Obama vs. Reality


Even blue-sky goals fall short.

Fortnightly Magazine - February 2009

The buzzword in Washington, D.C., right now is “change.”

Throughout his election campaign, President Barack Obama promised to bring change to Washington. On a range of issues, from greater public accountability to greener energy policy, Obama has set high expectations for his administration. But as the president acknowledged in his inaugural address, fulfilling those expectations won’t be easy.

Invoking the heroism of George Washington’s troops at Valley Forge, Obama said, “In this winter of our hardship … let us brave once more the icy currents, and endure what storms may come.” Inspiring as such imagery might be, the reality behind Obama’s promises bears questioning. Are Obama’s goals for real? Or are they mostly blue sky, representing his ideals but not necessarily his practical intentions?

For the U.S. power and gas industry, the specific questions are whether Obama really means what he says about energy policy; whether his policy priorities are sufficient to accomplish the goals he’s set; and whether his “Yes we can!” strategy can survive in the real world, with all its practical constraints and party politics, after the “change” buzz subsides.

Dirty Reality

During inauguration week, visitors to Washington, D.C., witnessed a pair of brilliant marketing campaigns.

First was the familiar “Yes we can!” message that propelled Barack Obama to election victory. All over town, on placards, t-shirts and storefronts, these three words—almost meaningless in their simplicity—came to represent a unifying principle of hope and determination. The “Yes we can!” campaign convinced even jaded cynics to extend the benefit of doubt to America’s new president.

Against this backdrop, an advocacy group called the Reality Coalition—comprised of Al Gore’s Alliance for Climate Protection, the Sierra Club and other environmental groups—launched a series of clever advertisements promoting the message, “In reality, there’s no such thing as clean coal.” During inaugural week, Washington’s Metro Center transit station was blanketed from top to bottom, end to end, with the Reality Coalition’s ads. These messages were unavoidable, even among the dense clot of travelers that passed through on inauguration day.

The Reality Coalition’s anti-coal campaign, juxtaposed with Obama’s “Yes we can!” campaign, raises interesting questions about the direction of energy policies in 2009 and beyond.

Energy issues played a prominent role in Obama’s election campaign, and near the beginning of his inaugural address he said, “Each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.” Obama’s agenda translates this statement into two goals:

• “Eliminate our current imports from the Middle East and Venezuela within 10 years”; and

• “Reduce our greenhouse gas emissions 80 percent by 2050.”

Both of these goals portend major policy changes, but the first might be even more radical than the second—that is, if the Obama administration is serious about it.

Every president since 1980 has applied the Carter doctrine—declaring oil shipping routes through the Persian Gulf vital to U.S. national security, and committing military force to protect them. But Obama’s goal turns the Carter doctrine on its head, in effect saying within 10 years America’s national security should no longer depend on imports from the Persian Gulf.

This is a wise and worthy goal, but precisely how Obama hopes to eliminate these imports remains unclear. In an ideal world, Obama would slap tariffs on Middle East oil cargoes sufficient to cover the costs of the U.S. Navy’s Fifth Fleet. Practical and political realities rule out anything so direct, but achieving even symbolic independence from Middle Eastern and Venezuelan oil (i.e., by reducing U.S. demand by about 3.5 million barrels a day, or 16 percent of total current consumption) will require major changes in U.S. energy strategy—particularly if that strategy also includes dramatic GHG reductions.

Reducing oil imports by the envisioned amount will require the United States to fully exploit its domestic energy resources, and to apply those resources in ways that displace petroleum, such as electrifying the auto industry. But fully half of America’s electricity comes from burning coal—the biggest single source of GHG emissions. Obama’s energy strategy seems to recognize this, by prioritizing efficiency and smart-grid investments, and setting a goal to to double the country’s wind, solar and biofuels capacity within three years.

The industry is poised to respond to that challenge, but even if the “Yes we can!” principle succeeds in erecting windmills and stringing transmission lines with breathtaking speed during the worst credit crisis in decades, achieving even this blue-sky ideal will scarcely change America’s energy strategy. It might satisfy new demand growth, but it won’t free us from Mideast or Venezuelan oil, and it won’t make a dent in our carbon footprint.

Obama’s energy strategy ignores the one existing, scalable, carbon-free source of power—nuclear energy, which has faced fervent opposition from Democratic voters and lawmakers. So even though power companies are ready to begin the nuclear renaissance, “Yes we can!” evidently doesn’t apply to building safe nuclear reactors and fuel management systems.

That leaves our old standby fuels, natural gas and coal. Obama’s strategy does prioritize natural gas development, and it includes clean-coal technology as a general objective. But whether “Yes we can!” applies to building an industry-scale infrastructure to capture and sequester carbon remains to be seen—particularly given well-funded and savvy opposition from groups like the Reality Coalition.

Many Big Plans

Upon watching Obama deliver his inaugural address—and then re-reading that address—it seems clear our new president sincerely believes the rhetoric of his campaign, i.e., that his leadership can unify the American people to transform the country and indeed the world. Obama’s election campaign brilliantly distilled this idea into the phrase, “Yes we can!” and wielded that phrase as both a rallying cry and a defiant challenge.

In his inaugural address, Obama reiterated that challenge in a pointed way: “There are some who question the scale of our ambitions, who suggest that our system cannot tolerate too many big plans. Their memories are short, for they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.”

Such determination and optimism are precisely what America needs right now. However, a national energy plan must account for the real-world laws of physics and economics, as well as politics. As Senate minority leader Mitch McConnell (R-Ky.) told the National Press Club a few days after the inauguration, “[President Obama has] indicated repeatedly he wants to govern to the middle. In that effort some of his biggest problems may be with his own party in Congress.” Indeed, Obama might face problems from within his own base of supporters, who are expecting greater things from this president than any mortal is capable of delivering.

Nevertheless, the people who work in America’s energy industry are capable of being inspired to greatness, and responding to the challenge of “Yes we can!” They have plenty of imagination and courage, and they understand the necessity for energy security and environmental solutions. All they need now is an energy strategy that works in the real world.