President Obama was rightly praised by many environmentalists for his State of the Union speech last night. For one thing, he included a word that had gone missing in similar addresses in the past: climate change. And he didn’t pull his punches — at least rhetorically:
"For the sake of our children and our future, we must do more to combat climate change.
Now, it’s true that no single event makes a trend. But the fact is, the 12 hottest years on record have all come in the last 15. Heat waves, droughts, wildfires, floods, all are now more frequent and more intense.
We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states have ever seen were all just a freak coincidence. Or we can choose to believe in the overwhelming judgment of science and act before it’s too late."
Obama went on to call Congress to pass a “bipartisan, market-based solution to climate change” — without using so many words, a carbon cap-and-trade system of the sort that ultimately died in the Senate in 2010. To judge by the stone-faced reactions of Republicans in the audience, that almost certainly won’t happen. But what came next actually could make a difference. Obama promised an “all of the above” energy strategy, one that would support the continued growth of clean energy — citing competition from China — and reduce energy waste, while speeding the development of domestic oil and gas. And he pledged to do that, in part, by linking clean energy and fossil fuels in an innovative way:
"So tonight, I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good. If a nonpartisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we. Let’s take their advice and free our families and businesses from the painful spikes in gas prices we’ve put up with for far too long."
The EST plan is light on specifics, though the idea seems to be that some money taken from the government revenue generated by oil and gas drilling on federal territory will be channeled toward research on clean energy and especially low-carbon transportation. It’s a plan that already has the support of some Very Serious People, while Republican Senator Lisa Murkowski of Alaska had already come out with a similar idea. Over at the Council on Foreign Relations, Michael Levi explains why the EST could effectively bridge the gap between old and new energy:
"But the political reality is that this proposal only has legs if it has something for everyone — and that means it needs to mix new oil and gas development with more investment in clean-energy innovation. Indeed that is pretty much the point. There is no technical reason that money can’t be taken from general funds to support innovation, and there is no reason that lands can’t be opened for drilling without spending the revenues on clean energy. To me the biggest virtue of this approach is that it starts to tie the fortunes of various combatants together: oil and gas supporters can only cut clean-energy funding by blocking drilling; clean-energy backers suffer if oil and gas development is curtailed."
It’s the sort of compromise that seems to naturally appeal to President Obama (if, increasingly, no one else in Washington). In fact, Obama tried something similar earlier in his first term, when he proposed essentially trading expanded offshore-drilling rights for support of comprehensive climate legislation. That effort sunk with the Deepwater Horizon in April 2010 — the resulting oil spill made expanded offshore drilling toxic for greens and many Democrats, though the cap and trade likely would have faced an uphill battle regardless. Will the EST do better?
I’d hope so. Levi is right — though the specifics need to be fleshed out, channeling some drilling revenue to clean energy seems to be a smart way to make use of the domestic fossil-fuel boom while positioning the country for a decarbonized future. It’s like taking a bonus or something similar and investing it for the future — hopefully in something that offers better returns than my sluggish 401(k) — rather than just blowing it all now on, I don’t know, the government equivalent of iPads.
But there is a problem: “all of the above,” as attractive as it sounds, isn’t really possible. Energy policy may not be a zero-sum game — whenever one side wins, the other must lose — but there are choices that need to be made. And if you believe that reducing carbon emissions is of existential importance to the world — as many environmentalists do — you’re not likely to be on board for any policy that will seek to grow oil and gas drilling, even if some of that money goes to support clean energy.
Call it the Keystone Conundrum. The day after Obama gave his State of the Union speech, scores of celebrities, environmentalists and activists descended on the White House to engage in an act of civil disobedience. Their cause was the proposed Keystone XL pipeline, which would bring oil-sands crude from Canada to the U.S. — and which President Obama is still deciding whether or not to approve. Nearly 50 people were arrested protesting the pipeline, including Sierra Club executive director Michael Brune, who noted that the venerable environmental group was participating in the first such act of civil disobedience in its 120-year-old history:
"We cannot afford to allow the production, transport, export and burning of the dirtiest oil on earth via the Keystone XL pipeline. President Obama must deny the pipeline and take decisive steps to address climate disruption, the most significant issue of our time."
Obama most definitely did not mention the Keystone decision in his speech, and it’s not hard to see why. “Keystone stills very ill in the President’s energy scheme,” says Levi. “At some level, people can accept one piece or another piece of his policy. But with Keystone, you need to pick one side or the other.” And there are big players on both sides — environmentalists like Brune and Bill McKibben on one, the powerful oil industry and most Republicans on the other — who will be very unhappy if the President doesn’t come down on their side.
It is worth noting that local opposition to the pipeline’s path in Nebraska seems to have died down somewhat. (Nebraska’s governor last month approved a revised path for the pipeline that would avoid some — though not all — environmentally sensitive areas in the state.) That means the opposition is rooted more in the global fears that building the pipeline will speed development of the carbon-intensive oil sands in Canada. But does that make Keystone the climate redline that many environmentalists have called it? Severin Borenstein of the University of California at Berkeley doesn’t think so, noting that oil-sands crude itself isn’t that much more carbon polluting than crude anywhere else:
"Blocking any one fossil-fuel technology or supply source — whether it is tar sands oil, hydraulic fracturing, or deep water drilling — will reduce supply and raise fossil-fuel prices. That will make alternative energy sources at least marginally more cost-competitive. But it will also increase the incentive to find new fossil-fuel sources and new ways to access the energy in the fossil-fuel sources that we already know about. Alternative energy technologies are progressing, but so are the technologies for extracting and using fossil fuels, and the market incentive for improving those conventional technologies is at least as great."
But there’s also value in opposing Keystone as a political symbol — just ask David Roberts of Grist:
"Steep odds, however, are not cause for the movement to give up. If it were easy, there would be no need for a movement. Steep odds are a call for sweat and blood, passion and ingenuity. Knowing what we now know about climate change, it is simply immoral to tap large new sources of fossil fuels. We’ve got to start leaving the damn stuff in the ground."
And that’s where Obama’s very reasonable all-of-the-above strategy is likely to run into some problems. From the left, there will be those who will oppose new oil and gas development, citing the need to fight climate change right now. (Even stronger opposition will likely come from those who live in the path of those new developments — just look at the grassroots war over natural gas fracking.) And as Roberts points out, there are many, many conservatives who are opposed to any limit on fossil-fuel development — and who have no interest in seeing drilling revenue channeled toward the kinds of clean energy they simply don’t believe in.
Obama staked out reasonable middle ground on energy in his State of the Union speech. But these days, the middle can be lonely ground.
Dr. Ali Ghalambor has authored more than 10 books and nearly 200 articles about petroleum engineering. For more updates about the petroleum and natural gas industry, visit this Facebook page.