What impact will a cap-and-trade system have on the average American? Should the renewable electricity standard be expanded to include other domestic sources of energy? During today's OnPoint, former Virginia Gov. and Sen. George Allen (R), introduces his new group, the American Energy Freedom Center. Allen explains why he believes the push for cap and trade will result in financial losses for Americans and will put the United States at a competitive disadvantage on the international level. He also explains why he thinks the definition of "renewable" should be broadened beyond what is currently being discussed in Congress.
Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. Joining me today is former Virginia senator and governor, George Allen. Governor Allen is now heading up the American Energy Freedom Center. It's great to have you on the show.
George Allen: It's great to be with you, Monica.
Monica Trauzzi: Governor, you've kept a relatively low profile since your Senate re-election campaign three years ago. You're now back in the political arena launching the American Energy Freedom Center. Why now? Why this issue?
George Allen: Well, I'm maybe told folks aren't watching some of the political activities. I have been involved in politics, as long as I'm breathing, as long as they don't kill me I'm always advocating ideas. I was national cochairman for Fred Thompson's campaign and then also one of the chairmen and advocate's advisers in the McCain campaign as well. And so Susan and I have been very much involved in politics. Now, the American Energy Freedom Center, the purpose of that is to motivate and also inform the American people on energy policies that are going to affect them in their homes, at their kitchen tables, in their businesses, how they travel, in their quality of life. I've cared a lot about energy since the days I was a delegate. In Mr. Jefferson's seat as governor I saw how energy really mattered. The price of electricity, for example in Virginia, how that gave us a competitive advantage since we're about 30 percent less than the national average in getting technology companies to come to Virginia, like semiconductor fabs that need perfect power. And the cost of doing business is taxes and a lot of things, but one of the key factors, particularly in manufacturing and in technology companies, is electricity and so affordable, reliable electricity matters in our high-tech society. And then in the U.S. Senate I was on the energy committee and energy affects our way out of life. Energy is the foundation. It's the lifeblood, including electricity, of our economy and so affordable, reliable electricity and energy matters a lot for jobs. It matters for the competitiveness, not just of a state, but of our entire nation. It matters to our balance of trade. And what we aim to do with the American Energy Freedom Center is to make sure people understand how it affects them at the kitchen table and make it in those other terms as opposed to short tons and trillions of cubic feet. All that matters, but try to get it in a way that normal people understand it and I have a lot of faith in the American people, that if they have the information, if they have the evidence with their common sense they'll come up with the right ideas.
Monica Trauzzi: Newt Gingrich comes to mind when we talk about conservatives who have a strong influence on the energy discussion. How are you separating yourself from other Republican voices, other conservative voices in the energy debate and does your influence here have an impact on the Republican Party?
George Allen: I think it will have an impact on America is what we want to do. This is not Republican versus Democrat. It's good ideas versus bad ideas. If there are bad ideas that are going to increase the cost of people's electricity, of their fuel, of their food, we need to play tenacious defense against it and defeat it. We also want to have positive constructive ideas being put forward and we can go into those if we can. There are a lot of different groups; you have Grover Norquist, the leader against taxes. There are groups that are on social issues, whether it's pro-life issues, the life issue. Newt Gingrich is just a brilliant person and his American Solutions is a great operation. It's in a variety of issues. American Energy Freedom Center is focused on energy and it is using our plentiful coal, having access to our oil, our natural gas, hydropower, batteries, alternatives, any of them that make sense for our country. And, again, trying to stop counterproductive approaches that have our country less competitive with the rest of the world.
Monica Trauzzi: You've come out strongly against cap and trade. You've said that a federal cap and trade program would impose an additional $260 a month burden on families. That number is up to debate however, based on the modeling that's used, the targets that are involved in the modeling. So where is that $260 number coming from?
George Allen: All right, yeah, good question. If you want to get into the details of it there's an MIT study. The Heritage Foundation also has a study. They average it out to around $3100 a year. People pay their electric bills on a monthly basis. They pay their natural gas bills on a monthly basis. They pay their credit cards on a monthly basis. So I think if people see it's going to increase their cost $260 a month, month after month after month, they understand it. Now, you can have other studies I suppose that say, oh, it's only $1800 a year. Great, well, whatever the figure you want to use, there is no question whatsoever that this cap and tax scheme is going to increase the cost of electricity, of energy, of fuel, of food in this country. And they ...
Monica Trauzzi: What about the discussions that are happening about helping American people through the tax code when there are increases in energy prices?
George Allen: Right, and in fact that is an admission on the part of those who are advocating this cap-and-tax scheme that there is going to be an adverse impact, that there is going to be a cost.
Monica Trauzzi: But is it a solution too?
