FRONTLINE

S2008 E11 | FULL EPISODE

HEAT

A far-reaching investigation into America's energy landscape and what can be done to save our planet - and what it will take.

AIRED: October 21, 2008 | 1:56:19
ABOUT THE PROGRAM
TRANSCRIPT

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Thank you.

With major funding

from the John D. and Catherine T. MacArthur Foundation.

Helping to build a more just world.

And additional funding from the Park Foundation.

Committed to raising public awareness.

Major funding for "Heat"

was provided by the FrontlineJournalism Fund.

And a grant from Hannelore and Jeremy Grantham

and the Grantham Foundation

for the Protection of the Environment.

And additional support from Scott Nathan and Laura DeBonis.

Additional funding for "Heat"

is provided by The Kendeda Fund.

And the Nathan Cummings Foundation.

And Wallace Genetic Foundation, Inc.

>> Tonight on Frontline...

>> We're standing at the precipice of hell.

If everybody else was to live like an American,

then the planet is doomed.

>> ...in the midst of a campaign

dominated by economic anxiety...

>> The facts of global warming demand our urgent attention.

>> Frontline investigates

what will be the most important issue facing our world...

>> We can't wait to solve one of the greatest crises

that mankind has ever faced

and roll back greenhouse gases and global warming.

>> Tonight, correspondent Martin Smith travels the planet

to uncover the scale of the problem

and the scale of any solution.

>> By the year 2050,

we need to reduce greenhouse gas emissions between 60% and 80%.

>> It's an un-accomplishable goal.

>> SMITH: As simple as that?

>> Just that simple.

>> It is an investigation of the resistance to change

inside major corporations.

>> SMITH: Why did Toyota beat you to the Prius?

>> Toyota looked at the hybrid from an overall standpoint

and General Motors really looked

at "Can this vehicle make money?"

>> SMITH: But yet Toyota is eating your lunch.

>> And a report on resistance to change in Washington.

>> This bill will attack citizens at the pump.

>> Congress is in no mood to debate anything that was going

to increase gas prices, even by a little bit.

>> And an examination of the hard choices that lie ahead.

>> We seem incapable of grasping what's at stake here

and perhaps it's because so much is at stake.

If we don't do something about reducing CO2 emissions,

we're going to cook the planet.

>> Tonight, "Heat," a Frontline global investigation.

>> SMITH: When we set out to investigate climate change,

we had already heard a lot about polar bears in the Arctic

and collapsing ice shelves in Antarctica.

I decided to go to what some call the Earth's third pole,

the Himalayas.

My guide was climber and filmmaker David Breashears.

He's been to the summit of Mt. Everest five times.

This time, he was returning on a special mission.

So where are you going?

>> I'm going to go right up there to about 19,000 feet

on these rocky ridges here that are in this early morning light,

to get a viewpoint here to shoot from a place

where George Mallory shot in 1921,

and see how much has changed in that amount of time.

I'm going up here.

Right up there on those pinnacles.

>> He passed this river?

>> Yes.

It's a long way, and then we'll see how much this glacier has

melted here.

>> SMITH: First, Breashears had to cross a small river

of icy water with his three porters.

I stayed behind.

It was going to take a fast climb in thin air

up the side of a steep ridge with no trail.

Eight hours later, Breashears reached this spot

at 19,000 feet.

He'd identified it as the outcrop where British explorer

George Mallory took his photograph of Everest in 1921.

At the foot of the mountain, the main Rongbuk Glacier,

a frozen river of ice that flows from Everest's north side.

>> I first was on this side of the mountain in 1996, so I know

this place well, and to look at the glacier here in 1921

and to look at it out there now...

It's... the glacier's just gone.

>> SMITH: Using photographs and maps, Breashears has calculated

that the glacier has lost up to 40% of its ice.

Glaciers are disappearing fast here.

The United Nations' Intergovernmental Panel

on Climate Change estimates

that 80% of all glacier ice in Tibet and the Himalayas

will be gone by 2035.

Earlier, I had visited

one of the world's foremost glacier labs,

located in Columbus, Ohio.

Here, ice cores from glaciers all around the planet are

collected and studied.

The lab's founder and director, Dr. Lonnie Thompson, is said

to have spent more time at high altitude

than any other scientist in the world.

>> SMITH: How will warming affect the people that live

on either side of the Himalayan range?

>> You can think of glaciers as water towers.

They kind of store the water from the wet season

and during the wet times,

and they disperse it during the dry season and the dry times.

And they do that for free.

You go down in these valleys,

and they're really dry parts of the world except for the water

that's coming from the glaciers

and from the higher elevation sites.

>> SMITH: For now, the melting glaciers are bringing more water

to these slopes.

But it's a mixed blessing.

More water has attracted more settlers and thrown

their environment out of balance.

>> ( translated): As the population has increased,

deforestation has also increased.

So our cattle have less food and are giving off less milk.

>> SMITH: And what's happening here will not just hurt

these farmers.

>> What really makes our time so different,

people talk about, you know,

"Oh, we've had these huge climate changes in the past."

Yeah, that's true.

But we never have had 6.5 billion people.

>> SMITH: And nearly half the world's people depend

on Himalayan and Tibetan glaciers for water.

Among the major rivers that flow from here are the Ganges,

the Indus, the Mekong, the Brahmaputra, the Irrawaddy,

the Yangtze and the Yellow Rivers.

>> We're talking about millions of people living downstream.

And, therefore, what happens to those glaciers and what happens

to the water supplies at the source are extremely important.

>> SMITH: The Intergovernmental Panel on Climate Change predicts

that, in the near future, as the glaciers dry up,

some major rivers will no longer flow year round.

IPCC Chairman, Dr. Rajendra Pachauri:

>> Over a period of time,

about 500 million people on the subcontinent are going to suffer

from water scarcity as a result of the melting of those glaciers

and 250 million people in China.

In terms of the impact on the lives and livelihoods of people,

we're turning thousands of years of human history around

and perhaps leaving people with no choice now.

>> SMITH: Millions of people in China live in areas

already starved of water.

As their glaciers dry up, conflicts with their neighbors

are inevitable.

China's idea to divert water from the Brahmaputra

has already heightened tensions with India.

Melting glaciers are just one problem.

Scientists warn of many other consequences:

Sea levels are rising, their waters absorbing CO2,

contributing to the creation of vast dead zones devoid of life.

Fisheries are failing.

Deserts are also expanding.

People are being forced off their land by frequent droughts.

Worldwide, storms are becoming more violent;

fires, more frequent.

>> I think it is important for people to understand

global warming is not the sole cause

of everything that happens.

What it does is it just makes certain things more likely.

So you cross a threshold and you get a collapse.

And unfortunately, once you've changed the climate, it becomes

very hard to un-collapse.

And it may be... it may very well be impossible.

I mean, it may be that some of these changes are irreversible.

>> SMITH: The overwhelming majority

of the world's climate scientists warn

that the only way to avoid larger disasters

is for the world to dramatically reduce its emissions

of greenhouse gases,

cutting them by 60% to 80% by mid-century.

>> If we just sit back and say, "Oh, it'll happen,"

it's not going to happen.

Climate change is being caused by human actions.

And we need to do something about it.

And I think the sooner we realize that, the better.

>> SMITH: Before the dawning of the Industrial Age,

the level of carbon dioxide in the Earth's atmosphere

had remained relatively steady

for hundreds of thousands of years.

But as people began to burn fossil fuels, oil, coal

and natural gas on a large scale,

CO2 levels began to climb.

By the mid-'50s, scientists had begun to wonder

if there might be a consequence.

This episode of the popular TV show

"The Bell Telephone Science Series" aired in 1958.

>> Even now, man may be unwittingly changing

the world's climate

through the waste products of his civilization.

Due to our release, through factories and automobiles

every year, of more than six billion tons of carbon dioxide,

which helps air absorb heat from the sun,

our atmosphere seems to be getting warmer.

>> This is bad?

>> Well, it's been calculated a few degrees rise

in the Earth's temperature would melt the polar ice caps.

(dramatic music playing)

And if this happens, an inland sea would fill a good portion

of the Mississippi Valley.

Tourists in glass-bottomed boats...

>> SMITH: But at the time, no one paid much attention

to such theories, and in the US,

industrial growth and human consumption accelerated

through the '60s, '70s and '80s.

By the 1990s, we were consuming as never before.

Manufacturing more goods, using more electricity, and driving

bigger cars and trucks.

Gas was cheap.

>> The history of the US is a history of cheap energy.

This country sits, or sat, on vast pools of oil.

There was no reason to care.

>> SMITH: Cheap and abundant coal also played its part.

>> Coal is the rock that built America.

It was the engine of the Industrial Revolution.

We should all be very grateful

for all the miracles of modern life

that coal has brought to us.

But CO2 emissions are rising and rising and rising.

>> Okay, fellows, let's make it roll.

>> SMITH: Today, carbon dioxide in our atmosphere has risen

to record levels.

And people's demand for energy

shows little sign of slowing down.

>> Our electric needs in this country,

according to the federal government,

are going to increase 41% between now and 2020.

41% between now and 2020.

If the coal industry were eliminated

and the 52% of the electricity

that it accounts for, this country would go black.

>> In the United States, we have

the world's tightest air quality standards...

>> SMITH: In 1992, the world started talking

about climate change at the Rio Summit, but there was no action.

At Kyoto, in 1997, there were higher hopes.

>> The human consequences

and the economic costs of failing to act are unthinkable.

>> SMITH: But the US Senate balked

because developing nations were exempted from making cuts.

They feared that signing the treaty would put the US

at a competitive disadvantage.

Four years later, President Bush made it clear he also rejected

the treaty.

>> The Kyoto Protocol was fatally flawed

in fundamental ways.

>> SMITH: Meanwhile, developing nations were entering a new era

of rapid growth.

Today, the rise of China threatens to overwhelm

any hope of controlling CO2 emissions.

>> China is growing at a rate that is just massive.

China is the proverbial teenager.

The hormones are going in one direction.

The body's growing faster than the brain.

Some parts are not in coordination with other parts.

The Chinese deny, at this point, that they should aspire

to a lower standard than any other country.

When people say, well, you can't develop a society

where everybody can own a car like the United States.

And the Chinese say, why not?

