Obama's Plan to Double Energy Production

By Michael Kanellos

Like him or not, at least President Barack Obama isn’t spending all his free time at a ranch.

In his weekly address to the nation (see clip here) Obama said that he wants to “double renewable energy production” as well as create three million new jobs. Although he didn’t specify how many of those jobs would be in the green sector, it’s a good bet that he means a lot of them. Over 80 percent of those new jobs will be in the private sector.

He also wants to kick off a program to renovate public buildings for energy efficiency, a topic that incoming Secretary of Energy Steve Chu has championed for years. Contractors, get ready: you work in what will become one of the huge growth sectors in the economy.

“Nearly two million lost their jobs last year and millions more are working in jobs that pay less with fewer benefits,” he said.

Of course, delivering on this will be tougher than promising it. Doubling renewable energy production won’t exactly reverse global warming or eviscerate OPEC either. As the Energy Information Administration points out in its comprehensive surveys, renewables remain a fairly low fraction of the energy pie in the U.S. Renewable electric power only accounted for 7 percent of the total energy in the U.S. in 2006. Biomass and hydroelectric account for 90 percent of that 7 percent. Wind only accounts for 4 percent and solar only one percent. Together, that makes wind and solar five percent of seven percent, or 0.35 percent.

The report came out in 2008, but it takes a while to assess all the data. Still, even if you factor forward you can bet that solar is bigger, but still a very small contributor.

The Department of Energy and ThinkEquity also reported last month that companies will likely miss their targets for producing cellulosic ethanol.

But it’s a start.

Comments

[TripleG:]

This is just outstanding. Increase debt by borrowing money, create more inflation, and put those resources into public housing for all the people who don't contribute a penny to the GNP. Sounds like a master plan to me.

Jan 05 08:45 AM

[Paul Killinger:]

Michael,

The title of your post, which omits the word "Renewable," is misleading to say the least. Now, if the President-elect were to really "Double" domestic energy production, that would be a truly national headline story.
I'll let that pass, however.

Indeed, the U.S. certainly has the CAPABILITY to double its internal energy production, just not the political will to actually do so. Between shale gas, shale oil, coal, nuclear, Alaska and the OCS, we have more proven energy reserves than the Middle East or Russia.

Meanwhile, as you point out, we're concentrating our efforts by spending billions of taxpayer dollars to double our renewables from .35 to .7% of our total. If these numbers appear irrational, it's only because they are.

Some good could come out of this yet, however. If the government were to support the Pickens Plan we could at least begin to put a dent into oil imports, and placate the renewable energy lobby at the same time with massive wind farms.

Failing to take even this step, we will be destined to continue down the road we're now on toward economic oblivion. (Of course, maybe sitting in the dark for awhile reading by candlelight won't be so bad. It would have a way of clearing our heads about our nation's future energy choices.)

Jan 05 09:32 AM

[billp37:]

"Obama said that he wants to “double renewable energy production” "

Let's hope Obama understands HEAT RATE.

www.google.com/search?...

And thinks about possible environmental consequences.

Jan 05 09:49 AM

[DiggerUK:]

Throwing money at renewables is truly putting lipstick on a pig.

The only part of Obamas plans for energy that make sense are for the upgrading of the national grid.

Those who still believe that the world of science is in universal support of damage from CO2 and GW should examine the views of 31000 US scientists. oism.org/pproject/

Jan 05 11:26 AM

[DW:]

"Like him or not, at least President Barack Obama isn’t spending all his free time at a ranch."

I stopped here.

Jan 05 12:56 PM

[searcher:]

This doubling, are we talking geologic time? Let's hope we don't have to end up wishing for a Hidden Valley Ranch for our latest leader. One thing for sure, our new leader will give excellent addresses, far surpassing anything FDR ever approached.

Jan 05 02:57 PM

[casey00001:]

Doesn't Barry "The Messiah" have a plan for everything. This guy won't do didley dick.

