By Steven Mufson
Sunday, April 5, 2009
Steven Chu, the Nobel Prize-winning physicist who is President Obama's energy secretary, recently gave a speech in which two key words never passed his lips. He talked about energy efficiency, electricity transmission lines and renewable energy sources. He waxed eloquent about technology and the need to fund energy research. But afterward, Chevron vice chairman Peter Robertson noted disconsolately that "it would be nice to hear a bit about oil and gas."
Oil and natural gas, however, are not what's lighting up the Obama energy agenda. The new president is setting out to change the very nature of American energy, from the way we use it to the way we generate it. It's a goal that drives his policy on automakers, whom he wants to push to manufacture more fuel-efficient cars. And it's why he inserted a "down payment" of mammoth proportions into the stimulus bill, roughly $70 billion or more in grants, loans and loan guarantees for Chu to hand out for high-tech research and commercial projects for renewable energy such as biofuels and wind, solar and geothermal power. That's nearly three times as much as the baseline Energy Department budget and more than the annual budgets of the Labor and Interior departments combined.
Obama has decided to do it all. Need help weatherizing your home? He'll pay for that. Smart meters? He'll help pay for them, too. Industry wants to determine whether you can economically capture and store carbon emissions at coal plants? Obama has set aside a few billion federal dollars for that as well.
This isn't the first time a president has set an ambitious energy policy agenda. Almost every chief executive since Nixon has vowed to promote oil independence. Jimmy Carter went farthest in the late 1970s, declaring the "moral equivalent of war" on energy use. Then Ronald Reagan became president, eliminated tax breaks for solar power and removed the solar panels Carter had installed on the White House roof. The war was declared over before it had really begun.
Now the battle has resumed, but this time it's not only about U.S. independence from oil imports; it's also about slowing climate change that most scientists say threatens to inflict catastrophic damage on the environment and the economy over the next four decades. Thus the administration's coming attractions feature an energy bill with nationwide renewable energy standards for electric utilities and a far-reaching cap-and-trade program that would limit greenhouse gas emissions, raise the price of everything from gasoline to plastics to electricity and generate more than $100 billion a year in revenue.
"The clean energy revolution is here now," declares Greg Wetstone, senior director for government and public affairs at the American Wind Energy Association.
To carry out this revolution, Obama has appointed a climatologist's dream team of scientists, regulators and political operatives to energy and environment positions. Chu gave up his research to devote himself to seeking technologies that could slow climate change. Environmental Protection Agency head Lisa Jackson is determined to set greenhouse gas regulations. Lisa Heinzerling, principal author of the brief in a key lawsuit against the Bush EPA, is now working as the agency's senior climate policy counsel. And Carol Browner, who served for eight years as head of Bill Clinton's EPA, is back as White House energy and climate czar.
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It's not hard to see an energy program emerging that Obama -- part activist, part centrist -- might embrace. It offers something for everyone, not just solar, wind and biofuel industries. Bush and Congress bequeathed Obama enough loan guarantees to spur the construction of at least three new nuclear plants. With the offshore-drilling moratorium gone, Obama could open up some promising prospects. New high-voltage transmission lines for renewable energy sources could be to energy what Dwight D. Eisenhower's interstate highway system was to transportation. And if energy efficiency (combined with a recession-induced slump in electricity consumption) proves effective, new coal plants could be postponed indefinitely while Obama pours money into carbon-capture technology to clean up their emissions.
But change environmentalists can believe in won't come about just because of change in the Oval Office. In Congress, Rep. Henry Waxman, the new chairman of the Energy and Commerce Committee, has an ambitious timetable for a climate bill. Senate Environment and Public Works Committee Chairman Barbara Boxer, who wrested the lead on climate policy away from rival committees, isn't far behind.
More importantly, two seminal documents changed the balance of power on climate policy before Obama won a single primary. One was the Intergovernmental Panel on Climate Change's fourth and most frightening report, issued in November 2007, offering new evidence that climate change is real and that human behavior is making it worse. The second was the Supreme Court ruling on April 2, 2007, that carbon dioxide, a common greenhouse gas produced by burning fossil fuels, qualifies as a pollutant under the Clean Air Act. That gave the EPA the authority and responsibility to regulate CO2 without waiting for Congress to issue guidelines. Just recently, in fact, the Obama EPA declared that global warming endangers public health, bringing it a step closer to regulation.
The Supreme Court's decision gives the administration tremendous leverage in negotiations over a cap-and-trade bill, offering Obama a sturdy backup if he fails to extract concessions from industry, utilities and recalcitrant members of Congress. "People will have to recognize that there is a sword of Damocles out there mandated by the Supreme Court," says Rep. Jay Inslee, a Washington Democrat who's a leading proponent of cap-and-trade legislation.
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At the boisterous celebrity-studded "Green Ball" on the eve of Obama's inauguration, expectations about his energy and climate agenda were already rife. As the tuxedo-clad Carl Pope, executive director of the Sierra Club, said, "The president has set the bar extraordinarily high."
But is it high enough? America's energy industry is immense, and so is the job of changing its profile. The conventional energy industry is not only politically powerful, it is enormous and hard to replace. The United States has about 500 coal plants that supply half the country's electricity, thousands of miles of low-voltage electricity lines, more than 100 million dumb meters and 240 million cars that run on diesel or gasoline with mediocre efficiency. As large as the energy portion of the stimulus package may be, it amounts to what the world's top three oil companies spend every year. The U.S. energy business overall represents $1.6 trillion a year.
Obama's goal of doubling renewable energy would give solar, wind and geothermal power only a 2 percent share of the nation's energy production. Even deep cuts in energy use would leave the country, and the planet, far short of what it would take to slow climate change sharply. The Energy Department's own Energy Information Administration predicts that even rapid growth in renewable energy sources and high oil prices will leave fossil fuels still providing 79 percent of the nation's energy needs by 2030.
While Obama sells his energy and climate plans as part of a push for U.S. oil independence, he has ruled out any increase in the gasoline tax, the most effective way of cutting oil use: More than half the oil used in the United States goes into the fuel tanks of cars and trucks. A gasoline tax would also be likely to boost consumer appetites for the more fuel-efficient cars Obama wants car companies to make. Blurring the rhetoric about renewable energy and oil independence obscures the fact that without mass market electric cars -- still a remote prospect -- wind and solar may cut coal use and carbon emissions, but they won't save a drop of oil.
Yet the stars have never aligned in favor of a change in U.S. energy and climate policy the way they're aligned in Washington today.
Thirty-two years ago, Jimmy Carter called on people to "put up with inconveniences and to make sacrifices" to slash oil consumption and safeguard American power. With Obama comes a new vocabulary, promising "green jobs" and "a revolution in energy efficiency" that will "save consumers money" and "spur innovation."
Time will tell. It took more than a century to construct the electricity and oil industries we have today. It will take more than a presidential term to remake them.
Steven Mufson covers energy for The Washington Post.