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Sizing Up Obama's State of the Union Address

By Amy Harder
energy and environment reporter, National Journal
February 11, 2013 | 6:00 a.m.
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Sizing Up Obama's State of the Union Address

 

In his State of the Union address, President Obama challenged Congress to act on climate change  - but declared that if lawmakers don't act, he will.

 

He did not detail how, specifically, he'll use his executive authority, but his speech appears to set the stage for a series of cabinet actions, starting with Environmental Protection Agency regulations on both new and existing polluters.  

 

How much can Obama achieve on climate change without Congress?  What will be the impacts - environmental, economic and political? What obstacles and challenges stand in the way?

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February 20, 2013 9:31 AM

Energy Efficiency Helps Climate, Economy

By Kateri Callahan

President, Alliance To Save Energy

There are a lot of arguments about taxing carbon emissions. But what if we could instead pay companies to reduce carbon emissions? Energy efficiency can.

With energy efficiency we can begin to address climate change while saving money. And although there’s no single policy answer, many of the needed common-sense measures can be done under existing legal authority.

In the State of the Union the president set a goal of cutting energy waste in half by 2030. The Alliance Commission on Energy Efficiency Policy the week before set an equivalent goal of doubling U.S. energy productivity by 2030 (energy productivity is the level of economic activity we get per amount of energy used).

We asked Rhodium Group to model how we could meet this goal. They found the technologies and practices are available. And the impacts are remarkable. Carbon dioxide emissions would fall to 22% below 2005 levels by 2020 and to 33% below 2...

There are a lot of arguments about taxing carbon emissions. But what if we could instead pay companies to reduce carbon emissions? Energy efficiency can.

With energy efficiency we can begin to address climate change while saving money. And although there’s no single policy answer, many of the needed common-sense measures can be done under existing legal authority.

In the State of the Union the president set a goal of cutting energy waste in half by 2030. The Alliance Commission on Energy Efficiency Policy the week before set an equivalent goal of doubling U.S. energy productivity by 2030 (energy productivity is the level of economic activity we get per amount of energy used).

We asked Rhodium Group to model how we could meet this goal. They found the technologies and practices are available. And the impacts are remarkable. Carbon dioxide emissions would fall to 22% below 2005 levels by 2020 and to 33% below 2005 levels by 2030.

Would it break the bank? No. Saving energy saves money—and helps create jobs, make us more competitive, and grow the economy. Rhodium Group projects meeting the goal would in 2030:

  • Save the average household more than $1,000,
  • Save American businesses $169 billion (adding consumer savings, the total is $327 billion),
  • Reduce government agency spending by $13 billion,
  • Create 1.3 million jobs and increase GDP by up to 2%, and
  • Decrease energy imports by more than $100 billion.

Would it take investment? Of course. Achieving those savings would require $166 billion a year. But the savings described above are net after investment.

And the investment would bring additional environmental and security benefits. SO2 and NOx emissions from the power sector would decrease by roughly half. Oil imports would decrease by a third.

The Alliance Commission, including twenty leaders from utilities, manufacturers, environmental groups, academia, government, and other sectors, made a number of recommendations to set us on a path to achieving these benefits. The recommendations are aimed at federal, state, and local governments and the private sector because all must pull together. Some of the actions that the Obama administration could do under current law include:

  • Reduce the cost of financing energy efficiency by fostering a secondary market;
  • Enable mortgages, appraisals, and listing services to take into account the value of energy efficiency;
  • Update efficiency standards for appliances, medium and heavy duty vehicles, and manufactured housing;
  • Encourage energy efficiency as an air emissions reduction strategy in EPA regulations;
  • Improve energy-use labeling and disclosure, especially for buildings;
  • Apply best practices in energy management and disclosure to federal buildings and fleets; and
  • Help states and local governments implement innovative policies and programs.

Federal agencies are already working on most of these, and several have bipartisan support. But much more concerted action is needed. With presidential leadership and focus the administration can use energy efficiency to make real progress in reducing climate change.

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February 19, 2013 12:09 PM

Captive Consumers

By Brent Erickson

Executive Vice President, Industrial & Environmental Division, Biotechnology Industry Organization

President Obama made a powerful statement last week about the return on investment in biotech innovation, noting that for every dollar in public-private investment in mapping the human genome, $140 was returned to U.S. economic growth. He also noted that the United States is poised to control its energy future and begin to address climate-changing carbon emissions. But he stopped short of closing the loop and making the full connection between these two points.

Biotech innovation is a driving force behind the development of advanced biofuels made from sustainable, renewable biomass. The biotech industry – in partnerships with several federal programs – has invested billions over the past five years in commercializing the technology for a broad range of renewable fuels and chemicals that directly replace oil. That investment has already paid dividends in creating new employment and economic opportunities, and it will make a growing contribution to our domestic energy security over the next decade, according to both the ...

President Obama made a powerful statement last week about the return on investment in biotech innovation, noting that for every dollar in public-private investment in mapping the human genome, $140 was returned to U.S. economic growth. He also noted that the United States is poised to control its energy future and begin to address climate-changing carbon emissions. But he stopped short of closing the loop and making the full connection between these two points.

Biotech innovation is a driving force behind the development of advanced biofuels made from sustainable, renewable biomass. The biotech industry – in partnerships with several federal programs – has invested billions over the past five years in commercializing the technology for a broad range of renewable fuels and chemicals that directly replace oil. That investment has already paid dividends in creating new employment and economic opportunities, and it will make a growing contribution to our domestic energy security over the next decade, according to both the Energy Information Administration and the International Energy Agency.

One of the President’s major policy proposals calls for an Energy Security Trust fund that will “drive new research and technology to shift our cars and trucks off oil for good” and “free our families and businesses from the painful spikes in gas prices we’ve put up with for far too long.” Achieving energy security for the nation must also achieve these goals, since American households are captive consumers to a single source of transportation fuel – which is also where most of our oil imports are used. And Americans continue to face higher costs at the pump each year, even as they cut back driving to use less.

The fact is there is already a long-term policy in place to displace reliance on foreign oil in our transportation sector, and it’s one of the keys to the current projections of energy self-sufficiency in the future. The Renewable Fuel Standard has been very successful in driving new research and technology in oil alternatives. And the industry is on the cusp of a commercial breakthrough for cellulosic biofuels, with first-of-a-kind biorefineries under construction and starting production. Staying the course on this policy will ensure the public reaps dividends on the multi-year investment already made. By lowering oil prices and reducing imports of oil, the RFS will contribute $144 billion annually to U.S. GDP by 2022.

Many additional policies that the Obama administration has championed have paid measurable dividends. The energy title of the Farm Bill, for instance. Since 2008, Farm Bill energy programs have supported 6,600 U.S. projects, employed 15,000 people, and generated or saved more than 7.3 billion kilowatt hours of energy. The programs have supported more than 860 growers in 188 counties across 12 states who are converting nearly 60,000 underutilized acres of land to energy crops. The programs have also educated consumers about more than 25,000 biobased products made by 3,100 companies, which employ nearly 100,000 people. These programs deserve to be renewed, expanded and funded.

It seems to me President Obama missed an opportunity to acknowledge the success of these two programs.

Meanwhile, the RFS is under attack from oil refiners who want to roll back this progress. In a bit of unintended irony, a U.S. Court of Appeals recently determined that oil companies themselves have no obligation under the RFS to ensure the success of homegrown technology that reduces reliance on foreign oil and promotes a cleaner and healthier environment – they are, the Court said, “captive consumers” to this technology. I wonder if the average American family – which paid $257 more last year for gas than the previous year, while using fewer gallons – would feel that oil companies are the “captive consumers.”

If the goal is to ensure a thriving middle class, then stable energy prices and new technology-driven employment opportunities ought to fit the bill. Support for the RFS and a new Farm Bill should be something the President and Congress can agree on.

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February 19, 2013 10:36 AM

It's All About Power

By William O'Keefe

CEO, George C. Marshall Institute

There is absolutely no way good policy can come from a foundation based on illusion and misleading rhetoric. In his State of the Union address, President Obama’s comment that he would “direct” his federal agencies use their regulatory authority unless Congress passes cap and trade legislation was a ruse and not a very clever one at that. He knows that no such legislation will be passed. Cap and trade couldn’t be passed when Democrats controlled both houses and many members of the Democratic Caucus even lost their reelection bids largely in part because they supported. What the President did was lay the foundation for more regulatory excess.

Analyses of cap and trade legislation have clearly demonstrated that it is a bureaucratic job killer. Of course, the President may be pushing cap and trade in public in the hopes that Congress will pass some form of a carbon tax. Energy is being used more efficiently and CO2 emissions are not rising, so what would be the purpose of a carbon tax? In addition to making fossil energy more expensive, it would give Co...

