Viewpoint: A Careful Balancing Act Charlotte Business Journal, May 16, 2008
(Duke Energy Corp. Chief Executive Jim Rogers spoke to shareholders last week about the difficulties the company faces in balancing its goals of providing electricity and reducing carbon emissions. Following is an edited excerpt from his remarks at Duke's annual shareholders meeting May 8 in Charlotte.)
Let me talk a little bit about connecting the dots. That, quite frankly, is what my conversation with you today is all about.
I look out and the biggest problem we have is carbon. I believe what (former U.S. House Speaker) Tip O'Neill used to say: "When you have a problem, the most important thing you can do is hang a lantern on it." I want hang a lantern on the problem that we have in terms of solving the CO2 challenge.
Congress is now considering carbon legislation. My hope is they connect the dots. I'm not encouraged by the recent legislation that was passed on corn ethanol.
That is going to prove to be a disaster. They have created a situation where there is a battle between if corn is going to be used for food or fuel. They didn't understand the implications. They didn't understand the consequences. And the corn-ethanol legislation is simple compared to the vexing complexity of climate change.
So it is very important, as a company that's trying to make this transition to a low-carbon world, that we help them to get it right, so they don't make the same kind of mistakes with carbon legislation.
Job one for our company is producing affordable, reliable, clean electricity. There are five ways we can produce electricity. We can do it with coal. We can do it with nuclear. We can do it with gas or renewables, or we can do it with what we call the fifth fuel, energy efficiency.
Let me take coal for instance. Coal is affordable. It is reliable. It is not clean. Renewables: very clean, but not affordable. Not reliable. You only have solar when the sun shines. You only get wind when the wind blows.
If you look at natural gas, those prices are going up and raising questions about affordability. It's reliable. It's clean. But it is only 50% (cleaner than) coal.
Every one of those has tradeoffs. There is no perfect choice. There is no silver bullet. Every one's got pluses and minuses.
There are those in the consumer movement who say the No. 1 priority is affordability. Sure, I could do affordability. But then I would have to trade reliability goals and clean goals.
There are some in the environmental community who say to me, "Rogers, don't worry about affordability. Don't worry about reliability. It's just got to be clean."
The reality of life is I don't have the luxury of being able to say clean is my No. 1 objective. I don't have the luxury of saying affordability is my No. 1 objective. I don't have the luxury of saying reliability. I've got to make sure we do all those things and that we balance those things going forward.
Let me kind of step away for a moment and look at it in a more macro view. This is the view I would like Congress to look at and our national leaders to look at.
It is critical that we get it right with respect to the relationship of energy to the environment (and) to the economy. That we have energy policy that supports our economy. That we have energy policy to achieve our environmental objectives.
There's an interplay here that goes on. And we can't, as a country, forget that we have to balance each of these objectives.
Dan DiMicco's here from Nucor. (DiMicco, chief executive of Charlotte-based steelmaker Nucor, is a member of Duke's board of directors.) If we get it wrong with respect to the pricing of energy, Dan at the end of the day will move those steel plants -- he's going to have no choice -- offshore. He's going to find himself competing with people from China who don't have the same environmental requirements that we do. And they're going to be able to produce steel at lower prices. And that's going to translate into less jobs in our country.
So we've got to get this right. We don't live alone in America. We live on a planet. We have to address these issues in terms of worldwide goals. We need to look at this in a much broader way in the future.
Reprinted with the permission of the Charlotte Business Journal.