Energy

I'm sitting in on a very enjoyable panel on Climate Change and Energy Security hosted by Reid Detchon from the UN Foundation and featuring J. Michael Davis, former Assistant Secretary of Energy under Bush 41; Robert McFarlane, former National Security Advisor to President Reagan; George Pataki; and R. James Woolsey, former CIA director under Clinton. Piece of advice, if you get a chance to catch a panel hosted by Detchon (excellent dry wit) or featuring the others, particularly Woolsey or Davis, you should. My battery's dying, so I'll have to upload some more thoughts later, but the first thing that struck me was how the ideas of those on the panel very closely match what I have heard being said about or by Obama recently.

I just want to highlight the fact that Obama said this last night:

And for the sake of our economy, our security, and the future of our planet, I will set a clear goal as President: in ten years, we will finally end our dependence on oil from the Middle East.

The desire to truly repeat Kennedy's call to reach the Moon within a decade has long been a dream of politicians, actual and fictional. The end goal, in this case, is undeniably admirable (and politically savvy). It is somewhat broader than Gore's call for clean electricity within the decade and more clearly beneficial to our economy and foreign policy than Bush's call to reach Mars. As Obama says, it is securely at the nexus of economic, foreign policy, and environmental concerns. (I would also add humanitarian.) I'm sure I don't need to rehash to this audience why such an action helps us reach major goals in each of these areas. Only time will tell whether Obama will be able to do so. It is a major challenge. As Governor Schweitzer so entertainingly laid out on Tuesday, we currently consume 25 percent of the world's oil output and only 3 percent of the reserves. His strategy?

As President, I will tap our natural gas reserves, invest in clean coal technology, and find ways to safely harness nuclear power. I'll help our auto companies re-tool, so that the fuel-efficient cars of the future are built right here in America. I'll make it easier for the American people to afford these new cars. And I'll invest 150 billion dollars over the next decade in affordable, renewable sources of energy -- wind power and solar power and the next generation of biofuels; an investment that will lead to new industries and five million new jobs that pay well and can't ever be outsourced.

The $150 billion is a good start. Hopefully, in the near future, we'll see more details.

Center for American Progress President John Podesta and UN Foundation President Timothy Wirth write a joint op-ed in the Denver Post today on the promise and challenge of remaking the energy economy through smart public policy.

The technologies we need to begin this economic transformation already exist today, and the dollars will flow if we just change the rules of the energy game, rules that have favored the old ways of doing business with tax breaks, regulatory incentives, and lip service to alternatives, and stop using the atmosphere as a garbage dump for our emissions. As a first step, we must cap our emissions and put a price on carbon. The investments that will result from this decision will be a powerful stimulus for economic growth, competitive advantage, and new jobs -- good jobs in manufacturing, installation, and research, entry-level jobs and high-wage jobs alike. [snip] The Democratic Party platform recognizes the energy opportunity in its section on "Investing in American Competitiveness" -- but it does not go far enough. The size and urgency of this task require a president willing to make it the top domestic priority in the White House -- not pigeonholed as an energy initiative or environmental initiative or even as a security initiative, but made the centerpiece of his economic agenda. Indeed, it will demand that the president refocus the mission and responsibility of all relevant government agencies and convene them in a new National Energy Council in the White House. The success of this year's candidates and next year's elected leaders will rise and fall on how they address the energy issue. Those who convey the scale and scope -- and opportunity -- of transforming our energy economy will succeed.

The two mention Colorado's good track record and leadership on renewable energy. I would be remiss if I did not use this as an opportunity to link to the excellent work of Fort Collins, Colorado based blogger Timothy B. Hurst, who chronicles Colorado's energy transformation at EcoPolitology and Red Green and Blue.

Steve Clemons tries to cut through the smog surrounding the domestic debate on oil prices:

This debate over oil and energy policy disgusts me because both Obama and McCain are trying to force short term, knee jerk responses to a major policy challenge for the nation.

To get the price of oil down, candidates should work harder at thinking through what the characteristics of a new equilibrium in the Middle East and globally might look like. What kind of deal can be done with Iran that preserves Israeli security, Iran's domestic energy interests, and does not leave Iran with a domestic capacity to covertly manufacture nuclear weapons? There's much that can be done.

