Toward the end of September last year, in the midst of Ohio’s heated gubernatorial campaign, Republican candidate John Kasich gave an interview to the Dayton Daily News in which he raised the possibility that as governor he might try to axe the state’s mandate that electric utilities expand their renewable-energy portfolios.
“It will drive up utility bills because we don’t have (energy from renewable sources) ready and have to buy it somewhere else,” he explained. “I don’t like that and you can’t mandate invention.”
In a state that relies on coal for 90 percent of its power “” and whose attention in the campaign was focused on hard economic times, not the complexities of energy policy “” this seemed like an unexceptional comment from a conservative Republican. But it turned out to be quite a shock to many in the state’s growing renewable energy industry.
Ohio’s “renewable portfolio standard,” which originated in the Republican-led state Senate in 2008, requires that 25 percent of Ohio’s energy come from renewable sources by 2025, and that half of that renewable portion be created in-state. Its passage “” along with grants from a state program known as the Ohio Advanced Energy Fund “” essentially jump-started an alternative energy industry in the state.
Already, the impact is visible across Ohio. Farmers, homeowners and small companies put up solar panels and wind turbines; several large-scale renewable projects, including a 12-megawatt solar field in northern Ohio and planning for a 50-megawatt field in the southeast, got underway; wind companies moved ahead with plans for five new wind farms around the state and five turbines in Lake Erie; hundreds of companies either started up or got involved in the manufacturing supply chain for renewable energy; the city of Toledo emerged as a hub for research and manufacturing of thin-film solar cells.
“Folks looking to invest in the renewable energy sector have choices across the country and within the Midwest,” says Nolan Moser, director of energy and clean air programs at the Ohio Environmental Council. “One of the reasons these companies have chosen Ohio has been this policy.”
So two things happened after Kasich’s comments appeared. His opponent, incumbent Democratic Governor Ted Strickland, began traveling around the state with renewable-energy businessmen, hammering Kasich as a threat to clean-energy jobs. And Kasich himself heard from entrepreneurs and others, many of them Republicans, alarmed by his statement.
“Folks in that industry when those comments came out were very vocal, and they encouraged their customers to be vocal as well,” says Chris Montgomery, a lawyer in Columbus who helps run an association of energy firms, Ohio Advanced Energy. “He was receiving comments not just from solar and wind developers, but also word from farmers and businesses and others who’ve benefited from some of these renewable energy projects.”
Within days, Kasich’s campaign was letting it be known that he actually had no intention of repealing the state’s renewable energy standard. “He supports increasing renewable generation in Ohio in a way that expands our energy choices,” his spokesman said.
No one expects Ohio to emerge as a green-energy colossus after Kasich, who went on to win the race, takes office on January 10. As one newspaper reporter in the state says, “You’ve got quite a bit of loud resistance to the idea that we can do anything aside from using the carbon molecule to create energy.” But the fact that a conservative Republican backed so quickly away from angering the renewables industry says a great deal about the politics of state energy policy at the moment “” and not just in Ohio.
Taking House Republicans at face value on their pledge to cut 20% of all non-defense discretionary spending, we took a quick look at what cuts might mean for America’s ability to compete in the $2 trillion clean energy market. While there are certainly areas of the nation’s energy budget that should get cut or eliminated, to achieve $100 billion in savings every program — even those that help fuel the economic growth the new majority says it wants — is going to suffer.
Thanks to smart government investments, many clean energy businesses are getting off the ground or expanding in the U.S. This means new jobs created by Dow at a battery plant in Michigan, by Nissan for electric vehicles in Tennessee or Southern Company to build a new nuclear reactor in Georgia.
So what might a 20% chop look like?
– A $1.6 billion cut in the federal loan guarantee program would potentially cripple the much-needed nuclear renaissance at a time when China is planning a five-fold expansion over the next decade. Without loan guarantees, it’s unlikely we’d be building first nuclear power plant in the US in almost 30 years, and creating as many as 3,500 jobs, in Georgia today. — $60 million less for ARPA-E’s already meager $300 million budget, gutting funding for advanced energy storage, next generation nuclear power and micro-battery technology that could also be used by the US military.
— Eliminating almost $500 million in grants to companies innovating in renewable energy, advanced vehicle technology, and battery storage. This could kill emerging clean energy businesses that have the potential to become the 21st century’s Google, General Electric or Exxon.
— Slicing $20 million from R&D investments to schools like Purdue University, Penn State, University of Wisconsin, and Iowa State University, which are developing the next generation of innovators and ideas that could spawn new businesses and jobs across the U.S.
Sen. Barbara Boxer took a first swing Thursday at her new House counterpart on environmental issues, calling out Energy and Commerce Committee Chairman Fred Upton over his plans to stymie the Obama administration’s global warming and air pollution rules.
The Environment and Public Works Committee chairwoman joined the chorus of Senate Democrats who have quickly criticized the House GOP majority as it targets rules covering everything from health care to the environment.
“I believe what Chairman Upton has indicated he wants to do, which is essentially stop all progress on this front, is against the law,” Boxer (D-Calif.) told reporters.
Boxer said she’d use press conferences and other public forums to highlight the potential political peril for Republicans who go after the Environmental Protection Agency’s rules that are directly tied to protecting public health.
“I want to tell him that I will use every single tool available to me as chairman of this committee and as a senator from California to oppose any legislative efforts that threatens the health or the safety or the well being of the people of this great nation,” she said.
