(These comments were submitted by Rob Mosher, Director of Government Relations at the Alliance to Save Energy.)

While today’s economic and political challenges make it increasingly difficult to advance national energy policy, energy efficiency – the quickest, cheapest, cleanest way to tackle growing energy demand – should be the first fuel of the future.

Bipartisan, affordable energy efficiency initiatives save money, lessen dependence on imported energy sources, reduce pollution and improve America’s global competitiveness. That’s because no one is in favor of wasting energy, and the cheapest fuel will always be the energy that we do not use.

Without the numerous energy efficiency improvements made since 1973, the United States would have required an additional 50 percent more energy to power our current economy. And even with those efficiency gains, U.S. energy requirements are still projected to increase roughly 20 percent by 2035, according to the U.S. Energy Information Administration.

But by offering extraordinary value for consumers and domestic businesses – saving them money – energy efficiency can help meet our growing needs and must be a critical component of ongoing efforts to reduce spending and spur economic growth.

In keeping with that approach, Congress should advance the bill authored by Sens. Jeanne Shaheen (D-N.H.) and Rob Portman (R-Ohio) that would implement several energy efficiency measures to lower energy costs and create jobs in the commercial, residential and industrial sectors. Congress should also adopt the bill sponsored by Sens. Jeff Bingaman (D-N.M.) and Lisa Murkowski (R-Alaska) to enact consensus appliance efficiency standards developed by manufacturers, efficiency advocates, states and consumer groups.

Taken together, Shaheen-Portman and the standards measure would save billions in energy costs over the next two decades and provide tens of thousands of jobs by facilitating the production and deployment of domestic energy efficiency technologies.

Similarly, we call on policy makers to pass bipartisan proposals that would help homeowners finance improved energy efficiency in their homes and then pay back the financed up-front costs out of their utility bills savings. Sens. Michael Bennet (D-Colo.) and Johnny Isakson’s (R-Ga.) bill would help recognize the value of efficiency in mortgage caps, and a bill from Reps..Nan Hayworth (R-N.Y.) and Mike Thompson (D-Calif.) would enable local governments to finance home energy efficiency projects and then get paid back using an adder on the property tax bills.

At a time when too many Americans are suffering financial hardships, energy efficiency offers real solutions that would not only help alleviate their pain, but would also deal with the short- and long-term economic, environmental and national security problems associated with rising energy use. Significantly, energy efficiency also gives Congress the opportunity to demonstrate considerable leadership by responding to the electorate’s call for bipartisan action to help the economy during this most critical moment.

Setting greenhouse gas performance standards for new and existing coal-fired power plants has to be THE environmental, energy, and climate policy priority for 2012. Given the carbon footprint of this industry, building a new coal fired power plant without some level of carbon dioxide control is simply not justifiable technically, politically, or even economically. Cleaning plants up later costs more than building them with clean technology now.

The first of these U.S. EPA rules is now under review at the Office of Management and Budget, and EPA must finalize the rule in the late spring, under a consent decree with environmental groups. This rule is critical because coal-fired power plants are the largest stationary sources of carbon dioxide air pollution – and there is now available control technology permitting deep reductions, as we are seeing with the first applications for plants that capture and sequester carbon dioxide.

EPA’s recent actions in finalizing the Mercury and Air Toxics Rule and the Cross-State Air Pollution Rule are excellent protections for public health – but they simply won’t get significant carbon dioxide reductions from new or existing coal plants. Cost-effective controls exist to meet these rules without retiring many existing units, but those controls do not have any impact on carbon dioxide emissions. So, the MATS and the CSAPR --when implemented, as we are confident they will be -- are not a substitute for a performance standard for CO2 emitted by coal fired power plants. And, to the extent that the power industry seeks “regulatory certainty” these new source performance standards are very timely – as they complete EPA’s multi-pollutant strategy for the power sector, providing critical information for planning for power sector transition in the coming decades.

We expect President Obama to continue to stand strong on the need to bring the electric generating sector into the 21^st century. Issuing CO2 performance standards for this industry is an absolutely necessary step if the Administration has a hope of meeting its commitment to a 17 percent reduction below 2005 levels by 2020. Moreover, the Supreme Court’s recent decision in AEP v. Connecticut, denying private plaintiffs the right to sue power plant owners over climate damage, is based on the assumption that these standards will come out in the near term, and be established at levels that actually address the significant climate impact from this industry.

Most policy insiders are writing off the prospects of Congress being able to move meaningful energy legislation in 2012. Between partisan gridlock and the frenzy of the presidential campaign, experts are saying that chances are nil that this Congress can pass an energy bill of any significance.

I have a contrarian view. It’s true that a comprehensive energy package probably won’t become law this year. But legislation that creates jobs by championing grassroots energy efficiency without worsening the federal deficit has a decent chance to pass both chambers in 2012. Congress is also likely to extend – and hopefully expand – a range of tax credits that give home- and building owners the financial incentive to invest in greater amounts of insulation and other measures that save energy and cut back on utility bills.

The energy efficiency vehicle that has the best chance to gain momentum this year is the SAVE (Sensible Accounting to Value Energy) Act. Why? It not only has strong bipartisan backing on the Hill but has attracted support from a wide-ranging coalition, including such strange bedfellows as the U.S. Chamber of Commerce, the American Gas Association, the National Association of Manufacturers, and the Leading Builders of America, along with the Natural Resources Defense Council, the U.S. Green Building Council, and the Center for American Progress, among others. These disparate groups recognize that the SAVE Act would generate immediate economic benefits, spurring job growth in sectors that sorely need it.

How? The SAVE Act would correct "blind spots" in federal mortgage underwriting and home appraisals that don’t accurately reflect true energy costs. Unveiled last fall by Senators Michael Bennet (D-CO) and Johnny Isakson (R-GA), the SAVE Act would stimulate greater investment in energy efficiency by making homeowners appreciate just how much money they could save.

The SAVE Act’s economic impact is nothing to ignore. Enacting it would, according to a study from The American Council for an Energy-Efficient Economy, create some 83,000 new jobs in construction, renovation and manufacturing over the next decade.

Another bipartisan energy efficiency initiative that would be a powerful antidote to our ailing economy without exacerbating the federal deficit is the Property-Assessed Clean Energy (PACE ) Assessment Protection Act. Sponsored by Representatives Nan Hayworth (R-NY), Dan Lungren (R-CA), and Mike Thompson (D-CA), the bill is aimed at restoring the PACE program’s promise by bringing together small businesses and local governments to ensure accurate residential property assessments. A revived PACE would also spur greater residential investment in energy efficiency. One study suggests that if just one percent of America’s homes were retrofitted through PACE, some 226,000 jobs would be created across the country, generating $42 billion in economic activity.

