Skip to content

Has the Climate Changed on Capitol Hill or Is It Congressional Warming?

April 12, 2011

Flash from the past:

“The United States would prefer to continue to import oil, petroleum products from the Mideast, from Venezuela, from Canada, from other countries, but also we are keenly aware of the fact that no nation, and particularly no industrial nation must be in a position of being at the mercy of any other nation by having its energy supplies suddenly cut off.”
……………………… President Richard Nixon, Remarks About the Nation’s Energy Policy, September 8, 1973

“The energy crisis is real. It is worldwide. It is a clear and present danger to our Nation. These are facts and we simply must face them.”
………………………  President Jimmy Carter, Crisis of Confidence, July 15 1979

Consistent with previous Administrations, the current “energy” climate in Washington DC is cold, cloudy, stormy and hot, but mostly blowing in the wind. It’s been rather difficult, if not nearly impossible, to determine America’s energy policy or at the lowest a comprehensive plan. Is Capitol Hill so dysfunctional that the best they can come up with is to back –  poking more holes in the Gulf, extracting tar sands in Utah, promoting Electric Vehicles as the ultimate cure-all, and passing short term incentives that makes long-term planning a game of roulette.

Current legislation embracing energy security and a cleaner environment lacks focus, contradictory, confusing and so minimalized that more heat is expended by the Executive and Legislative Branches than that from the programs themselves. Energy is not alone in this matter; Washington suffers a paralysis affecting other paramount issues of the day such as education, health care, job creation and the economy.

To stay on track, this discussion is a reflection on leadership, policy and direction, the current state of affairs and what can be done to meet America’s energy needs so eloquently stated by every administration over the last 40 years. Notwithstanding, the extreme polarization present in today’s government between Democrats, Republicans and Tea Partyites, it’s debatable if our leaders share a real concern for the future of America.

This is exemplified by the Department of Energy (“DoE”), whose mission is to ensure America’s security and prosperity by addressing its energy, environmental, and nuclear challenges through transformative science and technology solutions. DoE’s funding from FY 1980 to that projected for FY 2012, in constant 2010 dollars is given in the following chart. Expenditures are broken down into four main programs; Defense, Energy, Environmental Management and Science. Programs areas include:

Defense
• National Nuclear Security Administration
• Atomic Energy Defense Activities

Energy
• Energy Efficiency and Renewable Energy
• Electricity Delivery and Energy Reliability
• Nuclear Energy
• Fossil Energy Programs

Environmental Management
• Defense Environmental Cleanup
• Non-Defense Environmental Cleanup
• Uranium Enrichment D&D Fund

Science
• Advanced Scientific Computing Research
• Basic Energy Sciences
• Biological and Environmental Research
• Fusion Energy Sciences Program
• High Energy Physics
• Nuclear Physics
• Workforce Development for Teachers and Scientist
• Science Laboratories Infrastructure
• Safeguards and Security
• Science Program Direction
• Congressionally Directed Projects
• Small Business Innovation Research (SBIR)

By the last year of several recent Administrations, the amount allocated to each of these programs are:

Carter’s Administration – 1981
• 43% to Energy programs
• 11% to Defense

Regan’s Administration – 1989
• 31% to Energy programs
• 47% to Defense

G.H.W. Bush’s  Administration – 1993
• 22% to Energy programs
• 37% to Defense

Clinton’s Administration – 2001
• 14% to Energy programs
• 38% to Defense

G.W. Bush’s Administration 2009
• 17% to Energy programs
• 38% to Defense

Obama’s Administration – Projected 2012
• 17% to Energy programs
• 41% to Defense

Since Carter’s Administration the amount spent on energy programs has eroded from 43% to 17% of DoE’s budget.

Where DoE’s Energy expenditures were the #1 category in 1980, it is now the lowest with defense, environmental management and science ranking much higher. Obscuring the depth of the issue, energy dollars are being allocated to electricity delivery, fossil fuel, nuclear fuel and administration, which have less immediate impact on energy independence. Less available for renewables and energy efficiency than what the numbers suggest. Comparison of expenditures by program can be located at “The Department of Energy (DoE) Exposed: http://tinyurl.com/barry-stevens199.”

Obama’s FY 2012 Budget request supports three strategic priorities:
Transformational Energy: Accelerate the transformation to a clean energy economy and secure U.S. leadership in clean energy technologies.
Economic Prosperity: Strengthen U.S. science and engineering efforts to serve as a cornerstone of our economic prosperity and lead through energy efficiency and secure forms of energy.
Nuclear Security: Enhance nuclear security through defense, nonproliferation, naval reactors, and environmental cleanup efforts.

With some degree of certainty, national security through defense appropriations will be successful. However, it is less certain if energy security will be achieved by the projected expenditures in the highly diminished energy programs. Economic prosperity will be left to others to ruminate over.

Not sure where and when the term ‘Transformation Energy” was coined, but someone was creative enough to distract attention from renewable and energy efficiency programs that serve quite well the mission to reduce dependency on fossil fuels or foreign oil. Luckily, the budget still denotes appropriations for these programs, including hydrogen, biomass, solar, wind, geothermal, hydro, vehicle technologies, building technologies, and industrial technologies.

In 2009, Peter Z. Grossman writing for “The Christian Science Monitor” said in an article titled “An Apollo program for US energy? – “History shows that massive federal support for alternative-energy projects could be a massive waste of money”  (http://www.csmonitor.com/Commentary/Opinion/2009/0128/p09s01-coop.html).

He goes on to say:

“Nearly every president since Richard Nixon has invoked the Apollo program to win support for some energy panacea program. President Obama went into Apollo-mode on the campaign trail to explain why he was going to spend $150 billion to jump-start renewable energy.”

