EcoLogic Blog

After the morning panel discussion, AWEA held a news conference with the panelists. This is an excerpt of the questions from reporters and bloggers (including one from yours truly) and the panelists’ answers.

Q: General Clark, what would federal energy legislation look like to you?

General Clark:

“Big picture legislation would look like cap and trade legislation, benchmark goals and a timeline, incentives, research and funding, energy efficiency standards apart from the cap and trade system and incentives to promote energy efficiency. If you put those in and probably some other pieces like dealing with the strategic petroleum reserves, you could address energy security in terms of infrastructure and protection.”

Wood didn’t think government was the most effective way to create change. What it should do is create a market, he said, like with renewable energy standards, and then let the market work itself out.

But, Clark responded, you do need a regulatory piece when you’re talking about carbon sequestration or nuclear power. To launch technologies like these, we’ll have to have a public-private partnership.

“…There are winners and losers as you move forward. It’s who gets what, how much, how soon that determines whether these programs work or not. Emphasize the best technology and spread the profit opportunities around in a fair way. Spread it wide enough to pick up the little producers as well as the big producers.”

I thought about the American Petroleum Institute/Newsweek energy series last week at Stanford, and how a few of those panel members said the real test of renewables would come when the price of oil comes back down. And so I asked these panelists: “If the price of oil were to plummet tomorrow, how would this effect renewable energy markets and the political will to keep moving in this direction?”

General Clark answered first, noting that although we’re at a time when the price of oil and the awareness helps the drive towards cleantech, the fundamentals of energy policy – like the cost of oil extraction – don’t change with the price of oil exactly. Oil prices are certainly a stimulus to cleantech, but regardless of the price of oil, it’s still a matter of national security and climate change.

Podesta:

“When I was in the White House [as President Clinton’s Chief of Staff], oil was $13 a barrel…but we didn’t capture what the cost of that all meant to climate change, the economy, and the effect it had on national security like the regimes in the Mid-East. We need to learn from that experience.”

Wood:

“Even at $65/barrel, you could still do corn ethanol and other more efficient fuels profitably. I think we’re there and it’s going to take time to change out the auto fleet but I think we still will.”

Next, a reporter asked whether the climate bill in the Senate could put coal on the right track?

Wood was skeptical that Congress could deal efficiently with a topic as complicated as energy and global warming. Instead, he said, we should have a bill that either says “Coal, you’re over with” or “Coal, you have to get cleaner.” Although there have been a number of states who have just said “no” to coal, he questioned: can we do that as a nation?

Goodell completely agreed with Wood except he thought such a straightforward move on coal would be politically impossible:

“You’re asking politicians to put their finger on the red button…It’s easier to do it if it looks like you’re doing something else rather than to just say what you’re doing. It’s one of the hottest political issues right now.”

Then Podesta made an interesting point: If Congress can’t pass a bill to regulate CO2, the EPA now has the authority to directly regulate CO2 from power plants. “I think [that option] can be a backstop to partisan gridlock.”

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But like the states that have put renewable energy standards in place and are now getting into the dirty details, the details of national CO2 regulation will get at least as messy, especially when we start talking about who’s going to pay for what. So how far down into this new cleantech market does government legislate? Yesterday afternoon, I arrived to a session late but just in time to hear a panelist practically yell:

“If government’s going to create the markets then they can’t set the prices! You either regulate [emissions] or you don’t, but a bill that creates a ‘free market’ and then sets a price or price limit will fail. That’s what Europe did and it didn’t work. Let the market decide.”

The Tuesday morning panel was outstanding: Diverse opinions, common goals, wise thoughts. The following people addressed the question: What’s next in American energy policy?

• John Podesta, President of the Center for American Progress and former Bill Clinton Chief of Staff
• Pat Wood III, Principal of Wood3 Resources and former chairman of the Federal Energy Regulatory Commission
• Wesley Clark, former Supreme Allied Commander of NATO
• Jeff Goodell author of Big Coal

All panelists agreed that the issue of global warming has come a long way, but while American politicians are just coming around to supporting emissions cuts and the change to a cleantech system, foreign competitors have raced ahead: Japan and Germany are solar leaders and Europe has more wind power installed and better policies to support it.

