We applaud the President's leadership in starting a serious debate on the concept of a Clean Energy Standard. A CES, properly crafted, gives us two important components:

First, it creates a robust U.S. environment for clean and efficient technologies, which quickens the pace toward a clean energy economy and reestablishes America as the worldwide leader in advanced energy solutions.

Second, by “widening the technology tent” to include not only the traditional renewable technologies, but also nuclear power, coal with carbon capture and sequestration and highly efficient gas turbines, a CES lets utilities, power generators and state and local regulatory authorities choose the best technologies to meet their local circumstances while minimizing the cost to consumers.

By creating an environment for innovative energy technology and a powerful incentive for investments, a Clean Energy Standard that includes aggressive near term targets can spark a wave of technology deployment that will create new jobs, reduce U.S. energy dependence, modernize America’s power generation sector and ensure continued innovation leadership.

At GE Energy, we are committed to inventing and delivering the most advanced clean technologies. We commend President Obama for his proposal and hope Congress will begin a serious debate as quickly as possible.

President Obama challenged the nation during his State of the Union address to join him in working toward generating 80 percent of our electricity with clean energy sources (CES) by 2035. This call is indeed bold, and it merits an honest and thorough discussion among legislators, regulators, industry officials, among many others, if we are to make any progress toward this goal. However, given the current state of our research and development (R & D) efforts generally – and future projections for these efforts throughout the energy industry specifically – this goal will be very difficult to reach.

The discussion of how we are to meet our future energy demand should be based in science and on reasonable economic projections, not wishful thinking or on politically chosen winners and losers among America’s diverse and abundant energy sources. To meet the president’s clean energy challenge, we need to encourage and support our young people who need to recommit to learning those hard sciences necessary to producing and distributing both today’s conventional resources more efficiently and to creating tomorrow’s new energy technologies.

Developing nations such as India and China are now ahead of America in this regard. As John Gapper writes this week in the Financial Times, “The biggest innovation challenge for the U.S. in relation to Asia is not financial but human.” In fact, Gapper goes on to report that 40 percent of new degrees now awarded in China are in science and engineering, whereas in America only 15 percent of new degrees are granted in these disciplines. If we are serious about driving a clean energy revolution here in America, we must ensure that our own cadre of scientists and engineers is able to put us and keep us in the lead.

Unfortunately, the president’s State of the Union message created a degree of uncertainty surrounding our path toward his 2035 goal. Reducing our production of traditional fuels is not the path forward, nor is force-fitting new technologies before their time. America’s energy producers – whether conventional or renewable – stand ready to produce the energy we need. But the marketplace needs to decide what technologies will succeed based on their performance and their costs.

Finally, the regulatory framework which sets the operational boundaries of our energy industry must be developed in light of the responsible protection of human and environmental health and safety as well as insuring economic efficiency. It is vitally important that we not be led by unsubstantiated accusations into applying unwarranted or unnecessary restrictions to inhibit the robust production of our domestic natural gas resources. Natural gas is a clean burning fuel with many applications for buildings and for transportation. Natural gas is readily accessible in major shale deposits in places such as New York, Texas, Pennsylvania and Louisiana; and we have more than sixty years of experience in its production. Do we even need to mention that shale gas offers considerable economic development potential?

Sen. Carper notes that we send $250 billion each year to pay for oil imports. A good portion of that expenditure will be redirected to fuel our own economy when our shale production matures. Natural gas development will lead to jobs, to investment in infrastructure, and to affordable fuel for every family and every business.

For Americans to maintain their standard of living now and into the future, we need to optimize every type of energy we have. If we are to come close to reaching President Obama’s clean energy goal within the next 25 years, policymakers must ensure companies and consumers that government policy is science-based, responsible and consistent. If America is to enjoy a strong economy and an adequate supply of clean energy in the future, three goals will need to be met. In sum, America’s energy policy should recognize that abundant, clean energy sources like natural gas are integral to this future, that significantly increasing the scientific and technical capability of our human talent pool is mandatory, and governmental regulations must be fact-based, thoughtfully considered, and responsibly applied if they are to establish any barriers to domestic production of our energy sources. Only then will we be prepared to heed President Obama’s call.

Dear Senator Carper,

A clean energy standard is most likely to succeed if clean energy technologies are diverse, reliable and affordable. These characteristics are best achieved by having access to a wide range of options produced by a globally competitive “clean tech” sector. Some of the most reliable and affordable technologies and equipment that embody them may be produced in China, Europe, and elsewhere. Even a single piece of clean energy equipment, such as a wind turbine now operating in your neighboring state of Pennsylvania is a complex combination of basic scientific knowledge on aerodynamics developed by a German scientist, Albert Metz in 1919, embodied in a foundation, tower and blades, together which have thousands of components produced and assembled all over the world and installed onsite primarily by U.S. labor. A clean energy standard in the United States, the world’s largest economy, will ensure that our country will add substantially to the demand for and growth of clean energy. But in and of itself a CES does not guarantee U.S. preeminence as suppliers in this market, absent trade protection provisions requiring US-based sourcing, which would generally work against the goals of ensuring the most diverse, reliable, and affordable clean energy sources available. The WTO is weighing in on such cases now.

The United States can position itself for success in the global marketplace, a space that would be greatly expanded by clean energy policies such as a CES, but even more effectively with a price on carbon. But at the core of this success strategy must be a focus on producing clean energy technologies, products and services that are innovative, reliable, and price competitive. Moreover, the U.S. should focus on those parts of the value chain where we have the most comparative advantage. Traditionally this has been on the high value front end such as R&D and product development but also in skilled manufacturing, with less emphasis on assembly and the most exteme labor-intensive activities. But on the back end of the supply chain, there is always the need to put these often large capital structures into place using very traditional “blue collar” positions in construction and transportation.

In summary, mandating demand for clean energy, justified by many environmental and social factors, does not guarantee success in supplying it. Different policies, more in the realm of investments in research, education and training will be necessary for success in the latter. Higher demand, and the opportunities created by it, make the potential payoff to these investments higher, but the investments are still necessary to spur the successful clean technology sector that your question seeks to find.

Good Evening Senator Carper,

First off our largest source of imported oil is Canada. The last time I checked we and the Canadians were on good terms. We also import a lot from Mexico, although in declining amounts. I suppose you mean that we import a lot from the Persian Gulf, where "they don't like us". It is not that they don't like us they really don't like our foreign policies – and even that is not universal. I suggest you visit this part of the world and meet some of the folks.

I have traveled a lot in the Arab world and have never felt threatened or personally disliked for being an American. That is travel of nearly 20 years in the region. I suppose that says something. I have also found the people in that region to be quite hospitable toward guests.

They also do not dislike our freedoms. They want freedoms, and to be treated with dignity and respect, as recent events show. People are people and we need to do a lot on our end to improve our relations with the parts of the world where we may trade goods a lot, but do not trade ideas enough.

If the problem is that we send "$250 billion" overseas to buy oil then I think we should stop buying toys from China? Trade is important. We overuse our oil. They have it. We buy it. It is as simple as that.

