Foreign Competition Pressuring US to Support Clean Energy at Home

Nov 20, 2009

Industry leaders, politicians and other stakeholders gathered Friday on Capitol Hill to rally support for a move to a renewable energy-based economy.

The tone was largely optimistic and painted a picture of the U.S. at a crossroads where, if the right path is chosen, numerous challenges can be addressed at once – including energy security, unemployment and climate change. But speakers warned that a failure to act would put the US at a global disadvantage.

"We've got a Kennedy-esque moment to attract the boldest and brightest to the renewable energy sector," said Cathy Zoi, Assistant Secretary for Energy Efficiency and Renewable Energy at the U.S. Department of Energy, as she mentioned workers in industries like steel and manufacturing who, she says, would be eager to transition to green energy sectors.

Saying unemployment is even worse than current numbers, United Steelworkers president Leo Gerard said, "this is either a crisis or an opportunity."

"If we electrify our railways...and say all that [goes into the project] is going to be made in America, all our workers go back to work," he said. "The next industrial revolution is going to be the clean energy revolution."

The American Council on Renewable Energy Conference was titled "Phase II", as in the second phase of renewable energy development and deployment in the U.S. The first phase, according to ACORE, was from 1975 to 2000, when wind, solar, hydro, geothermal, ocean energy, biomass and biofuel technology was developed with the help of federal funding.

Phase two has consisted of developing the economic incentives necessary for the adoption of renewable energy technology in everyday U.S. economic activities. So far, this has largely taken place at the state level, but conference attendees hope federal legislation like the House climate bill passed in June and the Senate's version still under consideration will push renewable energy firmly into the mainstream.

"For us [policymakers], our job is to create a marketplace – a Darwinian, paranoia-inducing marketplace" where entrepreneurs and investors will be pushed by market forces into renewable sectors, said Rep. Edward
Markey, of Massachusetts.

In order to create this marketplace, clear policies are needed that will give investors some idea of what that marketplace will look like in the years to come.

"I can't tell you how much the markets hate uncertainty. We don't know how to value it," said Jeff Holzschuh, Vice Chairman of Morgan Stanley's Investment Banking Division.

"The other thing we don't know how to value is technology," he added.

Technology, many panelists agreed, is the main way in which the U.S. can take the lead in renewable sectors, or at least not fall too far behind the rest of the world - a major preoccupation of many conference attendees.

"The role that our four percent of the world's population should play in relation to the other 96 percent of the world's population...is technology," said Markey.

It won't do any good, said Gerard, "if we substantially reduce our dependence on foreign oil but have to rely on" foreign sources of renewable energy.

A "Sputnik moment" arrived several weeks ago, Gerard said, when it was announced a wind farm was to be built Texas but that most of the research jobs for that project would go to China. He would like policymakers to look at instances such as this and decide to increase the ability and eagerness of the U.S. to take a lead in renewable sectors.

The U.S. led the world, by far, in investment in renewable technology in the late 1970s, but the EU and, to a lesser degree, Japan have been at comparable levels since the late 1980s.

If renewable energy were the World Series, the U.S. would have won the first three games but lost the next two, offered Steen Riigaard, CEO of Denmark's Novozymes, a firm specializing in biofuel innovation. "There's no trophy for the team that wins the first three games," he said.

He cautioned, "While the U.S. might still be in the lead in terms of projects...it would be wise for it to look over its shoulder."

"If we don't do that," warned Gerard, "we're going to have to rely on foreign technology for renewable energy."

Much of these concerns echo those voiced by congressional leaders who hope to sculpt climate legislation to reduce U.S. dependence on foreign oil. In Congress, however, solutions are often sought in increasing domestic production of fossil fuels combined with some investment in renewables.

At Friday's conference, the hope was that legislation would favor, heavily, the latter element.

"Asking for 20 percent renewable energy by 2020 is, for me, low-hanging fruit," said Gerard.

The EU agreed to a 20 percent increase in the share of renewables in its energy mix last December. The rationales for this policy were similar to those voiced at the conference Friday: increasing energy security, reducing greenhouse gas emissions and creating new employment.

The emphasis, though, seemed to be specifically on the last of these Friday.

"Yes, [clean energy] is good for our national security. Yes, it will help to save the planet. But there's a practical element, as well," said Markey. "The issue for us [as policymakers] is to put a new job base in place."

"Folks need to realize these aren't just green jobs; these are good jobs," said the DOE's Zoi, explaining that the DOE needs to branch out into the business of capturing the hearts and minds of the population in order to promote renewable sectors and the jobs they can provide.

She also spoke of the need for the DOE to focus on "high-impact innovation" and "investing where the private sector isn't."

"We can move [to strong renewable sectors] very quickly if we get the right policy in place," she concluded.

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