Screen shot 2011-05-04 at 2.21.44 PMIn the high-stakes federal budget debate, getting the facts right is critical.  That is why the Heritage Foundation’s recent error-riddled report — which proposed a near-dismantling of the U.S. energy innovation system — demanded an immediate response, which Americans for Energy Leadership has provided with our colleagues at the Information Technology & Innovation Foundation (ITIF) and the Breakthrough Institute.

Last week, these three organizations released a point-by-point analysis of the inaccuracies and misrepresentations of Heritage’s proposal.  Today, we are releasing a new report on the fundamental misconceptions of Heritage’s approach.

Download: All About the Fundamentals: Three Misconceptions of the Heritage Foundation’s Deficit/Energy Proposal” [PDF]

The report highlights three major problems with the Heritage proposal:

1. The proposal fails to meaningfully reduce the deficit now or in the future.

Even though the proposal advocates cutting DOE research budgets in the name of deficit reduction, the Department of Energy represents a tiny portion of the federal budget and contributes little to the deficit and national debt. Moreover, the proposal fails to distinguish between government spending and productive public investment in science and technology, which drives innovation and economic growth.

2. Heritage fails to understand where technological innovations come from.

Heritage wrongly assumes that “when it comes to energy policy, the free market works” and is best suited to develop new technologies. In fact, the energy sector is anything but free, and has always been characterized by extensive regulations and subsidies, natural monopolies, and other divergences from the free-market ideal held by Heritage. Moreover, Heritage ignores the long history of public support for innovation and assumes the private sector will invest sufficiently in energy innovation. For decades, the energy sector has consistently underinvested in R&D, and market failures plague the energy innovation process at each stage of development, from lab to market launch. There is a broad expert consensus that public investment and public-private partnerships are essential to moving new, innovative technologies into the marketplace.

3. The proposal ignores the immediacy and enormity of U.S. energy challenges.

While Heritage pays lip service to energy security, its recommendations would undermine many of the best efforts underway to achieve it. The Department of Defense has recognized the critical role that innovative clean energy technologies will play in enhancing their strategic and tactical abilities, as well as the nation’s energy security. DOD also views the DOE as a strategic partner in its effort to reduce its own vulnerability from relying on fossil fuels. If Heritage had it their way, DOD would lose a key partner in the long-term effort for greater force effectiveness and security through better energy management.

Download the full report here.

Download the point-by-point rebuttal here.

How Energy Fits into U.S. Military Posture

Soldiers wait as bundles of fuel are air delivered to Forward Operating Base Waza Kwah in Paktika province, Afghanistan, Jan. 30, 2011.

Source: energy.defense.gov | Soldiers wait as bundles of fuel are air delivered to Forward Operating Base Waza K'wah in Paktika province, Afghanistan, Jan. 30, 2011.

Last week, the services of the U.S. military (and the JCS) released their respective posture statements, which are unclassified summaries of the roles, missions, accomplishments, plans, and programs of each branch. Essentially, these statements combine to represent the state of the military as a whole.

In a reflection of an emerging consensus, each statement devotes a substantial portion to energy issues, acting as a benchmark for our military’s energy reform efforts. Combined with the launch of the DoD Operational Energy website, found here, these statements have contributed to an eventful week on the military energy front.

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Energy Security by the Numbers

Last spring the Institute for 21st Century Energy, a U.S. Chamber of Commerce affiliate, released The Index of U.S. Energy Security Risk, a report aimed at clarifying one of the most ambiguous buzz terms of the last several years: energy security.  Thrown around ad nauseam by politicians, the media, and scholars alike, any advancement in securing our energy sector has been overshadowed by an inability to determine what is meant by this vague, but important objective – begging the question, how can we protect something we have failed to define?

Our understanding of energy security has lacked clarity in part due to its conceptual complexity. All part of the popular lexicon, none of the descriptive terms often evoked in conversation (reliable, green, affordable, resilient, domestic, etc.) suffice as exhaustive definitions.  While it might be tempting to parse out favored adjectives and champion them as the most critical, promoting an oversimplified understanding of energy security only prohibits real progress toward achieving it, simultaneously condoning a public lack of awareness about energy and its global importance.  Toward the goal of influencing policy decisions to mitigate current risks and meet future energy needs, the Institute for 21st Century Energy constructed the most expansive attempt at quantifying energy security to date.

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Gas-Pipeline

It was Canadian Prime Minister Pierre Trudeau who once announced, “Canada is a country whose main exports are hockey players and cold fronts. Our main imports are baseball players and acid rain.”  Yet the head of state’s wry humor belies the significance of the U.S-Canadian relationship, and how this relationship is destined to shape – and to be shaped – by the posture that the United States takes towards the explosion of unconventional oil production occurring because of the Canadian oil sands.

