SO CEO Fanning: Policy, jobs, and the economy plus fracking

You may have wondered, how was Southern Company (SO) CEO Thomas A. Fanning so ready and able to respond at length to any question at the SO shareholder meeting? Because he’s a class A CEO who does his homework, such as this white paper he wrote dated September 2011: American Energy Policy, Jobs and the Economy, in which he explains what he meant by “the revolution we have seen in the shale gas industry”.

So, natural gas is important, but it’s not a panacea. Here’s why.

First, the reason prices have dropped so far is because of a new technology called fracking, which releases natural gas from so-called tight rock formations, such as shale gas. Fracking is the injection of chemicals underground, which have the effect of fracturing the rock deposits, thereby releasing the natural gas. There are environmental concerns around the chemicals associated with the fracking process. Those concerns have to be resolved.

Those concerns range from polluted groundwater to earthquakes. It’s great that SO is turning away from coal. I don’t think it’s so great to trade dirty air from coal for dirty water and earthquakes from fracking.

Secondly, many of these shale gas deposits are in places where there is no sufficient pipeline infrastructure necessary to move the gas to the places it’s needed to generate the electricity. Pipelines will have to be built. It will take time. We need to resolve that issue, too.

Meanwhile, rooftop solar doesn’t require shipping or even new electric transmission lines, since it’s generated right where it’s used.

The third issue with gas concerns its volatility. Both nuclear fuel and coal are not nearly as volatile in price. Especially in a situation where everybody rushes to gas and you have constraints in terms of supply, transportation and demand, particularly on cold winter days when gas would be used to not only generate electricity but also heat homes.

Solar electricity is already cheaper than nuclear and keeps going down, and wind power is now at parity with nuclear. I suppose decreasing price is a form of volatility, but not the form that Fanning seems primarily concerned about in the above paragraph.

He also claims solar and wind are a problem because they’re variable, and:

We also must keep in mind that the renewable industry is supported by significant federal subsidies. Considering our current debt crisis, how much longer can the United States continue to do that?

That’s pretty rich coming from the company that convinced the Georgia legislature to approve a stealth tax as a rate hike on Georgia Power customers to pay for its new nukes at Plant Vogtle; the company that benefits from the Georgia Public Service Commissions’s agreement to let Georgia Power pass Plant Vogtle cost overruns on to Georgia Power customers; the same company that got $8.3 billion in federal loan guarantees for those same nukes; Southern Company is really the last company that should be complaining about government subsidies. Especially while its corporate offshoot Georgia Power continues to peddle old, tired, disinformation about solar power to prevent fixing Georgia law that stops you from putting up solar panels on your property and selling the power to somebody elsewhere. If Georgia Power and SO would get out of the way, you could do that and the utility could take a cut so everybody could profit. Southern Company is one of the biggest corporate welfare queens there is.

It’s not Tom Fanning’s job to tell you any of that; it’s his job to promote his company. If you want to see SO CEO Fanning’s positions laid out in an even more organized and straightforward manner than he did in response to questions at the shareholder meeting, many of them are here in this position paper. I’m sure a first class CEO such as Fanning who has already joined in on a wind project can find a way to leverage SO’s private R&D to implement a smart grid and deploy solar power and wind. For jobs, for energy independence, and for profit. All that and clean air and water, too!