Energy Sector Under Scrutiny

Pittsburgh Post-Gazette
16 March 2010
By Elwin Green,

Perhaps no business sector is such an obvious candidate for going green as energy. After all, fossil fuels often are villainized as public enemy number one.

In response, the multinational conglomerates that dominate the sector are not simply walking away from their GDP-sized investments in fossil fuels. But they are responding to the growing concern.

Petroleum giant BP, for instance, launched its Alternative Energy division in 2005, with a commitment to invest $8 billion in "low-carbon energy" by 2015, including wind power, solar power and biofuels, as well as research in carbon capture and storage. Tellingly, it also has launched a rebranding campaign that ties its name to the slogan, "Beyond Petroleum."

Closer to home, every watt of electricity, every cubic foot of natural gas, every gallon of gasoline comes from companies that themselves are major users of energy.

Most Pittsburghers receive their electricity from Duquesne Light. Like other electric utilities, the company has a mandate from the state Public Utility Commission to develop programs to help their customers use less electricity. Duquesne Light's customer program, called Watt Choices, offers incentives for actions ranging from replacing light bulbs to recycling refrigerators.

But what about its own energy use? Spokesman Joseph H. Vallarian said the company is taking measures similar to those that it encourages customers to take. In its Downtown offices, Duquesne Light has replaced incandescent bulbs with compact fluorescent bulbs. At its scattered facilities, "we use energy-efficient lighting outdoors where possible." The company also has recycling policies in place for employees.

Mr. Vallarian said the company also has purchased "a couple of hybrid bucket trucks" for field work. "We're trying those out on an interim basis to see how they do."

Still, the key question for an electric utility may be, how much, if any, of the company's electricity comes from renewable sources?

In Pennsylvania, the answer has been mandated by the PUC. In 2004, lawmakers passed Act 213, requiring that an increasing percentage of electricity sold to retail customers be derived from alternative energy resources, such as wind or solar. The commission then fleshed out that requirement with yearly benchmarks, beginning with a target of 5.6 percent renewables in 2006-07, and concluding with 18 percent in 2020-21. The current requirement is 6.7 percent.

About half of the electricity used in the U.S. comes from coal-fired plants. And Cecil-based Consol Energy is by far the region's biggest coal company.

Spokeswoman Laural Ziemba knows how her industry is viewed by many with environmental concerns. "There's a 250-year supply of coal in the U.S.," she said. "It is incumbent upon us as an industry to apply technology and innovation to recover those reserves in an environmentally responsible manner.

"Being a fossil fuel company and being and environmental steward are not mutually exclusive."

A recently-announced methane abatement project at the company's Enlow Fork mine will capture methane released during mining that would otherwise escape to the atmosphere. The captured methane will be converted to carbon dioxide before being released into the air. This does not sound like abatement until one realizes that methane absorbs about 20 times the heat that carbon dioxide does, making it potentially a much greater threat to the atmosphere.

In a separate project, Consol has installed a "micro-turbine" at its Bailey Mine in Greene County that captures methane and uses it to generate electricity.

A major step in greening Consol's internal operations was the completion of its new headquarters. The 309,000-square-foot building was constructed with low-emission paints, adhesives and carpet. Design touches, such as energy efficient lighting and sunshades on the building's exterior, will reduce energy costs by about 18 percent, and helped to make the building the first one in Southpointe to be LEED certified.

Pittsburgh's largest natural gas utility was recently sold by Dominion Resources to a private investment group. The former Dominion Peoples, now Peoples Natural Gas, is headed by Morgan K. O'Brien, who left the CEO post at Duquesne Light to take the position.

Peoples is so new that when interviewed, Mr. O'Brien was the only occupant of the company's new offices on the 16th floor of Two PPG. That also means that is so new that formal policies regarding sustainability have not yet been written -- and Mr. O'Brien doesn't intend to be the one who writes them.

"My style is not to dictate," he said, "My style is to give a vision and ask [managers] how to get there."

In describing that vision, Mr. O'Brien said that part of it will be customer-focused: "We should be telling people how to use less gas."

"From the person out in the field who's installing something or fixing something, to the person who answers the phone when somebody calls in, to the employee who's appearing at the local carnival, we should all be telling that story.

"The other piece to that then becomes, you have to live that," he said. "We have to run the business the same way."

He is relying on the executive staff, which is still being assembled, to figure out how to do that.

"I tell them, 'Look at this office. There's nothing here. It truly is a blank sheet of paper. How we have water, and how we get coffee, and how we use supplies ... all that is a clean slate of paper. Come back to me with how we can not only talk the talk but walk it as well.'"

In years to come, Peoples, along with the other local utilities, Equitable Gas and Columbia Gas, may receive an increasing portion of their natural gas from the Marcellus Shale, the geological formation underlying much of southwestern Pennsylvania that has attracted a swarm of natural gas producers to tap its reserves.

Last summer, Range Resources began recycling wastewater from its drilling operations. Now, said spokesman Matt Pitzarella, the company recycles 90 percent of its wastewater throughout the Marcellus, and 100 percent in its "core operating area," which includes southwestern Pennsylvania.

Other producers have followed suit, so that industry-wide recycling has gone from zero a year ago to 60 percent now, he said.

Chesapeake Energy, another major Marcellus player, is walking the industry's talk by making more use of natural gas vehicles in its fleet and building refueling centers at some of its operating locations. The lack of refueling stations has been a deterrent to the use of natural gas vehicles in the past.

One of the most important elements of most consumers' energy landscape is the family automobile. Keeping the ride rolling used to mean stopping at a gas station that provided little more than the fuel for which it was named. Now people refuel their cars at establishments that make as much on coffee, soda, sandwiches and snacks as they do on gas.

As a destination that a consumer may visit once or twice a week, the convenience store has many opportunities to model energy efficiency.

Giant Eagle's GetGo has gotten on the bandwagon, going so far as to demolish a store and replace it with a more sustainable model. The new GetGo at Baum and Morewood in Bloomfield, which opened in December, was built with recycled materials, including sustainably harvested wood. The Energy Star certified roof includes skylights that allow the use natural lighting.

Outside, the landscaping is done with "drought-tolerant" plants to conserve water. Speaking of water, the WetGo car wash is designed to use only 30 to 40 gallons of water per vehicle, about the same amount that the average consumer uses to take a shower.

As for fuel itself, the GetGo continues to offer biodiesel at several pumps.

Dan Pastor, Giant Eagle's vice president of fuel and convenience operations, said the new features are just an extension of a focus that has been part of the company's culture since 1962, when it created an in-house conservation department, and that more of those features will appear in more stores going forward.

"We have a sustainability focus as an organization that drives us in every step of the way, to try to make sure that we're walking the talk," he said.

Engineering manager Brad Morris said the biggest challenge in building more sustainability into the convenience stores is simply staying on top "the amount of information and products that are becoming available" to do that.

Do customers notice the differences?

"Customers who are more aligned with sustainability and those practices really appreciate and like" the new features, Mr. Pastor said. But those customers are the minority.

"It's very difficult to get the consumer's reaction unless you take the time to have that one-on-one and have the conversation," he said.

Elwin Green: egreen@post-gazette.com or 412-263-1969.