One of the most important tools the federal government has for encouraging energy efficiency in homes and commercial structures is the tax code. Since 2005, incentives have driven efforts to improve both the energy efficiency of new homes through a provision known as 45L, as well as the energy retrofitting of existing homes – through a provision known as 25C. These credits have driven significant energy efficiency gains in American homes. Unfortunately, both provisions expired at the end of 2011 and are part of a package of provisions known collectively as “tax extenders” that are awaiting extension. Like other tax credits, 25C and 45L can be extended retroactively to fill the gap, but long gaps discourage builders and home owners from taking energy efficiency as seriously as they need to. Hopefully, 25C and 45L can be extended as soon as possible.

A similar provision – a tax deduction known as 179D – is aimed at buttressing energy efficiency in commercial buildings. It’s in place through 2012, but the complexity of certain provisions has discouraged property owners from taking full advantage. Last year, President Obama endorsed measures to simplify 179D and make it more effective. These reforms have been met with bipartisan support on Capitol Hill, but have not become law. Hopefully, by February Congress can agree to implement common sense reforms in 179D and extend it to ensure that energy efficiency improves in commercial buildings.

Creating greater incentives for energy efficiency is the one area of energy policy likely to gain traction on Capitol Hill this year. It’s the real bipartisan legislative ticket for 2012.

Many Americans would probably agree that the primary concern of Congress and the Administration in 2012 should be the economy. But fixing the national debt is not exclusive to cutting costs and slashing budgets; it’s also about preventing legislation and regulations that will ultimately damage the nation’s economic well-being, and limit its ability to recover from these unprecedentedly trying economic conditions. Take for example, the discreet finalization of the Utility MACT rule right before the holidays. While, on the surface, this regulation makes the simple claim that its goal is for power plants to reduce emissions of mercury within the next three years, it does not mention the damaging results of what that unrealistic and unfair timeframe will be: a cost of nearly $11 billion annually; the closure of dozens of power plants and loss of an estimated million jobs over the next decade; a serious threat to the reliability of the nation’s power grid; and a burden on consumers who will have to deal with higher power bills.

But with the New Year comes new opportunities to set the country back on track. There are already some in Congress who have expressed their disapproval of the MACT regulation and announced their intention to work to overturn it. And when it comes to preventing new legislation that is harmful to consumers, there is hope that the Cross State Air Pollution Rule (CSAPR) may be reconsidered before it could do similar damage to the electricity sector, consumers and jobs. The U.S. Court of Appeals for the D.C. Circuit recently ruled to delay the regulation, which was scheduled to take effect this month. As Texas Governor Rick Perry stated, “The court was right to stay this highly flawed, job-killing rule that was based on inaccurate and incomplete information.”

It is imperative in 2012 that Congress and the President do not ignore the comprehensive consequences of the energy policies they pursue to enact. Often, information from experts that oppose these regulations is disregarded, and agencies like the EPA have free reign, despite warnings from the Federal Energy Regulatory Commission (FERC) in the case of Utility MACT. But energy and environmental policy does not occur in a vacuum. These policies usually have a broader effect than on just the energy industry and the environment, as these two areas impact the very viability of our country. While the election will certainly be the most popular dialogue in Washington for the next 11 months, Congress should still focus on the issues that matter to every American citizen.

The damages of last year’s record-setting droughts, floods and fires are estimated to have cost the country more than $52 billion. Not to mention the costs to our natural resources. The Texas Forest Service estimates as many as 500 million trees throughout the state were killed by the year’s horrific drought —a full 10 percent of the forests in the Lone Star State. And according to the top international climate scientists that comprise the Intergovernmental Panel on Climate Change, the natural disasters of last year were only a preview of the extreme weather to come.

Instead of waiting for 2012 to deliver worse and potentially deadlier punches, Congress should take this opportunity to fortify our natural defenses and prepare ourselves for what’s ahead. Senators Sheldon Whitehouse (D-RI) and Max Baucus (D-MT) have taken the first important step in that direction. In November the two introduced the Securing America's Future and Environment (SAFE) Act, a bill that outlines the countless benefits that healthy natural resources provide to our country's safety, economy and well being, and provides a roadmap to help them adapt to a more hostile climate. From combating pests in forests in order to prevent fires to restoring watersheds that protect drinking water supplies, the legislation offers common-sense solutions to protecting our communities, natural resources and wildlife in an uncertain future.

Without a doubt, the coming year will be one of belt tightening and tough budgeting. The SAFE Act does not appropriate money but does provide a clear outline of how our resource agencies can strengthen and protect our invaluable resources through new planning and coordination. The bill is an investment plan; each step taken to help our natural resources adapt to a changing climate now will save us time, money and energy down the road.

We may not know what the coming year will bring. But by passing the SAFE Act, Congress can ensure America is ready to meet the challenges of the future head-on, in 2012 and beyond.

Congressional action on energy, climate, or both seems unlikely unless a clear link to the economy is perceived. The nation’s fiscal distress calls for attention to revenue, tax reform, and spending reductions. All of these can be addressed by a variety of actions, but worth a long look is a reasonable carbon tax. A $20 per ton tax would raise $100+ billion and could be used directly for deficit reduction or to reform the US tax code by lowering payroll and corporate income taxes, in turn accelerating economic growth and job creation.

It’s also clear that the public welcomes new energy supplies but there are risks that we need to manage from unconventional energy production, whether drilling in ultradeep Gulf waters, in the Arctic, or in shale-gas and oil-sands rich regions. More study—and informed public debate—is needed.

Actions by the US EPA under the Clean Air Act (CAA) to both cut carbon and push for stronger control of traditional pollutants, taken together, will influence the fate of coal power. With Congress unlikely to do anything this year – although a carbon tax really should be on the table -- the Act is the only federal tool for regulating carbon.

But the EPA’s carbon regulatory program is under attack, both in the courts and by some in Congress. Analysis indicates that using the CAA will not cause the "train wreck" critics predict, and could lead to meaningful carbon cuts - though it is true that the tools in the Act are far from perfect, and using them well requires the EPA to be both smart and bold.

The Act is worth protecting and using to target carbon emissions, but in the long term it will need to be supplanted by new legislation. The political tradeoffs involved in this switch will be difficult. The economics are also large, but Without a clearer perceived link to solving fiscal problems, it is very hard to see them happening this year.

The President and Congress should remain committed to policies that foster a biobased economy – particularly advanced biofuels – in 2012 as part of our country’s efforts to improve energy security and the environment. Advanced biofuels include cellulosic fuels, such as ethanol derived from non-food biomass, and higher-performance or drop-in fuels, such as biobutanol.

DuPont and many other companies have been working on biobased solutions, including advanced biofuels, for several years already, and have demonstrated that renewably-sourced solutions can provide a solid foundation for continued economic growth and sustainable development. In fact, both the Bush and Obama administrations have actively encouraged the private sector to make these investments.

