Energy looms large in Obama’s agenda — and re-election plans

Source: John McArdle • E&E  • Posted: Wednesday, January 25, 2012

In his final State of the Union address before the 2012 election, President Obama did not shy away from some of the same energy and environmental issues that Republicans have said would be among his greatest weaknesses this fall.

Obama referenced both his stalled climate change initiative and the bankrupt Solyndra solar energy company last night while chiding Congress for inaction on a host of energy issues. And while he did not directly engage on the controversial Canadian Keystone XL oil pipeline that his administration has held up, the president sought to focus the energy debate on how he plans to make better use of American energy resources.

“Right now, American oil production is the highest that it’s been in eight years,” Obama said in a speech laying out a vision for “an America built to last.”

“But with only 2 percent of the world’s oil reserves, oil isn’t enough,” he said.

Employing a phrase that has generally been used by his GOP opponents on energy issues, Obama called for an “all of the above” energy strategy that “develops every available source of American energy — a strategy that’s cleaner, cheaper and full of new jobs.”

Obama especially emphasized natural gas.

“We have a supply of natural gas that can last America nearly 100 years, and my administration will take every possible action to safely develop this energy,” Obama said, adding that experts predict the industry will support more than 600,000 jobs by the end of the decade.

But the move toward increased natural gas development won’t be cheered by all of Obama’s allies in the environmental community.

As companies have increasingly employed hydraulic fracturing, or fracking, techniques to obtain natural gas, the process has been criticized by green groups. One of their biggest concerns is the chemicals found in the fluids used in the fracking process. The exact makeup of those fluids is guarded by oil and gas companies as trade secrets, but environmental groups have linked some of them to ground and drinking water contamination.

Obama pledged last night to develop natural gas in a manner that does not put Americans’ health at risk and said he would require any company that drills for gas on public lands to disclose the chemicals they use in that process.

The other major American energy sector Obama highlighted last night was clean energy.

It is an issue that Obama has taken plenty of heat on in the wake of the Solyndra bankruptcy.

The bankruptcy of the solar energy company that received more than $500 million in federal funding has led to a congressional investigation and caused Republicans to question the entire multibillion-dollar Department of Energy loan program that was designed to support renewable energy development in the United States.

Obama was clearly referencing Solyndra last night when he said that “some technologies don’t pan out; some companies fail.”

But he promised that despite such setbacks, he would not walk away from clean energy.

“I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here,” Obama said. “We have subsidized oil companies for a century. That’s long enough. It’s time to end the taxpayer giveaways to an industry that’s rarely been more profitable and double-down on a clean energy industry that’s never been more promising.”

He called on Congress to extend clean energy tax credits and spur energy innovation with new incentives.

In another politically risky reference, Obama brought up the controversial climate change legislation that he pushed hard just two years ago in the 2010 State of the Union.

While Republicans will likely use the reference to the climate change bill to revisit some of their old attacks on the subject, Obama employed it as a jumping off point to push the clean energy standard that he made a headline in his State of the Union last year (see related story).

The clean energy standard — which would require the United States to produce 80 percent of its electricity from clean energy by 2035 — is viewed as something of a compromise after Obama’s climate change proposal failed.

But after pushing the clean energy standard hard in last year’s speech, the effort gained little traction. Obama said last night that he was tired of waiting for Congress to act on the measure.

“The differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change,” Obama said. “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.”

Obama said he directed his administration to allow the development of clean energy on enough public land to power 3 million homes by the end of this year, the equivalent of 10 megawatts. The White House indicated last night that that would come from utility-scale solar and wind projects. The president also said the Department of Defense will commit to purchasing 1 gigawatt of power from clean energy sources.

Obama also announced a new proposal to provide incentives and streamline regulatory barriers to help increase energy efficiency in the industrial sector.

“Help manufacturers eliminate energy waste in their factories,” Obama implored Congress. “Their energy bills will be $100 billion lower over the next decade, and America will have less pollution, more manufacturing and more jobs for construction workers who need them.”

The president also called on Congress to help rebuild the country’s power grid and fund infrastructure projects that can help put Americans back to work.

“With or without this Congress, I will keep taking actions that help the economy grow,” Obama said. “But I can do a whole lot more with your help. Because when we act together, there is nothing the United States of America can’t achieve.”

GOP questions Obama’s intentions

After the speech, Republicans said Obama’s actions belie his commitment to promoting an “all of the above” energy strategy.

Indiana Gov. Mitch Daniels, who offered the official GOP response, was quick to try to steer the energy conversation back toward Keystone XL (see related story).

Daniels charged that the “pro poverty policy” promoted by the Obama White House “stifles the development of homegrown energy,” while it “cancels a perfectly safe pipeline that would employ tens of thousands” and “jacks up consumer utility bills for no improvement in either human health or world temperature.”

House Energy and Commerce Chairman Fred Upton (R-Mich.) said the Obama administration’s policies seem intent on keeping certain energy supplies locked away.

“President Obama talked of a future where we’re in control of our own energy, but time and again, he has blocked our ability to develop our vast energy resources and partner with North American allies to lessen our dependence on hostile regions of the world,” Upton said.

“He said a lot about energy at a time when the American people recognize the jobs and security that come with energy development, but he stayed silent on two of the most significant energy issues facing our nation today: the Keystone XL pipeline he rejected and the failed government gamble on Solyndra. The silence speaks volumes about contrasting policy visions.”

Upton’s fellow Energy and Commerce Committee member, Rep. Lee Terry (R-Neb.), expressed similar concerns.

“The issue is, does he mean it?” Terry said. “Right on the heels of rejecting Keystone pipeline, it shows to me that he’s not really in favor of an all-of-the-above strategy. He’d reject tens of thousands of jobs from an oil pipeline that would also make us less dependent on foreign oil. … So, his actions aren’t matching his w