There is absolutely no way good policy can come from a foundation based on illusion and misleading rhetoric. In his State of the Union address, President Obama’s comment that he would “direct” his federal agencies use their regulatory authority unless Congress passes cap and trade legislation was a ruse and not a very clever one at that. He knows that no such legislation will be passed. Cap and trade couldn’t be passed when Democrats controlled both houses and many members of the Democratic Caucus even lost their reelection bids largely in part because they supported. What the President did was lay the foundation for more regulatory excess.

Analyses of cap and trade legislation have clearly demonstrated that it is a bureaucratic job killer. Of course, the President may be pushing cap and trade in public in the hopes that Congress will pass some form of a carbon tax. Energy is being used more efficiently and CO2 emissions are not rising, so what would be the purpose of a carbon tax? In addition to making fossil energy more expensive, it would give Congress a mechanism to easily and regularly increase government revenue.

Congress and the Administration are addicted to spending. Over the past four years, our country has added nearly $6 trillion to the national debt. At $16.4 trillion, our nation’s total debt is now larger than our entire economy. Anyone who knows this and still thinks that Washington could possibly resist the temptation to gradually increase a carbon tax to feed its spending habit only has to look at what happened to the value-added-tax (VAT) in Europe. When first levied, the average was about 13%. It is now almost double that.

The President is long on assertions and short on facts. Even the Intergovernmental Panel on Climate Change (IPCC) draft of its next assessment report makes clear that there is insufficient evidence to support the allegations made by the President. Recent research by well-respected climate expert Professor Roger Pielke, Jr. from the Center for Science and Technology Policy Research shows that “U.S. intense hurricane landfalls are currently in longest drought (7 years+) ever documented -- US tornadoes, especially strongest ones, have not increased since at least 1950. -- US drought has decreased since middle of the past century. -- US East Cost Winter Storms show no trends…Trends in costs of disasters are not a proxy for trends in climate phenomena.”

In addition, as time passes, more climate scientists are moving away from the climate orthodoxy by acknowledging that global warming has halted and that there has been no significant temperature increase in 16 years. Some are acknowledging, finally, that they have over-estimated climate sensitivity and have not given enough attention to cloud formation, oceans currents, and solar affects, all of which can have a greater affect on climate than CO2.

If the temperature increases that are supposedly the result of fossil energy consumption and the driver for climate extremes have halted, how can energy consumption be blamed for the extreme “weather events” cited by the President? The answer is that they are an attempt to create the illusion that it is necessary for the government to exercise more power over the economy.

Beyond these inconvenient truths, the President fails to acknowledge the big elephant in the room. CO2 emissions in the United States have gone down and are not predicted to return to the 2005 level until 2035, according to the Energy Information Administration. The increases in global emissions are coming from China, India, and other developing economies. There is nothing in the President’s proposal to address those, although there are things that could be done that would help them use energy more efficiently while helping our economy.

The President’s claims about climate change could have been written by the most extreme environmental organization. It is clear that they believe any extreme weather event that occurs is the result of human activities that consume fossil energy. Freeze or fry, wet or dry, the problem is always the same—energy consumption. And so is the solution—more government control over the economy and our lives. It is only a matter of time before someone will find a way to blame fossil energy consumption for the recent meteorite that hit Russia or the asteroid that passed by Earth.

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February 17, 2013 6:48 PM

Natural gas can fight climate change

By Bernard L. Weinstein

Associate Director, Maguire Energy Institute at Southern Methodist University and George W. Bush Institute Fellow

In both his inaugural and state-of-the-union addresses, President Barack Obama made it clear that battling climate change will be tops on his policy agenda. He has further proclaimed that if Congress won’t help, he’ll use executive orders and agency regulations to achieve his climate goals.

But just what are the president’s goals? So far, he hasn’t articulated any specific benchmarks, though he did state he wants households and businesses to cut “energy waste” by 50 percent over the next 20 years. Regulatory actions during his first term, and the likely appointment of Gina McCarthy as EPA administrator, augur tighter limits on greenhouse gas emissions (GHGs) from both stationary and mobile sources as well as tough new restrictions on toxics and particulates from power plants and industrial boilers over the next several years. And though Mr. Obama paid lip service to the natural gas boom in his state-of-the-union, the thrust of his remarks clearly indicated he wants to “double-down” on “sustainable energy sources&rdqu...

In both his inaugural and state-of-the-union addresses, President Barack Obama made it clear that battling climate change will be tops on his policy agenda. He has further proclaimed that if Congress won’t help, he’ll use executive orders and agency regulations to achieve his climate goals.

But just what are the president’s goals? So far, he hasn’t articulated any specific benchmarks, though he did state he wants households and businesses to cut “energy waste” by 50 percent over the next 20 years. Regulatory actions during his first term, and the likely appointment of Gina McCarthy as EPA administrator, augur tighter limits on greenhouse gas emissions (GHGs) from both stationary and mobile sources as well as tough new restrictions on toxics and particulates from power plants and industrial boilers over the next several years. And though Mr. Obama paid lip service to the natural gas boom in his state-of-the-union, the thrust of his remarks clearly indicated he wants to “double-down” on “sustainable energy sources” (i.e. renewables) as a strategy to fight climate change and improve America’s energy efficiency.

Unfortunately, several of the president’s goals are misguided in that they ignore economic reality. Mr. Obama acknowledged in his state-of-the-union that GHGs in the U.S. have fallen in recent years, though his preferred nomenclature is “dangerous carbon pollution,” which is unsettled science. But this drop is carbon emissions has virtually nothing to do with the $150 billion in federal subsidies to wind, solar, biofuels and electric vehicles that have been the hallmark of Mr. Obama’s energy policy. Rather the drop in GHGs can be attributed almost entirely to the substitution of natural gas for coal in power generation and industrial boilers.

As for the claim that households and businesses are wasting energy, this is also not the case. Indeed, efficiency in energy use has improved markedly of late. For example, a dollar of economic output today requires 50 percent less energy input than was the case 30 years ago. No other country has recorded efficiency gains of this magnitude. Though government mandates on fuel economy and appliance energy use have contributed, market forces—in particular higher oil prices—are largely responsible for these efficiency gains.

Though the administration would like to see Congress enact a carbon tax or a “cap and trade” scheme to reduce GHG emissions, this is unlikely to occur over the next four years. But there is a strategy the president could pursue to achieve his clean energy goals: embrace natural gas. Since 2005, 8,000 megawatts of coal-fired generation have been retired and another 15,000 megawatts will be off-line by 2016. These coal plants are being replaced primarily by natural gas which has a “carbon footprint” about half that of coal. Whereas 45% of America’s electricity was generated by coal in 2005, by 2016 coal will account for less than 30%, with natural gas taking up the slack. The result will be even lower carbon emissions.

What’s more, the newfound abundance of natural gas has pushed down prices to near-record lows. Lower natural gas prices, in turn, have been like a tax cut for millions of households and businesses that are served by utilities burning natural gas to generate power or supplying natural gas for home heating. Abundant and affordable natural gas is also inducing a rapid shift away from expensive fuel oil in the Northeast, saving companies and households hundreds of dollars every winter while at the same time improving the air quality in these states.

Low-cost natural gas is also restoring the competitiveness of America’s manufacturing sector. For example, natural gas, and natural gas liquids such as propane, butane, and pentane, are the primary inputs used by the petrochemical industry which makes the building blocks for plastics, pharmaceuticals, and many other products. Whereas a decade ago the U.S. was a net importer of petrochemicals, thanks to the shale gas revolution it is once again a net exporter of petrochemicals, which means more American jobs and a lower trade deficit.

Endorsing and facilitating the export of U.S. natural gas is another way the White House can pursue its clean energy goals. By exporting some of our abundant natural gas supplies, the U.S. can help others reduce their GHGs and toxic emissions—particularly those countries that rely heavily on coal for power generation.

President Obama and his advisors need to acknowledge that renewable energy sources such as wind, solar, and biomass, even when combined with efficiency and conservation in our use of energy, cannot supply the power needs of a growing economy. They should also recognize that not all fossil fuels are created equal and that greater use of abundant, domestic natural gas can help improve air quality while reducing power costs and making America’s manufacturing industries more competitive.

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February 15, 2013 3:07 PM

A Free-Market Solution to GHG Emissions

By Rachael Jonassen

Senior Scientist for Climate Change, LMI

Little noticed among his actions in the first administration, President Obama issued Executive Order 13514 in 2009, which required federal agencies to measure and reduce their greenhouse gas (GHG) emissions. Because the federal government is a large part of the US economy, this will have measurable impact on US emissions while in effect (until 2020).

