Obama’s Energy Plan: All of the Above — Including a Price on Carbon

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President Obama laid out an all-of-the-above energy policy in a speech to national business leaders this afternoon: America need nuclear, solar, energy efficiency, and expanded oil and gas production, he said, and “to truly transition to a clean energy economy, we need to put a price on carbon pollution.”

His words suggest White House support for the framework Sens. John Kerry (D-Mass.) and Lindsey Graham (R-S.C.) are using to write a compromise climate and energy bill.

The wildcard, of course, for that bill — which could be introduced as early as next month — and for any Senate action remains the price on carbon.

Kerry said this week that the senators were still trying to figure out what the most effective pricing mechanism would be. It could be a cap-and-dividend system, similar to the CLEAR Act proposed by Sens. Maria Cantwell (D-Wash.) and Susan Collins (R-Maine), or a hybrid approach mixing CLEAR’s consumer dividends with the allocation process included in the House-passed American Clean Energy and Security (ACES) bill. They are also considering different approaches for different sectors, such as a carbon tax for transportation fuels.

The effort comes amid a noisy backlash from Republicans and some Democrats to the EPA’s plans to begin regulating carbon emissions in 2011 if Congress fails to act. The senators’ new emphasis on nuclear energy and fossil fuels through expanded drilling and carbon capture and storage are efforts to bring enough fossil fuel-state Democrats and some Republicans into the fold.

“A competitive America is also an America that finally has a smart energy policy,” Obama told the business leaders. “We know there is no silver bullet here. That to reduce our dependence on oil and the damage caused by climate change, we need more production, more efficiency, and more incentives for clean energy.

“What we’re looking at is a comprehensive strategy that isn’t either/or when it comes to energy."

He highlighted the government’s “unprecedented effort” to make homes an business more energy efficient, its $8.4 billion loan guarantee for the first new nuclear reactors in the United States in well over a decade, its support for building some of the world’s largest solar plants — including a $1.4 billion loan guarantee announced Tuesday for BrightSource Energy — and he talked about expanding gas and oil drilling, which was a Republican battle cry during the last election.

He also talked about the impact of federal recovery act funding, including ramping up advanced battery production for hybrid vehicles to take the U.S. from producing 2 percent of the world’s advanced batteries to having the capacity to produce 40 percent by 2015.

Increasing U.S. exports was a major focus of his speech, and while Obama didn’t directly tie clean energy technology to exports, his discussion of advanced batteries suggests that he sees clean energy and exports going hand-in-hand.

“But to truly transition to a clean energy economy, I’ve also said that we need to put a price on carbon pollution," Obama told the business leaders, some of whom staunchly oppose regulation of carbon emissions.

"Many businesses have embraced this approach — including some who are represented here today. Still, I am sympathetic to those companies that face significant potential transition costs, and I want to work with this organization and others like this to help with those costs and get our policies right.

“What we can’t do is stand still. The only certainty of the status quo is that the price and supply of oil will become increasingly volatile; that the use of fossil fuels will wreak havoc on weather patterns and air quality. But if we decide now that we’re putting a price on this pollution, in a few years, it will give businesses the certainty of knowing they have the time to plan for the transition.

"This country has to move toward a clean energy economy. That’s where the world is going. And that’s how America will remain competitive and strong in the 21st century.”


See also:

New Climate Bill Framework Embraces GOP Energy Mantra: All of the Above

Cap-and-Trade, California Style: Who Gets the Money?

Obama: The Making of a Clean Coal President


(Official White House photo)