“If government could do something so stupendous as put a man on the moon, surely it could produce a device to make us energy independent. Right? Well, no. The Apollo Program was an engineering feat.”

“Replacing conventional energy technologies with something new will be a commercial feat. Government is good at the former (although the New Orleans levees may give us pause); it’s terrible at the latter.”

“The fact that the technology exists and the government is behind it means very little when a consumer has to decide how to spend thousands of dollars. That’s why governments have historically failed to “pick winners” in the technology market.”

“The analogies to Apollo and Manhattan (District, atomic bomb project) miss the point. Their aim was to prove that we could do something. We can already do all of the energy technologies the Obama administration is touting. But that doesn’t mean they’ll become commonplace consumer purchases, even with massive federal support.”

“There really isn’t a good example of government ever providing a commercially viable alternative energy technology.”

In closing, the answer to the question “Has the Climate Changed on Capitol Hill?” is NO, at least since President Carter’s days. From Carter to Obama, all iterated the same theme. Other than more chaos and deeper into debt, unilaterally they delivered nothing. In fact the situation is worse today than it was when Carter reigned. American dependence on oil imports has almost doubled from 35% in 1973 to 60% by the end of 2010.

Today’s climate on Capital appears to be more polarized, combative, indifferent and self-serving. All proclaim the same energy security words are propagandized over and over again with little substance to share. All hear the glorious words of government inspired energy programs and directions. America has been crying wolf all too long.

So what can be done? One way is to take Howard Beale’s approach in “Network” and to shout out of the window “I’m as mad as hell, and I’m not going to take this anymore!” Most likely this would be futile and land you in a Psychiatric Hospital with your picture embedding in the local newspaper. It is doubtful if screaming would be much help in the long-run. Though a large group organized to March on Washington chanting the same slogan could be impactful, hence the Civil Rights Movement and the War in Vietnam.

A more pragmatic solution would be market driven. First and foremost, the U.S. must allow the price of oil to reflect its true cost. Remove subsidies and account for the myriad hidden costs such as the war in the Mideast, impact on the environment, contribution to the trade deficit, and added health-care from pollution.

In “Over a Barrel,” John Duffield discusses the cost of U.S. foreign oil dependence? He states, “Unfortunately, no one has yet offered a satisfactory answer to this vital question. As a result, the costs to the United States of its dependence on oil from abroad have gone largely unrecognized and, in fact, are much greater than most people realize. Some costs, like the annual bill for oil imports—and, by reflection, the price that motorists pay at the pump or the size of homeowners’ heating oil bills—are obvious and quantifiable. A number of others, however, are not so apparent or easy to measure. For example, it is difficult to put a price tag on the costs of coddling oil-rich authoritarian regimes at the expense of promoting representative government, human rights, and other important values.”

Naturally, petroleum prices will soar to previously unseen levels and unfortunately hurt a healing economy. But fortunately, renewable energy would be able to compete on a level playing field. Currently, due to real or manipulated market forces, as the price of oil continues to rise and the cost of renewables, especially solar, drops the price gap between the two keeps getting smaller. As the price differential becomes a wash, there is renewed interest for renewables. However, for those who been through this before, the concern is anticipation of another sharp drop in oil at which time complacency sets in almost as fast.

A final recommendation would be to get the government entirely out of the renewable and energy efficiency business. On a performance basis, the government has failed; not once, not twice but continually over the last 40 years. Enough is enough. It’s time for the private sector to take over. Where private enterprises can see a profit renewables will happen. It’s foolish to let the government continue to fight this battle.  Let private enterprise do that.

Unused federal dollars earmarked for discontinued energy programs should be returned to taxpayers. The added dollars would help stimulate demand for renewable and sustainable solutions. Concurrently, the U.S. must exert real pressure to eliminate unfair foreign trade practices.  American businesses may then win the war and become globally competitive.

It’s worth a shot, can’t do much worse. Maybe transparent too! To quote Thomas Friedman:

“This is about us. This is about the world we and our children will inhabit for the rest of our lives ….”

Advertisements
2 Comments leave one →
  1. April 13, 2011 4:56 PM

    Barry – terrific stuff, as usual. Thought for a while maybe you were headed down a “lets do more federal funding for renewables…”. Whew.

    Every time the market has been allowed to operate the results have been more efficient than anything possible through government. For example – the market jumped on high mpg cars so quickly with the last run-up in prices the manufacturers ran out of cars to sell. This happened without any changes in CAFE standards and without any rebates. EV’s will make sense when the battery life improves and the charging issues are resolved. The market will buy into the product when the product is desirable.

    Solar at the consumer level is just about level with a ten year payoff of a ten year investment. Once the cost-benefit curve is more favorable – the consumer will figure out the advantages and the marketplace will soar. Not that consumers will benefit fully – one of the big distortions in Germany is that on sunny days – there is so much residentially generated solar that no one gets paid and base generation is dumped. When an EV can be paired with sunny day solar – then there really is an attraction with or without net metering.

    In comparison, using the “government knows best planning method”, Jerry Brown in CA just made sure to drive industry out of his state with yet another impossible uplift in renewable standards. Utilities are already unable to buy enough renewable capacity at above market prices to meet the current 20% mandate. Since the loopholes for non-compliance are still in place – he could have made a 100% renewable goal for all the good it will do. Without nukes, without hydro, and without a massive investment in transmission infrastucture to connect the as yet uneconomic, unbuilt, and unsited renewable solar and wind farms – California is still dreamin’. Higher energy costs will just put the nail in the economic coffin with nothing to show for it at the end.

    Apparently he didn’t read your blog.

  2. April 19, 2011 6:57 AM

    Gay,
    Thank you.
    Barry

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: