The Obama Energy Plan

Nov. 19, 2008
The best way to look at the future of energy under the Obama administration is by looking at the platform itself

Now that we know who will occupy the White House after Jan. 20, 2009, it remains for the pundits to forecast how the incoming administration of President-Elect Barack Obama will develop plans and implement them for our energy future. The attitudes, goals, and objectives of the Obama/Biden campaign included a detailed platform for energy issues in the immediate future, as well as more long-term efforts. So, perhaps the best way to look at the future of energy under the Obama administration is by looking at the platform itself. There are elements that could affect you personally and professionally, so following are edited excerpts taken from the campaign website (minus the political rhetoric). With this plan in hand, you can prepare to support or oppose any developments as they arise.

Short-Term Solutions
The Obama/Biden comprehensive energy plan confronts our dependence on foreign oil; addresses the moral, economic, and environmental challenge of global climate change; and builds a clean-energy future that benefits all Americans. Obama and Biden recognize that skyrocketing energy costs are taking a heavy toll on American families. To address the squeeze on consumers, they’re calling for the following: an emergency energy rebate funded by windfall profits taxes on oil companies, an aggressive plan to crack down on price speculators, and a swap of oil from the Strategic Petroleum Reserve to help provide immediate relief from soaring prices for winter heating oil.

New Energy for America
Our nation is confronted by two major energy challenges – our dependence on foreign oil and global climate change – both of which stem from our current dependence on fossil fuels for energy. Obama and Biden believe we have a moral, environmental, economic, and security imperative to address our dependence on foreign oil and to tackle climate change in a serious, sustainable manner.

Implement Cap-and-Trade Program to Reduce Greenhouse-Gas Emissions. Obama and Biden support implementation of an economy-wide cap-and-trade auction system to reduce carbon emissions by the amount scientists say is necessary: 80-percent below 1990 levels by 2050. A 100-percent auction ensures that all industries pay for every ton of emissions they release rather than giving these valuable emission rights away to companies on the basis of their past pollution. A portion of the receipts generated by auctioning allowances ($15 billion per year) will be used to support the development of clean energy, invest in energy-efficiency improvements, and help develop the next generation of biofuels and clean-energy vehicles. It will also be used to provide new funding to state and federal land and wildlife managers to restore habitat, create wildlife-migration corridors, and assist fish and wildlife to adapt to the effects of a warming climate. All remaining receipts will be used for rebates and other transition relief to ensure that families and communities aren’t adversely impacted by the transition to a new-energy, low-carbon economy.

Obama and Biden will use a portion of the revenue generated from the cap-and-trade permit auction to make investments that will reduce our dependence on foreign oil and accelerate deployment of low-carbon technologies. The investments will focus on three critical areas: 1) basic research, 2) technology demonstration, and 3) aggressive commercial deployment and clean market creation.

Invest in a Clean Energy Economy and Help Create 5 Million New Green Jobs. Obama and Biden will strategically invest $150 billion over 10 years to accelerate the commercialization of plug-in hybrids, promote development of commercial-scale renewable energy, encourage energy efficiency, invest in low-emissions coal plants, advance the next generation of biofuels and fuel infrastructure, and begin transitioning to a new digital electricity grid. The plan will also invest in America’s manufacturing workforce and manufacturing centers to ensure that American workers have the skills and tools they need to pioneer the green technologies that will be in high demand throughout the world.

Convert our Manufacturing Centers into Clean Technology Leaders. Obama and Biden believe that American companies and workers should build the high-demand technologies of the future, and they will help nurture America’s success in clean technology manufacturing by establishing a federal investment program to help manufacturing centers modernize and help Americans learn new skills to produce green products. This federal grant program will allocate money to the states to identify and support local manufacturers with the most compelling plans for modernizing existing or closed manufacturing facilities to produce new advanced clean technologies. This investment will help provide the critical upfront capital needed by small- and mid-sized manufacturers to produce these innovative new technologies.

Make our Cars, Trucks, and SUVs Fuel Efficient. Last year, oil provided more than 96 percent of the energy in our transportation vehicles. It’s an economic, national security, and environmental imperative that this near-total dependence comes to an end. To achieve this goal, Obama and Biden will implement a strategy that will – within 10 years – allow us to reduce our consumption of oil by more than we currently import from the Middle East and Hugo Chavez’s Venezuela combined. To do that, they will increase fuel economy standards 4 percent per each year while protecting the financial future of domestic automakers. The plan, which will save nearly a half trillion gallons of gasoline and 6 billion metric tons of greenhouse gases, will establish concrete targets for annual fuel efficiency increases while giving industry the flexibility to meet those targets.

Invest in Developing Advanced Vehicles and Put 1 Million Plug-in Electric Vehicles on the Road by 2015. Obama and Biden will invest in advanced vehicle technology with a specific focus on R&D in advanced battery technology. The increased federal funding will leverage private-sector funds and support our domestic automakers to bring plug-in hybrids and other advanced vehicles to American consumers. Obama and Biden will also provide a $7,000 tax credit for the purchase of advanced technology vehicles as well as conversion tax credits. And, to help create a market and show government leadership in purchasing highly efficient cars, half of all cars purchased by the federal government will be plug-in hybrids or all-electric by 2012. Obama and Biden will work to ensure that clean alternative fuels are developed and incorporated into our national supply as soon as possible. They will require at least 60 billion gallons of advanced biofuels by 2030. They will invest federal resources, including tax incentives and government contracts, into developing the most promising technologies and building the infrastructure to support them.

