January 02, 2009
President-elect Obama and his family seem to be pretty well rested after having spent the Christmas holiday season vacationing in Honolulu where he was raised. It's a good thing because in 19 days he'll be inundated with the world's problems.
Before the economy hit a tailspin last October, energy had been one of the hottest topics on the campaign trail: To implement an aggressive global warming strategy or to sit tight until things get better; to use more federal dollars to support green energy technologies or to let the private sector handle all of that; to pursue clean coal power plants or to let them idle; to drill or not to drill and to rev up the nukes or not.
It may be the time of year -- it may also be because the nation is suffering the worst economic crisis since at least the early 1980s. But most of Washington is feeling generous these days. Trillions are about to pumped into the coffers of the banking and automotive sectors. And at least $500 billion is expected to go into green energy.
For their part, energy groups are in line to get some. The Edison Electric Institute has joined arms with the Natural Resources Defense Council, the Alliance to Save Energy and the Energy Future Coalition to get $33 billion that would go to state and local governments. They, in turn, would use the money to create more energy efficient programs that include weatherization, smart meters and programmable thermostats.
"Any serious approach to moving America toward clean energy and tackling our climate crisis must include energy efficiency as one of the key elements," says Peter Lehner, executive director of the defense council. "Energy ef! ficiency is the fastest and most cost-effective way to decrease global warming pollution. Significant investments to increase energy efficiency in people's homes and businesses will help repower America with clean energy, save consumers millions of dollars, and create new jobs to restart our economy."
Their thinking is that energy efficiency ought to be the key element of any federal response to climate concerns. Such investments create jobs as well as mitigate rising energy costs and reduce emissions related to global warming.
Sounds good. But the line forms at the rear. The Western Governors' Association wants the new president to establish "aggressive" and "achievable" national greenhouse gas emission reduction goals. To do so, it proposes a mandatory national system for reducing greenhouse gas emissions that makes maximum use of market-based mechanisms.
Revenue raised should then be used to bolster green technologies. That money would go to "dramatically" in! crease wind, solar, geothermal, biomass and hydro resources. It would also be used to expand and upgrade the grid and electricity storage technologies, not to mention toward the development of advanced automotive batteries and alternative transportation fuels.
Next Retreat
The governors go on to say that unless the country makes substantial investments in energy efficiency and other systemic changes, the Energy Information Administration projects that by 2030 U.S. demand for petroleum and other liquid fuels will increase by 10 percent while global demand will jump by 30 percent. In the same time period, the nation's demand for electricity is expected to rise by 20 percent while global demand would nearly double.
"The United States faces a very serious policy and technological challenge in increasing energy security, while simultaneously reducing greenhouse gas emissions and maintaining energy expenditures at a reasonable fraction of national GDP," write Utah Governor Jon Huntsman and Montana Governor Brian Schweitzer. "The challenge must be met decisively with policies that represent the best environmental and economic interests of our nation."
What's all this talk of energy efficiency and climate change mean for the coal and natural g! as industries? For their part, coal groups say their goals are in tune with the aforementioned ones. As far as the western governors go, they support investing in the types of technologies that reduce greenhouse gas emissions. And that includes carbon sequestration and storage as well as those that minimize the level of harmful pollutants that blow out the smokestack.
They therefore support calls for the feds to fund clean coal technology research, saying that coal equates to energy independence and access to affordable and reliable energy. Such groups are quick to note the fact that coal provides half of the nation's electricity and that roughly 300 years worth of supplies still exist.
Natural gas groups, meanwhile, want to remind everyone that they are willing and able to meet America's expected need for energy. They say they are not locked into any form of natural gas, although add that all sources will be required to meet the expected future demand and to addres! s climate change. The challenge for the industry is to educate the pub lic and continue to develop safer drilling technologies and new energy variations that include rich shale deposits here in this country.
And nukes? That interest still has a lot of work to do. But such groups are setting about to lay the foundation for a resurrection of sorts. President-elect Obama is sympathetic but the cause is not among his priorities. Nuclear developers will hence spend the next year filing paperwork to show both the public and regulators that nuclear power plants are safer and more productive than ever before. If they can achieve this, they'll need some money too.
The wish list is long. But Washington has limits. The new administration and Congress must therefore balance the twin needs to pull out of recession and create next-generation jobs with the massive debt that taxpayers will owe. Obama is chipper for now but next holiday season, he'll be ready for another Hawaiian escape.
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Ken Silverstein EnergyBiz Insider Editor-in-Chief
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