Politicians will always have an influence on the stock market, through regulation, tax policy, incentives and more. This truism is only more certain in energy policy, where electricity markets and transport are highly regulated, and the next administration is widely expected to enact some sort of carbon regulation, if not a tax.
Last night, I heard the head of the Colorado Governor’s Energy Office speak on what the state administration is doing on energy policy. Our current governor, Bill Ritter, ran on a three part platform: working to fix Colorado’s healthcare, transportation, and energy policies. Last year, the administration mostly focused on energy, and although healthcare and transportation will get more attention this year, there are already several energy bills on the legislative slate. This is because "Nobody is certain what to do about transportation or health care, but we do know what to do about Energy." This scenario may also be familiar to residents of California.
Since we do know what to do about energy, do the remaining US presidential candidates? From the news coverage, I have to admit I’m far from certain. My impression has been that most of the Democrats and John McCain among the Republicans have been talking a good game, but repeated mentions of potentially problematic technologies and policies such as "Clean Coal," Biofuels, Carbon Cap’N Trade, Nuclear power, and even Coal to Liquids, leave me wondering if even the best of intentions might lead to bungled energy policy.
If I Were President…
There is no doubt that energy policy is complex. Nevertheless, energy policy much more tractable than solving our nation’s healthcare crisis, the looming unfunded costs of entitlements such as Medicare and Social Security, or even what to do about the mess in Iraq. In short, I feel I know why Al Gore isn’t running for President again.
It is true that many of the candidates have health care plans as well as energy plans. but until some other unsuccessful presidential candidate reinvents himself (or herself) by trudging around the nation with a slideshow about healthcare, I doubt our next President will be able to do more than apply a band-aid to any of these problems. (I sincerely hope to be wrong on this.)
In contrast, Energy policy, while complex, provides clear opportunities for improvement.
- Improved energy efficiency provides winners all around.
- Strengthening our national grid is essential to large-scale renewable energy development.
- If a Carbon cap is chosen over a carbon tax, it needs to be carefully designed to avoid rewarding polluters without significantly reducing pollution.
- The entire life-cycle of transport fuels needs to be considered to ensure they don’t do more harm than good.
- All externalities of transport solutions need to be considered to avoid unintended consequences, such as higher fuel economy encouraging driving and hence contributing to congestion and accidents. We need better transportation systems and smart growth more than we need better cars.
- "Clean Coal" and …
- Nuclear are likely to be much more expensive when true costs are taken into account than cleaner options with less active lobbyists.
Admittedly, several of my above points are controversial, but they’re less controversial than turning off life support on a brain-dead Florida woman. And they’re orders of magnitude more important.
Grading the Candidates
I’m doing this exercise partly for my own benefit; I don’t know how the candidates are stack up against each other, and I still have a caucus to participate in. What follows are my grades of the remaining candidates on each of the seven above criteria. Keep in mind that I give candidates low grades on "Clean Coal" and Nuclear if they support subsidies for these technologies. I assume that the candidates who are not currently talking about energy policy will not attempt to do anything about energy policy.
All of the democrats have put real effort into their proposed energy policies, but only Obama considers it one of his highest priorities. Links are to sources other than the candidates policy statements.
|Hillary Clinton||John Edwards||Barak Obama|
Rudy Giuliani and Mike Huckabee seem to consider energy independence (a chimera) more important than reducing carbon emissions. Ron Paul shifts the subject to property rights, while Mitt Romney waffles about whether climate change is caused by human action. Given this backdrop, I cannot take any of their energy policies seriously.
While John McCain also emphasizes energy security, he puts priority on combating climate change. If you are a Republican who cares about this issue, he is the only one likely to take any meaningful action.
|Energy Efficiency||C||Smart Growth||F|
|Transmission and Smart Grid||B||"Clean Coal"||D|
I’m surprised to find that Barak Obama is the best candidate for the Clean Energy voter. I started this project remembering the furor he aroused with his support of Coal-to-Liquids technology, but his subsequent "clarification" that he was only interested in low-carbon coal to liquids seems to have taught him a lesson about transport fuels, and that early misstep may have led to a more comprehensive look at the tricky issues of transport fuels. This may be why he now takes the lifecycle costs of transport fuels seriously, while they aren’t really on other candidates’ radar.
