Obama: Invest in Energy Technology to Solve Long-term Challenges

On 04.25.11, In News, By Staff

On Saturday, President Obama posted his weekly national address, this time focused on rising oil prices and long-term solutions.  He made a strong call for federal investment in clean energy technology as the most important long-term solution and criticized recent budget proposals that would slash these investments [read transcript]:

Instead of subsidizing yesterday’s energy sources, we need to invest in tomorrow’s. We need to invest in clean, renewable energy. In the long term, that’s the answer. That’s the key to helping families at the pump and reducing our dependence on foreign oil. We can see that promise already. Thanks to an historic agreement we secured with all the major auto companies, we’re raising the fuel economy of cars and trucks in America, using hybrid technology and other advances. As a result, if you buy a new car in the next few years, the better gas mileage is going to save you about $3,000 at the pump.

But we need to do more. We need to harness the potential I’ve seen at promising start-ups and innovative clean energy companies across America. And that’s at the heart of a debate we’re having right now in Washington about the budget.

Both Democrats and Republicans believe we need to reduce the deficit. That’s where we agree. The question we’re debating is how we do it. I’ve proposed a balanced approach that cuts spending while still investing in things like education and clean energy that are so critical to creating jobs and opportunities for the middle class. It’s a simple idea: we need to live within our means while at the same time investing in our future.

That’s why I disagree so strongly with a proposal in Congress that cuts our investments in clean energy by 70 percent. Yes, we have to get rid of wasteful spending – and make no mistake, we’re going through every line of the budget scouring for savings. But we can do that without sacrificing our future. We can do that while still investing in the technologies that will create jobs and allow the United States to lead the world in new industries. That’s how we’ll not only reduce the deficit, but also lower our dependence on foreign oil, grow the economy, and leave for our children a safer planet. And that’s what our mission has to be.

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White House Releases Updated Energy R&D Strategy

On 04.05.11, In News, By Staff

Last week, President Obama delivered a major speech on energy policy at Georgetown University and announced the release of the White House’s new “Blueprint for a Secure Energy Future.”

In terms of promoting clean energy innovation through research and development (R&D), the contents of the White House report are included below.  President Obama defended these investments in his speech by noting:

So a clean energy standard will help drive private investment in innovation. But I want to make this point: Government funding will still be critical. Over the past two years, the historic investments my administration has made in clean and renewable energy research and technology have helped private sector companies grow and hire hundreds of thousands of new workers.

I’ve visited gleaming new solar arrays that are among the largest in the world. I’ve tested an electric vehicle fresh off the assembly line. I mean, I didn’t really test it — I was able to drive like five feet before Secret Service said to stop. (Laughter.) I’ve toured factories that used to be shuttered, where they’re now building advanced wind blades that are as long as 747s, and they’re building the towers that support them. And I’ve seen the scientists that are searching for the next big breakthrough in energy. None of this would have happened without government support.

I understand we’ve got a tight fiscal situation, so it’s fair to ask how do we pay for government’s investment in energy. And as we debate our national priorities and our budget in Congress, we’re going to have to make some tough choices. We’re going to have to cut what we don’t need to invest in what we do need.

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A New Approach to Passenger Rail

On 02.24.11, In Opinion, By Timothy Krueger

a new approach to passenger railFlorida’s rejection of $2.4 billion of federal rail money last week brings to light a new truth of federal projects: the federal government cannot simply act like a charitable foundation. Under such a foundation model, in which states choose whether or not to compete for grants and governors can pull out at a whim, we may end up with one high-speed rail line connecting Los Angeles to San Francisco and another connecting New York City to Buffalo. It’s difficult, however, to see how this system will produce a national passenger rail system. Luckily, there are a score of other strategies to pursue.

