Obama’s energy report card

Obama Illustration by Jack D.
Illustration by Jack D.

Grading President Obama on his clean energy policies is no easy task. Ask a conservative, and they’ll say Obama has invested far too much in the industry. Ask a progressive concerned about climate, and they’ll tell you he’s done far too little.

Outside of those lenses, it’s important to keep in mind that this Administration has done more to lay the groundwork for a clean energy revolution than any other president in history. However, a number of major factors have dragged Obama’s grades down. Some of them are a direct result of the Administration’s actions and others are just market realities.

Clean Energy Deployment: B-

The still-sluggish economy has made development of energy projects very challenging, even in fast-growing clean energy. Yet the president’s stimulus package, which created the Loan Guarantee Program and the Treasury Grant Program, has kept project deployment levels relatively high during extraordinarily bad economic times.

When the financial crisis struck, tax credits for the industry became much more difficult to monetize. That’s because the number of financial players with enough profits (i.e., tax appetite) to take advantage of tax credits dropped precipitously. As a result, the Administration created a grant program that allowed developers to take a cash payment through the Treasury equal to 30 per cent of a project’s cost. This incentive enabled a range of new banks and financiers to partner with developers, thus keeping project development rates steady.

Through the Loan Guarantee Program, which has leveraged more than $35 billion in private dollars, the Department of Energy has enabled some extremely important first-of-a-kind projects and manufacturing facilities in the United States. Among them are the largest wind farm, the country’s first cellulosic ethanol plant and some of the largest solar projects in the world. This program has also spurred development of numerous advanced battery and electric vehicle manufacturing plants.

Unfortunately, the lack of transparency in the loan guarantee process has attracted sharp criticism and turned a few recent failures – Solyndra being the highest profile example – into a political nightmare, even though a certain degree of failure is inevitable and expected with such a program.

At the same time, the Administration has balked at extending the single most important stimulus program for clean energy, the Treasury Grant Program, which expired at the end of 2011. In all, Obama has done a lot to elevate the industry, but many in the industry are concerned that he’s shifting focus at the wrong time.

Clean Energy Job Creation: B

Grade Job creation is a very sensitive issue, due to the political controversy around the 2009 stimulus package, so it’s important to set the record straight. To say the stimulus was a failure is simplistic and incorrect. The non-partisan Congressional Budget Office found that through the first quarter of 2011 the stimulus created between 1.6 million and 4.6 million jobs and reduced unemployment by between 0.6 and 1.8 percentage points. It also allowed the clean energy industry to grow by 8.3 per cent between 2008 and 2009, adding thousands of needed construction jobs. The recent green jobs report from the Brookings Institution described it as a period of “explosive” growth.

And those jobs are diverse. There are now 100,000 jobs in the U.S. solar industry, according to the Solar Foundation’s Solar Census. There are 661,000 green jobs in the design and construction industry, according to McGraw Hill. And the Administration’s energy efficiency weatherization program hired 25,000 people between April and June of 2011 alone.

The problem is not that the Administration didn’t create jobs, because it created a substantial amount. It’s that Obama and other clean energy advocates touted figures for job creation that were extraordinarily high – based largely on the assumption that we would get a comprehensive energy bill including a serious price for carbon dioxide that in turn would pay for major clean energy investments. So even though we’ve seen slow and steady growth in this sector, clean energy job creation is wrongly being held up as a failure.

The Administration could be doing more to accelerate clean energy job creation, but it must also be recognized that millions of jobs can’t be created overnight.

Clean Energy Regulations: B

In 2009, the industry was very close to getting a comprehensive climate and clean energy bill that would have busted the market wide open. After that bill went down in flames in 2010, the president stopped pursuing a price on carbon or a national clean energy standard. We’ve seen very little movement on the issue since.

Why a decent grade then? This Administration has undertaken a considerable number of regulatory efforts that don’t have as much political flair, but do have an enormous impact on spreading clean energy technologies.