Tucked away in that EO was a large opportunity for a whole new path toward national GHG reductions. Section 13 required the General Services Administration to report to the Council on Environmental Quality (CEQ) and the Office of Management and Budget (OMB) on the potential to reduce GHG emissions related to the federal supply chain. GSA reported that such a reduction is possible; CEQ and OMB endorsed the method that GSA suggested.

How will this be done? GSA recommended use of competitive markets … let suppliers to the government compete with one another to offer goods and services to the government with lower GHG emissions. Here’s the idea: if company A offers paper clips (or bridges, buildings, cars, o...

Little noticed among his actions in the first administration, President Obama issued Executive Order 13514 in 2009, which required federal agencies to measure and reduce their greenhouse gas (GHG) emissions. Because the federal government is a large part of the US economy, this will have measurable impact on US emissions while in effect (until 2020).

Tucked away in that EO was a large opportunity for a whole new path toward national GHG reductions. Section 13 required the General Services Administration to report to the Council on Environmental Quality (CEQ) and the Office of Management and Budget (OMB) on the potential to reduce GHG emissions related to the federal supply chain. GSA reported that such a reduction is possible; CEQ and OMB endorsed the method that GSA suggested.

How will this be done? GSA recommended use of competitive markets … let suppliers to the government compete with one another to offer goods and services to the government with lower GHG emissions. Here’s the idea: if company A offers paper clips (or bridges, buildings, cars, or anything else) to the government that result in 5 tons of emissions, and company B offers the same item but emits only 4 tons of GHGs, then the government may, if it so chooses, give some priority in the purchase decision to company B.

It sounds simple enough, but, as with any real-life issue, it has many complexities. GSA has been working since 2009 to make sure those complexities are understood and to fashion the details into a workable program. GSA has also entered into dialogue with federal suppliers to make sure concerns are voiced and companies are given time to prepare.

To grasp the magnitude of this, consider the possibilities. There are roughly 100,000 suppliers to the federal government! But that’s not all. Those suppliers depend upon their own suppliers. These tier two suppliers could total one million companies. Moreover, many of those companies have multinational operations, which means that international emissions may be affected. Many others of these companies may be small ‘mom-and-pop’ operations that may struggle to estimate their emissions. GSA is sensitive to all of these issues.

Wisely, GSA has been moving deliberately to develop the needed system for implementation and proposes a phased approach that won’t shock the suppliers. This effort may find new vigor in the second term. The real beauty of this approach is that it allows companies to unharness their capabilities and compete, and be rewarded, for lowering their emissions and those of the government. This can grow rapidly to engage much of the economy and dramatically lower US emissions. And it inherently encourages the growth of green jobs … a plus for everyone.

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February 15, 2013 2:26 PM

A Four-Point Plan for the President

By Jamie Rappaport Clark

President and CEO of Defenders of Wildlife

While the administration can and should take action to reduce greenhouse gas emissions, President Obama also made it clear that we need to “prepare our communities for the consequences of climate change.” Because past emissions have “locked in” a certain amount of warming regardless of future reductions, this is a critical element of climate change response, and the administration is poised to build on its past work to help increase resilience in the face of inevitable change. We recommend a four-point climate change preparation strategy that needs no Congressional action:

Rethink Rebuilding. After any major weather disaster, the pressure is on to repair damage quickly. However, with climate change worsening disasters­­ like fires, storms and coastal floods, we must rethink where and how we rebuild to promote real, long-term recovery rather than opening ourselves up to a repeat of the same set of risks. The administration should build on its first-term commitments to restore floodplains, wetlands, coastal dunes and fire-resilien...

While the administration can and should take action to reduce greenhouse gas emissions, President Obama also made it clear that we need to “prepare our communities for the consequences of climate change.” Because past emissions have “locked in” a certain amount of warming regardless of future reductions, this is a critical element of climate change response, and the administration is poised to build on its past work to help increase resilience in the face of inevitable change. We recommend a four-point climate change preparation strategy that needs no Congressional action:

Rethink Rebuilding. After any major weather disaster, the pressure is on to repair damage quickly. However, with climate change worsening disasters­­ like fires, storms and coastal floods, we must rethink where and how we rebuild to promote real, long-term recovery rather than opening ourselves up to a repeat of the same set of risks. The administration should build on its first-term commitments to restore floodplains, wetlands, coastal dunes and fire-resilient forests, all of which help to protect communities from future climate risks.

Plan for Impacts. Over the past four years, the administration has released high-level policies and strategies to encourage new thinking about climate change, including draft guidance for incorporating it into planning for federal projects. This helps federal agencies “look before they leap” and plan for climate change impacts. But many agencies still aren’t sufficiently accounting for the many effects of climate change when planning their programs and projects, and are still engaged in actions that may be vulnerable to climate impacts, and that may increase damage to wildlife and ecosystems. The administration needs to strengthen and finalize its climate change guidance and build capacity to help agencies implement it.

Protect and connect. As dire as the potential consequences of climate change are for people, for wildlife and habitats they may be even worse. If we want to avoid leaving our children a world marred by the extinction of some of our most iconic species, we need to protect more wildlife habitat and make sure it is connected to allow species to respond to climate impacts. These natural areas will in turn provide us with clean water, flood protection, open space and recreation.

Make the science accessible. The past several years have seen an explosion of new information about climate change, including detailed projections of future impacts across much of the country. However, finding and understanding these results can be a challenge. The administration should create a single hub for climate change information that is current, accurate and accessible to all.

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February 15, 2013 2:16 PM

Security Trust Fund Equals Massive Tax

By Brigham McCown

Principal and Managing Director of United Transportation Advisors LLC

In Tuesday’s State of the Union address, President Obama proposed a program to divert revenues from federal oil-and-gas drilling into research for alternative energy solutions. How would that be done? Well, by raising taxes and creating another new government program.

The proposed program carries the name “Energy Security Trust Fund” as a nod to the economic woes facing many families across the nation. The idea builds upon numerous proposals, one by Securing America’s Future Energy, or SAFE.

The plan is also similar to one introduced by Representative John. Larson featuring a carbon tax to fund R&D for alternative energy solutions. It remains unclear whether Rep. Larson considers his bill inspiration for the Presidents plan, as his office did not respond to requests for comment. SAFE however did reach out, Larson’s plan was pitched as a solution to reduce household gasoli...

In Tuesday’s State of the Union address, President Obama proposed a program to divert revenues from federal oil-and-gas drilling into research for alternative energy solutions. How would that be done? Well, by raising taxes and creating another new government program.

The proposed program carries the name “Energy Security Trust Fund” as a nod to the economic woes facing many families across the nation. The idea builds upon numerous proposals, one by Securing America’s Future Energy, or SAFE.

The plan is also similar to one introduced by Representative John. Larson featuring a carbon tax to fund R&D for alternative energy solutions. It remains unclear whether Rep. Larson considers his bill inspiration for the Presidents plan, as his office did not respond to requests for comment. SAFE however did reach out, Larson’s plan was pitched as a solution to reduce household gasoline expenses, which have spiked numerous times this past year. Interestingly, the plan will only increase costs to families who can least afford it.

The current idea is to create a government run fund that would be overseen by thought leaders opposed to fossil fuel. The money received by taxing the oil and gas industry would then be spent by the government to support research for electric vehicles, biofuels, solar, and hydrogen fuel cells. The end goal is to eventually replace gasoline and diesel fuel from cars and trucks. While we do not know the details, Larson’s original bill would impose a per-unit tax on the carbon dioxide content of fossil fuels, beginning at a rate of $15 per metric ton of CO2.

Just for reference, the average passenger car obtains 20.3 miles per gallon. Therefore, a car driven 12,000 miles per year would roughly be responsible for generating 5.5 metric tons of CO2 per year. Naturally commercial motor vehicles, buses and the like would generate even more on a per unit basis. Airlines would face an even higher cost on a per unit basis.

Aside from the obvious fact that any such tax would be passed along to consumers in the form of even higher fuel costs, such an artificial increase to the operating costs of every personal, business and construction vehicle used in the country would have a chilling effect on our fragile economic recovery. Airlines struggling to avoid bankruptcy would potentially fare worse, and let’s not forget that the vast majority of trains run on fuel that would be affected by this government imposed tax.

On the other hand, the plan boasts an incentive for those who “stop contributing to global warming” by granting them a bigger payroll tax rebate.

While enacting a tax for a trust fund traditionally requires the approval from Congress, the President boldly declared, “If Congress won’t act soon to protect future generations, I will. I will direct my cabinet to come up with executive actions we can take.”

In essence, the “Energy Security Trust Fund” is an attempt to levy a new national tax affecting everything we purchase in this country. That Starbucks cup of coffee didn’t just materialize; the coffee, equipment and even plastic lids were transported to your neighborhood location. It would be somewhat untenable to suggest that the actual operating costs would not in turn, be passed along to consumers.

