Fmr. Alaska Gov. Knowles discusses gridlock in Congress, action on CES and fracking

Will Congress make progress on energy policy this year? During today's OnPoint, former Alaska Gov. Tony Knowles (D) explains how the United States can move toward an energy-independent future. Knowles, now president of the National Energy Policy Institute, also weighs in on the regulation of emissions and fracking.


Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is former Alaska Governor Tony Knowles. Governor Knowles is the president of the National Energy Policy Institute. Governor, it's great to have you back on the show.

Tony Knowles: Well, thanks for having me, Monica.

Monica Trauzzi: Governor, the subsidy battle has dominated headlines over the past few months here in Washington, ultimately being rejected by Congress. Does Congress seem to get wrapped up though in the same energy discussions year after year? How do they break that cycle?

Tony Knowles: Well, you know, it's been 40 years since we declared that we wanted energy independence. And yet so many people today, I think, who believe that our national security is at stake and the health of Americans and our environment is at stake are so disappointed to see no action taking place. I mean, really, they're batting a zero in terms of getting something done. Numbers count and I think that if we take a look at science and economics to steer the way to what broad numbers of people support regardless of party, regardless of what part of the country they're in, that we can strip away some of the divisiveness and partisanship and, as I say, numbers count. Pick a number of the amount of oil, imported oil barrels that we have to reduce and the amount of tons of air pollution that we're pouring into the air every day, set a time target and produce the policies that, at very little cost or no cost, can accomplish that.

Monica Trauzzi: But agreeing on those numbers is the real difficult part. Does it come down to politics? Is that why, or money? Why can't we cross that finish line?

Tony Knowles: Well, there's a lot of special interests and single agenda forces at work here. In taking a look at a broad base of numbers, everyone has their own numbers, but there's, you know, facts are different. And we can get to the facts in terms of how many barrels of oil do we need to reduce our imported oil, do we need to reduce to get our national security more better for Americans and how many tons of emissions do we need to reduce and what policies will get us there and how much will they cost? And that is a path that can be trod, and, but people have rejected that.

Monica Trauzzi: Do you think the idea of energy independence for the United States is a feasible one? Can we get there?

Tony Knowles: Oh, absolutely. We can have a domestic, sustainable supply of energy that is cleaner and will serve America's interest in not being held hostage by foreign nations and our economy that we see, that we've gone through for the last 40 years.

Monica Trauzzi: The Senate Energy and Natural Resources Committee is working on clean energy standard legislation. How do you define clean energy and how should a standard like that be crafted?

Tony Knowles: Well, you know, people have a different clean energy concept. Some people want to pick the winners. Like we think wind and solar ought to have a certain percentage, that's one way of taking a look at it. Other people want to exclude certain energies like natural gas or nuclear. I think a performance-based clean energy standard that opens it up to all fuels based upon the emissions that it puts out for credits and everybody can participate in that. Everybody complains that coal was never invited to the party, but if they actually can produce coal with a carbon capture and sequestration, it would get a 0.9 credit. And you can then figure out the number of emissions that you want to reduce by how many credits the utilities are required to get. But it would be market-based, a competitive market-based solution rather than picking winners. And that way you'll get the least cost and you'll get the support of the industries, as well as the consumers who are affected.

Monica Trauzzi: Has the push for a comprehensive energy policy sort of slipped off the radar for this year because of politics?

Tony Knowles: It clearly did, which is really too bad. Natural Energy Policy Institute and Resources for the Future, a well-respected research organization, we spent two years on a study, a comprehensive and exhaustive study of 35 policies, measuring them by the most sophisticated modeling system out, the National Energy Modeling System, consistent across all policies and using common metrics on how much will it cost to reduce a barrel of oil and how much will it cost to reduce a ton of greenhouse gas emissions? And by that we could then score and rank the policies. And out of all the policies that we did we had, we came out with five what I would call the most promising policies. And the principles that we used in determining what policies would be the most productive is, one, is competitive market-based solutions. Number two, jobs. Number three, that we wanted to ensure the fact that the export of capital, we export a billion dollars a day to foreign governments to import their oil, that we need to reduce that. We need to reduce our balance of payments. And we need to make sure that there are no new taxes and we can also ensure that the national budget is not part of it. Given those, we came out with five policies that adhere to those principles and can accomplish by 2030 even the most ambitious goals that have been talked about for national energy policy. So we need to instead of being discouraged by the lack of action, is rekindle and revitalize the decision-makers because the American public wants no less.

Monica Trauzzi: Industry has been critical of Interior Secretary Ken Salazar's pace on offshore drilling permits. They say it's stalling jobs and the economy. But the president recently indicated that he'd like to move a little faster on drilling permits and offshore drilling. What's your take on how this administration is handling drilling within our own borders?

Tony Knowles: Well, that really is a separate issue from the national energy policy. It is true that if we produce, the more domestic oil we produce it will replace imported oil. But the fact of the matter is that it will not eliminate the need for imported oil. We will always need some imported oil. We use about 18 million barrels a day. We're importing around somewhere between 10 and 12 million barrels a day. So, yes, we can increase with the right environmental safeguards and I think that's the balance that the secretary is trying to put and that industry should embrace. So, I think that we can do it offshore and on other government lands, should be encouraged, but with a balance.

Monica Trauzzi: Many opportunities seen for natural gas as we move forward with our energy policy, but there's a huge issue with fracking. Lots of questions there. Do you think that that's a big enough issue that it could derail the level at which we use natural gas or is it just sort of a minor thing that's going to go away?

Tony Knowles: It's really been a game changer to discover the quantities of a domestic, cleaner energy than we're using now primarily to produce electricity. It's a game changer and it's really a blessing in so many ways. But in developing it we should use the same standards and industry should embrace the transparency, the strict protection of water quality, those are the conditions by which that we can have a healthy environment and a healthy economy and a domestic supply of energy. So it's got to be put together as a package. And to step back from that and to not release the contents of your fracking fluids, to not allow there to be strict regulations on the casing cementing job that is necessary to protect the aquifer as you're going down to conduct the fracking and also what you do with the disposal of the liquids that you use for the fracking method, that it's adequately disposed of, because it does contain pollutants and we have to take care of that. That is as important as the production of the resource and it does fit together and it is a game changer, but don't lose your sight of the values that are needed.

Monica Trauzzi: OK, we'll end it right there. Thank you for coming on the show, nice to see you again.

Tony Knowles: Great, thank you.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

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