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. As Energy Secretary Steven Chu recently told our board of directors, natural gas is a necessary component of any truly renewable energy program.

And, while everyone is encouraged by the increased awareness being brought to renewables, 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. A realistic plan for a low-carbon future, therefore, must include, and support, traditional and proven fuel sources like natural gas.

While coal has historically been the dominant fuel in America’s domestic resource base, natural gas has begun to play an increasingly important role in electricity generation. 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 – directly using natural gas to heat homes, to heat water, for cooking, and for other end-use applications – is encouraged and supported. Direct use of natural gas is more efficient, more cost effective and greener than 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 energy it needs to grow its economy, is with a wide-ranging set of options that accesses and utilizes natural gas, and all of America’s other energy resources.

Last week I joined with executives from the wind, hydropower, biomass, and geothermal industries to talk about the most important thing renewables generate aside from clean energy: jobs.

We’ve seen the results of enacting the right policies. Last year’s stimulus bill, signed a year ago at a museum with a solar installation on its roof, helped to create 18,000 new solar industry jobs. These jobs include plumbers, electricians, and construction workers – the backbone of our economy. These are jobs that can’t be shipped overseas.

We can keep up that momentum by enacting forward-looking policies in the jobs bill. Those policies include:

• Extending the Treasury Grant Program for two years
• Returning $2 billion to the Department of Energy Loan Guarantee Program that was used to extend the “cash for clunkers” program
• Extending the manufacturing tax credit
• Establishing the Clean Energy Deployment Administration, commonly called the Clean Energy Bank

With the right policies in place, the solar industry can focus on creating jobs and deploying more clean energy nationwide.

The American Forest & Paper Association supports President Obama’s call for more domestic energy generation from all sources. We also support the important role that renewable energy can play alongside traditional sources in the emerging energy economy. Access to affordable energy is vitally important to American manufacturers’ global competitiveness, and an abundant supply of energy helps send the right market signals.

The forest products industry embraced renewable energy early in the last century and today generates two-thirds of its own power onsite from carbon-neutral renewable biomass. The 28.5 million megawatt hours the industry generates annually is greater than all solar, wind and geothermal energy generation combined. Excess power is often sold to the grid, making the industry an important, existing source of renewable energy.

The industry’s considerable contributions to our country’s existing renewable energy base provide an important foundation on which our nation can build a larger renewable energy economy. As our country seeks to encourage additional renewable energy sources with incentives and tax credits, it is essential that policies are additive to existing producers like the forest products industry rather than a replacement for existing contributors.

Government programs that seek to steer biomass toward certain renewable energy generators and away from others stand to create serious disruptions in the marketplace, and put government in the position of picking winners and losers. All biomass users should be treated equally under these programs so that existing biomass energy can compete with new biomass energy. Furthermore, renewable energy programs should focus on increasing the supply of biomass, as well as incentivizing its use, to ensure that our forests continue to expand as they have over the past century.

The nation’s investment in renewable energy is broader than just putting steel in the ground, and must be significantly increased. I haven’t seen a poll or credible opinion leader that suggested any different. Over-reliance on fossil fuels has put our economy and our national security in jeopardy. For years, investment in renewables has languished. Surely other energy sources will continue to play a major role but standing up a domestic renewable industry is crucial to a successful transition to a clean energy economy.

Federal investments must be made with an eye toward sustaining our natural heritage. Innovative generation and transmission technologies should be promoted that reduce impacts to land and wildlife. Energy efficiency technologies must be deployed broadly so we do more with the power we already generate. And large-scale renewable facilities must be guided to suitable places, especially on the public lands.

There are specific things renewable companies can do to enhance their ability to succeed in the near term. Because public lands, along with state and private lands, will likely be considered as potential sites for wind, solar, and other renewable energy technologies, The Wilderness Society believes that the following standards should be applied to any renewable development on these lands.

• Unlike our approach to oil and gas drilling, we should identify areas suitable for renewable projects—as well as areas that should remain off-limits to development—in order to sustain the integrity of our wild lands and wildlife habitats as we make the transition to a new sustainable energy economy.
• Real opportunities exist to redevelop land that has already been disturbed by industrial or other intensive human uses, and we should prioritize these opportunities over intact public land.
• Developing the transmission facilities needed to move power across public lands should support renewable energy above other generation technologies.
• Wherever development occurs on our public lands, we must make sure impacts to environmental and other sensitive resources are mitigated or, in some cases, offset.

