Sen. Murkowski unveils her big new energy plan. Here’s a breakdown.

February 4, 2013

Lisa Murkowski is the ranking Republican on the Senate energy committee. So it's worth paying close attention to what she has to say on the subject. And on Monday, Murkowski released a 121-page blueprint (pdf) detailing her "vision for America's energy future."


On Monday, Sen. Lisa Murkowski (R-Alaska) unveiled a big new energy blueprint. (AP)

Many of the proposals in here are long-standing items on the Republican wish list — Murkowski is calling for more oil and gas drilling on federal lands, and she opposes strict environmental regulations on coal mining. But she also touches on smaller issues that don't get as much attention, from energy efficiency to small modular reactors to new financing models for wind and solar power.

Let's take a look at some of the big items in Murkowski's energy plan:

1) Become independent from OPEC oil by 2020. Currently, the United States imports about 8.7 million barrels of oil per day, with about half of that coming from OPEC countries such as Venezuela and Saudi Arabia. Those imports are already falling, but Murkowski argues that we could get the OPEC share down to zero by 2020 through a combination of expanded domestic drilling and new pipelines from Canada.

It's worth noting that Murkowski is more restrained about the benefits of oil independence than many of her peers. Her report points out that the world oil market is tightly interconnected, and the United States would still be vulnerable to global price swings even if our imports weren't coming from OPEC. That said, the report adds, "we can certainly have a meaningful effect on prices and minimize our exposure to international volatility."

2) Rewrite the definition of "clean energy." When most people think of clean energy, they think of solar panels or wind turbines or geothermal plants — these are the sorts of renewable technologies that policymakers often focus on in setting clean-energy policy.

Murkowski argues that this is too strict a standard and wants to redefine "clean energy" to simply mean energy that is “less intensive in global life-cycle impacts on human health and the environment than its likeliest alternative.” That's a significant change. Under this definition, the report notes, fuel oil could count as "clean energy" if it allowed people to burn less wood for heating.


More of this. (Mac Morrison/Bloomberg)

3) Use revenues from expanded oil and gas drilling to fund advanced energy. Yes, oil and gas drilling have been booming of late. But Murkowski argues that the U.S. government could be doing even more. For instance: Open up 2,000 acres in the Arctic National Wildlife Refuge (ANWR) for exploration. Open the Outer Continental Shelf off the coast of Virginia and the Carolinas. Speed up permitting for drilling on federal lands and waters.

And, the report notes, the revenues from all this new drilling could be used to create an “Advanced Energy Trust Fund” to finance programs on renewable power, energy efficiency and advanced vehicles, as well as to pay down the national debt.

It's worth noting that this would likely be a small fund for the foreseeable future. The Congressional Budget Office recently estimated that opening up all additional federal lands and waters for drilling would bring in just $7 billion in revenue over the next 10 years. (And even that could be a hard sell: Many Democrats in Congress are flatly opposed to opening up ANWR and the Outer Continental Shelf.)

4) Build more dams. In her report, Murkowski notes that hydropower is often excluded from newer clean-energy initiatives because dams can be controversial. But, she adds, there's still room for further expansion here.

The blueprint cites research (pdf) from the Energy Department suggesting that the United States could squeeze an additional 300 gigawatts of hydropower from upgrading existing dams, electrifying many existing dams, and putting dams in smaller rivers. That's roughly 30 percent of U.S. electric capacity.

5) Phase out subsidies for renewable power and instead create energy programs that are "technology-neutral." A key phrase from Murkowski's report: "By 2020, we need to eliminate most of the government’s current subsidies and implement a new system of clean energy finance that is cost‐effective, technology‐neutral, and conducive to private investment."


Fewer subsidies for this. (AP)

Among her ideas on that front: Focus most government spending on basic research rather than on programs to deploy existing technologies. Reform the Energy Department's loan-guarantee program so that it focuses less on reducing greenhouse-gas emissions.

The report also proposes changes that would allow wind and solar companies to take advantage of the same sort of financing mechanisms that oil and gas projects enjoy, including Master Limited Partnerships.

6) Find new ways to slow coal's decline. Lately, coal has been waning in the United States, under pressure from natural gas and new environmental regulations. But Murkowski argues that coal can continue to play an important role in the U.S. energy system if given a chance.

So, for instance, there's this recommendation: "Ensure that new regulations do not jeopardize the reliability or affordability of electricity, both of which rely heavily upon coal for baseload power generation."

And this: "Enable efficiency improvements at coal‐fired power plants by reforming regulations that discourage investments in such upgrades. Specifically, this should include reforms to the New Source Review (NSR) Program that might narrowly exempt efficiency improvements from triggering NSR."


