Blueprint for a Secure Energy Future
by the Obama Administration
Demand for oil in countries like China and India is growing, and the price of oil will continue to rise with it. We need to make America more secure and control our energy future by harnessing all of the resources that we have available and embracing a diverse energy portfolio. Beyond our efforts to reduce our dependence on oil, we must focus on expanding cleaner sources of electricity, including renewables like wind and solar, as well as clean coal, natural gas, and nuclear power–keeping America on the cutting edge of clean energy technology so that we can build a 21st century clean energy economy and win the future.
To help reach these goals, the Blueprint for a Secure Energy Future outlines a three-part strategy:
Develop and Secure America’s Energy Supplies: Deploy American assets, innovation, and technology so that we can safely and responsibly develop more energy domestically and be a leader in the global energy economy.
- Expand Safe and Responsible Domestic Oil and Gas Development and ProductionEnsure that oil and gas production is safe, responsible and efficient. Continue reforms to environmental standards for and oversight of domestic exploration. Encourage domestic exploration, development, and production of oil and gas. Explore new opportunities for production and new ways to safely utilize domestic assets.
- Lead the World Towards Safer and More Secure Energy SuppliesReduce oil demand and increase reliable supplies of oil internationally. Diversify fuel mix in US vehicle fleet. Moderate global oil demand and secure additional supplies of liquid fuels. Build a new international framework for nuclear energy.
Provide Consumers With Choices to Reduce Costs and Save Energy: Volatile gasoline prices reinforce the need for innovation that will make it easier and more affordable for consumers to buy advanced and fuel-efficient vehicles, use alternative means of transportation, weatherize their homes and workplaces, and save money and protect the environment.
- Reduce Consumer Costs at the Pump with More Efficient Cars and TrucksInvest in advanced vehicle and fuel technologies, public transit, and high speed rail. Set ambitious fuel economy standards. Encourage the use of biofuels. Encourage the adoption of electric vehicles. Fund R & D into advanced vehicle and battery technologies.
- Cut Energy Bills with More Efficient Homes and BuildingsPass the HOMESTAR legislation to provide financing for home retrofits. Make commercial facilities 20% more efficient by 2020 through a “Better Buildings Initiative.”
Innovate our Way to a Clean Energy Future: Leading the world in clean energy is critical to strengthening the American economy and winning the future. We can get there by creating markets for innovative clean technologies that are ready to deploy, and by funding cutting-edge research to produce the next generation of technologies.
- Harness America’s Clean Energy PotentialAdopt a Clean Energy Standard (CES) that would require by 2035 that 80% of electricity comes from sources including wind, solar, biomass, hydropower, nuclear, natural gas, and clean coal. CES would utilize a market-based credit structure.Position the United States as a global leader in clean energy development and manufacturing. Advance policies that modernize the electric grid and ensure a safe and reliable power plant fleet.
- Win the Future Through Clean Energy Research and DevelopmentEliminate fossil fuel subsidies to help support clean energy. Expand ARPA-E. Double the number of DOE Energy Innovation Hubs. Deploy smart grid technologies. Ensure access to energy critical elements.
- Lead by Example: Clean Energy and the Federal GovernmentImprove the Federal government’s energy efficiency. Expand Federal government’s use of clean energy. Improve Federal government’s vehicle fleet fuel efficiency and make it entirely alternative fuel vehicles.
By Matthew Jordan Program Manager, CLASP
Full text available here.
By Albert Rossin Writer & Lecturer -- Energy Politics, University of South Florida
Energy goal for years after the term of current office holders will generally become meaningless. However, vast resources can be wasted in the meantime trying to do relatively useless things. Calling CO2 a pollutant is one such silly thing. Stalling on nuclear power loan guarantees rather than getting the only alternative source that can make a significant difference moving again is another. Killing nuclear waste disposal after several decades of preparation and more than $12 billion spent on it just to get the votes of one selfish Senator is an obvious disaster.
No! Pres. Obama’s ten year, twenty year and other energy goals will not be reached and do not make good policy for a weak nation.
Dave Rossin
By Ron Fort Director of Risk Management, Infinity Power Partners LLC
Mine is a two-fold response.