Interior Secretary Salazar is laying a solid foundation for our nation’s entrepreneurs to harness the planet’s wind, sun, heat and other renewable energy sources in a manner that safeguards the wildlife and natural resources that help keep American communities healthy, safe, and prosperous. Done correctly from the start, we have the opportunity to develop renewable energy and protect our treasured public lands—avoiding the conflicts we’ve seen over other forms of energy development. In this way, we can quickly and intelligently unlock clean renewable energy, and its power for creating jobs and contributing to our economic prosperity.

While job creation is not the primary standard to be used in evaluating those investments, moving to a clean, renewable energy economy comes with this added benefit. Investing in renewable energy is good news indeed and will also create tens of thousands of new American jobs—especially at a time when our economy is struggling, and so many Americans are unemployed.

Renewable energy is undoubtedly the business opportunity of the century, particularly for the US. China is already there - it leads the exports of solar and wind equipment -- and it is up to us to grab what is ours. We cannot afford to loose this opportunity. Renewable energy can give a new life to the $50 trillion power plant industry around the world - this $50 trillion figure comes from the International Energy Agency - and while this has been said before, this time around it will.

Silicon Valley understands the challenge and the opportunity - as clean tech is its most dynamic investment sector.

We have the know - how, the innovative spirit and the patents, the technology and the expertise, and we definitely need those new jobs.

How should this all work out?

The energy industry is the key player here. It is transforming itself - and must do so faster and better in this world -changing game. The power plant industry can build any sort of power plant - as long as it makes money. They should build renewables - geothermal, wind farms, hydroelectric, solar, as well as cleaner versions of fossil fuels plants that use CCS (carbon capture and storage) whenever possible and available. Concentrated solar power plants are the preferred alternative because solar is the only energy source that can produce enough energy to replace fossils. The rest are all limited in supply and this includes nuclear - since nuclear fuel is scarce, and in addition nuclear plants have well known strategic risks (think of Iran).

Right now concentrated solar power is not quite competitive with coal in producing electricity - but - here is the important point - they have a steep 'learning curve' that shows that soon they will be - see the DOE for detailed data on costs and learning curves.

Air capture of carbon dioxide is the new kid in the block. It is preferable to the conventional carbon capture and storage from the flue because - by intelligent use of cogeneration, it can make a fossil power plant "carbon negative" - namely can transform a fossil plant onto a net sink of CO2, something that traditional CCS cannot do. And it can retrofit existing power plants - something that traditional CCS cannot do at a reasonable cost.

My preferred scenario is to build carbon negative power plants in low income low emitting nations - Africa, Latin America, Small Island States - and use the Kyoto Protocol Clean Development Mechanism to fund this - for this purpose I have already introduced wording in December 2009 into the CDM Agreement in Copenhagen COP XV. This would allow the Kyoto Protocol carbon market that I designed and wrote into the Protocol - a $125 billion a year market in the European Union EUTS -- to help fund such power plants.

This way we provide added power for development and will also help clean the planet's atmosphere. Yes, clean the atmosphere, because "carbon negative" means that Africa, Latin America and Small Island States -- which emit only 3%, 5% and 0.3% of the world CO2 respectively -- can together capture and store 20 to 40% of the world's emissions as needed. Storage can be in oil deposits as CCS uses at present, or even better into cement and plastics as is currently being developed. This is all real and possible, and we should do it. For example in island nations or in the Middle East, existing algae technology can transform waste into clean water, fuel and electricity. When algae are fueled by CO2 captured from air, the process becomes a powerful one-stop renewable energy solution that reduces carbon from the atmosphere and can prevent the worst risks of climate change -- while producing drinkable water and fueling economic development.

Congratulations to the President for recognizing that dramatic expansion of solar and wind would cost the floundering US economy dearly; and not just by squandering taxpayers dollars.

The public may be surprised to learn that another set of interest groups, uncompetitive businesses and labor unions, are also weighing in -- attempting to leverage these climate change policies in order to raise trade barriers.

For instance, the House cap and trade bill passed last summer provides for carbon tariffs to limit imports from countries which do not restrict greenhouse gas emissions. The most likely targets - steel, cement, paper, chemicals, and aluminum – include products that are already favorite and frequent targets for businesses and labor unions seeking special trade barriers against competition.

This new wave of protectionism, “green” protectionism, threatens to spark an international trade war that would end up costing American consumers more money and foreign workers their jobs.

This issue is a hot topic in Brussels too. Last summer, the EU imposed the first trade barrier in the name of climate change -- a renewable energy directive which requires member states to limit biofuel imports as part of a larger strategy to reduce emissions from fossil fuels. Like the well-hidden, self-interest driving the carbon tariffs proposed by Congress, the true intent behind this ban is to ensure biofuels from outside Europe are kept out of this lucrative market.

