Obama stands firm behind CES, renewables

Source: Hannah Northey • E&E • Posted: Wednesday, January 25, 2012

President Obama confronted a deeply divided and sluggish Congress last night and pledged to increase clean energy development on public lands.

“The differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change,” Obama said during his State of the Union address. “But there’s no reason why Congress shouldn’t at least set a clean energy standard that creates a market for innovation.”

Obama took an aggressive tone, scolding Congress for failing to follow through on his call last year for a clean energy standard, or CES, which calls for the generation of up to 80 percent of the country’s electricity from low-carbon sources by 2035.

Obama said the Defense Department will buy 1 gigawatt of renewable energy, calling it “one of the largest commitments to clean energy in history.” He also directed his administration to establish solar energy zones and wind energy areas on public lands for 10 gigawatts of utility-scale solar and wind projects, enough to power 3 million homes by the end of 2012.

Obama’s strong language in support of renewables came in the context of a nod to traditionally Republican messaging about an “all of the above” energy policy. The president reiterated his support for boosting production from energy sources including renewables like wind, solar, biomass and hydro, nuclear, efficient natural gas and clean coal.

Obama’s call for legislation is currently being implemented by Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.), who told reporters he plans to bring it before the Senate committee in the coming weeks.

“I will not walk away from the promise of clean energy,” Obama said. “I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here. We have subsidized oil companies for a century.”

The president also renewed his calls for Congress to pass clean energy tax credits.

“It’s time to end the taxpayer giveaways to an industry that’s rarely been more profitable and double-down on a clean energy industry that’s never been more promising,” he said. “Pass clean energy tax credits and create these jobs.”

The president’s speech was a nod to legislation Sens. Jeanne Shaheen (D-N.H.) and Rob Portman (R-Ohio) moved through the Senate Energy and Natural Resources Committee last year to establish building and manufacturing energy efficiency measures (E&ENews PM, Dec. 14, 2011).

“It described our bill pretty well,” Portman said after the speech. “I think we can pass what we can this year. This is an obvious candidate [to show] Republicans are for conservation as well as for finding more resources.”

Obama touted the proposals as part of a broader agenda to repair the nation’s infrastructure, noting crumbling roads and bridges, an inefficient electric grid and an incomplete broadband network.

Democrats applauded Obama’s speech, saying he was keeping the conversation focused on supporting the nation’s economy through clean energy development.

“He wove everything into the economy, education, energy, manufacturing, help reduce regulations so new companies can start up,” said Sen. Dianne Feinstein (D-Calif.), the chairwoman of the Energy and Water Development Appropriations Subcommittee.

Bingaman said the president’s speech outlined a good blueprint for how the government can accelerate economic growth by rebuilding manufacturing. “I also agree with the president that we need to focus on our own energy sources to meet our economic needs,” he said. “I hope the Congress will rise to the challenge and work with President Obama over the next several months.”

But Republicans criticized Obama for failing to address high health care costs, persistent unemployment and an overall ailing economy.

“The State of the Union is that we’re in trouble and he’s made it worse in his three years,” said Sen. Lamar Alexander (R-Tenn.). “I didn’t hear a solution to the Obama economy that we’re struggling with.”

Sen. John Barrasso (R-Wyo.) dismissed Obama’s repeated calls for producing domestic energy. “If he really was focused on getting all the North American energy, he should have approved the Keystone XL pipeline,” he said. Barrasso said Obama’s way of making renewable energy cheaper is by boosting the cost of fossil fuels.

Will a CES survive?

Liberal and conservative groups alike say any substantial energy legislation will have a difficult time traversing such a divided Congress, a task that will only be made more difficult by the upcoming presidential and congressional elections.

Such a prickly partisan atmosphere could throw Bingaman’s CES legislation into question.

Joshua Freed, director of the clean energy program at centrist Democratic think tank Third Way, said passing major energy bills, including Bingaman’s, will be an uphill battle.

Bingaman, who is retiring at the end of 2012 after 30 years in the Senate, “has a long-standing, strong record of building bipartisan support and it would be a great legacy for him,” Freed said. “But it’s very tough to get 60 votes in the Senate these days.”

Bingaman worked for most of 2011 to craft the bill after earlier attempts to implement a stricter renewable-only electricity standard were dashed (Greenwire, Feb. 24, 2011).

Robert Dillon, a spokesman for Senate Energy and Natural Resources Committee ranking member Lisa Murkowski (R-Alaska), said Republicans have no appetite for energy mandates or a CES.

“The president seems to be doubling down on the same talking points,” Dillon said. “He wanted to see a CES last year and never sent language to Congress or pressed the issue. All he did was set a high goal of 80 percent by a certain year.”

Conservative groups and Republicans say a CES amounts to little more than a federal mandate that could force the nation to pay higher prices for renewable electricity that has not been deemed economical by the markets. Even so, a few GOPers, like Sens. Lindsey Graham of South Carolina and Dick Lugar of Indiana, have signaled some interest in working on a standard.

“I don’t like these national mandates that impose unrealistic standards on states,” Alexander said. “I think we need to move ahead with clean energy such as nuclear power and natural gas.”

Political will in the House in support for a CES has also waned.

Although House Energy and Commerce Chairman Fred Upton (R-Mich.) at one time supported a national renewable standard, the chairman’s support has since dissipated. Last year, he began ramping up anti-regulatory arguments and questioned whether nuclear, gas and coal would be fully utilized under such a measure (E&E Daily, Feb. 7, 2011).

When asked why the House has been slow to act, Rep. Henry Waxman (D-Calif.), the committee’s ranking member, said “you need to ask the Republicans who run the House [who are] responsive to oil and coal, the fossil fuels.”

Nick Loris, a policy analyst in energy and environment issues at the right-leaning Heritage Foundation, said most conservatives agree that markets work better than mandates in determining what energy sources should generate the country’s electricity.

“Conservatives who are champions of the free market think that if nuclear and natural gas are going to succeed, they should succeed on their own merits, not because the government says they should,” Loris said. “With the subsidies for renewables that have been allowed to expire, the failures of Solyndra and some others, all of that combined makes for a pretty effective case for why we shouldn’t mandate the use of energy sources.”

Liberal-leaning energy players, on the other hand, say federal mandates are a crucial means for securing renewable power in the United States.

Kate Gordon, vice president of energy policy at the Center for American Progress’ Action Fund, a liberal think tank, said carving out a space for renewables is crucial because sources like wind and solar will otherwise be crowded out by natural gas. Although defining what energy sources are “clean” is difficult, Gordon said more than 30 states with renewable portfolio standards have overcome the hurdle, showing that crafting such a standard is possible.

“Clean energy has become such a partisan issue, anything the president says he likes in a speech is automatically going to be a hard thing to pass,” she said. “We need a national position on renewable energy.”

Freed said he hopes Congress will revisit policies like CES at some point after this year’s election because it is a common-sense proposal that has garnered bipartisan support and worked on the state level. The public wants clean energy and the federal government needs to move aggressively in that direction, he added.

“If we’re not able to enact policies like this at some point, we’re in trouble,” Freed said.