Pragmatism for the New President

by Richard T. Stuebi

I consider myself an equal opportunity offender. Many people in the energy industry or those who for some reason don’t believe in climate change think I’m somewhat of a radical. On the other hand, many ardent environmentalists think I’m too apologetic, conservative or pessimistic about what carbon reductions can realistically be achieved in what time frames and at what costs.

Therefore, I appreciate it when I find someone who makes well-argued, nuanced and balanced statements like those I would attempt to make. A recent example: a September speech at the Metropolitan Club in Washington DC by David J. O’Reilly, the Chairman and CEO of Chevron (NYSE: CVX).

I was particularly pleased by his comments on renewable energy and climate change. O’Reilly was quite clear and blunt: “Renewable energy is very real. We need it. It will be an essential part of the future I envision.” His only caveat, which I agree with: “It’s not realistic to suppose that it can replace conventional energy in a timeframe that some suggest,” referring to Al Gore’s well-intentioned but wishful-thinking goal of 100% U.S. electricity supply from renewable energy by 2018.

As for climate change, his comments were also measured and reasonable: “There is no doubt that carbon dioxide concentrations in the atmosphere have increased. And although there is uncertainty about the future impacts on climate, most people agree that it’s not a good idea to continue unrestricted hydrocarbon combustion. And I agree.” This line acknowledges that climate science is still subject to considerable uncertainty (see, as one example, a recent paper published in Geophysical Review Letters by two MIT Earth and Planetary Sciences professors), while at the same insisting that it’s very worthwhile to move concertedly towards lower carbon intensity in the likely case that the increased concentrations of carbon dioxide in the atmosphere will lead to unfavorable impacts on the planet.

O’Reilly closes by noting the importance for the next President to mobilize the public in a sustained commitment for change. “We need collaboration to achieve real progress. Businesses and consumers need affordable energy. Young and old want renewable energy. Republicans and Democrats seek reduced emissions….Today, public sentiment supports action on energy policy. That action should lead to a future of greater energy efficiency, enhanced supplies of all forms of energy and reduced emissions. While I am concerned about the urgency of the situation today, I’m also optimistic. I believe that, by the time my grandchildren are my age, our energy system will look much different. But we must get started now.”

Wise words, in my humble opinion. Let’s hope our new President can pull us together, in the face of declining oil prices and weakening economic conditions, towards a new resolve on energy.

A good start for the President-elect would be to read an open letter written by Ernest Moniz, the Director of the MIT Energy Initiative in this month’s Technology Review. Moniz’s four-pronged recommendation for a major step-up in Federal commitment:

1. Implement carbon dioxide emissions pricing, presumably through a cap-and-trade system
2. Add a surcharge on energy to generate $10-15 billion annually for the next 10-15 years to spend on development and deployment of new low-carbon energy technologies
3. Establish a mechanism spanning the various bureaucracies of the Federal government that will lead to a truly coherent energy policy — perhaps by appointing an energy advisor to the President
4. Commit to implementing a “smart grid” within 10 years

When one considers that the Federal government now allocates less than 3% of its research dollars to energy, down from10% in 1980, it seems pretty clear that the U.S. doesn’t put its money where its mouth used to be, and needs to get much more serious. Step one will be a President who himself is serious, and doesn’t fall prey to cheap populism or get swayed by protecting the interests of a select set of constituencies.

We need to stop the dogma and hyberbole from both sides, buckle down, and get on with it. I hope our new President can lead the way.

Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc.

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