One such investment DuPont has made is in a demonstration facility in Vonore, Tenn. This plant is currently producing cellulosic ethanol from corn stover, providing fuel for fleet vehicles at the University of Tennessee. And in mid-2012, we will take another important step by breaking ground on a commercial-scale biorefinery in Nevada, Iowa, - one of the first in the US - with a capacity to produce 27.5 million gallons of cellulosic ethanol annually. Indeed, DuPont and other leaders are on the cusp of commercialization. And while we are confident in our ability to make these fuels economically over the long haul, short-term challenges remain that impede more rapid growth of the overall biobased economy such as:

· existing infrastructure still favors traditional fossil-fuel based sources;

· market confidence is required for production capacity build-out; and

· policy stabilization and consistency over longer timeframes are critical as change or uncertainty discourages investment.

These challenges can be complicated and are beyond the capacity of any one organization to solve, which is why overall policy stability is so critical.

For example, the Renewable Fuel Standard (RFS) calls for 21 billion gallons of cellulosic and other advanced biofuels in our supply by 2022. It is vital to hold the line on these mandates in 2012 and beyond, as the RFS sets up the framework and basis for the billions of dollars already committed by private entities to grow a domestic biofuels industry and offset rising fossil energy costs and greenhouse gas emissions. In addition, there are three key tax credits for advanced biofuels that have expired or will expire in 2012: (1) the Alternative Fuels Mixture Credit, which applies to a variety of non-traditional fuels; (2) the "other alcohol fuels credit", for biomass-based alcohol fuels other than ethanol; and (3) the cellulosic ethanol producer tax credit.

We encourage Congress to renew these advanced biofuel tax credits as an important element in improving the investment economics of the first commercial plants and to facilitate broader technology licensing by investors for timely production scale-up. U.S. policy support for biofuels has already helped to build the largest first generation biofuel production capacity in the world, and needs to remain steady and consistent in order for the next generation of advanced biofuels to reach scale.

With strong public-private partnerships, an abundant domestic supply of biomass and market-leading technologies, the U.S. is well positioned to produce advanced biofuels in the very near future and ultimately lead the global biobased economy.

The biggest issue during 2012 will be the state of the economy and its impact on American consumers. With the economy still dependent on imported oil and at risk of oil price shocks, consumers are likely to remain wary about spending. Similarly, U.S. businesses may remain wary about investing in growth and jobs without a stable, long-term energy policy.

While reliance on imported oil has decreased, that change has primarily come from a depressed economy and a drop in energy consumption. High prices at the pump are restricting American’s mobility and freedom and reducing overall economic activity. The average price of gasoline has increased by more than $1.00 a gallon since 2009. The United States needs a long-term energy policy that will address energy security. In 2012 jet fuel and diesel markets are expected to see the highest growth, and higher prices are affecting air travel and freight transportation.

The Administration is expected to announce a Bioeconomy Blueprint early this year, intended to harness biotechnology for future economic development, including production of biofuels, biobased products and renewable chemicals. If done right, this blueprint can set the nation on the path toward energy security. Growth of a biobased economy can reduce dependence on foreign oil and flatten sharp rises and falls in the price of energy. It also can strengthen the nation’s economic security by increasing domestic manufacturing of affordable consumer products.

The Farm Bill will need to be renewed this year, and it can contribute greatly to economic and energy security by including a strong Energy Title that supports development of the bioeconomy. America’s agricultural producers want more than just a safety net; they want energy programs that create new markets for their products and new jobs. Producing advanced biofuels and growing and harvesting sustainable biomass can create as many as 800,000 new jobs and as much as $37 billion in economic activity over the next decade. This sizeable new market for agricultural products means farmers will rely less on the Federal government safety net.

The U.S. military has already recognized the threat to national security from dependence on imported oil and begun efforts to increase its use of domestically produced biofuels. Congress can and should enable the effort by continuing to authorize and fund the DoD’s coordinated efforts with the USDA and DOE to jumpstart biorefinery financing and investment.

Opponents of biofuels will continue their feckless assault on the Renewable Fuel Standard, despite its demonstrated and growing success in supporting the accelerated development of renewable and advanced biofuels. The RFS is the key policy supporting the commercial development of advanced biofuels, and its continued stable implementation is working to drive investment in a brand new and vitally important industry. This policy is one of the few long-term and stable policies supporting growth of the bioeconomy. Congress should stay on course and ignore efforts to undermine this policy and our national energy security. Weakening the RFS will not only chill future job creation, but also actually cause the loss of current jobs.

As we consider the issues that the energy industry is facing in 2012, it’s important to take a moment to reflect on what an important moment this is in the United States’ energy history.

Through recent decades, there has been a growing concern on our nation’s dependence on foreign oil and the political pressures that results from dependence. Especially in light of Iran’s recent threats to shut down the Strait of Hormuz, it is important that the United States looks inside its borders to flex its own energy muscles.

However, this dependence has been considerably lessened in the past decade with the advent of America’s abundant reserves of oil and natural gas which are now recoverable, thanks to the recent combination of horizontal drilling and hydraulic fracturing. Pioneered by independent oil and natural gas producers, this technological innovation has unlocked access to an enormous amount of homegrown energy. Just since 2005, due in part to America’s shale oil and natural gas, U.S. oil imports have decreased from 60 percent in 2005 to 47 percent today.

Not only does developing these vast reserves secure America’s energy future, it provides an enormous amount of jobs and bolsters other industries. This is especially encouraging in states like Pennsylvania and Ohio, which have been darkened in recent decades by dwindling manufacturing industries. Shale plays like North Dakota’s Bakken have turned small, rural towns into economic fairy tales, where people in fast food restaurants are paid $20 dollars an hour, industry workers earn on average $90,000 a year, unemployment stands around 3 percent, and housing expands like the gold rush booms of yesteryear.

Unfortunately, the Obama administration has been far from friendly to oil and natural gas development. Although hydraulic fracturing has been closely regulated by the states since its inception in the 1940s, the EPA has threatened to impose its own regulations on top of the successful existing regulations. If imposed, these blundering federal regulations would cause enormous uncertainty, costing much-needed jobs and economic investment.

The oil and natural gas industry also faces obstacles from the Department of Interior, which has restricted access to America’s abundant offshore reserves. In particular, America’s smaller independent producers, who don’t have the cash flow to deal Interior’s heavy bureaucracy, have encountered serious problems trying to obtain offshore leases and permits in a timely manner.

Additionally, the Fish and Wildlife Service (FWS) under the Department of Interior threatens to shut down entire swaths of oil and natural gas production by its misuse of the Endangered Species Act. If the dunes sagebrush lizard is listed as endangered when the final determination deadline comes up this June, then the economic revitalization that has occurred because of oil and natural gas development in the small Texas and New Mexico towns of the Permian Basin could be destroyed.

The United States stands at a critical juncture. One road, chained in limited access and overregulation, leads to deepening dependence on foreign pressures and economic stagnation. The other road, propelled by opened access and thoughtful regulation, beckons to economic rebirth and an energy future we can call our own. Let’s hope that the U.S. government guides us in the second direction. Let’s make 2012 the year of shale.