Renewables must be cost effective if there is to be uptake. Otherwise, consumers take the hit. The best energy policies are ones that provide a level playing field for all energy sources to fairly compete to give consumers the choice to decide which form of energy most efficiently meets our energy and environmental needs.

Right now, there is no way for renewables to become the top energy source. To get there, wind and solar companies should transfer their focus on increasing the government subsidies and handouts they use to sustain their industry and instead focus on making their products more efficient and less expensive so that they can compete in the marketplace. After all, government subsidies will someday end, and—unless something changes, quick—so too will the wind and solar industries.

The best way for Congress to balance emerging technologies with existing ones is through a hand-off approach. If Congress, or any of the rest of us, knew which technologies will power the future, we would have invested in and created that technology by now. But no one, not Congress, not me, not the experts on this blog, knows which technologies with “win” and produce efficient, inexpensive energy in the future.

The best thing the President could do in the energy arena is to eliminate -- not expand -- subsidies for all energy sources. It is time for the government to get out of the business of picking winners and losers in the energy sector and let these technologies swim or sink on their own.

Finally, with respect to the Administration's supposed support for offshore drilling, let me be clear. At best, this Administration has given lip service to additional offshore drilling and domestic energy production. The Administration cancelled onshore leases in Utah, took back plans to allow commercial oil shale leasing, and are slow walking the regulatory process to enable more offshore drilling. In fact, with the exception of one sentence in the State of the Union, it would be hard for the Obama Administration to be any more hostile to American production of efficient and reliable energy resources like oil, natural gas, and coal.

For clean energy, focus on stable policies, sustained investment, and a level playing field--American innovation will do the rest.

Three fundamental principles need to guide America's energy strategy, particularly as it relates to renewables.

Focus on efficiency

Efficiency is job # 1. Whether we are talking renewables, fossil fuels, or nuclear, to outcompete other countries and stop giving our energy dollars to OPEC, America can't afford to waste energy anymore. Our economy uses approximately 25-70 percent more energy per dollar of GDP than other industrial nations like Japan and Germany--which means we would be a whole lot wealthier if we were as energy efficient as they are.

In the past, we dominated the global economy through the shear "shock and awe" size of our economy, but the world has changed and emerging countries like China, India, and Brazil, along with other industrial nations are jockeying for the same energy resources. Studies by DOE, McKinsey Company, and others suggest we could reduce energy efficiency by at least 20 percent by 2020 and SAVE A TRILLION dollars doing it--which means we shoot ourselves in the foot if we don't get serious about efficiency first.

Efficiency is especially critical to transitioning to a future where renewable energy can meet all our energy needs. For example, installing solar panels on the roof of the average American home would typically offset part of the average household electric load. But with aggressive efficiency measures, a combination of renewable technologies can conceivably provide all household energy use--that is the kind of energy independence we need.

Focus on the future and the next energy investment dollar

The past is not prologue. Our existing sources of energy are what they are. What is important is where we invest each new energy dollar. The choice comes down to whether we will continue to invest in dirty unsafe energy sources of the past or clean safe energy sources of the future.

Renewables already provides more energy than many people realize or that some people are ready to admit. Renewable energy met 7.3 percent of our total energy needs in 2008 according to DOE, nearly as much as nuclear power--8.5 percent in 2008. Biomass, including its use for industrial heat and electric power as well as biofuels, now surpasses hydropower as the largest renewable energy source.

True, electricity from solar and wind presently accounts for less than 1 percent of all U.S. energy consumption, and 1-2 percent of all electricity, but the potential growth curves for these emerging industries over the next 10-20 years are exponential, similar to other technology stories like computers and telecommunications. Studies by both industry and independent sources estimate conservatively that wind alone could provide 20 percent of U.S. electricity by 2030. Together with the myriad of other renewable and transitional energy technologies, crossing the 50 percent mark by 2030 becomes possible.

Stable policies, sustained investment, and a level playing field are essential

RETECH, a national convention of renewable energy companies and investors concluded in Washington DC last week just in time to beat the snowfall. The level of entrepreneurship, innovation, and capital involved in renewable energy as evidenced by the event was impressive. There is a vast amount of talent and resources already engaged in clean energy and gearing up for more. But what struck me in every conversation and session I attended was the uncertainty regarding sustained investment and supportive policies. Like any business or industry, the capital-intensive energy industry in particular, predictability regarding the future financial and regulatory environment has a huge impact on how readily and how fast that industry will grow and develop.