Eisenhower’s aspirations of building an interstate highway system were in some ways similar to Obama’s current rail aspirations. The interstate highway system was a huge investment spread over multiple decades. Like a national passenger rail system, our highway system would be much less useful if it only went through states with pro-infrastructure governors. Also on par with current rail proposals, the federal government fronted about 90% of our highway system’s cost, while states funded the remaining 10%, as stipulated in the Federal Highway Act of 1956.  Florida’s $2.4 billion of rail funds would have required matching funds of $280 million, or 10.4% of the projected total cost.

Unlike current passenger rail projects, however, there is little indication that individual governors attempted to send back federal funds or otherwise resist the construction of highways in their states. This may be in part because the interstate highway system was understood as important to national security. It may also be true that infrastructure investment was, in the 1950’s, seen as patriotic in a way it no longer is today. Prevailing economic theory has also shifted in the past half-century. These and a dozen other factors point to the conclusion that a plan to simply dish out federal funding, while it may have been successful in 1956, will not work today.  Seeing a national passenger rail network through to completion requires that we understand why the foundation model is no longer appropriate, and what the possible alternatives look like.

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Presidents Day: Winning Our Energy Future

On 02.21.11, In Opinion, By Teryn Norris

Today, we have an op-ed published in the Presidents’ Day edition of The Plain Dealer, the largest newspaper in Ohio. The op-ed, “Winning Ohio’s energy future,” arrives one day before President Obama visits Cleveland to promote the administration’s “winning the future” agenda and host a business forum on entrepreneurship and innovation.

Co-authored with the CEO of the Cleveland Foundation, one of the country’s largest community foundations, we discuss how greater federal investment in clean energy technology innovation — on the scale of $15 billion annually for R&D — can unleash economic growth in the Midwest and across America, help recapture our global clean-tech leadership, and drive down the price of low-carbon energy.

Winning Ohio’s energy future
The Plain Dealer – Cleveland, OH
Monday, February 21, 2011

By Ronald B. Richard and Teryn Norris

When President Barack Obama visits Cleveland on Tuesday to talk about entrepreneurship and innovation, he will find a city and state where those forces are driving a revolution in clean, green energy – and where a greater federal commitment to energy innovation can secure our national competitiveness.

Northeast Ohio entrepreneurs are building an innovation ecosystem in clean-energy technologies and pushing the region and state into national leadership. NorTech, the regional technology-promoting nonprofit, has pulled together more than 400 public and private partners to create a cluster of advanced-energy innovation. Case Western Reserve University’s Great Lakes Energy Institute is conducting cutting-edge research into improvements in power generation, storage and transportation.

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Senate Democrats Unveil Plan for “Winning the Future”

On 02.17.11, In News, By Daniel Goldfarb

Senate Democrats have adopted the principles and rhetoric set forth in Obama’s State of the Union Adress in their new “Winning the Future” plan. Senate Majority Leader Harry Reid yesterday released his caucus’ plan to simultaneously cut spending and increase targeted investments in order to “out-build, out-innovate, and out-educate the rest of the world, so that the jobs and industries of our time will take root in America.“

In the face of Republican attacks on Obama’s budget proposal, Senate Democrats have produced a twenty point plan broken up into four focuses: “Deficit Reduction,” “Out-Innovate,” “Out-Build,” and “Out-Educate.” The strategy focuses on expanding and extending already existing successful initiatives such as the Advanced Energy Manufacturing Tax Credit (48C), the R&D Tax Credit, the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.

Also put forth are some new programs that have been previously proposed, the most notable example being the Clean Energy Deployment Administration (CEDA). CEDA has long been touted as an efficient way to bring clean energy technologies to market, helping them to avoid the “valley of death.” Other new itiatives would include an “America builds” bond program as well as a transportation authorization bill.

While Senate Democrats’ support of Obama’s innovation agenda is highly encouraging, it is yet to be seen what will be able to make it out of a House bent on deep spending cuts. Regardless, it is good to see an emerging consensus forming around policies that aim to stimulate innovation and American competitiveness.

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Cutting Fossil Fuel Subsidies: Third Time’s the Charm?