The obvious response to this week's question is why should Washington want to do anything about energy this year? It's a tough issue to address, and one which the political will to act only seems to arise when there is a major national crisis. So, the underlying question to ask might be, what energy-related crises might be in store for 2012?

How about gasoline prices? They are now "at the highest level ever to start the year" and headed towards $4 a gallon due to the latest crisis in the Persian Gulf. Does anyone expect events in the Gulf, or relations between the US and Iran, to become an oasis of tranquility anytime soon? Nothing to worry about, or are the odds pretty good for an oil price/supply crisis?

And, what about the weather? 2011 set new records for extreme weather events, with storms causing over $150 billion in damages. In fact, as meteorologist Jeff Masters points out, at least 32 disasters caused more than a billion dollars in damage, and four topped out over $10 billion each. Meanwhile, the emissions that lead to global warming and severe weather events continue to increase and are reaching a point beyond which many scientists warn we had better get used to these kind of weather events and worse. Will a dramatic weather event capture enough attention to spur action?

While there has been an abundance of debate in this political cycle about how to reduce the government deficit, the issues created by our continued dependence on imported oil and addiction to fossil fuels seem by comparison largely ignored. Yet oil price spikes and severe weather events are both likely to impact our economy for generations to come and potentially in ways far more shattering than federal budget deficits. But, which is easier to solve, reigning in overspending or addressing either our tragic dependence on fossil fuels or its consequences in terms of climate and weather mayhem? (Here's a hint: President Bill Clinton was able to balance the budget, but his energy policies made only a dent in our national energy problems.)

One part of the solution is to sustain the growth of renewable energy technologies. Action is needed now to keep clean, domestic energy production growing, and there are several potential courses to take. Congress could agree to extend tax credits that are starting to expire; the renewable industries list this as a top priority. Even bolder action could be considered by also establishing a national renewable energy standard. We need growing markets and long-term incentives for new renewable industries to grow and become main-stream.

But, Congress tends not to tackle the really tough issues unless it has to, so will 2012 be the year this changes, at least for energy? Unfortunately, the odds seem pretty good that one or the other -- an oil crisis or dramatic climate event or both -- will happen in the future, but will it happen between today and November 2012?

And, just in case the opportunity does arise, at least the Senate Energy Committee, led by Senators Jeff Bingaman and Lisa Murkowski, has been working all last year on energy issues on a bi-partisan basis. Yes, despite the highly charged rhetoric in Washington this past year, the Senate Energy Committee should be applauded for continuing to operate on a get-the-people's-business-done basis passing numerous bills with bi-partisan support and initiating work towards consensus in other areas.

Outside events will eventually move energy legislation, it's just a question of when. From the renewable energy point of view, the "when" needs to be "now" to sustain the progress which is being made in growing these industries, their infrastructure, and the jobs and economic growth that come with their expansion.

Given that it's a presidential election year and last year saw limited environmental and energy policy success, the obvious temptation is to declare 2012 another lost opportunity to effectuate major changes to energy or environmental policy. However, those with a stake in our nation's energy production should not assume that Congress and the administration will simply "kick the can down the road" again. There are several areas where there could be significant action, and even if policymakers fail to make much progress this year, it behooves everyone to participate actively since the debate will frame the energy and environmental agenda for a new Republican president or Obama's second term.

Here are five major energy/environmental issues to watch in 2012:

First, shale gas will continue to change the energy landscape by flooding the market with affordable supplies of natural gas, depressing the appetite for renewables and new nuclear power plants. Of course, restrictions on hydraulic fracturing could stem the tide of shale gas. Look for EPA to step up on fracking by proposing new emissions limits for oil and gas processing plants in April, continuing efforts to develop effluent guidelines, considering petitions to regulate oil and gas wastes as hazardous, and perhaps initiating new chemical disclosure requirements under TSCA.

Second, the Keystone XL pipeline will be a politically divisive issue that could see added attention in the presidential campaign. With Nebraska now apparently on board, it appears that the Republicans have the upper hand in the partisan battle over Keystone. Since jobs continue to drive the political agenda, the Obama administration will be hard pressed to disapprove the oil pipeline when the decision deadline comes due February 21st.

Third, the assortment of EPA regulations to control emissions from coal-fired plants will continue to attract substantial interest. Many in Congress are already angling to block the long-awaited utility MACT rule just issued by EPA. The final boiler MACT rule is expected in April. The Cross State Air Pollution rule was stayed by a federal court last Friday. And, EPA is expected to issue a rule regulating power plant cooling water intake structures in July. The uncertainty created by these EPA rules will encourage Congress to move grid security bills.

Fourth, the Yucca Mountain nuclear waste repository could be revived. The DC Circuit Court has an oral argument scheduled for May 2 on a petition for mandamus to compel NRC to resume consideration of the Yucca license application. The court could easily conclude this summer that NRC's delay was unreasonable and direct that the licensing process continue, at which point Republicans (and many Democrats) in Congress will likely provide the necessary funding to move forward on Yucca.

Fifth, clean energy development will still be an issue. Without climate change as the engine for clean technology, look for the Department of Defense to take up the leadership in promoting renewables, especially drop-in advanced biofuels needed by the Air Force and Navy which are seeking to reduce their dependence on overseas oil. While Congress probably won't move legislation creating a national clean energy standard, modest energy efficiency bills may advance. Finally, look for a preliminary decision this month by the Department of Commerce on whether Chinese subsidies on polysilicon solar cells violates international trade laws, which could trigger the imposition of tariffs.

Renewing Job-Creating 1603 Treasury Program Should be Congress’ New Year’s Resolution

The U.S. solar industry is on a roll as we head into 2012, but a key driving force behind our growth – the 1603 Treasury Program – expired on Dec. 31. Renewing this job-creating program should be one of Congress’ top New Year’s Resolutions.

Solar now employs 100,000 Americans at 5,000 businesses across every state, and no industry in America is growing faster. In the third quarter of 2011, the U.S. solar industry set new records for installations (449 megawatts in Q3) and growth (140 percent year-over-year), according to the U.S. Solar Market Insight: 3rd Quarter 2011 report. And the fourth quarter of 2011 is predicted to be even better.

A major reason for this success is the job-creating 1603 Treasury Program, which has spurred completion of more than 22,000 energy projects across all 50 states and attracted $23 billion in private investment. The 1603 program creates jobs and drives growth in a dozen energy industries, not just solar. These are mostly blue collar jobs and relatively small projects that benefit small businesses. In fact, about nine out of every 10 solar awards from the 1603 program (89 percent) are less than $500,000, and the average size of a solar project award is about $65,000.

Recently, a SEIA-led coalition of more than 750 companies, small businesses and organizations from all 50 states – representing a dozen energy technology industries, electrical contractors, engineers and roofers – joined to ask Congress to extend the 1603 program. But Congress failed to act before 1603 expired on Dec. 31, leaving 37,000 American solar jobs in jeopardy.