Conventional wisdom would suggest that the prospect of a nearly 2,000 mile long pipeline between Canada and the United States, the TransCanada Corporation’s “Keystone XL” project, should be welcomed as a harbinger of closer ties and safer energy supplies.  Under the surface, however, lies a complex geopolitical and commercial logic that suggests it is Canadian producers – not American consumers – who stand to gain most from the project.

Our neighbor to the north will hardly ever receive the bursts of attention or scrutiny that Saudi Arabia or China garner in present times, but it is this bromidic consistency on Canada’s part which places it squarely, albeit quietly, as a foundation of US energy policy.  The US has been Canada’s largest market reaching back to the beginning of the Cold War, and the two are currently the world’s largest trading partners.  Canada has the world’s second largest oil reserves – after Saudi Arabia – and is the United States’ number one source of oil imports, almost doubling the volume of its closest competitor – Mexico.  In 2008, Canada provided 90% of US natural gas imports, and also boasts one of the world’s largest reserves of high-quality uranium.  Were the country anything other than a stable Western democracy sharing a similar colonial heritage with the United States, our deep interdependence with such an energy superpower might prove alarming.  Instead, it is often cited as a source of strength.

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A controversial new report released last week by the RAND Corporation suggests that if the US military increases its use of alternative fuels, there will be no direct benefit to the nation’s armed forces. In their report “Alternative Fuels for Military Applications,” found  here, RAND senior policy researcher James Bartis and Lawrence Van Bibber argue that any benefits from investment in alternative fuels by the Department of Defense (DoD) will accrue to the nation as a whole rather than to mission-specific needs of the military.

The report, mandated by Congress in the 2009 Defense authorization bill, was the result of a DoD inquiry to analyze whether alternative fuels can meet the needs of the nation’s military in a climate-friendly and affordable manner.  The study looked at several topics:

  • Opportunities to produce alternative fuels in a way that reduces lifecycle greenhouse gas emissions, including the use of clean energy alternatives such as nuclear, solar, and wind energies for powering the conversion processes
  • The military utility of concepts for production of alternative fuels in or close to the theater of military operations compared to domestic production
  • The goals of progress of research, testing, and certification efforts by the Department of Defense of Defense related to the use alternative fuels in military vehicles and aircraft
  • The prospects for commercial production of nonpetroleum military fuels.

The takeaway, the authors say, is that there is a national strategic reason to increase the use of alternate energy sources, but not a military advantage. In the face of a growing consensus amongst policy makers and military personel on increasing the use of alternative energy sources in the military, the report recommends that the military directs its efforts towards using energy more efficiently instead of wasting money on certain alternative fuels.

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A Lesson from the Great Australian Floods

Renewable energy has been put forth as the solution to a myriad of problems, some of which have received more attention than others. Perhaps most prominently, the implementation of renewable energies has been touted as a method of abating CO2 emissions and climate change, alleviating energy poverty in developing nations, as well as the boon to employment in the United States. Focusing on a small subset of benefits of renewables certainly has its advantages but also leads to the neglect of other benefits perceived at one time to be less important. One such neglected benefit, though, now merits much greater significance than has been previously accorded it given the tremendous floods that ravaged eastern Australia earlier this year: a hedge against marketplace volatility.

Marketplace Volatility

The world stands at a crossroads when it comes to market volatility. Historically, market volatility has largely been a result of anthropogenic influences, such as geopolitical conflicts (e.g. the 1973 oil crisis) or abrupt surges in supply or demand as new reserves are discovered or nations rapidly industrialize (e.g. China’s recent rise to power). However, in the 21st century, these historic drivers of market volatility may be dwarfed by a growing player on the world stage, natural disasters. Certainly, natural disasters have always caused market fluctuations, but as climate change escalates and increases the frequency of extreme weather events and shifts global weather patterns, these events will have an even greater effect on the world’s economy.

The effect of the recent floods in Australia provide a perfect illustration of this claim. First and foremost, while true that climate change has not been (and perhaps cannot be) linked to the floods, the Intergovernmental Panel on Climate Change (IPCC) nevertheless found that the likelihood of heavy precipitation events becoming more frequent over most areas is “very likely”. Thus, although climate change may be entirely unrelated to this instance of flooding, it almost certainly will drive other instances in the future. Furthermore, floods are not the only severe weather event that will be impacted by climate change; tropical cyclones, droughts, heat waves, and fires will most likely all be exacerbated as well. In other words, expect to see considerably more naturally-induced disturbances to supply chains as in Australia earlier this month. (more…)

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Also published at The Huffington Post

A confluence of recent events, both tragic and inspiring, have once again reminded us that America’s national security is inextricably linked to its energy posture.  As a result, a new consensus is emerging within government and the private sector: the U.S. military can make the nation and its soldiers safer while simultaneously aiding in an economic transformation to a less carbon intensive economy.

