Policy

When American voters go to the polls on November 4^th, they will have to make a decision that will profoundly affect both their own nation’s future and the rest of the world. The decision will determine the direction of action that the world’s second largest producer of CO₂ (after China) will take on energy generation and usage. But will the change in president and his administration make a real difference to US energy policy?

When US presidential candidates John McCain and Barack Obama launched their strategies for the country’s future energy policy in recent weeks, they agreed on one key point: climate change is real. But they also appear to agree that the key issue – for voters at least – is energy security, or rather, energy ‘independence’. But this isn’t independence from oil and fossil fuels, this is independence from the Middle East.

So what are the approaches that the two candidates are advocating to enable the US to achieve ‘energy independence’? What are the key policy differences on which voters should base their decision?
“The two candidates have pulled closer together on their various energy policy proposals,” says expert on public policy issues Richard Kearney of North Carolina State University. “[But] neither is addressing energy policy in any depth.”

McCain’s energy plan – the Lexington Project – “is the most ambitious national project in decades,” he claims. The central thrusts are nuclear power and ‘clean’ coal – never mind the fact that former is unpopular with voters and the latter is unproven. Without a clear strategy to increase efficiency and reduce oil consumption, McCain’s plan relies heavily on opening up new oil wells in the US – both on and offshore. “We’ll drill new wells offshore, and we’ll drill them now,” he told a Republican Party rally.

Obama’s strategy is simply called New Energy for America. However, his energy plan is separate from his climate change one. Joined up thinking anyone? Obama’s plan presents a broad sweep of policies – placing more emphasis on renewables, plug-in hybrids and biofuels – than McCain, but also encompassing clean coal and (maybe) some nuclear power too. This ‘kitchen sink’ approach is really more of a listing of all the possible energy sources and alternatives, says Kearney. “Obama is throwing a lot of stuff out there, but hasn’t really set any priorities,” he says.

At a glance

In detail

Carbon emissions

McCain has a history in this sphere. It was he and Joseph Lieberman that tried to introduce the first attempt on emission-regulating legislation in the US. The Senate may never have backed their bill, but now McCain may have another opportunity to get the US to adopt a cap-and-trade emissions scheme.

Both candidates support a cap and trade scheme for emissions but are careful to steer clear of any specific mention of the Kyoto protocol. McCain is calling for a 60% reduction in carbon emissions by 2050, Obama an 80% reduction.

While both candidates promise a scheme, McCain’s would allocate allowances to business and let them sell what they don’t use, while Obama favours auctioning off the allowances at the outset. In addition, Obama is promising that a portion of the revenue generated through the auctioning of carbon allowances (around $15 billion per year) will be ploughed back into supporting energy efficiency improvements, clean energy development and next generation biofuels and vehicles.

“I am not convinced that either fully understands the complexities of a carbon tax,” says Kearney.

Dodging the silver bullet

The potential ‘silver bullet’ of energy efficiency appears to have been taken on board more by Obama than McCain. The former says he is not happy about America’s position as the 22^nd most energy efficient country in the world and promises to turn around the trend that has seen the country’s average electricity usage triple since 1973. Obama has set a target of reducing electricity demand by 15% from the Department of Energy’s projected levels for 2020 through more efficient buildings and a phasing out of traditional light bulbs, among other initiatives.

Obama also promises that his administration will lead by example. The US federal government is currently the largest single consumer of energy in the world so he plans to increase the energy efficiency of all new federal buildings by 40% within five years and reach zero-carbon by 2025. A national building code will also set a zero-carbon target for all new buildings by 2030.

The process of implementing energy standards for appliances, which has met with recent criticism for missing update deadlines and letting inefficient appliances slip through the net, will also be tightened up under his administration, promised Obama.

Increased efficiency in electricity will be supported by investment in new grid technology, including smart metering. Updating electricity transmissions systems would also enable the accommodation of more generating capacity from renewables.

McCain doesn’t give much airtime to energy efficiency, other than proposals to ramp up fuel standards for vehicles.