The impact of letting 1603 expire is severe and immediate. Already, energy projects are being put on hold or even cancelled, businesses are cutting new investments, and jobs are being lost.

But New Year’s Day offers all of us – including members of Congress – a fresh start, a chance to correct what went wrong the year before. Congress should extend the 1603 program early in 2012 to fix the mistake of causing severe market uncertainty in one of the few industries driving job growth in the U.S.

Important solar policy decisions are not limited to Congress and the White House; governors and state legislatures across the country also play a key role. That’s why SEIA is continuing to ramp up our state advocacy efforts in 2012.

Last year, 11 state SEIA chapters signed on as formal affiliates of national SEIA, and more are coming soon. And effective Jan. 1, SEIA completed its merger with the Solar Alliance, creating a unified industry voice and policy effort on both state and federal issues.

Solar is not just for California and the Southwest; New Jersey ranks second in the country in solar installations, and states like North Carolina and Tennessee are rapidly climbing the list. States that have enacted smart, pro-solar policies have seen their efforts pay off. In fact, the number of states with 10 megawatts of annual solar installations grew from just four in 2007 to 17 in 2010.

Last year was a record year for the U.S. solar industry. With effective federal and state policies, solar can achieve even greater success in 2012.

At a moment when China is increasingly dominating the clean energy sector, the U.S. is being left behind. Businesses refuse to make long term investments because of the regulatory uncertainty they face. If Congress could provide certainty to the energy sector, businesses could and would invest more, hire more workers, and help the U.S. economy rally.

There are three easy things that Congress should do to enable U.S. businesses to get back in the game. All of them have broad bipartisan support, and all would help the U.S. compete in the global clean energy market. Most importantly, all would provide the private sector with an idea of the long-term direction for the clean energy sector.

First, Congress needs to promote innovation within the sector. Members of Congress should restore funding to the 1603 and 48(c) programs to keep U.S. companies in the game. Congress did well by increasing funding to the ARPA-E program for 2012, but shouldn’t drop the ball on other important programs.

Second, Congress must accelerate the things we are already doing well. Sens. Shaheen’s and Portman’s bipartisan proposal on energy efficiency would create thousands of jobs and go a long way towards decreasing the amount of energy we buy. There is also an opportunity to revitalize and strengthen the nuclear industry to provide pollution free base load power.

Finally, Congress must not revisit old arguments and undermine previous decisions for political ends. The last thing we need is for Congress to open up long-finalized regulations. “Like many electric utilities, Exelon has anticipated the Toxics Rule and other environmental rules for years and made the necessary clean energy investments to prepare,” said Joseph Dominguez, senior vice president of federal regulatory affairs, public policy and communications for Exelon. Similarly, Tom Williams, Duke’s spokesman echoed this sentiment in speaking about the Mercury Rule: “we have been preparing for many of these regs for years.” To go back on long-planned regulations is exactly the kind of regulatory uncertainty that the business community wants to avoid.

Companies need certainty in order to invest, hire and plan for the future. The Majority’s recklessness in the House has caused gridlock and undermined business’ ability to move the nation forward. Congress should focus on solving problems by investing in clean energy innovation, accelerate successful technologies, and not reopen arguments long past.

In a presidential election year, it’s too much to hope that a coherent American energy policy will emerge. I do hope, however, that we will reject government directives that further distort energy markets and drain valuable resources from job creation and real economic development.

2011 saw the unraveling of efforts by the government to pick winners and losers in the energy markets, with Solyndra and missed cellulosic ethanol targets the most obvious examples. EPA tried to alter conventional fuel markets by imposing sweeping regulations that deliver little environmental benefit while imposing huge costs on energy consumers in an effort to induce alternatives. These ill-advised attempts to impose costs on energy sources that power 85% of our economy and support our way of life have artificially prevented job growth and increased costs to the struggling 99%.

Luckily, despite the obstacles, the oil and natural gas industry has seen resounding success over the last few years. Technical innovation has enabled producers to uncover almost a 200 year supply of natural gas, and to increase American oil production and lessen imports significantly while simultaneously reducing environmental impacts. If regulatory and access barriers were lifted, the industry could create one million jobs and deliver $1 trillion in government revenue over a decade.

Economic and job imperatives should convince the federal government to get out of the way and let American producers continue to make advances in American production. Budget deficits should further limit wasteful spending on energy better delivered through true market mechanisms. The failure of favored green jobs to materialize despite the best efforts of politicians has demonstrated that attempts to manipulate the economy are counterproductive, especially in the face of robust supplies of energy made in America.

President Obama and the Congress should focus on examples of positive energy policy - those things that play to our strengths as a nation; create jobs and are a common cause. When you have a single digit approval rating as a leadership group the Congress should look to build, not obstruct. So rather than just trying to minimize the harms of our 19th century energy technology's - for example, by requiring scrubbers on flues to clean up an ancient boiler or combustion engine - we should maximize the potential of our energy system to provide services - electricity and transportation - in the best possible way. We're encouraged by the EPA's efforts to set the Mercury and Air Toxic Standards (MATS) for the sake of our children's lungs but ask that the members of Congress avoid fighting a rearguard action over these, now that they have passed, and instead focus their personal energies on something worthwhile, like the following bipartisan initiatives for renewables:

The 1603 Cash Grant program for the Solar Industry Tax Credit was one of the fastest job growth engines in the country last year. The tax credit is standing policy through 2016 but converting it to cash was part of the stimulus in 2011. And it worked! The US solar industry growing 6.7% in job creation in a year when the rest of the economy almost flat-lined, avaraging 0.7% job growth. So let's keep what's working going - when Congress returns to discuss the tax extender bill they punted before Christmas they should maintain the 1603 Treasury grant and give another 40,000 jobs to Americans in a growth industry that is saving normal people money.

Another easy win is the Solar Energy Regulatory Relief Act of 2011, this is a bipartisan piece of legislation that will “promote standardization for local permitting requirements for solar energy and lower the installation costs for solar energy systems,” and should be non-controversial.The solar market is booming, and the majority of American homes would benefit financially from installing solar on their home over coming years. However, local permitting variation continues to hamper the growth of the industry and is a growing cost that could be alleviated by some simple standardization. This would unleash billions in value and millions of jobs.

Similarly, supporting what has worked in setting goals for markets, including Renewable Portfolio Standards with solar carve-outs, is one of the best ways to create jobs in the advanced energy economy. It is notable that the states with the most renewable energy uptake as a result of these RPS' and policies like net energy metering have suffered the least electricity price inflation, whereas those with less clean energy have their rates go up (this makes sense given the fuel bill from fossil energy). The main utility in Colorado, which has an RPS of 30% by 2020, admits that they will reach their target this year - 8 early - and in so doing save it's ratepayers $100m. Anything that the President and Congress can do to support markets and deployment, such as a Clean Energy Standard will be well met in 2012.