Given the government’s less than stellar track record at say, running any other governmental program, it is difficult to imagine how this program would result in any benefit to the average taxpayer. At worse, it is simply another attempt to artificially manipulate the winners the losers in the energy industry by raising costs on one form of energy products while subsidizing another.

Instead of trying to control the markets, the President should be looking at ways for renewables to compete on a level playing field with fossil fuels. That’s not to say that the government shouldn’t pursue R&D, but there’s a real difference between initial investment in experimental research and subsidizing a go-to-market strategy for private companies. Real change will occur when renewables can compete with fossil fuels. Opponents point out that the oil and gas industry, the nuclear industry, and many other industries received favorable treatment when they were in their infancy. That is a true statement, but then again, this isn’t the early 1900s, or even the 1950s when we were locked in a cold war against the Soviet Union. Moreover, the country was not staggering under a $16 trillion dollar deficit either.

Mr. President, instead of trying to push big government policies that actually stifle economic expansion and productivity, maybe it is time for the government to get out of the way. Successful economic expansion is not really that difficult a principle to master and utilize successfully.

A free market economy requires the government to set a level playing field, enact succinct regulations to keep competition fair, and then sit back and allow private competition and market forces drive the economy. Such an approach places the consumer in charge by allowing each American to purchase the goods and services they desire.

That’s how winners and losers are chosen in business, and that simple fact has always been the recipe for American success.

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February 15, 2013 11:12 AM

Technology is Key, But Don’t Forget Coal

By Kevin Crapsey

Vice President, Corporate Strategy & Development, Eco Power Solutions

I had two important takeaways from President Obama’s State of the Union – one positive and one negative.

On a positive note, I was encouraged by President Obama’s call to “encourage the research and technology that helps natural gas burn even cleaner and protects our air and water.” Technology is the key to addressing climate change. Innovative technologies like multi-pollutant emissions control systems can address many pollutants at once, thus reducing the cost and time needed to burn fossil fuels, including natural gas AND coal, more cleanly.

Many of these technologies are commercially ready, but have not been embraced by utilities because of a comfort level with traditional air quality control systems. By ramping up these newer technologies, the United States cannot only address climate change more aggressively, but become the world leader in this sizable market.

On the other hand, I was disappointed that the President failed to mention America’s dominant energy source – coal. We cannot have a conversation about...

I had two important takeaways from President Obama’s State of the Union – one positive and one negative.

On a positive note, I was encouraged by President Obama’s call to “encourage the research and technology that helps natural gas burn even cleaner and protects our air and water.” Technology is the key to addressing climate change. Innovative technologies like multi-pollutant emissions control systems can address many pollutants at once, thus reducing the cost and time needed to burn fossil fuels, including natural gas AND coal, more cleanly.

Many of these technologies are commercially ready, but have not been embraced by utilities because of a comfort level with traditional air quality control systems. By ramping up these newer technologies, the United States cannot only address climate change more aggressively, but become the world leader in this sizable market.

On the other hand, I was disappointed that the President failed to mention America’s dominant energy source – coal. We cannot have a conversation about an all-of-the-above energy strategy without coal as a key discussion point. It is possible for coal-fired power plants to burn cleaner than natural gas, as we’ve proven at our Technology Center in Louisville for the past 2.5 years.

If the President is committed to addressing climate change, he must promote technology, and not just renewable technologies like solar and wind. And, we need to leverage that technological innovation to make all fossil fuels burn cleaner, including coal.

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February 14, 2013 4:12 PM

Natural Gas Can Move Country Forward

By Dave McCurdy

President and CEO, American Gas Association

During this week’s State of the Union address, President Obama spoke about the challenges our nation faces and solutions that can help address many of these challenges. Whether focused on job creation, economic recovery, or improving our environment or national security, natural gas is part of the answer to moving our country forward.

The President also outlined a ‘Partnership to Rebuild America’ that will attract private capital to upgrade natural gas pipeline and other critical infrastructure. Streamlining and expediting infrastructure permitting is necessary to ensure timely completion and investment for these important projects, and I appreciate the President’s focus on ‘cutting red tape.’

The energy industry has long been on the forefront of innovation, and that still rings true today. Our domestic supplies of natural gas have led to stability – natural gas utilities are delivering essential energy to customers at stable prices, and doing so more efficiently every year. Research, development and bipartisan government su...

During this week’s State of the Union address, President Obama spoke about the challenges our nation faces and solutions that can help address many of these challenges. Whether focused on job creation, economic recovery, or improving our environment or national security, natural gas is part of the answer to moving our country forward.

The President also outlined a ‘Partnership to Rebuild America’ that will attract private capital to upgrade natural gas pipeline and other critical infrastructure. Streamlining and expediting infrastructure permitting is necessary to ensure timely completion and investment for these important projects, and I appreciate the President’s focus on ‘cutting red tape.’

The energy industry has long been on the forefront of innovation, and that still rings true today. Our domestic supplies of natural gas have led to stability – natural gas utilities are delivering essential energy to customers at stable prices, and doing so more efficiently every year. Research, development and bipartisan government support are vital to ensuring that we continue to improve upon the clean, efficient production, delivery and use of this foundation fuel across our economy.

AGA is pleased to see the president recognize the many benefits of natural gas and we look forward to working with his administration in making use of this foundation fuel to help address our national priorities.

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February 14, 2013 1:00 PM

RFS Contrary to the President’s Goals

By Charles Drevna

President, American Fuel & Petrochemical Manufacturers

During the State of the Union address President Obama stressed the importance of lowering energy costs for Americans and ensuring middle-class families can afford to keep food on the table. He failed, however, to acknowledge one significant policy change that could achieve both goals: repealing our nation's flawed ethanol mandate.

By requiring that ethanol be blended into the gasoline supply, the Renewable Fuel Standard (RFS) drives up fuel prices while decreasing fuel efficiency. Ethanol contains 33 percent less energy per gallon than gasoline, and vehicles fueled with ethanol cover fewer miles per gallon than those running on conventional gasoline. This means that Americans are spending a lot more time and money at the pump. According to FarmEcon, LLC, the higher cost of ethanol added $14.5 billion, or 10 cents per gallon, to the cost of U.S. gasoline consumption in 2011.

The RFS also puts consumers at risk for costly repair bills, as ethanol can damage vehicles and affect performance — corroding metals, causing rubber to swell and causing engines to brea...

During the State of the Union address President Obama stressed the importance of lowering energy costs for Americans and ensuring middle-class families can afford to keep food on the table. He failed, however, to acknowledge one significant policy change that could achieve both goals: repealing our nation's flawed ethanol mandate.

By requiring that ethanol be blended into the gasoline supply, the Renewable Fuel Standard (RFS) drives up fuel prices while decreasing fuel efficiency. Ethanol contains 33 percent less energy per gallon than gasoline, and vehicles fueled with ethanol cover fewer miles per gallon than those running on conventional gasoline. This means that Americans are spending a lot more time and money at the pump. According to FarmEcon, LLC, the higher cost of ethanol added $14.5 billion, or 10 cents per gallon, to the cost of U.S. gasoline consumption in 2011.

The RFS also puts consumers at risk for costly repair bills, as ethanol can damage vehicles and affect performance — corroding metals, causing rubber to swell and causing engines to break down more quickly. Tests have shown that 25 percent of cars approved by the EPA to run on E15 — gasoline containing just 15 percent ethanol — experienced engine damage or complete failure. And because ethanol increases the chance of engine damage, vehicle manufacturers have warned its use will void the warranty on some newer vehicle models.

But it doesn’t stop there. Countless food producing and hunger groups have noted that the RFS also makes food more expensive for American families. RFS ethanol blending mandates guarantee a market for corn — the most common ethanol feed stock — and compels more and more farmers to compete for land to grow the crop. Land-use competition and high demand for corn have caused prices to increase by 40 percent, 20 percent and 17 percent for corn, soybeans and wheat, respectively. Because corn is a main component of animal feed, prices for beef and dairy have risen as well.

Our nation has abundant natural resources and historically, our open economy has allowed such resources to go where they were most valuable and affordable. Without the RFS, we would find that more of our food resources would go to the table, more of our abundant petroleum resources would be set free to produce more fuel for our engines, and consumers would save more money at the grocery store and the pump.

Continuing to support the RFS makes no sense. Burdening hardworking families, is contrary to the president’s goals and will only stand in the way of a stronger U.S. economy and growing middle class. Congress and the administration must take action and repeal the failed RFS.