I agree that fossil fuels have significant externality costs, as we economist would call them. They cause a lot of pollution, even though per dollar of output the amount of pollution and greenhouse gases produced from coal and oil in this country is much less than it was in the 1950s, for example. This is mostly from the decreased energy intensity in this country, where many of these improvements have come from industry. There are also diplomatic and military costs to having all of this oil being imported. We spend tens of billions to protect sea lanes, pipelines, oil states and more in many ways.

One of the most common missing elements in arguments to change the way we use energy is how much we waste. The typical electricity generation plant loses about 65% of the energy put in dissipated heat, friction, etc. Then there are those pesky transmission losses, distribution losses and then the step up and step down losses along the way, including at the house, factory or building where the voltage is often split. By the time the electron moves into the light bulb, for example, maybe 10% of the energy in the original natural gas, coal, etc used to power the production of the light bulb is left. Then the light bulb sends off more heat then energy and wastes even more of that precious natural gas, coal, etc.

For the typical automobile the story is not much better. Depending on what kind of automobile it is it could lose between 50-70 percent of the gasoline put in just moving the weight of the auto, in break energy losses, in drive train inefficiencies and other wastage of this precious oil based product, most of which is imported.

Consider the Hummvee. It weighs over 13,500 lbs. Now consider what it is typically used for: getting one or two persons to the grocery and back, with maybe a couple of kids in tow. Total weight of cargo and people: maybe 400-600 pounds maximum, depending on the weights of the people, the ages of the children and how many bags of groceries they got in their typical 5 mile ride to go shopping. Miles per gallon? Not good. Most of the oil-based refined gasoline used is for moving the weight of the car, and in moving the typically inefficient and wasteful parts of the Hummvee. In the last three years I have not seen a Hummvee with more than one or two persons in it, so then the problem is multiplied if that is the typical case.

The biggest source of cleaner energy is being more efficient in our energy use. If we want to be more energy secure we should really stop whining about all of the imported oil and start looking in the mirror to see how much of it we are wasting. Almost 97 percent of our road transportation is based on oil products, which are mostly imported. The trucks and automobiles are massive sinks of wasted energy, and, hence, are massive sources of environmental issues. By light-weighting the cars and trucks, making the drive trains, etc more efficient and more we could save much of the $250 billion Senator Carper mentions.

One could say that the largest source of oil (saved oil) and the largest source of reduced CO2 emissions might be found in Detroit and in the manufacturers of electricity generation stations.

Not only that we would be producing less pollutants. Now how about that for a clean energy solution? Now make these autos, trucks progressively more efficient and move them to alternative fuels that we can produce here, such as CNG and the like and we add more to the solution. Biofuels are a less advantageous solution than CNG or certain types of plug in electric vehicles.

Ah, yes, the plug in cars. Nice idea, right? Sure. If we produce the electricity with more efficient electricity generators and smart grid systems that don't waste so much and with cleaner fuels than the coal that we use then we might just have a partial solution.

We also have another problem here. The financing of the maintenance and building of highways is mainly based on the gas tax. So what happens to the Highway Trust Fund when we start to move toward electric cars? There are many subsidiary issues to consider when we talk about changing out methods of transport.

Then there is that pesky problem of importing rare earths and our huge reliance on other imported minerals that are needed for the electric cars, magnets for the windmills, parts for the solar panels and for the surge in production of new and cleaner energy systems.

All of these and other problems with moving from oil so quickly can be resolved. However, targeting 80 percent clean fuels by 2035 seems highly unrealistic given that such a huge change will require a huge number of industries and sub-industries to change at even faster paces and would require gigantic and rapid investments from the private and public sectors that could be in the end somewhat economically destabilizing.

We also have that problem with the Congress having to actually pass energy and climate bills that help changes along. Right.... I am not holding my breath on that one. 2035 may seem far away, but it is only 25 years away. Some industries and methods of transport, heating, cooling, building buildings, etc. will likely change, but it seems a real stretch to think that we could move that rapidly in 25 years to an entirely new economy. Why not say by 2080. That might be more realistic. And it would have a better political ring to it: 80 by 2080. Not bad?

But then there is the following problem: there really is no such thing as clean energy. That term is a misnomer. We should be using the term "cleaner energy". All energy sources cause pollutants and other externality effects. There is no perfectly clean energy. So let us please get our terms correct. We should also should not be focused on the term cleaner fuels, but cleaner energy systems.

80 by 2080?

Even that means a complete reworking of our energy and other systems. Can it be done? We may not have much of a choice to move forward at increasingly faster paces given the problems associated with climate change, peak oil, and, well, indecisive leadership. But we need to move in reasoned and reasonable steps forward. Slogans are slogans, not reasoning.

80 by 2080? But that would also include using more of our vast resources of natural gas as well. This is in many ways a cleaner fuel for transport than what we are using. There are thousands of options for us to look at to smartly move forward. But this also requires strategic thinking and long term thinking, and some real leadership on these issues.

President Obama laid out an ambitious energy agenda during his State of the Union address last week—the centerpiece of which is achieving an 80 percent Clean Energy Standard (CES) by 2035. This is the kind of bold goal needed to spur innovation, competitiveness and domestic power generation. We can do it and, with bold national leadership, we will do it.

Presently, in the absence of a federal mandate, more than 30 states have adopted renewable energy standards. This patchwork approach does not provide the kind of nationwide clarity or certainty that is required to propel significant long-term investment in clean energy technology. Nor does it provide all Americans with access to the economic, environmental and security benefits of reliable, affordable and clean electricity.

The United States needs a national policy roadmap that creates certainty for private investment in clean technologies and flexibility for states, which should be able to choose from a range of alternatives from the clean power mix most appropriate for their needs. A CES will help reduce our dependence on foreign oil, create opportunities for job growth, manufacturing and exports and advance the adoption of low-carbon energy sources.

Some have criticized the president’s proposal for being too inclusive—raising concerns that nuclear, carbon capture and sequestration (CCS) and natural gas should not be defined as clean energy. But, starting with a broad definition could bring divergent voices together to agree on a national policy goal that will enhance our energy and national security.

Industrial efficiency also should be part of this discussion. For example, Congress should consider allowing utilities to meet some portion of a Clean Energy Standard with improvements, such as combined heat and power (CHP or “cogeneration”), which can reduce pollution, enhance competitiveness, create jobs and save money. According to the U.S. Clean Heat and Power Association, CHP systems already in place currently produce nearly eight percent of electric power, saving building owners and industrial facilities more than $5 billion annually in avoided energy costs. CHP is proven technology, which provides clean power and should be a component of a Clean Energy Standard or the subject of a stand-alone national goal.

America can get to an 80 percent CES through innovation and a mix of new and proven technologies that create jobs, limit our dependence on foreign oil and reduce pollution. But, to get there, it will take ambitious leadership from both the administration and Congress.

Last week, during his State of the Union address, President Obama announced that our generation’s Sputnik moment is here, and it is clean energy. Calling on Americans to invest in the future, he cited clean energy as his prime example of how America must reinvent itself to stay competitive in the global economy. As part of this declaration, Obama challenged the country to join him in a new goal—by 2035, generate 80% of America’s electricity from “clean energy sources.”

