(John Kemp is a Reuters market analyst. The views expressed are
By John Kemp
LONDON Feb 6 Abundant, affordable, clean,
diverse and secure energy is in the U.S. national interest.
So finds a report on the future of the country's energy
system published on Monday by Senator Lisa Murkowski, the
highest-ranking Republican on the Senate Energy and Natural
"Energy 20/20: A Vision for America's Energy Future" is a
thoughtful attempt to discuss some of the energy choices and
opportunities the United States will face by the end of the
Murkowski's report starts from the premise "energy is good"
and the consumption of energy is and will remain the basis for
rising living standards. It is positive towards the development
of fossil fuels like oil, gas and coal -- natural for a
Republican from the hydrocarbon-producing state of Alaska.
Murkowski devotes only 31 pages out of 122 to fossil fuels.
There are also intelligent sections dealing with renewables,
nuclear, investment in gas and electricity transmission
infrastructure, efficiency and links with water use as well as
the need for regulatory reform (bit.ly/Energy2020Doc).
The report has been condemned by environmentalists. "Senator
Murkowski's energy blueprint for the future reads more like a
cut-and-paste job from the fossil fuel industry's playbook of
the past," the Natural Resources Defense Council said in an
"It relies extensively on policies and incentives for
increased oil and gas drilling, while ruling out many of the
policy tools most likely to reduce carbon pollution and bring
cleaner energy technologies into the market," according to NRDC.
"We need a plan that moves us forward to the 21st century, not
one that keeps us wedded to the past."
NRDC's response was predictable. Extremists on both sides --
the climate deniers and drill-baby-drillers, as much as the
windmills and woolly sweater lovers -- remain trapped in a
Manichean world where only total victory over the other side
will bring satisfaction.
Environmental groups continue to mount a ferocious
last-ditch campaign to block construction of the Keystone XL
pipeline for symbolic reasons out of all proportion to its
On the other side, much of the oil and gas industry moved
into outright opposition to President Barack Obama and the
Democratic Party during the 2012 election cycle, and ended up
jeopardising its remaining influence with the administration and
Congress by backing the losers.
Energy has become one of the most polarising issues in
American politics. And as usual extreme polarisation encourages
partisans on both sides to reject any attempt at finding middle
ground and compromise.
However, the impassioned rhetoric conceals an emerging
consensus behind a mixed strategy that seeks to curb
greenhouse-causing emissions while also boosting oil and gas
production at home to ensure energy remains affordable and less
exposed to international turmoil and is keen on new technologies
like carbon capture and storage (CCS) and greater energy
Murkowski's energy blueprint is not so very different from
the president's call for an "all of the above" approach in his
2012 state of the union address.
Murkowski is much friendlier towards fossil fuels and
emphasises the need for clean energy to wean itself off
subsidies but accepts that clean energy must play a significant
role in future. Obama is far keener on wind, solar and
geothermal but has acknowledged the continuing role of oil and
gas, and positive transformation wrought by horizontal drilling
and hydraulic fracturing.
The difference is arguably one of emphasis.
Partisans continue to highlight the differences. But
lobbyists build lucrative careers on partisanship, stoking fear
and offering legislative, regulatory and legal solutions to
threats, both real and imagined. Look behind the rhetoric and a
more complicated picture emerges, characterised by a surprising
degree of consensus.
The reality is that the United States energy outlook has
already been transformed in the last five years.
Consumption of liquid transport fuels has peaked and is
expected to continue falling in the next decade. Crude imports
are down and domestic petroleum production is up. Wind and solar
power provide a significant proportion of the power used in
homes, factories and offices. For the first time in decades,
private companies are investing in long-distance transmission
capacity for gas and electricity.
The changes are the result of a complex interaction between
market forces (high oil prices, low gas prices), technology
(fracking) and regulation (vehicle mileage standards, biofuels
blending mandates, emissions regulations for industrial boilers
and new power plants, as well as quotas for wind and solar
generation) enacted by administrations and Congresses controlled
by both parties.
SCOPE FOR AGREEMENT
Following the president's re-election, and the obvious
disarray among his Republican opponents in the House of
Representatives, there is tremendous pressure from
environmentalists, who have been among his most steadfast
supporters, and the rest of the liberal-left to take an
uncompromising line on energy issues.
The president himself outlined an ambitious commitment to
bold policies in his second inaugural address. Obama promised to
respond to the "threat of climate change" and the "devastating
impact of raging fires and crippling drought and more powerful
storms" even if the "path towards sustainable energy sources
will be long and sometimes difficult."
The president undertook to ensure the United States remains
a leader in developing new sustainable energy technologies.
Having backed the losing candidate in the 2012 presidential
election, and identified themselves strongly with the Republican
Party, in what proved to be a strategic blunder, oil and gas
producers cannot blame the president and the Democratic majority
in the Senate if they do not show much consideration now.
Politics is a rough game.
Ultras in his own party will urge the president to seize
this moment to cement the transition from fossil fuels to clean
energy with a raft of ambitious new regulations that burden oil,
gas and coal industries to tilt the playing field in favour of
zero-carbon technologies. Why compromise, they will say, if the
other side is uninterested in reaching agreement.
But that would be a mistake. If the policymaking machinery
in Washington is to be made to work and rescued from gridlock,
both parties will have to show greater willingness to compromise
on issues that matter to them (climate, taxes, energy,
immigration, spending and entitlements). Zero compromise on
energy issues will only encourage the president's opponents to
block other parts of his agenda.
Murkowski's report shows there is room to strike some
creative compromises on energy between the administration and at
least some congressional Republicans.
The administration will not agree with all elements of the
blueprint. Nonetheless it contains some useful ideas and
deserves to be taken seriously as part of the wider conversation
about America's energy future, not dismissed out of hand.
If the administration is serious about an "all of the above"
energy policy, Obama's officials should grasp the opportunity
offered by Murkowski's report to work with Congress, rather than
(Editing by Keiron Henderson)