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February 13, 2013 7:59 PM

Rhetoric Not Enough

By Bill Snape

Senior Counsel, Center For Biological Diversity

Climate change won’t be solved with rhetoric alone. I look forward to seeing the Obama administration’s plan to actually cut greenhouse pollution. It must include use of existing laws like the Clean Air Act to cut carbon, methane and ozone pollution, a significant shift toward sustainable energy, and rejection of the Keystone XL pipeline and drilling in the Arctic. It is disappointing the President didn’t use the State of the Union to educate the American public on how we can and must reduce greenhouse pollution from major industrial sources, particularly through the Clean Air Act’s new source performance standards and national ambient air quality standards. The math is simple: we cannot achieve science-based greenhouse pollution reductions while simultaneously promoting policies that do the exact opposite, like speeding up oil and gas permits on public lands and offshore areas, and promoting dangerous fracking that will poison our air and water. Leadership involves touch choices, not convenient punting and pandering. The fact that so many of our wildlife species are in decline due to climate change and related pollution should be a wake-up call, the canary in the coal mine so to speak, that we are taking horribly risky chances with our common future.

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February 13, 2013 2:24 PM

Some Good ideas, But Bad Budget Moment

By Paul Sullivan

Professor of Economics, National Defense University

The President’s comments on energy in the State of The Union Address were fine on vaulting rhetoric, yet were lacking in specifics and real policy options. I suppose that is what such speeches are all about. They are more to set the stage than to get down to the details. However, it is disappointing once one really thinks of the details and how difficult it will be to get his ideas across and implemented.

The rather large elephant in the room not mentioned is the true dysfunction in the political system in Washington. We are more in gridlock now than ever before on so many issues. Energy will likely take a back seat in this traffic jam for some time. The economy remains weak. Most Americans are more worried about jobs than energy efficiency. He budget axes are causing real havoc across the government. The churn created by draconian decisions on budgets that are far from long term and strategic in nature are damaging the morale and the productivity of many in the federal government. We will likely see a lot of the best and brightest move on from the tensions from t...

The President’s comments on energy in the State of The Union Address were fine on vaulting rhetoric, yet were lacking in specifics and real policy options. I suppose that is what such speeches are all about. They are more to set the stage than to get down to the details. However, it is disappointing once one really thinks of the details and how difficult it will be to get his ideas across and implemented.

The rather large elephant in the room not mentioned is the true dysfunction in the political system in Washington. We are more in gridlock now than ever before on so many issues. Energy will likely take a back seat in this traffic jam for some time. The economy remains weak. Most Americans are more worried about jobs than energy efficiency. He budget axes are causing real havoc across the government. The churn created by draconian decisions on budgets that are far from long term and strategic in nature are damaging the morale and the productivity of many in the federal government. We will likely see a lot of the best and brightest move on from the tensions from the Damocles Sword of unthinking sequestration. The threat of furloughs and 20 percent or more cuts in pay will drive many out and drive others into less effort and less creativity. The lack of leadership during this time of churn may break some systems for some time to come.

The President seems to put a lot of reliance on the federal government to get energy programs started. I would not resort much to the federal government for much of anything until well after the churn stops. Also, most of the creative and effective energy policies are being developed at the state levels. The private sector will likely drive changes in energy efficiency and energy technologies changes as the federal government chases its tail over budget issues.

Any policy drive toward solving climate change will run into a brick wall on The Hill. The brick wall is called the Tea Party and some others who think that climate change is a fraud or worse. The President’s comments on emissions going down could have been clearer. Some of this decline is from movements from coal generation to natural gas generation and from higher MPG cars and trucks. However, a lot of the decline of emissions is from the decline in the use of energy due to the chronic and crushing recession. Increasing gasoline prices, even if we are lucky in this country to have some of the lowest gas prices in the developed world, also tend to cut back on gas use and hence emissions.

Much of the increase in shale oil and shale gas production is on private lands and via private leases. He could have mentioned that. I am sure he knows that. Indeed, a lot is from federal lands, but the data need to be clarified.

He also mentioned the use of public water sources. That gets into some very dicey territory on water rights, proper water use and the politics of water, especially in the Western States and the drier states. Water is a fighting word and a legally laden word in many parts of the country where the unconventional hydrocarbons are being developed. There are groundwater issues that could become very dicey in some places.

Water security, energy security, land security, and food security are tied very tightly together. If the federal government really wants to make a difference they should establish some precedents linking these various forms of resource security in legislation, rules, regulations, etc. in some logical, comprehensive and sensible way. However, I am not holding my breath on that one.

His comments on the problems with our infrastructure also were on target rhetorically, but otherwise lacking in substance. If we are to redo our electricity networks developing smart grids that are self-healing then we should have about $13 trillion available over the next 13 years. I doubt the government will find that in its declining budget boxes.

One of the vanguards of energy change has been DOD. With the blunt hammer of budget cuts it is hard to see some of the very important programs related to energy efficiency, smart grids, new transport technologies, increased deployment of renewables and more that DOD is really at the forefront continuing. There will be many costs involved in the blunt instrument method of accounting.

Another set of losses not being discusses could be the huge losses in tax and other revenues that will occur when the furloughs, cutbacks and more happen. We are talking about 800,000 in DOD alone. There may be 5 million overall that could face furloughs. Now add in their families. Now add in the bartender and barber effects, the pressures on the housing, auto and other markets and the potential financial crisis that may result from such vast furloughs and you get the picture. Cutting costs does not necessarily lead to a stronger budget or a stronger government or better policies.

There are many things we could be thinking about to improve our energy situation and energy systems if we had been more prudent with the federal purse in the past. We could look into high-speed rail, tram systems, improved building designs, improves city and down designs, more walkable cities, cities with safe bike paths, more efficient transport vehicle technologies, and so many more. It makes me physically nauseated to think of the waste that has been produced in the budget over the years. I am most particularly uncomfortable when I consider the opportunities lost from the opportunity costs that were never fully considered.

Can cheaper gas move the economy forward? Yes it can. It already is. Can increased energy efficiency produce profits and jobs? You betcha. Can tightening up the waste produced from transport and electricity generation create massive opportunities? Indeed. Can exporting gas and oil help resolve our trade deficit and strengthen our economy? Yes. Will this increase prices for gas? Prices will likely bounce up a bit, prompt more investment in finding and production and then drive the prices down again. We have massive reserves of shale gas. Let us not forbid ourselves from their benefits by acquiescing to half measured and self-serving economic studies.

I respect the President for his interests in energy issues and the environment. I do not envy his job in trying to move these forward in this dysfunctional environment. I may disagree with some of his policy ideas and in what institutions he may be placing his hopes for a better energy future in, but my sense is his heart is in the right place given his understanding of things -- even if some of his advisors on these issues may be pointing him in the wrong direction.

We have lots of threats to the stability and security of our energy systems. A potential war with Iran is just one of them. We should not be complacent at all when it comes to developing, deploying and improving new energy, building, transport, communications and other technologies and their infrastructure. However, the section of our country to rely on to make this happen will likely not be the federal government. It will be the private sector.

This is not a political comment. I am a member of no party. I go with the ideas and results.

(All opinions expressed are mine and do not represent those of any institution I may be a part of or associated with, as usual. I am speaking as US citizen who cares deeply for the future of this country, its economy, its people, its energy and transport systems, its environment and its overall security situation.

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February 13, 2013 2:18 PM

Obama makes the case. What comes next?

By Manik Roy

The Vice President for Strategic Outreach for the Center for Climate and Energy Solutions

When Congress failed to enact the climate bill in 2010, many longtime climate action advocates responded by falling silent on climate change. “Too polarizing,” they said. “When we talk about climate change, the skeptics attack climate science, the press reports he-said-she-said, and all the public hears is a muddle. Let’s talk about green jobs and air pollution instead.”

That silence was a big mistake. It understated the urgency of the challenges we face. It undervalued the clean energy solutions we need to deploy throughout our economy. And it underestimated the ability of busy moms and dads to cut through the noise about the world we’re leaving our children.

Meanwhile, even as climate change was barely whispered about in Washington D.C., climate-driven impacts were loud and clear across America in the form of record-setting heat, extreme drought, floods, severe wildfires, and, of course, Hurricane Sandy.

President Obama has now broken the silence. First in his inaugural address and then in his State of the Union addres...

When Congress failed to enact the climate bill in 2010, many longtime climate action advocates responded by falling silent on climate change. “Too polarizing,” they said. “When we talk about climate change, the skeptics attack climate science, the press reports he-said-she-said, and all the public hears is a muddle. Let’s talk about green jobs and air pollution instead.”

That silence was a big mistake. It understated the urgency of the challenges we face. It undervalued the clean energy solutions we need to deploy throughout our economy. And it underestimated the ability of busy moms and dads to cut through the noise about the world we’re leaving our children.

Meanwhile, even as climate change was barely whispered about in Washington D.C., climate-driven impacts were loud and clear across America in the form of record-setting heat, extreme drought, floods, severe wildfires, and, of course, Hurricane Sandy.

