If the goal is to produce the most clean energy possible and reduce air pollutants and other emissions, then a clean portfolio standard should include all emission-free and low-carbon technologies that help meet the overarching goal of ensuring a domestic, reliable supply of energy and reducing our carbon footprint. It also must have appropriate targets and timetables for proper implementation.

Nuclear energy must be a key component in a portfolio approach that balances all options. Nuclear energy already produces more than 70 percent of U.S. carbon-free energy and it is the only baseload source of clean electricity. Removing that from a clean energy portfolio standard would be a misstep.

Recent analyses by the Environmental Protection Agency and the Energy Information Agency call for dramatic increases in nuclear power generation to meet carbon reduction standards. EIA calls for an increase equivalent to 69 new reactors by 2030; EPA for the equivalent of 187 new plants by 2050. To realize this goal:

-- A long-term financing mechanism is needed to ensure deployment of clean energy technology in the numbers required and to speed the flow of private capital.

-- With standardization in reactor design and experience from licensing and building the first advanced reactors, the schedules for these projects could be reduced from 10 years to six. This can be achieved by eliminating redundancies in the process, without eliminating public participation.

-- The government should provide federal tax stimulus to accelerate capital investment in new nuclear power plants—and in the workforce and supply chain that will be required to build and operate them.

If you want to address climate change and produce electricity, nuclear has to be a significant part of the equation.

The difference between Senator Graham’s proposed “clean energy” requirement and other “renewable electricity standards” (RES) is important. All of these measures would direct utilities to supply increasing portions of their power from a pool of energy sources that have limited carbon emission profiles. The Senator’s proposal adds nuclear energy and “clean coal” to the list of preferred generating technologies. He is to be applauded for suggesting means that would dramatically increase our ability to meet emission reduction objectives, maintain a vibrant economy, and ensure an important degree of regional fairness.

Although this broadened definition is a significant improvement, the basic principle of RES remains flawed. It is not reasonable to hold every power generator to the same predetermined set of generation technologies, since the location, history, capability, load profile, asset base, etc. should determine the most effective approach to meeting customer needs. Holding generating entities to a “performance standard” rather than dictating the method of generation would be more cost effective, more operationally efficient, more socially equitable, and, in the end, more sustainable.

Better yet, lawmakers could establish a carbon budget per megawatt generated. Under such an approach, conversions to natural gas could be a very viable means to greenhouse gas emission reduction. By combining a carbon budget with a graduated rate for consumers based on the amount of usage, not unlike the water rate structure, we could bring in an additional level of fairness among households and encourage energy efficiency as well.

At the end of the day, America needs policies which drive capital into a diverse array of fuels and technologies. We need policies which encourage us to determine how we might best use a combination of both traditional and alternative fuel resources and generating technologies to bring about a more sustainable environmental and economic future. Although Sen. Graham has put forth a significantly better concept than that which has been previously considered, who not give ourselves even more opportunity to successfully address these vitally important challenges?

Ensuring access to reliable and abundant clean energy supplies is vitally important to our economy and will help determine the competitiveness of the U.S. forest products industry and its nearly one million workers in the world marketplace. Senator Graham rightfully recognizes the important role that energy sources like nuclear and new clean coal technology can play alongside alternative fuels in the new energy economy. He is also right to recognize many of the existing sources of clean energy equally with new sources.

Retaining our nation’s existing renewable energy is as important as expanding on the progress we’ve already made and government policies shouldn’t punish early renewable energy users who are already doing the right thing. The forest products industry is the leading producer and user of renewable biomass energy, and a healthy and globally competitive forest products industry is important to achieving the goals of the President and the Congress to reduce our nation’s greenhouse gas emissions. In fact, the amount of energy we produce from carbon-neutral, renewable biomass exceeds all solar, wind, and geothermal energy generation combined. Our facilities have reduced their fossil fuel use and now produce an average of two-thirds of their energy needs from biomass. We can do more, and the right policies from Congress will help us add to the nations clean energy supply rather than substitute one form of clean energy for another

AGA has long supported, to the fullest extent possible, the development of a diverse domestic energy supply, including coal, oil, nuclear, wind, hydro, solar and, of course, natural gas. Senator Graham’s proposal, while an important first step, does not fully engage all of America’s low-carbon tools in our fight to reduce carbon emissions; specifically, it omits natural gas. As Energy Secretary Steven Chu recently told us at an AGA Board of Directors meeting, natural gas is a necessary component of any truly renewable energy program.