The renewable energy industry faces challenges that mature established energy industries do not. These emerging businesses simply need clear stable policies and steady access to financial capital and they will make the projects happen and all the rest work. They simply need to enjoy the same public support that other emerging industries get in terms of R&D and assistance to bridge the "valley of death" between technology development and commercialization--something that Secretary Chu has made a priority to his credit.

Finally, they need the playing field to be level when competing with conventional energy sources. Subsidies to mature coal, oil and gas companies that should no longer need them must be phased out. The external impacts of energy production--on the air we breath, the water we drink--ought to be part of the costs that energy companies incur. Subsidizing dirty energy with our health is not just morally questionable, it's bad economics.

In the movie of Field of Dreams, the central refrain is "if you build it, they will come," prompting the fictional characters to take the leap of faith and build a baseball diamond in the middle of a farm field. With global warming, the leap of faith is far shorter and the stakes much higher (no offense to Shoeless Joe Jackson). We know that climate change, if unabated, will cause and is now causing incredible suffering to humans and the natural world. We also know that a handful of pollutants -- carbon dioxide, methane, black carbon, HFCs, and ozone precursors among others -- are causing this damaging climate change. And we also know that renewable forms of energy -- most notably solar, wind and geothermal -- can immediately and feasibly provide significant energy production in the U.S. and around the world. What we have yet to build is the political will to end the addiction to cheap coal, gas and other damaging fuels. Once the true cost of those damaging fossil fuels is incorporated, renewable forms of energy will follow in a very cost-effective manner. In other words, if we build the legal mechanisms to phase out coal, renewables will come.

The following comments are from Tom Carnahan, founder and President of Wind Capital Group:

Wind power is now a mainstream source of energy in the United States with a vast potential for growth in the future. Last year alone, more than 10,000 megawatts of wind energy was installed in the US – that’s enough to power more than 2 million homes. Our company, Wind Capital Group, is currently developing wind energy projects in over a dozen states across the United States. And as the President of a company that has seen rapid growth over the past few years developing wind energy, I know that wind is no longer an alternative but an integral part of our energy supply that also includes natural gas, coal, nuclear, and other renewables such as solar and geothermal.

Although perhaps not quite as steeply, all projections show that demand for electricity will continue to increase substantially both domestically and around the world, so Congress needs to take action today on specific measures promoting the development of wind and other renewable sources of energy. Such action is critical in order to meet the energy needs of tomorrow in a clean, responsible and efficient manner. The most important steps Congress can take are passing a strong national Renewable Electricity Standard (RES), upgrading our electric grid, and extending the Investment Tax Credit (ITC).

Twenty-eight states and the District of Columbia have enacted some form of RES, but we need a national standard and a national commitment to wind and other renewable energy sources. Anything less than a 20% target over the next decade is not likely to spur the innovation and investment necessary to dramatically transform our current energy mix. As such, 20% should be the bare minimum standard in the short term with a more ambitious target for the long term in order to ensure we get on track and stay on track.

We also need to make a national commitment to and a national investment in our aging electric grid. That would include what we call “green power superhighways,” which would use high-voltage electric lines to bring power from areas with the potential to generate clean electricity to the areas that have significant demand for electric power.

Lastly, in order to bring certainty and stability for investors in wind and other renewables, Congress needs to pass a clean extension of the Investment Tax Credit’s Section 1603 grant program. This program has been extremely successful, freeing up capital for the renewable industry at a time when lending markets had dried up.

There is some discussion of making changes to the structure of the program, changes that would significantly hamper the ability of small and medium-sized renewable developers to access the capital they need to develop projects. A clean extension will allow the planning of and investment in new and important projects, creating long-term sustainable jobs for American workers and economic development throughout the country.

We urge the Administration and Congress to act quickly on these matters, as they not only represent investments in our energy future but will also create jobs and economic investment here in the United States at a time when we desperately need it.

Karl Gawell, Executive Director of the Geothermal Energy Association, submitting the following comments:

Before we jump to a new strategy, let’s take stock of where we are today. All renewable technologies are seeing significant growth in the marketplace, which is a real testament to the state and federal policies already in place, or at least put in place over the last ten years. Together, state renewable energy standards have ensured a growing market for renewable power, and federal tax incentives have lured new investors and helped buy down the first-cost of renewable technologies. This has been a winning strategy that combines a reliance on the power of the marketplace with effective federal and state support.

For all of the renewable technologies, there is substantial untapped capacity that does not involve big technological breakthroughs. There are tens of thousands of megawatts of wind, solar, geothermal, hydropower and biomass power – and that’s for each -- meaning together renewable power technologies are poised to make a very substantial contribution if the existing federal and state policies are sustained and supported. President Obama may be listening too much to the Department of Energy, which sometimes seems fixated on technological breakthroughs instead of growing the current markets and tapping the potential that is already within our grasp.

