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Obama's Latest Energy Blueprint: Will Congress Go Along?

The president used his State of the Union address to set three energy goals. The challenge, though, will be navigating a bitterly divided Congress.

Jan 26, 2012
President Barack Obama delivers the State of the Union, Jan. 24, 2012.

WASHINGTON—President Obama talked for one hour, four minutes and 15 seconds Tuesday night when he delivered his third State of the Union address. He devoted seven of those minutes to how Congress and his administration could and should press forward on energy and environmental issues.

Obama highlighted three issues as ready for immediate action: slashing oil subsidies, crafting a clean energy standard and requiring companies that drill on federal land to disclose the chemicals they pump underground.

Here, InsideClimate News summarizes where each of these topics stands today with Congress or the appropriate regulatory agency.

Oil Subsidies

"We've subsidized oil companies for a century. That's long enough. It's time to end the taxpayer giveaways to an industry that rarely has been more profitable, and doubledown on a clean energy industry that never has been more promising. Pass clean energy tax credits. Create these jobs."

Every budget President Obama has submitted to Congress since 2009 has called for chopping subsidies for oil and other fossil fuels in the neighborhood of $4 billion. Each time, it has gone nowhere. The response from the Senate and the House isn't expected to change after Obama presents his newest budget in early February. Once again, it will likely die on Capitol Hill.

Watchdogs from organizations that comb through budget numbers estimate that the fossil fuel subsidies tucked into various nooks and crannies of the federal government are upward of $12 billion annually. And cutting away what watchdog groups consider fat is an unappetizing thought for politicians who count on money from Big Oil as a meal ticket to re-election.

The anti-subsidy movement gained a bit of traction last spring. That's when Democratic Sen. Robert Menendez of New Jersey spearheaded an effort to slice subsidies that amount to about $2 billion each year for 10 years from the five largest and most profitable oil companies—BP, Exxon Mobil, Shell, Chevron and Conoco Phillips. That measure failed to advance through either chamber.  

During an election year, it's doubtful Republicans or Democrats in the House or Senate will have the stomach to put policy above politics. Meanwhile, it’s estimated that profits for the top five oil companies over the last decade added up to close to $1 trillion.

Clean Energy Standard

"We can also spur energy innovation with new incentives.  The differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change. But there's no reason why Congress shouldn't at least set a clean energy standard that creates a market for innovation.  So far, you haven't acted.  Well, tonight, I will.  I’m directing my administration to allow the development of clean energy on enough public land to power 3 million homes.  And I'm proud to announce that the Department of Defense, working with us, the world’s largest consumer of energy, will make one of the largest commitments to clean energy in historywith the Navy purchasing enough capacity to power a quarter of a million homes a year."

In early February, Democratic Sen. Jeff Bingaman of New Mexico will try to answer Obama's plea by unveiling a bill that defines a federal clean energy standard.

Capitol Hill insiders expect it to reflect what the president asked for in last year's State of the Union address—steering the United States toward producing 80 percent of its electricity from clean energy sources by 2035. The rub is in what qualifies as "clean" and which power companies should be required to participate. Should electric utilities operating with natural gas, nuclear energy or deploying carbon capture and sequestration technology for coal be rewarded in the same way as energy companies that have switched to solar, wind and other renewables?  

Legislatures in the District of Columbia and 30 states have passed their own varying versions of clean energy standards. For the most part, those laws have been successful in helping states reduce emissions of heat-trapping gases and determine which clean energies qualify in their geographical region.

But federal legislators have been less enthusiastic about adopting standards. Over the last decade, they've introduced at least a dozen iterations of bills calling for power companies to incrementally increase the amount of power they generate from traditional renewables such as solar and wind. But none has advanced much beyond the idea stage. Renewable energy standards fell out of favor more than a year ago when Republicans made it clear that the energy mix would have to be expanded to include natural gas, nuclear power, "cleaner coal" and other fuels.

A handful of legislators—including Republican Sens. Lindsey Graham of South Carolina and Richard Lugar of Indiana—have floated bills for clean energy standards that have gone nowhere.

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