Finally, the power of their offices, aside from the legislative potential, should not be overlooked. Energy efficiency improvements and solar installation on the First Home and Federal Buildings would be a wonderful way for our "leaders" in Washington to lead by doing, not just talking or legislating. On both sides of the aisle, constituents support clean energy more than continued dependence on fossil fuels. Poll after poll shows this. 2012 is the time our representatives caught the clue. Shine on!

Yes, it is an election year, and politicians will most likely be pushed by the media and campaign consultants to focus on the environmental, energy and conservation issues that divide the parties. But more conflict is not what the American people want. The great majority of voters want government to actually get something done, campaign or not. So why not focus on the environmental and conservation issues that have prospects for bi-partisan support--issues for which finding common ground could demonstrate hope for the future of America’s environment? Here are five areas where such progress is possible:

Get the U.S. Farm Bill re-authorized. The bi-partisan leadership of the House and Senate Agriculture Committees had pretty much agreed on a compromise to re-authorize the Farm Bill as part of the Budget Control Act process. When that process failed, the compromise got shelved. From an environmental perspective the most important part of this prospective agreement was the Conservation Title of the bill. Final language was never released to the public, but it appears that, while reducing spending by $6 billion over ten years, the committee chairs and ranking members managed to keep most of the popular and successful Conservation Title Programs going by improving program efficiency and coordination. An added benefit would be long term certainty of funding that would allow the Natural Resource Conservation Service to work with agricultural and forest landowners to plan for large scale conservation. It would be a shame not to take advantage of these agreements. While the Commodity Title of the bill still needs work, the Farm Bill should be re-authorized as quickly as possible in 2012.

Continue to fund the restoration of large systems like the Gulf of Mexico. There is a lot of consensus around fixing the problems of large and valuable natural systems like the Great Lakes, Puget Sound and the Gulf of Mexico. Sure money is a problem, but for the Gulf, a bill (the RESTORE Act) has been introduced to dedicate a portion of the likely Clean Water Act fines from the BP oil spill to Gulf restoration. The bill has strong bi-partisan sponsorship. It can use funding that no one was counting on and invest it in the long-neglected task of restoring the natural systems and resource-based economy of the Gulf. It would be good for the environment and good for jobs. Maintaining existing funding in the 2013 budget, in partnership with states and local governments, for other large system restoration effortscan demonstrate the value of the kind of cooperative conservation advocated by both parties.

Use the mitigation hierarchy to avoid environmental damage while facilitating construction of needed energy and other infrastructure. This sounds like a detail not important enough to be mentioned here, but improved use of the mitigation hierarchy can help to resolve regulatory gridlock and conflict surrounding the implementation of the Endangered Species Act, the Clean Water Act, and siting of alternative energy facilities on public land. Simply put, this approach says that development should attempt to avoid environmental impacts, minimize the impacts that can’t be avoided and compensate for the impacts that can’t be avoided or successfully minimized. This can only be done effectively by planning at an ecosystem or watershed scale. Existing Federal and state plans (like State Wildlife Plans) can be used to guide improved use of the mitigation hierarchy. Done right, this can facilitate large scale energy projects like solar production in the Mojave Desert, and put the more than $3 billion already being spent annually on compensatory mitigation to much better use. No new legislation or regulations are needed to make this possible.

Update the National Flood Insurance Program to reflect current risks. Conservatives and liberals both have concluded that it makes sense to reduce Federal spending that subsidizes construction and reconstruction in areas facing increasingly high risks of flooding and stormdamage. Ending subsidies will save substantial federal dollars and increase awareness of natural hazards and understanding by the public that restored floodplains and barrier beaches can help protect communities from natural hazards. Flood Insurance legislation has already passed the House. Passage by the Senate this year can be an important step in recognizing risks from natural hazards that accompany climate change and sea level rise and in reducing the costs of responding to natural disasters.

Accelerate energy saving, migration to lower carbon energy sources, and energy research by the Department of Defense. DoD has already recognized the national security implications both of our dependence on oil and of climate shocks to global politics. The department is addressing these threats with innovative research and pilot projects to reduce energy use and develop practical, low-carbon methods of powering military activities. Appropriations to support these efforts should remain strong for 2013.

These initiatives have several things in common. They are fiscally responsible. They will produce the kinds of quantifiable and tangible results that people want to see. They recognize the benefits of natural systems and natural resources to people. Most require cooperation among levels of government and with private interests. Perhaps most importantly they offer real possibilities for the kind of communication across partisan lines that could set the stage for addressing the more difficult issues our society must inevitably face up to after next election day--like putting a price on carbon and paying for the conservation and environmental management so essential to this country’s future in an era of severe budget constraints.

Some will attempt to define 2012 with chants of “Drill Baby Drill” despite the fact that the US is now a net exporter of petroleum products. We’re the 3rd largest producer of crude oil in the world, and our continued anemic domestic consumption has resulted in record domestic surpluses of petroleum products. We require permits to export crude oil, but don’t for gasoline. Limiting gasoline exports will keep a downward pressure on prices for American motorists. Drilling for more domestic oil (or importing more Canadian tar sands through the Keystone pipeline) simply to export the gasoline doesn’t improve US energy security, but it does raise prices for Americans.

We’ll continue to hear heated rhetoric that clean air regulations – both existing and proposed – are somehow responsible for higher electricity prices today. That’s false. As AEP and other coal-dependent utilities have said, retiring coal units are shutting down more because they’re old, inefficient, expensive to run and dormant much of the time. If politicians want to explore rising utility prices, let’s look at how, under the watch of the Federal Energy Regulatory Commission, Americans living in “deregulated” states have seen their power prices rise faster and become more expensive than those in “regulated” states. Recent Department of Justice antitrust settlements for market manipulation under FERC’s jurisdiction shows that a lack of adequate regulations – not EPA clean air regs – are to blame.

And many will claim that Solyndra exposed that promoting renewable energy is bad policy. Actually, the lesson learned is that the loan guarantee program is failed incentive design. America’s economic growth is historically consumption-driven, and creating a larger domestic market for green energy will put us back on the path of competing with Germany and China in the cleantech race. Germany is an international leader in reducing greenhouse gas emissions, creating renewable energy jobs while at the same time flourishing as a high-wage, manufacturing export economy that single-handedly is bailing out the rest of Europe. Germany features a $30-billion/year incentive program built into electric rates that promotes households and businesses to make money from roof-top solar and other smaller-scale renewables. This domestic consumption subsidy fuels the country’s green manufacturing sector, creating jobs while featuring 630% more installed solar capacity than the United States.

The future of energy is renewables. The longer we wait to create domestic demand for these products, the farther we fall behind on cleantech development and manufacturing. Our energy infrastructure was designed to accomodate cheap access to fossil fuels, but those days are over. We must move towards a localized, distributed energy system anchored by renewables, investments in sustainable energy use, and regulations that end the ability of energy corporations to price-gouge families. The solar rooftop revolution will put families and communities in charge of our energy future - right where it belongs.

