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Costa Rica’s Energy Paradise: Comment on Tom Friedman (Not everywhere can be a playground for the rich)

In his recent New York Times op-ed, Thomas Friedman veritably gushes about the long-term commitment of Costa Rica to a clean environment and renewable energy. He is proud of the fact that renewables power 95 percent of the country’s economy. Such energy air-conditions resort hotels, charges golf carts, powers cable pulleys through the rain forest canopy, and bakes chips at the local Intel assembly plant.

Costa Rica’s energy mix is led by 75–80% hydropower, 12% geothermal, and 3%–5% oil (more specific statistics are here). The workhorse hydro is a mix of storage and run of river, with storage at about 50% of the 2,000 MW installed capacity.  In a dry year, the run-of-the-river plants will not produce much, or very reliably, which brings up the risk of such reliance.  In 2007 Costa Rica suffered power cuts as a result of drought and its lack of diversity in electricity generation.

Mr. Friedman also is impressed that the locals have banned offshore drilling for oil and gas, which leaves them entirely dependent on imported oil for their petroleum-transportation sector.  But in an earlier column on Denmark’s commitment to wind energy, “Flush With Energy,” he neglected to mention this country’s commitment to offshore drilling, which is primarily responsible for their energy independence. In fact, Denmark exports nearly half of such production.

Costa Rica has been extremely successful in developing its hydro resources (wish we could build dams in the U.S.), with most of the rest of its power supply coming from geothermal. Less than 5% of electricity generation comes from oil. (Most environmentalists now oppose large scale hydro as damaging to the environment and native peoples, but Friedman did not mention that either.)

Electricity accounts for roughly 14,200 barrels per day equivalent end-user energy (about 35,000 barrels/day if you assume losses typical of thermal plants). The rest of the country’s energy, about 45,000 barrels/day, comes from oil with about 2% from coal. And this electricity is not cheap.  At an average price of about 13 cents per kWh, Costa Ricans pay roughly twice what we pay in the U.S. But then, no one ever said that near-total reliance on renewables to generate electricity was a way to save money. Last year, electricity rates increased between 11 percent and 41 percent for all users in the country.

Costa Rica has worked hard to maintain its image as an eco-friendly tourist destination. And this approach has paid off, with tourism, especially eco-tourism, accounting for almost 10% of 2007 GDP and more than 13% of total employment. Tourism is a greater contributor to the country’s GDP than for virtually any other country in the region.

Accordingly, energy use in the country is geared to light industry, agriculture, especially energy crops, and electricity use for domestic and tourism.  However, it still takes a lot of conventional energy, mostly jet fuel, to take tourists like Mr. Friedman to Costa Rica so that they can marvel at the pristine environment, and that is not likely to change for a long time.

The path that Costa Rica has chosen (with a good deal of government planning) is tailored for tourism, not for those locals not engaged in the care and feeding of eco-minded foreign visitors. This country’s energy model hardly applies to a large country with a diverse population, or even a small one that seeks to diversify its economy away from tourism and plantation agriculture.

And note that a country as wondrous and diverse in natural and man-made attractions as Brazil, has a tourism sector that is just one tenth that of Costa Rica’s relative to its economy. The fact is that industry and tourism do not mix readily—consider the coast of Maine, the mountains of Colorado and Wyoming, or the beaches of Brazil. But the money spent by tourists is usually earned in just the types of economic activities that people do not care to visit while on vacation.

Random Thought. Would the Natural Resources Defense Council or the World Resources Institute welcome an expansion of large scale hydroelectricity generation in the U.S. to emulate Costa Rica–or dedicate a significant proportion of U.S. agricultural land to biofuels or plantation export crops as in Brazil? Should Costa Rica look at some high tech fossil plants as a clean way to keep the lights on all the time and provide enough energy for an economy that can move beyond tourism and tropical fruit?

13 comments

1 Paul { 04.15.09 at 7:57 am }

Costa Rica is a tiny country with one climate, rains every day for much of the year, and sits on an active volcanic belt. I don’t see how the USA could duplicate their energy model even if we wanted to do so.

2 Paddy { 04.15.09 at 12:47 pm }

As I recall, Denmark also imports about 30% of its electricity that is generated by Swedish nukes. I suggest that your data may be confused.