President Obama has now broken the silence. First in his inaugural address and then in his State of the Union address, he referred to all the above in making the case for climate action. In the State of the Union, he urged Congress to move forward – “but if Congress won’t act soon to protect future generations, I will.”

What executive actions can the president now use while we wait for Congress to act? In a new C2ES policy guide, we offer some suggestions. Under existing authority, the administration can:

  • Increase the fuel economy and cut the carbon emissions of medium- and heavy-duty trucks and buses by setting standards through 2025. This will build on the administration’s prior efforts to double the fuel economy of cars and light trucks.
  • Set carbon emission standards for power plants, the sources of one third of U.S. greenhouse gas emissions. The key here will be to give states the flexibility to use market-based measures to meet the standards.
  • Set new energy efficiency standards for household appliances and industrial equipment, so we don’t need to run those power plants as much in the first place.
  • Continue to open federal lands to renewable energy production and transmission.
  • Reduce emissions of methane, black carbon and hydrofluorocarbons – short-lived pollutants that have an outsized effect on climate change in the near term.
  • Shrink the federal carbon footprint by improving energy efficiency and expanding the use of clean energy in defense and other federal operations.
  • Help states, businesses and communities prepare for the increasingly frequent and intense extreme weather events we expect to see as a result of climate change.

Working together, President Obama and Congress can also:

  • Support R&D and demonstration of low-emitting energy technologies, including through the Advanced Research Projects Agency-Energy (ARPA-E).
  • Extend the wind production tax credit for now, but establish criteria for phasing out all energy subsidies that are no longer needed.
  • Take steps to reduce emissions and promote clean energy in the reauthorizations of transportation, farm and other major federal programs.
  • Establish a comprehensive climate information service similar to the National Weather Service to help states and localities factor long-range forecasts into their resilience and disaster response strategies.

That’s a pretty good list. There’s a lot that can be done.

But most of all, let’s please remember – ignoring this problem won’t make it go away.

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February 13, 2013 1:14 PM

The Best Tool for Cutting Carbon Now

By Frances Beinecke

President, Natural Resources Defense Council

President Obama gave a full-throated call for climate action in his State of the Union Address. He urged Congress to develop bipartisan clean energy and climate. But he was unmistakably clear: “If Congress won’t act soon to protect future generations, I will. I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.”

The best tool the president has to achieve this is the Clean Air Act. The law gives him the authority to reduce carbon emission from power plants—the largest source of U.S. greenhouse gases. NRDC has laid out a flexible, cost-effective proposal for how the Environmental Protection Agency can use the Clean Air Act to cut these emissions by 26 percent by 2020 and generate...

President Obama gave a full-throated call for climate action in his State of the Union Address. He urged Congress to develop bipartisan clean energy and climate. But he was unmistakably clear: “If Congress won’t act soon to protect future generations, I will. I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.”

The best tool the president has to achieve this is the Clean Air Act. The law gives him the authority to reduce carbon emission from power plants—the largest source of U.S. greenhouse gases. NRDC has laid out a flexible, cost-effective proposal for how the Environmental Protection Agency can use the Clean Air Act to cut these emissions by 26 percent by 2020 and generate an estimated $25 billion to $60 billion in health and climate benefits by 2020.

The president also said America must dramatically expand our abundant wind and solar energy resources, cut in half the amount of energy we waste in homes and business—a proposal that generated great enthusiasm throughout the House Chamber last night—and invest in low-carbon technologies.

These are proven solutions that are already delivering clean energy and putting Americans to work. Wind energy now accounts for nearly half of all new installed energy capacity and more than 150,000 Americans have jobs building clean cars that go farther on a tank of gas. I am a member of the Alliance to Save Energy’s bipartisan Commission on National Energy Efficiency Policy, and last week we released a blueprint for doubling energy efficiency over the next two decades that would create 1.3 million jobs, reduce carbon pollution by one-third, and deliver more than $1,000 in annual savings for every U.S. household.

All this progress will lead to a stronger nation. It was significant that President Obama put climate action squarely within his plan for revitalizing our nation’s economy. Enhancing America’s manufacturing sector, producing energy that does not contribute to climate change, and revitalizing our infrastructure are opportunities that will lead to innovation and prosperity. This isn’t just about solving an environmental challenge; it’s about moving our country forward.

The American people have made it clear they want to move ahead. Immediately after the State of the Union, Public Policy Polling conducted a survey for NRDC about the President’s remarks about climate change. Sixty-five percent of Americans think climate change is a serious or very serious problem, and 60 percent support the president using his authority to reduce dangerous carbon pollution.

More and more Americans are joining the chorus for climate action. Now we have a president who is making the climate fight a central part of his second term and his legacy. With public momentum behind him, the president can make real and lasting progress.

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February 13, 2013 11:30 AM

SET A GOAL OF GENUINE OIL INDEPENDENCE

By Carl Pope

Former chairman and executive director, Sierra Club

The President’s reaffirmation of his commitment to action on climate change, action through his Executive Power if Congress won’t act, was unequivocal. That’s exciting. But it’s also clear that no road map has been developed for the kind of progress that is needed – not by the White House, not by the Democrats in Congress, and, I would argue, not by the climate movement. (Yes, various climate advocates have called for the full range of steps needed – but there is no obvious summary agenda which has taken the place of pricing carbon – the option which, at any meaningful level, is currently off the table and which the President did not embrace.)

There are definitely steps that have been flagged. Recognizing that the Keystone Excel Pipeline is a boondoggle designed to increase oil prices in the Midwest, use the US as the sacrifice zone for the risks of refining tar sands bitumen, and lock the world into unaffordable $90 dirty transportation fuel should be...

The President’s reaffirmation of his commitment to action on climate change, action through his Executive Power if Congress won’t act, was unequivocal. That’s exciting. But it’s also clear that no road map has been developed for the kind of progress that is needed – not by the White House, not by the Democrats in Congress, and, I would argue, not by the climate movement. (Yes, various climate advocates have called for the full range of steps needed – but there is no obvious summary agenda which has taken the place of pricing carbon – the option which, at any meaningful level, is currently off the table and which the President did not embrace.)

There are definitely steps that have been flagged. Recognizing that the Keystone Excel Pipeline is a boondoggle designed to increase oil prices in the Midwest, use the US as the sacrifice zone for the risks of refining tar sands bitumen, and lock the world into unaffordable $90 dirty transportation fuel should be – but isn’t – a no brainer.

Obama needs to move ahead with regulating not just new, but existing , coal power plants under the Clean Air Act. The President called for doubling energy efficiency, and the use of revenues from federal oil and gas drilling to reduce out dependence on fossil fuels. He called for a “fix it first” approach to our infrastructure deficits, many of whose components, like broad band wireless access, would also help cut waste of fossil fuels and the resultant carbon pollution.

If all this happens, and states hold on to their commitment to renewable electricity standards, the US utility sector will be on its way to a low-carbon future. But although the newly promulgated efficiency standards for cars and trucks will eventually reduce US oil consumption by 2.5 million barrels a day, that leaves almost 90% of our dependence on oil untouched.

Getting Beyond Oil is the next big challenge facing the American economy. Forgot the glitzy promises of “Saudi America.” Even the most bullish projections of increased oil production from tight formations like the Bakken show the cost of imported oil remaining at $300 billion a year indefinitely.

It’s not how much oil we import – it’s how many dollars we export that’s crippling our economy.

What the President did not offer – and what we need – is an ambitious national goal – not just reducing our oil dependence. Let’s end it. Let’s break the oil industry’s monopoly. Let’s replace at least another 7 million barrels of transportation energy with efficiency and other non-petroleum sources. That would make the US free from dependence on imported oil – market forces won’t do it.

Such a goal could also unlock an economic and sustainability revolution. It is excess demand which drove the price of oil from $30 only a decade ago to $100 today. Just cutting global consumption of oil by 7 mbd over the next five years would bring that price back down to a reasonable $60/barrel.

The world cannot afford – and need not tolerate – fuel prices of $4 gallon. Oil consumers pay this extortionate rate only because oil has a monopoly.

Ending our dependence on imported oil would have the same economic benefits as a permanent stimulus package of $300 billion a year – without adding a penny to the deficit. Oil imports amount to a tax paid to foreign governments like Iran, Russia and Saudi Arabia. (That’s ¾ the size of our fiscal deficit challenge, for the record.)

This benefit results not just from importing less oil, but from reducing the price of the remaining oil we use. That’s a factor not commonly taken into account in calculating the benefits of investments that replace oil with renewable fuels, vehicle performance and transportation efficiency shifts like road to rail.