The first regards my fervent belief that the U.S. has, for the first time in my lifetime, an opportunity to become as energy-independent as possible. The discussion of whether to enable bringing crude from Canada to the Gulf Coast when compared to how we receive supply now is, in my opinion, not even close. The security issues of not having to depend on a supply chain fraught with issues, both political and economic, plus the returning of monies spent into our (and our most-valued neighbor to the North) economy makes common sense. Wouldn’t we prefer the multiplier effect of dollars (and the taxes from them at every level of the transaction: energy companies, contractors, income taxes, etc.) to continuing to run trade deficits and incur Dollar-based consequences? Likewise, the already obvious benefits of abundant natural gas supply (and crude and gas liquids) due to unconventional recovery (hydrofracturing) presents opportunities that weren’t imaginable not so long ago (Concerning this technology, it’s critical to respect the concerns of the questions of collateral damage. Industry is responsibly addressing these and, from many instances, is responding appropriately. The standards should be the very highest and if any aspects of the process need improvement, then the industry should address them. New technologies have been developed for offshore drilling / production such as blowout preventers that meet stringent standards. If needed, this same process could address shale gas issues and, by the way, incentivize new jobs and more economic growth internally, again providing additional tax revenue). All of us (from the most rabid environmentalist to the most dyed in the wool oil patch guy)need to work to bring this to full potential. We owe T. Boone Pickens a debt of gratitude for carrying this banner, too often a single voice in the wilderness.
The second response is more pragmatic. It has to do with what tangible results are already evident to a paradigm-shift in pricing due to shale gas. The metric is the forward curve of feedstock (natural gas) pricing for end users of energy. This include schools, hospitals, commercial buildings, and more, the one common thread they share is that they come to the table with a short position. They can never be long. It’s a unique risk management challenge. Before the bubble burst in mid 2008, the decision to concede or decline part or all of a term of the forward curve of pricing was invariably based on where in the boom / bust cycle of pricing NYMEX happened to be. History taught us that if prices got above $8, we could likely expect a more severe spike that would be both painful and short-lived. Lesson learned was wait out these cycles until pricing found lower levels and then take action. The challenge today is to adjust to what appears to be a $3 to $7 forward curve and that’s an enviable problem for buyers of energy. The best answer is for producers to also live comfortably in this range and it appears that this is happening. Predictability on both sides of the table is a good thing. The ultimate judge of the validity of this perspective is the market. Today the market seems to vote that a sideways track for prices is the expected path. The surety of a domestic fossil fuel energy source that can enable the time necessary to transition to whatever better answers lie in the wings is just too compelling not to encourage.
By David Pimentel Professor, Ecology, Agriculture and Life Sciences, Cornell University
First of all, terminate the $23 billion in subsidies for corn ethanol and soybean biodiesel. Institute a national system of energy conservation that uses a combination of increased energy prices – by taxing energy use if necessary and regulations that are enforced. Mandates should be enacted for industrial producers to reduce amount of energy needed to operate the machines and appliances they produce, especially consumer products and oversee that they accomplish this.
I do support the President’s fast rail approach; unfortunately republican governors are politicizing the issue by turning down the money already enacted.
By Buddy Bolt President, CL&F Resources LP
While the Obama Administration’s “Blueprint” contains impressive rhetoric and says all the right things, it is essentially politically self-serving. Everyone agrees that alternative forms of energy will be necessary in the latter half of this century to address forecasted worldwide consumption. But anyone who reads the scientific facts, regardless of their rhetoric to the contrary, has to also believe that we still need fossil fuels – not only to sustain us until alternative energy becomes more economic and prevalent, but also beyond as a continuing core part of total requisite supply.
That said, what can you say about an Administration and Congress who readily acknowledge those facts, but yet insist on taking the politically expedient route of trying to tax the U.S. industry further by removing so-called “loopholes” that aren’t even loopholes? Most of the so-called “loopholes” are merely timing differences that will (a) have no long-term effect on tax revenues (e.g., deducting IDC currently versus amortizing it over 10 years, extending the amortization period for G&G expenses, etc.); (b) in many cases, impact only smaller and mid-sized independent oil and gas companies, who are responsible for most of the drilling in the U.S.; and (c) adversely impact the economics for near-term drilling. True enough, at $100+ oil, it is easy to “sell” the nation on the idea of taxing “oil” companies. But thus far, the tax rhetoric has completely ignored the plank in the Administration’s emerging “energy policy” of focusing on cleaner and plentiful natural gas for the future. At prevailing natural gas prices, many of the dry gas shale plays are already economically marginal to sub-marginal and cannot stand an additional tax burden.
By Peter Gardett CEO, The Energy Agency
From the people I’ve spoken to in the industry and in DC, it seems like the speech was a decent first step but truly lacking in any kind of actionable detail. In the search for guidance, industry groups have turned to the Clean Energy Standard process, although there are fears about how lengthy that process might become.