The reasons for transitioning from fossil fuels to clean energy are numerous—job creation, global competitiveness, reduced childhood asthma, ending our dependence on oil, halting the flow of oil money to hostile regimes. What has gotten lost in the mix recently is safeguarding the health of our planet – species, ecosystems and natural resources – from the impacts of climate change. The buildup of carbon pollution from fossil fuels is the key driver for climate change which is already threatening the integrity of ecosystems around the world.

From the melting sea-ice habitats of polar bears and walruses to warmer sea waters that destroy the coral habitats of fish, we are already seeing the fingerprints of climate change everywhere. Scientists estimate that as warming reaches 2 to 3 °C (3.6 to 5.4 °F) 20-30 percent of plant and animal species face a higher risk of extinction. But we are currently on track to exceed even this level of warming. The National Academies project that global temperatures could increase as much as 6.4 °C (11.5 °F) over the 21^st century. Such an increase would pose even greater risks to the natural systems that people and animals rely on for food, water and prosperity.

Fortunately we do not have to accept this kind of future for ourselves or our children. A new report released today by World Wildlife Fund shows that we have the capacity – using existing technology – to wean ourselves off of fossil fuels in less than 4 decades. We can do this with truly clean energy in a way that supplies all of our energy needs, not just electricity.

In collaboration with energy consultants at Ecofys, WWF developed The Energy Report which outlines a pathway to power the world entirely by renewable energy by the middle of this century—wind, solar, hydropower, geothermal, ocean and biomass alone without natural gas, nuclear or any form of coal. Some say the President’s more modest goal is impossible to reach. Our report shows the opposite: a much more complete clean energy future is in fact achievable.

The Energy Report is one of the most ambitious, science-based examinations yet of a clean energy future on a global scale. It covers all energy needs and the challenge of providing reliable and safe energy to all. Importantly, it uses deliberately conservative assumptions: fossil fuel price increases of no more than two per cent annually, deployment of technologies available today and continuous sustainable renewable energy expansion that ensures protection for ecosystems and species. It is an ambitious but attainable vision that outlines the key changes required to achieve a fully clean energy future and avoid catastrophic climate change.

President Obama is right, our Sputnik moment is here – but this time we already have the technology. To make this renewable energy future a reality what we need most is political leadership to confront this challenge and overcome the obstacles that we’ll face along the way. The president should start by offering a clear blueprint for how to reach the goal of producing 80% of our electricity from truly clean sources by 2035.

This plan should harness the full resources of the federal government to reduce our energy consumption, make our energy and transport infrastructure more efficient, and eliminate any subsidies for polluting fossil fuels. This strategy also should describe how the United States will meet our very modest commitment (reiterated last December in Mexico) to join the world in fighting climate change by reducing our carbon emissions 17% by 2020. The rest of the world is moving forward on clean energy and climate change, it’s time we join them.

Every year the evidence of climate disruption grows stronger, while the competition among countries to become the global leader in clean energy solutions grows fiercer. To meet this challenge, America needs to start moving forward today, advancing the Apollo projects of our generation and heading off one of the greatest threats to humans and nature that the world has ever seen. We have the technology and the vision, it’s now up to all of us, both in Washington and around the country, to choose a safer future.

Thank you to everyone that has commented to date. So far this has been an excellent discussion with a wide range of opinions and proposals. I would like to focus the conversation on job creation. The United States has been a global leader in clean energy technology innovation. Unfortunately for the most part, our innovations are being mass-produced somewhere else besides this country. We design it and China builds it – costing us jobs and billions of dollars in trade deficits. According to a recent Economic Policy Institute study, we import 10 clean energy technology products from China for every one product we export to China. Will a clean energy standard be enough to create a large clean energy manufacturing base in this country? Or do we need companion policies to help manufacturers – and if so – what are these policies?

Applied Materials is committed to helping make President Obama’s clean energy goal a reality – and not way out in the future, but now. Ultimately, the solution to lowering our dependence on fossil fuels lies not in one answer, but in a combination of many. Renewable energy, such as solar and wind, needs investment in research and development – as well as incentives for deployment - to make these energy sources a mainstream reality. Applied Materials works daily around the world to create ways to develop and scale renewable energy and clean technologies

The future of our clean tech industry depends on policy. Not just one policy, but a host of short and long-term policies. We need strong, national initiatives that will encourage and support the clean technology industry over the next two decades and put us on our way to 80 percent clean energy by 2035. Necessary initiatives include manufacturing tax credits, grant programs for deployment, a federal renewable electricity standard and low cost financing for renewable energy that will promote domestic manufacturing and build demand for cleaner energy sources. It is also essential that these policies not favor one energy source over another but instead encourage a broad array. To reach such an ambitious goal, we’ll need all the renewable energy sources we can get.

A strong, innovative domestic market that focuses on clean technology and energy efficiency is also paramount to attaining the ambitious clean energy goal set forth by President Obama. As California has done at the state level with legislation such as AB 32, federal legislation that promotes clean technology development and adoption will put the right foot forward on the path to a cleaner, greener world. Applied Materials continues to operate with energy efficiency as a cornerstone of our work, developing and scaling solutions that make clean energy technologies both possible and affordable.

Meeting the 80% by 2035 goal is not rocket science. At its simplest, it requires only two steps, both of which the President touched on in his State of the Union Address.

1. Stop favoring dirty energy. We are giving too many breaks to energy sources that are wrong for our country and the world. Dirty energy sources like oil and gas are subsidized twice, first with tax breaks and then by allowing carbon dioxide pollution to be free. This double advantage prevents clean energy from competing on a level playing field.

1. Favor clean energy: Develop the clean energy opportunities we know are out there, and shift financial incentives from dirty energy to clean energy. Extend the production tax credit, in the form of grants to offshore wind, for example to give investors some security in these economically difficult times.

Perhaps the greatest opportunity for clean energy in America is wind power. The United States has some of the best wind resources in the world. The National Renewable Energy Laboratory has shown that a full 20% of the United States electricity supply could feasibly come from wind power by 2030. Investors are already seeing the benefits of wind power – we have the world’s second largest installed wind power capacity, trailing China by a razor-thin margin.

Work by Oceana conservatively estimates that wind offshore on the East Coast could generate 65% of current electricity needs of the region (http://na.oceana.org/sites/default/files/Offshore_Wind_Report.pdf). That’s a conservative estimate. At best, east coast offshore wind resources could generate about four times that amount of electricity, or more than twice the coastal states’ current electricity needs.

Given these statistics, its easy to see how we can get to the 80% the President is shooting for.

Despite America’s current lack of offshore wind turbines, the technology certainly exists. Offshore wind in Europe currently generates enough electricity to supply roughly 2.9 million homes. This same technology could be manufactured in the United States, giving rise to a new industry that would employ hundreds of thousands of Americans.

It’s appropriate that Senator Carper is moderating this discussion, because the Senator has been a strong supporter of extending the production tax credit for offshore wind development. I hope the Senator will expand on this in his response. A suite of policies that promote clean energies should be something on which both parties could agree.