This morning Kate Sheppard posted a great succinct analysis on what the U.S. Congress may do on energy legislation before recess:

The "biggest opportunity" to pass energy legislation, Bingaman said, is the tax-credit extensions for renewable energy that have stalled repeatedly in the Senate, despite passing in the House on multiple occasions. GOP senators haven't liked the Democrats' proposals to pay for the tax credits by closing what Democrats consider to be tax loopholes for business, but moderate Democrats have insisted that so-called "pay-fors" are necessary to prevent the bill from adding to the budget deficit. A new compromise version of the bill, proposed by Senate Finance Committee Chair Max Baucus (D-Mont.), would pay for the extension of tax credits by setting limits on the ability of hedge-fund managers to defer taxes on their income held offshore and by putting off until 2019 a tax credit for multinational corporations. Baucus also added a number of unrelated provisions meant to make the bill more attractive to Republicans. It's unclear how many Republicans might be willing to back Baucus' proposal. Renewable-energy companies have been howling that failure to extend the tax credits is crippling them.

Kate's got it right, particularly the last line. Boom/bust cycles in the tax code have been truly damaging to the renewables sector and are one of the reasons why the U.S. lags behind its European counterparts and why most of these companies are headquartered abroad.

It seems like everyone these days is talking about energy. On the Hill, politicians are literally yelling about it, with a natural emphasis on prices at the gas pump. Some propose increasing oil supply as the solution to energy woes, while others see this as an opportunity to speed up the shift to a new energy economy. Of all those clamoring to get their ideas heard, I put my stock in Nobuo Tanaka of the International Energy Agency, who says that the world needs a $45 trillion energy revolution. Like I said, Mr. Tanaka works for the IEA, and if one takes the time to look at some of the IEA's long-term projections for the world energy outlook based on the status quo, it is not a pretty picture. The predictions show massive growth in world energy needs, along with reductions in security of supply. Perpetuation of fossil fuel reliance leads to problems in world supply, which means even higher prices, drastically reduced energy security, and a scenario that makes a more peaceful world difficult to imagine. All the dire effects of global warming aside, long-term reliance on fossil fuels, no matter what your political affiliation, spells disaster. Many, especially in the United States, are focused on the idea of increasing supply to ease costs, and while this may or may not be effective in the short-term, it seems that at best it ultimately delays the inevitable while ignoring the other side of the economic equation. Reducing demand seems a much more sustainable, long-term approach. Beginning an energy revolution now sounds all the more appealing given these dire predictions, since it looks like the options are either peaceful energy revolution now, or violent energy revolution later.

Commenting on the rush to blame biofuels for the global food crisis, the UN's Under-Secretary General for Humanitarian Affairs, John Holmes has warned against "throwing the baby out with the bathwater." His ideas were echoed by Lennart Baage of the International Fund for Agricultural Development, who said, "It is important not to go to extremes." In fact, there are a number of experts trying to dispel the myth that biofuels are the sole or primary force behind the unfolding global food crisis. As I have discussed previously on UN Dispatch, the processes that have caused the spike in food prices are numerous and complex (including increased demand, rising oil prices, the weak dollar, commodity speculation, trade distortions), and policymakers should avoid making a scapegoat out of biofuels simply because it is politically expedient. The truth is that sound policy toward biofuels can be extremely beneficial for the developing world. Nobody has said that the shift to biofuels from fossil fuels has been perfectly executed, but you would be hard pressed to find an energy expert who says that the situation presented by fossil fuel reliance is a sustainable path. The initial move toward biofuels offers developing countries an opportunity to develop natural resources and infrastructure that will help lead away from oil addiction, with the significant environmental, economic and security benefits that implies. Policymakers have already learned many lessons about the "smart" and "dumb" ways to manage the production and sale of plant-based fuel, and with this experience leaders will be all the more prepared to deploy the next generation of biofuels (made from non-food plants and agricultural waste products), which will be even further dissociated with the limitations of the current generation. John Holmes and Lennart Baage are right, managing food and energy requires a longer-term perspective and casting blame is counterproductive. The food crisis should be approached as a whole and responses must be measured. Thankfully, the UN is prepared to take a cautious approach, so at least on the international level, it seems unlikely that the world will throw the biofuels out with the bathwater. Current UN Secretary-General Ban Ki-moon has initiated immediate and sweeping responses to prevent dire impacts from rapidly escalating food prices. And former UN Secretary-General Kofi Annan is stressing the importance of long-term investment in agriculture, as part of a drive toward a second "green revolution" in Africa. He estimates that food production on the continent could be doubled or tripled through such a change. Unfortunately, this is made difficult as a result of such factors as drought and lack of property rights for farmers in many African countries. If these problems can be overcome, however, the African continent could quickly move simultaneously toward growing its own food and securing its economic, energy and environmental future.

