U.S. Politics 2007: A Lump of Coal or Clean Energy Legacy?

Much has been conjectured about the November 2006 elections, the political goals of The Administration and of the new leadership in the Democratic Congress. After untold meetings with the Members of Congress themselves, their staffers and senior Administration officials — clearly some optimism is warranted. But don’t hold your breath.

For those of us that have been in the clean energy arena for a few decades, we’ve surely seen the ebbs and flows of politics, energy prices and public interest before. Early in 2005, we saw the ‘crack in the dike’ when President Bush, in his State of the Union’ speech addressed “the U.S. addiction to oil” and emphasized biofuels, plug-in hybrids, solar and wind as potential answers to our energy woes. By the time the Republican-led Congress left town this past December, solar, fuel cells and geothermal industries saw the investment tax credits extended for another year (through December 2008) as did those industries receiving the PTC (wind and closed-loop biomass) and energy efficiency credits. While the clean energy tax credit extensions were short term — it did symbolize a strong bipartisan commitment for the breadth of clean energy options in what will be a very contentious political two years. Posturing on energy, now is the turn of the Democratic leadership. Senator Harry Reid (D-NV) and Representative Nancy Pelosi (D-CA) who will lead each House of Congress, have been in lock-step to reduce a list of “give away” incentives to the oil industry and in some way assist the clean energy industries. When the dust settled on a list of giveaways to be actually considered, basically only off-shore leasing was the focus — which if renegotiated, would mean from $2 – $6 billion recouped by the U.S. Treasury assuming the details of the fine print in the legislation. That drama will become clear in the first few months of 2007. Of the new Democratic leadership, Senator Reid, who is now the Senate Majority leader, has the strongest clean energy credentials. He personally has an interest in the issues, has toured installations and manufacturing plants, and has had a long history of legislative support over the years — a stellar resume. Representatives Pelosi and Steny Hoyer (D-MD) have co-sponsored some clean energy legislation, but have never been the leads on any clean energy issue. Congressman Chris Van Hollen (D-MD) was named Chairman of the Democratic Congressional Campaign Committee. He has been an active member of the House Renewable Energy and Efficiency Caucus and has used clean energy themes in his campaigns. The legislators who will head the respective Energy Committees, Senator Jeff Bingaman (D-NM) and Representative Dingell (D-MI) have less clear records. John Dingell has been the protector of the U.S. auto industries, (headquartered in his State), a skeptic on human-induced global warming, and a supporter of the traditional electric utilities’ ardor of coal and nuclear power. Bingaman has been a more balanced legislator, not favoring any energy source or industry, behaving in a truly bipartisan manner with his now Minority Chairman Pete Domenici (R-NM), where they both protect their two large national laboratories and their State’s largest employers, Sandia and Los Alamos — primarily defense and nuclear energy laboratories. Senator Bingaman’s staff has recently advised that the Senator will support as Senate Energy and Natural Resources Committee Chairman a National Renewable Energy Portfolio Standard (RPS). But the scuttlebutt is that such a proposed standard may include nuclear energy (possibly even clean coal)-and would definitely not have any ‘banding’ of technologies to insure the proposed RPS would actually insure the nation had a real renewable electric generation ‘portfolio’. The Union of Concerned Scientists appear happy that their RPS campaign has ‘high level’ support, the Washington D.C.-based renewable energy trade groups are remaining ‘mum’ so as not to counter their new Senate Energy Committee chairman, and the clean energy and anti-nuclear advocacy groups are sweating in anticipation. In other Committees, the legislative direction is also less clear. In early December, Rep. Bart Gordon (D-TN) was unanimously approved as chairman of the House Science Committee by the Democratic Caucus. He assumed the chairmanship at the start of the 110th Congress on January 4th, as the others, and has Oak Ridge National Labs, as a prime interest in his State, along with TVA and the coal industry. On the Senate Appropriations Committee, Senator Byron Dorgan (D-ND) took over as Chairman of the Energy & Water Development Appropriations Subcommittee. Dorgan has been an ardent supporter of biofuels and wind, and should represent a sea of change for the clean energy programs — both renewable energy and energy efficiency — administered by the U.S. Department of Energy. Representative David Obey (D-WI) will Chair the powerful House Appropriations Committee and also has a long term interest in low-income weatherization, energy efficiency and to a lesser extent renewable energy. He appears to be more sympathetic to clean energy than his Senate counterpart, Senator Robert Byrd (D-W VA) in a coal-state, however with a growing wind farm presence. Senator Max Baucus (D-Mt), the new Senate Finance Committee Chairman, has been sympathetic to clean energy issues. Rep. Charlie Rangel (D-NY) recently assumed the prestigious House Ways and Means Committee, and has also been open to clean energy extensions. These two Committees under the guidance of these new Chairs will have much to do with extensions and expansions of the Investment Tax Credits and Production Tax Credits (PTC). Neither of the new Chairs has expressed any predilections or viewpoints on clean energy tax incentives other than what has been released generally by the incoming Senate Majority Leader and House Speaker’s offices. But a triad of issues still keeps domestic energy — particularly renewable-generated electricity and distributed generation (such as fuel cells, combined heat and power, etc) — on the front political burner. The wars and tensions in the Middle East arena — Iraq, Afghanistan, Lebanon, Israel/Gaza and Iran — are keeping poll numbers high among U.S. voters wanting more energy independence. Fuel prices of both natural gas and gasoline are staying high – and while gasoline prices have moderated somewhat as have natural gas due to mild weather and thus mild heating bills overall – every consumer poll shows expectations of higher prices to come. Climate Change is slowly making a political impression too. A recent Rasmussen Reports poll found that 45% consider Global Warming a ‘very serious’ problem while another 28% say it is ‘somewhat serious.’ Forty-six percent (46%) of American voters believe that Global Warming is caused primarily by human activities. Rumors abound in Washington, DC that The Administration will open the door to carbon emissions trading — but those details are decided at the last minute before the upcoming State of the Union. The biggest political obstacles for increased tax credits and increased federal RD&D and procurement of energy efficiency and renewable energy relates to broader political issues. A fairly significant segment of Republican legislators, primarily in the House of Representatives, but also the conservative budget Democrats (self labeled as the “Blue Dog Democrats”) are positioning themselves to shrink the growing deficit. This has caused many traditional supporters of longer-span clean energy tax incentives and spending budgets to be far more cautious of their actual intentions. And this issue could tamper down many high expectations the clean energy industries and their advocates have been holding. The good news? Support by the general public has never been higher — along with the largest swath of legislators from both major parties than ever before. The bad news? Because of unaddressed budget issues and growing political tensions leading up to the elections of 2008 — don’t expect any huge changes.
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