.

Who is giving ExxonMobile, or indeed ANY of the western oil majors $550 billion a year to be inexpensive? I presume you know the source of that figure, which is the International Energy Agency’s estimate of fossil-fuel consumption subsidies across all fossil fuels (not just oil) in 37 mainly developing and emerging countries, in 2008. (There estimate for 2009 is $312 billion.) The biggest subsidizers are countries like Iran, Russia and Venezuela, and rest assured those countries ain’t handing money over to ExxonMobile, Chevron or any other western energy company.

ExxonMobile’s ad was technically correct: direct subsidies (budgetary subsidies and tax breaks) provided by the federal government for corn ethanol now exceed those for oil and natural gas.

Of course, those comparisons do not count money provided through export credits and the like, but has anybody quantified their value to the recipients, much less determined who are the beneficiaries — which may be more companies like Halliburton than the oil majors themselves?

Jack Harich

Mike,

Good post. What caught my eye was “From the gridlocked global warming treaty negotiations here in Cancun, however, the picture seems starkly different. The Congressional climate bill fight ended in disaster, the recession tightened credit markets, and the coal and oil industries bought themselves a new Congress last month.”

I’ve been a full time researcher on the sustainability problem since 2001. My work shows the above is due to high systemic change resistance, as described in this paper:
http://www.thwink.org/sustain/articles/009/ChangeResistanceAsCrux.htm

The paper explains how gridlock in Cancun, legislative disaster, and control of Congress by anti-sustainability industries are all symptoms of change resistance. The paper then analyzes why it occurs, what the root causes are, what the high leverage points are for resolving the root causes, and what some possible solution elements are.

Hope this helps. Keep up the good work.

Jack

mikec

Glad you’ve come to SG, Ron. We welcome your readership and your thoughts.

Your comments here and other places are encouraging me to find a more inclusive term for various forms of fossil fuels’ government welfare – tax breaks, direct subsidies, pollution forgiveness, rock-bottom access to public property (which they often ruin), grants, and appropriations.

I’m going to start using the term “welfare,” because to my mind, that’s basically what it is. Do you have a suggestion for a better, more inclusive term to suggest?

One point of clarification – We aren’t saying that ExxonMobil is lying about ethanol getting more subsidies than Big Oil. We’re saying that ExxonMobil’s slight of hand is to put their subsidies on the line as the policy support for renewables via some faux comparison. EarthTrack’s Doug Koplow has domestic fossil subsidies at $52B. As some working on renewable energy policy, I deeply doubt that either solar or wind are getting anything close to that in government welfare. You’re free to disagree, but I can tell you that the best we’re doing to do is agree to disagree.

mikec

Thanks for your comment, Dana, you definitely appear to “get it” when it comes to energy issues. I look forward to exchanging ideas with you going forward.

mikec

Thanks for the comment, Jack, and for the link to your paper. I will read it more carefully when I have some time to focus on it, but from what I’ve seen so far, it appears fascinating and very well written. No question, there is a tremendous amount of systemic change resistance out there!