Wednesday, January 25, 2012

Obama's SOTU clean energy wishlist derailed by Congress gridlock

A week is a long time in politics… 52 weeks between state of the union addresses is a lifetime. But progress in creating legislation that will actually help the US economy recover has been proceeding at such an agonisingly glacial pace thanks to the so-called "gridlock" in Congress that last year's appeals by the President to support investment in clean energy have not advanced since last year. 
Many Republican members of Congress are increasingly making it clear that they are not interested in running the country, just running their 44th President out of office – if his policies succeed, then Barack Obama has more chance of winning a second term in office and they will stop at nothing to stop anything that makes the current incumbent look like he might be a competent president.
Pugnacious comments punctuated Obama's usual emollience, which made his plea for Congress to look to the US military on tips on cooperation.
Chinese imports of cheap PV were clearly in the crosshairs when Obama announced the creation of a Trade Enforcement Unit to investigate "unfair trading practices in countries like China," thereby turning up the heat in the trade war started by SolarWorld's legal challenge last year.
"And I will not stand by when our competitors don’t play by the rules. We’ve brought trade cases against China at nearly twice the rate as the last administration –- and it’s made a difference… It’s not fair when foreign manufacturers have a leg up on ours only because they’re heavily subsidized."
Solyndra was not specifically named. But when Obama acknowledged that public investment in technologies had associated risk - some that paid off, such as shale gas and some that failed - everyone knew he was referring to the Californian thin-film solar company that collapsed last year taking around 535m federal dollars with it.
"Some technologies don’t pan out; some companies fail. But I will not walk away from the promise of clean energy."
He called for an end to fossil fuel subsidies - a vague hope that has not moved on since his last SOTU address. "Pass clean energy tax credits," he urged, before the first and only mention of climate change, over which his tongue slipped to say "flight" rather than fight climate change. The clean energy standard which would create a federal-wide renewable portfolio target for utilities, also got an honourable mention for the second year in a row even as bills in Congress have not inched further forward in the past 12 months.
"We can also spur energy innovation with new incentives. The differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change. But there’s no reason why Congress shouldn’t at least set a clean energy standard that creates a market for innovation. So far, you haven’t acted.  Well, tonight, I will.  I’m directing my administration to allow the development of clean energy on enough public land to power 3 million homes.  And I’m proud to announce that the Department of Defense, working with us, the world’s largest consumer of energy, will make one of the largest commitments to clean energy in history -– with the Navy purchasing enough capacity to power a quarter of a million homes a year." 
In many ways, that Obama's energy and climate goals have found a more welcome home in the US military comes as no surprise. As with the fuel economy standards introduced last year, executive orders are a useful addition to the political arsenal of the commander in chief. It's a curious trick of America's style of democracy that bypasses Congress… that is where Obama appears to be most effective. The same could be said of his administration's foreign policy - killing Osama Bin Laden tops a long list of successes in the state department thanks to Hilary Clinton, along with withdrawal from Iraq and toppling murderous dictators such as Colonel Gadaffy.
But the Republicans pretend not to be interested in foreign policy to avoid drawing attention to Obama's successes, citing the domestic problems as far more pressing.
But given the freedom to execute his executive role, Obama is clearly more effective without the burden of a Congress that has bound itself to industrial interests such as the Koch brothers et al at the expense of the wider American public. 
Tea Party Republicans mask prejudice and discrimination and obstruct reasonable discourse on everything from energy policy to abortion by citing the constitution, or rather their own appropriated interpretation, with the same religious fervour as Islamic fundamentalists cling to the Koran, or their own warped interpretation, as justification for waging war on the west.
Climate change is just one issue where Republican sceptics make themselves sound ridiculous because their arguments and comments have to stray so far from the facts and the scientific consensus that the rest of the world accepts.
That Republican presidential candidates are now equating "socialism" with "European" makes them sound silly. But these daft comments become more serious when this newly coined synonym passes almost without comment or inquiry by the public or press in the US…  David Cameron, Angela Merkel, Nicolas Sarkozy are all right of centre party leaders who have vowed to cut public spending and allowing sovereign monarchs to remain as heads of state in countries like Spain and the Scandinavian nations, is hardly a "socialist" strategy for organising society.  

During a conversation recently with a VC specialist at a large accounting firm the discussion turned around to Obama's threat to tax "wealth creators" and "wasting money on entitlements". Ah yes, the benefits culture has become a problem in the UK too, I said. To which the reply was: That's right, in Europe, you have socialism there. 

This lazy association through redundant ideologies obstructs discourse. After all, China a country run by a "communist" party has little or no "welfare" state as we would call it in the west, where healthcare payments are based on the extended family's ability to pay. So much for socialism taking care of the poor… if by socialism = European, they mean social equity, then that's a definition I'll live with. But that is a pejorative concept for too many Republicans.