So, the first thing renewable technologies can do is get the story out about the progress we are seeing, even in a severe recession we are seeing growth across the board! Second, there needs to be a better recognition of the potential that is there to be tapped, and support assessing that potential. Then, we need serious attention to some of the issues that stand in the way of achieving this potential, such reducing delays and bureaucracy for leasing and permitting, sustaining the key policies supporting renewable growth (the rollercoaster of policies over the past three decades needs to be seen as a fundamental problem undercutting renewable growth), addressing transmission needs in the most cost-effective way, and other nuts and bolts issues that may have less sex appeal than searching for a technological breakthrough, but which can achieve real and significant progress towards solving our national energy problems.

We still remain a hydrocarbon economy. About 85% of our energy comes from oil, natural gas and coal. Over 50% of our electricity comes from coal-fired electricity plants.

The President is being practical in his focus on clean coal technology, nuclear and the like. He and the better people on his staff know that we cannot transition quickly to a renewable energy future so we need to look at some practical solutions to the problems we face with the energy systems we have today. We have massive reserves of coal in the US. It would be entirely unwise to neglect the potential that we have in this fuel source. But it would also be unwise to neglect the serious environmental, health and other effects of using coal.

Let's not kid ourselves many times more people have had health problems or died from the use of coal than the use of nuclear. The nuclear industry is in fact the safest source of any of our major sources of energy. Nuclear produces about 8% of all of our energy. Renewable energy sources, mostly hydropower, are about 7% of our energy sources. Solar is about .07%, wind is about .49%, geothermal is .35%, hydropower is about 2.38% and biomass is about 3.71%. Biomass includes waste-to-energy, biofuels, landfill gas, wood, left over foods and cooking oils, agricultural waste and many other potential and actual sources of biological masses.

Again, given the huge reliance we have on hydrocarbons transition to any new energy future needs to be done carefully, methodically, and by using actual proven data and analyses on costs, benefits, environmental effects, health effects and so forth. We cannot rely on rumor, myths, and ideologies to judge the best futures. Given the pace we are going at now forging ahead toward 20% renewables by 2020 seems far fetched.

As I have said many times before here and elsewhere possibly the biggest source of energy in the US is in increased efficiency. When we toss away 85-95% of the fuels we use to produce electricity into the air as heat, in the use of 90-degree angle pipes to move things, and in the sometimes absurdly inefficient end-use processes and products that we produce there is surely a lot of energy there for the retaking. Combined heat-power-cooling-industrial uses seem a no brainer on this, but we are so far behind the curve on this globally that many of our companies don't even see the curve.

When 85% or more of the gasoline that goes into a typical car is used to move the weight of the car rather than the people and the cargo there is a lot of energy there for the retaking. Brake energy and more can be captured from the car. Cars can be light-weighted. Do we really need 2,500 pound cars to move 95 pound ladies with 30 pounds of groceries?

Different driving methods and patterns can also retake energy. Using public transport and developing a proper train system can give us lots of energy to retake from the saved energy from all of those car miles we would not use. Trucks and other road transport also have massive amounts of energy we could retake. Given that 72% of our oil use goes to transport and 98% of our transport is in oil, and that we import about 60% of our oil and that this is sometimes 1/3 of our trade deficit and sometimes greater than our imports from China, this could also help resolve some of our trade deficit issues and import reliance issues. Transport uses about 28% of our total energy use.

The major uses of energy in our residences and commercial buildings are heating, cooling and lighting. Commercial and residential use of energy accounts for about 41% of our use of energy in the US. About 75% of the energy use in commercial buildings goes to heating (including of water), cooling and lighting. The most goes to space heating.

About 95% of the energy used in residences is for heating (including of water), cooling, and lighting. Many of our buildings are old and quite inefficient. Many of our heating, cooling, and lighting methods are beyond absurdly inefficient. Add to this that the inefficiently produced electricity is used massively in commercial and residential building then we see compounded waste.

As I learned from an expert on The Hill the other day: none of our buildings would fulfill the LEED energy efficiency requirements for Germany. Our LEED requirements are hardly even scratching the veneer of the problem.

