It isn't cheap to go green.
That was all too apparent last week as local officials touted the launch of the latest phase of the wind farm along the Lake Erie shore and Modern Disposal showed off its new garbage trucks that run on compressed natural gas.
Two very different projects, but they had one big thing in common, beyond their environmental and energy independence benefits: They only make sense economically if they get major subsidies.
In short, going green may be cheaper in the long run, but the upfront costs can be a project killer.
It's not a lot different from car buyers, who may be attracted by the better gas mileage from a hybrid vehicle, but are turned off by the higher sticker price.
Only the scale is bigger. We saw that last year, when the new leaders at the New York Power Authority pulled the plug on the grand plans for an offshore wind farm along lakes Erie and Ontario because it was just too expensive to build.
Even the projects that go forward, like First Wind's 14 turbine Steel Winds project along the lakeshore in Hamburg and Lackawanna, need plenty of help. Local municipalities and school districts chipped in lucrative tax breaks. And the federal government is doing its part with all-important production tax credits, worth 2.2 cents for every kilowatt-hour of electricity a wind farm generates.
Modern Disposal executives had been looking into converting its trucks from diesel fuel to natural gas for the last five years. But it took $1.25 million in federal funding to clear the financial hurdles it faced to build a compressed natural gas fueling station -- only the third in the Buffalo Niagara region -- for the 40 natural gas-powered trucks it plans to have on the road by the end of the year. Each CNG-fueled truck costs $30,000 to $50,000 more than a conventional diesel vehicle, said Gary E. Smith, the chief operating officer of Modern Disposal.
"It's just a matter of getting over the investment of the fueling station," said Smith, whose company is pumping $3.9 million of its own money into the Lewiston project.
That's the thing with clean or renewable energy projects. The benefits are real and laudable. Who doesn't want to reduce our dependence on foreign oil and switch to energy sources that pollute less?
But conventional energy sources already are in place. They're convenient and they don't come with high upfront costs.
"There is always a cheaper, dirtier alternative," said U.S. Rep. Brian Higgins, D-Buffalo, who thinks the nation needs to make a "generational commitment" to renewable energy, including the extension of the wind energy tax credit.
Francis J. Murray, the president and chief executive officer of the New York State Energy Research and Development Authority, said the incentives his agency and others hand out are giving these green energy initiatives an early push down the hill. The hope is that these more costly alternatives will pick up momentum as others see the early projects in action.
"They're a wonderful way of demonstrating technology and introducing it to the public," Murray said. "You've got to bring the chicken and the egg together."
CNG vehicles are a good example. Switching fuel-guzzling trucks over to compressed natural gas makes a lot of sense these days, with diesel fuel selling for around $4.20 a gallon and compressed natural gas costing $1.26 a gallon at National Fuel's filling station in West Seneca.
That's a nice savings, especially when your typical garbage truck gets around 4 miles per gallon on a good day. No wonder Modern Disposal and Waste Management have both installed compressed natural gas fueling stations at their local operations within the last six months.
And with the price of natural gas at 10-year lows, thanks to the booming supply of shale gas now coming on the market, it's looking like CNG prices are a good bet to stay well below diesel prices.
Yet with just three CNG fueling stations in the Buffalo Niagara region and only a little more than 100 across New York, the scarcity of places to fill up is a big hurdle, especially since they can cost anywhere from $25,000 for a very small station to $5 million for an elaborate one, said Cliff Mason, a National Fuel energy consultant. National Fuel has a pilot program to provide financing help for companies looking to install CNG fueling stations.
"There's certainly more than enough gas out there," Murray said. "Compressed natural gas has a role to play with large, heavy-duty vehicles."
But it's going to be a slow process, especially when it still takes a lot of green to go green.