Last summer, the Administration negotiated aggressive fuel standards for light and heavy vehicles – a move that will bring a new generation of fuel-efficient cars and trucks on the road in the coming decade and create thousands of jobs in the struggling auto sector.

At the Interior Department, Secretary Ken Salazar has streamlined the regulatory approval of numerous renewable energy projects on public lands, including the largest concentrating solar power plant and the nation’s first offshore wind farm. As well, the department facilitated approvals by creating a “zones” approach to siting clean energy facilities on public lands.

The Administration has also improved the transmission siting process. The Federal Energy Regulatory Commission issued a final rule last summer that gives priority to those transmission corridors that help bring clean energy online, while also clarifying who must pay for transmission upgrades. Not very sexy, but it’s billed as one of the most progressive pieces of clean energy regulation coming out of the Administration.

Finally, the Environmental Protection Agency has actualized rules for regulating carbon emissions, air toxins and mercury from dirty power plants. Last fall, the Administration dropped a rule for regulating smog, infuriating environmental groups. The EPA has also delayed other rules for regulating greenhouse gas emissions from oil drilling rigs. But the agency, having successfully implemented rules for carbon and mercury from power plants, will be responsible for spurring a major transition away from coal and toward more renewables and natural gas.

Clean Energy R&D: A-

Obama has come out very strong in support of clean energy R&D, calling for a 70 per cent increase in research in his 2012 budget, even in the face of massive budget cuts. He explained: “Our focus cannot just be on the short term.”

The Administration has set aside more than $1 billion for grants to national labs and academic institutions for research on new solar materials, next-generation batteries, biofuels and bio-based materials development, and new manufacturing techniques for a variety of renewables.

One of the Administration’s hallmark programs is the SunShot Initiative, which is aimed at lowering the cost of utility-scale solar PV and concentrated solar power by 75 per cent in the next decade. The Administration recently announced $60 million in grants for research into new storage mediums, heat transfer technologies and engineering techniques in concentrated solar power. And the Advanced Research Projects Agency for Energy (ARPA-E) is playing an important role in the program by helping develop new integrated power electronics for clean energy facilities, with the goal of halving power conversion costs by 2020.

This Administration has done more for clean energy R&D than any previous administration, and deserves a high grade as a result.

Climate Change: D/Incomplete

A lot of people in the climate community would say Obama deserves an F in climate. Given all the Administration has done to set the stage for a massive uptake of renewables and other clean technologies, it’s unfair to give him an outright F. Instead, he gets an incomplete or conditional D.

In the face of the most vicious and well-funded attacks on climate science, this president has not stood up to the climate-denial machine. Since the completely bogus 2009 “climategate” scandal and the defeat of a cap-and-trade bill in Congress, Obama has fallen silent on the issue, even while the science continues to prove how dire the situation is. As a leader with one of the loudest megaphones in the world, Obama should be doing far more to defend the science.

There are still many unknowns that may impact whether this Administration’s grade goes up or down. The first is the future of the proposed 1,700-mile Keystone XL pipeline, which would bring carbon and water-intensive tar sands crude from the Canadian province of Alberta to refineries in Texas. Leading climate scientist James Hansen calls the project “game over for climate.” After a strong and vocal protest movement pressured the State Department to delay a decision until 2013 and demand another environmental review, congressional Republicans set a 60-day deadline which forced the Administration to deny the pipeline application to TransCanada. However, the state department insisted at the time that “denial of the permit application does not preclude any subsequent permit application or applications for similar projects.” TransCanada could reapply with an alternate route, which is a likely scenario. Obama deserves an F if he ultimately approves the project.

The other unknowns involve a few of the regulations mentioned above that are currently in the works: two aggressive fuel standards for light and heavy vehicles, and the Environmental Protection Agency regulation of carbon emissions. If both of these are finalized, they could prove to be a very effective tool for substantially reducing greenhouse gases in the transportation and electricity sectors – perhaps even better than the original carbon cap-and-trade program proposed in Congress.

In conclusion, when grading the Obama Administration across this range of issues, it fares above average. But the political pressure from Republicans to drop strong support for clean energy has the Administration on the ropes.

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