Our industries have increased their energy efficiency quite a bit over the last few decades. Well, they need to survive the bottom line and for some industries energy is a huge part of their input costs, such as for petroleum, chemicals, paper products, and metals. These four groups put together add up to 75% of all of the energy used in industry. And industry uses about 31% of all of our energy. There is a lot of energy to be retaken from industry by industry. As many industry leaders have told me: there is a lot more energy efficiency profit to be made. Refineries, for example, use a massive amount of energy to produce energy. Do we really need to continue to do things this way? I am sure the very smart people at our oil companies can figure out a better future. Frankly, if they do not they will not be around as the US and the world transitions to a new energy future in the longer runs.

In all of these sectors there are massive profits to be made by inventors, innovators, sales persons, investors and others in the energy future. Think of the returns to tightening up energy use in transport, commercial buildings, industry and residences and we could be looking at hundreds of billions if not trillions over the next few decades.

The old economist canard about the $20 that could not be on the ground because someone would have picked it up is multiplied by many hundreds of billions in energy. The greatest source of change in energy use will likely come from the private sector.

This may likely involve gradual and fairly incremental improvements in our use of hydrocarbons as a percentage of our energy needs over the next few decades. However, this may likely involve some significant changes in the efficiency by which we use those hydrocarbons. That is where the really big money could be. Think coal, natural gas, nuclear and the electric car's diffusion in the market.

Along with these changes to the inertial movements of our energy systems there could be revolutionary changes in the development of renewable energy sources. The best way to make renewable energy a larger part of the energy systems of the US is via technology change that makes them cheaper and cheaper sources of energy. This cheapness would also include cheapness in the use of resources and costs to the environment.

Energy needs some epic and game changing inventions. Until that happens we will be on the slightly changing inertial path of the dominance of hydrocarbons and the relative incremental growth of renewable energy systems. There is a massive amount of solar, wind, geothermal, tidal, wave, ocean and other energy sources potentially out there to be used. There are many tens of thousands of more barrels of oil, tons of coal and billion cubic meters of natural gas to be found in the desert suns, valley and mountain winds, the oceans and the hot rocks of the earth's mantle than all of the hydrocarbons put together that we know about, including methane hydrates. We just need the right ideas, the epic ideas that can bring these renewable sources into the mainstream and for the long run. Even the big oil companies can win from this one if they board this train early enough.

However, decisions to use energy are based on the QWERTY system in part. What we use today is likely to be the same thing we use in the near to medium term because that is just the way it is. Such decisions are also based on capital costs to refit or build new systems relative to the old, maintenance and operating costs, and the costs of regulation, benefits of subsidies, and other government policies. They are also based on ex-ante calculations of total life cycle costs for new and old technologies in possibly increasingly uncertain economic and technological environments.

The government policies that are being developed on renewable energy developments and diffusion are confused, mostly a lot weaker than are needed, and show that we as a nation are not serious on the issues of our energy futures. They also show that we are not really serious about climate change. Above all, they show that our legislative branch is near to completely dysfunctional on so many issues as to make its input into our energy futures strategies marginal. The President can do so much in such an environment on The Hill that is almost completely lacking in long term strategic thinking on one of the major problems we face.

We cannot rely on government to help push renewable energy into our new energy futures. The real driving force for change will need to come from adventurous investors, inventors, educators, managers and leaders in the private sector. The real driving forces may also come from public intellectuals who may help the people understand the complexity of our energy systems and how they are connected to so many other systems, including out economic, political, diplomatic, military, educational, environmental, and just about every system out there.

The power that will drive the needed changed in our energy use will be from the power of profits and the power of the mind, not the power of a legislative branch that seems to want votes more than change, and wants power rather than a better future for our people and our nation.

The future of our country needs to be built, as it was in the past, on the shoulders of the giants of invention, innovation, creative thinking, and adventure. Some of these giants may arise out of garage workbenches and from the windowless and quite parts of the national laboratories. The most important contributions of the government on these needed changes will likely not be from the publicly dysfunctional, but from quietly effective.

Wind has now accounted for over 40% of new electricity generation for two years running. Along with natural gas, wind was the largest source of new capacity added in the U.S. in 2009. I would say that we are well on our way to positioning ourselves to becoming 20% of capacity by 2030 as was predicted in a 2008 report produced by the Department of Energy—if the right policies are now put in place. Wind is cost-effective, plentiful, and has no environmental impact.

Wind power also supports a wide range of jobs, especially in the manufacturing sector. The wind industry is well on its way to creating an explosion of new jobs depending on when Congress makes a long-term commitment to renewable growth by passing a strong Renewable Electricity Standard. A national Renewable Electricity Standard will provide the market and policy certainty that is still needed in the U.S. and will ensure that we compete in attracting investment, build up our manufacturing base, and create jobs here in the U.S.