The fact remains that all of the power produced by alternative and renewable fuel sources meets only a small portion of the country’s daily energy needs, and those dependent on solar and wind to produce electricity rely on natural gas as a back-up fuel when the wind doesn’t blow and the sun doesn’t shine. A realistic plan for a low-carbon future, therefore, must include, and support, traditional and proven fuel sources such as natural gas.

With major energy producers publicly turning to natural gas as their fuel of choice, the message is clear – as the cleanest of all fossil fuels, natural gas can provide the nation and its consumers with a proven, reliable, low-carbon source of energy.

Equally important is ensuring that the most effective and efficient application of natural gas – its direct use in the home for space heating, heating water, cooking, and other end-use applications – is encouraged and supported. Direct use of natural gas is by far the most efficient, cost effective and green choice when compared to converting gas to electricity to power the same end-use applications.

The best way to address climate change and support the renewable market, while still providing America with the reliable energy it needs to grow its economy, is with a wide-ranging set of options that includes natural gas and all of America’s other energy resources.

Senator Graham’s proposed national “clean energy” mandate certainly offers an improvement to alternative renewable fuel standards and cap and trade proposals. Instead of imposing a defined cap on CO2, his proposal would achieve an indirect cap requiring electric power companies to increasing percentage of electricity generated by sources Congress defines as “clean energy.” Yet, his legislative proposal goes well beyond simply setting standards for production requirements.

Graham’s plan would also greatly expand loan guarantees for the nuclear energy industry, up to $100 billion. Although, encouraging growth in nuclear power is directionally correct, loan guarantees are a dangerous mechanism. In addition to creating another moral hazard, the Congressional Budget Office estimates that the tax paying public could end up holding the bag for up to 50% of these guarantees as a result of anticipated defaults. (That’s $50 billion, for those keeping count.)

Moreover, the Senator from the Palmetto State has yet to explain the basis for his renewable portfolio or to identify the cost of achieving it. How clean is clean enough? To what degree will consumers electricity bills go up? What is the rationale for the percentage requirements he has set? What is the basis for assuming the technology necessary for meeting his standard will be in place and cost-competitive on the time schedule his legislation would mandate?

Getting straightforward answers to these and other questions regarding “clean energy” legislation is even more important in light the growing list of recent scandalous activities which raise legitimate concern over many assumptions underlying climate legislation (including last year’s so-called “Climategate” emails and last week’s admission by Phil Jones -- East Anglia’s former director of climate research -- that recent rates of warming were not “statistically significant”).

Before Congress acts, there ought to be a reassessment of the facts. To quote Jones, “there is still much that needs to be undertaken to reduce uncertainties, not just for the future, but for the instrumental (and especially the palaeoclimatic) past as well.”

There is no doubt that as a nation we should pursue cost-competitive technologies to reduce CO2 emissions. The real question is what is the most cost-effective way to pursue that goal? Sen. Graham’s approach -- which is preferable to cap and trade -- should be compared to a carbon tax that provides an offsetting reduction in the federal payroll tax. Such an alternative would be simpler and easier to administer and the necessary incentives for technological development without Congressional imposition of arbitrary standards and timelines.

As a focused R&D strategy is being pursued, greater reliance on abundant supplies of natural gas and emerging smaller nuclear power units could reduce the growth in emissions without imposing unreasonable costs on consumers, costs comparable to those experienced in Europe. In order to successfully pursue low and no carbon energy technologies, American must adopt a strategy that does not try to force technology, does not pick winners by defining losers, and does not result in significantly higher costs to consumers and businesses.

