Rhein on Energy and Climate

It is less than two years since the US Congress was in the middle of a heated debate on climate legislation, including a system for emission trading similar to that of the EU. When President Obama addressed students of the Georgetown University, on a “Blue Print for a secure Energy Future”, on 31 March, he mentioned “climate change” just once. His address was entirely focused on how to make America less dependent on oil imports and consume less oil. More than anything, this Georgetown address symbolises the paradigm shift that American energy and climate policies have undergone since 2008.

The White House fully realises that it has no chance of getting this Congress to adopt any piece of legislation trying to openly address climate change; regardless, time is running out before Presidential and Congressional elections roll round in less than 18 months. Until then, the President has no alternative but to rely on action that has congressional approval or will not require it, with emphasis on measures aimed at reducing the wasteful oil consumption – one quarter of global demand – which US society has been indulging in these past decades.

On top of the agenda is the production of more oil and gas at home; hardly a strategy designed to reduce green house gas emissions. The Administration will grant 38 new drilling permits off the Caribbean coast – in shallow waters and making sure that any underwater spills will be safely contained. This is not a very convincing reply to the biggest oil spill ever in the Caribbean, which happened less than a year ago. Next on the agenda is to expand the drilling for shale gas, the US reserves of which are believed to last at least 100 years. Drilling firms will, of course, be invited to take the necessary precautions for not polluting underground drinking water. That may prove to be wishful thinking.

Gas emits less C02 than oil; by substituting oil for gas, the President can at least claim to mitigate climate effects. The Administration is therefore keen to encourage the retrofitting of trucks and other vehicles to gas engines.
The third priority is very familiar: using more biofuels from non-agricultural biomass like wood chips and switch grass. Yet the dream of copying Brazil will hardly come true considering the differences in climate and vegetation. One should therefore not place too much trust in biofuels as an effective alternative to fossil fuels.

The fourth priority is the most attractive, but also one that will raise the most objections from industry. In 2010 the Environmental Protection Agency (EPA) imposed tighter fuel efficiency standards for cars and trucks, which still lag behind EU standards. The President admired a recent US car model that consumes no more than five litres per 100 km. European car manufacturers sell dozens of models doing the same distance for less litres! Still, the President wants the first-ever fuel efficiency standard for heavy-duty trucks to be adopted by the summer and more stringent ones for cars by next autumn. This is at least good news, provided the Republican opposition does not foil such efforts by impeding the EPA from doing so.

Finally the President aims at waking up US industry to the challenge of alternative energies. Companies are invited to apply for competitive bids to develop the next generation of car batteries for which the government will make available $ 2 billion. The President has also instructed the federal government to buy, as of 2015, exclusively vehicles that run by alternative energy – electric and hybrid – and thus give a boost to hybrid and electric vehicles.
For electric power the US government is sticking to the target proclaimed by the President in his 2011 State of the Union Address: generate at least 80 percent of US electricity from “clean sources”, i.e. nuclear , wind, solar and clean coal (CCS) by 2035. To reach that objective utilities will have to generate and sell rising shares of their electricity from clean energy.

Combined with stricter fuel efficiency standards for cars this would be the single most effective measure in the government`s arsenal.

There are four parallels between recent proposals by the European Commission and the perspectives set out by President Obama:

  • They deal with concrete measures for reducing energy input and raising energy efficiency. The impact on climate change will be welcome by-effect.
  • Neither dares to raise excise taxes on fossil energies because they are unlikely to pass.
  • Both put absolute priority to energy security over whatever climate considerations.
  • Finally both share identical concerns for becoming world leaders in advanced energy technologies.

Let us take stock of their respective achievements in 2020!

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