On 02.14.11, In News, By Noah Fisher

In the recent State of the Union Address, President Obama called for an end to oil and gas subsidies, the third time he has done so since taking office in 2009.  The President’s FY 2012 budget, submitted today, includes the elimination of nearly $4 billion of incentives annually for the oil, gas and coal industries. Unfortunately, all previous attempts to reduce or eliminate these incentives have met the same fate: bipartisan opposition and heavy lobbying from fossil fuel groups. In spite of the uphill nature of the battle, the President hopes that current demand for reduced spending will result in a different outcome.

In addition to competing with the large dollar discrepancy between industry incentives, most renewable energy subsidies face annual reauthorization debates in Congress, whereas fossil fuels have for years been expressly written into law.  For example, the extremely successful 1603 Cash Grant faced serious opposition during the lame duck session of the 111th Congress, and only finally garnered inclusion as a compromise among politicians. On the other hand, fossil fuel subsidies face no annual scrutiny, flying under the rader of the public. The short-term authorization of renewable energy subsidies leads to market and price instability, making fossil fuels a more sure bet for investors.

Unsurprisingly, the oil and gas industry contends that the subsidies actually go in the other direction: from fossil fuel companies to the federal government, in the form of taxes and royalties. Other industry members claim the elimination of subsidies will reduce investment and slow down vital domestic exploration. Secretary of the Interior Ken Salazar, however, disagrees with the industry’s assertion:

“All you have to do is look at record profits in the oil and gas world over the last several years and, in my view, you’re going to continue to see a great interest in oil and gas because it’s an essential part of our economy today…I think the oil and gas industry will do just fine.”

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Obama’s Climate Omission: Can We Disagree on Climate and Win on Clean Energy?

On 01.31.11, In Opinion, By Teryn Norris

By Teryn Norris & Daniel Goldfarb

President Obama’s exclusion of “climate change” from the State of the Union, combined with Carol Browner’s exit as the administration’s top climate advisor, has sparked wide debate across the climate movement. On one hand, many climate advocates are backing the president’s strategy. As Senator Barbara Boxer (D-CA) put it, “He’s trying to unify… I think it was very smart of him.”

On the other hand, climate advocates like Joe Romm of Climate Progress and David Roberts of Grist are criticizing the president for not using climate change as a central justification for his clean energy proposals.  Unfortunately, even after the collapse of cap and trade legislation, Roberts and other critics continue to follow a type of policy literalism that has undermined environmentalists and climate advocates for years.

The argument goes something like this.  First, Roberts claims that without climate change as the central justification, the case for federal investment in the clean energy industry “is no stronger than the argument for supporting pharmaceuticals, or telecom, or any other industry that’s likely to be big in the 21st century.” (Roberts wrote partly in response to Norris’ article on the rise of “innovation hawks.”)

However, as the American Energy Innovation Council and the President’s Council of Advisors on Science and Technology recently explained in their reports, other industries like pharmaceuticals, aerospace, and computer electronics spend far more on research and development than the energy industry, due to a variety of market and non-market barriers.  The underinvestment is dramatic: whereas pharmaceuticals invest about 18.7% of sales in R&D, the U.S. energy industry only invests 0.3%.  The federal government already invests over $30 billion annually in health research, and $80 billion on military R&D, but only $3-5 billion in energy R&D.

Moreover, the current economic challenge from China and other “rising tigers” in clean-tech is clearer than any other industry, and it remains one of the most powerful motivating factors for the U.S. public and policymakers alike (analysts predict the global clean-tech market could surpass $600 billion by 2020). The importance of clean energy technology for the Department of Defense, and for saving the lives of American troops, is creating a new imperative in the defense community. Rising oil prices and instability in the Middle East are simultaneously strengthening the energy security consensus to reduce U.S. reliance on oil. And disasters like Deepwater Horizon and Massey Energy continue to highlight the public health and environmental benefits of reduced fossil fuel consumption.