(announcer narrating in Chinese)

>> SMITH: At Geely,

China's largest privately owned car company,

they are racing to keep up with demand.

Among their biggest sellers, the King Kong.

(man speaking Chinese)

>> (translated): The car industry is growing quickly.

We sold 160,000 cars last year.

My plan is to reach 400,000 to 500,000 by next year,

and 700,000 in two years.

>> SMITH: You know, I've looked at your corporate profile

and I could find no mention of initiatives of any kind

into higher efficiency vehicles of any kind.

>> We haven't such a model yet.

But we will in the future.

>> SMITH: Nothing epitomizes China's growth

more than the building of two new coal plants here every week.

This plant outside Beijing belongs

to Shenhua Energy Corporation,

one of the biggest, fastest growing energy companies

in the world.

>> SMITH: You grew 80% over the last year?

You almost doubled your capacity.

>> Uh-huh, yes.

>> SMITH: Of electricity generation.

>> Correct.

>> SMITH: And you expect to continue to grow 20% to 30%

over the next five years?

>> Yes.

>> SMITH: That's a huge amount of growth.

>> Yes, it's a very fast growth.

>> SMITH: What kind of plans do you have to address emissions

of carbon dioxide?

>> As a responsible company, I think we will do our best

to reduce the CO2 pollution, if we can.

But, how to say, as a CEO of this company, we must consider

other issues.

We must create money, not lose the money.

It's my responsibility as a CEO of this company.

>> SMITH: Your responsibility is to the shareholders.

>> First, to all of the shareholders.

Second, to the society.

>> SMITH: Why not public first?

>> If all of the shareholders say, "Oh, see, Dr. Ling,

the CEO, could you make the... your first responsibility

to the public, then to all the shareholders?" it's okay.

But I'm afraid maybe all the shareholders, they cannot accept

that concepts.

>> SMITH: Asia's other booming giant, India, will surpass China

as the world's most populous country by 2030.

Here, I found factories pumping out SUVs

for India's growing middle class.

And soon, a $2,500 gas-powered car

for millions more emerging from poverty.

Today, everywhere you look, there's new construction.

For India, it's a great success story,

a triumph of free markets.

>> Everywhere you go, you're seeing construction going on.

And everywhere you go, you see these kinds of things happening.

You see all these tall buildings that are coming up.

They almost seem to be sprouting up overnight.

You wake up one morning, it's, "Oops, there's another

tall building out there."

>> SMITH: But, as in China, growth is also the problem.

Even the most basic building material, cement, is an issue.

The process of making cement

is one of the biggest industrial sources of CO2 emissions

in the world.

>> SMITH: It surprised me when I learned that cement

was the third largest... the process of making cement

was the third largest contributor

to greenhouse gas emissions.

>> Well, it's true, because almost about 5%

of the carbon dioxide emission which comes out in the world

is from the cement industry.

And looking at the volume of the cement industry, it is...

is one of the biggest contributor

for the greenhouse emission.

>> SMITH: Most of the CO2 comes from roasting

powdered limestone and clay

inside large rotating furnaces.

>> That's where the real heat is generated, and that's the cause

of pollution-- that you have to supply energy to get it

the right temperature.

>> SMITH: Are there alternatives?

>> Everybody in the world uses that.

>> SMITH: How do you get to a point where you can actually

reduce the emissions?

>> I mean, the CO2 emissions will be there.

But there will be reduction.

>> SMITH: Can you get to 80% reductions by 2050?

Is that realistic?

>> 80% is maybe... may not be there.

But definitely, about 10% reduction can take place.

>> SMITH: In India, cement production is growing 10% a year

and will continue to grow

as India builds up its infrastructure.

>> We are standing at the precipice of hell.

The Western model of growth is inherently toxic.

It's highly capital intensive and highly resource intensive,

uses a lot of materials, uses a lot of energy, and generates

a lot of waste.

If every Indian was to live like an American,

then the planet is doomed, and the planet is doomed forever.

>> SMITH: In December 2007,

9,000 delegates from 187 countries

arrived in Bali, Indonesia,

for the United Nations Climate Change Conference.

Diplomats and scientists were convening to try to strike

a new global climate treaty.

As Dr. Rajendra Pachauri arrived, the IPCC had just

issued a string of ever more urgent reports.

He was hoping that governments, especially the US,

were finally listening.

>> Hello, CNN.

Hello.

>> With me is Dr. Rajendra Pachauri,

the Chairman of the IPCC.

>> SMITH: Ironically, the Bush administration had welcomed

Pachauri to the IPCC,

expecting that this engineer and economist,

on the board of several large Indian energy companies,

would be cautious and sympathetic to the US position

on climate change.

>> If we lose momentum over here, then we have a very short

period of time...

>> SMITH: Instead, Pachauri has repeatedly sounded the alarm

and put responsibility squarely on businesses and governments

in the industrialized West.

>> If one looks at the historical responsibility

for the problem, the fact

that the concentration of greenhouse gases

is essentially the result of emissions

that have taken place for 150-plus years,

largely in the developed countries, that's one reason.

And the second reason is that,

in terms of economic and technological capacity,

the developed countries are certainly better equipped

to do something about this than the developing world.

>> SMITH: US negotiators in Bali didn't see it that way.

>> Next is the United States.

>> Thank you, Mr. Chairman.

Unfortunately, there have been many strong statements...

>> SMITH: They maintained that America would make no cuts

unless developing nations also agreed.

They didn't expect what happened next.

>> So I just want to state

this preference of the developing countries...

>> For the first time,

the developing countries stepped forward and said,

"We will negotiate verifiable, measurable

and reportable emissions reduction measures

to be incorporated in the treaty."

The developing countries called their bluff.

>> May I now call upon China.

>> And China was in the lead in saying, "We should do that."

>> (speaking Chinese)

>> The US negotiator said no.

>> I have to say that the formulation

that has been put forward, we cannot accept.

(booing)

>> Thank you.

Thank you, United States.

>> And they were booed on the floor.

And suddenly, Paula Dobriansky recognized

that the story that was going to come out of Bali

was that the United States destroyed

a major climate agreement.

>> Does the United States wish to speak again?

>> So she sat there, flipped the microphone back on,

shut the meeting down by saying,

"We won't stand in the way of the consensus."

>> Let me say to you that we will go forward

and join consensus in this today.

(applause and cheers)

>> Who knows whether there was actual direct communication

with the White House on that or not.

The cell phones were going like crazy

at the US delegation table.

But it was clearly, I think, in her negotiating instructions

that, above all, don't let the United States get blamed

for blowing up a deal.

>> SMITH: There were other changes underway in Washington.

Democrats had won the 2006 midterm elections.

At the Senate Environment Committee...

>> ...restrictions on...

>> All right, Senator Gore, I don't want to be rude...

>> SMITH: ...Republican Chairman James Inhofe,

a global warming skeptic, was out.

>> Since you're not going to respond...

>> Just for a minute.

>> SMITH: In was Barbara Boxer, a California Democrat.

>> You're not making the rules.

You used to when you did this.

You don't do this anymore.

Elections have consequences.

(laughter and applause)

>> SMITH: Some American business leaders

seemed to get the message...

>> Today, we'll hear from a group of leading corporations...

>> SMITH: ...and showed up as part of a new organization

called the US Climate Action Partnership.

>> Our organization is here because we share a view

that climate change is the most pressing environmental issue

of our time.

>> They basically called for carbon regulation, a huge switch

from what their... their public lobbying positions in the past.

Why did they do it?

Well, they didn't do it because suddenly they changed

their environmental outlook.

They did it because they could read the political handwriting

on the wall.

>> SMITH: Whatever their motives, some senators

were won over.

>> It was a recognition that those most affected--

i.e., the industrial base, are ready to do something

to reduce the CO2 emissions.

>> SMITH: Did it have more impact than listening

to all the scientists over the years?

>> Well, there's real money in that group.

>> The meeting stands adjourned.

(gavel bangs)

(crowd cheering)

>> SMITH: And on the campaign trail, both candidates were

promising bold new leadership.

>> USA, USA, USA!

>> The facts of global warming demand our urgent attention,

especially in Washington.

>> We can't wait to solve one of the greatest crises

that mankind has ever faced

and roll back greenhouse gases and global warming.

We cannot wait.

>> Both of the candidates have strongly said they're endorsing

serious policies that will bring the United States

back into the fold of the civilized nations,

looking at what it is doing in our... in our share

to the contribution to global warming.

So, I am very optimistic that we're moving

in the right direction.

>> SMITH: But the big question is, will all the momentum bring

real change?

>> For a long time, we ignored the problem.

For a long time, we debated the problem.

For a long time, the US government ran away

from the problem, pretended it wasn't there.

>> We have to overcome our natural way

of doing business.

If this is all just a compromise

between various special interests, we're not going

to get it done.

>> Fundamentally, we... we have about, you know, ten years

to reverse course.

If we stay on our current path for ten years,

it will be all but impossible

to avoid catastrophic global warming.

>> We seem incapable of grasping what's at stake here,

and perhaps it's because so much is at stake.

And addressing this really means

changing the sort of essential economic engine of our lives,

which is fossil fuels.

>> SMITH: To understand the magnitude of the task,

consider the scale of America's addiction

to fossil fuels like coal.

Every year, Americans consume over a billion tons.

In the Powder River Basin in Wyoming, they shovel

a million tons a day.

>> Our single mine of Black Thunder produces more energy

every year... or every day than the north slope of Alaska.

And, every 24 hours, we'll have approximately 35 miles of trains

loaded.

(train horn blowing)

>> SMITH: Most of the trains head east to power plants

in the Midwest and South.

Coal shipments make up half of all rail traffic in the country.

At this railyard in Nebraska, coal trains account for 70%

of traffic.

>> Every day, we process 150 to 170 trains, which,

if you do the math, is, you know,

about a train every seven minutes.

>> SMITH: So, they're coming out of the Powder River Basin

through here on to the East and to the South?

>> That's exactly right.

And as...

>> SMITH: The empties going back.

>> And the empties coming back the other way.

There is no question that there is nothing like this

anywhere on Earth.

It is absolutely the world's largest conveyor belt,

and it never stops.

>> SMITH: There are 600 coal-fired power plants

in the country.

