The world vs. Obama’s energy plan
Published 5:00 am Thursday, March 31, 2011
- In just over two years, President Barack Obama has seen the major elements of his energy strategy demolished by economic, political and natural disasters. In a speech Wednesday, he urged a series of measures to get a retooled energy policy off the ground.
WASHINGTON — President Barack Obama came into office promising to enact a market-based system to combat global warming and encourage development of alternative energy sources. He endorsed a cap-and-trade system in his first State of the Union address and budget and began pushing for comprehensive legislation to place the nation on a path to a future less addicted to imported oil and more reliant on clean energy alternatives.
The plan’s complex structure depended on an expansion of offshore oil drilling and nuclear power generation, creation of a trillion-dollar market in carbon pollution credits, billions of dollars of new government spending on breakthrough technologies and a tolerance for higher energy prices by consumers and businesses, all in the service of a healthier atmosphere and a more stable climate in future decades.
But one after another, the pillars of the plan came crashing down. The financial crisis undercut public faith in markets. The Deepwater Horizon explosion and spill set back plans for offshore drilling by several years. The Japanese earthquake and tsunami, which led to a major release of radioactivity at the Fukushima Dai-ichi reactor complex, raised fears about nuclear power.
Huge Republican gains in the midterm elections also dashed hopes for big new spending programs for energy technology.
The upheaval in the Middle East has led to higher fuel prices and opposition to costly new regulations for the oil industry. And continuing high unemployment and sluggish economic growth have made raising energy costs for any reason a political nonstarter.
So what is left of the Obama administration’s energy ambitions?
Cap and trade has morphed into a “clean energy standard,” under which 80 percent of electricity in the United States would be generated from clean sources by 2035. Obama laid out the goal in this year’s State of the Union address and has promoted it at several events since.
In a speech at Georgetown University on Wednesday, the president went further to try to recapture the initiative on energy policy that Republicans seized after their midterm election gains. In response to rising oil prices, the turmoil in the Middle East and a growing chorus of criticism from Congress that he has choked off domestic oil exploration, Obama set a new goal — to reduce American oil imports by one-third over the next decade.
He said that while there were no quick fixes to the nation’s oil addiction, the United States needed to take a series of immediate steps to cut oil usage.
He called for producing more electric cars, converting trucks to run on natural gas, building new refineries to distill billions of gallons of biofuels and setting new fuel-efficiency standards for cars and trucks. He also said that the United States would continue to rely on nuclear power for decades and would have to find a way to burn coal with fewer climate-altering emissions.
Congress has been debating these measures for years.
“The only way for America’s energy supply to be truly secure is by permanently reducing our dependence on oil,” he said. “We’re going to have to find ways to boost our efficiency so that we use less oil. We’ve got to discover and produce cleaner, renewable sources of energy that also produce less carbon pollution that is threatening our climate. And we have to do it quickly.”
The president acknowledged that his energy proposals would require legislation and new money for innovative technologies and that getting either would be difficult in the current political climate. In the Georgetown speech, he noted that political gridlock had stymied the nation’s energy policy since the first Arab oil embargo in 1973.
“That has to change,” he said.
Some early efforts toward the president’s plans are now under way in Congress, although for every step forward there appears to be at least one step back. Senate Democrats are trying to write legislation to meet part of the president’s goal, but the Republican majority in the House seems determined to thwart any energy policy that does not begin with a major expansion of domestic coal production and oil and gas exploration.
So the administration has fallen back on a two-pronged strategy of discouraging dirty, old energy sources through regulation and encouraging clean, new technologies by heavy spending on innovation.
“It is true, a comprehensive energy bill is not going to be in the cards for this Congress,” Steven Chu, the secretary of energy, said in an interview. “That’s why the president came up with this proposal for a clean energy standard.”
Chu, a Nobel laureate in physics, is a technology enthusiast and says the nation can produce the innovations in clean energy necessary to meet the president’s goals if the right incentives are in place
The first piece is legislation that will require utilities to produce a growing proportion of electricity through clean sources — nuclear, natural gas, hydropower, wind, solar, geothermal and new technology players to be named later. The second is a robust federal research and development program to nurture technologies that are too expensive today to compete with fossil fuels or are not yet ready for the marketplace. The result, Chu says, will be a flood of private money into energy development that is now waiting for a signal from federal government that it is serious.
“Why not start today?” Chu asked. “Just think of what it does. It unleashes private capital, private capital sitting on the sidelines, that immediately creates jobs.”
The other part of the strategy, federal regulation of greenhouse gases and other pollutants from conventional power sources, also faces a tough challenge. Most Republicans in Congress are skeptical about the science of global warming, some even declaring it a hoax perpetrated by a coterie of self-interested scientists. Hefty Republican majorities oppose virtually any form of federal regulation of the greenhouse gases that contribute to the problem.
The House Energy and Commerce Committee has already passed a bill that would forbid the Environmental Protection Agency from imposing any nationwide standard on emissions of carbon dioxide and other climate-altering gases. The full House is expected to endorse the measure soon, although it is unclear whether Republicans can muster the 60 votes needed to overcome a Democratic filibuster in the Senate.
Lisa Jackson, the EPA administrator, has said that she is merely following the law and the consensus of scientists in seeking to rein in carbon emissions. She has repeatedly denounced the House bill as antiscientific and a threat to the nation’s health and environment. She noted that it was not the only pending measure that would “delay, weaken or eliminate Clean Air Act protections for the American people.” History has shown that the benefits of clean air regulation outweigh the costs by a factor of more than 30 to 1, she said.
But her critics in Congress are unmoved. They say the country cannot afford a new regime of energy regulation when manufacturing is in a slump and businesses are looking for cheaper places to operate.
“Look at these greenhouse gas regulations coming from the EPA,” said Rep. Fred Upton, R-Mich., who is chairman of the Energy and Commerce Committee. “Where’s the economic analysis? I haven’t seen it. And these regulations are going to cost billions of dollars and tens of thousands of jobs.”
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