Tax incentives like those proposed by Senator Carper should be strengthened and extended to encourage clean energies, electric vehicles, and energy efficiency. By tying these changes to reductions in benefits to fossil fuels we can move emerging technologies towards critical mass, meet the 80% goal, and win the clean energy future.

Interesting blog this week. Liberals like government support/standards for their favorite renewable technologies, alongside government-funded infrastructure. Conservatives like incumbent fossil fuels and project proverbially high policy costs with zero benefits from avoided damages. But the growing "just price carbon" voices in business and NGO's say why not just sell permits, or tax, the 3 fossil fuels - and use the money to keep tax rates on labor and capital low? Our nearly dormant cleantech capital markets will fund mind-boggling energy innovations once emitting co2 is no longer free. Sure, the Government needs to do a few things directly around the grid, nuclear, and existing subsidies...but, speaking of Sputnick, policy isn't rocket science. And, by the way, neither is the irreversible fat-tailed risk of climate damage.

President Obama’s goal—of 80 percent clean energy by 2035—is an ambitious goal, facing a significant stumbling block—capital. Capital concerns arise in two main areas. First, companies are struggling to find, and justify, funding for clean energy development. In this down economy, companies have difficulty competing for clean energy finance. Generally, without government mandates, subsidies, and rebates, clean energy investments do no generate a profitable rate of return. Enlarging such regulatory tools will spur industry growth. More significantly, redirecting and increasing capital flows to clean energy will bring down costs and increase rates of return.

Our government should create an infrastructure conducive to fostering and sustaining clean energy. Infrastructure, in addition to clean energy development, faces the stumbling block of capital. Clean energy companies cannot be expected to finance and resolve infrastructure issues on their own. Resolution and infrastructure development is needed with regard to integration of renewables into the electricity grid, transmission, and increased energy storage. This is an ideal place for government to start.

A lesson from history provides an excellent pathway forward. One of the largest and most successful public infrastructure projects in American history is the creation of the Interstate Highway System. The Federal-Aid Highway Act of 1956 authorized of 25 billion dollars for the construction of 41,000 miles of the Interstate Highway System over a 20-year period. Finance came from a trust fund funded by taxes on gasoline and diesel fuel—two carbon intensive commodities. This fund paid 90 percent of the costs, with states paying the remaining 10 percent. As unpopular as a carbon tax may be today, it is essentially nothing new. With the great success of the development of the Interstate Highway System, why not use a similar carbon tax today to develop clean energy infrastructure? Not only would a moderate tax generate the capital needed to fund infrastructure development, it would also create a greater incentive for investment in clean energy.

This target is well within America’s reach and we can meet it without sacrificing performance or weakening the safeguards that protect our health.

Here is how we do it. We start by driving investment in all cost-effective energy efficiency opportunities – essentially upgrading our homes, offices and factories with high-performance air conditioning and cooling systems, modern insulation, better windows, and more efficient appliances and equipment. McKinsey & Company concluded that tapping America’s efficiency potential will reduce our energy bill by $1.2 trillion by 2020 and create nearly 1 million jobs.

Next, we increase the market share for renewable technologies. At the same time, we must adopt rigorous safeguards to ensure we site all new power in ways that protect our land and water. To the extent that we rely on natural gas as a transition fuel, we must put smart protections in place so that we extract gas in ways that do not endanger public health, our drinking water or our wild landscapes.

There is no need to build any new nuclear plants to meet President Obama’s goal. Indeed, a true clean energy standard would encourage us to leave behind old, dirty technologies we’ve propped up for too long already.

And if we are smart about how we design a clean energy standard, we would save money relative to business as usual, because savings from efficiency measures together with avoided subsidies for dirty power more than offset the cost of temporarily paying more for some renewables until prices come down as their market share expands.

The technology exists to meet Obama’s clean energy target. Whether or not we have the political will is another question. There is bipartisan support for energy efficiency standards and renewable energy requirements, and many states have already put clean energy targets in place. Yet the fossil fuel industries continue to fight clean energy legislation at every turn: the oil and gas industry poured $174 million into the political system in 2009 alone.

Still, the 112^th Congress will likely take up energy legislation in the coming months, and it could move America closer to President Obama’s target. In the meantime, we must not undermine one of the most effective tools we have right now for reducing carbon emissions and promoting cleaner energy: the Clean Air Act. If we hamstring this law, it will make it hard to replace the dirty old power plants with the more sustainable sources that will help us meet a clean energy target.

If implemented, President Obama’s clean energy goal should give American businesses the certainty to make clean energy investments and retool our aging power fleet. By encouraging innovation, this concrete goal will empower American businesses to compete in the global clean energy market, boosting our competitiveness. As Members of Congress including Senator Carper develop a clean energy standard to meet this goal, the details behind the policies matter. Questions policymakers will need to address include:

Do technologies count evenly? For a clean energy standard to be most effective, technologies should compete on an even playing field so that the cleanest, cheapest technologies are the ones that move forward. This lowers overall program costs. Giving certain technologies preferential treatment – for instance, through giving extra credits per megawatt to one technology—could stifle the effectiveness of the standard.

Which technologies count? Policymakers will need to decide if the clean energy standard will provide incentives for truly transformational clean technologies or lock in the outdated technologies of the past. Will they aim to bring solar, wind and other renewable energy options to scale? Will they incentivize the use of new high-efficiency natural gas turbines? Will they prioritize the application of carbon capture and storage (CCS) for conventional technologies? If done right, a clean energy standard can drive innovation and investment while achieving real greenhouse gas emissions reductions. A broad portfolio of technology options should make an 80 percent target by 2035 attainable if we start soon.

How would the federal clean energy standard interact with state policies? Any federal standard must ensure that innovation at the state level is protected. While Congress has struggled for years to pass comprehensive energy legislation, the states have led the way in developing renewable energy standards and other incentives that are driving investments in clean technologies today. Congress must ensure that a federal law doesn’t weaken existing state efforts or hinder states from developing the next wave of transformational energy policies down the road.

Which utilities are subject to the standard? In the past, some federal energy standard proposals have exempted small utilities. The greater the number of utilities exempted from the standard, the harder it will be to reach the 80 percent goal.

Right now, there is no clear path forward for clean power generation in the United States. A clean energy standard will kick start a long-overdue transition to cleaner energy.

It’s important to note, though, that a clean energy standard is not a substitute for policies that regulate greenhouse gases and directly deal with climate change. Greenhouse gas rules and clean energy standards are not mutually exclusive. Much more will be needed to combat climate change, including using existing regulatory authorities and future climate legislation, to avoid the worst impacts. A clean energy goal, however, is a good place to start.

To answer Senator Carper’s question about the attainability of the 80% clean energy goal, we must first ask whether this is for all energy sources or electric power only? Looking at the Energy Information Administration’s data on energy flow within the U.S. economy (http://www.eia.doe.gov/aer/pecss_diagram.html) we see that petroleum and coal together account for about 58 percent of all primary energy sources; the remaining 42 percent fall into the other categories that President Obama mentioned as “clean” sources – natural gas, renewables (hydro, wind, solar, and biomass), and nuclear. If we look at electric power, 48 percent is sourced by coal, 1 percent petroleum and the other 51 percent is from the alternate sources.