A large plant will burn through one whole trainload

in just 12 hours.

>> We generate 1,300 megawatts per hour

at this generation facility.

So, we power up many cities from this one unit.

>> SMITH: This plant in West Virginia is owned and operated

by American Electric Power.

In 2007, A.E.P. was the single biggest emitter of CO2

in America.

Nowadays, everybody's talking about climate change,

everybody's talking about global warming, everybody's talking

about going green.

What does that mean for you?

>> The thought of green is nice.

It's politically the right thing to do, but people also like

their electricity.

When they flip the switch, they want the lights to come on.

>> Most Americans don't have any idea that we still burn coal.

They think of it as something that went out with, you know,

top hats and corsets.

And because... they don't see it, because it's burned

far away, it just powers our lights,

and we don't think about where that electricity comes from

and what really goes on behind the light switch.

>> SMITH: The facts are these:

it takes one pound of coal to power your TV for 4.5 hours.

Another pound to power your bedside light for two evenings.

The average American household uses 9.5 tons of coal

every year.

52% of all electricity consumed in America comes from coal.

(phone ringing)

And with electricity consumption rising,

utilities like AEP say coal is indispensable.

They refer to it as base-load power.

>> Hey, Josh, this is Dan Wagner.

I wanted to let you know that PJM has issued

a hot weather alert.

>> SMITH: It means it is always available,

unlike intermittent sources such as solar or wind.

>> Welcome to the 2007 second-quarter

employee earnings webcast.

>> Stand by.

Stand by, camera four.

>> Today's panel includes Mike Morris...

>> SMITH: Mike Morris is AEP's CEO.

Here, he's doing a live webcast for his employees.

>> I want to just run through the numbers real quickly.

>> SMITH: After an earnings update,

the moderator asks Morris a few friendly questions.

>> With global warming a hot-button issue

and with some presidential candidates

suggesting, naively, that wind and solar will solve it,

shouldn't we do more to shape the public debate?

>> That's an excellent question.

What I don't want to do is recreate the impression

that American Electric Power is a "Just Say No" utility.

>> SMITH: When I visited AEP, Congress was just beginning

to debate how to regulate carbon emissions.

Utilities were vying for a seat at the table.

>> How optimistic are you that we'll get our voice heard?

>> Oh, I'm certain we'll get our voice heard

because we are constantly queried on these issues.

>> SMITH: What needs to be heard, says Morris, is that

America desperately needs to burn not less coal, but more.

>> If we don't build more base-load generation,

and the US economy continues to grow, we will ultimately get

to an economic brownout environment

that'll have tremendous negative impacts on what goes on

in this country.

>> SMITH: And you're going to meet that demand by building

more coal plants?

>> Clean coal.

We hope so.

You bet.

>> You're looking at the most abundant fuel in our country.

>> SMITH: In the summer of 2007, America's coal companies,

railroads and utilities launched a major advertising campaign.

>> Coal.

It's the resource

that generates half of our electricity at a third the cost

of most other fuels.

It's the fuel that powers our way of life.

>> SMITH: The ads stress that coal will be clean.

>> ...including the capture and storage of CO2.

It's a big challenge, but we've made a commitment, a commitment

to clean.

>> SMITH: We found some coal activists outside

a Democratic primary debate in Philadelphia.

>> There's technologies that are going to make electricity

from coal emissions-free within the next 10-15 years,

so we're saying don't cut it out of the mix yet.

Would you like a hat?

>> SMITH: It turned out they'd spent the year

shadowing the candidates, working the crowds.

>> Let me give you some information about energy

in Pennsylvania.

>> SMITH: In Washington, the coal lobby has traditionally

gotten its way.

Consider the story of the coal- fired power plant that sits

just a few blocks from the Capitol.

>> The Capitol power plant is about a century old,

at this point.

It burns coal.

It provides ice water to senators.

That's its primary mission.

A couple of years ago, the architect of the Capitol,

who manages it, decided, "Well, maybe we ought to try

to convert it to a lower-polluting natural gas."

And he was immediately told by powerful senators

who control his budget-- Mitch McConnell of Kentucky

and Robert Byrd of West Virginia-- "Oh, no, you're not.

We'll cut your budget if you try to tamper with our baby."

It's as if Tony Soprano had a seat in the Senate.

If this Congress can't even clean up

the most egregious polluter in its own backyard,

how can they deal with the problem

across the entire United States?

>> SMITH: But in 2008, there was a new push on Capitol Hill

to rein in carbon emissions.

>> Sir, I started by members...

>> ...that were highly controversial

in the energy committee.

>> SMITH: Senator John Warner had drafted legislation,

along with Senator Joe Lieberman,

to mandate a 60% cut in greenhouse gases by mid-century.

>> Well, we have a prodigious task.

>> SMITH: And while how the industry does that is unclear,

the bill's authors are betting on it.

Is there a future for coal?

>> There's got to be a future for coal in the US.

It's too important to us.

And again, I think once you create this law, this mandate,

the coal industry and a lot of others are going to figure out

how to use coal and not pollute the air.

>> In the marshlands of central Florida,

there's not much activity for people.

>> SMITH: To make the case for clean coal, the industry likes

to point to a power plant outside Tampa, Florida,

known as Polk One.

GE made a short film about it.

>> With the help of GE's

advanced cleaner coal technology,

Tampa Electric is converting coal

into a cleaner burning fuel.

>> SMITH: We went down for a visit.

Mark Hornick is the plant's manager.

>> This is the top floor of the gasifier.

We call it the burner deck.

>> SMITH: The plant touts a process

known in the technical jargon of the utility business

as Integrated Gas, Combined Cycle-- or IGCC.

It's essentially a process

of turning coal into a cleaner burning gas.

>> And it doesn't take long to do that.

We mix that coal with the pure oxygen,

and that reaction happens very fast.

Converts that solid coal into that fuel gas,

what we call syngas.

>> SMITH: And then, in theory, and this is the big prize,

they can capture CO2.

>> And then we would take that captured CO2, compress it

and inject it into the ground, deep into a saline formation,

salt-water formation.

It would go in as a supercritical fluid

and kind of mix with that water, and it would be deep enough

where there's confining layers above it

such that it would not migrate to the surface,

wouldn't impact drinking water or have any adverse impacts.

So, that's what's envisioned for carbon capture and storage.

>> You've done some tests here then, have you, looking at that?

>> No, we haven't done any tests actually.

We've looked at the potential.

>> SMITH: The reason they haven't tested

carbon capture and storage

is that the state of Florida refuses to indemnify the utility

for damages in case of a CO2 leak.

>> The problem is carbon dioxide is an asphyxiant.

If the CO2 is... is buried 2,000 feet underground

and there's some minor earthquake

and it can leak up through a fissure

and get into someone's basement,

and you could be asphyxiated without knowing it.

It's odorless gas.

You know, there's no way to detect it.

>> SMITH: And so, until liability issues are overcome,

Polk will not be running a test.

But IGCC plants continue to be promoted

as carbon capture ready.

>> ...leaving a nearly undetectable impression

on the horizon.

>> Presently, there's a lot of talk about CO2 removal.

>> SMITH: At AEP's Mountaineer plant in West Virginia,

they may be closer to actually running a test.

Sometime in late 2009, they plan to inject CO2 into a well

beneath this shed next to the parking lot.

>> The "well to hell," as I've been known to call it,

is approximately a 10,000-foot deep well that we drilled

four years ago.

>> SMITH: Wait a minute.

That's two miles deep.

>> That's two miles deep.

>> SMITH: They are not using the IGCC process we saw in Florida,

but experimenting with a kind of CO2 scrubber.

Its advantage is that it can be installed on America's existing

fleet of power plants.

Most have 20 or 30 more years of useful life

and the industry doesn't want to scrap them.

But even if it works,

plant manager Charlie Powell points out,

removing CO2 may still be too expensive.

>> You can get it out, but at what price?

It may be that other options become more economically viable

than the technologies to remove CO2.

>> SMITH: Another obstacle is that not every plant

is near a suitable storage site.

>> It doesn't work everywhere.

Wyoming, for example-- the geology is well suited to it.

Parts of Appalachia, it's well suited to it.

But other parts-- New England, the Southeast-- it's not.

>> SMITH: And that means building

a lot of new infrastructure.

Every year, US power plants emit up to two billion tons of CO2.

These emissions alone equal the total worldwide flow

of petroleum today.

Disposing of such a volume of CO2 would require building

a massive new pipeline grid.

>> Ladies and gentlemen, welcome to the American Electric Power

Second Quarter 2007 earnings conference call.

>> SMITH: Even before the global credit crunch, big banks were

getting nervous about carbon capture and storage...

>> And our first question this morning comes

from the line of Dahlen Rose.

>> SMITH: ...asking utility executives

more and more questions about cost.

>> I was just wondering if you could compare

the price of the new coal plants that you are planning.

>> What we said all along, that we thought integrated gas

would be 20% to 30% more costly

than the more traditional pulverized coal.

That really has proven to be the case.

>> SMITH: What's the cost of this going to be?

>> Right now, it's too early to tell.

>> SMITH: No idea?

>> Well, no... no, I wouldn't say that.

I don't want to be too forecasting

about something like that,

to be considerably off base with it.

People say it may add 20%, 30% to the cost of energy.

That seems like a reasonable number.

If you're blessed, as we are, along the Ohio River Valley

with sub-surface geology that will accept captured carbon

for storage.

It's a very different place

than if you're in the great Southeast, and you've got

to transport your CO2 through a pipeline system

for considerable distances.

That adds cost.

So, to say today that we all are very comfortable

with some price forecast would just be silly.

>> SMITH: And consider the situation

facing Georgia-based utility Southern Company.

Its coal plants generate CO2 emissions second only to AEP.

Southern's CEO is David Ratcliffe.

The word on the street is that Southern doesn't really favor

carbon capture and storage because you don't have

the geology in the Southeast.

>> Martin, I think the truth is that we don't know

where we have storage capability in this nation

at this point in time.

We have... we haven't even come close to defining what will be

required in storage, what are the legal liabilities

and what are the permitting requirements;

much less the infrastructure needed to develop that storage

and to move the carbon, the CO2 into that storage,

whether it's pipelines or trucks or whatever it is.

