U.S. clean energy sector buffeted by U.S. election winds
WASHINGTON/ATLANTIC CITY (Reuters) - In a large Atlantic City conference hall bustling with entrepreneurs in the renewable energy sector, Parker Hadlock offered a blunt assessment of the industry.
"I am scared to death that I've spent a couple years of my life dedicating a lot of time to this business and it really isn't going to come together in my lifetime," said Hadlock, a general manager at Cianbro Corp. and an advocate of wind energy.
Business leaders, venture capitalists and government officials echo a similar concern: political uncertainty is roiling an industry once brimming with promise.
Long at the forefront of technological change, the United States is seen lagging behind competitors like China because U.S. President Barack Obama and his Democratic majority failed to pass climate legislation needed to seed a new clean energy sector.
"I think the lack of leadership, the lack of vision from elected officials ... is sad and frightening at the same time," Hadlock said.
The outlook could be even more perilous after the November 2 congressional elections where Republicans, who are skeptical about the need for climate change legislation, are set to make gains. Many believe Obama's chance to pass sweeping energy legislation has evaporated.
OBAMA: VENTURE CAPITALIST
While experiencing setbacks in Congress, the Obama administration used stimulus funding to pour billions into the industry to spur energy innovation.
The Department of Energy has a fat portfolio of often overlapping projects in the field, with the aim of reorienting the U.S. toward more new-age energy technology.
The Energy Department was given nearly $40 billion for investment and another $400 million to create the Advanced Research Projects Agency-Energy, an agency focused on expensive energy technology research that could eventually be profitable.
The agency has picked dozens of projects such as creating liquid membranes to capture carbon emissions from coal, powering air conditioners with solar energy or turning bacteria into greener motor fuel.
"We're funding technologies that have the potential to move the needle a lot," the Energy Department's Matt Rogers said.
Rogers believes full implementation of new technology must fall to the private sector -- but that's assuming a business sees the technology as a viable alternative to burning cheap, carbon-emitting fossil fuels.
"If we don't actually take steps here in the U.S. to make sure that the market pull is there, we run the risk of actually losing that leadership position we hold today," Rogers said.
But industry officials worry stimulus seeds will fall on rocky ground if Congress is not there to nurture them with supporting legislation.
Tim Greeff, policy director of the Clean Energy Network, said the past two years have been "frustrating" for an industry that watched momentum from Obama's massive investments dissipate when Congress failed to pass legislation.
"I think that everyone assumed that was going to be the shot in the arm to get things going, and then it would be followed by a robust legislative agenda," said Greeff, whose network includes energy companies and venture capitalists.
The U.S. House of Representatives passed a climate bill with extensive incentives for the industry in 2009, including a "cap and trade" system that would have forced companies to buy and trade the right to pollute -- effectively putting a price on the carbon blamed for heating up the planet.
But the legislation never made it to the Senate floor. Critics blamed the Obama administration for failing to push it. And senators in tight races were reluctant to back the legislation as a well-funded lobby rose against it.
Cap and Trade is generally dismissed as a "cap and tax" by Republicans ahead of the November elections where all 435 seats in the House of Representatives are up for grabs, along with 37 in the Senate.
Even Democrats in some coal dependent states are campaigning against it. In West Virginia, Democratic Governor Joe Manchin, in a tight Senate race, released a video featuring him shooting at a copy of the bill with his rifle.
While Republicans say the law would cost jobs -- a sensitive theme with the recession-weary electorate -- proponents said Congress stymied an industry that was ready to take off and bring people back to work.
American Businesses for Clean Energy, a collection of some 400 large and small businesses, released a paper saying the Senate's inaction is costing the country billions of dollars in investments and more than 1.9 million jobs.
The announcement by Google that it was backing a unique $5 billion plan to build a clean energy superhighway to bring power from eastern U.S. offshore wind projects could provide a boost for the industry.
But others believe a price on carbon is still needed. Martin Lagod, a Republican and managing partner of the venture capital firm Firelake Capital, believes a market-based price on carbon would have been the "single most powerful policy tool" the government could have used.
"Germany has decided they want solar. You know what? They're getting it. China wants solar, they're getting it. U.S. wants solar? Ah, we're not sure we do."