Washington has failed to have a serious conversation about U.S. economic and national security interests in the Arctic, and time is running short for the president and congress to act.

The loss of Arctic summer sea ice has created new opportunities for access to commercial maritime routes and sea lines of communication that could dramatically shorten the travel time from the Atlantic to the Pacific. The potential access to huge reserves of zinc, nickel, palladium and other valuable materials, in addition to the nearly 1.2 trillion dollars in estimated oil and natural gas, could be a windfall to the U.S. economy as the country continues to recover from the worst economic crisis since the Great Depression. Meanwhile, the rise in eco-tourism will challenge the U.S. Coast Guard’s limited search and rescue capabilities, and the potential proliferation of drugs, weapons and other illicit materials across the Arctic Ocean will leave U.S. law enforcement officials hamstrung unless the United States has the capabilities and policies set in place for interdicting dangerous materials. Moreover, commercial exploitation and travel will continue unabated as Arctic ice continues to retreat. The United States will need to be increasingly vigilant to respond to environmental disasters that could arise, including (we desperately hope not) another Deepwater Horizon event.

The Arctic may not be at the top of U.S. policymakers’ agenda for 2012, but other Arctic countries – especially Russia – are taking a serious approach to the region. Moscow is planning to build six more icebreakers, expanding its existing fleet to about 20. (The United States by comparison has three icebreakers; two of them are in mothballs.) Moscow also plans to pay $33 billion to construct a yearlong Arctic seaport. Meanwhile, tensions between Russia and other Arctic countries could flame up this year when Russia is expected to file its claim to the extended continental shelf, which could give Moscow claim to about 380,000 square miles of what has been considered international territory in the Arctic Circle.

The United States has been slowly giving the Arctic more attention. For example, last April, President Obama signed a revised Unified Command Plan (UCP), shifting major defense responsibilities for the Arctic to U.S. Northern Command. (Previously, authority over the Arctic region had been split between U.S. European, Northern and Pacific Commands, complicating unity of effort within the Department of Defense.) Then last May, Secretary of State Clinton attended the Seventh Ministerial Meeting of the Arctic Council, the first U.S. Secretary of State to attend the meeting of Arctic nations, where she emphasized the need for international cooperation to adjudicate grievances in the region.

Despite the call for increased international cooperation in the Arctic, U.S. policymakers will remain hamstrung unless the president and congress work together to develop a strategy for the region that is backed up by the resources that allow the United States to protect its economic and national security interests.

First and foremost, it is time for the U.S. Senate to ratify the UN Convention on the Law of the Sea (UNCLOS). U.S. reluctance to sign onto UNCLOS is standing in the way of the U.S. government protecting U.S. interests in the Arctic. For example, many of the valuable resources that U.S. firms could have access to – including precious stones and metals – lie in the extended continental shelf, up to 600 nautical miles off the Alaskan coast. U.S. failure to ratify UNCLOS prevents the United States from submitting a claim for rights to the extended continental shelf, which also prevents U.S. firms from securing commercial rights to those seabed resources. Moreover, U.S. failure to ratify UNCLOS excludes the United States from participating in the Law of the Sea Tribunal, where the United States could serve as a credible voice in rebuffing attempts by countries that seek to undermine longstanding international norms, such as freedom of access and navigation to international straits and waters (a potentially important issue looming in the Arctic).

Second, the president must direct the national security community to develop a strategy for the Arctic that clearly states what our national objectives are in the region. Does the United States wish to have a seasonal, semi-permanent or permanent presence in the Arctic? Will the U.S. Navy and Coast Guard serve to ensure freedom of access and navigation in the Arctic, or have a more limited mission to include supporting search and rescue and other modest law enforcement duties? These questions have yet to be asked and answered. Getting answers to these and other questions will then tee up the conversation on Capitol Hill about what resources the United States needs to support its interests in the region.

Third, congress needs to appropriate funding to expand the existing U.S. Coast Guard icebreaker fleet. The number of icebreakers will obviously be contingent on what it is the United States wants to do in the Arctic, but at a minimum the United States need to maintain its presence in the region. Having a sustained presence requires more than a single functional icebreaker at a time.

The United States has enduring economic and national security interests in the Arctic and 2012 is the year that the president and congress should work together to take immediate action to protect those interest. Presidential politics will make cooperation seem impossible, and the gridlock in Washington may ultimately delay or derail any efforts. But despite the hurdles ahead, the job is worthy of any serious policymaker who claims to support the economic and national security interests of the United States.

Energy policy will be a hot topic in 2012. But one thing we don’t need is another fight about climate change. Yes, climate change is a severe threat that all nations must acknowledge – but at a time when jobs and the economy precede all else, looking for ways to let the clean and renewable economy thrive is perhaps the more efficient use of our time.

Renewables will win the jobs argument in 2012. We need policies that give consumers confidence in purchasing clean energy, and give producers confidence to innovate and surge ahead. And we need a nationwide, on-the-ground marketing effort focused on energy efficiency and renewable power generation.

We’ve already seen leadership from the states – particularly Arizona, where utility companies have committed themselves to marketing energy efficient and renewable alternatives to their customers using SmartPower’s COR approach: community outreach, a robust online/social marketing platform, and rewards and incentives. The result has been a more than two-fold increase in the amount of residential solar installed in the last year. I expect to see a three-fold increase in 2012.

If the rest of the nation can adopt this COR approach, I have no reason to believe we can’t succeed in changing the way this nation’s people think about and use energy.

I won’t bother getting into the history of federally backed marketing for industries like Big Coal in the effort to justify support of clean energy. Instead, I’ll just say this: In 2012, we have a prime opportunity to determine our nation’s energy future. President Obama still has time to help our country pave the way toward a cleaner, safer and more reliable energy future. If Obama can do this, he will surely make history – whether or not he wins re-election.

(Note: NPRA is changing its name at the end of January to AFPM, the American Fuel & Petrochemical Manufacturers).

Just about everyone agrees that America needs more jobs, more domestic manufacturing

and greater energy security. We can have all these things if the Obama administration works with Congress in 2012 to pursue policies that take advantage of America’s tremendous energy resources in an environmentally responsible manner.

Yes, we have done and will continue to do both at the same time.

Environmental extremists who oppose all fossil fuels are pursuing an unrealistic “just say no” policy that is not in the interests of America or American consumers and workers. By working to prevent just about all domestic production of oil and natural gas and by insisting on emissions reductions that that are virtually impossible to achieve at a cost consumers can afford, these extremists raise energy costs and deny us the right to use our own natural resources to advance America’s national interests.

Those of us who work in fuel and petrochemical manufacturing and in the production of oil and natural gas want a clean environment as much as anyone else – and we’re proud that we’ve played a major role in environmental improvement.