We haven't even scratched the surface yet.

>> I think there's a reality check going on

about carbon capture and storage right now.

There was huge, rosy optimism about carbon capture

and storage.

It was a... it was really the quintessential silver bullet.

It would allow you to take what was fundamentally a dirty fuel

and burn it cleanly.

Cheap and dirty fuel and you could burn it cleanly.

And at least a huge chunk of the problem would be solved.

What's wrong, I think, is that reality is intruding.

>> And at a certain point, you have to ask, well, if I'm going

to go to all this expense, why not just do something else?

Why not do, you know, a clean, renewable power

or something that is perhaps the same price

or maybe a small percentage more expensive right now

but vastly simpler and eliminates

all of these technological problems?

>> SMITH: If carbon capture and storage doesn't work,

is the game over

for your business of generating electricity with coal?

>> I would say that we'd have a hard time

in a carbon-constrained future burning coal

without the ability to capture CO2.

>> SMITH: Meanwhile, the candidates routinely promote

carbon capture and storage in their stump speeches.

>> Good to see you guys.

( cheers )

And all of you up there.

Look at you.

>> SMITH: No one mentions cost.

>> We'll invest in the technology that will allow us

to use more coal, America's most abundant energy source,

with carbon capture and sequestration for...

>> Clean coal demonstration projects alone--

just the demonstration projects--

will employ over 30,000 Americans.

>> Look, in order to run for president in this country

in 2008, you have to be for clean coal.

You can't go to Indiana and Ohio and say, "I want to do away

with coal."

You're just not going to win votes that way.

>> In the state of Colorado, over 80% of the electricity

comes from coal;

in Ohio, it's over 90%.

>> There's an amazing correlation

between being a swing state and being dependent on coal.

You look at that map and you know why both candidates

are very strongly in favor of clean coal.

>> SMITH: This is the other big challenge,

the second largest contributor to greenhouse gases.

But capturing and storing tailpipe CO2 emissions

is not feasible.

What's needed is dramatically more efficient

or zero-emission vehicles.

America's cars and trucks emit more CO2 than all the cars

in Europe, Japan, China and India combined.

>> We continue our focus on the proper response to the challenge

of climate change.

We have a very distinguished panel of witnesses.

>> SMITH: In March of 2007, the auto makers were in Washington

to discuss raising fuel economy standards.

Congress has been trying for years.

>> I think the way we're going to achieve this is maybe

thinking differently than how we've thought about it

in the past, to start to think outside the box.

And it just seems to me...

>> There have been many attempts over the years to force

improvements in fuel economy in this country,

and the most notable is in the late '70s

after the Mideast Oil Crisis.

>> When the CAFE law was passed in the 1970s,

the goal was to reduce our dependence on foreign oil.

>> And the history is that that attempt early on worked.

When those rules came into effect, the average fuel economy

of the US fleet was about 20 miles per gallon.

By the mid-'80s, early to mid '80s, it had gone up

to about 25 or so.

That was quite a significant step in a few years.

>> SMITH: But ever since then, fuel economy, or CAFE standards,

as they are known, have remained frozen.

Car companies and autoworker unions have always fought them.

They insist they never were effective.

>> Yes, sir, against its stated goals of-- and I'm quoting--

"reducing US gasoline consumption and oil imports"

it was not effective, and I think it's for the reason...

>> Over time, we have looked at the CAFE policy and said,

"If we're really looking

at reducing dependence on petroleum

and reducing CO2 emissions,

CAFE standards have not been very effective in this country

to do so."

As an overall policy, if you're looking at reducing dependence

on petroleum, that alone is not going to get you there.

>> Mr. Mulally, you said that CAFE was not a success.

You couldn't be more wrong.

>> There had been many members of Congress saying we needed

to have more aggressive fuel economy standards.

And for years, literally decades,

the car companies lobbied aggressively

to prevent that from happening.

>> The man the car companies routinely turn to

is Democrat John Dingell of Michigan.

>> And third, that I understand a statutory increase

in fuel economy standards may have unintended consequences

in the marketplace.

>> SMITH: Over the years, Dingell has fought

virtually every regulation, from seatbelts and airbags

to tailpipe emissions and fuel efficiency standards.

Why has it taken so long

to increase fuel efficiency standards in the US?

>> There have been some small changes

on both trucks and automobiles, but the basic problem

has been the absence of technology.

>> SMITH: Critics say that elected officials like yourself

are too beholden to large corporate interests

to really get anything done.

>> I disagree with that.

I'm not too beholden to anybody

except the 800,000 people that live in the 15th District.

I'm their man in Washington.

It's my job to look after them and to see that they do well.

>> SMITH: And with Dingell's help, Detroit has successfully

resisted attempts to raise fuel economy standards

for more than 32 years.

In the absence of action by the federal government,

the challenge has come from here.

(applause)

>> Thank you.

You know, when I became governor

of the great state of California,

I promised that I would protect California's environment.

>> SMITH: Governor Arnold Schwarzenegger has pledged

to raise fuel economy in California

to 42.5 miles per gallon,

and is removing 20,000 old, dirty gas guzzlers

from the roads every year.

>> Let's crush the car, terminate the waste,

and have cleaner air and breathe easier.

>> SMITH: Ultimately, he's pledged to cut

California's greenhouse gas emissions from all sources

by 90% by mid-century.

( laughs)

>> Warnings couldn't be clearer.

This is the hottest summer on record.

Forest fires in the West, fueled by global warming,

can be seen from outer space.

>> SMITH: Schwarzenegger embraced

California's Global Warming Solutions Act,

introduced to the state legislature in 2006.

>> Cut greenhouse gas pollution now.

Tell your representative to vote yes on Assembly Bill 32.

>> This is a commitment to an objective that's measurable,

but how we get there has yet to be fully articulated.

>> SMITH: Can you do it?

>> That remains to be seen.

Physically, can we do it?

Yes.

Psychologically, politically, spiritually,

that has to remain an open question.

>> SMITH: The bill put Schwarzenegger

on a collision course with Detroit,

where a billboard depicted the governor as their enemy.

But California has a long history of demanding and getting

cleaner cars.

Back in the '70s, under pressure from the state,

auto makers were forced to address

California's smog problem.

Over the years, officials came to expect that the auto makers

would eventually cooperate.

>> The auto business has always had a love-hate relationship

with California.

Obviously, they love the fact

that we're the biggest car market on Earth.

They hate the fact that we try to regulate

what comes out of their tailpipes.

>> But overall, we've had a very cooperative relationship.

And frankly, I was taken aback when I found out

that the industry was not only not prepared to be cooperative,

but that they were determined to fight us

in every possible arena.

>> SMITH: The stakes were very high.

18 other states were lining up to adopt

the California standards.

But to make it law, California needed a ruling from the EPA

to allow them to set stricter fuel economy standards

than the federal government.

>> We still have to go to the Bush administration to get

what's called a waiver from the Clean Air Act,

to go ahead and implement those regulations.

And the car companies have lobbied strenuously,

successfully, with the Bush administration to prevent us

from doing that.

>> They lobbied not only the EPA, but they lobbied Congress.

They lobbied the White House.

They lobbied the Transportation Department.

The US Transportation Department was caught red-handed, actually,

trying to line up members of Congress to lobby the EPA.

>> SMITH: Internal Department of Transportation documents show

that more than 70 Congressmen and governors were called

by department officials

and warned that an EPA waiver could have

"significant impacts on the car industry."

On Capitol Hill, Congressman Dingell proposed a law to make

California's waiver request illegal.

There were also several key visits to the White House

by car company executives.

>> This was all-out war by the car industry against California.

>> SMITH: In December 2007, the EPA denied California's waiver.

Have you been denied a waiver before?

>> This is the first time that California has ever been denied

a waiver under the Clean Air Act.

>> The Bush White House and, I presume, the president himself,

gave the direction to the Environmental Protection Agency:

"Don't do it."

>> And that's resulted

in us having to take the Bush administration to court

because they're withholding that waiver

in violation of the Clean Air Act.

>> SMITH: So you've sued them to get them to act.

>> Correct.

>> SMITH: And nothing.

>> So far, nobody's home, which somewhat exemplifies

the Bush administration.

>> SMITH: We wanted to talk to someone in the White House

about why the administration blocked action

and about the extent of lobbying by the car companies.

They refused to offer an interview.

>> The mission of the EPA is to protect...

>> SMITH: And when California Senator Barbara Boxer demanded

to see internal EPA memos, she was thwarted.

>> This is what they did to us.

They put this white tape over the documents

and staff had to stand here-- it's just unbelievable.

>> SMITH: EPA administrator Stephen Johnson

was called before the committee and scolded.

>> This isn't classified information, colleagues.

This is information the people deserve to have.

Now, I want to show you what your staff said.

>> Boxer focused on the advice Johnson had received

from his staff.

>> And we're going to share that information

with the American people.

You said...

>> SMITH: Among the memos uncovered by the committee was

this one-- notes from the EPA's director of Transportation

and Air Quality as she prepared talking points for a meeting

with Johnson.

"The eyes of the world are on you," it reads.

"The stakes are huge.

If you deny this waiver, I fear the credibility of the agency

will be irreparably damaged."

>> The professionals at the EPA have been solid

on all of the things, all of the environmental issues--

they've come down on the right side.

But this administrator has just walked away from them

and walked into the arms of the White House,

walked into the arms of the special interests.

It's just really very, very sad.

>> First of all, the staff presented me

with a range of options.

>> SMITH: Johnson said he took

everybody's view into consideration.

>> Certainly, people within the administration had their view,

but ultimately it came to me and making a decision

and a judgment call on my part, and I made that decision.

>> Johnson himself initially was in favor of granting the waiver.

>> SMITH: What's the evidence of that?

>> Well, we've heard anecdotal evidence for sure

from people within the EPA that he was going to do that.

We know that the White House was heavily involved

in the final decision.

We know this because the White House has invoked

executive privilege and has refused to disclose

a lot of the documents about what went on

in the White House in its interactions with Johnson.

>> SMITH: It's not known exactly what went on in the White House,

but just before the waiver was denied,

on Capitol Hill, Congressman Dingell brokered a compromise.

Congress would raise fuel economy standards,

but by considerably less than California had requested.

