Why Can’t Obama Articulate His Energy Strategy?
The president's all-of-the-above approach to oil, gas, coal, wind, solar and everything else has been comprehensive, but incomprehensible.
When President Obama says his energy strategy is “all of the above,” I cringe. The statement is hardly inaccurate: pushing every kind of energy from nuclear to natural gas and oil to solar, wind, energy efficiency, and grid upgrades is exactly what he’s done during his term. What I dislike is that the president is missing an opportunity to tie all the stuff he’s doing into a grander strategy to decrease carbon emissions, give Americans control over their energy spending, and sustain long-term economic growth. “All of the above,” is using a lame-ish crutch where Obama could be using a sword (or at least a laser) to point towards a future where reducing carbon emissions and having a vibrant economy go together. This is crucial to passing legislation in the U.S. and getting India and China on board.
Reducing carbon emissions and sustaining or accelerating economic growth is not a controversial idea in the business community. In 2008, McKinsey, the global business consultancy, estimated that the world could reduce carbon emissions by creating a new Industrial Revolution focused on energy and carbon productivity for well under half the amount of money (in GDP terms) that global spending on insurance.
This revolution in productivity would be like experiencing the Industrial Revolution in triple time—full of extraordinary opportunities and risks, too.
When Obama took office in 2008, his advisers had essentially two approaches to climate policy: The first was to let the House and the Senate hash out their legislation. The second was to use a threat of the EPA regulating carbon emissions to reach legislative compromise. In other words, the administration was largely reactive. It was waiting, essentially, for a multiple choice to be presented. When bipartisan legislation fell apart, the administration didn’t step in, or pivot to legislation like a carbon tax. Nor, when the BP oil spill hit the Gulf, did the administration take the opportunity to push a less ambitious but still comprehensive plan to reduce fossil fuel use, air and water pollution, and carbon emissions.
While the administration was flat-footed on climate, its energy actions were a wild stampede across a wide range of agencies, programs, and bureaucratic domains: The Detroit auto bailout included new fuel economy standards. The ARRA Stimulus funding included money for basic science research on energy as well as controversial “venture” loans for energy startups (including luxury electric auto maker Tesla, the now bankrupt battery maker A123, and solar panel maker Solyndra, along with 27 others). And the administration offered $54 billion in loan guarantees for nuclear power. The administration opened more federal offshore land in spring 2010 to oil drilling, and offered money for research on “clean coal.” (Both of these actions infuriated environmentalists.) And they made a massive investment in the smart grid, which benefited utilities, and Cash-For-Clunkers and a $5 billion fund to retrofit low-income homes for better energy efficiency, which, benefitted individuals. The Department of Defense and ARPA-e (an agency to invest in high-risk research) undertook new fuel initiatives. The IRS put forward a new tax code that offered “production tax credits” for wind and solar—cast as part of a “green jobs” initiative. And there was a $7,500 tax credit for people who bought qualified electric vehicles—part of a call to get a million electric vehicles on the roads by 2015.
I could go on. The pell-mell Obama energy initiative was comprehensive—and even really smart at times—but not comprehensible to the public. Who had time to understand it? So it became encapsulated in slogans about green jobs and clean energy. The energy initiative's roll-out was buried in various departments and budgets—which kept it from being cut by critics; but now it has few champions.
The Department of Energy created an inspiring strategy document called the Quadrennial Technology Review that knit many of the initiatives together into a twofold strategy: to reduce the $1 billion the US spends on foreign oil daily, and to provide heat and power in ways that protect the climate while boosting U.S. economic competitiveness.
That was what the administration intended, but wrapped in a report called “the Quadrennial Technology Review,” its message never made it to prime time. Rather, Newt Gingrich was able to absurdly disparage the Chevy Volt as un-American by saying it couldn’t hold a gun rack. No one had the backup to counter that the Volt was a patriotic vehicle and part of the admin’s strategy to break the power of OPEC and the world oil market to determine the price of U.S. transportation fuels!
But alas, even today the president is still touting his very decent, forward-looking strategy as an “all-of-the-above ” goodie basket. (Of course he’s been loathe to mention carbon legislation or global warming on the campaign). In an interview with the Des Moines Register he came close to the real message: “Our support of biofuels, our support of wind energy has created thousands of jobs in Iowa. But even more importantly, this is going to be the race to the future. The country that controls new sources of energy, not just the traditional sources, is going to have a huge competitive advantage 10 years from now, 20 years from now, 30 years from now.”
So what does all this mean we’d get from a second Obama term? Less of all of the above, with even less of the risk. We’d still have the hodgepodge, but without stimulus funding. Republican congressional leaders are sharpening their knives to abolish clean-energy tax credits, loans, and anything else they can get at. Any new initiatives the administration takes on are likely to be less visible and less risky than the loans—which may be a good thing. But I fear a lack of audacity in a second term. We need an audacious, yet still conservative path towards the future. President Obama has the tools to articulate that, and even to motivate us all to join him, but will he?
Strip away the audacity, and “All of the Above” becomes “More of the Same.” It’s hardly a productivity revolution.