We also need the right policies to meet global competition. We have a once-in-a-generation opportunity to build a new manufacturing industry in our country as the global wind industry builds out its supply chain. The jobs will go where the wind market grows. In 2009, China passed the U.S. in new installations and in manufacturing of wind turbines. This is clear evidence that America must have stable renewable energy policy and hard targets in order to create jobs here in the U.S. and revitalize our economy. China gets it, and so do the 37 other nations that have renewable targets. We still don’t get it. It is time to act now on a national Renewable Electricity Standard (RES) so that America can immediately create manufacturing jobs and be the world wind power leader. The economy can’t wait, job creation can’t wait, and America can’t wait.

Even if electricity demand eases slightly because of economic conditions, American’s appetite for electricity is unlikely to disappear anytime soon, and we will need to use all available energy sources to meet that demand, which is why the Obama administration is supporting development of all sources of clean energy.

I submit that many renewable sources of energy are already positioning themselves as top energy sources utilizing existing technologies. For example, over the last several years, wind energy has represented a significant share of new electric generation additions and solar is poised to break out in similar fashion.

What both wind and solar have in common is that they represent manufactured energy, as they rely on the availability of increasingly sophisticated collection and conversion equipment to transform these naturally occurring but diffuse energy sources into concentrated energy sources such as electricity and fuels.

Both industries also rely on scale of production to drive down costs. The solar photovoltaics (PV) industry, in particular, is transitioning from a sector of component assembly operations to large-scale manufacturing. New market entrants are bringing capital, technology and manufacturing experience from established and successful industries, such as semiconductor and display, which will dramatically increase scale, automation and throughput of PV module production in the coming years.

But in a proverbial chicken-and-egg situation, these industries need the promise of large and predictable markets to invest in the scale of manufacturing that will drive down costs – unfortunately, selling solar systems in energy markets is not like selling iPods or flat-panel televisions in consumer markets.

For “emerging” renewable energy technologies, such as solar, where initial costs are generally higher than prevailing market prices, government policy support, both in terms of strength and consistency, plays a key role in creating initial demand.

An aggressive national renewable electricity standard (RES) would allow the market to select the most advantageous mix of resources to minimize costs. Indeed, analyses from Lawrence Berkeley National Laboratory have found that most states have been able to achieve their renewable energy targets at little to no additional costs to ratepayers, while creating significant new job opportunities for state residents. Colorado is one state specifically that has attracted significant renewable energy manufacturing in addition to downstream development jobs. Furthermore, a just-released study from the RES Alliance for Jobs shows that a national RES will support an additional 274,000 renewable energy jobs over a no-national policy option and that these jobs will occur broadly across the nation. At a time when 10 percent of Americans are unemployed, it is imperative that President Obama and Congress push even harder to make renewables a larger part of the energy mix.

Renewables like wind, solar and biomass can certainly play a complementary role in U.S. energy supply, but because of their cost, the intermittency of wind and solar, (the sun doesn't always shine and the wind doesn't always blow) and need for a backup energy supplies it is foolish to think that they will replace large amounts of our more traditional energy sources in the next 10 to 20 years.

Because each one percent increase in U.S. GDP growth is accompanied by a 0.2 percent increase in energy use, we are going to require every source of energy available to us to as we emerge from the current economic slump. Greater reliance on higher priced energy sources like wind and solar energy would slow the rate of economic recovery. This would be further exacerbated by President Obama's proposed higher taxes on domestic oil and gas firms. These taxes would reduce our ability to develop reserves and increase production and will increase our reliance on foreign energy supplies..

The main reasons renewables have been booming is because they already receive the lion's share of Federal budget energy expenditures and many states have enacted renewable energy portfolio standards. But sooner or later the economic laws of gravity must be recognized. GE did so when at the end of 2009 when it pulled the plug on its solar panel plant in Newark, Delaware, citing that production costs that were higher than what the panels could be sold for.

The current promise of renewables is founded in fantasy: a glittering yellow brick road that leads to nowhere. This is a harsh indictment but also an accurate one. Unless we adopt a different energy strategy for renewables, their potential will continue to be delayed. And tax dollars will continue to be wasted on rent-seekers.

Over the past few decades, advocates of renewables -- primarily wind and solar -- have predicted they could soon provide 20% or more of our energy needs if only the government (ie taxpayers) gave them a helping hand. Washington has acquiesced. And all we have to show for this heaping helping of pork is energy production that meets a mere 2% of our electric power needs. EIA projects that by 2035, with continued government handouts, non liquid renewables will still only provide 4% of our power needs.