>> The California standards were going to be considerably tougher

than the standards being considered by Congress.

Once Congress passed its bill, the car companies lined up

behind it.

The White House then told the EPA, "Stand down.

You're to do nothing."

>> SMITH: Had the California standards been adopted

by all 50 states, they would have reduced

greenhouse gas emissions 40%

over the more moderate standards adopted by Congress.

>> So the big picture here is

that every time we get a good idea about how to move forward,

there's delay.

There's huge battles on the Hill.

The lobbyists come in and get a compromise

that's a victory for the old Washington way of doing things

and a defeat for the kind of new way that we need

to begin doing things if we're going to solve this problem.

>> SMITH: No one has resisted change more than big oil.

They sell carbon for a living, and their rigs, pipelines

and refineries represent trillions in sunk investments.

This rig sits 200 miles off Newfoundland

and rises 16 stories above the surface of the ocean.

It cost ExxonMobil and its partners $4 billion.

It's the largest oil platform in the world, Hibernia.

It's rooted to the ocean floor in about 250 feet of water

in an area famous for disasters.

>> The "Titanic" went down about 200 miles south of here.

So we are... you do see a lot of icebergs through here.

Pack ice has been a design basis that we were set up for.

>> SMITH: Does the thing shake at all?

>> Just a small vibration.

>> SMITH: How much oil are you looking at here?

>> We're sitting on... we're hoping to recover

upwards of just over a billion barrels of oil.

Right now, we're ten years into production.

First oil was in 1997, and we've just hit the milestone

of 500 million barrels produced off the facility.

>> Along with major projects off Angola and in Russia,

Hibernia is one of ExxonMobil's biggest investments,

and it's paying off.

Every five to six days, a tanker leaves here

with a payload of crude oil worth about $100 million.

Multiply that times hundreds of wells and tankers

feeding Exxon's refineries,

and it adds up to make ExxonMobil

the largest corporation in the world.

>> We manufacture a lot of different products.

We manufacture gasoline, jet fuel, diesel fuels.

>> SMITH: In 2007, Exxon's revenues surged

to over $400 billion.

After expenses, the company cleared $40 billion,

the largest corporate profit ever reported.

>> We have our geoscientists

going all over the world looking at rocks.

>> SMITH: At Exxon's Houston research center,

their best and brightest scientists and engineers

spend all their time deciding where to drill next.

>> A common technique is something called a geophone.

You can see motions in the ground

that are 10,000 times smaller

than the thickness of a human hair.

>> SMITH: For now, ExxonMobil is investing

less than 0.1% of its profits in renewable energy,

much to the consternation of environmentalists.

>> If we run the animation on the left now,

this is a fly-through of the Guadalupe Mountains...

>> Isn't this the time to be getting out of oil and gas

and diversifying?

>> If you look at what the energy balance is

over the future, in spite of the growth of the renewables,

which will grow in the near future--

for decades, the predominant source of energy

is going to be fossil fuels: oil, gas and coal.

So we see a role for us in the near term in helping to deliver

those fuels that meet the needs of the world.

>> SMITH: Why not take more of your resources and deploy them

towards development of alternative energies?

Why the balance is so heavily tilted

towards oil and gas exploration?

>> I think that, no matter what a company spends on research

in a particular area, there would probably always be

someone that said, "It's not enough."

I think we feel like we're doing a responsible job of evaluating

how we can bring our strengths to the challenge of finding

energy technologies for the future.

>> The longest well that we've drilled to date

is about seven miles measured depth.

It happens to be an industry record.

>> None of the oil companies are investing in alternatives

in a meaningful way, if by "meaningful" you...

if you define "meaningful" as a sizeable chunk

of their total energy investment.

They are all of them investing the vast majority of their money

in finding more oil and natural gas-- even BP, even Shell.

The differences are at the margins, and fundamentally,

all these oil companies are still oil companies.

No one is beyond petroleum.

>> SMITH: Professor Dan Kammen specializes

in renewable research.

He serves as an advisor to Arnold Schwarzenegger

and Barack Obama.

>> When you look at Exxon or Chevron or even Shell and BP,

and they're putting such small percentages

into renewable research, should we be outraged?

>> Well, I think we should be outraged.

Companies that profess to be sensitive

and aware of public need and what's good for the...

for citizens overall need to respond.

So, we are waiting for the big companies to really play

the role that they profess to on TV and in advertisements.

And so, I do think there's a real reason to be outraged

at the lack of action so far.

>> SMITH: Not only have big oil companies not invested much

in renewables, but, for years,

they were among the largest contributors

to so-called climate change denier groups--

groups like the Heartland Institute,

the organizer of this 2008 convention.

>> Unless we conclude that human-produced greenhouse gases

are not responsible for global warming...

>> SMITH: Exxon was also a principal funder

of the Competitive Enterprise Institute, the group responsible

for this ad.

>> Now some politicians want to label carbon dioxide

a pollutant.

Imagine if they succeed.

What would our lives be like then?

Carbon dioxide.

They call it pollution.

We call it life.

>> SMITH: Exxon dropped funding for the Institute in 2005,

but continued to support other denier groups.

>> It is very painful to hear the allegation that we have

somehow supported poor quality science or ignored the science

on this issue.

>> SMITH: But true, you did support groups

like Competitive Enterprise Institute, Heartland Institute.

Was it a mistake to support those groups?

>> When we look at those groups over time, we make

the best decision we can make at the time

about whether to continue supporting them.

>> SMITH: I'm not sure what your... what your answer

to the question is, whether...

whether it was a mistake to support those groups or not.

>> The support for those groups

I think you cannot take out of time-context.

We made the best decision we could at the time

about whether the...

the mix of issues that those groups were supporting

fit with our needs.

We made that decision; we are making those decisions

every year on an ongoing basis.

>> Expose Exxon!

Expose Exxon!

Expose Exxon!

>> SMITH: Protesters routinely gather

outside ExxonMobil's annual meeting in Houston.

>> Exxon, enough!

>> SMITH: But this year, there was something new.

Major shareholders filed a resolution insisting

that the company and its CEO, Rex Tillerson, change course.

>> At ExxonMobil, investors from across the country

went to the board and filed shareholder resolutions

and said, "We want you to address climate change.

We want you to bring the carbon footprint down.

And we, as investors, want that to happen now

because we think it's good for the company."

>> SMITH: Have you talked to Rex Tillerson?

>> Rex Tillerson, interestingly enough, has been one

of the only CEOs who, when asked by huge investors

to sit down and have a meeting,

has denied them a meeting and instead has sent senior staff.

I mean, we are talking about some of his largest owners,

not activists, who have been asking for a meeting for years.

The company is smart, they make a lot of money.

They need to get on the bandwagon

and be part of the solution.

>> It's time for ExxonMobil to become

one of the creative leaders in this field.

It has the sophistication.

It has the know-how.

>> SMITH: Leading the charge were not just any shareholders;

they were descendants of Exxon's founder, John D. Rockefeller.

They filed a resolution calling on ExxonMobil

to do more renewable energy research.

>> Inside the meeting, CEO and Board Chairman Rex Tillerson

faced the very real chance of having to give up his seat

on the board.

>> SMITH: The resolution received support from 27%

of all shareholders,

a high tally for a dissident shareholder resolution.

>> After the vote,

Tillerson said while ExxonMobil is investing

in new technologies, the focus will remain on oil and gas.

>> We have a corporate social responsibility, in my view,

to ensure the world continues to receive the energy it needs

in a fashion it can use...

>> SMITH: Facing rising criticism,

ExxonMobil and other oil companies were summoned

to Capitol Hill to explain their policies.

>> Why is your company not investing in renewables?

>> Well, thank you, Mr. Chairman, for giving me

the opportunity to address the area of alternative fuel.

>> SMITH: An ExxonMobil senior vice president, Stephen Simon,

began to answer.

>> We looked at it on an energy basis, on the energy balance...

>> How much have you invested in renewable energy, Mr. Simon?

>> And I will get to that, Mr. Chairman.

>> I only have five minutes.

What is the investment in renewable energy?

Please.

>> Recognizing that we needed

to do something of a great magnitude, we initiated

the Global Climate and Energy Project at Stanford University,

which is about...

>> How much money are ..

>> About $100 million.

>> $100 million?

But you made $40 billion last year.

>> Mr. Chairman, putting more money into something

does not necessarily equal progress.

>> Well, Shell...

>> Exxon would tell you that they are watching

the development of a whole panoply

of renewable energy technologies,

but that they don't think that any of those technologies

have gotten to the point of economic viability yet.

And meanwhile, Exxon will do what Exxon knows best how to do,

which is run around the world trying to pull oil

out of the ground.

>> SMITH: The consequences can be very negative.

In recent years, the big oil companies have put down stakes

in the Canadian tar sands.

There's a lot of oil here,

enough to keep generating oil company profits for a long time.

>> We can extract oil for about 155,000 barrels per day

for about 40, 50 years ahead of us.

Even at minus-40, we keep going, keep digging.

It's cold here obviously for the people, for the mechanics,

but we keep going non-stop.

>> SMITH: The problem is that the oil here

is mixed with sand and clay, and extracting it comes with a cost

to the climate.

That's because the process uses lots of heat, pressure

and chemicals.

The result is that oil from the tar sands has a carbon footprint

two to three times greater than ordinary crude oil.

>> The tar sands are a goopy mess.

The tar sands are not really sustainable.

There's no way Canada can meet its global warming commitments

with the tar sands.

Any claim the Canadians have ever had to being green

and greener than the US, which I think they'd like to believe...

the tar sands, you know, throws out the window.

But, look, oil is $90 a barrel.

So the tar sands are incredibly profitable.

You can't do it

in an environmentally responsible fashion,

but at $90 a barrel, everything looks good.

>> These companies don't exist to be morally... upstanding,

although they would certainly tell you that they want to be.

They exist to make money for their shareholders.

They will respond to the signals with which they're presented

in the market.

And I think, at the end of the day, Exxon hasn't had

market signals to shift away from oil.

>> SMITH: In this election year,

the political signals have been very clear.

It's the high price of oil,

not climate change or renewable energy,

that's on most people's minds.

>> Drill, baby, drill.

(laughs)

Drill, baby, drill.

>> Drill, baby, drill.