So much for the argument that only climate change can seriously justify major federal investment in clean energy technology over other industries. The case for expanding these investments for economic competitiveness, national security, and public health reasons is stronger than ever before.  (And beyond domestic concerns, cheaper forms of clean energy can help alleviate the poverty of billions who lack electricity access and already suffer from the vagaries of the climate.)

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The Rise of Innovation Hawks

On 01.26.11, In Opinion, By Teryn Norris

By Teryn Norris
Published by National Journal
January 26, 2011

Last night, President Obama crystallized a new moment in U.S. political and economic history. The president is declaring it the “new Sputnik moment,” but whatever the label, it represents a major development in U.S. politics.

The catalyzing force behind this trend is the rise of China and the aftermath of the Great Recession, which is quickly producing new political fault lines. Just as the rise of the Soviet Union caused a fundamental political realignment in the United States, so the rapid rise of China is causing another today.

This realignment is just beginning, but one of the clearest implications is the rise of a new national economic strategy based on “innovation economics.” Instead of emphasizing spending cuts, even in the face of the Tea Party and new Republican House, Obama strongly promoted an active, innovation-centric federal strategy at the front and center of his agenda – a first for any modern president.

The key to American leadership in the face of China, Obama argued, is to make large-scale federal investments in the three pillars of economic competitiveness: innovation, education, and infrastructure. “We need to out-innovate, out-educate, and out-build the rest of the world,” he declared. “That’s how we’ll win the future.”

By embracing an investment-centric strategy, Obama adopted a growing expert consensus: modern economic growth primarily emerges from technological innovation, and the federal government plays a central role in innovation. The information technology revolution was grounded in federal investments in microchips and the Internet – especially by the Department of Defense – and so were major growth sectors like aviation, biotech, and others.

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Speaking to President Obama on Energy: What’s Your Elevator Pitch?

On 01.24.11, In , By Teryn Norris

Andrew Revkin, who runs New York Times Dot Earth and formerly served as the lead NYT environment/energy reporter, has a new post, “America’s Energy Challenge, and Opportunity,” asking what people would say to President Obama about energy if he were to launch a national energy listening tour with his State of the Union tomorrow:

“As I asked on Sunday, if he does this, and the Obama Energy Road Show came to your town, what would you say? Below, you can read “Obama moment” statements on energy from industry representatives to climate campaigners, scientists to investors… When President John F. Kennedy announced plans to send men to the Moon, it was not because people were marching with signs demanding a space race. There were a host of reasons – strategic, economic, military, visionary and more. Kennedy wove them into a comprehensive, challenging and extraordinarily productive technological journey.”

He invited several scientists, advocates, and pundits to kick off the discussion with a few sentences, including Bill McKibben, Nathan Lewis, Andrew Karsner, Roger Pielke, Marty Hoffert, Paul Hawken, and others, and it’s worth reading their thoughts. He posted my contribution here alongside theirs, where I spoke to the “new Sputnik moment” the president is declaring:

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How Energy Reform Can Break the Partisan Stalemate

On 11.16.10, In Columns, By Teryn Norris

Published by National Journal
Energy & Environment Expert Blog

By Teryn Norris
November 16, 2010

In the aftermath of the mid-term elections, it’s unlikely that Washington can overcome the crippling gridlock in Congress. Yet one critical opportunity for bipartisan compromise stands out among the rest: energy policy.

Addressing the country the day after elections, President Obama signaled a clear opening by pressing the reset button on cap and trade and calling for a new agenda. “I don’t think there’s anybody in America who thinks that we’ve got an energy policy that works the way it needs to, that thinks that we shouldn’t be working on energy independence,” he declared. “And that gives opportunities for Democrats and Republicans to come together and think about… how do we move forward on that agenda.”

Senator Minority Leader Mitch McConnell (R-KY) quickly agreed. “I think energy is an area where there is potential for a bipartisan accomplishment of some consequence,” Senator McConnell told the Wall Street Journal. “There are a variety of other things there could be pretty broad agreement on… Nobody thinks it is a bad idea to reduce carbon emissions, the question is how do you do it.”

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