Saturday, January 28, 2012

President Obama's Green Report Card

In his State of the Union address (a.k.a., his re-election campaign launching speech), President Obama took Republicans to task for their love of fossil fuels and laid out a reasonable case for a diversified energy strategy. He even mentioned the words "climate change" for the first time in months. The big question is: Can we believe him this time? Or is this just political posturing?

The fact is, this is not a green President, but a grey one.

He has been an open and fervent supporter of so-called "clean" coal. Many experts believe the concept of "clean" coal is a fallacy, and the utilities that have been working on carbon capture and storage technologies have stopped because they do not think it is economically viable under current regulatory conditions. It is unclear whether the President continues to argue for "clean" coal because he thinks the experts are wrong, or whether he is just playing to voters in important swing states like Ohio and Pennsylvania, where coal is an important part of the local economy. Either way, this President is not going to shift our economy away from its overwhelming dependence on coal to generate electricity.

The President should be given high marks for restructuring the auto industry in a way that has increased production of electric vehicles (EVs). Unlike many of his other initiatives, shifting the U.S. away from a transportation sector monopolized by petroleum to one that allows competition from all fuels that are capable of producing electricity is a major structural change that could have long-lasting impact.

But so far he has only taken half the steps necessary to make this a reality. EV sales are heavily influenced by gasoline prices. As long as gasoline prices remain much lower in the U.S. than in Europe and other countries, it is unlikely that EVs will capture a large share of the market. Without scale, EVs will ultimately fail and we will be right back where we started from -- reminiscent of when Jimmy Carter promoted energy conservation and synfuels, only to have all his policies reversed when Ronald Reagan took office and launched the era of the gas-guzzling SUV.

Another of President Obama's achievements, and one with potentially longer lasting impacts, is his Executive Order requiring all government agencies to reduce their carbon footprints. Since the U.S. government buys $500 billion worth of private sector goods and services every year, this has the potential to create rippling effects as private sector vendors are forced to meet ambitious carbon footprint goals or lose government business to competitors who will.

Oil, on the other hand, is another story. While President Obama imposed a brief moratorium on drilling in the Gulf of Mexico during the BP Deepwater Horizon disaster, he did not use that high-profile incident to promote any new initiatives. To the contrary, President Obama allowed BP to avoid the scrutiny of very public lawsuits by agreeing quickly to a compensation fund that may or may not be adequate. And as soon as Anderson Cooper stopped showing a live feed of the oil gushing out of BP's pipe on the ocean floor, the President authorized and promoted more deepwater drilling in the Gulf.

On the Keystone XL pipeline, President Obama made the classic election year move of telling his green supporters that he was not approving it, while telling everyone else that he wasn't disapproving it either -- he just didn't have enough time to make a final decisions. Let's face it, if the President is re-elected, he will probably approve the Keystone XL pipeline, thereby advancing the commercial prospects for the dirtiest petroleum known to man and continuing our economy's dependence on oil for a few more generations.

Perhaps the President's most significant major green initiative has been to promote lower-priced natural gas by doing absolutely nothing to regulate hydro-fracking, leaving that for the states to decide (as any good Republican would do).

Our growing dependence on natural gas has kept electricity prices low, avoided the need for more coal-burning power plants, and arguably reduced our dependence on foreign oil. But these benefits come with a steep environmental cost. Investments in fracking for natural gas have crowded out needed investments in cleaner and more sustainable technologies such as geothermal, wind, and solar. Fracking has also raised very frightening concerns about groundwater pollution at a time when everyone is starting to recognize that clean water scarcity may be our next environmental catastrophe.

Clean air has not been President's strong point. When his EPA Commissioner announced new rules to reduce smog, the President provided absolutely no political backing or support. Even though these rules have been in the works for 20 years, even though the utilities were given more than adequate notice to prepare for these rules, and even though many utilities had already taken steps to comply with the new rules, the President allowed his EPA Commissioner to be pummeled mercilessly by the few utilities that want to keep spewing pollutants like it's 1955, and ultimately President Obama withdrew the rules from consideration.

It is understandable that the President must pursue green energy policies in the context of current economic conditions and the equally pressing need to create more jobs. But even taking these economic and political realities into account, the President has been a disappointment. His stimulus package contained tens of billions of dollars for investments in green and sustainable energy. The lion's share of that money went to weatherizing old buildings that should be torn down because he wanted to create construction jobs quickly. This emphasis on immediate job creation is understandable, but very short sighted because the jobs that were created were completely temporary. They disappeared again as soon as the government money ran out.

The President could have created just as many jobs in the short term by investing in the construction of smart grids, the installation of smart meters, and other infrastructure essential to building a green economy. Those types of infrastructure investments would have provided a multiplier effect by attracting private sector funding as well, and by putting in place the infrastructure needed to create even more jobs over the long term. Instead, we got temporary construction jobs and slightly better insulated buildings that will ultimately be torn down over the next 5-10 years. This insulation project will turn out to be as long lasting as Jimmy Carter's solar panels on the roof of the White House, which were taken down immediately after Ronald Reagan took office. What a waste.

I have not even begun to talk about President Obama's funding of individual renewable energy companies and projects. The problem with Solyndra is not that it failed, it is that the government was never going to get anything in return. If President Obama wants the government to invest in next generation renewable energy technologies, then the funding should go to our great research universities. That way, the government wins whether or not the specific technology proves commercially viable. Here's why.

When the government invests in private companies, the best that happens is a single company benefits and we get a few more jobs. Private companies have an incentive to keep their technology advances to themselves with patents and trade secrets. They have no incentive to share their breakthroughs with actual or potential competitors. And if the company fails, the government gets nothing.

In contrast, when the government commits the same dollars to research universities, any resulting technology advances are usually broadly licensed, thereby allowing entire industries to grow. And even if the research fails, at least the government has advanced our nation's knowledge base and funded the next generation of Ph.D. scientists and teachers.

Where does that leave us? With perhaps the most depressing fact about President Obama and Green Energy: Given the alternatives, he's the best hope we've got.

John J.P. Howley
Woodbridge, New Jersey

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