Electric power is where most policies described as “clean energy” are focused, such as the clean energy standards discussion now taking place in Congress. Getting to 80 percent clean electricity would essentially mean cutting conventional coal from half the feedstock to at most one-fifth and replacing that capacity with clean coal (e.g., carbon capture and storage, possibly with gasification combustion technology), natural gas, nuclear and renewables. Putting aside whether these alternate sources are indeed clean – I refer the reader to other commenters on this blog for that – the issue remains whether they are attainable. One can look at EIA’s recent analysis of the Waxman-Markey climate bill (http://www.eia.doe.gov/oiaf/servicerpt/hr2454/index.html) for an indication. EIA projects that by 2030 (its model projections do not go beyond that point) that coal would be 30% of the electric power mix under a Waxman-Markey economywide carbon cap. Thus, 80% of electricity from non-coal sources by 2035 would not seem out of the question, or at least within the realm of model projection. According to EIA, where is the rest of the power needs met? Primarily through expansion of nuclear (from 22 percent of the mix to 36 percent) and renewables (from 11 percent to 20). Some have questioned whether such an expansion in nuclear capacity is possible, given concerns about storage, safety, and costs. Moreover, such an expansion of renewables would require investment in the transmission grid to primary sources of renewable generation, such as wind, that is not always near the current grid. Policy supplements for loan guarantees and other assurances for nuclear, and federal government stimulus money for grid expansion are seen as ways to help make this happen.

Taking the entire economy, rather than just the electric power sector, to the 80 percent target is a significantly tougher task, requiring significant decarbonization of the transportation sector, which is now fueled almost entirely by petroleum. This would require electrification of vehicles or use of natural gas in vehicles, substantially higher fuel economy, or radically altered public transportation infrastructure (and use) on a grand scale.

Getting the entire economy to 80 percent clean sources will probably require something even more impressive than the Sputnick/Apollo moment President Obama alluded to in his address. And even with a space age like commitment to clean energy, the problem still requires more than just science and engineering solutions, but the arguably tougher hurdle of behavioral change (see my previous National Journal blog post from Cancun, “Forging a Climate Agreement: It’s Not Rocket Science, It’s Harder” http://climate.nationaljournal.com/2010/12/forging-a-climate-agreement-is.php#167705).

The 80% electric power target seems plausible, given the technologies today and on the horizon. But plausible still involves costs. EIA shows that meeting the Waxman-Markey targets would raise power prices to about 12 cents per kilowatt hour in 2030 (in 2007$), up about 2 cents from the reference level. Since that gets you 70% of the 80%, the additional stringency will cost a little more. Demand side efficiency responses will cut this burden in half by lowering usage. Macroeconomic indicators are barely nudged by a policy response of this magnitude, though effects are uneven across regions within the country.

Whether these higher costs are worth it depends on how you view the costs of continued reliance on fossil-heavy sources of energy. Most scientists and economists who study the issue think that the costs of greenhouse gases accumulating in the atmosphere and the release of local pollutants like particulate matter, sulphur dioxide and nitrogen oxides from fossil fuel combustion are higher than the costs of switching to alternatives and increasing efficiency. Senator Carper’s views have apparently been informed by the many political scientists and defense experts who also think that reduced reliance on (at least imported) forms of fossil energy is a threat to our national security. It is impossible to say whether 80 percent is the magic number, it could be lower or higher. But embarking on a path to get there does not preclude adjustment in the future.

A percentage target for clean energy, however is at best, a second best approach to environmental, economic, and security goals – one that stresses the numerator (generation mix) over the denominator (power production and use). Energy efficiency means lowering the denominator, not the mix, and policies should be at least as interested in that objective, given that it has clear economic benefits (energy cost reduction) as well as environmental and security. An advantage of approaches that price carbon, either cap-and-trade or a strong and rising tax on carbon, is that it works not only to reduce the numerator by encouraging cleaner generation, it also provides strong incentives for energy (and carbon) efficiency.

Finding new, sustainable and domestic sources of energy is a national imperative that is perhaps distorted by setting any goal of any percentage of “clean” energy by any date. It’s clear that the U.S. cannot continue to rely on imported petroleum from unfriendly countries because international competition for this limited resource will continue to push its price upward and drive production toward increasingly costly and environmentally unsound offshore sources. But it is unclear what qualifies as “clean” energy.

The United States relies on petroleum not just for energy, but also for nearly every consumer product on the market today. To reduce reliance on imported oil, new and sustainable chemical feedstocks must be found to replace the entire barrel of oil, including plastics, chemicals and transportation fuels. Many new feedstocks and energy sources will be needed. The key will be to judge which can be produced domestically and sustainably.

The sustainability of biofuel production in the United States has undergone the equivalent of a TSA airport screening over the past few years, unlike many other claimed “clean” energy sources. EPA has determined that biofuels produced with the most up-to-date technology will meet clean air goals, and it has already recognized that chemicals produced with the same technology can reduce pollution.

The United States has the potential to lead the world in using renewable resources for energy, fuels, chemicals and materials. We are already a leader in agricultural productivity and manufacturing infrastructure, and with biotechnology we can capitalize on that lead while generating thousands of new green jobs.

What is most needed is a firm commitment to reducing reliance on foreign oil, building a stronger economy and improving the environment. Federal policy should encourage commercial development of innovative technologies by helping to mitigate the risks of investment in first of a kind technologies and facilities. It should also support growers and land owners in the sustainable production of wood, grasses, energy crops and algae and deployment of biotechnology to improve productivity.

Designing a Clean Energy Standard

Kyle Danish and Curt Moffatt

President Obama’s announcement of support for a Clean Energy Standard (CES) is attracting increased attention to an idea that has been in play in various forms for the past two years. Our firm has been significantly involved in CES-related efforts—including the CES bills introduced by Senators Lindsey Graham (R-SC) and Richard Lugar (R-IN) in the last Congress (S. 20 and S. 3464, respectively). In addition, we advised clients on the Renewable Electricity Standard that was part of S. 1462, (the American Clean Energy Leadership Act or ACELA); ACELA was reported from the Senate Committee on Energy and Natural Resources in June 2009.

In our experience, any Congressional debate on a CES bill will likely revolve around the following design issues:

· Targets and timing. Key variables for the CES will include the date upon which the CES takes effect, any interim deployment targets before 2035, and any continuing obligations after 2035.

· Treatment of renewables and energy efficiency. One objection raised to CES proposals is that such policies may not adequately support the deployment of renewable resources or encourage energy efficiency investments. To address these concerns, some CES proposals have included a separate renewables purchase obligation to ensure utilization of a minimum quantity of renewable resources. Further, the Graham, Lugar, and ACELA bills allowed electricity savings from energy efficiency projects to qualify for crediting—although the Graham and ACELA bills placed stringent limits on degree to which such credits could count toward the overall goal.

· Treatment of natural gas and carbon capture and sequestration (CCS). The President’s proposal recommends issuing “partial credits” for CES compliance to “efficient” natural gas generation and coal with CCS. Whether such generation must meet minimum levels of emissions performance or efficiency in order to qualify for the CES, and the manner in which partial or discounted credits are calculated, will be salient political issues for utilities and fossil fuel suppliers.

