Energy Issues in Obama’s State of the Union Speech

Posted by Charlotte LoBuono on January 29, 2010 at 10:56 am

Support for domestic oil drilling and nuclear energy expansion was a point of common ground in the President's address and the Republican response. (image: cbc.ca)

In his State of the Union speech on Wednesday, President Obama urged the U.S. Senate to pass comprehensive energy and climate legislation, and turned away from any discussion of cap and trade or putting a price on carbon to focus on job creation and energy independence. Such legislation can put Americans work today, “building the infrastructure of tomorrow,” said Obama.

Framing clean technology in terms of national competitiveness, Obama went on to say that “There’s no reason Europe or China should have…the new factories that manufacture clean energy products.” Building the facilities to create clean energy and offering homeowners rebates for making their homes more energy efficient will create those jobs in the US.

China and India, Obama said, are “putting more emphasis on math and science,” and investing in clean energy, “because they want those jobs.

“No area is more ripe for innovation than energy,” said Obama. However, when he named the types of energy that would drive job production, he did not include many of the renewable sources of energy that the environmental movement considers central to the future of US energy. Instead of wind and solar, Obama called for expanded nuclear power, offshore oil and gas development, advanced biofuels, and clean coal technology. Focusing on these sectors of the energy industry represents the Democrats’ compromise position, since they have already tried to entice Republican support for the climate and energy bill by offering concessions for offshore drilling and nuclear energy.

Mention of advanced biofuels holds special relevance for the heating oil industry and heating oil consumers. Biofuels may represent the future of the heating oil industry, and industry pioneers such as Hart Petroleum are leading the way to the development of cleaner heating fuels. The Department of Energy has already awarded a great deal of money to biofuels research, and Obama’s inclusion of biofuels in his State of the Union address indicates that such favorable funding is likely to continue.

Ensuring that innovation in energy moves forward “means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America,” said Obama. He also expressed gratitude to the House of Representatives for passing the Waxman-Markey bill in June of last year, which included provisions for cap and trade, and urged a bipartisan effort (such as that led by Senators Kerry, Graham, and Lieberman) in the Senate this year to do the same.

Incentives for energy efficiency and clean energy are the right thing to do for America’s future, Obama said, because “the nation that leads the clean energy economy will be the nation that leads the global economy. And America must be that nation.”

In an effort to reduce the deficit, Obama stated that tax cuts for oil companies will be discontinued, which could lead to increased costs that will be passed on to heating oil consumers.

As an indication of how President Obama’s proposals on energy aimed to find common ground, Republicans seemed to agree that innovation and clean energy have key roles to play in America’s economic future. In the Republican response to Obama’s speech, Virginia Gov. Bob McDonnell said that all Americans can agree that the country must become more energy independent.

“We are blessed here in America with vast natural resources and we must use them all,” said McDonnell. He went on to say that technological advances can “unleash” alternative energy sources such as wind, solar, and nuclear power, which can lower energy costs.

However, McDonnell said, the Obama administration’s policies delay offshore production and hinder the expansion of nuclear energy. The Obama administration and congressional Democrats also want to impose what McDonnell called “job-killing” energy taxes in the form of cap and trade—objections that Obama had hoped to steer clear of by avoiding any mention of cap and trade.

Members of both parties can certainly agree with McDonnell that, “Now is the time to adopt energy policies that create jobs and lower energy prices.”