The President Opens a Conversation on Energy: Let’s Take It Forward.

Solar March 30, 2011

An open and honest conversation about America’s energy needs is long overdue. Today the President began that conversation, and so now is the time for each of us to weigh in with our priorities: for saving money and creating jobs, for health and a clean environment, and for national security.

With unrest in the Middle East driving up oil prices, and the nuclear tragedy in Japan raising more questions about the safety and risks of our energy sources, today President Obama presented his latest assessment of our current energy situation: it is highly insecure, undermines our competitiveness and innovation, and pollutes our communities. He outlined for the nation his plan to build on measures taken to date to diversify the sources of energy in our energy system and dramatically improve its efficiency. The fundamental message: we need to develop a diverse mix of cleaner energy sources and continue to increase efficiency in our homes, commercial buildings, and our industrial facilities. It’s time to have an honest, informed conversation about our energy alternatives and about how our lack of choices and inefficiencies are undermining our global competitiveness, security, and health

Domestic oil production is at its highest level since 2003, and the administration intends to maintain it, but that production is not enough now and won’t be enough in the future to protect us from our energy insecurity. To reduce the risk, we must reduce our oil consumption: we do this with more efficient cars, alternative modes of transit, and by changing our energy sources, for instance to biofuels and electricity. We must give ourselves choices for our energy needs, so that as oil becomes scarcer, we are ready with multiple options. Oil products – gasoline and diesel – enjoy a near-monopoly for our cars and trucks and we have an electricity system dominated by old, inefficient, coal-fired power plants. Both of these markets, transportation and electricity, must be rapidly diversified with new sources. We also need to prioritize increased efficiency. America uses more energy than any other nation, not just overall, but according to the McKinsey Global Institute, per unit of GDP we use 80 percent more energy than Northwestern Europe, 94 percent more than Japan, and seven times the level of China. This is an expense we cannot afford.

It is long past time for America to step forward and come to terms with our energy situation. This is not a partisan issue, it is universal challenge that we can meet by engaging our greatest strengths: ingenuity and entrepreneurship, determination, access to information, and open dialogue. We can do this. The President’s goals announced today of a 1/3 reduction in oil imports by 2025, and making 80% of our electricity from clean energy by 2035 (a mix of renewables, efficient natural gas, nuclear, and clean coal), can provide initial market signals needed to begin to spur investment in new technologies and efficiency. The Clean Energy Standard, if designed right, should enable an honest competition among energy sources so that we can transparently see how they compete in full costs, in job creation, in health and environmental benefits, and in safety and security. Of course we’ll have to address the various subsidies that each of the sources receives in order to have that transparent competition. To fully unleash American innovation and the power of private investment, we need the right mix of regulations and incentives, and we need our best clean energy business minds and experts at the table to help design that mix, with openness, not just based upon whose lobbyist is there the most, or who funds campaigns in the largest amounts. The world’s next great technologies are emerging right now, and every month China is investing $9 BILLION in clean technologies, while we invest only about $2 billion each year. Our energy system desperately needs our attention and our investment, but the vast majority of that investment does not need to come from government, nor should it. With the right policies and incentives, private investment will find efficient solutions and scale them.

The President reminded us that three years ago, gas prices topped $4/gallon in the midst of the Presidential campaign. A lot of words were exchanged, but in that immediate moment of opportunity, we missed the chance for government to do something that would potentially reduce the likelihood that we’d face high gasoline prices again in the future. Historically there are seasonal and geopolitically-caused ups and downs in prices, but there are overall more ups than downs as demand escalates globally with the increased consumption of China and India. We know this and we must plan for it. Thanks to a combination of more recent government efforts including the terms of the government bailout of the automakers, along with a long-term expectation of higher oil prices and related consumer signals, we are seeing increasing choices in hybrids, plug-in hybrids, all-electric cars, and other high-efficiency vehicles in 2011. As part of his plan to meet his goal of reducing our imports of oil by 1/3 by 2025, the President has called for greater electrification of our transportation system, increased use of advanced biofuels (using agricultural waste and other non-food biomass), and greater efficiency – and is leveraging the government’s buying power to help build those markets. If we put in place more of the policies to support the development of these products, as well as transit and incentives for smarter growth patterns for our housing and workplaces (which the President barely mentioned), we could accelerate the growth of cleaner, more efficient options and dramatically reduce our energy insecurity. We can have greater quality of life, with more options, we just have to help design our future. Wise choices now will protect us; each year our challenge grows as oil supplies dwindle and demand rises.

President Obama opened the conversation today, and we have to take it forward. We need to recognize the size and speed at which changes need to be made, and take on the challenge at the scale required. Given the volatility of oil markets, given our need to become much more energy self-reliant quickly, we need to go very far, very fast. It’s time we honestly and aggressively assess the viability of all energy sources while recognizing their full economic, environmental, and security costs and benefits. And then shape policies at the national level and in our states and communities to create choices. Let’s demand our political leaders enable this to happen, and fast.

We need to ensure that today was just the beginning.

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