· Cost containment provisions. The Lugar and Graham CES proposals, along with ACELA, allowed utilities to comply with the mandate by paying a fixed fee (ranging from 2.5 cents to 5 cents per kiloWatt-hour) in lieu of surrendering credits. Such a policy would effectively place a ceiling on the price of CES credits, providing some assurance as to the maximum cost of the policy and aiding in long-term planning for utilities and large electricity consumers.

· Scope. Small public and rural utilities, which may face relative difficulty in complying with a CES, may attempt to seek exemptions from a CES mandate. The Graham and ACELA bills, for example, exempted utilities with sales of less than 4 million megaWatt-hours per year.

· Bonus crediting. Some CES proposals have provided “bonus” credits to provide incentives to sources facing high market barriers, such as small distributed renewable generation.

· New and incremental generation versus existing units. Some prior CES proposals credited only new or expanded generating capacity. Others credited existing clean generation that is dispatched at higher incremental levels.

· Interaction with state RPS programs. A federal CES could create complicated policy interactions if overlaid on an existing state-level RPS. Congress may debate whether state-issued RPS credits should be eligible for compliance with a federal CES, and how enforcement of overlapping mandates should be coordinated.

· Linkages to other proposed federal regulatory programs. Although the contours of a political bargain involving the CES remain unclear, there have been discussions among key Congressional Members regarding linkage of a CES to modifications of other federal regulations affecting the power sector—in particular, EPA initiatives to regulate emissions of GHGs under the New Source Review and New Source Performance Standards provisions of the Clean Air Act.

Whether a CES becomes law depends in part on the extent to which the resolution of these policy issues addresses major political hurdles that have prevented progress on recent energy policy initiatives—including regional differences in energy costs and availability; the concerns of manufacturers, retail customers, and other users of energy; and the interests of competing suppliers of fuel, thermal energy, and electricity. Continued weakness in the economy and the impending presidential election further complicate the political backdrop for a CES. Nonetheless, the Administration’s support for a CES gives critical impetus to the measure at a time when long-term policy drivers—including EPA regulation of GHGs, concerns over the security and diversity of the nation’s energy supply, and climate change—continue to place energy and climate policy high on the national agenda.

Kyle Danish and Curt Moffatt are Members in the Washington, D.C. office of Van Ness Feldman, P.C.

(These comments were submitted by Joshua Freed, Director of the Clean Energy Program at Third Way)

After the Senate stiff-armed every important clean energy idea that crossed its path last year – cap and trade, oil drilling reform, even a clean energy bank – the President called for energy reform to move in a new direction. This new approach, a Clean Energy Standard, has the potential to achieve the results Senator Carper highlights: American innovation and production of clean energy technologies, including wind, solar and nuclear by setting an ambitious but eminently achievable goal.

It is the right policy at the right time.

With fewer clean energy advocates in the Senate and a Republican-controlled House, prospects for reform would appear even dimmer for 2011 than 2010. But with energy use increasing, new power plants being put on the drawing board and China aggressively pursuing clean energy and its $2 trillion payday, the United States cannot sit on the sidelines another two years.

There is a way to get energy reform back on the right path. Conveniently, it also helps overcome market failures in the United States that are restraining the deployment of clean energy, including solar, wind, waste-to-energy and nuclear power: a Clean Energy Standard (CES). Done correctly, it could also provide incentives for deployment of new and emerging technologies to help spur American innovation.

This could reduce pollution, provide utilities the certainty they need to build new wind, solar and hydro as well as nuclear power and carbon capture and storage for coal and natural gas, and create new jobs. As important, it would create a disincentive to build conventional new coal plants. This idea has growing bipartisan support in parts of the country, the South and Midwest, which have shown the most opposition to previous proposal.

A CES that does not pre-empt tougher existing state energy standards helps encourage clean energy in every region of the country without creating a one-size-fits-all solution to a complex problem. It avoids picking technological winners and losers. It also can get results. An analysis by Resources for the Future determined that a CES could actually achieve most of the carbon emissions reductions of a Renewable Energy Standard, but at just 68 percent of the cost.

That’s why Energy Secretary Stephen Chu voiced support for a CES at a Third Way event on the future of nuclear power in December. It’s why we released a report calling for one earlier this month.

This is important for clean energy advocates and climate hawks not just because there will be more renewable generation and less pollution in the air. It shows that we can get votes and win policy victories. That is what gets noticed in Washington, DC and in state capitals around the country. Policy successes, even smaller national ones, are replicated and expanded. As important, a CES victory would help push back against efforts by opponents of clean energy and climate to marginalize reform and gut existing protections like the Clean Air Act.

Is it perfect? No.

Will it single-handedly spur the transition from conventional fuels to clean energy? Of course not.

A CES, however, will make a real difference in encouraging utilities to build more renewable and other clean power. It will help the US compete in the enormous global clean energy market. It will reduce pollution. It’s a win for the sector, the environment and the country. That more than anything is what we need.

Jon Anda’s citation of EIA’s assumption about generally no change in laws or regulation seems to be a way of dismissing my citation of the agency’s energy outlook for 2035. Implicit in his comment seems to be the assumption that laws and regulations will only cut in one direction--restricting the use of fossil energy. While no one would claim that the status quo will persist for two decades, no one should also assume that changes in laws in regulation will force deep reductions in fossil energy use.

EIA’s annual outlook, which is consistent with IEA’s, is the most credible forecast available. The purpose in citing the EIA numbers was two-fold.

First, Congress has passed several energy bills in the past 15 years, and EPA continues to churn out regulations affecting energy use. But fossil energy has continued to provide 80% of our energy needs. Under any plausible technology and economic assumptions, it is hard to see how fossil energy will not remain our major source of power generation and transportation fuels for a long time to come.

Second, achieving the President’s goal, while restoring robust economic growth, is a herculean challenge. While there is a lot of hand waving about the potential of so called “clean energy,” I am not aware of any plan for how it can realistically achieved. A top-down set of mandates might look realistic from an engineering perspective but they become less so in the real world where politics, economics, and technological realities become the dominant drivers.

Hybrid vehicles remain more expensive than their gasoline counterparts in part because there are two power systems and expensive battery packs. And, the NAS does not foresee any significant reduction in battery costs on the horizon. Tax credits can induce some to buy these vehicles but that just makes deficit reduction that much harder. Furthermore, a lot of suburban families need full size or cross-over vehicles to meet their mobility needs.

Even if hybrids in all of their variations represented 25% of the vehicle fleet in 2035, there would still be around 200 gasoline and diesel vehicles on the road.

The turnover rate for power plants is not rapid and there are limits -- financial, engineering, material, and manpower -- to how many new plants can be permitted and brought on line annually. Attempting to force utilities to turnover their facilities faster and replace them with so-called “clean energy” will drive up the cost of construction and the cost of energy.

Instead of picking an arbitrary target and time table, our economy would be better served by creating incentives for rational turnover and investments in new technologies which can be deployed when they are commercially viable. The market is moving the utility industry from coal to natural gas which reduces carbon emissions but the other lower carbon alternatives remain more expensive or not ready for prime time.

