It’s a good thing ESPN doesn’t cover federal energy policy. SportsCenter fans like to tune in to the previous day’s 10 most exciting plays: At-the-buzzer half-court shots, walk-off home runs, hail Mary passes. But federal energy policy in 2011 (and 2012 for that matter) may be as exciting as Ohio State football under Woody Hayes: three yards and a cloud of dust. Incremental gains-when they come-will be the norm. There even may be some yardage lost depending on how cranky Congress is when it convenes in January. The renewable energy highlight video for 2011 is likely to be pretty boring.
Major energy legislation almost certainly won’t advance. That means everything from cap and trade to a federal renewable portfolio standard. Face it, if Congress is talking about repealing the health care legislation it passed a year ago, it isn’t going to take on energy policy. Republicans aren’t going to let Team Obama inside the red zone on this one. Four downs and out.
Even though support for renewables crosses political boundaries, the mood on Capitol Hill favors cutting the federal budget and reducing the deficit. Money intended for renewables already has been shifted to other uses. There’s no reason to think the same thing can’t-or won’t-happen in 2011. Competition for scarce federal resources is likely to be fierce. And while renewable energy has a lot going in its favor-green energy plus thousands of manufacturing and installation jobs-issues related to cost will have to be addressed.
Specifically, in a recession-bruised economy with chronically high unemployment, the renewable energy industry will need to voice a position strong enough to soothe concerns over its relative expense. The issue may become even more high profile if efforts arise again to stop greenhouse gas rulemaking by the Environmental Protection Agency. Sen. Lisa Murkowski (R-Alaska) last spring introduced a measure to do just that; it lost. But the Senate’s new calculus plus the Republican-controlled House could give energy to her initiative. Debate no doubt would focus on the cost of EPA greenhouse gas regulation. But there’s a chance renewable energy will be pulled into the fray. Fossil fuels offer the appearance, anyway, of being lower cost. In this economy and political mood that will be hard to overcome.
Renewable energy enjoyed an impressive 2010. Federal stimulus money approved in 2009 did a lot to keep the industry intact and advance new projects and technologies. But in the spirit of game-day analysis, it’s today’s lineup that matters most. And here the contest in the renewable energy arena may be overshadowed by a cross-town rival: natural gas. The rise of unconventional natural gas-produced primarily by tapping tight sands and shale formations where pockets of the fossil fuel are trapped-could make it tough for renewables (and even coal) to compete.
The big breakthrough has been hydraulic fracturing technologies, which-so the natural gas industry says-will usher in an era of reliable supplies at stable prices. If unconventional natural gas lives up to its press, the resource will be cheap, domestically produced, environmentally friendlier than coal and available in quantities that should last for decades.
The natural gas industry has done a good job promoting itself over the years as a “greener” fossil fuel. But it’s a carbon-based energy source with a carbon dioxide footprint that starts to come under EPA scrutiny on January 2. Exactly when carbon controls will become necessary is uncertain. So it seems likely that natural gas generation will be the big winner in the coming few years. That’s even more likely as EPA rules on emissions other than carbon take hold and put still more pressure on coal-fired generation. Can renewable energy figure out how to take advantage of natural gas’s ascendency?
So in 2011 watch for incremental improvement at best in the renewable energy game. Even more interesting plays seem likely from the game over on the Natural Gas Channel. Highlights at 11.