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Sunday, October 12, 2008

Candidates' Energy Plans Don't Add Up, Critics Say

By John Fleck
Copyright © 2008 Albuquerque Journal
Journal Staff Writer
          If you listen to campaign rhetoric on energy issues, the two presidential candidates offer a clear choice.
        If you favor oil drilling and nuclear power, John McCain is your man. If you think conservation and an expansion of renewable energy is the key to our nation's energy future, Barack Obama is the better choice.
        Behind the rhetoric, energy policy experts say, are significant similarities in some areas. But some critics say there are holes in both candidates' energy policy prescriptions that at times make them sound more like a list of bullet points aimed at corralling votes than a coherent energy policy.
        "The pandering as Election Day nears," said Kenneth P. Green, an energy policy analyst at the American Enterprise Institute, "has produced incoherent platforms that signify a deep lack of seriousness."
        'Energy independence'
        For both candidates, "energy independence" — reducing our reliance on imported oil — has become a campaign centerpiece.
        The issue rose to prominence over the summer as oil and gasoline prices spiked. In a June Gallup poll, 90 percent of respondents said energy was "extremely important" to their decision about whom to vote for. That dropped to just 10 percent in a CBS/New York Times poll late last month. But even after the steep price drop in the last month, gasoline in New Mexico is selling for 45 cents per gallon more than a year ago, and both candidates still make energy one of their main campaign talking points.
        McCain has dubbed his energy plan "The Lexington Project," "named for the town where Americans asserted their independence once before," McCain said in a June 25 speech laying out his plan.
        "What will we do about our addiction to foreign oil?" Obama asked during an Aug. 4 speech introducing his energy platform.
        According to the federal Energy Information Administration, 72 percent of the oil used in the United States — nearly three out of every four gallons — is imported. Both candidates have made reducing that number a central plank in their campaign platforms.
        The oil question offers a clear difference in approach.
        "Obama is almost all about curtailing demand," the American Enterprise Institute's Green said. "McCain is almost all about supply growth."
        But critics question whether either approach is sufficient given the enormous scale of the problem.
        When John McCain visited Albuquerque on Sept. 6, his campaign supporters chanted what has become a campaign energy mantra: "Drill, baby, drill." Opening up areas of the nation's outer continental shelf to drilling has become item No. 1 on McCain's energy policy agenda.
        Domestic production, McCain argues, is key. "We cannot outsource the solution to America's energy problems," he said in his June 25 energy policy speech.
        It may be a popular sentiment, but what effect will it have on our overall energy situation? Not much, said Tim Wawrzyniec, who teaches petroleum geology at the University of New Mexico. "It's a fallacy," he said in an interview. The domestic supplies available are too small, and the time they will come on line too far in the future, for the policy to make any appreciable dent in U.S. oil imports, Wawrzyniec said.
        While Obama favors limited expansion of offshore drilling, he argues that it is not the answer. "With 3 percent of the world's oil reserves," he says in his campaign energy platform, "the U.S. cannot drill our way to energy security."
        Obama's main focus is to demand reduction: increased vehicle fuel economy standards, tax credits for next-generation fuel-efficient cars, and federal government "technology pull" by mandating the government buy fuel-efficient vehicles.
        Obama also advocates $4 billion in tax credits and loan guarantees to help the U.S. auto industry retool to make more fuel-efficient vehicles.
        The problem with Obama's plan, Texas oil tycoon T. Boone Pickens said during a recent town hall meeting in Albuquerque, is that the number of new high-efficiency vehicles Obama claims will be added to the nation's fleet — 1 million by 2015 — is far too small for the size of our oil consumption problem.
        Obama also supports a windfall profits tax on oil companies, taking what he calls "a reasonable share" of the profits the companies make on high-priced oil and pledging $500 per person in tax rebates. McCain opposes a windfall profits tax, as does Sen. Jeff Bingaman, D-N.M., who heads the Senate Energy Committee.
        Electricity needs
        Oil, both domestic and imported, is used primarily for gasoline and diesel fuel for our cars and trucks. While it has drawn much of the political attention this year because of the dramatic increase in the price of oil, the candidates have also spoken at length about how we will generate the electricity needed in the future.
        Burning coal provides the majority of our electric power, but other sources, both from nuclear power and renewable energy, have featured prominently in the 2008 campaign debate.
        McCain has made nuclear power for the generation of electricity another centerpiece of his energy policy, but has been short on details of how he would accomplish the ambitious goal he lays out.
        "If I am elected president, I will set this nation on a course to building 45 new reactors by the year 2030. And I will set the goal of 100 new plants to power the homes and factories and cities of America," McCain said in his June 25 energy policy address.
        Such a push for nuclear power is vital for the nation's energy future, said Mohamed El-Genk, a professor of nuclear engineering at the University of New Mexico.
        The McCain campaign told The Associated Press last week that the candidate proposes no new federal spending to help with the plants other than federal loan guarantees and a resolution of the impasse over nuclear waste disposal.
        An analysis by the business news service Bloomberg concluded that the McCain plan could leave federal taxpayers on the hook for $315 billion in such loan guarantees because of uncertainties over the cost of new nuclear power plants.
        Obama has said that nuclear power cannot be eliminated as an option, but that key issues of nuclear proliferation and waste safety must be addressed before it can be expanded.
        That position frustrates nuclear power advocates like El-Genk, who say it is tantamount to removing an important power source from the energy table. "Nuclear can't be ignored," he said.
        For electric power, Obama advocates a mix of government mandates and federal technology investment to increase the use of renewable energy in the United States.
        Obama's plan would raise revenue through a climate change program that charges polluters, using some of the revenue to fund the renewable energy investment. Obama argues that the program would "help create 5 million new green jobs" in alternative energy industries.
        New Mexico, with its solar and wind energy potential, is well-positioned to gain a lot of those jobs, said Shrayas Jatkar, with the Sierra Club in New Mexico.
        But economists question Obama's claim that his program would create 5 million new jobs. In the long run, such programs merely shift jobs from one economic sector to another, resulting in no net job creation, argues Appalachian State University environmental economist John Whitehead. Regions that have opportunities in wind and solar energy could see job growth, Whitehead said, but they will be offset nationally by job losses in regions that produce energy from more traditional sources like coal. New Mexico has abundant wind and solar energy resources, but it is also a coal-producing state.
        Whitehead said incentives for alternative energy make good economic sense because of the environmental problems caused by traditional fossil fuels. But arguing for the policy based on job growth is "totally bogus," he said.
        McCain says he also supports alternative energy, arguing that the United States "must become a leader in a new international economy." His campaign would not say what policies a McCain administration would pursue to accomplish that goal.
        Obama himself acknowledged in his Aug. 4 energy speech that it is reasonable for voters to approach both candidates' energy plans with skepticism.
        "We've heard promises about energy independence," he said, "from every single president since Richard Nixon."