If Mr. Anda has a plan to achieve the 80% goal while supporting a growing economy and being politically viable, he should lay it out for scrutiny and review. Plans to auction permits upstream, otherwise known and cap and trade, have had a well deserved burial and a tax on carbon is only going to be viable in the context of comprehensive tax reform.

Can America reach Obama’s clean energy mandate? Of course we can, but how much will it cost? How much will it increase energy prices? How many American jobs will it cost? How many more businesses will leave America never to return?

Before we follow the President and mandate that 80 percent of our electricity comes from politically-preferred sources, we need to understand history and our true energy situation. History shows us that there is no example of government mandates working to create a commercially viable alternative energy product. We can achieve the President’s mandate, but using non-commercially viable technologies mean that we will be paying far more for our energy than otherwise.

As for our true energy situation, implicit in the President’s energy mandate is that America is energy-poor. This assumption could not be more wrong. The U.S. is the world’s third largest oil producer. We are the world’s largest natural gas producer, and we are the world’s second largest coal producer (we have, by far, the world’s largest coal reserves). We could be producing much more of our energy domestically, but the Obama administration continues to battle against domestic oil, natural gas, and coal production.

The administration only leases 3 percent of federal lands for energy production, and despite this handicap we produce large amounts of oil, natural gas, and coal. The administration’s de facto moratorium in the Gulf of Mexico means that oil production will continue to decline and the price at the pump will continue to rise.

The administration is also fighting a war against coal. EPA’s regulations make it almost impossible to build new coal-fired power plants. EPA also vetoed a permit for a new coal mine, not because the mine would harm human health—EPA admits the mine meets those requirements—but because the mine might harm mayflies, stoneflies, and caddisflies.

These are just a few of the many examples of the administration fighting affordable energy production. We could reduce our use of foreign oil, if we had access to more energy sources here at home. But administration after administration, Democratic and Republican, have put roadblocks in front of our own domestic resources.

If Senator Carper would like to reduce our use of foreign oil, the easiest, most cost-effective solution is to get the federal government out of the way and give America's energy producers access to America’s energy resources. Unlike wind and solar production, oil and gas companies pay billions in taxes and create millions of jobs, and they don't need government set-asides, grants and mandates to exist in the marketplace.

Last week, in the State of the Union, the President raised the specter of an economically ascendant China. Our trade deficit with China is $250 billion a year. We can’t compete with China on labor costs, so it is of paramount importance to keep other costs low—such as the cost of energy.

But the President’s plan will make energy prices increase. This isn’t a glitch, but a feature. The clean energy mandate is nothing more than cap-and-trade recycled. And before he was elected, Obama said that his cap-and-trade plan would make electricity prices “necessarily skyrocket.”

It is simply not true that imposing arbitrary constraints on electricity producers will “create jobs.” We know from experience—both in the U.S. and abroad—that the federal government can’t overturn economic reality by issuing decrees from Washington. Renewables like wind and solar have been subsidized for the last 30 years and yet today those two sources produce less than 1 percent of total energy use. Worse, after more than 30 years of subsidies, they still claim they need these massive subsidies and mandates to compete. What is standing in the way of wind and solar “competitiveness” is that they are expensive and unreliable forms of energy. International experience in Spain, Germany, and Denmark shows that massive subsidies for wind and solar do not create jobs. In fact, the Spanish study showed that it these subsidies cost 2.2 jobs per job created as an opportunity cost.

Americans should work to compete with China economically, but to compete, we need low, not skyrocketing, energy prices. If the President is serious about creating American jobs, and not sending more jobs offshore, then he will stop his war on affordable energy and allow us to produce the plentiful oil, coal, and natural gas resources we own right here at home.

Pursuing the Holy Grail of clean energy has become an oft-repeated mantra by many of America’s political and business leaders, including President Barack Obama who proclaimed in his recent State of the Union message that we should aim for 80 percent clean energy by 2035. If we substitute the term “cleaner” for “clean,” there’s a good chance we can realize that 80 percent goal. Here’s how.

First, we get serious about reviving the nation’s nuclear power industry. Nuclear energy is the cleanest of all, but we haven’t built a new plant in almost 30 years. This won’t happen unless the pool of federal loan guarantees for nuclear plant construction is increased and the terms are modified to offer reasonable premium and repayment terms.

At the same time, uncertainties over the Yucca Mountain repository must be resolved. If Yucca or an alternative site for permanent waste storage is not approved, the electric power industry is not likely to build new plants. At the same time, nuclear fuel reprocessing should be resumed in the U.S. as a way to reduce the physical volume of nuclear waste.

The second path to a cleaner energy future is greater use of natural gas for power generation, industrial boilers, and transportation. Greenhouse gas emissions (GHG) from the combustion of natural gas in power plants and industrial boilers are 44 percent lower than with coal and 29 percent lower than oil. When used to power motor vehicles, natural gas produces 23 percent less GHG than diesel and 30 percent less than gasoline.

Importantly, nuclear and natural gas are both domestic energy resources. Several weeks ago, the U.S. Department of Energy more than doubled its estimates of recoverable shale gas to 827 trillion cubic feet. These reserves are equivalent to 140 billion barrels of oil, more than the proven reserves of Iran, and would supply enough gas at current usage levels for up to 150 years.

Last year, the tab for imported oil totaled $260 billion and accounted for roughly half of our trade deficit. With economic growth accelerating, and oil prices rising, this year’s tab could exceed $300 billion. America’s growing reliance on imported oil is good neither for our economy, our national security, nor the quest for cleaner energy.

"Under the assumption that current laws and regulations will remain generally unchanged throughout the projections, the AEO2011 reference case…" - line from the first paragraph of EIA's AEO2011 Early Release

"According to the EIA’s report, “coal remains the dominant energy source for electricity generation"" - quote from William O'Keefe (1/31 NJ blog post)

An 80% reduction by 2035 in co2 from electric power...assuming full carbon accounting for natural gas if included in a utility low carbon energy standard...would achieve roughly a 25% reduction in total U.S. greenhouse gas emissions by 2035 relative to 2008 levels. This modest reduction, of course, comes from the LCES exclusion of non-electric energy and non-energy greenhouse gases.

Maybe that's why the 2003 McCain-Lieberman Bill was an economy-wide cap. What has changed since those Senators led from the center with a (tested) market-based solution? Other than politics...higher projected climate damages, direct evidence of climate change in ice-oceans-species, Copenhagen commitments affirmed in Cancun, both massive oil company profits and a massive oil spill, ongoing instability of our Middle East oil suppliers, and a far more pressing need for revenue from selling co2 permits (or taxing co2) to balance the budget while keeping personal and corporate tax rates low.

Notwithstanding all of this, apparently the President feels the need to cut a limited deal. And given the dire straits of American clean technology development, maybe that deal (with lots of bells and whistles around R&D, vehicle & fuel standards, nuclear, CCS, and smart grid) will end up kick-starting a low carbon economy that abates far more than 25% of emissions. But Obama's lack of the word "climate" in his speech doesn't set a clear path to stringency or bells and whistles...let alone vociferous support of EPA greenhouse gas rules if legislation fails.