The emerging consensus was highlighted in this week’s announcement of the military authorization’s “Buy American Provision,” which provides a glimmer of hope for U.S. competitiveness yet also sends shivers down the spines of those worried about a trade war with China.  The importance of this development can only begin to be understood as the realization within Congress, and hopefully the general public, that clean energy stands at the nexus of economic recovery and the nation’s security.

The horrifying shooting of Rep. Gabriel Giffords, a champion of renewable energy, prompted a thoughtful article by Politico’s Darren Samuelsohn about Rep. Gifford’s now notorious questioning of General Patreus.  During a congressional hearing last June, Rep. Giffords posed a question about how the military was moving to adress the increasingly obvious link between troop safety, national security, and military energy practices:

“In places like Kandahar, where we have a large presence, we have been plugged into a very unsustainable and incapable grid system,” Giffords said. “We know that a major part of the upcoming Kandahar offensive will include some serious repairs and upgrades to the energy system, which will include small-scale solar and hydropower systems and also some solar-powered street lights. I’m just curious, General, whether or not there’s plans to utilize any of these same technologies at our bases around Afghanistan, and wouldn’t that greatly reduce our need for fuel?”

Gifford’s rather straightforward question drew the ire of conservative pundits around the nation. Soon she had become a target of Glenn Beck, the Red State blog, and a number of other sources which moved to question her patriotism.  Yet those attacking Rep. Gifford’s poignent question failed to pick up on an emerging consensus amongst think tanks, legislators, but most importantly the DoD itself: the military must move to change its energy sources and usage.

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Guest contribution by Leigh Ewbank

On the heels of filing a complaint with the WTO against China’s subsidies for its domestic wind turbine manufacturers, President Obama signed an appropriations law that requires the Department of Defense to purchase American-made solar panels. The move appears to be the first instance of America leveraging its WTO complaint to boost its clean technology industry, and shows that the US is beginning to take clean energy competitiveness seriously.

Some will argue that the ‘buy American’ provision smacks of hypocrisy—that the administration is as guilty of the same behavior it has criticized China for. Others will argue that the measure counters the Chinese subsidies and is a legitimate way to bolster the US clean energy sector in an uneven playing field. Regardless of your position on the matter, the move shines a spotlight on the role of military procurement.

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Can Congress Avoid a Climate Science War?

Everybody loves a good fight, and Andrew Revkin reports that scientists are gearing up for an upcoming slugfest over the validity of climate science in his post “Scientists Join Forces in a Hostile Climate.”  On the other side, Rep. Joe Barton (R-TX) is maneuvering to become Chairman of the House Energy and Commerce Committee, saying of the position, “Within the Energy and Commerce committee we are ground-zero in the effort to reestablish conservative principles in the Congress and by extension in the country.”

So how can we avoid an unproductive back and forth between climate scientists and climate zombies?  One idea is to shift the debate from what causes climate change to a discussion of more specific concerns and solutions, starting with how our current energy posture hampers national security.

National security provides the perfect arena in which to discuss energy policy.  Unlike politicians, members of the military don’t point fingers, they find solutions.  Our politicians could learn from the Department of Defense’s solution oriented approach to problems, and move past who is causing global warming to how we can best address it.  Writing in the Washington Post today, Meg Bostrom recommends such a solution oriented approach for the upcoming Congress in her piece “A Climate Plan for Climate-Change Deniers“:

“There is good reason to think that those who are worried about climate change would make greater progress – especially among Republicans, who profess increasing skepticism about warming – if they focused less on arguing the scientific reality and more on building support for specific solutions that all sides can agree on.”

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“The Marines Go Green” and Civilians Gain

A good deal has been written about the military’s recent efforts to “go green,” but Fred Kaplan’s piece for Slate last week is unique in its exploration of the potential civilian benefits of such an initiative. Kaplan does well to delineate the military’s history as a robust market for innovative technologies, driving up demand and down costs:

“In the last half-century, many of the United States’ great technological breakthroughs have been made possible because of the demand created by large-scale government projects—which, in this country, has mainly meant military and space projects… In this same way, the military’s demand for renewable-energy technologies today could create the conditions for a wide commercial market in the years ahead.”

Also important is his recognition of the policy advantages of housing such large scale projects within the Department of Defense.  Whereas Department of Energy programs face financial uncertainty, see ARPA-E, DoD programs enjoy long term funding because of the uniquely insulated nature of defense spending.

Policy stability is currently one of the foremost concerns of the U.S. clean energy industry.  With crucial stimulus initiatives set to expire and no new energy bills on the horizon, the military could be one of the few places for the clean energy industry to turn.   As the Breakthrough Institute noted yesterday, military funding for the “advanced demonstration and early commercialization of promising clean energy technologies, particularly those with dual-use military applications,” may be essential in the near future.  It is the dual nature of DoD work – that its technology initiatives regularly benefit the national defense and civilian economy – that gives the DoD its unique freedoms.  In the past, Kaplan shows, the DoD’s unique attributes have allowed it to house long term and capital intensive projects when others were unwilling or unable:

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