More research on this. (Basic schematic of a Gas-Cooled Reactor, via Wikipedia)

7) More support for nuclear power. Murkowski argues that the federal government should be investing in research into more advanced nuclear technology, including the sort of small modular reactors that are currently on the drawing boards in many countries.

"These reactors have the potential to replace aging power plants that are near retirement, incrementally add generating capacity as needed, provide strong export potential to foreign markets, and provide reliable off‐grid power supply," the report explains.

8) Boost the energy efficiency of the U.S. economy, albeit without government mandates. Key part of this section: "Promote a comprehensive energy efficiency approach by making financing accessible for efficiency retrofits, both in the federal space and private markets, and pursuing integrated efficiency systems, without creating any mandates, all while pursuing efficiency per unit of GDP rather than less energy production."

The report also discusses some of the lesser-known barriers to efficiency. "For example, landlords may have little incentive to purchase energy efficient but costly appliances for a new tenant who pays the utility bills. We should address these difficulties and see how we might better encourage informed decision‐making, reduce risk, and decrease payback periods for those who are responsible for purchasing efficient equipment."

9) Set a very modest climate policy. The climate change section of Murkowski's blueprint starts by criticizing environmentalists who engage in "ad hominem attacks" against climate skeptics.

But it then adds this: "There are many actions that we can take to mitigate greenhouse gas production and respond to a changing climate, particularly those with broad benefits like efficiency improvements, diversification of energy supplies, or increasing resilience to adverse weather.  These ‘no regrets’ climate policies deserve more attention."

So what sorts of policies might this entail? The blueprint lists a few specifics. Some spending on basic R&D for clean-energy technologies, particularly energy storage. Reducing the cost of financing for "promising technologies." And speeding up the permit process for low-carbon energy sources like solar, wind, and geothermal. Plus, some of the items above could help reduce emissions, such as expanded hydropower and efficiency.

----

All told, Murkowski's plan is quite distinct from what many environmentalists (and Democrats) have envisioned for energy and climate policy. There's no price on carbon. There's not a lot of money for deploying low-carbon technologies. And oil and coal get a big boost. That said, there are quite a few ideas in here — particularly on energy efficiency and financing for clean energy — that might be able to attract some interest from the other side of the aisle.

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February 4, 2013

Lisa Murkowski is the ranking Republican on the Senate energy committee. So it's worth paying close attention to what she has to say on the subject. And on Monday, Murkowski released a 121-page blueprint (pdf) detailing her "vision for America's energy future."


On Monday, Sen. Lisa Murkowski (R-Alaska) unveiled a big new energy blueprint. (AP)

Many of the proposals in here are long-standing items on the Republican wish list — Murkowski is calling for more oil and gas drilling on federal lands, and she opposes strict environmental regulations on coal mining. But she also touches on smaller issues that don't get as much attention, from energy efficiency to small modular reactors to new financing models for wind and solar power.

Let's take a look at some of the big items in Murkowski's energy plan:

1) Become independent from OPEC oil by 2020. Currently, the United States imports about 8.7 million barrels of oil per day, with about half of that coming from OPEC countries such as Venezuela and Saudi Arabia. Those imports are already falling, but Murkowski argues that we could get the OPEC share down to zero by 2020 through a combination of expanded domestic drilling and new pipelines from Canada.

It's worth noting that Murkowski is more restrained about the benefits of oil independence than many of her peers. Her report points out that the world oil market is tightly interconnected, and the United States would still be vulnerable to global price swings even if our imports weren't coming from OPEC. That said, the report adds, "we can certainly have a meaningful effect on prices and minimize our exposure to international volatility."

2) Rewrite the definition of "clean energy." When most people think of clean energy, they think of solar panels or wind turbines or geothermal plants — these are the sorts of renewable technologies that policymakers often focus on in setting clean-energy policy.

Murkowski argues that this is too strict a standard and wants to redefine "clean energy" to simply mean energy that is “less intensive in global life-cycle impacts on human health and the environment than its likeliest alternative.” That's a significant change. Under this definition, the report notes, fuel oil could count as "clean energy" if it allowed people to burn less wood for heating.


More of this. (Mac Morrison/Bloomberg)

3) Use revenues from expanded oil and gas drilling to fund advanced energy. Yes, oil and gas drilling have been booming of late. But Murkowski argues that the U.S. government could be doing even more. For instance: Open up 2,000 acres in the Arctic National Wildlife Refuge (ANWR) for exploration. Open the Outer Continental Shelf off the coast of Virginia and the Carolinas. Speed up permitting for drilling on federal lands and waters.