Promote the Supply of Domestic Energy. With 3 percent of the world’s oil reserves, the United States cannot drill its way to energy security. But, U.S. oil and gas production play an important role in our domestic economy and remain critical to prevent global energy prices from climbing even higher. There are several key opportunities to support increased U.S. production of oil and gas that don’t require opening up currently protected areas.

A “Use-it-or-Lose-it” Approach to Existing Leases. Oil companies have access to 68 million acres of land, more than 40 million offshore, which they’re not drilling on. Drilling in open areas could significantly increase domestic oil and gas production. Obama and Biden will require that oil companies diligently develop these leases or turn them over so that another company can develop them.

Require 10 Percent of Electricity to Come from Renewable Sources by 2012. Our economy, security, and environment will be best served through a sustained effort to diversify our energy sources. Obama and Biden will establish a federal renewable portfolio standard (RPS) to require that 10 percent of electricity consumed in the United States is derived from clean, sustainable energy sources like solar, wind, and geothermal by 2012. And, Obama and Biden will also extend the federal production tax credit (PTC) for 5 years to encourage the production of renewable energy.

Develop and Deploy Clean Coal Technology. Carbon capture and storage technologies hold enormous potential to reduce our greenhouse-gas emissions as we power our economy with domestically produced and secure energy. The Obama/Biden administration will provide incentives to accelerate private-sector investment in commercial scale zero-carbon coal facilities. Obama and Biden will instruct the U.S. Department of Energy (DOE) to enter into public-private partnerships to develop five “first-of-a-kind” commercial-scale coal-fired power plants with carbon capture and sequestration.

Safe and Secure Nuclear Energy. Nuclear power represents more than 70 percent of our non-carbon generated electricity. It’s unlikely that we can meet our aggressive climate goals if we eliminate nuclear power as an option; however, before an expansion of nuclear power is considered, key issues must be addressed, including security of nuclear fuel and waste, waste storage, and proliferation. Obama and Biden will make safeguarding nuclear material both abroad and in the United States a top anti-terrorism priority. In terms of waste storage, Obama and Biden don’t believe that Yucca Mountain is a suitable site. They will lead federal efforts to look for safe, long-term disposal solutions based on objective, scientific analysis. In the meantime, they will develop requirements to ensure that the waste stored at current reactor sites is contained using the most advanced dry cask storage technology available.

Commitment to Efficiency to Reduce Energy Use and Lower Costs. According to the United Nations, America is only the 22nd most energy-efficient country among the major economies in the world. This means that we spend more on energy than we need to because our lifestyle and our built environment are wasting too much excess energy. Since 1973, the average amount of electricity each American uses has tripled. An Obama/Biden administration will strive to make America the most energy-efficient country in the world.

Deploy the Cheapest, Cleanest, Fastest Energy Source: Energy Efficiency. The DOE projects that demand for electricity will increase by 1.1 percent per year over the next few decades. Cutting this demand growth through efficiency is both possible and economically sound. Obama and Biden will set an aggressive energy-efficiency goal: to reduce electricity demand 15 percent from the DOE’s projected levels by 2020. A portion of this goal would be met by setting annual demand reduction targets that utilities would need to meet. The rest would come from more stringent building and appliance standards.

Set National Building Efficiency Goals. Obama and Biden will establish a goal of making all new buildings carbon neutral – producing zero emissions – by 2030. They will also establish a national goal of improving new building efficiency by 50 percent, and existing building efficiency by 25 percent, over the next decade to help us meet the 2030 goal.

Overhaul Federal Efficiency Standards. The DOE has missed 34 deadlines for setting updated appliance efficiency standards, which has cost American consumers millions of dollars in unrealized energy savings. Obama and Biden will overhaul this process for appliances and provide more resources to the DOE so it implements regular updates for efficiency standards.

Invest in a Smart Grid. Achieving these aggressive energy-efficiency goals will require significant innovation in the way we transmit electricity and monitor its use. Obama and Biden will pursue a major investment in our national utility grid using smart metering, distributed storage, and other advanced technologies to accommodate 21st-century energy requirements: greatly improved electric-grid reliability and security, a tremendous increase in renewable generation, and greater customer choice and energy affordability. They will establish a Grid Modernization Commission to facilitate adoption of Smart Grid practices across the nation’s electricity grid to the point of general adoption and ongoing market support in the U.S. electric sector. They will instruct the U.S. Secretary of Energy to:

  1. Establish a Smart Grid Investment Matching Grant Program to provide reimbursement of one-quarter of qualifying Smart Grid investments.
  2. Conduct programs to deploy advanced techniques for managing peak-load reductions and energy-efficiency savings on customer premises from smart metering, demand response, distributed generation, and electricity storage systems.
  3. Establish demonstration projects specifically focused on advanced technologies for power-grid sensing, communications, analysis, and power-flow control, including the integration of demand-side resources into grid management.

As you can see, this is a bold and broad plan that will likely affect your personal and professional bottom line. Of course, much of it will require cooperation from the new Congress, but that is a tale for another time. Look forward to an update on developments in the Smart Grid in the next issue. You may be amazed.

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