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Bingaman: Energy Policy Must Be World-Class

The US Used 94.6 Quadrillion BTUS of Energy in 2009
Click to enlarge and see the energy mix
The 112th Congress should move ahead soon with serious legislation that brings predictability to its clean energy policy, said Sen. Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee.

Because the US given and then taken away tax and other incentives for the clean energy industry, other countries have gained market share leadership in the new technologies, Bingaman said in a speech outlining energy policies for the 112th Congress.

This has had the result of erasing the $14 billion green trade surplus the US enjoyed in 1997 to a deficit of $9 billion in 2008, Bingaman said.

Despite the fact that many energy initiatives in the previous Congress failed, energy is still important to legislators because of US dependence on foreign energy and geopolitics affecting its energy supplies. Further, issues linger from the past; Bingaman in the opening weeks of the Congress chaired a hearing on the Presidential commission's Gulf oil spill report and its recommendations for the regulation of offshore drilling.

Bingaman pointed out that competitive pressures with other countries in clean energy important. China and Europe are serious competitors in clean energy, China invested over $50 billion in clean energy last year.

To remain at forefront of competition Bingaman asserted four things are necessary:
The US must remain a leader in research and development
In 2007 US clean energy research and development 3/10% of GDP, but US R&D investment grown modestly while other countries have invested more aggressively. Bingaman said that Dept. of Energy Secretary Steven Chu will testify on US energy R&D plans on Feb. 16, two days after the new budget is released.
There must be a strong market for clean energy in US
Bingaman said there has been an uncertain US market for clean energy, which has deterred companies from establishing clean energy factories in this country. Clean energy manufacturers will locate very close to where there is demand their products and will choose countries with good clean energy policies, he said.
Finance and tax incentives for clean energy must be available
The "on and off again" tax incentives will not compete with other countries, Bingaman said.
There must be manufacturing capacity for clean_energy
The capital cost of clean energy is higher than previous high-growth technologies. Other countries have set up institutions to fund clean energy growth and the US should too, he stated.

He said appliance energy standards are critical if US manufacturers are to be competitive abroad and that he plans to introduce a package or revisions to energy efficiency measures in the next few weeks.

On transportation, Bingaman called for rebates for more efficient cars should be closer to consumer and diversified sources of motor fuel.

A renewable energy standard is needed to provide a steady, long-term market for clean energy.

Financing of clean energy has three priorities:

  • reforming loan guarantees
  • assurance of the 30% tax credit for manufacturing clean energy tech. Bingaman called for billions more
  • predictability for tax incentives for clean energy.

On the last point, Bingaman noted that some tax incentives have expired already and others will expire this year.

He described the end-of-session debates on extensions of clean energy tax credits a "Perils of Pauline exercise". "We need to get away from that," he said.

The most pressing energy problem, he noted, is vulnerability of the electric grid from cyberattack and the related need to ensure security mechanisms across the grid. The Senate and House Representatives in the last Congress developed their own respective legislation to address this, but could not agree on bill. Bingaman said cybersecurity legislation and policies are needed soon.

"For a number of years I have advanced a proposal for a Renewable Electricity Standard, to ensure a long-term and predictable demand for renewable clean energy resources," Bingaman said. In the State of the Union address President Obama called for greater us of technologies such as nuclear energy, "clean coal" (in Obama's words), and natural gas generation along with wind and solar. Obama set a goal of obtaining 80 percent of US electricity from clean energy sources by 2035.
But Bingaman said there were many details to work out on a renewable energy standard.

"I plan to work with colleagues on both sides of the aisle in the Committee to determine how we can craft a workable legislative proposal to achieve what the President has set out as his goal," he said. "As we do so, a number of key design questions will need to be answered, such as, what counts as a clean energy technology? How does the proposal account for existing clean energy sources? Does the credit trading system that we have developed for renewables in our proposal for renewable resources fit with these other resources?"

Taking questions from the audience, Bingaman gave the following answers:

  • It is impossible to know the effect of Mideast crisis on future of foreign oil dependencies
  • Most solutions to US dependence on foreign oil can't be done immediately, most action addressing foreign oil will take time
  • Proposals to cut oil subsidies have not had traction last two years and he said he would be surprised if it got traction this Congress.

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