by Jennifer Van Burkleo, associate editor
American voters are virtually guaranteed to witness more political punches through Nov. 6, the day they’ll cast ballots in the bout for the White House. A jab here, a hook there likely will be about energy, but the electricity crowd could go home disappointed if they expect more than a featherweight match on industry issues.
Most of the rounds on energy thus far have focused on alternative energy and oil. Electricity policy heavyweights, political commentators have said, likely will slug it out in a different venue: the U.S. Congress.
“I doubt that the person sitting in the White House will have a huge impact on energy policy unless they control both houses of Congress, and then where does energy policy sit in the priority related to all the other issues that exist today?” said Doug Houseman, vice president of technology innovation at EnerNex LLC, a Knoxville, Tenn.,-based electric power research, engineering and consulting firm.
An industry veteran with more than 20 years of experience, Houseman previously served as chief technology officer of Capgemini’s Global Energy, Utility and Chemical practice. He said some energy sources will be left out no matter who wins in November, and neither candidate seems interested in adding much coal-fired generation. What’s more, energy does not top most Beltway to-do lists these days, he said.
“Jobs will come first, health care second, foreign policy third,” Houseman said. “Overall, federal budget will be fourth, and energy policy will probably be somewhere between eighth and 15th on the list of things to get done in Washington in 2013 to 2016.”
In that case, meet the electricity featherweight contenders for president of the United States: Barack “the 44th President of the United States” Obama, in blue, who is 1-0 in presidential bouts and fighting for the Democrats, and his challenger, Mitt “the former Massachusetts Gov.” Romney, in red, who is making his presidential bout debut fighting for the Republicans.
During his nearly four-year presidency, Obama racked up energy wins and losses, plus some draws for issues that are ongoing (see Obama Energy Accomplishments, Failures, Works in Progress on Page 19). During his 2011 State of the Union, Obama announced plans to generate 80 percent of the nation’s electricity from nuclear, natural gas, renewable and clean coal sources by 2035. In his 2012 State of the Union, the president called for an “all-of-the-above” energy strategy that focuses on developing all energy sources to reduce U.S. dependence on foreign oil.
Some people have their doubts, including Houseman.
“President Obama talks about an all-of-the-above strategy, but his regulatory agencies are pursuing anything but,” Houseman said. “For example, the Bureau of Land Management published a series of rules on the positioning of wind turbines on federal land that put many potential locations off limits. The EPA (Environmental Protection Agency) has published rules that would impact coal, oil and petroleum-based power plants. Other agencies have weighed in on hydroelectric, biomass and other forms of electricity production.”
Still, Obama’s re-election campaign website states the administration will open more public lands and approve clean energy projects in hopes that renewable generation will power 3 million homes by the end of 2012. The website further states that the administration approved the nation’s first offshore wind farm, which is expected to power more than 200,000 homes; and the administration approved plans for 16 solar, five wind and eight geothermal projects on public lands, expected to power more than 1 million homes.
Houseman expects wind and solar programs would grow during a second Obama term.
“In the case of President Obama,” Houseman said, “wind and solar would continue to gain, assuming that Congress would agree to either candidate’s policy.”
Many pundits agree. Jim Manley works as a senior director and strategic consultant for QGA Public Affairs, a firm co-founded by Ed Gillespie, the Republican strategist and senior Romney campaign advisor, and Democrat Jack Quinn, a former counselor to President George W. Bush and chief of staff to Vice President Al Gore.
“President Obama has widely made the decision that we need to conduct more research into and generate more development in the areas relating to clean-air technology, including wind and solar,” Manley said.
And then there is oil, one of the most talked about energy issues. Obama said in February during his weekly address that the U.S. is closer to energy independence because foreign oil dependency is declining. That same month, Obama rejected TransCanada’s application to build the $7 billion, 2,000-mile-long Keystone XL pipeline that would connect Canada’s oil sands to Houston refineries and the Gulf of Mexico. The president reasoned that the deadline set by Congress for his decision did not allow adequate time for the required environmental reviews of a cross-border pipeline. Obama said his decision was not final. TransCanada said it would reapply for a construction permit and seek immediate permission to build the Gulf Coast portion of the pipeline, which would cost $2.3 billion and create some 4,000 construction and support jobs.