Sen. Graham should be commended for drafting a proposal that addresses one of the nation's most difficult issues--clean electricity policy. However, his bill fails to include any mention of clean-burning natural gas and its potential contribution to the nation's energy portfolio.

Natural gas emits the lowest greenhouse gas emissions of all fossil fuels. Today, natural gas powers about one-quarter of U.S. electricity production, and its use could be expanded. Advanced environmentally-responsible technologies, including horizontal drilling and hydraulic fracturing, have made it possible to unlock natural gas from hard rock formations such as the Marcellus Shale, which exists deep beneath a wide swath of New York, Pennsylvania, Ohio, West Virginia and Virginia. This formation as well as others in Louisiana, Texas, Colorado and elsewhere are greatly increasing U.S. natural gas reserves. According to estimates, the United States has about 100 years of natural gas supplies based on today's consumption levels.

The United States' abundant reserves of natural gas have been called a "game changer" for the economy and U.S. energy policy. The American public and the environment could benefit from policies that include a prominent role for natural gas in the nation's energy future.

Clean energy standards will not go far enough to rein in our carbon emissions and will cost more—pound for pound—than putting a price on carbon. Granted, it is better to take some action than it is to take none, but this is a small, expensive band-aid on a planet-sized problem.

The issue stems from the fact that the true price of energy is hidden—what we pay on our monthly bills is only a portion of the real costs of using fuels that pollute. Our nation subsidizes these fuels in many ways, most importantly by failing to internalize the social costs of pollution. Many side effects of fossil fuel consumption—from increased mortality caused by air pollution, to insurance rate increases from rising sea levels, to national security threats based on reliance on foreign oil—are not taken into account. These costs will only grow as the effects of climate change are felt more and more.

This is an economy-wide problem that can only be fixed by an economy-wide solution. Clean energy standards will send an economic signal, but not one that is strong enough to drive the kind of investment and innovation needed to drastically reduce our greenhouse gas emissions. Only a market-based policy can create enough economic incentives to conserve energy and switch to clean energy sources.

Top-down regulations and mandates that specify how companies are to comply cannot complete with market incentives in terms of efficiency. A command-and-control style approach puts the government in the awkward position of picking and choosing one-size-fits-all standards. Demanding a certain percentage of clean energy sources will almost certainly ask too much of some companies who cannot afford the required measures and not enough of others who can bring clean energy online at low cost.

Economists largely agree that it is more efficient to allow companies to decide how best to comply with a new rule. That way, each firm can find the cheapest ways to reach its goal without wasting time or money.

But if putting a price on carbon is not politically possible now, clean energy standards can serve as a bridge towards that future. At the least, this approach will help start to chip away at the hidden subsidies of dirty fuels. It is a short term mechanism that won’t answer our long term problems, but if our choices are a small measure or no measure, progress is preferable.

But it is important to emphasize that this tactic is not free. It will, like any command-and-control regulation, impose costs on businesses, which will quickly pass them along to consumers. Unit for unit, we will be paying more per ton of carbon restricted than under a carbon cap or tax. It’s a penny-wise, pound foolish policy.

The answer to the question is neither. Whether the government forces utilities to buy politically preferred sources of energy from wind farms, carbon-captured coal, or hamsters running in cages, a renewable energy standard is still a mandate that utilities purchase and sell energy that is more expensive and less reliable than the energy they are selling today. All that is really being debated is the number of different interest groups that can benefit from having the federal government force American families to pay even more for less reliable electricity.

In the same way that cap-and-trade’s proponents hope to use it make the price of proven energy sources “necessarily skyrocket,” the renewable electricity mandate will force prices to take the same upward trajectory. No matter what it is called, how many special interests are pleased, or which energy sources make the final cut, a mandate is still a mandate. And this one will be expensive.

Apparently it isn’t enough that the government heaps billions in taxpayer subsidies to support these unproven energy sources. The American people understand when they are being ripped off and are unwilling to pay more for an inferior product. And so it goes that our enlightened leaders must force the “standard” on them. After all, doesn’t Washington know what’s best?

