Forget Fracking: 2012 Was A Powerful Year For Renewables

Wind turbines stand alongside an electrical tower at the National Wind Technology Center, run by the U.S. Department of Energy, outside Boulder, Colo.

Brennan Linsley/AP Wind turbines stand alongside an electrical tower at the National Wind Technology Center, run by the U.S. Department of Energy, outside Boulder, Colo.

Brennan Linsley/AP

Natural gas may have reshaped the domestic energy market in 2012, lowering energy prices and marginalizing the coal industry, but America's shale boom hasn't undermined renewables.

In fact, while analysts were paying attention to fracking this year, a record number of solar panels were being slapped on roofs — enough to produce 3.2 gigawatts of electricity.

That sounds like a lot, but solar is still providing just .05 percent of the country's total energy. Still, the solar industry keeps expanding. Roan Resh, who heads the Solar Energy Industries Association, said that's because solar panels are becoming cheaper to make and to install.

"Just to give you perspective," Resh said, "in Washington, D.C., where I live, when I installed solar on my house six years ago, the average install cost was about $14 a watt. Today it's about $4 a watt."

So if you're installing solar panels, business is good. But there's a flip side to that equation. Prices are low because of a global manufacturing glut. Solar manufacturers have the capacity to produce way more panels than consumers are asking for right now, and many panel producers are struggling.

The bulk of solar growth is happening at businesses; companies are installing panels on roofs so that they don't have to buy as much energy from the grid. State and federal policies are making that an easy decision for companies. Businesses who install panels can qualify for grants and tax breaks, and laws in 38 states require a certain amount of electricity to be generated by solar, wind and other renewable sources.

A Good Year For Wind Power, Too

Wind was up this year, too. The federal Energy Information Administration says the industry could add 1.2 gigawatts of capacity this year. Wind only provides a small portion of domestic power, about 3 percent.

Wind is on a strong streak with consumers as well, says Rob Gramlich, a vice president at the American Wind Energy Association. "Where we were serving the equivalent of 6 million homes at the end of 2008, we're serving 13 million today," he says.

In three of the last five years, wind has been the fastest-growing energy sector. That was the case in 2012, but this year's totals leave a bit of a false impression. There's been a flurry of activity in December, and in fact more than half of new wind farms will likely come online this month.

"The single-most reason for that is the tax support system which we all rely upon is expiring at year-end," explains Jim Spencer, the president and CEO of New York-based EverPower, which runs wind farms in Pennsylvania, New York, Ohio and California. "We really accelerated projects that might otherwise have been built next year."

The 2013 Windbreaker

The program — called a production tax credit — expires on Dec. 31. It allows companies that get their wind farms running before then to claim a 2.2-cent tax break for every kilowatt hour of energy produced. That might not sound like a lot, but it keeps their business costs down by about 30 percent.

So wind power is about to get 30 percent more expensive for the utilities at a time when natural gas is very cheap. That's bad news, Gramlich says.

"Utilities are looking at those prices. And they simply won't buy nearly as much wind power without that credit," he says.

The tax credit could still pass, likely as part of the huge bills all the "fiscal cliff" agreements will be stuffed into. A last-minute extension, however, won't help for 2013.

"It's really a black hole next year," says EverPower's Spencer. "We have absolutely no construction plans for next year."

So wind will slow down next year, but no matter what happens with natural gas, you can still expect growth in renewables, due to those state laws pushing alternative energy.

States are doing that because climate change scientists around the world agree that if we don't find a replacement for fossil fuels, our goose is cooked.

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Next In Line For A Fracking Boom, California Looks At The Rules

Most hydraulic fracturing in California is done to extract to oil in areas like this field in Kern County. The state is drafting fracking regulations for the first time.

Craig Miller/KQED Most hydraulic fracturing in California is done to extract to oil in areas like this field in Kern County. The state is drafting fracking regulations for the first time.

Craig Miller/KQED

The controversial drilling technique known as hydraulic fracturing has created an oil and gas boom around the country. In states like Texas, Pennsylvania and Colorado, there's been heated debate about rules that protect groundwater and public health.

California is now wading into that arena with the release of the state's first fracking regulations. The state's earthquake-prone geology, however, could bring particular concerns.

Fracking itself isn't new. The technology behind it, though, has changed.

"We don't do things the way we used to do them," says Ben Shepperd, who heads the Permian Basin Petroleum Association, a regional trade group in West Texas.

"In the '20s, a frack job was once you drill a hole, you drop TNT down the hole and crack the rock that way. That was an old-fashioned frack job," he says standing next to a towering rig that's drilling a new oil well on the outskirts of Midland.

Fracking technology has come a long way. Oil companies now drill horizontally underground along a layer of oil-saturated shale rock. Then they crack the rock by injecting water mixed with sand and chemicals at high pressure.

The West Texas oil industry went bust 30 years ago, but it's currently booming. Shepperd says companies are spending $1 billion a month on drilling in the region.

Next in line for a fracking boom could be California, which is sitting on one of the largest shale oil resources in the country.

"There's a high degree of public interest in this, a high degree of legislative interest in this," says Jason Marshall of California's Department of Conservation.

The state's newly proposed rules are similar to others' in many ways, he says. Drillers would have to pressure test wells and monitor them during and after fracking. But there are new requirements, like looking for old oil wells around fracking sites that could create leaks. "So we are leading in a number of these areas," he says.

Not everyone agrees. "I think we were late to this game," says Bill Allayaud of the non-profit Environmental Working Group. He says just a few years ago, California state regulators were slow to admit that fracking was going on at all.

"They said we don't need to frack here. We don't need to get gas out of the ground that way," he says. "But it turns out we've been getting oil out of the ground that way for decades."

Drillers weren't required to report fracking to the state, but under the proposed rules, they would be. Regulators would then make that information public online.

But Allayaud says landowners near oil wells would have to keep checking that website, because oil companies wouldn't be required to contact them directly.

"Why not?" he asks. "If this stuff is so safe, you're saying you're not polluting anyone's groundwater, let them know in advance so if they want to do their own water quality testing, more power to them."

Like in other states, drillers would have to say what chemicals are in their fracking fluid — unless it's considered a trade secret. Tupper Hull of the Western States Petroleum Association says that information is propriety.

"There's a reason we protect trade secrets and it's not to benefit oil companies," he says. "It's to benefit consumers and to ensure we've got a very competitive marketplace."

Recently, though, concerned lawmakers in Texas have said their trade secret rule is so heavily used, it's become a loophole.

And then there's one more issue: "It takes a big fault to make a big earthquake," and California has plenty of those, says Mark Zoback, a geophysicist at Stanford University.

The risk of a big earthquake from fracking itself is relatively low. But there could be an issue with the fracking wastewater. Drillers often dispose of it by injecting it underground, which builds up pressure.

"You don't inject into existing faults, especially big ones," Zoback says.

California regulators say the fracking rules don't address that because it's handled in existing wastewater rules, but Zoback says the state will have to increase its scrutiny.

"You know it's not [whether] hydraulic fracturing is good or hydraulic fracturing is bad," he says. It's whether "hydraulic fracturing is safe or hydraulic fracturing is unsafe."

California's geology is so complex, says Zoback, that safety has to be considered on a site by site basis.

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