ENERGY POLICY:

Chamber, renewable groups clash over ability to meet clean energy goal

The U.S. Chamber of Commerce yesterday summarized how it views President Obama's goal of doubling the country's clean energy production in 25 years: "impossible."

Hitting that target would require a nearly eightfold increase in renewable power generation, the business trade group said, a boom that can't happen with the existing obstacles.

"There are so many regulatory barriers right now, with siting, licensing and building these facilities, it would be impossible to get there," said Christopher Guith, vice president for policy at the chamber's Institute for 21st Century Energy. "It would be impossible to build the wind farms. It would be impossible to build the solar photovoltaic farms."

Hours after the chamber's comments, others in the energy world called something else impossible: assessing the accuracy of the trade group's conclusions.

In reaching its determination, the chamber made some assumptions about what a legislative proposal would look like. There isn't a detailed clean energy proposal from the Obama administration. Nor is there a bill in Congress, although lawmakers have begun preliminary talks.

"The chamber is saying no reflexively before the facts have had a chance to make their case," said Tyson Slocum, director of Public Citizen's clean energy program. "The 80 percent standard by 2035 is totally doable and relatively modest."

Obama in his State of the Union address called for the country to generate 80 percent of its electricity from clean energy sources by 2035. Renewables, nuclear power, efficient natural gas units and coal with carbon capture and sequestration (CCS) could count toward achieving that goal. The White House, however, has not yet fully defined "clean energy."

The chamber's criticisms came as the influence group met with reporters to unveil what it wants in an energy plan, including more domestic energy production, paring back of some regulations and commitment to research and development of new technologies.

The chamber said the president and Congress should be focused on this year and not 2035. Achieving the clean energy goal would be very expensive, Guith said.

"There needs to be a discussion of what it would take to go down that route," Guith added, "what it would take to get there and what the costs are going to be."

Complicated calculations

The chamber calculated its numbers using some information from the White House and Energy Information Administration (EIA) projections for how much various energy sectors are likely to generate in 2035.

The trade group assumed that the White House would give natural gas and CCS generation only a 50 percent credit toward meeting the clean energy goal. It based that on a White House fact sheet on the State of the Union.

That fact sheet states that the United States currently generates 40 percent of its power from clean energy. According to EIA, the country's current clean energy mix is 10 percent renewables and 20 percent nuclear.

Overall, natural gas provides 23 percent of electricity, said Matt Letourneau, spokesman with Institute for 21st Century Energy. "So it is therefore reasonable to assume that the White House is counting natural gas as the remaining 10 percent, even though it actually has a 23 percent share," Letourneau said, adding that that's "roughly half, therefore a half credit."

That State of the Union fact sheet, however, says only that "partial credits" should be given for natural gas and CCS. It does not specify half. The White House did not respond to requests for comment.

The chamber then concludes that in 2035, renewables would need to generate nearly 31 percent of the power that would be counted as clean, Letourneau said. Nuclear would make up slightly more than 37 percent, natural gas almost 25 percent and CCS less than 8 percent.

But EIA projections look at a "business as usual" situation, Slocum said. There likely would be changes in energy use if there were a clean energy standard, he said.

"We also have to talk about the role that efficiency plays in meeting a clean energy standard," Slocum said, adding that the EIA projections on efficiency are conservative. As well, he said, there are high-efficiency natural gas units that now are sitting idle.

The chamber said that even if it's slightly off in its numbers, it's trying to make a broader point.

The 80 percent by 2035 mandate "would require a massive restructuring to the utility sector," Letourneau said.

However, even if the chamber is accurate about the amount of renewable power that would be needed to meet the 80 percent requirement, the trade group seems to be discounting the role of future technological advancements, said Phyllis Cuttino, director of Pew Environment Group's clean energy program.

"What's clear is that we're not going to win the clean energy race if we don't set an ambitious goal and try to move toward it," Cuttino said, adding, "investment follows an ambitious target."

There are many policies now in effect that were once decried as impossible, Cuttino said.

"This is the kind of rhetoric that we heard from automakers," which before 2007 said that higher fuel efficiency targets were unachievable, would cost too much and would kill jobs, Cuttino said.

"Lo and behold, they met the standard five years earlier" than required by the 2007 energy law, Cuttino said.

In response, the chamber said it doesn't rule out that technological advancements could help renewable energy and nuclear power grow faster. But there needs to be a full discussion about the probability of attempting that kind of expansion, Letourneau said.

"The amount of increase that you would have to have is so dramatic that it would cost a lot of money," Letourneau said, adding that there are technological challenges. "These things to us are not achievable irrespective of costs," he said, "because we're not able to build them."

One major player in the renewable industry disagreed with that assessment.

"The Chamber of Commerce seems to be good at telling Americans why they cannot have clean energy," said Peter Kelley, vice president for public affairs at American Wind Energy Association. "The wind industry is here to tell Americans that they can have clean energy, and we're building a lot of it."

While there are regulatory hurdles and some challenges in locating wind farms, Kelley said, those issues aren't blocking expansion. The wind industry grew 40 percent in both 2008 and 2009, he said.

"I don't think the chamber has caught up with the reality of today's energy business," Kelley said.

Clean energy studies

There are no other similar analyses to the chamber's projections. There are other studies, however, that looked at clean energy and renewable power.

Research group Resources for the Future last fall studied the effect of a policy that would cap carbon emissions and set up a trading system for greenhouse gas allowances. It was aiming for 65 percent clean energy by 2030, and gave about a half credit to natural gas.

The analysis found that nuclear, natural gas and coal with carbon sequestration could generate about 72 percent of the country's power by 2030, said Karen Palmer, senior fellow with the group.

"It would be feasible," Palmer said. Her study found that natural gas and nuclear power expanded significantly.

"It's not going to be all renewable for sure unless they get really, really cheap," Palmer said.

Even if natural gas only received a 50 percent credit, it would grow sharply because it's less expensive, Palmer said.

Her study found that in 2030, renewables would generate 13 percent of energy, hydropower 6 percent, nuclear 25 percent and natural gas 32 percent.

Palmer cautioned that her analysis looked at a different scenario than the likely results of a clean energy mandate requiring 80 percent in 2035.

"For example if electricity were generated 25 percent nuclear, 25 percent renewables (including hydro) and 50 percent natural gas (no coal at all), that would only be 75 percent clean, so even that would not achieve the 80 percent clean energy standard under that interpretation," Palmer said.

The Energy Information Administration has not been asked to analyze whether a clean energy standard is achievable. The agency has looked at some of the proposed mandates for renewable electricity, including legislation in 2009 that would have required utilities to produce 25 percent of their power from green sources by 2025.

The actual amount utilities would have to generate to meet the mandate would have been closer to 21 percent because they were able to improve efficiency and small utilities were not included, said Chris Namovicz, an EIA energy analyst.

The legislation would have capped the price that could be charged for buying renewable credits, which slowed renewable growth, he said. But by 2030, the target would have been reached.

"Given enough time, the market, even with that credit price, was eventually able to catch up," Namovicz said.

Time usually is the biggest factor in determining whether goals for energy generation can be met, Namovicz said. The longer the period of transition, the easier compliance is, he said.

"The faster and higher you want to grow, the more it's going to cost you," Namovicz said.

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