Obama is also the only candidate who explicitly calls energy one of his highest priorities. I can’t say I’m in love with any of the candidates (note the almost total lack of "A" grades.) John Edwards earned the sole "A" because he panders towards interest groups. On energy efficiency, he managed to hit one of my hot-button issues squarely, but then he went and blew it by pandering to the ethanol and "Clean Coal" lobbies.
A major part of Clinton’s platform involves forcing oil companies to invest in renewable energy, an idea that does not fit into my rating schema. I think this is a bad idea, because reluctant investors are unlikely to make intelligent investments. Even without Clinton’s paln, oil companies that understand peak oil will invest in alternatives, and oil companies that do not will decline along with their reserves.
With my discomfort with Obama’s initial endorsement of Coal-to-Liquids, and Edwards’ habit of pandering to every interest group at the expense of his own coherence, I used to lean towards Hillary. I’m now convinced that Barak has the best grasp of the issues involved.
Republican Clean Energy voters have a much easier choice: only John McCain is willing to confront Climate Change.
ron paul is right in that it is an issue of property rights… that is that polluters damage our property (air, water, wildlife, etc) and law suits should be an important part of our environmental protection.
the only aspect he needs to add to his platform on this is a pollution tax. this could be very easily done, as well as constitutionally.
if he adopts that stance, although i’m not sure that he will, he would go from the only candidate in either party that understands the true nature of the issue, to being the candidate which has the best plan to stop polluters.
i hope you don’t confuse candidate TALK with policies. obama has too many negatives to consider him just for his talk on energy.
btw, i very much doubt that ron paul is right about anything.
This is an article about energy… naturally most voters will consider other factors. As for talk vs. delivery, we can’t expect ANY of them to do what they say… I have to assume the errors will mostly cancel out. — TK
What the renewables industry needs is for the sponsorships to go away. Today, the new tech can’t begin to compete, and thusly can’t get loans or grants, when the big boys get the ear and dollars from Washington. I have fought for ways to startup a renewables company for nearly a decade. Due to the big energy companies, both mobile and electrical, I can’t get any ‘approved’ experts to support my engineering. I’ve finally funded development, with much excitement, and now I have another battle because of net metering regs.
Ron Paul is the only candidate that would level the playing field for us startup guys. We certainly don’t need anothe dollar going to Exxon, Exel, BP or the nuclear industry!
FP: Talk is cheap, but it’s all we have to go on.
Tech Guy & Ron Paul Supporters: While it is true that fossil fuels get the l;ion’s share of the subsidies, and simply wiping the slate clean (a political impossibility) would not be sufficient to grow clean energy fast enough to tackle the problem… it’s way to late to sit back and let the free market do its job.
As for your RE company that can’t get loans or grants, stop whining and talk to Angel investors and VCs… if your venture has merit (most don’t) you’ll be able to get funding… the amount of money private equity is trying to put into this sector is mindboggling, and there simply are not enough high quality projects available.
Contrary to the spoonfed news reports, we have much more than talk to go on than just talk. Ron Paul has 20 years of perfectly consistant voting record plus personal morals and lifestyle that no one can knock.
I completely disagree that it’s too late. Any significant research will show there are many many startups hitting the market with competitive technologies this year and next. ..and yes, mine included. For most of us, it wasn’t a matter of not finding a vulture capatilist, but rather the need to keep the company on track once it took off. I simply refuse to cower to those who say you have to give up control and 51% just to get the first seed money. I’ve been to too many of ‘those’ meetings! I believe a company should thrive from it’s profits, not send them all to Wall Street and be forced to increase profits every quarter.
RTG: Organic growth you cite is better for the entrepreneur, there’s no question, but organic growth will not be sufficient for the carbon savings we need. Many VCs are vultures as you cite, many Angels and soem VCs are not, but anyone putting significant money into a business will want to be rewarded for the risk he is taking.