3 Paddy { 04.15.09 at 12:48 pm }

As I recall, Denmark also imports about 30% of its electricity that is generated by Swedish nukes. I suggest that your data may be confused. However, that does not change the fact that Tom Friedman once again proves that he is a fool.

4 Donald Hertzmark { 04.15.09 at 1:45 pm }

Paddy,
Not confused, just incomplete. Denmark does indeed import about one third of its total consumption from Sweden, but it also exports an equivalent volume – some years more some years less – to Germany and Sweden. Those countries, with their large baseload generation plants, are the buffers for Denmark’s wind generation.

Denmark’s net oil exports run about 100,000 b/d.

5 Andrew { 04.15.09 at 4:31 pm }

You totally smacked down Friedman-not hard, of course, but nice to see you do it anyway!

6 Daniel { 04.15.09 at 6:09 pm }

You mention it obliquely, but another major flaw with Friedman’s article is that he confuses energy with electricity. Costa Rica gets 95% of their electricity from renewables, but according to your numbers, they only get 30% of their energy from renewables. That’s because the other 70% of their energy comes from oil which is used for transportation and cooking.

It’s tough to take someone like Friedman seriously when they make these simple mistakes about energy.

7 William { 04.18.09 at 8:31 pm }

I also feel that costa rica is not as eco- friendly as the world presumes them to be. it is also important for costa rica to start pulling their own weight globally. It is also important for costa rica to start pulling their own weight globally.

We feel costa rica should be concered with how much oil they are using, because compared to its size it uses, roughly the same as the U.S. does.

8 Costa Rica Follow-Up: Fatal Dependence on Renewable Electricity (Tom Friedman’s energy paradise loses its luck) — MasterResource { 04.25.09 at 1:03 am }

[...] world, noting its reliance on renewable energy (hydro) to generate electricity. In response, we posted last week about how such dependence had left it vulnerable to the vagaries of rainfall, and (to [...]

9 Robert { 06.05.09 at 6:37 pm }

Paddy,
It´s important to have official sources to make such statements. I share this website: http://www.grupoice.com/esp/ele/planinf/docum/datosgenerales_ele_dic2007.pdf, which is the national electricity company in Csta Rica. Please review slide 12 and 17, from an official source, and you will confirm Friedman´s point of view. Another fact you should be aware is that energy cutoffs at CR are approximately 15 hours a YEAR!!. Make your numbers on efficiency and productivity. It´s clear that on this whole thing, size and consumption does matter, but CR model proves that alternatives sources of energy generation can be accomplished in a sistematic way to foster economic development.

10 Dear Tom Friedman: Are You a Fascist Wannabee? — MasterResource { 09.11.09 at 8:42 am }

[...] you can always go back to your Super Home and forget about the residents of Costa Rica who have no job options other than waiting on tables or cleaning up hotel rooms since the mandated renewable energy supply of the country is not reliable enough to support industry. [...]

11 James { 01.08.12 at 8:53 pm }

Quebec and British Columbia, Canada have some of the cheapest power in the world and rely on hydroelectricity for more than 90% of their needs. BPA dams also make electricity in the U.S. Pacific Northwest relatively inexpensive. Big hydro can be extremely economical.

12 DavidH { 06.30.12 at 5:59 pm }

I read this article and had some serious disagreements with the views expressed here. I then checked to see who Donald Hertzmark (author of the article) is. I see that he is employed by the fossil fuels industry. Now the article makes perfect sense. The Costa Rican energy program is one we should all strive towards in our own countries. We will have to move to renewables eventually, and in the meantime our reliance on fossil fuels is quite destructive in ways that Hertzmark and his friends at industry front group Heartland Institute will be quick to deny.

13 rbradley { 07.02.12 at 9:21 am }

DavidH:

Open-minded readers will be suspicious of your ad hominem approach. Don Hertzmark is a Ph.D. economist with an encyclopedic knowledge of the energy industry as a result of many years if not decades of industry consulting. He is pro-private property rights and free-market-oriented to take the ‘right’ side of many issues and avoid compromising his principles.

So the causality is reversed from what you assert. Glad to know that you like his piece otherwise. And just perhaps fossil fuels are less destructive than uneconomic, intermittent renewables that require fossil fuel shadowing.

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