Jan 05 04:55 PM

[Rikiki:]

No schmuck, he spends it in Hawaii. You mean spirited Klutz. I Stopped reading at your first blather.
Rikiki

Jan 05 09:52 PM

[Ferdinand E...:]

Somebody used the expression "energy choices". There are no energy choices if cost is taken into consideration - assuming of course that the intention is maintain standards of living by continuing to use large amounts of energy. More nuclear will be necessary, and a few of the renewables, some coal, and some gas, while a lot of the popular candidates among energy resources will have to be forgotten about or minimized. And all of this will have to be commenced sooner rather than later.

Jan 06 07:22 AM

[Road Runner:]

TripleG, What do you propose the federal government do instead of borrowing and spending our way out of this problem before it becomes a deflationary death spiral? That's right - I said deflation instead of inflation. That's the first problem with your post. There is no inflation now. Actually, we are close to a deflationary down spiral. You need to learn about how a deflationary spiral works because, obviously, you don’t. If you did, it would scare the hell out of you, and you would be applauding Obama’s actions. Deflationary spirals are self-reinforcing which leads to very long (10 years plus) depressions like the Great Depression and Japan of the 90s. Only some strong outside influence breaks them like World War II.

There is no other choice now but massive federal spending. The consumer is not going to return to strong spending because they feel much less wealthy because of falling house prices and falling stock market. Corporations are not going to return to strong spending because there is no reason to expand capacity as long as the consumer is in a coma. So that leaves the spender of last resort, the government.

Right now the federal government can borrow massive amounts of money at extremely low interest rates because of the flight to quality in US Treasury bills and because the Federal Reserve is injecting massive amounts of money into the capital markets (it can because there is no inflation). Thus, even though the federal debt is being massively increased, it is being done at very low interest rates. Thus the taxpayer payback (interest) on this added debt is very low. Think of it like getting an extremely low rate on a large home mortgage – the payback amount may be larger but the payments are lower.

Jan 06 05:46 PM

[Road Runner:]

This comment is for those of you that think that government is much less efficient and effective than the private sector at spending money. I believe this thinking is perpetuated by the conservatives that are more interested in putting money in their pockets, via the private sector, than in caring about the overall health of the US economy.

Look at where the private sector has spent a huge amount of money in the last 5 years. It drastically overbuild luxury homes and condos. The best thing to do with that housing to help the economy is the bulldoze it. Sure, this housing may have been efficiently build but it was not effective for the economy. Basically, money efficiently wasted. How about the 7 homes that McCain owned? How does that improve the productivity of this country and make us better competitors in the global economy? Sure the goal of owning a nice home is an incentive to work harder and smarter, but how does adding another home to a rich person’s trophy list make anyone work harder or smarter?

The founder of the Vanguard investment group estimated that before the credit crisis, $600 billion a year was being spent on the financial industry. He was shocked and disappointed by how much of a waste that was. This is basically paying many very-smart people to figure out how to get money from other people. Not only was it money thrown away, it wasted the valuable resources of smart people. I’m not criticizing these people – making the most money a person can is not “evil”. I’m blaming a system that promotes such waste. Also, I’m not saying financing activity is a waste. Just the excess that has little to do with moving capital to where it is best used.

There are many more examples of how the private sector wastes money without adding the incentive to work harder or smarter, especially when it is concentrated in the hands of few extremely wealthy people. I won’t “flush out” my argument against the new “robber barons” here.

On the government spending side. Government is the only place that takes giant risks for giant potential rewords. The private sector can’t because it needs return on investment that can be calculated.

One example is the development of basic technology at universities and research centers. The university system of the US is the envy of the world and the source of much of the wealth of this country. The developments are almost endless.

Another example of extremely effective government spending are large scale infrastructure projects. My favorite is the Hoover dam which launched the economy of the southwest. It doesn’t matter if there were a huge number of pet pork-barrel projects that came along with the Hoover dam because the dam would have more than made up for them in economic value.

I believe there is an optimum balance in private and public spending. Right now there is too little government spending and too much private sector spending. This has made the US a “fluffy” economy without sufficient intellectual, infrastructure, and industrial backbone for leadership in the future world economy.

Jan 06 06:59 PM