Abandoning “all of the above” for “renewable energy fast” is significant change in American energy policy, politics
After the high-profile speeches and celebrity endorsements of Hillary Clinton, down on the floor and in the backrooms of the venue, Democratic delegates will be debating policy – including a significant change to the party’s “all of the above” energy approach.
This is a big deal. Here’s why.
I recently interviewed Jim Carr, Canadian natural resources minister and the counterpart to US Energy Secretary Ernest Moniz. I asked him to respond to a version of this statement: “The global economy has begun a 75 to 100 year transition from fossil fuels to clean energy technologies. Fossil fuels and renewable energy will co-exist and compete in the marketplace for many decades. Governments will do what they can to cost-effectively encourage clean energy, while recognizing the external costs of fossil fuels, but the technology will lead policy and governments will rely upon markets to drive the transition. Is this the worldview held by the Canadian government?”
“Absolutely!” said Carr.
He also pointed out that the American government holds the same worldview.
The Obama Administration uses different language, but “all of the above” and “energy transition” are essentially the same idea, reflecting the same pragmatic worldview about what is possible in the world of energy.
While President Barack Obama talks about climate change and the COP 21 Paris agreement, his officials – like Interior Secretary Sally Jewel – have been busy dampening expectations of a quick transition to clean energy: “There are many, many miles driven every day. We don’t yet have solar-powered cars. It’s going to take a very long time before we can wean ourselves from fossil fuels, so I think that to keep it in the ground is naïve, to say we could shift to 100 percent renewables is naïve.”
I’ve called Bernie Sanders’ view of energy policy naïve in the past. And I’ve wondered whether Hillary Clinton will revert post-convention to the practical approach to energy she held as Secretary of State or forge ahead with her more ideological stance of the past year, in which she supported the rejection of Keystone XL and proposed a North American Climate Change Pact.
The Democratic party resoundingly answered that question. Here is the description of the climate change and energy approach the Democrats want to adopt, taken from the party’s website:
“Moving beyond the “all of the above” energy approach in the 2012 platform, the 2016 platform draft re-frames the urgency of climate change as a central challenge of our time, already impacting American communities and calling for generating 50 percent clean electricity within the next ten years.
“The Committee unanimously adopted a joint proposal from Sanders and Clinton representatives to commit to making America run entirely on clean energy by mid-century, and supporting the ambitious goals put forward by President Obama and the Paris climate agreement.”
Governments certainly can compress the timeline for energy transitions, but doing so increases cost and risk. Are American consumers willing to pay more for power and gasoline? Energy economist Ed Hirs of the University of Houston thinks not.
“The Democrats’ plans to move America to clean energy production are attainable if the electorate is also willing to pay for the costs of converting to clean energy,” he said in an email.
“Currently, battery storage technology that is required to provide backup supplies of electricity is very costly and not uniformly available. Solar and wind deployment to reach the level required will require a massive building boom, or as I have said elsewhere, a Marshall Plan style implementation.”
Clean and renewable energy are not free, argues Hirs.
“Subsidy schemes employed at state levels and in other countries have been very effective, but the consumer pays for these via increased tax bills at the state and federal levels rather than at the meter or the pump,” he said.
“Political platform positions can be difficult to implement when the reality means that trillions of dollars in revenue and capital, and thousands of jobs will be disrupted.”
Clinton has clearly capitulated to the environmental movement, which was lobbying furiously for the changes.
Was this sharp turn to the left part of a deal with Sanders for his enthusiastic endorsement at the convention Tuesday night?
If the changes to party energy policy are adopted and if Clinton incorporates them into her presidential campaign, and if she wins in Nov. and Congressional Democrats do well, this could be a game changer for the American oil and gas industry.