Sen. Lindsey Graham’s Clean Energy Act is, like cap-and-trade, calculated to raise energy prices and expand government control over the economy for the benefit of special interests.

The public – and therefore the Senate – isn’t buying cap-and-trade, and no informed adult really believes we can “repower” America with wind turbines and solar panels. So Sen. Graham has come up with a slick alternative to both cap-and-trade and a national renewable electricity standard (RES) – a national “clean energy” standard (CES).

RES advocates claim they want to reduce greenhouse gas emissions and dependence on Mideast oil, yet won’t allow nuclear power and coal with carbon capture and storage (CCS) to contribute to those goals. Graham’s CES avoids this rank inconsistency. (Or it does in principle – it’s anybody’s guess whether in practice any new nuclear facility would qualify as “qualified nuclear,” or if CCS ever becomes economical.)

Nonetheless, Graham’s proposal does not deserve even one cheer from free marketers. A CES is still a Soviet-style production quota – an attempt to decree what percentage of America’s energy comes from what kinds of sources. And Graham proposes to fix these percentages not for the duration of a mere five-year plan, but for the next 40 years! For sheer hubris, that clobbers the ethanol mandate, which establishes production quota for 15-years.

Graham professes to believe that we cannot “clean the air” until we “price carbon,” but because cap-and-trade has hit a wall in the Senate, he is proposing a CES as a “bipartisan” alternative. However, the notion that we cannot clean the air without pricing carbon is bunk.

History is clear on this point. U.S. air quality has improved, decade by decade, for almost as long as we’ve been measuring it. Particulate matter, for example, has been dropping since at least the late 1950s. Between 1980 and 2008, nationwide air pollution levels decreased 79% for carbon monoxide, 25% for ozone, 92% for lead, 46% for nitrogen dioxide, and 71% for sulfur dioxide. Between 1990 and 2008, air pollution levels decreased 31% for coarse particulates (PM10) and 20% for PM2.5. This progress will continue under regulations already on the books or planned, as motor vehicle fleets turn over to cleaner vehicles and new capital stock replaces old.

Graham claims his main concern is not saving polar bears but saving American jobs. “Every day we wait in this nation [to price carbon], China is going to eat our lunch,” he explained at a February 3 conference (Business Advocacy Day for Jobs, Climate, & New Energy Leadership) in Washington, D.C.

The Senator is mistaken on two counts. First, “clean tech” industries that cannot compete without policy privileges are now and very likely will remain less competitive than the industries Graham would have them replace. That is a recipe for reducing wealth- and job-creation. In Spain, subsidies for “green energy” destroy about 2.2 jobs for every single job created. Similarly, Germany’s feeder tariff system promoting wind and solar power has produced net job losses.

Like many conservatives, Graham is a fan of nuclear power, but corporate welfare, whether right wing or left wing, benefits special interests at the expense of the overall economy. Federal nuclear subsidies have totaled $178 billion during 1947-1999, according to economist Doug Koplow. Yet as Cato Institute energy analyst Jerry Taylor points out, despite this largesse, no new nuclear plants have been built in 30 years. Why? Because the economic risks are too great:

"In short, even during the go-go days prior to the September 2008 crash – a time when Wall Street was allegedly throwing around money left and right to all sorts of dubious borrowers – the banks that stand accused of recklessly endangering their shareholders on other fronts were telling utility companies that they would not loan them anything for new nuclear power plant construction unless the feds unconditionally guaranteed every last penny of those loans. That’s how risky market actors think it is to build nuclear power plants."

Piling mandate on top of subsidy would feed corporate welfare dependency, not ‘incentivize and reward the future,’ as Graham supposes.

Second, the notion that China will “eat our lunch” unless we handicap the most competitive sources of U.S. electric generation is deeply confused. China, after all, does not put a price on carbon! Indeed, one reason China has become a leading manufacturer of solar voltaic panels is that Chinese energy prices are low. Putting a price on carbon would jeopardize Chinese manufacturers’ access to abundant, affordable coal-based power (China’s consumption of coal for electric generation is projected to more than double from 2006 to 2030).

