Guest Column

Prop 3 will hurt state economy; ignores fastest path to sustainable future

October 20, 2012
| By Rich Wells |
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The Dow Chemical Co. has long advocated for comprehensive energy policies — those that support stable energy supplies and costs, lead to innovation and sustainable solutions, strengthen economic growth and increase competiveness.

There are four fundamental principles to a comprehensive energy policy that leads to a sustainable energy future: conserving energy, optimizing existing energy resources, accelerating the development of new energy solutions, and transitioning to a successful low-carbon economy.

Unfortunately, these principles are largely missing in the proposed state constitutional amendment, Proposal 3, on the November ballot. Prop 3, or 25x25 as it is often called because the mandate takes effect in 2025, is narrowly focused on the use of renewable resources for electricity generation. Dow opposes this proposal because it hurts our business and our employees. We believe both the constitutional approach and the focus of Prop 3 are misguided, and will lead to the unintended consequences of reduced job growth and greater economic hardship for Michigan residents.

Michigan already has the highest utility rates in the Midwest, which gives job-creating manufacturers pause when considering building or expanding plants here. At a projected cost of $10 billion to implement, Prop 3 will significantly increase the cost of electricity for Michigan residents and businesses. This is sure to have detrimental effects on businesses, both large and small, and on economic growth and job creation in our state.

As a supplier to the wind industry and producer of solar technology, with a considerable stake in research and development of practical clean energy technologies, some may expect Dow to be supportive of the measure. However, any gains renewable markets might see from Prop 3 would be significantly overshadowed by the higher energy costs it causes. Dow, like all residents of Michigan, would suffer financially under the 25X25 amendment.

The proposal is also shortsighted in that it doesn’t consider energy efficiency, which is the fastest and most inexpensive path to ensuring a sustainable energy future. Considering that the average home contains about a half-mile of cracks that release enough heated or cooled air to fill two Goodyear blimps every single day, energy efficiency is clearly the most economical and easily accessible form of sustainable energy available.

At Dow, we are passionate about energy conservation because we experience its value every day. Since 1990, Dow has reduced its energy intensity by 40 percent, saving more than 5 quadrillion BTUs, roughly equivalent to 11 years of energy consumption by every home in Michigan. As a result of these efforts, we avoided more than 270 million tons of greenhouse gas emissions and have returned more than $24 billion of value to our company. However, since 1990, the technologies and practices involved in improving our energy footprint have evolved significantly. Thankfully, we have maintained the flexibility to adapt to significant breakthroughs in technology and practices. Michigan residents deserve that same level of freedom to benefit from the evolving energy landscape.

We are also concerned with the prospect of Michigan’s constitution serving as policy vehicle for select special interests. The state constitution is a foundational document meant to address and solidify the basic rights of Michigan citizens. Energy solutions are diverse and ever-evolving, requiring the flexibility of legislative policy-making to stay current. Without flexibility to respond to new technologies and practices, Michigan could find itself falling further behind other states in making the most out of affordable, sustainable energy, which is the key to economic growth and prosperity.

What Michigan needs most is a comprehensive approach to energy policy where consumers, businesses and government embrace multiple solutions for clean, sustainable and cost-effective energy. It does not need a narrowly focused, rigid and costly state constitutional amendment. Michigan voters should vote no on Proposal 3.

Rich Wells is vice president and site director for the Michigan operations of The Dow Chemical Co.

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