In March, Obama traveled to Cushing, Okla., the southernmost hub of the proposed pipeline. As of 2007, the city with some 7,800 residents held 5 to 10 percent of the total U.S. crude inventory. As of June 1, crude oil inventories at Cushing were 47.8 million barrels, the highest level on record and very close to total working storage capacity as of March 2011, according to the Energy Information Administration. In Cushing, the president touted his “all of the above” energy policy and called the southern half of the pipeline a priority of his administration.
During another March campaign stop, this time in Largo, Md., the president reminded potential voters of his oil and gas accomplishments.
“We’ve quadrupled the number of operating oil rigs to a record high,” he said. “My administration has opened millions of acres of land in 23 different states for oil and gas exploration. Offshore, I’ve directed my administration to open up more than 75 percent of our potential oil resources. That includes an area in the Gulf of Mexico.”
Romney has little track record within the electric utility industry, so the impact of his possible presidency on the industry is more unknown, Houseman said.
Romney was involved in energy efficiency efforts as Massachusetts governor, however. He left office in 2007. A recent article in The Hill quotes Kateri Callahan, president of the Alliance to Save Energy, as having said Gov. Romney “had a record that is really good on energy efficiency,” and that “he had an energy plan there where the first pillar was energy efficiency.” Four years after Romney left office, the American Council for an Energy-Efficient Economy ranked Massachusetts the most energy-efficient state, and the nonprofit Solar Foundation ranked it 10th in U.S. solar jobs.
In his energy plan, Romney states his desire for an all-of-the-above energy strategy. “The Romney Plan for a Stronger Middle Class: Energy Independence” addresses three themes.
Significant regulatory reform. Romney said he will streamline and fast-track approval processes and amend the Clean Air Act to exclude regulation of carbon.
“For example,” the plan states, “rules affecting coal power plants could be streamlined to achieve the necessary environmental protection while avoiding job-killing plant closures.”
According to the Romney plan, “The Clean Air Act was passed to protect us against pollutants that pose dangers to human health. It was not intended to control carbon-dioxide emissions, and is poorly tailored to that purpose.”
As for nuclear regulation reforms, the Romney plan calls the current regulatory structure “extraordinarily cumbersome and restrictive.”
For instance, the plan states, the Nuclear Regulatory Commission (NRC) is equipped to review only one kind of reactor design, which limits competition and innovation and drives up prices.
“Romney will seek to streamline NRC procedures so that licensing decisions for any reactors to be built with an approved design on or adjacent to an existing site are completed within two years. And he will expand NRC capabilities so that the agency is able to review and approve several types of certified reactor designs in a way that ensures safety and reliability.”
The plan compares Romney’s nuclear vision with current policies in the U.S. and France, where 15 nuclear generation plants have been built in 30 years, and China, where construction has begun on 10 plants in 10 years.
“Seventeen applications for 26 units are now pending before the NRC,” the plan states. “It is little surprise, then, that the United States has not issued a permit to construct a single new nuclear plant for more than three decades.”
EnerNex’s Houseman said the difference between the contenders on nuclear generation is clear.
“Under Gov. Romney, changes in regulations would probably diversify the generation mix more,” he said. “President Obama will probably never approve a nuclear power plant in the U.S.—Gov. Romney probably would.”
Increased production. Romney said he will conduct a comprehensive inventory of the nation’s untapped carbon-based resources so policymakers and developers know the full scope. The Romney plan also includes permitting drilling for conventional reserves, as well as shale oil deposits wherever it can be done safely, including the Gulf of Mexico, the Atlantic and Pacific outer continental shelves, Western lands, the Arctic National Wildlife Refuge (ANWR), and off the Alaska coast.
