The “all of the above” approach to energy policy

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I’m a strong believer in an ‘all of the above’ approach [to U.S. energy policy] … and I believe our policies should reflect five primary goals, many of which favor renewable resources. We should continually strive to make our energy supply more abundant, affordable, clean, diverse, and domestic.” –Senator Lisa Murkowski, R-Alaska, from a speech at the 2011 Renewable Energy Technology Conference & Exhibition (RETECH) being held in Washington D.C. this week

I know, I know: a politician proposing possible solutions for meeting our nation’s energy needs. Is there a more frightening thought?

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Just witness the recent (and quite dramatic failure) of Solyndra, a solar energy firm that went belly-up after consuming millions in grant money from the Department of Energy. Already, that singular debacle is forcing Congress to re-evaluate how it invests in clean energy start-up companies, noted Senator Lisa Murkowski, R-Alaska, during a speech at the 2011 Renewable Energy Technology Conference & Exhibition (RETECH) being held in Washington D.C. this week

One would think that RETECH, a conference sponsored by the American Council on Renewable Energy (ACORE), would be a poor choice of venues to discuss “green energy” firm failures, much less a place to tout an energy policy focused on keeping traditional energy sources in play even as “green” resources are brought on line.

But that’s the interesting part about what Murkowski (seen above with Lt. Governor Mead Treadwell in Nuuk, Greenland at the Arctic Council Ministerial meeting earlier this year) believes about the direction energy policy in the U.S needs to follow in the future.

In her view, despite all the rhetoric about Americans trying to lead “greener” lives, we’re still going to need lots of power just to keep the basic pieces of civilization functioning – to heat and cool our homes and businesses, power our computers and lights, while fueling the myriads of machines that move people and products around the world.

“By harnessing all of our resources, we can grow our economy, create jobs, and strengthen our national security,” she explained. “We should promote everything from energy efficiency to hydropower and clean coal. But we also have to be careful: our policies can’t sacrifice the economy or the budget for the environment. We have to protect all three.”

Murkowski said this all starts with an overarching philosophy about what our nation’s energy policy should look like. “I’m a strong believer in an ‘all of the above’ approach – and that certainly includes a place for renewable energy,” she stressed. “In fact, I believe our policies should reflect five primary goals, many of which favor renewable resources: we should continually strive to make our energy supply more abundant, affordable, clean, diverse, and domestic.”

OK, sounds nice, but what does such a “philosophy” translate into here in the real world? Especially in the face of spiraling federal deficits? Here’s Murkowski’s answer:

“Last week I was participated in a roundtable discussion on energy innovation with Bill Gates, Norm Augustine, and several other distinguished business leaders [and] one of them remarked that while we’re very good at coming up with plans, we’re terrible at sticking to them – and I think that’s particularly true for energy,” she said.

“We regularly authorize programs that have little chance of being funded. We pass short-term tax credits, change them or let them lapse, and then wonder why they weren’t successful oil-rig.jpg

That brought up to one of the toughest subjects of late: federal funding in the energy sector. “We are $15 trillion in debt right now [and] 12 members of Congress have less than two months left to identify $1.5 trillion in savings over the next ten years,” Murkowski pointed out. “Suffice to say, it’s a lot easier to cut spending than to increase it right now.”

So she’s urging every industry and interest group – but those especially in the energy sector – to prepare for a time when federal funding is greatly restricted. “If Plan A is the government, events like this provide a perfect opportunity to develop a strong Plan B, where you can form new partnerships and focus on building up your supply chains with less help from the government,” she noted

“Government cuts could be a threat to your industry – but this is also an opportunity to demonstrate just how far your industry has come,” she stressed. “So I urge you to focus intensely on competitive business models and on driving your costs down. When government funding is available, make sure it’s exactly what you need. If it doesn’t work for you, don’t hesitate to say so. It’s certainly in our interest to promote new technologies that can lower the cost of energy. But, clearly, it’s against our interest to focus on sources of energy that will depend on continuous, long-term subsidization.”

And this is where the “all of the above” approach comes into play.

“If we can agree to develop more of our conventional resources, it would provide billions and billions of dollars in revenues for the U.S. Treasury each year,” she noted. “And if we’re smart enough to dedicate a significant portion of those revenues for clean energy, that will finally provide the makings of legitimate long-term energy policy – policy where the substantial government revenues from fossil fuels are used to speed up the development of their replacements. Our best energy policy will not rely on new mandates or higher taxes; it will instead help fossil fuels work themselves out of a job.”

Murkowski also stressed that this will require “traditional” and “green” energy providers to work in concert going forward.

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“At this point, we’re almost conditioned to expect that the various sectors of the energy industry will be at war with one another,” she said. “To do our best to change that dynamic – and enact a balanced long-term policy that works – would mark a big and positive shift.”

With the government taking in billions of dollars from energy resource extraction each year – and perhaps more – even a small portion of that money could have a positive impact on renewable energy, Murkowski emphasized.

“With the federal budget in generally terrible condition, we don’t have the luxury of simply diverting that money without finding some way to replace it,” she said. “So when I consider the best ways to keep energy prices low, to create new jobs, and to bolster our national security, one approach stands out: to increase domestic energy production, and ensure that some of the returns to the Treasury are used wisely to develop the resources we will depend on in the future.”

That’s even more critical as current projections by the Energy Information Administration, noted in its International Energy Outlook 2011, indicates U.S. energy consumption rates aren’t going to decline significantly anytime soon.

“I look at forecasts and see that our nation now imports about nine million barrels of oil per day, and that 25 years from now, that number is projected to be largely unchanged,” Murkowski stressed. “Think about that: eight or nine million barrels a day, at $100 a barrel or perhaps higher, for the next quarter century. That will cost our nation trillions of dollars that we can’t spare – and the truth is we have resources right here at home to dramatically reduce those costs.”

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