There is no greater calling for West Virginia at this time than for working on the transition from our current carbon-based energy infrastructure to a low- or no-carbon energy economy of the future.

Secretary of Energy-Designate Steven Chu, President-elect Obama and the new Congress will lead the country in that direction.

Business leaders are urging this transition. One of the top five overall recommendations the Wall Street Journal's panel of 100 leading CEOs and policymakers have for the new administration is to: "Put national legislation in place that starts us on the road to decarbonize our economy and to create the most energy-efficient economy in the world. Level with the American people that ensuring an adequate and diverse energy supply will not be cheap or easy. But make the case that the transition must be transparent and fair to all Americans, and that linking the economy, the environment, and energy policy bolsters security for all three."

The transition to a low-carbon economy is in fact already under way with what have been called "gray energy" technologies, i.e., not completely green but very cost-effective, near-term technologies that reduce carbon emissions. For example, energy-efficiency measures, energy recycling and co-firing renewable fuels with fossil fuels are important parts of the transition and can be implemented now.

West Virginia can be a leader in this transition and boost its economy at the same time. The goal is to identify, attract and seed here in West Virginia innovative gray energy technologies and businesses from anywhere in the world that reduce carbon emissions, manufacture gray energy and energy-efficiency products or provide other energy-efficiency services, such as assessments and performance contracting.

Billions of private investment dollars are flowing to innovative gray energy companies. Vinod Khosla, Silicon Valley billionaire and founding partner of Khosla Ventures, is investing in an innovative new company, Calera Cement, with what is described as the best carbon capture and storage technology currently under development. The Calera process injects fossil fuel power plant flue gas into the cement-making process, fixing the carbon during the curing cycle (more on Calera in the Aug. 7, 2008, issue of Scientific American).

West Virginia has competitive advantages and a head start in implementing gray energy technologies. Recycled Energy Development, or RED, is investing about $100 million of its own money for retrofit and installation of heat recovery and power generation equipment at the West Virginia Alloys plant in Alloy in Fayette County.

This energy-recycling project is projected to reduce the plant's energy costs by 37 percent and eventually enable it to increase production and employment by 20 percent. RED's mission is to "...reduce greenhouse gas emissions profitably." They also happen to have $1.5 billion from Bill Gates and Harvard University investment funds to accomplish just that. See "Gray Is the New Green" in the Sept 15, 2008, issue of Forbes magazine for more on RED and the West Virginia Alloys project.

This is a vibrant, rapidly changing field with the potential for much new business development. The 21st annual Industrial Growth Forum in Denver, Colo., attracted about 500 attendees from venture capital firms, banks, state and local government, DOE national laboratories, universities, power companies and numerous new small business ventures in wind energy, solar conversions, advanced batteries and energy storage, biofuels, cellulosic biomass conversion and other renewable energy technologies.

Fledgling new companies making pitches to private investors at the Industrial Growth Forums have raised about $1.2 billion since 2004.

West Virginia needs to be a part of the new energy economy and can start by taking proactive steps now:

• Build a coalition of coal, oil, natural gas, utility and energy-intensive industries. These industries, along with state agencies, the Legislature, the governor and universities, should make a sustained and coordinated effort to identify and attract emerging "gray energy" companies and commercializable technologies and processes.
• Look around the world for emerging gray energy businesses and do what it takes to get them here. For example, RED Chairman Tom Casten has said the company would put an office in West Virginia if we had a Clean Energy Standard Offer Program providing long-term contracts to clean energy providers that meet certain conditions.
• Be proactive in reducing carbon emissions. West Virginia's coal, natural gas and utility industries should go on the offensive and become engaged with technologies such as the Calera Cement process, energy recycling and other "gray energy technologies" and processes that reduce carbon emissions.
• Promote gray energy business development and commercialization with targeted venture capital tax credits, dollar-for-dollar matching for qualifying private-sector investments and incubator facilities for innovative new gray energy companies.
• Implement state-level policies and programs that promote smart, efficient and sustainable production and use of energy -- policies that include achievable goals for 2020 such as reducing by 20 percent the amount of energy consumed per dollar of gross state product, generating 20 percent of all power produced in the state from gray/green/renewable sources and increasing building energy efficiency by 20 percent.

Some state or region will emerge as the "gray-to-green" leader and will reap the benefits, including:

• new companies and business development;
• a larger share of the 5 million new green (and gray!) energy jobs promised by the new administration;
• an enhanced position for obtaining infrastructure and R&D funding through future clean energy research and economic stimulus programs; and
• a larger portion of the billions of dollars being invested in development, demonstration and commercialization of clean-energy technologies.

West Virginia can be that leader. We can create a vibrant new business development scene, be recognized as part of the solution and invigorate our state with new industry, investment dollars and R&D funds.

Caulton "Carl" Irwin is director of market enhancement and program development at the National Research Center for Coal and Energy at West Virginia University in Morgantown.