What happens environmentally if we get the price of oil back to $60? Well, the investors in the Keystone Pipeline would thank President Obama for refusing to permit it, because at $60/barrel there is no economic market for new tar sands oil. Nor would Shell keep fighting for the right to bring its badly damaged, unArctic worthy drilling rigs back to the Chuckchi Sea. Extreme oil – more than half of the risk oil poses to the climate – is a threat only when the price of oil remains at or near $90/barrel or higher.

So setting a national goal of oil independence, and meeting it by investing in an All-American, sustainable transportation system, are the biggest steps the President – or the Congress – could take to move forward on climate – and to jumpstart our economy. Implementing that goal would drive the development of low-carbon transportation alternatives. After we have ended the threat of extreme, expensive oil, by cutting global demand by 7 mbd, the US and the world would be positioned to take the next step – moving beyond cheaper, conventional oil, which amounts to the bulk of the world’s transportation fuel.

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February 13, 2013 9:13 AM

Reconciling Rhetoric and Reality

By William O'Keefe

CEO, George C. Marshall Institute

Most State of the Union speeches are either a long list of initiatives that rarely get implemented or a series of aspirations. On Tuesday night, President Obama chose a mix of aspirations and specifics dealing with wealth redistribution. His words on energy and climate were not surprising. What is important is his choice of actions.

The economy is and should be “job 1” to quote an old Ford tag line. The question is how to square the President’s Keynesian and very progressive political instincts with the reality of what makes the economy grow and work.

Two subjects of the President’s focus were energy and climate change. Depending on how these are pursued, the priority of economic growth will either be enhanced or diminished. There is a clear choice and with choice comes consequences.

As has been demonstrated in North Dakota, abundant low cost natural gas and increased oil production have led to more private investment, increased job creation and good wages, lower unemployment, among the many spillover effects that further benefit the ...

Most State of the Union speeches are either a long list of initiatives that rarely get implemented or a series of aspirations. On Tuesday night, President Obama chose a mix of aspirations and specifics dealing with wealth redistribution. His words on energy and climate were not surprising. What is important is his choice of actions.

The economy is and should be “job 1” to quote an old Ford tag line. The question is how to square the President’s Keynesian and very progressive political instincts with the reality of what makes the economy grow and work.

Two subjects of the President’s focus were energy and climate change. Depending on how these are pursued, the priority of economic growth will either be enhanced or diminished. There is a clear choice and with choice comes consequences.

As has been demonstrated in North Dakota, abundant low cost natural gas and increased oil production have led to more private investment, increased job creation and good wages, lower unemployment, among the many spillover effects that further benefit the local economy. None of this should be surprising because it is exactly what economic theory predicts.

Looking to the future, the Energy Information Administration projects that over the next two decades, oil and gas will remain our dominant sources of energy and that they will serve as the pillars of economic growth. While this is not ideal news for the Administration as it does not fit into the President’s green agenda, it is the reality. Will the President in fact take the road laid out by reality or will he go down the road of illusion? Only time will tell.

Energy Independence, at least North American independence, realistically defined, is achievable. The right course of action is to allow exploration and production on more public lands where it can be done meeting reasonable but tough environmental standards. The approval of the Keystone XL pipeline is also critical. Keystone XL has been overanalyzed and slow walked. If the Administration approves it, it will be a sign of a serious energy policy. If it doesn’t or continues to slow walk decision making, it will be a sign that the State of the Union was just words. Ironically, disapproval of the pipeline will not reduce environmental risks, but actually increase them because the alternative is shipping Canadian oil to China by tanker and processing it in Chinese refineries.

Increasing oil and gas production and removing restrictions on exports will improve our trade balance and enhance our economic relations with trading partners. And, more importantly, it improves our energy security.

On the other hand, if the Administration continues to push its green industrial policy, we will have four more years of wasteful subsidies and more crony capitalism; neither of which benefit the economy.

A second test of sincerity and reality will be how the Administration pursues climate policy. Secretary Kerry is a strong proponent of a global agreement. The question is what kind of global agreement. An agreement with Kyoto like mandates that try to suppress carbon emissions would fail and cause unnecessary economic damage. A global agreement based on technology and trade would be mutually beneficial, even though it would not be as dramatic in appearance.

Advocates of action are using climate change as a rallying tool to promote an environmental and industrial policy agenda because the reality is that nothing we do domestically will have any serious impact on global concentrations of CO2. U.S. emissions are down and will not return to 2005 levels until 2035 according to the Energy Information Administration. Hence, what is the purpose of doing more? The road the President chooses to take on climate policy will be an indicator of either a serious commitment to a sound energy policy and strong economic growth or more political pandering.

Based on the last four years, there are not many reasons to be optimistic that the President will simply do the right thing and let history judge him on the basis of restoring strong and healthy economic growth. It is early in his second term and he is freed from campaigning for re-election. Rather than a rush to judgment, it would be best to suspend disbelief and adopt President Reagan’s strategy to trust but verify.

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February 12, 2013 7:00 PM

Clean Coal Essential To Energy Future

By Evan Tracey

Senior Vice President for Communications, American Coalition for Clean Coal Electricity

Clean coal technology is an essential part of our nation’s energy future. As the President outlines his energy proposals tonight, we hope they will be consistent with his embrace of clean coal during the 2012 campaign. Unfortunately, over the past four years, the Administration’s policies have been inconsistent with the President’s campaign rhetoric.

While commitment to fully implementing 21st Century coal-based electricity seems to have wavered from the current administration, it’s clear that American ingenuity and know-how will continue to produce major developments in clean coal technologies for years to come. Coal-based electricity is vital to our nation’s energy mix. It holds down energy prices, keeps U.S. manufacturers competitive, helps the household budgets of families struggling to make ends meet, and makes our nation more secure. America agrees. A ...

Clean coal technology is an essential part of our nation’s energy future. As the President outlines his energy proposals tonight, we hope they will be consistent with his embrace of clean coal during the 2012 campaign. Unfortunately, over the past four years, the Administration’s policies have been inconsistent with the President’s campaign rhetoric.

While commitment to fully implementing 21st Century coal-based electricity seems to have wavered from the current administration, it’s clear that American ingenuity and know-how will continue to produce major developments in clean coal technologies for years to come. Coal-based electricity is vital to our nation’s energy mix. It holds down energy prices, keeps U.S. manufacturers competitive, helps the household budgets of families struggling to make ends meet, and makes our nation more secure. America agrees. A recent poll shows that 77 percent of Americans believe that U.S. policies in the next four years should include clean coal electricity. Our industry is respectfully urging the President to reaffirm his commitment tonight to clean coal in his State of the Union address.

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February 12, 2013 1:27 PM

WH Should Encourage Oil, Gas Success

By Jack Rafuse

Principal, The Rafuse Organization

President Obama has never tried to hide his disdain for America's oil and natural gas industry.

Even his rousing let’s-all-come-together speeches are peppered with unflattering references to the greed of “Big Oil”, which is his shorthand for domestic oil and natural gas producers. And we can expect more of that when he goes before Congress and the nation Tuesday with his State of the Union message.

Why does the President have such antipathy for oil and gas companies? Well, anti-Big Oil hyperbole plays well on the campaign trail. Then, maybe he’s frustrated by the failure so far of his “green” energy initiatives, encapsulated in the 2011 bankruptcy of California solar panel firm Solyndra despite half a billion dollars in taxpayer assistance.

Regardless of the reason, the President is entitled to his negative opinion of the U.S. oil and gas industry. That opinion, though, should, not prevent him from seeing that oil and natural gas producers are at the heart of an ongoing energy boom that represents one of America’s ...

President Obama has never tried to hide his disdain for America's oil and natural gas industry.

Even his rousing let’s-all-come-together speeches are peppered with unflattering references to the greed of “Big Oil”, which is his shorthand for domestic oil and natural gas producers. And we can expect more of that when he goes before Congress and the nation Tuesday with his State of the Union message.

Why does the President have such antipathy for oil and gas companies? Well, anti-Big Oil hyperbole plays well on the campaign trail. Then, maybe he’s frustrated by the failure so far of his “green” energy initiatives, encapsulated in the 2011 bankruptcy of California solar panel firm Solyndra despite half a billion dollars in taxpayer assistance.

Regardless of the reason, the President is entitled to his negative opinion of the U.S. oil and gas industry. That opinion, though, should, not prevent him from seeing that oil and natural gas producers are at the heart of an ongoing energy boom that represents one of America’s best sources of sustainable economic recovery.

Expanded and more efficient domestic production of oil and natural gas has significantly decreased our dependence on imported oil. Major discoveries of shale based natural gas could make the U.S. a major exporter of liquid natural gas, as long as politics doesn’t get in the way.