Upton is planning an early series of hearings on the Obama EPA rules that target power plants, petroleum refiners and other major stationary industrial sources. He’s also said he’s considering legislation that would stop the agency’s efforts until a series of lawsuits have been resolved.
Other ideas are also on the table to stop EPA.
Should the U.S. get rid of energy subsidies altogether?
In a new piece for Washington Monthly, Jeffrey Leonard argues just that: “Get the Energy Sector off the Dole.” Amory Lovins argued something similar in The Weekly Standard in past October. Way back in 2002, Ed Crane (head of the libertarian Cato Institute) and Carl Pope (then head of the Sierra Club) made the same argument in a Washington Post op-ed.
So, is it a good idea? Today I want look to at the question from a policy angle. Tomorrow I’ll get into the politics.
Can government get out of the energy game?
The intuitive appeal of a subsidy-free market is that energy technologies would compete in a pure meritocracy — a “level playing field,” as pols are fond of saying. Success would be determined by the aggregate distributed decisionmaking of market actors rather than the whims of bureaucrats. A proper market at last, hallelu.
But you don’t have to tug on that string very long before you end up with a whole armful of yarn. Leonard cites $20 billion a year in U.S. energy subsidies, but there is heated disagreement about that figure, mainly because no two people agree exactly what qualifies as a market-distorting subsidy. Obviously cash. Tax breaks, credits, and write-offs, sure. After that it gets a bit fuzzy.
A group of House Republicans introduced a bill on Wednesday to rein in the various “czars” in the Obama administration.
Rep. Steve Scalise (R-La.) and 28 other House Republicans introduced legislation to do away with the informal, paid advisers President Obama has employed over the past two years.
The legislation, which was introduced in the last Congress but was not allowed to advance under Democratic control, would do away with the 39 czars Obama has employed during his administration.
The bill defines a czar as “a head of any task force, council, policy office within the Executive Office of the President, or similar office established by or at the direction of the President” who is appointed to a position that would otherwise require Senate confirmation.
Republicans had complained about the president’s use of czars to help advance his agenda in Congress. In particular, the GOP had harped about the personal history of Van Jones, the president’s czar for “green jobs,” over past comments Jones had made about Fox News came to light. Jones eventually resigned.
Another prominent czar over the past year was Carol Browner, the president’s energy and environmental adviser. She helped head up efforts in response to the Gulf of Mexico oil spill, and the ultimately unsuccessful effort for an energy and climate bill from Congress.
A major report on the BP oil spill coupled with jitters about rising gas prices are reviving talk in the Senate of tackling spill response and energy legislation.
The oil spill commission released a chapter of its final report Wednesday. The full report will be released next week. The report blamed a “failure of management” by BP and the other companies involved in the construction and operation of the Macondo well for the spill.
But before a bill can move forward, one major issue has to be resolved: liability. Drill-state lawmakers have locked horns with anti-drilling Democrats over the issue of exactly what portion of the damages from an oil spill the responsible party must pay.
Under current law, that number is capped at $75 million (BP has said it will go beyond that cap if necessary). Sens. Robert Menendez and Frank Lautenberg, both New Jersey Democrats, as well as Sen. Barbara Boxer (D-Calif.) and others have argued that companies responsible for a spill should pay 100 percent of the damages. Menendez is using the oil spill commission’s report, which found “systemic” problems in the oil industry, to gain traction for a bill that would remove the $75 million cap.
But Sens. Mary Landrieu (D-La.), Mark Begich (D-Alaska) and Lisa Murkowski (R-Alaska) argue for a mechanism to share liability between the responsible party and the oil industry as a whole in order to prevent companies from having to shoulder multi-billion dollar bills.
Last year, attempts to pass an oil spill response bill in the Senate petered out, largely over disagreements about liability. The key lawmakers involved in the issue continue to discuss a potential compromise.
The 112th Congress has just begun, and so have the attacks on the Environmental Protection Agency’s ability to regulate greenhouse gases.
Three Republican House members — Marsha Blackburn (Tenn.), Shelley Moore Capito (W. Va.) and Ted Poe (Tex.) have each introduced separate bills aimed at blocking EPA from regulating carbon dioxide and other greenhouse gases under the Clean Air Act.
The three measures hamstring the agency’s authority in different ways: Blackburn’s would “amend the Clean Air Act to provide that greenhouse gases are not subject to the Act,” even though the Supreme Court ruled in 2007 that they are; Capito’s would delay EPA from regulating carbon dioxide and methane for two years; and Poe’s would prohibit any agency funding “to be used to implement or enforce a cap-and-trade program for greenhouse gases.”
While Capito’s bill is the most modest of the bunch, the West Virginia lawmaker explained in a statement that she has introduced a more limited bill because she thinks it has enough votes to pass and block initiatives such as new EPA permitting requirements that now require major new greenhouse gas emitters to show how they would use the best available current technology to lower their carbon footprint.
“Time is of the essence,” she said. “The Democrats failed to act in any way to stop the EPA from implementing new rules pertaining to greenhouse gas emissions on January 2, 2011.Without congressional action to say otherwise, the EPA will continue to dismantle energy and manufacturing industries through regulation.”
Franz Matzner, climate and air legislative director at the Natural Resources Defense Council, an advocacy group, decried the move.