In order for people to better understand the urgency of the issues, General Clark said, we have to connect the dots between cleantech, the price at the pump and national security. In other words, dependence on foreign imports and global warming. And both have foreign policy impacts: they affect U.S. relationships (our refusal to sign international agreements), enable potential adversaries (petrol dollars funding unfriendly regimes) and distort economic development abroad (China needs a lot of energy and will compete with us for it).

Pat Wood agreed, going on to explain his theory he calls “A tale of two Jihads.” The first “Jihad” is against petrol-totalitarians (transport fuels) and the second is against coal (power generation). Neither of these energy sources will be the future of our power supply. Instead, by 2100, Wood predicts wind, solar and nuclear to make up the electricity sector.

Jeff Goodell said that although we frequently hear we have 250 years of coal left in the ground, that number is based on decades-old studies and on current rates of consumption. But even besides all that, the easy coal is gone: what we have left to dig out is going to be far more expensive and environmentally harmful to get.

Carbon capture and sequestration (CCS), he went on, “is often talked about as a no-brainer, like it’s a technology that’s just about ready for prime time. But I think there are a lot of questions about the economics of it and about the scalability of it.”

Clark disagreed that CCS pie-in-the-sky. “It’s a proven technology; they have a facility up in North Dakota. But just as we’re talking about all the details needed to make wind power work, there’s a million and one details to deal with CCS.”

The General is working and advising cleantech investment firms, and explained that while renewables like solar energy are great, “If you go to the Street, [wind] is a really hot sector. They want opportunities in this field.” But we also can’t think we can exclude certain industries in energy policy negotiations:

“There’s something for everyone…as long as we don’t let ourselves get too narrowly focused in the wind energy business, then I think we can bring others with us and get what we need.”

Podesta explained what the wind industry and wind advocates need to do:

“Energy is still a regional issue….what this [wind] industry needs to do in order to really make progress is to break through that and create a national movement to support clean energy. The states that have embraced – including coal producing states – a clean energy future have done so with great results. People who embrace the future and who embrace a clean technology approach to their economy are succeeding politically and succeeding economically.”

The American Wind Energy Association’s WINDPOWER 2008 conference and expo kicked off this morning with an opening session of top-notch wind power people. The languishing production tax credit for wind (PTC) (stuck in legislation that the president promises to veto) was a big topic of discussion. In fact, chairs in the auditorium had a card on it with all members of Congress’ phone numbers.

All the speakers were very good, but one of the most interesting was Kansas Governor Kathleen Sebelius (D): She and her state have done great things for renewable energy. She talked about the struggles and successes getting there:

“Five years ago, we decided to change the fact that we were so dependent on coal. But we had a hostile regulatory environment, transmission issues and financial uncertainty. So we had to define ‘cost’ in a broader sense; when taking into account jobs, environmental and health costs, you get a very different answer than coal.

We don’t have a majority of legislators ready to embrace a renewable portfolio standard [RPS]. So I had to work on the regulatory side. We created a voluntary RPS of 10 percent by 2010 and 20 percent by 2020.

By the end of this year we’ll be at 10 percent wind in Kansas already…We’re only one of two states to have achieved this without a legislative mandate.”

Regarding the coal plants Kansas denied based on global warming concerns (a first in the nation):

“There were two new coal plants cited for Kansas. But the power wasn’t for us, it was for another state; we wouldn’t actually need to build a coal plant for a very long time.

If we opened up our doors to become a coal exporter, that would send exactly the wrong signals to developers, regulators and the public looking to Kansas for clean technologies. [Our denial of the plants] produced a firestorm. They threatened legislation mandating that the coal plants be built. But the legislature adjourned last week and all of my vetoes were sustained…We were told that without new coal plants, we wouldn’t get the transmission needed that would also help wind. A week after I vetoed, a major transmission line was announced by Warren Buffet’s company in Kansas. This myth was debunked. We’re turning a corner in the heartland.”

Some say Governor Sebelius is a vice presidential contender.