And, the report notes, the revenues from all this new drilling could be used to create an “Advanced Energy Trust Fund” to finance programs on renewable power, energy efficiency and advanced vehicles, as well as to pay down the national debt.

It's worth noting that this would likely be a small fund for the foreseeable future. The Congressional Budget Office recently estimated that opening up all additional federal lands and waters for drilling would bring in just $7 billion in revenue over the next 10 years. (And even that could be a hard sell: Many Democrats in Congress are flatly opposed to opening up ANWR and the Outer Continental Shelf.)

4) Build more dams. In her report, Murkowski notes that hydropower is often excluded from newer clean-energy initiatives because dams can be controversial. But, she adds, there's still room for further expansion here.

The blueprint cites research (pdf) from the Energy Department suggesting that the United States could squeeze an additional 300 gigawatts of hydropower from upgrading existing dams, electrifying many existing dams, and putting dams in smaller rivers. That's roughly 30 percent of U.S. electric capacity.

5) Phase out subsidies for renewable power and instead create energy programs that are "technology-neutral." A key phrase from Murkowski's report: "By 2020, we need to eliminate most of the government’s current subsidies and implement a new system of clean energy finance that is cost‐effective, technology‐neutral, and conducive to private investment."


Fewer subsidies for this. (AP)

Among her ideas on that front: Focus most government spending on basic research rather than on programs to deploy existing technologies. Reform the Energy Department's loan-guarantee program so that it focuses less on reducing greenhouse-gas emissions.

The report also proposes changes that would allow wind and solar companies to take advantage of the same sort of financing mechanisms that oil and gas projects enjoy, including Master Limited Partnerships.

6) Find new ways to slow coal's decline. Lately, coal has been waning in the United States, under pressure from natural gas and new environmental regulations. But Murkowski argues that coal can continue to play an important role in the U.S. energy system if given a chance.

So, for instance, there's this recommendation: "Ensure that new regulations do not jeopardize the reliability or affordability of electricity, both of which rely heavily upon coal for baseload power generation."

And this: "Enable efficiency improvements at coal‐fired power plants by reforming regulations that discourage investments in such upgrades. Specifically, this should include reforms to the New Source Review (NSR) Program that might narrowly exempt efficiency improvements from triggering NSR."


More research on this. (Basic schematic of a Gas-Cooled Reactor, via Wikipedia)

7) More support for nuclear power. Murkowski argues that the federal government should be investing in research into more advanced nuclear technology, including the sort of small modular reactors that are currently on the drawing boards in many countries.

"These reactors have the potential to replace aging power plants that are near retirement, incrementally add generating capacity as needed, provide strong export potential to foreign markets, and provide reliable off‐grid power supply," the report explains.

8) Boost the energy efficiency of the U.S. economy, albeit without government mandates. Key part of this section: "Promote a comprehensive energy efficiency approach by making financing accessible for efficiency retrofits, both in the federal space and private markets, and pursuing integrated efficiency systems, without creating any mandates, all while pursuing efficiency per unit of GDP rather than less energy production."

The report also discusses some of the lesser-known barriers to efficiency. "For example, landlords may have little incentive to purchase energy efficient but costly appliances for a new tenant who pays the utility bills. We should address these difficulties and see how we might better encourage informed decision‐making, reduce risk, and decrease payback periods for those who are responsible for purchasing efficient equipment."

9) Set a very modest climate policy. The climate change section of Murkowski's blueprint starts by criticizing environmentalists who engage in "ad hominem attacks" against climate skeptics.

But it then adds this: "There are many actions that we can take to mitigate greenhouse gas production and respond to a changing climate, particularly those with broad benefits like efficiency improvements, diversification of energy supplies, or increasing resilience to adverse weather.  These ‘no regrets’ climate policies deserve more attention."

So what sorts of policies might this entail? The blueprint lists a few specifics. Some spending on basic R&D for clean-energy technologies, particularly energy storage. Reducing the cost of financing for "promising technologies." And speeding up the permit process for low-carbon energy sources like solar, wind, and geothermal. Plus, some of the items above could help reduce emissions, such as expanded hydropower and efficiency.

----

All told, Murkowski's plan is quite distinct from what many environmentalists (and Democrats) have envisioned for energy and climate policy. There's no price on carbon. There's not a lot of money for deploying low-carbon technologies. And oil and coal get a big boost. That said, there are quite a few ideas in here — particularly on energy efficiency and financing for clean energy — that might be able to attract some interest from the other side of the aisle.

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