Drill, baby, drill.

Drill, baby, drill.

Drill, baby, drill.

>> SMITH: The candidates have responded.

>> And yes, yes.

As that sign says over there, my friends, "Drill, baby, drill."

We've got to offshore drill, and now.

>> When we began this campaign,

John McCain was opposed to offshore drilling.

When he saw where the political winds were blowing,

he reversed course and supported offshore drilling.

>> Drill, baby, drill.

>> John McCain, having flipped his position

on offshore drilling, started bashing Obama

for being against drilling.

In other words, he's attacking Obama

for holding the same position that McCain had held

up until about two weeks before.

(cheers and applause)

Unless you were in favor of some form of drilling,

the American people didn't want to hear

anything you had to say on energy.

They didn't want to hear anything you had to say

on climate.

Drilling was sort of the litmus test.

Obama finally realized he was in the wrong place,

and so he switched.

>> Increased domestic oil exploration

certainly has its place

as we make our economy more fuel-efficient

and transition to other renewable...

>> SMITH: As I've traveled

through America's energy landscape this past year,

it's become increasingly clear

that tackling climate change is going to require a huge

and concerted push from government.

(applause)

But when it comes to government leaning on big business,

the recent past contains some instructive lessons.

15 years ago, President Clinton invited Detroit's Big Three CEOs

to the White House and announced

the Partnership for a New Generation of American Vehicles.

>> Today, we're going to try to give America

a new car-crazy chapter in her rich history

to launch a technological venture

as ambitious as any our nation has ever attempted.

>> SMITH: Clinton thought that he could bargain his way

to a solution.

>> I worked at the Department of Energy

during the Clinton Administration, where we created

a deal with the automobile companies,

that we would not work to pass regulations

to make tighter fuel economy standards.

But in return, they would partner with us to develop

a triple efficiency, 80-mile-per-gallon family car.

>> This is not an ordinary kind of decision.

These three men really have done something extraordinary.

>> SMITH: The project got off to a good start.

The car companies went to work on building prototypes

of diesel electric hybrids.

The Clinton Administration pledged over $1 billion

to the effort.

Within a few years, Ford, Chrysler and GM each rolled out

a concept car: the Dodge ESX, the Ford Prodigy,

and General Motors' Precept.

>> When will we see this kind of hybrid on the road?

>> Well, we've made a commitment to have a hybrid vehicle

in production by the year 2001.

>> SMITH: But that was a commitment they failed to keep.

>> What's behind the grill is what matters most.

>> SMITH: Instead, the Big Three chose to sell big cars

and trucks.

>> I mean, they did a lot of posturing for photos

in the Rose Garden and photo ops.

But, at the same time,

they were grinding out sport utility vehicles and Hummers

that got atrocious fuel economy.

And that's where their big money was coming from.

>> I think that they were just as amazed in Detroit

that every time they made something bigger,

more powerful, more doors, and more stuff in it,

we bought as many as they could build.

>> SMITH: Quietly,

the Partnership for a New Generation of American Vehicles

faded from view.

What happened with that initiative?

>> Actually, I'm not that familiar

with the specifics, but my understanding is

that that was a project that all the teams worked on,

and we learned a lot from that project.

There were a number of technologies it put in place.

And as a project, we worked on what would be achievable

at that point in time.

>> SMITH: But what wasn't achievable

for the big three US auto makers

was achievable for Toyota and Honda.

Ironically, the Japanese scrambled because they feared

they were going to get left behind.

>> Because the Department of Energy had excluded

Toyota and Honda from this partnership,

because they were foreign auto companies,

Toyota and Honda built hybrids on their own

and introduced them into the US market, and got an advantage

in the marketplace by being perceived as interested

in fuel economy.

And Detroit has, until the last year or two,

stuck its head in the ground.

And it has given to Toyota a ten-year advantage

in fuel economy technology.

>> Detroit waited until they got murdered in the market

and until the supply and demand

just simply drove their monster cars out of public favor

before they started to act.

Foresight.

They need foresight.

>> SMITH: Why did Toyota beat you to the Prius?

>> Toyota looked at the hybrids and the Prius

from an overall standpoint, knew there would be

the loss of money for some time on the cost of that,

but looked at it from a overall marketing and image standpoint,

and General Motors really looked at it from a business place.

Can this vehicle make money?

>> SMITH: But yet Toyota is eating your lunch.

>> Well, as I mentioned before, General Motors is very committed

to reducing emissions.

We're very focused on bringing products to market that are

going to satisfy the customers, not only in the US,

but globally.

And we are working every day on fuel efficiency.

>> I want a hybrid that fits my life.

>> SMITH: Today, American car companies are playing catch-up,

furiously offering new hybrids while ramping up

their alternative car research.

The most promising of the alternatives

is the plug-in electric car.

>> The electric car is here.

>> SMITH: GM's most recent effort was the EV-1.

Its story was first told

in a popular investigative documentary,

"Who Killed the Electric Car?"

The film reported how the EV-1 was developed in response

to a California mandate for zero-emission vehicles.

>> There they are.

Wow.

>> SMITH: And how, when California loosened the mandate,

GM abandoned the project.

>> I don't imagine there are very many EV-1s left

that haven't been crushed down.

It's pretty sad.

>> SMITH: Why'd you have to crush them?

Why'd you have to destroy them?

>> Well, actually, we have a number of them that are

in museums and that are in universities.

And then, with respect to some of them, we did recycle them,

which is what we do with vehicles

at the end of the lifecycle.

>> SMITH: So that was a recycling program?

Which was crushing them and for scrap, right?

>> Yeah, absolutely.

>> SMITH: Now, years later, GM is starting over.

They're betting billions of dollars that this car,

the Chevy Volt, will put them back in the game.

>> A GM electric vehicle is an inconvenient truth.

>> SMITH: It's a unique concept.

While the engine is fully electric and can operate

as a plug-in, the Volt can alternatively use on-board fuels

like hydrogen, ethanol or gasoline

to recharge its battery.

>> Just let him come right by.

>> SMITH: GM invited Frontline to come see the Volt

during a publicity shoot.

It didn't go well.

The car could hardly make it up this small hill;

then, it stalled altogether.

The shoot was cancelled.

>> SMITH: I went to see the Volt on display.

It was running at about ten miles per hour.

Your representative there suggested that, if we wanted to,

we could speed up the tape.

And then, after about 15 minutes, it conked out.

It wasn't a confidence-builder.

Where are you now on that car?

>> Well, the Chevy Volt was introduced last January

as a concept vehicle.

We have a production team in place to really advance

the production of the vehicle,

as well as working on the battery.

So, we're in the process of testing lithium-ion batteries

that could be used for a plug-in capability

at this point in time.

And we're hoping in the spring

to have additional vehicles for driving.

>> SMITH: When's that car going to be on the market?

And how much is it going to cost?

>> Well, we certainly don't know what the cost would be,

and we don't have a specific date.

We really have a stretch objective

by the end of the decade to have something in the marketplace

with respect to the Chevy Volt.

>> GM is now saying that the Volt is on target

to be in dealer showrooms by 2010.

>> The question is, why are we reinventing the wheel

when they already had a car that was serviceable, then junked it?

Now, a decade later, they seem to be starting all over again,

>> SMITH: And once again GM has gone back to Washington.

This time, the big auto makers have asked for and received

$25 billion in low-cost loans to help them build

a new generation of vehicles.

>> SMITH: Another cautionary tale

about business and government is the story of corn-based ethanol.

Initially, it had nothing to do with climate change, but today,

ethanol is routinely promoted as a green solution.

>> Ethanol started in this country

before concern about climate change was pervasive.

It was a political push by corn producers in the Midwest.

>> Hi.

I want to talk to you today

about something that is really important: ethanol.

>> SMITH: Ethanol took off after the oil shocks of the 1970s

as a domestic alternative to Middle Eastern oil.

Farm states embraced the boost to their economies,

and dozens of corn ethanol refineries

sprang up overnight.

>> Everybody thought, "New gold rush, ethanol.

It's just the alternative fuel, and let's make as much of it."

We saw investments from Wall Street, from pension funds

across the board.

>> SMITH: Texas oil man T. Boone Pickens was told

by corn-state senator Bob Dole that resistance was futile.

>> Senator Dole said, "You're against ethanol.

Let me explain to you how it works.

There are 21 farm states and 42 senators.

Those people want ethanol and they're going to have ethanol.

And you're wasting your time trying to explain

it's a bad idea."

>> SMITH: Just that simple.

>> That simple.

I think it was that simple.

>> SMITH: Good idea or not, ethanol is now a huge business

with more than $7 billion in annual government subsidies.

>> What if we could lower greenhouse gas emissions

with a fuel that grew back every year?

What if we could live green by going yellow?

>> SMITH: Car companies like GM have jumped on the bandwagon.

>> The reason is that GM can tweak an existing engine

to accept E85-- 85% ethanol, 15% gasoline-- for about $150 a car.

And GM believes that, at the end of the day, people may say

that they want a green car, but people aren't willing to pay

that much more.

>> SMITH: Let's say everybody's driving an E85 vehicle.

What does that do for reducing carbon emissions?

>> Well, there are disagreements about that.

It has to do with how that ethanol is produced.

There are studies which say that there's a net benefit

in carbon emissions.

There are studies that say that that net benefit

in reducing carbon emissions isn't so great.

>> SMITH: What does the flex fuel vehicle really do

for reducing CO2 emissions?

>> Actually, the CO2 reduction, it depends

where you get the ethanol from.

So, corn is different than sugarcane

is different than cellulosics.

So, it ranges from 15% all the way to about 65%.

>> SMITH: But the few service stations that we have

are putting out corn-based ethanol, right?

>> Absolutely.

At this point in time, it is corn-based.

>> SMITH: And so, the savings that you get on CO2 emissions

from using corn-based ethanol would be how much?

>> It's about a 15% reduction.

>> SMITH: GM is using an optimistic estimate.

Some studies show that corn-based ethanol

may actually increase overall emissions,

depending on how the corn is farmed, fertilized, harvested

and transported.

All these processes have their own carbon footprints

and can offset savings over using gasoline.

>> Corn ethanol is simply a bad biofuel, and it's a bad biofuel

several times over.