Commenting on the rush to blame biofuels for the global food crisis, the UN's Under-Secretary General for Humanitarian Affairs, John Holmes has warned against "throwing the baby out with the bathwater." His ideas were echoed by Lennart Baage of the International Fund for Agricultural Development, who said, "It is important not to go to extremes." In fact, there are a number of experts trying to dispel the myth that biofuels are the sole or primary force behind the unfolding global food crisis. As I have discussed previously on UN Dispatch, the processes that have caused the spike in food prices are numerous and complex (including increased demand, rising oil prices, the weak dollar, commodity speculation, trade distortions), and policymakers should avoid making a scapegoat out of biofuels simply because it is politically expedient. The truth is that sound policy toward biofuels can be extremely beneficial for the developing world. Nobody has said that the shift to biofuels from fossil fuels has been perfectly executed, but you would be hard pressed to find an energy expert who says that the situation presented by fossil fuel reliance is a sustainable path. The initial move toward biofuels offers developing countries an opportunity to develop natural resources and infrastructure that will help lead away from oil addiction, with the significant environmental, economic and security benefits that implies. Policymakers have already learned many lessons about the "smart" and "dumb" ways to manage the production and sale of plant-based fuel, and with this experience leaders will be all the more prepared to deploy the next generation of biofuels (made from non-food plants and agricultural waste products), which will be even further dissociated with the limitations of the current generation. John Holmes and Lennart Baage are right, managing food and energy requires a longer-term perspective and casting blame is counterproductive. The food crisis should be approached as a whole and responses must be measured. Thankfully, the UN is prepared to take a cautious approach, so at least on the international level, it seems unlikely that the world will throw the biofuels out with the bathwater. Current UN Secretary-General Ban Ki-moon has initiated immediate and sweeping responses to prevent dire impacts from rapidly escalating food prices. And former UN Secretary-General Kofi Annan is stressing the importance of long-term investment in agriculture, as part of a drive toward a second "green revolution" in Africa. He estimates that food production on the continent could be doubled or tripled through such a change. Unfortunately, this is made difficult as a result of such factors as drought and lack of property rights for farmers in many African countries. If these problems can be overcome, however, the African continent could quickly move simultaneously toward growing its own food and securing its economic, energy and environmental future.

As food prices continue to rise, various theories have emerged as to the underlying forces driving prices higher. BBC News reported today on the growing debate about the role biofuels might play, and highlighted a vigorous rebuttal from the President of Brazil. Brazil, in particular finds itself defending the biofuels industry at a conference of the UN's Food and Agriculture Organization (FAO) in Brasilia. Both Brazil and the U.S. are heavily invested in the production of corn and sugar-cane-based fuels, with Brazil being the world's largest exporter. BBC News reported Brazil's President Luiz Inacio Lula da Silva's comments:

"Biofuels aren't the villain that threatens food security," said President Lula. "On the contrary... they can pull countries out of energy dependency without affecting foods."

He said that rises in food prices came because people in developing countries like China, India and Brazil itself are eating higher up the food chain--shifting from grain to meat--as economic conditions in those countries improved. An interesting argument. Could there be a connection between rising obesity levels and rising food prices? It's something to think about, and it's another reason to follow through with that diet you've been thinking of doing. We already know that our food consumption habits affect far more than our dating prospects. So Brazil says it's simply a supply and demand situation, others note that agriculture is highly dependent on petroleum and that skyrocketing oil prices are a primary cause of food price increase. And as I continue to read these kinds of stories, as well as OECD reports that weigh the pros and cons of biofuels, it is apparent that there is no single cause or villain, and that we haven't seen the last of the debate.