For example, EPA data shows sharp reductions in total emissions of hazardous pollutants from fuel and petrochemical manufactures in recent years. These emissions fell by 80 percent from petroleum refineries and by 75 percent from petrochemical manufacturing plants between 1988 and 2009. Refiners have cut sulfur levels in gasoline by 90 percent just since 2004 and reduced sulfur in diesel fuel by more than 90 percent since 2005.

As a result of these actions and actions by other industries, America today enjoys the cleanest air in generations. The air will grow cleaner still in future years without any changes in environmental regulations.

We can create jobs and improve the environment at the same time as long as we pursue policies based on real science rather than political science and conduct objective cost-benefit analyses to examine new regulatory proposals.

Here are some actions on the energy and environment front that would benefit all Americans in 2012:

· A top-to-bottom review by the Environmental Protection Agency of its regulations to determine which are beneficial and which amount to overregulation that causes far more harm than good. Efforts to impose severe and unnecessary restrictions on greenhouse gas and ozone emissions, and to mandate use of biofuels that don’t exist or can’t survive without billions of dollars in taxpayer subsidies, should be abandoned and replaced with sensible regulations.

· Increased exploration and drilling for oil and natural gas in many parts of the United States now off-limits to energy production. A December report from the Institute for Energy Research says there are 1.79 trillion barrels of recoverable oil in North America (the U.S., Canada and Mexico). The report says this is “almost twice as much as the combined proved reserves of all OPEC nations.” The same report says there are 4.244 quadrillion cubic feet of recoverable natural gas in North America. This is “more natural gas than all of the next five largest national proved reserves … Russia, Iran, Qatar, Saudi Arabia and Turkmenistan,” the report says.

· Approval of construction of the Keystone XL pipeline to bring oil from America’s close friend and neighbor Canada to U.S. refineries, creating an estimated 85,000 new U.S. jobs by 2020 and making America less reliant on oil from other parts of the world. Canadian officials have said many times that if America doesn’t buy their nation’s oil the oil will be shipped across the Pacific to Asia – increasing greenhouse gas emissions. After more than three years of extensive environmental study and the approval of strict safety standards, the Keystone XL pipeline is long overdue to receive construction approval.

· State and federal actions to allow increased use of hydraulic fracturing, known as fracking, to sharply increase production of natural gas in America. This technology has a long record of safety and can help revitalize American manufacturing and end our reliance on foreign sources of natural gas.

· Abandonment by some state and federal officials of efforts to impose low-carbon fuel standards that would raise energy costs for American families and businesses without providing any environmental benefit. A federal judge blocked enforcement of California’s low-carbon fuel standards last Thursday. These standards amount to giant energy tax and fuel rationing scheme that would be forced on everyone who drives a car or truck. They are anti-consumer and anti-worker, and would raise fuel costs, decrease the fuel supply and destroy jobs.

Will all these sensible steps be taken in 2012? Unfortunately, environmental extremists will do all in their power to block this from happening by using protest demonstrations and media campaigns based on distortions to demonize fossil fuels and the workers who bring them to the American people.

Individual adoption of any of the actions described above will benefit all Americans. Collective adoption will set our nation on the path to energy security, consumer protection, manufacturing rebirth, full employment and economic prosperity. In 2012 the American Fuel & Petrochemical Manufacturers will work to educate and inform our elected leaders and the American people about the importance of a pro-American energy policy based on reality and achievement.

The short answer is more gridlock because we have a dysfunctional and polarized government.

When the President and Congress cannot find common ground on dealing with the most important issues--debt, deficit, and economic growth-- it represents a triumph of hope over experience to think that anything useful on energy or the environment will get done. Paralysis reigns supreme and is a substitute for governing. As a result, there is little prospect of any significant policy initiatives being enacted before 2012 elections.

The potential crisis over the Strait of Hormuz is another reminder of our misguided energy policy. The Obama Administration has wasted 3 years, not to mention $90 million, in pursuing an energy agenda that makes little economic or technological sense. The US is rich in hydrocarbon resources but we continue to have a self-imposed embargo on their full economic development. From the Gulf of Mexico, to Alaska, to the Keystone XL project, the Administration has slow walked projects that could lead to more domestic oil production and more good paying jobs associated with that production and fewer imports. Instead, it has squandered resources and on so called “green energy” projects that have floundered just as so many other attempts at industrial policy have floundered. We have no more energy security today than we did when the President took office.

A more productive road to travel would be to remove barriers to developing our own natural gas and oil resources while simultaneously investing in a well developed R&D program and exploring the potential for public-private energy partnerships that are not based on subsidies. A far sighted energy policy would not reduce the near term risks of turmoil in the Persian Gulf but it would set the foundation for gaining greater control of our own destiny and would send a clear signal to private investors. But, that road will not be traveled because of opposition from the President’s liberal base.

EPA has demonstrated that it is immune to the economic consequences of its extreme regulatory agenda. From the proposed NAAQS revision, to the boiler MACT, to the 2025 CAFE standard, and to the recent mercury rule, EPA has consistently used an approach that overstates benefits, understates costs, and which creates tremendous uncertainty in the private sector as well as states. The President has given lip service to better balance in regulations but there is no evidence of sincere intention. In an election year, it is almost certain that EPA will continue its ill conceived approach as a way of keeping the base sullen but not mutinous. This will not benefit the President because it will not benefit the economy.

Recently Peggy Noonan recently wrote an opinion piece that made an important point about why our government is not working. It was based on Steve’s Jobs view about why good companies fail. According to Noonan, “The(Jobs) theory applies also to our politics. America is in political decline in part because we've elevated salesmen—people good on the hustings and good in the room, facile creatures with good people skills—above people who love the product, which is sound and coherent government—"good government," as they used to say.”

There needs to be a fundamental change in the way Washington works, not just on environmental and energy matters but how it does business and how we define what government should do. The muddling through approach that has been followed for decades is no longer adequate.

It has been 80 years since the last major restructuring of the Federal government. It, like any successful and enduring business, needs to reinvent itself. The environmental problems we face today are much different than those we faced in the early 1970s. The Department of Energy has never had the right mission focus, except when James Schlesinger was Secretary, and has few accomplishments that it can point to with pride. Promoting energy security should involve promoting abundant and affordable energy, not wasting resources on projects like Solyndra.

In a world where economies are ever more closely connected, our future prosperity needs a government that is structured for the challenges of tomorrow, not the past. A new “Hoover Commission” could lay the ground work for such restructuring. In the meantime, we desperately need major tax and regulatory reform. We also need fewer salesmen in elective office and more who are committed to doing the people’s business--governing. For the past two years the White House and Congress have conducted media based budget battles, and yet the 2012 budget is almost $200 billion larger than 2010’s and more than 20% larger than 2008’s.

The changes that are needed to prepare us for the future will not get started in 2012, although the political climate is ripe for a serious debate about the proper role of the federal government and the policies that will restore healthy economic growth and enable us to meet the challenges that lay ahead.

We can have a cleaner environment, more abundant energy, and a stronger economy but not unless we change the way Washington does business.