Former DOE official McConnell says power plan a forced renewable portfolio standard

Does the Clean Power Plan help spur carbon capture and storage technology innovation and investments? During today's OnPoint, Charles McConnell, executive director of Rice University's Energy and Environment Initiative and a former assistant secretary of Energy at the Department of Energy, discusses the Obama administration's fossil energy strategy and the challenges ahead for technological innovation. He also explains why he believes the Obama administration has been "disingenuous" about its plans for an all-of-the-above energy strategy.


Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is the Honorable Charles McConnell, executive director of Rice University's Energy and Environment Initiative and a former assistant secretary of Energy at DOE from 2011 to 2013. Charles, it's nice to see you. Thanks for coming on the show.

Charles McConnell: Pleasure.

Monica Trauzzi: Charles, you were one of the critics of the efficiency building block that was part of EPA's draft Clean Power Plan. With that block out of the final rule, how has the game changed for coal as states begin crafting their compliance mechanisms and utilities strategize on investments?

Charles McConnell: Well, I think it's pretty obvious what it is to coal, but it's not just coal. It's coal and gas. If you look at it, really, fundamentally it's more or less a forced renewable portfolio standard that requires the deployment of an enormous amount of wind. If you boil it down, that's really what we're talking about. It's approximately 127,000 new windmills in the next 15 years in this country that'll take up, if they were all deployed, about 10 million acres of land.

Monica Trauzzi: From a technological standpoint, can that be met?

Charles McConnell: No, it can't. And that's a little bit of what's flawed with many of the calculations and how some of the decisionmaking and rulemaking came about is that, if you look at the practical aspects of it in terms of deployment and in terms of the reliability and cost for people in this country, it's just really not something that's ... for our efforts here.

Monica Trauzzi: But there's no directive written into the final rule specifically on wind -- driving all the investments towards wind. There's this Clean Energy Incentive Program that seeks to incentivize all clean energy, so why specifically do you think that this is going to drive wind?

Charles McConnell: Well, if you look at gas as an example, which a lot of people have seen as the replacement for coal, many of the states that are going to be bearing the burden of this -- and by the way, of the 50 states, seven of the states bear roughly 40 percent of the responsibilities for all of the reductions. And so what you end up with are technical milestones and hurdles that, unless you do deploy wind, you're -- you're unable to meet them.

Monica Trauzzi: So the final rule has coal providing about 27 percent of the nation's power in 2030. That's a big chunk. I mean, will the technology that is needed be commercially viable by that 2030 target?

Charles McConnell: Well, if you look at the way it's presented now, the only way to get there is to deploy wind in those massive amounts that I just cited. Fact of the matter is that there isn't any pathway for coal to continue to be in the mix. As it's been in this country, not long ago, over 50 percent of our energy in this country, and we've made dramatic reductions over the past several years, but the technologies necessary to keep coal in the mix are available if we continue to invest in those technologies and truly believe that we're approaching an all-of-the-above strategy.

Monica Trauzzi: So talk about the dynamic there, because has there been a shift away from advancing carbon capture and storage technology? How would you characterize the current landscape on CCS?

Charles McConnell: Well, there's been a dramatic shift away from it. As a matter of fact, when I took the job as the assistant secretary, Secretary Chu asked me one question. He said, "What's the one thing you want to do?" And I said it's simple. We want to put the U in CCS. Utilization, carbon capture utilization storage so that we can begin to focus on putting that carbon dioxide to good use in enhanced oil recovery, but also provide the safe and permanent long-term storage of that CO2 so it doesn't go to the atmosphere. The ability for us to move forward with simply CCS, requiring governments to provide carbon taxes and all of the other incentives, fundamentally, over the past 10 years have been unsuccessful. We've seen that in Europe, we've seen it in our country here as well, and unless we're actually to actually create that pathway toward a commercial utilization of that CO2, we're not going to achieve that.

Monica Trauzzi: Doesn't the Clean Power Plan help spur technological innovation, and it sort of leaves it in the hands of the market to decide exactly where the innovation occurs?

Charles McConnell: In the time frame that it's been proposed, what power companies and utility organizations are required to do is put in demonstrated technology. That's what people expect. That's what the marketplace demands. That means that it's been commercially proven. That means we've continued to invest in it to get it to that point. In 2010, we were going to spend $400 million a year over a 10-year period to bring this technology to a point in 2020 where it would be commercially available. But over that period of time, from 2010 to today, we've cut the fossil budget at DOE by over 40 percent during that period of time. Slashed the investments in that area of technology while we've continued to invest dramatically in renewables. We haven't invested in the clean fossil technologies. And so part of the concern that's out there, and clearly with me is that we're not truly advancing in all-of-the-above strategy. We're really focusing on simply renewables.

Monica Trauzzi: And clean energy. There was a shift away from natural gas from draft to final. Is this administration setting policy based on what the market is doing? Is that why there was that shift from the draft rule to the final?

Charles McConnell: I couldn't speak to what the administration's motives are. I can simply tell you that from the standpoint of the results of what is going to drive, it will require wind deployment. But you know, Monica, this is an interesting conversation we're having about deployment, about the implementation off all of this to achieve climate objectives, because that's what's behind it, right. Except, if you looked at this and you really analyzed it through the EPA administration statistics and the way the sheets are pulled together, you'll see that there's only a 0.2 percent decrease in global CO2 emissions as a result of this policy. So it's really not climate policy. It's really more of a forced renewable portfolio standard.

Monica Trauzzi: There have been a variety of fossil-fuel-focused regulations coming out of this administration. How would you define the Obama administration's fossil strategy?

Charles McConnell: It's not a strategy. It's really been, in some ways, a disingenuous discussion around all-of-the-above because it hasn't been all of the above. The investments and the strategies and the policies, if you look at the way the government operates, it's very clear. You put your money where your policies are, and that's exactly what the administration has done. And so, in the meantime, while the fossil budget has continued to be cut over that period of time, I think it's very clear that there's a drive away from fossil fuels.

Monica Trauzzi: I want to get your thoughts on the administration's proposal for methane emissions regulations from the oil and gas sector. What changes do you anticipate EPA will make as it heads towards that final rule, and again here, do these regulations sort of help advance the technology?

Charles McConnell: Well, they can. I can't speak to what EPA's motivations will be or what their next move will be. I would -- wouldn't dare to guess that. But I would suggest that anytime you put policies out there that will drive technology, that's a good thing, especially when you have a strategy behind it that will enable the technology to get there, to actually be commercially demonstrated, and to meet performance standards in the kind of time frame where technology actually informs the policy. And in this case, I would hope that would be the case with the methane emissions.

Monica Trauzzi: All right. We're going to end it right there. Thank you for coming on the show. Pleasure to talk to you.

Charles McConnell: Thank you.

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

[End of Audio]



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