There are two ways to create bad energy policy: with bad legislation, or with constantly changing legislation.Frequent changes make long-range planning impossible. Stable policy provides clear benefits for industries that receive it.
One example in this country is the ethanol industry, and the bipartisan push it had early on.
Growth in the US ethanol market has been driven by three legislative 'legs': an import tariff keeping out foreign competitors, and the renewable fuels standard creating a predictable demand for production targets, and a credit creating an incentive to blend ethanol into other fuel.
Of the three, the early renewable fuels standards: targets that established the production needed through 2022 that has been most responsible for enabling long range planning. Corn ethanol legislation has now been modified by the current Democratic Senate, with Senator Bingaman's "no harmful effects" clause requiring no environmental impact on carbon emissions, water and food supplies.
As a result of the early biofuels support, various forms of algae and other genetically modified or bio-engineered liquid fuels are now in development. Whatever you think of corn ethanol, it was precisely the stable policy that helped create the infrastructure for this next generation of biofuels, and investment in all of the liquid alternative fuels.
As a result of these long lead times for biofuels supports, spurring longterm investment, the United States is now poised to constitute the largest biodiesel market by 2012, overtaking Germany in four years, and already constitutes the worlds leading ethanol market. Following the lead of our investment, the governments of China and India have now announced major biodiesel initiatives.
Other renewables have not been similarly benefited from long range support. As typified by the solar roof that Carter put on the White House roof, that Reagan took down, there has long been a battle line drawn on energy between Democrats and Republicans, that has led to stops and starts in the development of all the renewables at the expense of the fossil fuels, each time the power in congress and the White House changes hands.
This inability to head in the same direction for more than a couple of years at a time cripples the development of renewable development. Ideally, we could simply agree that renewable energy is a public good, and that the fossil fuels are not, and act accordingly.
But, as listening to Governor Palin at the VP debates well illustrated: there is a wide gulf between Democrats and Republicans on energy policy direction. Republicans are convinced that the nation is floating atop a gigantic oil resource that will just solve our energy problems, and that carbon causation of climate change is not a real concern, but merely some idea manufactured by power-mad scientists or Al Gore.
This gulf in beliefs is why our energy policy is so fragmented and why we are so far behind Europe in carbon policy. The divide is exacerbated by the way congress works. We have two Senators for every state, whether that state has 30 million constituents, or practically none. This gives undue influence to some very insular thinking, that makes it more difficult to get the appreciation for science necessary to get agreement on renewable energy.
But biofuels were the exception. They garnered bipartisan support because the broad swathe of farm states across the nations heartland created both Democratic and Republican support for the promise of home-grown energy independance. That was why the ethanol industry recieved the long term bipartisan support that has us now leading the world.
The solar energy lobby learned one thing from the experience of the biofuel growth. This is why the tiny solar lobby worked so hard to get a one-time eight year extension of the solar investment credit. Eight years is enough time to establish solar to the point where it would not need support, regardless of who controls congress.
On Friday, the solar lobby finally succeeded in that long range goal with the passage of the bailout. Both homeowners and utilities will now have eight years to invest a much smaller outlay to go solar, since now the Federal subsidy is for the full 30%.
Going back to 1993, there have been only two times renewables have gotten such a boost as in the bill attached to the bailout last week. Because of the split in the Senate between Red states and Blue states, it was achieved by also heavily subsidizing fossil fuel as well.
But the end result was that George Bush signed virtually the very same clean energy bill he had vowed to veto in December, and that John McCain and many Republicans voted "Yea" to renewable energy for almost the only time since the beginning of the Clinton/Gore administration.
And in return, Obama and Boxer and most of the Democrats had to "vote for" some incentives for even dirtier fossil fuels like tar sands, for the second time in 5 years. So we get "all of the above". The renewable portion will cost the taxpayers a whopping $7 billion. It should create at least $232 billion in solar jobs.
Given the make-up of the Senate and the consequent back and forth tug of war over 30 years between these two warring visions of America's future energy supply, it is understandable that the 'sausage making' is so bizarre.
But it is an exhausting and ridiculous way to create energy policy.
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