We, in this country, have optimized corn, ironically,

to be as greenhouse gas intensive as possible.

We reward farmers for using more fertilizer, more irrigation

because those things have been cheap historically.

So, we have lots of greenhouse gases and carbon embedded

in what it takes to grow an ear of corn.

And the analysis that my lab and many others have done says

very clearly that corn is simply not a good feedstock

for biofuels.

>> SMITH: Regardless, the corn lobby continues

to throw its weight around Washington

and has helped the auto companies

win a fuel efficiency credit for every E85 car they sell,

even though very few drivers have access

to ethanol filling stations.

>> SMITH: You say you have 2.5 million E85-ready vehicles

on the road.

>> Yes.

>> SMITH: How many of those are actually using ethanol?

>> Well, there's a few pumps.

>> SMITH: A few.

But there's...

>> It's not widespread.

It's not widespread.

>> SMITH: In fact, out of a total of 120,000 gas stations

nationwide, only 1,600 offer ethanol, most in the Midwest.

California has just ten; New Jersey, none.

>> SMITH: We've invested a lot of money in ethanol.

Is that getting us anything?

>> The corn-based ethanol program

is going to be considered one of the biggest follies

ever implemented in energy policy anywhere in the world,

in the history of energy policy.

Ethanol is not a solution to greenhouse gases.

>> SMITH: There are some who believe that the answer lies

in making ethanol from other plants, like switchgrass.

But even then there are problems.

>> The problem is that we don't know

how quickly we will have a crop

that itself produces enough biofuel.

And that's not the whole equation.

In the last year, we've learned a fairly striking piece

of new science.

And that is that there's an indirect land-use effect

of growing biofuels that is very negative.

And that is, if a piece of land goes out of food production

in the US Midwest, in the global market for food, that opens up

an opportunity for a producer in Brazil, in Indonesia, in Ghana,

or somewhere else to go into production.

And frequently, that comes at the expense

of new land being carved out of rain forests,

carved out of the savannah, that was already storing carbon.

>> SMITH: The World Bank says using more land to grow fuel

inevitably will lead to greater food shortages

and higher food prices.

Meanwhile, President Bush has called for a seven-fold increase

in ethanol production by 2017.

US corn ethanol producers

have 70 new ethanol refineries planned.

>> I opposed ethanol subsidies, because I thought they were

going to distort the market.

They distorted the market.

(applause)

>> John McCain wants to get rid of ethanol subsidies.

Barack Obama does not.

>> I have been a big supporter of ethanol,

because Illinois's a big corn producing state.

It's been good for farmers.

It's been good for the rural economy.

>> Obama is from Illinois, which grows a great deal of corn.

And so, it was only natural for him to be for ethanol.

McCain is from a state that does not grow corn.

>> SMITH: There's no corn in Arizona.

>> That's right.

>> SMITH: Only when food prices began to rise did Obama begin

to soften his position.

>> If it turns out that we've got to make changes

in our ethanol policy to help people get something to eat,

then that's got to be the step we take.

>> Yes we can!

>> Thank you.

Thank you.

>> Everything that's happened wrong in energy

in the United States has happened because

there was a group of voters that put their own parochial needs

ahead of our nation: West Virginia coal miners,

Michigan autoworkers, farmers from Iowa.

None of these groups have thought about our nation.

They're thinking about their small local community.

We have to think as a nation.

We need a leader who's going to stand up and say,

"We need to do this together."

And it's doable.

>> SMITH: In Europe and in Japan,

governments have been much more successful

instituting policies that foster efficiency

and renewable energy.

It stems from the fact that Europe and Japan

never had much oil.

>> They had fewer fossil fuel or other kinds of energy resources

by themselves and they had to husband them better.

And they also were acutely aware of the security threats

to their country if somebody cut off the supplies.

>> And as a result of that, governments bit the bullet

in Europe and Japan and imposed policies that were not popular

with consumers.

But over a period of years, imposed tax policies

that had the effect of, first,

making gasoline much more expensive,

and second, making cars that got lower fuel economy

much more expensive through painful tax policy.

>> That, combined with the fact that Europe has had

a long tradition of public investment

and public protection.

And the U.S. has long had suspicion of big government

and suspicion of public investment.

So, you have some political, cultural differences between us

and Europe and Japan.

>> SMITH: The result has been that, in Europe and Japan,

cars are smaller and more efficient.

Europe is also the world's leader

in deploying renewable power.

>> SMITH: This solar farm just outside Berlin

is one of the largest in the world.

The German government began granting large subsidies

to alternative power providers.

Their contribution is still small.

Solar produces just 0.6% of Germany's electricity,

but that's six times what the U.S. produces.

Wind is a similar story.

>> I think I was always misunderstood.

>> SMITH: This ad compares wind to an underappreciated giant.

>> People just didn't seem to like me.

>> SMITH: Today, wind provides

over 7% of Germany's electricity,

about ten times what wind energy provides in America,

in spite of the fact that Germany is not very windy.

>> I finally feel useful.

>> Germany has a wind resource poorer than that

of North Dakota.

In North Dakota, we have about 200 megawatts

of wind power installed.

Germany has 20,000 megawatts.

Again, we have a better wind resource in one state alone.

>> SMITH: In sharp contrast to Europe,

wind and solar energy in America

have received inconsistent government support.

>> If you look at a graph of the construction of wind power

in this country, it looks like an EKG chart

with peaks and valleys that, essentially,

exactly approximate decisions in Washington on subsidies.

And if you're in business and you're watching this,

you don't have much reason to be confident

that there's going to be suddenly consistency here

by Washington.

So you're skittish.

>> SMITH: One businessman who's not skittish is Texas oil man

T. Boone Pickens.

He's already amassed a fortune of around $2 billion

second-guessing the big oil companies.

But at 80 years old, he's still interested in making more.

Sensing that the mood in Washington is about to shift,

he's planning to build the world's biggest wind farm.

So, you went into the wind business to make money.

How are you doing?

>> Haven't made any money.

But I think I will make money.

We're getting ready to commit for about $2 billion

worth of turbines next month.

So, I believe in it, and the only dollar that's in the game

right now is mine.

>> SMITH: Pickens plans to install 2,500 wind turbines

and generate 4,000 megawatts of electricity.

He's expecting to gross hundreds of millions of dollars a year.

And he say's there's a lot more potential.

>> If you gave me the assignment today,

"We need 150,000 megawatts in the next ten years"--

I'd go to Sweetwater, Texas.

>> SMITH: Starting in Sweetwater and running north

through Oklahoma, Kansas, Nebraska and the Dakotas

is America's biggest wind corridor.

>> Then, if you take off west from Sweetwater,

you can pick up solar, and the Californians love that.

So, you're talking about increasing, in ten years,

the 150,000 megawatts.

It could be accomplished in that corridor:

north/south, east/west.

>> SMITH: In the spring of 2008, Pickens took to the airwaves

to sell his idea.

>> If you look at a corridor, a huge corridor of wind...

>> SMITH: And he called on the federal government for help.

>> Somebody's got to sit down and look at it

and decide what we got to do, because it is huge.

I'm T. Boone Pickens.

I've been an oil man my whole life.

But this is one emergency we can't drill our way out of.

>> SMITH: He followed up with a nationwide ad campaign,

positioning himself as a savior of the American economy

who can deliver energy independence.

>> I've committed $58 million to this project.

And that's my money.

>> SMITH: What he wants from the federal government

is the same thing that all wind producers want.

>> You're going to have to have production tax credits.

>> SMITH: In order to help you with operating costs?

>> Yes.

>> SMITH: To make it cost-competitive?

>> Exactly.

You have to have it.

>> SMITH: He also needs the government to open corridors

for transmission lines to move electricity

from wind farms to customers.

To be viable, both wind and solar will require billions

in infrastructure investment.

>> The way I see the government should operate in this,

they should open up corridors and help with that

and make it happen.

You can't go in and invest a huge amount of money

and not have a way to get your money back and make a profit.

I would expect to make money out of it.

>> SMITH: As calls for carbon-free power grow,

nuclear power is getting a fresh look.

It's already the source of 20% of America's electricity.

>> Hi, Peter.

It's nice to talk to you again.

>> SMITH: Patrick Moore is a paid spokesman

for the nuclear lobby,

representing 32 utilities with nuclear plants

in their portfolios.

>> The statistics show that nuclear energy

is among the safest technologies...

It is simply and clearly obvious that nuclear energy

is going to be the most important base technology

for energy, like providing the bulk of our electricity

in the future, and hopefully, charging our cars

and running heat pumps in our houses,

so we can eliminate fossil fuels from our transportation

and our infrastructure at the same time.

>> SMITH: Moore wasn't always so enthusiastic.

In the 1970s, he was a founding member of Greenpeace

and a fierce nuclear opponent.

In 1976, you called nuclear power plants "slow atomic bombs.

Nuclear power plants are, next to nuclear warheads themselves,

the most dangerous devices that man has ever created."

>> That's how I saw the world at that time.

I was wrong.

And, it's... I mean, it was a fact back then

in the Cold War that we saw nuclear energy

and nuclear weapons as all part of the same technology

and all part of the same thing,

as if all things nuclear were evil.

>> SMITH: By the late '70s,

nuclear energy was a troubled industry.

In large part due to the success of anti-nuclear activists,

it was burdened with numerous federal and state regulations

and was experiencing massive construction cost overruns.

>> Please stay indoors with your windows closed.

>> SMITH: The nuclear accident at Three Mile Island

was the final nail in the coffin.

>> There has been a state of emergency

declared on Three Mile Island.

People look at Three Mile Island, it scares them.

>> Well, it's not rational to be scared by Three Mile Island,

that's for sure.

>> SMITH: Why not?

>> Because no one was injured at Three Mile Island.

It did not leak, the radiation.

And that was because engineers designed a reactor dome

that was made to prevent the radiation from coming out

in the event of an accident, and it worked.

It was a safety system that worked.

>> SMITH: To be fair, there was some leakage of radioactive gas,

but it didn't go far and any serious leak was contained.

Still, it frightened communities.

No application for new nuclear plant construction

has been approved since.

And new plants still face big obstacles.

>> They've become fabulously expensive--

$5 billion to $10 billion per nuclear power plant.