In the Iron Lady biopic of Margaret Thatcher there is a wonderful scene in which Meryl Streep quotes: "Beware of your thoughts, they become your words. Beware of your words, they become your actions. Beware of your actions, they become your habits. Beware of your habits, they become your character. Beware of your character, it becomes your destiny."
Words and their real meaning should matter to everyone, especially politicians, regardless of bias.
The global warming debate is where this lack of interrogation of factual accuracy stands out in the US - it is depicted as if there is still enough weight of evidence to give credence to the doubters. That is just not true and it doesn't matter who says so or how many times, the US is a country where consensus on climate change can be reported as a "revelation" 10 years later than every other nation because it suits politicians and their fossil fuel influencers to obscure and dissemble.
Professor Naomi Oreskes deftly argues in the LA Times that climate change is an issue where "open mindedness" does not apply. It's just one of many issues: it is no longer scientifically acceptable to stay "open minded" on the adverse affects of smoking; nor is it socially acceptable to stay "open minded" about prejudice or discrimination on grounds of colour, gender, religion or sexual orientation. There are some things in life which are so politically or socially unpalatable in a free and fair society that "open mindedness" is inappropriate…
Unlike last year, there was no specific mention of high-speed rail. Last January, Obama boldly said:
"Within 25 years, our goal is to give 80% of Americans access to high-speed rail, which could allow you go places in half the time it takes to travel by car."
In the 12 months since then, not a single piece of HSR track has been laid and its deep controversies have seeded doubt about its viability even among staunch supporters such as Joe Simitian, a Democratic state Senator for Palo Alto, a region not known for its aversion to technology. 
This year, Obama played safe by pledging to reduce redtape on infrastructure projects: 
"Building this new energy future should be just one part of a broader agenda to repair America’s infrastructure."
Clean energy advocates responded positively to Obama's speech last night. But the headwinds of cheap and abundant natural gas, the possible expiration of the Production Tax Credit low and the spectre of China's oversupply of cheap PV - the Solyndra ghost will haunt the solar industry and government support for clean energy for years to come.
Eileen Claussen, president at the Center for Climate and Energy Solutions, which had to remodel itself from the Pew Center on Global Climate Change after Pew Charitable Trusts cuts its purse strings at the end of last year.
"Even if comprehensive legislation remains off the table for now, we can make important progress tackling these challenges piece by piece. C2ES is working with policymakers and stakeholders on ways to expand enhanced oil recovery using captured carbon dioxide – an approach that can boost domestic oil production while reducing greenhouse gas emissions. Similarly, we’re working with automakers, environmentalists and others on a plan for integrating plug-in electric vehicles into the U.S. electrical grid. We look forward to sharing the results of these and other C2ES initiatives aimed at practical solutions to our twin climate and energy challenges."
C2ES is now mostly funded by business, including Entergy, HP, Shell, the Alcoa Foundation, Bank of America, GE, The Energy Foundation, Duke Energy, Rockefeller Brothers Fund. The presence of energy companies among its top donors may explain the interest in advanced fossil fuel technologies such as enhanced oil recovery which aims to maximise the extraction of the resource and does nothing to minimise the effect of burning what comes out of the ground.
At one point the president pointed out Bryan Ritterby, who he tried to present as an ordinary Joe who was laid off …

"Bryan Ritterby was laid off from his job making furniture, he said he worried that at 55, no one would give him a second chance.  But he found work at Energetx, a wind turbine manufacturer in Michigan.  Before the recession, the factory only made luxury yachts.  Today, it’s hiring workers like Bryan…"

But Bitterby is no ordinary born-again American clean energy industry worker. He is representative of many who work in the US wind industry - largely developed with expertise from Europe where policy has created an export market for renewables.

Although Energetx is an American company that has changed course from making yachts in Michigan, if it's not built by GE, wind turbines in the US will be built in factories established by European-based companies: Gamesa, Siemens and Vestas just to name a few. These companies were attracted to the US manufacturing industry partly by the 48C advanced manufacturing tax credit, which as I've reported before, was not taken by GE. However, last night Obama made clear that any future tax credits would favour indigenous companies. Where that leaves the Europeans who have been so involved in developing the US wind industry and creating a manufacturing base remains to be seen.

Aside from being a wishlist of things that will never happen, like the clean energy standard, commentators last night also saw Obama's third SOTU as a stump speech for the presidency. I wonder whether he will make it to a 4th… otherwise Mitt Romney may be required to dig into his own deep pockets for ideas on how to help the economy recover. Perhaps he could pay down some of the US debt from his own savings account?

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