These realities should dissuade the President from going ahead with a punitive tax increase on domestic oil and gas producers. That tax hike is his shaky answer to cutting the federal deficit before the legally mandated sequester forces large and arbitrary cuts in defense and social programs spending March 1.

The energy tax increase would penalize an industry that never took a dime in bailout money during the height of the recession. America's eight largest energy companies contributed $44.8 billion to the U.S. economy in 2011 alone. Oil and gas companies continued to create jobs even when the national unemployment rate was in double digits. Today they support 9.2 million jobs nationwide.

The President’s energy tax increase might be teed up in his speech Tuesday. But it will be delivered to Congress wrapped in the non-transparent packaging of tax reform and closing tax loopholes for rich corporations. It is, in fact, a narrowly focused tax assault on an industry that apolitical logic says we should be giving our enthusiastic support.

Details of any tax policy are enough to put normal people to sleep, but we’d do well to understand the basics of the President’s plan because it has serious implications for all of us. It could mean lost jobs, diminished economic growth and more financial strain on average families due to energy cost increases. So pay attention.

First, it would deny oil and gas producers the tax deduction provided in Section 199 of the tax code for creating jobs in America. That job creation incentive now applies to almost every company included in the Dow Jones Industrial average. Second, the plan would deny these producers the benefits of the tax rule that allows U.S. companies with overseas operations to declare the foreign tax payments they make on income earned overseas as a business expense on their U.S. tax returns.

This targeted attack would apply only to American oil and gas producers. It would thus put these U.S. companies at an added disadvantage in competing against foreign firms that already dominate the international energy market.

The closer you look at the President's energy tax increase, the more self-defeating it seems for America. By one estimate it would cost three times more in lost economic opportunity than it would gain in tax revenue. I personally think the President has the intelligence to see that this is a bad idea and the courage to change course.

No one expects him to have a Kumbaya moment with the oil and gas industry. He does, though, need to acknowledge that when it comes to economic recovery, this industry is an asset that should be encouraged, not impeded.

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February 11, 2013 8:22 PM

What Obama Should Say, Then Do

By Bill Snape

Senior Counsel, Center For Biological Diversity

Five Executive Actions to Combat Climate Chaos: What the President Should Announce in State of the Union Speech

Four weeks after federal scientists reported that climate change is raising extreme weather risk and could warm America by as much as 10 degrees Fahrenheit by 2100, President Barack Obama is being challenged to lay out a bold plan to fight climate chaos in Tuesday’s State of the Union speech to Congress. Citing the draft National Climate Assessment, the Center for Biological Diversity urged the president to announce five executive actions to cut greenhouse gas pollution to avert the scientific report’s prediction of catastrophic climate change.

President Obama needs to grab the steering wheel before we drive off the climate cliff. Starting with his first post-election State of the Union address, the president can regulate carbon pollution from power plants and airplanes, ban fracking on public lands and set a national cap on greenhouse gases. Bold and ...

Five Executive Actions to Combat Climate Chaos: What the President Should Announce in State of the Union Speech

Four weeks after federal scientists reported that climate change is raising extreme weather risk and could warm America by as much as 10 degrees Fahrenheit by 2100, President Barack Obama is being challenged to lay out a bold plan to fight climate chaos in Tuesday’s State of the Union speech to Congress. Citing the draft National Climate Assessment, the Center for Biological Diversity urged the president to announce five executive actions to cut greenhouse gas pollution to avert the scientific report’s prediction of catastrophic climate change.

President Obama needs to grab the steering wheel before we drive off the climate cliff. Starting with his first post-election State of the Union address, the president can regulate carbon pollution from power plants and airplanes, ban fracking on public lands and set a national cap on greenhouse gases. Bold and immediate action is the only way to avoid the terrifyingly hot future predicted by climate scientists.

Here are five executive actions President Obama should use to fight climate change:

1. Set a national carbon pollution cap: The president should direct the Environmental Protection Agency to set a national pollution cap for greenhouse gases. The Clean Air Act already requires the EPA to set a cap for widespread and damaging "criteria pollutants." The agency has done so for six pollutants, including carbon monoxide and lead. Between 1980 and 2010, emissions of these six pollutants fell by 63 percent while the gross domestic product grew by 128 percent. Meanwhile, carbon dioxide emissions, which were unregulated, went up by 21 percent, contributing to climate change and ocean acidification. The president should also order the EPA to immediately regulate greenhouse gas emissions from existing power plants, the nation’s largest source of carbon pollution, and from airplanes, the fastest-growing transportation source of greenhouse gases.

2. Ban fracking and end fossil fuel development on public lands: The president should direct the Department of the Interior to stop leasing out millions of acres of publicly owned lands for extreme and polluting forms of fossil fuel development. Fracking, a particularly dangerous extraction practice, poisons our air and water and releases large amounts of methane, a potent greenhouse gas. As a first step, the president should direct the Interior department to prohibit fracking on federal lands. Ending all fossil fuel development on public lands will allow these precious areas to be used for wildlife habitat and recreation in a warming world.

3. Don’t approve the Keystone XL pipeline: The Keystone XL pipeline would transport up to 35 million gallons of oil a day from Canada's tar sands — one of the dirtiest and most carbon-intensive energy sources in the world — to the Gulf of Mexico. Dr. James Hansen, one of the world's leading climate scientists, has called the Keystone pipeline "game over" for the climate. The Keystone pipeline cannot go forward without State Department approval, and the president should stop the project permanently.

4. Protect the Arctic from offshore drilling: The president should prohibit offshore fossil fuel development in the Arctic’s delicate ecosystem. As melting sea ice hits record lows, oil companies have rushed to exploit the Arctic’s fossil fuel spoils. We should not invest in a new carbon-intensive fossil fuel infrastructure at the top of the world, where cleaning up spilled oil would be impossible and where multiple accidents this year demonstrated that the oil industry cannot operate safely. An oil spill in Alaska’s Beaufort and Chukchi seas would devastate one of the most pristine ecosystems on the planet, killing polar bears, ice seals and other imperiled wildlife.

5. Join the world in seeking a fair and ambitious climate treaty: It’s time for President Obama to fulfill his campaign promise to seek a successful global climate treaty. In 1992 the first President Bush signed, and the Senate ratified, the United Nations Framework Convention on Climate Change, in which America agreed to take action to avoid dangerous climate change. Yet the U.S. negotiating team refuses to agree to the cuts necessary to avert climate disruption. The president should direct his State Department negotiating team to commit our country to fair, ambitious and binding greenhouse gas reductions.

If 2012 taught us anything, it’s that climate change is setting in and Americans are feeling the pain, whether it’s Superstorm Sandy, record hot temperatures, widespread drought or massive wildfires. It’s imperative that the president take the reins and finally do what’s needed to begin addressing this crisis before it’s too late.

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February 11, 2013 5:16 PM

Science Can Help Lead the Way Forward

By Christine McEntee

Executive Director and CEO, American Geophysical Union

When he delivers his State of the Union speech tomorrow night, President Obama should not ignore the important role scientific research can play in solving the problems we face today, as well as building a better future for our children.

Climate Change: When President Obama committed to addressing climate change in his inaugural speech, it was admirable. Now he must call on Congress, the business community, the energy industry, and other key stakeholders to join him in that commitment. Climate change is already having a negative influence on our economic health, public safety, and national security, so building universal bipartisan support should become a priority.

Research and Development (R&D): It is time for the President to address the impacts that proposed cuts to discretionary R&D funding could have on programs—including those focused on hazards, natural resources, energy and climate change—that we rely on to protect public safety and support national security, as well as create jobs and grow our economy. This includes a number ...

When he delivers his State of the Union speech tomorrow night, President Obama should not ignore the important role scientific research can play in solving the problems we face today, as well as building a better future for our children.

Climate Change: When President Obama committed to addressing climate change in his inaugural speech, it was admirable. Now he must call on Congress, the business community, the energy industry, and other key stakeholders to join him in that commitment. Climate change is already having a negative influence on our economic health, public safety, and national security, so building universal bipartisan support should become a priority.

Research and Development (R&D): It is time for the President to address the impacts that proposed cuts to discretionary R&D funding could have on programs—including those focused on hazards, natural resources, energy and climate change—that we rely on to protect public safety and support national security, as well as create jobs and grow our economy. This includes a number of critical programs, such as Earth observing satellites that support our weather forecasting abilities, which help us to protect lives during events like the recent Northeast blizzard and know where and when we can deploy our military resources. It also includes water monitoring systems that show us when streams or rivers reach dangerous levels that threaten our homes and businesses. While cuts to defense sending have received much attention in recent weeks, there has been a noticeable and regrettable silence on the impact of cutting critical R&D programs. The President should address how we can help put people back to work, jump start our economy, and protect our public safety and security by investing in scientific R&D.

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