>> And also, what are you going to do with the waste?

I think that there are technical solutions,

but you can't get any location.

Nevada doesn't want any of that waste.

>> SMITH: These issues of waste and cost make it unclear

whether an expansion of nuclear energy will ever be politically

or economically viable.

>> A lot of the opponents of nuclear

point to the spiraling cost of projected new plants.

The price of cement has gone up so much.

The price of steel has gone up so much.

So nuclear power may be a low-carbon option,

but it's not a low-cost option yet.

>> I find that really interesting

that people are challenging the cost of nuclear energy.

When if... all you have to do is look at France,

which has 80% nuclear energy, and does not have

unreasonable energy prices.

>> SMITH: If the French can do it, why can't we do it?

>> Well, the French have done a couple of things differently

than we do.

One of which is they've standardized the designs

to a large extent.

>> SMITH: But we've done that now.

>> Well, we've done it now.

But our process to permit and to evaluate

how a plant will work and do the financing is all over the map.

It's a hodgepodge based on where you are,

who the financing team is, how you work with utilities.

>> And this returns to sort of a theme we've been talking about.

France didn't happen simply because someone decided

that they wanted... that they like nuclear energy.

It happened because the government decided

it was going to impose a strict policy,

and it followed through with that policy,

much to the consternation of a lot of consumers

and environmentalists over decades.

But that takes immense political will.

And it's not clear that other countries are going to follow.

>> SMITH: The future of nuclear power in the U.S.

could be very different depending on who becomes

the next president.

>> Nuclear power is the most dependable source

of zero-emission energy we have.

>> McCain wants to double down on nuclear power.

He wants to... look, he's an old nuclear Navy guy.

He thinks it's safe.

He thinks we can solve the problems

and he wants full steam ahead.

>> Have we been sailing Navy ships around the world

for 60 years with nuclear power plants on them

and we've never had an accident.

>> Obama says we need to solve a few problems

before we go down that road.

He's not opposed to nuclear power,

but he's not willing to move ahead with it yet.

So this is a strong difference between the two of them.

>> Until we can make certain that nuclear power plants

are safe, that they have solved the storage problem,

I don't think that's the best option.

I am much more interested in solar and wind

and biodiesel and strategies...

>> SMITH: So, can America summon the political will

necessary to address climate change?

>> The meeting of the committee will come to order.

>> SMITH: In December 2007, the Senate Environment Committee

sat down to decide whether the Lieberman-Warner Climate bill,

an economy-wide effort to cut carbon emissions by 60%,

should be recommended to the Senate floor for a vote.

At the last moment, Senator Inhofe led an effort to derail

the legislation by submitting hundreds of amendments.

>> At the heart of the matter is that this bill is all pain

and no gain.

If this bill should pass, which it won't, but if it should pass,

this is the going to be the greatest boon for China.

>> SMITH: China, Inhofe argued, would benefit

because legislation would drive up energy costs,

and as a result, force American companies and jobs overseas.

>> I represent millions of families, farmers, drivers

and workers who will pay higher heating bills,

suffer more pain at the pump and lose more jobs

because of the bill.

>> I happen to think that the economy's going to respond

in an appropriate way and that energy costs

may in fact go down.

>> Global warming is a catastrophic crisis

facing our planet.

If we do not act boldly and aggressively...

>> SMITH: After 9.5 hours, the bill was put to a vote.

>> On this vote, the ayes are 11, the nays are eight.

The ayes have it.

And the bill is reported favorably to the Senate.

>> SMITH: The real test was to come on the Senate floor.

A lot was at stake.

The bill would grant utilities hundreds of billions of dollars

for carbon capture and storage technology,

and hundreds of billions more for wind and solar incentives

and other renewable research.

Auto makers would also get billions

to develop cleaner cars.

It's estimated that the total package, over the next 40 years,

would run anywhere from $1.5 trillion to $7 trillion--

by any standard, one of the largest bills ever debated

by Congress.

>> The amount of money involved here is staggering.

You're talking about legislation

that could affect the power industry, the car industry,

the chemical industry.

Every manufacturing industry in America

is going to have some say in what happens here.

>> SMITH: At the heart of the bill is a market mechanism

called cap and trade, designed to penalize businesses

that don't cut their emissions.

>> The government imposes a cap beyond which

companies cannot emit.

Companies that emit more than their quota of allowances

buy from companies that emit less.

>> SMITH: And over time,

the number of available pollution permits is reduced.

Scarcity drives up their cost.

In theory, businesses will then invest in new, clean technology,

creating new business opportunities and new jobs.

>> It would force the coal guys to come up with

making carbon capture and storage work.

It would begin to level the playing field

so that other forms of power and other ways of thinking

about power could compete competitively.

>> SMITH: But when the bill hit the Senate floor,

gas prices were hitting all-time highs.

>> Families are already struggling

to pay a record gas tax...

>> It mandates nothing on the part

of other industrializing powers like China and India.

>> SMITH: It was practically dead on arrival.

>> This bill will attack citizens at the pump

and increase their electricity costs.

>> The Lieberman-Warner bill never really had a chance

of passing.

>> ...increase energy prices.

>> It hit the floor as gasoline prices were peaking.

Congress was in no mood to debate anything

that was going to increase gas prices, even by a little bit.

>> Our planet is growing warmer.

We, as human beings, are a major contributor to that.

>> Mr. President, I yield the floor

and make a point of order that the quorum is not present.

>> The Republican leader...

>> SMITH: Senate Minority Leader Mitch McConnell

moved to cut off any debate by ordering Senate clerks

to read the entire 500-page bill into the record.

(reading portions of the bill)

The bill fell into a procedural black hole

and never came to a vote.

>> The proponents of this bill-- Joe Lieberman, John Warner,

Barbara Boxer, the people that were really trying to push

this ahead-- did not have their communication strategy together

when they hit the floor of the Senate.

They were scrambling, if you will.

They didn't have the votes.

The debate was creaming a lot of Democratic senators

who were up for reelection.

They didn't want to be there.

>> SMITH: Where were the candidates?

>> The candidates were hiding.

(laughs)

The candidates both support the concept of cap and trade,

but neither of them showed up.

>> SMITH: Both candidates may have determined that,

in the midst of an election, it wasn't a good time to vote yes

on a big government spending bill.

The real question is, what will Obama or McCain do once elected?

Meanwhile, the planet is operating on its own timetable.

>> We don't have a lot of time to reverse course.

The Arctic is probably going to be ice-free by 2030

and possibly by 2020, which is stunning

because people used to think it was going to be 2080 or 2100.

And we have seen a fantastic explosion of wildfires

around the world and in the United States.

I think we are starting to see a perception shift

that maybe climate change is as serious as people thought.

I think Hurricane Katrina played into that.

I think these unbelievable droughts in the United States

that we've been seeing...

Australia's been seeing an unbelievable drought,

parts of China have seen brutal droughts.

At the same time, we are heating up the oceans.

We're cramming carbon dioxide in them.

And there are great fears that

you will render large tracts of the ocean lifeless.

>> SMITH: Emissions continue to rise.

China has now passed America as the biggest emitter of CO2.

India, Indonesia, Mexico,

Brazil, Russia all are emitting more, too--

the inevitable result of more and more development.

A global recession may slow the rate of growth in emissions,

but it will also crimp governments' ability to act.

And a recession will make it more difficult for America

to take the lead.

>> We're not going to be able to spend all the money

that the nuclear industry wants us to spend on nukes

and all the money that the coal people want us

to spend on coal and all the money that solar and wind

and hydro people want us to spend on those things.

So where do we make our bets?

Where do we spend our dollars?

>> What makes this challenge so daunting is that it has to fly

in the face of habits, like more consumption and more and more

and more is good, as opposed to maybe not good.

Maybe we need different kind of consumption.

>> We have to change the way we live, change the way we produce,

have a new kind of energy system.

I would suggest we roll up our sleeves and that...

see what we have, try out what we can do

and invest in what we need.

>> If we understand what climate change is going to do

and we understand what kind of cuts are needed,

we will have to be far more serious about what we do.

I believe, today, there's a lot of rhetorics;

there's very little action.

>> Our wealth, our society, our being is driven by oil

and carbon.

And when we say we have to make a shift,

that is extremely difficult.

It's intellectually dishonest to somehow say we can get

some light bulbs or, you know, get a Prius and we're all done.

No.

This is going to take massive technological innovation.

It's going to take changes in the way we live and work.

And it's going to take cooperation

of unprecedented degrees among business

and government and among countries.

That's where we are.

There's no other word except "daunting."

I'm hopeful.

I'm cautiously optimistic.

But I would have to say one has to approach this

with great humility.

>> There's more to explore on our website,

where you can watch the whole program again online.

And watch more of Martin Smith's interviews

with energy executives.

>> SMITH: And you're going to meet that demand

by building more coal plants?

>> Clean coal. We hope so.

>> We haven't even scratched the surface of that.

>> Or read more of the interviews.

>> The Western model of growth is inherently toxic.

>> I am very optimistic that we are moving

in the right direction.

>> Find out where venture capital is placing

its energy future bets,

and what the next president will do.

And why do the French love nuclear power?

Then, join a discussion about this program at pbs.org.

>> Next time on Frontline...

on January 20, a new president will take office.

>> He's going to find crisis in a half-dozen different countries

around the region.

>> He will inherit two wars...

>> Every single operation you are doing in Iraq

is an operation you can't be doing in Afghanistan.

>> ...an over-stretched military...

>> There are no extra troops left on the shelf.

>> ...and an enemy beyond reach.

>> A nightmare scenario is a failed state of Pakistan.

>> "The War Briefing," next time on Frontline.

>> Frontline is made possible by contributions

to your PBS station from viewers like you.

Thank you.

With major funding from

the John D. and Catherine T. MacArthur Foundation.

Helping to build a more just world.

And additional funding from the Park Foundation.

Major funding for "Heat" was provided by

the FrontlineJournalism Fund.

And a grant from Hannelore and and Jeremy Grantham

and the Grantham Foundation

for the protection of the environment.

And additional support from Scott Nathan and Laura Debonis.

Additional funding for "Heat"

is provided by The Kendeda Fund.

And the Nathan Cummings Foundation.

And Wallace Genetic Foundation, Inc.

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