President’s Jobs Council recommends an “All-in” energy strategy; from fossil fuels and pipelines, to efficiency, renewables and vehicle electrification
In its 2011 year-end report, Road Map to Renewal, the President’s Council on Jobs and Competitiveness (Jobs Council) made a number of recommendations to create jobs in the short run and improve US competitiveness over the long term. Very broadly, the report lays out an agenda to “Invest in Our Future” through education and innovation, “Build on Our Strengths” in the critical sectors of energy and manufacturing, and “Play to Win” by making overdue tax and regulatory reforms to stay competitive.
More specifically, in the energy sector, the Jobs Council, which defined the challenge there as energy availability and security, recommended what it called an “All-in” strategy. The All-in strategy is intended to optimize all US energy resources while promoting efficiency and driving innovation and investment in new technologies such as renewables and vehicle electrification.
Every business leader knows the basic principles of risk management: Diversify your portfolio and reduce your exposure to unacceptable outcomes. America must do likewise. An all-in approach is imperative if we hope to reduce our reliance on foreign oil and create a more diverse electricity generation portfolio. We need innovative, affordable and reliable energy solutions for the 21st century, a set of investments that will meet our energy needs today while creating job opportunities and economic prosperity for our future.
The Council’s recommendations for energy policy, which reflect current policy discussions in Congress and within the administration, are aimed to achieve energy resilience and diversity. America needs to: optimize use of all of its natural resources while protecting public health and the environment; support efficiency measures in both electricity generation and transportation; and drive energy innovation and investment from basic invention to industry scale-up.
...It will also require cooperation among industry participants, regulators and environmental advocates. Continuing to deliver inexpensive and reliable energy is going to require the United States to optimize all of its natural resources and construct pathways (pipelines, transmission and distribution) to deliver electricity and fuel.
The Council recognizes the important safety and environmental concerns surrounding these types of projects, but now more than ever, the jobs and economic and energy security benefits of these energy projects require us to tackle the issues head-on and to expeditiously, though cautiously, move forward on projects that can support hundreds of thousands of jobs.
...while other countries like China and Germany are stepping up their energy R&D spending, the US budget crisis threatens even current levels of publicly funded energy R&D. Cuts in this area would be terribly shortsighted. Because energy entails huge capital investments in projects that often last decades, utilities have traditionally shied away from making big investments in energy R&D or buying into new technologies. If the United States wants to build an energy infrastructure for the 21st century and remain globally competitive in energy technologies, we need to increase, not decrease, vital public and private investments in energy research, development and deployment.—“Road Map to Renewal”
The Jobs Council made three overarching recommendations for the energy sector:
1. Optimize use of all US natural resources while protecting public health and the environment. The Council said that while it believes the United States, as well as the rest of the world, needs to move deliberately and cost-effectively towards greater proportions of renewable and low-carbon forms of energy, that transition is a long-term one. Traditional forms of fossil energy will continue to be important to the economy during the transition, it emphasized.
The council recommended:
Allowing more access to oil, natural gas and coal opportunities on federal lands. Where sources of shale natural gas have been uncovered, federal, state and local authorities should encourage its safe and responsible extraction.
While the administration has supported holding additional lease sales and evaluating new areas for drilling, the report notes, further expanding and expediting the domestic production of fossil fuels both offshore and onshore (in conjunction with more electric and natural gas vehicles) will reduce America’s reliance on foreign oil and the huge outflow of US dollars this reliance entails.
In addition, the Council said, policies that encourage rapid lease development while emphasizing the highest safety standards will ensure companies responsibly drill for natural gas or oil and mine for coal or other our minerals in federal areas in a timely manner.
As the largest owner of land in the country, the US government should make more areas available for renewable energy development.
The federal government should also streamline the permitting process.
The Council recognizes that providing access to more areas for drilling, mining and renewable energy development is controversial, but, given the current economic situation, we believe it’s necessary to tap America’s assets in a safe and responsible manner. Additionally, policies that facilitate the safe, thoughtful and timely development of pipeline, transmission and distribution projects are necessary to facilitate the delivery of America’s fuel and electricity and maintain the reliability of our nation’s energy system. Over the long term, we expect that innovation and technological advancements will greatly reduce America’s reliance on fossil fuels. Until then, however, we need to be all in.—“Road Map to Renewal”
2. Support efficiency measures in electricity and transportation. Any energy strategy would be incomplete, the report said, if it relied solely on existing supply and the promise of innovations in production.
We must reduce our overall energy dependence through bold and achievable efficiency gains. If we pursue this agenda creatively, we’ll not only save on energy costs, but also capture an opportunity to lead in emerging efficiency technologies, while creating tens of thousands of new jobs and reducing emissions. To stretch our domestic resources, the United States should continue to promote energy- and fuel-efficiency measures.—“Road Map to Renewal”
The Council suggests that real estate agents and auditors should incorporate energy audits into the standard practice for buying, selling and valuing a home and continuing to provide innovative financing options for homeowners undertaking retrofits. For the industrial sector, the Council encourages adoption of energy management best practices—such as empowering companywide energy managers and improving operations and maintenance to reduce energy use—that can greatly reduce the energy intensity of their work.
It also noted that the Federal government can incentivize states to adopt increasingly strict efficiency standards for new residential and commercial buildings. All levels of government can encourage home energy testing.
Finally, if we are truly to increase our energy resilience through new sources of supply and energy efficiency, we must address the transportation sector’s overdependence on oil.
...We can reduce our dependence on oil even further by promoting alternative vehicle technologies, ranging from fully electric vehicles to hybrids to natural gas and alternative fuels...It bears repeating here that both state and federal government agencies should continue (and ideally increase) purchases of electric and hybrid vehicles to support scale- up of these critical technologies; and the military should continue to do the same with advanced energy and vehicle technologies.
In addition, government research programs should continue to support advancements in battery and materials technologies and alternative fuels that can give America an edge in advanced technology vehicles. The potential returns on our investments here are significant. Widespread adoption of vehicles powered by electricity, natural gas, and alternative fuels could hasten and make permanent our return to being a net exporter of petroleum.—“Road Map to Renewal”
3. Drive energy innovation and investment from basic invention to industry scale-up. Rapidly evolving technologies in areas such as natural gas drilling, 21st-century nuclear power, renewable energy, energy storage, coal gasification, electric vehicles, the smart grid and carbon capture, utilization and storage have enormous potential, the Council noted.
The Council said it believes the US needs policies that encourage private companies to invest in R&D and the deployment of new power generation technologies such as wind, solar, advanced nuclear and coal gasification.
While game-changing inventions are most likely to come from federal or joint public-private efforts, sequential and incremental innovations are more likely to come from companies that are involved in the manufacturing or operations of power products—staffed by employees that have been in the industry for decades and have hands-on, practical know-how when it comes to energy systems.—“Road Map to Renewal”
Recommendations in this area include:
Tax provisions that encourage investment in R&D (such as the R&D tax credit) and performance-based tax policies that support the deployment of technology are effective tools for bringing to market the technologies born of R&D and driving deployed technologies to long-term viability.
Increasing the federal government’s commitment to and financial investment in energy R&D.
Establishing a Clean Energy Development Administration to help energy start-ups hurdle the financing valley of death.
The Council believes this all-in strategy for U.S. energy resilience and diversity can bolster growth, jobs and competitiveness even as it lowers emissions and protects the environment. If we optimize America’s natural resources, make energy and transportation efficiency a national priority and promote energy innovation and investment, we can fuel the prosperity Americans seek for the coming generation and beyond.—“Road Map to Renewal”