An assessment of energy systems published in the respected journal Science concluded, “All renewables suffer from low…power densities…are intermittent dispersed sources unsuited to base load without transmission, storage, and power conditioning.” Those realities must be taken into account in looking at a realistic near term role for these energy sources.

In today’s world of out of control deficits and national debt levels not seen since World War II, the potential and limitations of renewables should be sobering to members of Congress who support ever larger subsidies and tax credits. Yet, there’s little evidence so far that is taking place. As a nation, we can no longer afford the waste and misallocation of money sent to Washington by workers and business on the renewables illusion.

The history of energy transitions all have one thing in common. They are protracted. The investment in plants, infrastructure, and end use systems is simply too large, too complex, and too costly to turnover rapidly. Some estimates put the replacement value at around $2 trillion dollars. Promises of rapid shifts to renewables create expectations that can’t be met and distract us from putting in place long term, realistic energy strategies.

In the past couple of years, technology has unlocked enough natural gas reserves to meet our needs for the rest of this century. It is abundant, economical, and produces far less CO2 than coal. As a nation, we should allow natural gas to be the bridge to a low/no carbon future. While we cross that bridge, we should focus R&D not on incremental improvements in wind and solar but on the home runs that could allow them to make a larger contribution in the future. Home runs could include storage for intermittently generated power, ocean thermal and tidal systems, and space solar power.

Continued subsidies or even larger ones will not only harm our economy but will be restraint in making real technological breakthroughs because they encourage forced commercialization before its time. If solar and wind advocates believe that they are ready for prime time, they should prove that with private financing; not by extracting taxpayer dollars in the form of subsidies and credits.

As the CEO of America’s largest provider of renewable energy, I obviously have a bias on this topic, but in my view we are simply not serious about building a robust renewable energy industry in the United States.

In 2009, the federal government provided $1.5 billion in tax credits to wind power developers. More than $1 billion went to firms headquartered in Europe. Now, it does not trouble me that European firms are earning U.S. tax credits. They are playing by the rules, and their investments are helping to create jobs here in the United States, just as intended. What troubles me is the lack of urgency on the part of U.S. policymakers in ensuring that America remains competitive in the renewable energy sector.

Unlike the United States, Europe started down the path toward renewable energy in earnest many years ago. Over the past decade, European firms have acquired critical expertise in the renewables business and are now formidable competitors. They got a jump start in their home markets – Spain, Portugal, France and Germany – and have exported this know-how to become major players in the U.S. market.

The United States has tremendous solar and wind energy resources, and we can harvest them through a combination of smart public policy and fierce entrepreneurialism. Yet for all of the political rhetoric in support of renewables, the fact remains that the United States has no price on greenhouse gases, no transmission superhighway to carry renewable energy to population centers, and no national renewable energy standard.

With the proper economic signals in the marketplace, we can build a world class renewable energy industry in the United States. Right now, carbon is not priced, making fossil fuel generation look artificially cheaper than renewables. With a gradually escalating price on carbon that reflects the full social costs of burning fossil fuels, low-emissions fuel sources will find a level playing field with their high-carbon counterparts.

Until carbon is priced and renewables can deploy on a level playing field, we need a national renewable energy standard to build a bridge from our high-carbon electricity system to the low-carbon future. A renewable energy standard that requires power providers to get a certain percentage of their electricity from renewable sources will give the renewables industry certainty. In the electric power sector, we make capital decisions with a 30-year time horizon. We can’t spend billions of dollars to build a clean-energy economy without confidence that demand for low-carbon power will remain strong.

Lastly, we need federal regulators to play a larger role in siting interstate transmission lines – just as they do with other critical national infrastructure such as railroads, interstate highways and natural gas pipelines – and in fairly allocating the cost. Without transmission, renewable energy cannot get from its remote generation locations to our country’s population centers. And without the right policies, we simply cannot develop the necessary transmission lines. In some parts of the country, there is an effort to make wind farmers pay the entire cost of new transmission lines, even though we would never make wheat farmers singlehandedly pay for the highways that carry food to market.

In its recent forecast for the U.S. energy sector, the Energy Information Administration predicted how the world will look in the year 2035 if we simply continue with the energy policies we have in place today: The amount of electricity generated from coal will remain above 40 percent, the amount generated from renewables will be stuck below 20 percent, and carbon dioxide emissions will rise by 9 percent. In other words, a “do nothing” energy policy virtually assures that we will forfeit renewable energy investment and jobs to others and fail to make even a dent in our greenhouse gas emissions.

The United States still has an opportunity to put a policy framework in place that will encourage the development of a vibrant domestic renewable energy industry. We better hurry.