Nor is it the case that a nation must produce lots of zero-carbon energy for domestic consumption in order to compete in global “green tech” markets. China has become the world’s largest producer of solar panels, producing about 820 megawatts of PVs in 2007. But, due to their relatively high cost, China in 2007 deployed only about 20 megawatts of PVs domestically, mostly for “remote off-grid applications.”

A final point – enactment of Graham’s bill would not preclude subsequent enactment of a cap-and-trade bill or a more stringent CES. Recall how quickly the ethanol mandate grew between 2005 and 2007 – from 7.5 billion gallons per year by 2012 to 30 billion gallons per year by 2022. Recall also that Al Gore says we need it all – cap-and-trade, renewable energy mandates, tougher energy efficiency standards, and a carbon tax. Enactment of the Graham bill will surely embolden rather than mollify the global warming movement. As we should all know from Captain Hook, feeding the crocodile your hand does not make it less aggressive.

Leaving natural gas out of any clean energy standard is like holding the Winter Olympics without snow. Natural gas is that vital fuel that policy makers need in order to achieve clean energy.

In a perfect world, natural gas producers prefer a market-based approach to meeting clean energy standards, allowing natural gas to compete fairly and fulfill its potential as part of the clean energy mix. If instead a clean energy standard is adopted, it ought to be crafted so that utilities have the option to use natural gas in order to reduce their emissions. It’s here, reliable, clean, and as a bonus, it is a jobs-creating machine.

To get an idea of just how significantly natural gas could contribute to meeting clean energy goals, look no further than a study released by the Congressional Research Service in January. CRS calculated the potential reduction in CO2 emissions simply by making the most possible use of natural gas plants that are currently under-used. Maximizing the use of existing natural gas plants could immediately cut carbon emissions up to 20 percent, CRS said.

As an added benefit, allowing utilities to use clean natural gas for power generation would necessitate more natural gas to be produced, leading to significant jobs creation. We’ve seen the natural gas jobs effect already in states like New York and Pennsylvania, which have created tens of thousands of new jobs in the two years since production from shale gas in those states has taken off.

If reducing emissions is the goal, natural gas passes the emissions inspection test. Jobs creation? Check. Reliable and here today? Check. We are confident that as Sen. Graham’s draft gets vetted, it will expand to recognize natural gas’s ability to help meet a clean energy standard.

A clean energy standard is not “clean” merely because a Senator dubs it so. Yes, we need a clean energy standard. Yes, we need a renewable energy standard. Yes, we might even need transition energy sources to get us away from our current suicidal greenhouse polluting practices. But to call any form of coal burning “clean” is not only a joke, but also a dangerous turn toward Orwellian politics. The same holds true for carbon sequestration, biomass and nuclear options proposed by Senator Graham. We should debate those issues on their own terms, rather than slapping a false label on them for lowest common denominator political consumption. Indeed, the destruction of trees around the country in the name of “biomass” is a rapidly growing threat to our nation’s forests that is anything but clean for the air, water and landscape in many instances. Further, nuclear proponents still cannot assure us, inter alia, of significant waste and safety issues; Three Mile Island and Chernobyl are not “clean” whatever other attributes they might or might not possess. And carbon sequestration, besides being a gargantuan subsidy to the coal industry, is simply not a proven technology at the scale now necessary; why are we proposing to pour incredible sums money into that when we already know that wind, solar and geothermal technologies work well as is? We appreciate the fact that Sen. Graham has entered the global warming debate and recognize his efforts to bring along the more stone age-like members of his caucus. If Messrs. Graham, Kerry and Lieberman were truly serious about “clean,” they would be embracing a 350 parts per million (ppm) atmospheric carbon dioxide-eq. standard that the best available science tells us to follow. But Graham and other members of Congress do not get a pass at re-inventing the English language. Black is not white. Apples are not oranges. Coal is not clean.