George Allen: Well, they understand that there's a cost and you see some of them saying, oh, we've got to sell off these allowances because we need the money to mitigate the harm that we're going to impose on middle income and lower income families. And then try to create in some cases it's been described as an energy welfare system. So my view is why cause the harm in the first place, so you don't have to be mitigating the damages of it. So I think that most Americans, you could take the figures of those who are the proponents and say, oh, it's only going to be $100 a month more. I think most Americans that are trying to make it these days, with it as tough as our economy is, say why in the heck are we doing this? And then to put it in a larger context is that this burden will be imposed only on the United States. Europe has tried this scheme. It has failed. You know darn well that the Russians are going to impose this on their citizens nor will those in India nor will they in China or other countries. And so here's the United States imposing this burden, making our country less competitive, throwing people out of work, harming families and their household budgets and we're the only country doing it. It is in effect economic unilateral disarmament. So I don't think there's ever a good time to put added burdens on the American people. This is especially a horrible time to be doing it to our economy, to families, for jobs and our country's competitiveness.
Monica Trauzzi: So, do you see a way forward about how we can handle the global warming issue legislatively then?
George Allen: Well, and this is all supposedly for global warming and they estimate 50 years from now there'll be some negligible impact on climate. Gosh, you watch the news and they'll only forecast about four or five days out and a lot of times those aren't right forecasts. I'm not a meteorologist, but they rarely get those right and they're trying to forecast 10, 50 years from now. I think that the way you move forward is with more innovation, more creativity. Look at, for example, the great progress that has been made in coal-fired power plants and coal is very important. We're the Saudi Arabia of the world when it comes to coal. It generates half of our electricity in our country. It is, by all measures, the most reliable and available and cost efficient or least costly source for baseload electricity. We need to use it more cleanly and there are innovations, but the innovations and progress that has been made insofar as sulfur dioxide, NOX, mercury and so forth over the years has been phenomenal and more can be done. For example in Indiana Governor Mitch Daniels is moving forward and gasifying coal and if you gasify coal that burns it even cleaner. So there are creative approaches we need to take. Nuclear, advanced nuclear is another solution too, but our country has burdens on the next generation of nuclear. Some may think it's blasphemous to learn from the French, but the French get about 80 percent of their electricity from nuclear. But, unfortunately, our country doesn't allow reprocessing or recycling of spent fuel, which is much less dangerous than our present approach which is high-level radioactive waste sites at every one of our nuclear reactors now that the government shut down any progress on Yucca Mountain as a national repository. What the French do is they reprocess it and then vitrify it, encase it in glass and I know darn well if the French can do it so can Americans. But I think coal is key, nuclear is key, access to American oil and natural gas is key to our future as well as other creative advancements, particularly in nanotechnology.
Monica Trauzzi: On coal though, carbon capture and storage technology is not yet readily available. It may be 20 years away, but we're not even certain that we're actually going to see that technology come into play. Should we be throwing billions of dollars at it when there are no guarantees that we're actually going to be able to see the benefits from it?
George Allen: Monica, that's an interesting overall question in that if there are no guarantees to it, why would we be requiring limits and restrictions on energy production in this country where there is not the technology yet available? When the legitimate concerns about acid rain and others were being imposed, there were technologies available. Those technologies are not yet available. People do need to recognize though that the coal-fired power plants that are coming online now and will be coming online are far cleaner as far as emissions than they were before. I think that it makes a lot of sense though to be working to the extent we can with the private sector, with the universities and others in looking at and enhancing clean coal technologies. And the ideal would be of course to have the carbon sequestration in a place where there are oil wells so that you have that enhanced oil recovery from depleted wells.
Monica Trauzzi: We are just about out of time and I want to get this last question in because you've talked a lot about coal, nuclear, I haven't heard you mention wind, solar. What's your definition of a renewable?
George Allen: Well, my definition of a renewable would be something that is renewable and I think that part of the definition of renewable actually ought to include hydro. They do not. They only have wind and solar and whatever sort of biomass that they like. There's nothing wrong with renewables and I think solar photovoltaics with advancements in nanotechnology can be helpful on individual buildings. But to think that we're going to rely on very expensive solar and wind, which is an intermittent power source for our baseload electricity is just…you're violating physics. The wind doesn't blow all the time. The sun doesn't shine all the time. And so as a backup you end up having to get natural gas which is a great clean-burning fuel, but it's really important for manufacturing jobs when you have alternatives which are much better, coal and advanced nuclear. So wind and solar, I think have a place as a supplement, but to think that you're going to get our baseload from intermittent sources is just…unfortunately the world revolves, it actually spins and we don't have wind all the time.
Monica Trauzzi: And we're seeing this exact debate happening on the Hill right now. Thank you for coming on the show. It was great to have you here.
George Allen: It was good to be with you, Monica, and we want to have this debate at kitchen tables all across America.
Monica Trauzzi: And thank you for watching. We'll see you back here tomorrow.
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