Wednesday, February 13, 2013

President Obama's State Of The Energy Union

The State of the Union address tonight will reflect the modest changes in our energy mix brought about by the dramatic increase in fracking for natural gas and increased domestic oil production of the last four years.

As we get ready for the President?s State of the Union Address, don?t expect anything dramatic on the energy sector.? Although not generally acknowledged, oil, gas and renewables have benefited greatly under this Administration and will continue to do so in the next four years. Coal has declined and nuclear and hydro have remained essentially neutral.

The words and the tone of the Address, when discussing energy, will reflect these changes and set the stage for some modest energy initiatives on which the Administration will likely succeed. The President will:

1) address Climate Change through continued hammering on coal and power plant emissions through the EPA and rulemaking,

2)?approve the Keystone Pipeline,

3) drive for even higher CAFE standards, and

4)?push for efficiency and conservation through better standards for buildings and appliances with a revolving loan fund to improve manufacturing efficiency.

The last point is ideal for bipartisan agreement and is a major focus of Senator Murkowski (R-AK) in her recently published Energy Plan (Energy 20/20). This Plan bears close reading. Murkowski is the ranking Republican on the Senate energy committee and, although she calls her plan more of a vision for America?s energy future and not a detailed plan, it is a blueprint for starting serious discussions. Murkowski is also the most likely to catalyze a bipartisan plan that has some chance of passing into law.

One of the more important proposals made in the Plan, and which I hope the Administration supports, is to rewrite the definition of clean energy, which most people incorrectly think of as solar panels, wind turbines or geothermal plants, the renewable technologies that policymakers use in setting clean-energy policy (Ezra Klein Washington Post).

Arguing that this is too strict a definition,?Murkowski wants to redefine clean energy to mean energy that is less intensive than its likeliest alternative in global life-cycle impacts on human health and the?environment.

Under this sensible relativistic definition, nuclear counts as clean energy, as all of us have been saying for years, because its alternative is coal.? Similarly for natural gas and hydroelectric, as their alternatives are also coal.

Domestic Oil & Gas prospered under Obama much more than under the previous Administration. Coal has been declining and nuclear has remained unchanged. Courtesy of Robert Rapier (Energy Source)

Renewables really can?t be compared to anything, except maybe hydro, because, by definition, there are no intermittent base load sources.? So just lump renewables in with everything else and compare them to coal, since anything compared to coal comes out a winner.

It?s too bad a major ten-year, trillion-dollar energy infrastructure stimulus is not on the table, although the President wants one, and will mention infrastructure in the Address. Such a package would catapult America into uncontested global energy leadership, would allow smart expansions of the grid, would produce a huge number of jobs, would significantly reduce the debt and would pay for itself in less than ten years.

Instead, we will be hard pressed to keep up with China?s smart grid expansion and technical advances in energy infrastructure, and we will continue to leak energy and profits into the ether from our decrepit grid and associated 1970?s technologies.

Senator Murkowski (R-AK) with her recently published Energy Plan that bears close reading as a bipartisan rallying point.

Still, hurting coal is OK. Coal is the most dangerous of all energy sources, both to human health and the environment. But few would have predicted that gas would pass coal so quickly as the largest supplier of electricity in America. Coal still rules the world but, domestically, gas has emerged as the biggest producer of the century. New environmental regulations for fracking being proposed by several States, like Pennsylvania, will address some of the most egregious problems of the fracking craze (PA DEP), but the inherent cleanliness of gas relative to coal will continue to force this metamorphosis all on its own.

Increased natural gas use, together with increased efficiency and conservation, will reduce our total carbon output more significantly than any other policy changes. The substantial subsidies to renewables will continue to increase their visibility but their effect on our energy mix will be small.

All in all, the State of Our Energy Union does look strong.

Source: http://www.forbes.com/sites/jamesconca/2013/02/12/president-obamas-state-of-the-energy-union/

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