“A New Obama Energy Policy?”

By: Glenn McCullough, Jr.

President Obama’s much touted recent shift to the political center does not appear to apply to his energy policy. However, by reconsidering his position and action, the President can lead America to a more secure, clean, affordable energy supply. Simply put: President Obama still has time to do an energy policy course correction that will put the nation on the right path to energy security, a cleaner environment and growing economy.

The Current Situation
For the past two years, the Administration’s policy has relied on public spending (referred to as “investment” in Washington), regulation, the expansion of renewable energy–mainly solar and wind–along with an aggressive push to reduce carbon dioxide emissions. Despite the defeat of “cap and trade” legislation by the U.S. Senate, the Administration seems intent on achieving by regulation what it has been unable to achieve by legislation.

On Decemeber 23, the U.S. Environmental Protection Agency announced a rule to regulate carbon dioxide emissions which could impose hundreds of billions of dollars of costs on utilities, refineries, factories and ultimately consumers. On January 13, the EPA issued a ban on mountain-top removal for coal mining in West Virgina which could lead to a significant increase in the cost of coal which is used to generate nearly half of America’s electricity supplied.

The immediate impact of both EPA rules are lawsuits and uncertainty regarding the scope and definition of future regulation. This uncertainty stifles capital investment, increases the cost of electricity and impedes a fragile economy at a time when we need capital investment, affordable energy and economic growth more than ever before.

What should the President do?

The Triple Play Solution

    1. Change the Regulatory Approach

In his January 18 Op-Ed in The Wall Street Journal calling for less regulation on business, President Obama explained a process of dialog between the EPA, U.S. Department of Transportation and automakers on fuel economy and greenhouse gas emission standards for automobiles. While there are many more electric utilities in the country than automakers, the process of respectful discussion between regulators and electricity producers should be given a chance.

Each side has compelling reasons to negotiate in good faith. Utilities could gain regulatory certainty needed to make capital investment decisions for generating cleaner, affordable electricity. History proves that utilities have been able to dramatically reduce nitrogen oxide and sulfur dioxide emissions. Regulators could gain the assurance that carbon dioxide emissions will be reduced in a manner balanced with Americans having cleaner, affordable energy, job growth and avoiding lawsuits.

In fact, there is recent precedence for the Administration showing it will work with political adversaries for the sake of sound energy policy. The Administration deserves credit for successfully working with U.S. energy companies to reach clean energy deals with China in conjunction with President Hu’s recent visit.

    2. A Clean Energy Portfolio vs. Renewable Energy Only


The Administration should embrace a portfolio of clean energy sources instead of strictly renewables–primarily wind and solar, as it largely has over the past two years. In fact, the President gave indications in the state-of-the-union speech he would go down this road.

A 2007 Electric Power Research Institute study found that the best way to significantly reduce carbon dioxide emissions while ensuring affordable electricity for economic growth was to implement a seven step plan. Energy efficiency, renewable energy sources, more nuclear energy, advanced coal technologies, carbon sequestration, plug-in hybrid electric vehicles and use of smaller decentralized generation facilities are the path to lower carbon dioxide emissions, and clean affordable electricity to power economic growth. All of these technologies are available today.

Electric cars are in high demand evidenced by 50,000 people on the waiting list for a Nissan Leaf. Both FM and Chrysler each recently hired 1,000 engineers to expand their lines of electric cars. EPRI determined that so long as the cost of gasoline at the pump is above 75 cents a gallon, electric cars will be more cost efficient to drive. Plus electric cars are cleaner for the environment and reduce our dependence on foreign oil.

    3. Now is the Time for a National Energy Policy

For nearly 40 years and eight Presidents, America has talked about becoming energy independent. And it has been just that, talk. We have become more dependent on foreign oil, exporting hundreds of billions of dollars annually, while losing jobs.

With a $14 trillion annual economy, the U.S. will never be energy independent but we can and should become more energy secure with clean, sustainable electricity generated by Americans.

Leaders in France and China have taken action to expand domestic energy production. Today France generates 80 percent of its electricity from nuclear energy while China is building nuclear, coal and renewable energy plants to power the world’s fastest growing economy. China and Japan are aggressively pursuing electric car production.

America has come to the crossroads on energy policy. In the state-of-the-union speech President Obama set an ambition yet achievable goal of obtaining 80 percent of America’s electricity coming from clean energy resources by 2035. The President cited wind, solar, clean coal, and natural gas.

Large numbers of Republicans and Democrats support energy efficiency, electric cars, nuclear energy, renewable energy, advanced coal technologies, carbon sequestration, and smaller distributed generation facilities.

If the Administration continues down the path of punitive regulation, the country will be harmed economically with little environmental benefit. If leaders will embrace a visionary, inclusive, expansive, clean energy policy, the benefits will be enormous for generations to come.

Now is the time for President Obama to reach out to Speaker Boehner, Senatore Reid, Senator McConnell and other key Congressional leaders in a Camp David-like Energy Summit toward to goal of a secure, clean, affordable energy plan to power more jobs for Americans.