The nuclear equation

McCain’s focus is to meet US energy demands through increased nuclear power and has committed to supporting 45 new reactors by 2030. “Nuclear power has got to be part of any real meaningful effort that we are going to make to reduce greenhouse gas emissions,” McCain has said. “It has got to be part of the equation.” What is not part of McCain’s equation, however, is what to do with the waste.

Obama is on the fence on nuclear power – no commitment to further development but no plans to decommission and replace nuclear reactors with alternatives either. His wavering has attracted criticism from McCain, who says that Obama’s plans for renewables and efficiency measures will not meet America’s energy demands.

Oil addition… what oil addition?

The key component of McCain’s plan is fossil fuels. As well as opening up new oil wells, McCain plans to sink investment – in comments at a recent visit to Missouri State University he gave a figure of around $2 billion – into carbon capture and storage (CCS).

And Obama also looks set to do more for the coal industry than any other president in recent years if his calls for five “first-of-a-kind” commercial-scale coal-fired power plants with CCS to be developed are met. His climate change plan indicates that he would also adopt new standards that might put an effective moratorium on any new coal-fired plants that do not have CCS.

Obama is also in favour of drilling for oil and gas in the US and pumping CO₂ into oil wells to produce more from existing fields. However, Obama is contemplating a windfall tax on oil company profits to support rebates of $500 for individuals and $1000 for families to help cope with increased energy and fuel costs.

Pie in the sky

And what of the alternatives? McCain says he supports renewable energy, but makes no mention of solar, wind, water or other renewables, let alone setting targets for their adoption. “If you can generate that power and set up a station that is powered by solar, by God I would love it, but you know we don’t have that technology,” he has said.

By comparison, Obama projects 10% of electricity from renewables by 2012 and 25% by 2025. He is calling for an investment of $150 billion over ten years in clean energy and infrastructure to support it, as well as an extension to the production tax credit for renewables for another five years. More detailed though this plan is than McCain’s, it falls short of Al Gore’s challenge of 100% renewable electricity by 2018 that environmentalists may have hoped for.

On the road

On the transportation front, Obama is again favour of a bit of everything. He is calling for one million plug-in hybrid cars by 2015 and also for the development of plans to enable at least 60 billion gallons of advanced biofuels by 2030, with two billion gallons of cellulosic (non-food feedstock) biofuel by 2013.

Meanwhile, Obama will also require a 1% reduction in the carbon content of fuel per year and a 4% increase in fuel economy standards. In fact, the figure is not so different from what Congress has already agreed to in the energy bill passed last December. However, Obama hopes that consumers will be persuaded to buy electric with a $7000 tax credit incentives for advanced technology vehicles – and he’s certainly more generous that McCain, who is only promising $4000. He is also promising $4 billion in tax credits and loan guarantees to US carmakers to build next generation vehicles at home.

McCain seems to be resting his hopes on the offer of a $300 million prize for an advance in battery technology that enables hybrids to become a truly mainstream technology.

Running green

So what of the overall picture? “McCain’s energy policy is largely premised on incremental change from the status quo,” says Kearney, “whereas Obama’s is much more favourable to comprehensive change and much more willing to employ government incentives to bring it about.”

In some areas such as clean coal and new oil drilling the candidates look surprisingly similar, but in others such as nuclear and renewables the choice of candidate could mean profound policy differences in future. But there are big unknowns in both strategies – what about nuclear waste? What about energy efficiency measures that will really make a difference? What about the future of biofuels – and if not biofuels, what are the alternatives.

But do the moves of either candidate go far enough? It is not clear that either candidate truly appreciates the urgency of dealing with climate change, nor the profound changes that are underway in the energy generation area. The era of cheap energy is over according to many experts, but is either candidate willing to face up to this reality yet? Not according to Kearney. “Neither is willing to discuss the tough choices that the new energy economy will require of Americans,” he says.

Cordelia Sealy

For further information:
www.johnmccain.com/
www.johnmccain.com//Informing/Issues/17671aa4-2fe8-4008-859f-0ef1468e96f4.htm
www.barackobama.com/index.php
my.barackobama.com/page/content/newenergy