Despite a depressed economy, energy and environmental policy is poised for dramatic change under an Obama administration. Precisely because they have all the makings of an administration that recognizes that both problems are interlinked. Energy IS economic growth and so finding new ways to produce energy are fundamental to producing new, sustainable growth. Oh, and along the way, it might just help our planet recover from the damage we’ve done to it with our use of fossil fuels over the last two hundred years.
Renewable energy advocates and environmentalists said they anticipate a comprehensive national energy plan focused on fostering clean-energy technologies.
Dan Farber, a professor of law at the University of California at Berkeley wrote “The election is over. Now the hard work begins,” and a member of the lobbying group Cleantech & Green Business for Obama. “Change is on the way.”
Obama’s energy plan calls for a $150 billion investment in clean technologies over 10 years, programs to promote energy efficiency, low-carbon biofuels, and renewable energies and tough targets for greenhouse emission reductions.
A troubled economy does mean that radical, new energy legislation, notably caps on greenhouse gas emissions, is unlikely to pass in the first years of an Obama administration, according to experts.
Instead, the Obama presidency is expected to first push for smaller yet significant measures, such as efficiency and renewable energy mandates, and then lay the groundwork for far-reaching climate initiatives, they said.
New Energy Economy
During Obama’s acceptance speech Tuesday night, his reference to “new energy to harness and new jobs to be created” could be read in two ways, a call for political involvement, or for alternative-energy sources.
In an interview with Time magazine late last month, he said, “From a purely economic perspective, finding the new driver of our economy is going to be critical. There is no better potential driver that pervades all aspects of our economy than a new energy economy.”
Professionals in clean-tech industries expect that energy and the environment, major issues during the campaign, to continue to command the attention of politicians and the electorate. The combination of a Democratic-controlled Congress and Obama administration means that government stimulus spending targeted at the energy business is a strong possibility.
Ethan Zindler of research firm New Energy Finance says, “investing in infrastructure, even if it means more deficit spending, is a good thing because it will help economic growth in the short and long term. And green energy has come to be regarded as a 21st-century infrastructure play.”
Obama and Clean Tech
President-elect Barack Obama has advocated investing in clean energy to create “green jobs.” Here are some possible policy changes.
- An investment in upgrading the power grid which would make it easier to use solar and wind.
- A national renewable portfolio standard that mandates utilities get 10 percent of electricity from solar, wind, or geothermal by 2012.
- Continued support for biofuels and introduction of low-carbon fuel standard.
- Increased vehicle fuel-efficiency standards and tax rebates for plug-in hybrids.
- Incentives for smart grid products like advanced meters.
- A carbon cap-and-trade regime meant to make low-carbon technologies more price competitive.
- Research on so-called clean coal technologies to store carbon dioxide emissions underground.
Some technologies stand to benefit more than others if Obama’s administration is successful in implementing its proposals.
Obama has called for a national renewable portfolio standard to mandate that utilities get 10 percent of electricity from renewable sources–wind, solar, and geothermal–by 2012, and 25 percent by 2025. “That’s the backbone the country needs to invest in,” said Rhone Resch, president of the Solar Energy Industry Association.
Even if more than half the states already have renewable portfolio standards, many southern states have balked at national standards because they say they do not have sufficient renewable energy resources.
In this case, having an activist federal government may meet resistance from the states because electric utilities are regulated by a mix state and federal agencies. “It’s not just a question of money. It’s also a question of governance and public policy,” said Jim Owen, a representative for the Edison Electrical Institute.
The election increases the chances that wind energy will be extended further after the recently passed financial bailout package, increased the solar energy federal tax credits to eight years, while wind received only a one-year extension.
Efficiency and smart grid technology
Efficiency products such as demand response, advanced metering, and sensors to monitor usage should further benefit from government incentives. The new administrations plan calls for a power grid modernization program and stricter building efficiency codes in federal buildings.
power generation of all kinds will more efficient and allow utilities to use more renewable sources with a federal initiative to establish interconnection standards and bulk up interstate transmission lines.
Obama is expected to continue supporting ethanol, as he comes from the corn-producing state of Illinois. But Brooke Coleman, executive director of the New Fuels Alliance, noted that Obama appears to understand that the biofuels industry needs to transition to nonfood feedstocks, such as wood chips or algae, in order to be sustainable.
Coleman said that strong federal policies are required for biofuels to crack into the fossil fuel industry.
“There is not a free market in the fuel sector. There’s no real competition in the wholesale supply chain–it’s completely owned by oil,” Coleman said. “You have to be pretty heavy-handed to fundamentally correct this market.”
Struggling auto makers, said to be running dangerously low on cash, will need government aid in the coming months to prevent larger harm to the economy. For that reason, government leaders of all kinds will be supportive. Obama has called for increasing fuel efficiency, tax credits for plug-in hybrid cars, and loan guarantees so that automakers can “retool.”
“Politically, the issue here is pretty stark and cost of keeping the auto industry in game is whole lot less than of a major failure,” David Cole, Chairman for the Center for Automotive Research said.
Nuclear and Fossil fuels
Obama said he would allow increased domestic oil and gas drilling as well as investments in so-called clean coal technology where carbon emissions are stored underground during the campaign. Companies that have coal gasification technologies stand to benefit because they are cleaner source of electricity, said Kurzman.
In the campaign, Obama voiced caution on storing nuclear waste. But during the second presidential debate, Obama said he backs nuclear power “as one component of our overall energy mix.”
Skip Bowman, president of the Nuclear Energy Institute, said Tuesday he expects the new Congress and administration to continue its support of nuclear because it addresses energy and climate change.
The biggest policy change on energy and environment will be climate-change regulations. Obama has called for an 80 percent reduction of greenhouse gas emissions from 1990 levels by 2050 through a federal cap-and-trade system. Pollution rights would be auctioned, at least partially, which would create a fund for clean technology programs.
Chemical companies and other large polluters like utilities that rely heavily on coal, are the ones that will be most affected. However, given that there is stronger political will to tackle energy security than climate change, policies to promote domestic energy production and efficiency are likely to take precedence over cap and trade.
Using only the federal government’s purchasing power to integrate green building technologies and addressing grid interconnection issues, for example, a huge amount can be done without passing laws. “Existing programs can be tweaked to accommodate the new vision,” Scott Sklar, a renewable energy lobbyist and president of the Stella Group said. “Depending on how you structure things, you could have a quick and profound impact on new technologies.”
The biggest danger to the Obama administration and new Congress is to be careful not to push too hard for what some would consider more extreme environmental policies. The key will be to allow diversification of energy, whether it be wind, solar, using rural areas for geothermal or wind corridors. while also using conventional energy sources in as controlled a manner as possible.
Obama’s presidency surely means that this web site and all other green energy blogs out there have, overnight, become all that much more relevant. I hope that you continue to return here for your future energy news as we move into what I think will become one of the most transformational periods of US and World history.
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