Did Obama change the voltage in the energy policy debate?


White House Photo, Pete Souza

by Joshua Gardner, Edelman

With deference to TIME’s Bryan Walsh, last night’s State of the Union will be remembered as the moment when the White House began working on energy and stopped working on climate.

In his speech, the President called for a “clean energy standard” of 80 percent by 2035 and an end to (roughly $4 billion worth of) tax breaks for the oil and gas industry. Some of his proposed solutions include high-speed rail, plug-in vehicles, nuclear, clean coal, natural gas, wind, solar and biofuels. Obama placed clean energy investments at the top of his agenda, saying it “will strengthen our security, protect our planet and create countless new jobs for our people.” “We’re not just handing out money,” he said. “We’re issuing a challenge. We’re telling America’s scientists and engineers that if they assemble teams of the best minds in their fields, and focus on the hardest problems in clean energy, we’ll fund the Apollo Projects of our time.”

According to the White House, Obama’s budget will call for a 33 percent increase in clean energy tech funding compared to 2010, including an expansion of the Energy Department’s ARPA-E research program (a Steven Chu favorite) and a doubling of the number of Energy Innovation Hubs. For some industries, such as electric vehicle manufacturers, this will mean increased funding and possibly consumer rebates to make those cars more affordable – all part of Obama’s goal of putting 1 million “advanced technology” cars on the road by 2015 and reducing oil consumption by about 785 million barrels by 2030.

The budget will also focus on “high-value” clean energy research and include a more than 85 percent jump in renewable energy investment. This will be achieved by redirecting the $4 billion in oil and gas subsidies annually toward increased research in energy efficiency for consumers and industrial businesses, renewable energy, and funding for scientists and engineers focusing on the “hardest problems in clean energy.” That level of funding could help renewable energy become more affordable – and competitive with cheap natural gas and coal-fired electricity.

Despite Obama’s proposal, there were those who were angered that not a mention was made of climate change, global warming, cap-and-trade, EPA regulations, the Clean Air Act or the BP oil spill. Still, it seems most recognized this for what it is: a clean energy standard might represent the best chance for legislation in the new Congress. It could lure Republicans and conservative Democrats in the Southeast, where renewable energy is perceived as scarce, by allowing nuclear power to count toward part of the minimum requirement of low-emission fuel on utilities. Including “clean coal” technologies could persuade lawmakers from West Virginia, Pennsylvania and other coal states to support passage. Placing natural gas in the equation could attract others.

To be sure, Obama’s plan is far more modest than the one he put forth in last year’s speech when he called for an aggressive climate package aimed at restricting carbon dioxide in the nation’s industrial sectors (i.e., transportation, electric utilities and manufacturing plants). The President’s new plan also nods to Republicans’ expanded power by including fuels barred by a Renewable Electricity Standard, which was passed in the Senate Energy and Natural Resources Committee last Congress with cooperation from both parties. The tune now, it seems, is compromise. “I am encouraged by the president’s continuing commitment to clean energy,” said Sen. Jeff Bingaman (D-N.M.), who as chairman of the energy committee resisted suggestions, just months ago, to include nuclear power in a renewable electricity standard. “Congress has a real opportunity to work together on bipartisan legislation to achieve his goals.”

As POLITICO’s Darren Samuelsohn wrote, “Prospects for a so-called ‘clean energy standard’ are wide open in 2011 but it could be the most aggressive and politically-feasible way to reduce greenhouse gas emissions on Capitol Hill in this Congress.” That’s because the President’s proposal appears to have something for (almost) everyone: renewables for greens, nuclear for Republicans and “clean coal” for coal-state Democrats.

“Adding nuclear, carbon capture coal and natural gas to a clean electricity standard brings a far more diverse regional and ideological group to the table, and is probably the surest path right now to bipartisan support for policies that cut emissions,” said Paul Bledsoe, senior advisor to the Bipartisan Policy Center and a consultant to Edelman in Washington, D.C.

For more on insights into what the new numbers mean, check out Michael Levi’s blog. He says that Obama’s proposal is more ambitious, for the electricity sector anyway, than the short-lived KGL cap-and-trade bill.