“Expanding energy production on this scale,” according to the Romney plan, “would bring lower prices, greater reliability of supply, and jobs, jobs, and jobs.”
The plan also states that under a Romney administration, the EPA “will not pursue overly aggressive interventions designed to discourage fracking altogether,” and that the environmental impact of fracking should be evaluated in comparison with the impact of using the fuels that natural gas displaces, including coal.
Research and development. Romney said he will focus investment in basic research and use Defense Advanced Research Projects Agency (DARPA)-like funding mechanisms. Government, his plan states, has a role to play in energy innovation, but the U.S. government should not steer investment toward particular politically favored approaches.
“There is a place for government investment when time horizons are too long, risks too high, and rewards too uncertain to attract private capital,” the Romney plan states. “However, much of our existing energy R&D budget has been devoted to loan guarantees, cash grants, and tax incentives for projects that might have gone forward anyway. Mitt Romney will redirect clean energy spending towards basic research.”
QGA’s Manley said Romney makes his plans clear.
“Romney is campaigning to eliminate the wind production credits, for instance,” Manley said.
The Romney plan states that the Obama administration has “an unhealthy ‘green’ jobs obsession” and has spent billions of dollars on alternative fuels that are “sharply uncompetitive” without taxpayer subsidies, such as wind and solar. In his plan, Romney credits green jobs with killing 2.2 jobs in Spain for every green job created there and killing 3.7 jobs in the U.K. for every green job created there.
“Here in the United States … the marketplace is simply not absorbing green-collar workers,” the plan states. “Of 3,586 recent graduates of a Department of Labor-sponsored ‘green’ jobs training program, only 466 were able to find jobs. Taxpayer money spent on ‘green’ training, it seems, was wasted.”
The plan states that focusing government funding on research and development of new energy technologies and initial demonstration projects offers the best opportunity to promote innovation without distorting the market. Romney, according to the plan, believes the DARPA model, which ensures long-term, nonpolitical sources of funding for various competing, early-stage technologies, holds the most promise for energy advances.
“From the perspective of creating new jobs and strengthening our economy, the main line of policy should be directed toward technologies that will replace imported oil with domestically produced fuels or electric power,” the plan states.
Romney’s plan will focus on the traditional energy sector—oil, gas, coal, and nuclear—which hold “remarkable job-creating potential.” The plan also calls for partnerships with U.S. allies Canada and Mexico to achieve North American energy independence by 2020. In August while on the campaign trail in Hobbs, N.M., Romney talked up those plans.
“We are going to get that Keystone Pipeline built as one of those first infrastructure projects to take advantage of their resources,” he said.
In Obama’s Corner
Vice President Joe Biden, the former senator of Delaware, also a Democrat, is in Obama’s corner again in 2012.
Ontheissues.org breaks down some of Biden’s energy votes in the Senate. Biden voted “yes” on the following measures:
- Tax incentives for energy production and conservation (2008)
- Addressing carbon dioxide emissions without considering India and China (2008)
- Removing oil and gas exploration subsidies (2007)
- Factoring global warming into federal project planning (2007)
- Disallowing an oil-leasing program in ANWR (2005)
- $3.1 billion for emergency oil assistance for hurricane-hit areas (2005)
- Reducing oil usage 40 percent by 2025 (instead of 5 percent) (2005)
- Banning drilling in ANWR (2005)
- Bush administration energy policy (2003)
- Targeting 100,000 hydrogen-powered vehicles by 2010 (2003)
- Removing consideration of drilling in ANWR from budget bill (2003)
- Including oil and gas smokestacks in mercury regulations (2005)
- Requiring EPA risk assessments (1994)
Biden voted “no” on the following measures:
- Drilling in ANWR on national security grounds (2002)
- Terminating CAFE standards within 15 months (2002)
- Preserving budget for ANWR oil drilling (2000)
- Ending discussion of CAFE fuel efficiency standards (1999)
- Defunding renewable and solar energy (1999)
- Approving a nuclear waste repository (1997)
- Not requiring ethanol in gasoline (1994)
In Romney’s Corner
Wisconsin Rep. and House Budget Chairman Paul Ryan is Romney’s Republican running mate.
“We will streamline the regulations,” Ryan said during an August campaign stop in Lakewood, Colo. “We will open up these resources so that we can create jobs here.”
EnerNex’s Houseman said Ryan has made no major energy policy speeches.
“His drive to reduce the federal budget could have an impact on a number of programs that exist today,” Houseman said. “The first would be the oil depletion allowance, something that many people have said is out-of-date for years. The second would be subsidies for ethanol, something that the government has debated. And the value of ethanol from corn is under debate, as well. Then there is the subsidy to wind. There are probably a dozen other programs that might face cuts if the federal budget was reduced to the level that is sustainable, based in revenues.”
Ontheissues.org breaks down breaks down some of Ryan’s energy votes in the House. Ryan voted “yes” on the following measures:
- Opening outer continental shelf to oil drilling (2011)
- Barring EPA from regulating greenhouse gases (2011)
- Criminalizing oil cartels like OPEC (2007)
- Scheduling permitting for new oil refineries (2006)
- Authorizing construction of new oil refineries (2005)
Ryan voted “no” on the following measures:
- Enforcing limits on CO2 global warming pollution (2009)
- Tax credits for renewable electricity, with PAYGO offsets (2008)
- Tax incentives for energy production and conservation (2008)
- Tax incentives for renewable energy (2008)
- Investing in homegrown biofuel (2007)
- Removing oil and gas exploration subsidies (2007)
- Keeping moratorium on drilling for oil offshore (2006)
- Passage of the Bush administration’s national energy policy (2004)
- Implementing Bush-Cheney national energy policy (2003)
- Raising CAFE standards; incentives for alternative fuels (2001)
- Prohibiting oil drilling and development in ANWR (2001)
- Starting implementation of Kyoto Protocol (2000)
The Final Bell
As the presidential election draws near, the contenders will outline their differences to reach their common energy goal, said Dan Hagan, an attorney and partner with Washington, D.C., energy law firm White & Case.
“Obama and Romney’s strategies are similar in the sense that they are variations of the all-of-the-above strategy,” Hagan said. “They differ on whether that means that green technology receives incentives or an easier regulatory process for nuclear.”
Many watching the bout also are watching the heavyweights. Fisher Investments in its Q3 2012 Stock Market Outlook states Republicans could snag some Congressional seats this season.
“Republicans will see gains in Congress and governors’ houses,” according to the outlook. “The Electoral College is what really matters, and there Obama has an advantage. States with bigger populations—and more electoral votes—such as California and New York tend to be reliably blue. Plus, the 18 states (along with the District of Columbia) that voted Democratic in the past five elections carry 242 electoral votes. If Obama sweeps these, he needs only 28 more votes to win and can pick and choose which swing states to focus on. Challenger Mitt Romney, on the other hand, has his work cut out for him: The 13 reliably red states yield only 102 electoral votes, so he must effectively sweep the swing states.”
Nearly all the pundits agree: 2012 likely will not be decided by a knockout. The winner must go the distance.
Vice Presidential Debate on Foreign and Domestic Policy
9-10:30 p.m. Eastern time Thursday, Oct. 11, Centre College, Danville, Ken.
Moderator: Martha Raddatz, ABC News chief foreign correspondent
Presidential Town Meeting on Foreign and Domestic Policy
9-10:30 p.m. Eastern time Tuesday, Oct. 16, Hofstra University, Hempstead, N.Y.
Moderator: Candy Crowley, CNN chief political correspondent
Presidential Debate on Foreign Policy
9-10:30 p.m. Eastern time Monday, Oct. 22, Lynn University, Boca Raton, Fla.
Moderator: Bob Schieffer, host of “Face the Nation” on CBS
Each debate will be broadcast live on ABC, CBS, FOX and NBC, as well as all cable news channels including CNN, Fox News and MSNBC among others.