Pennsylvania Governor Urges Bush To Launch 'Manhattan Project' for Energy

By Lynn Garner / BNA Daily Report for Executives

Pennsylvania Gov. Edward Rendell (D) sent a letter Dec. 1 to President Bush urging him to show "strong leadership" by launching "a modern day Manhattan Project" that would create large-scale alternative fuels projects and reduce reliance on crude oil.

Rendell used a speech at the National Press Club to outline his idea, called the American Energy Harvest Plan, which he is urging Bush to adopt on a national scale. The federally funded Manhattan Project led to the development of the atomic bomb in the 1940s.

Rendell's plan would rely on the federal government's enormous purchasing power to provide the certainty that Wall Street is seeking before committing millions of dollars to big alternative energy projects.

The federal government spends about $10 billion a year on energy purchases and is the nation's largest energy buyer.

Rendell outlined what he has done at the state level in Pennsylvania as an example of what could be accomplished on a national scale by leveraging the purchasing power of states and the federal government.

"The execution of this plan does not require new federal revenue and it would not add to our country's deficit. But it does require strong leadership," Rendell wrote in his letter to Bush.
Rendell said in his speech that if his American Energy Harvest Plan is adopted on a national scale, the result would be a significant reduction in oil imports.

Oil imports currently are 59 percent of total U.S. supply and are projected by the Energy Information Administration to climb to 66 percent by 2015. Rendell claims his plan would lead to a reduction in oil imports to 53 percent in a decade. "Clearly we won't be done, but we will have taken a huge step in the right direction," Rendell said.

Rendell's plan builds on a state initiative unveiled Nov. 28 called EDGE, or Energy Deployment for a Growing Economy, which promotes advanced coal gasification technology. Coal would be gasified to produce many products, such as synthetic gas used to make chemicals, synthetic natural gas to heat homes, transportation fuels, and electricity.

The state's electric utilities, facing $15 billion in costs to upgrade older coal-fired power plants to meet federal clean air regulations, would have a grace period to keep the older plants running without updated controls if the utilities agree to upgrade or replace those plants with the more efficient gasifiers by Jan. 1, 2013.

Rendell has written to Department of Energy Secretary Samuel Bodman and Environmental Protection Agency Administrator Stephen Johnson asking them to grant waivers to "leapfrog" the installation of conventional pollution controls such as scrubbers on older power plants.

Among the main points of his national energy plan are:

1. Producing 2.5 million barrels a day of fuel, such as diesel and synthetic gas, from 50 clean coal gasification plants

2. Adopting a federal alternative energy portfolio standard to produce 1 million barrels a day from biofuels, 10,000 megawatts of electricity from solar energy, and 100,000 megawatts of electricity from wind power

3. Requiring one-third of federal and state fleet vehicles to be hybrids, conserving half a million barrels of oil per day.

These goals could be accomplished by 2015, Rendell said. He criticized the congressional leadership and the Bush administration for not supporting a national renewable portfolio standard for electricity generation during the energy bill debate earlier this year.

Pennsylvania last year adopted an alternative portfolio standard that will require 18 percent of all retail electricity in the state to come from renewable sources within 15 years. Approximately 20 states have similar renewable energy programs, but there is no national standard.

Rendell said he was spurred to do something after realizing that Pennsylvania companies "are sending $30 billion a year outside our state," and sometimes outside the country, to buy energy. More of that energy should be home grown, he said.

Here are the details of Rendell’s proposal that have already been adopted in Pennsylvania:

The nation’s first waste coal-to-diesel fuel plant. It will produce diesel and jet fuels and generate enough electricity to power more than 40,000 homes. The state pledged to purchase 10 million gallons from the plant for 10 years and organized a consortium of private fuel purchasers to do the same.

An economic stimulus program of $2.3 billion in government capital that is strategically investing in Pennsylvania industries, including $15.6 million in loans and grants for the development of the first windmill blade manufacturing plant in the nation. Gamesa, a world-renowned Spanish firm, agreed to open a U.S. manufacturing facility with Pennsylvania’s investment.

An investment to stimulate the development and the use of biofuels. The state provided capital support for a state-of-the-art biofuels injection facility. Every year the plant will replace 3.2 million gallons of foreign oil in the state’s diesel supply with domestically produced bio-fuel.

A plan to build new state-of-the-art clean coal fired electric generating facilities. The plan, called EDGE – Energy Deployment for a Growing Economy – is a unique partnership to support Pennsylvania’s manufacturing firms by providing low-cost, cleaner fuel, and furthering the state’s solid leadership in creating homegrown energy solutions. The initiative promotes advanced coal gasification technology that gasifies coal to produce an array of products, including synthetic gas, which can be used to make chemicals and consumer products, synthetic natural gas to heat homes, transportation fuels or electricity.

Setting energy efficiency standards for the state government fleet, including cutting out the gas-guzzlers and directing fleet managers to purchase smaller and higher fuel-efficient cars and mandating 25 percent of the fleet of SUVs and light trucks be hybrids.

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