If there is beauty in the President's proposal, it will lie in the details. And a few details from the recent IEA World Energy Outlook might just humble us back to John Doerr's simple advice to "just price carbon". IEA scenarios of U.S. energy in 2035 highlight the huge rebalancing needed to conform to a 2 degree goal:

Change in Total Primary Energy Demand (mtoe's) - from WEO 2010
2035 "450ppm scenario" less 2035 "Current Policies scenario"

Coal -282

Oil -214

Bio-Waste +125

Renewables +123

Natural Gas -110

Nuclear +84

Total -274 = demand reduction (i.e. energy efficiency)

Not to say this scenario is definitive. But the President's State of the Union indication of support for a utility-only LCES would need serious stringency and a plethora of bells and whistles, in many non-utility sectors...to come anywhere close to the "energy rebalancing" necessary for the US to claim support of 450ppm and 2 degrees.

My answer to the Senator's question is to auction upstream permits based on the co2 content of coal, oil and natural gas (or just tax them on that basis) and use the proceeds to cut tax rates on labor and capital. If you support free markets...yet see how the greenhouse gas externality makes markets fail...that approach would be best for the economy and best to unleash competitive forces in U.S. technology (as opposed to the incumbency forces at work now). And, it is the most conservative.

Whatever one says about the President’s clean energy goals as articulated in his State of the Union speech, one thing is clear: the English language certainly is pliable. Even if one can forgive Mr. Obama for failing to mention climate change or global warming once (not even once!), the word “clean” cannot be every person’s subjective fantasy. Nuclear energy, for instance, is not clean; no one knows what to do with the waste and uranium mining is an incredibly dirty and harmful process. Clean coal is a complete oxymoron; we are only entertaining the expenditure of multiple billions of dollars for questionable carbon sequestration initiatives because the body politic believes it must bow down to the dirtiest energy source in history. And then there are “biofuels,” which have a lot of different meanings (e.g., wood, cellulose, various synthetic alternatives) but whose overall carbon footprint could easily be as large as oil (no wonder Shell and Chevron have taken such a liking). Even natural gas, many people’s miracle “bridge fuel”, creates oceans of dirty water through fracking and has itself recently been shown to have a very large carbon footprint because of exploration, extraction and transportation challenges.

Senator Carper, does the Congress have the fortitude to finally ban all government subsidies to dirty fuels? Will we allow our successful environmental laws such as the Clean Air Act to actually do their work? Lastly, why is the Senate, supposedly the most deliberative body in the world, so scared to acknowledge the scientific consensus that atmospheric greenhouse pollutants must be reduced significantly within a decade (e.g., to 350 parts per million of carbon dioxide). 80 percent “clean energy” by 2035 sounds good at first blush, and I’m sure the focus groups became very jazzed about it, but are we answering the wrong question (notwithstanding the Alice in Wonderland nature of “clean”)?

Responding to this involves two lines of thought. The first is the value proposition, and the second is the 80% clean energy goal by 2035.

There’s a big difference between government creating a level playing field to give a wide range of businesses a chance to compete and government deciding which of those businesses should win or lose. Lawmakers should maintain a tax and regulatory regime aimed at encouraging innovation and competition among producers, both domestic and foreign.

The notion that oil consumption is intrinsically bad is simply wrong and harkens back to the era of mercantilism. To claim that our reliance on fossil energy costs the “lives of tens of thousands of Americans each year” is pure demagoguery. In fact, access to reliable and affordable energy sources has enabled America to create the wealth that has helped increase our longevity, lower infant mortality, delay onset of chronic disease, and increase our quality of life overall. From an environmental perspective, our air quality today is better than at any time in the past.

If we want to have an honest debate about the role of fossil fuels in our economy and the future of alternatives, then we ought to stick with facts and objective analyses.

The Energy Information Administration’s (EIA) latest long-term outlook presents some conclusions that undermine the President’s 80 percent goal and shows how foolish it is to pursue the impossible. Challenges are great, but they ought to be achievable. The White House’s clean energy mandate is not.

According to the EIA’s report, “coal remains the dominant energy source for electricity generation ... [and] the generation share from renewable resources increases from 11 percent in 2009 to 14 percent in 2035.” Analysts expect renewables, including biomass for transportation, to grow from 7 percent in 2009 to 13 percent in 2035. That is an impressive rate of growth given that total energy use is only projected to grow 28 percent over the same period.

There is no serious analysis that demonstrates renewables’ share of our energy budget can feasibly grow more than an order of magnitude growth in a little over two decades.

The technological advances necessary to enable solar and wind power to be commercially competitive without large subsidies are not in sight. Even if they were, the land mass required for such a large-scale deployment would be economically and environmentally problematic. And since both sources are both intermittent, we would still need conventional base load capacity. As for biomass in transportation, cellulosic ethanol technology is a long way off. And without it, increasingly more crops have to go from food production to ethanol production.

If the “recovering governor” doesn’t like imports, he should become an advocate for increased domestic production. A rational energy policy would allow our domestic energy firms to produce on the order of an additional 2 million barrels a day. Every barrel we produce here is a barrel that we don’t import and represents domestic investment that produces jobs and contributes to a stronger economy.

Too often, energy and technology policy conflicts with realities -- economic, technical, or energy. Government can rarely mandate the future. New and lower carbon energy systems require a sustained program of R&D and a stable business climate to encourage the investments needed to bring those new systems to the market.

What we need as much as sound policy are political leaders who know that like King Canute they cannot command the seas to behave.

Yes, we believe the President's goal is definitely attainable.

We are pleased to see the possibility of the first predictable long-term federal policy toward renewable energy. But of course we'll need to make sure the policy really deploys the renewable energy Americans want in the near term, as well as the long term. We've got to more than double the renewable portion to have a truly diversified portfolio.

Wind energy can deliver right now on its promise to deliver new electricity to Americans more affordably than any other energy source, if we have a level playing field to compete with the permanent entitlements that fossil fuels have enjoyed for over 90 years. Even after that multi-decade head start, fossil fuels still receive five times more in federal incentives than renewable energy. We don't believe that is in line with Americans' current priorities.

Further, the predictability of the permanent incentives for conventional energy sources is as important as the amounts. Renewable energy currently suffers from the inability to predict whether incentives will be extended every year or two.

It's time to reorient the tax code to predictable policies that allow energy sources that will never run out, to thrive -- instead of keeping renewable energy on a constant one-year footing.

From a jobs perspective, we believe a priority focus should be deploying clean energy sources over the next few years. Wind energy is ready to go now; we don't need to wait nearly three decades.

By 2030 wind can be up to 20% of the electric supply all by itself, according to a study by the George W. Bush administration. And it insources jobs and investment into America. That's what our industry is doing to make good on this national commitment to clean energy and economic growth.

We applaud the president's emphasis on innovation and ingenuity, and getting more jobs from clean energy. Wind energy has improved its efficiency 40% in five years. In tight budget years, it makes sense to invest our money in that kind of new technology.

We look forward to working with the new majority in the House and leaders in the Senate to diversity America's energy portfolio and foster renewed economic growth.