Thursday, August 19, 2010

Does New Republican Bill Signal Bipartisan Support for Clean Energy Investment?

By Jesse Jenkins, originally at the Breakthrough Institute

New legislation introduced by Republican Representative Devin Nunes (CA) and backed by several GOP House members would invest billions into renewable energy deployment, signaling an opportunity for bipartisan support for clean energy technology policies.

Over at CNBC, reporter Trevor Curwin has been one of the first to note the significance of the Republican bill, which Nunes' says could "potentially provide hundreds of billions in financing" for renewable energy over the next several decades.

Rep. Devin Nunes' (R-Calif.) who introduced the bill, in late July, wants to use a reverse auction process to allocate future federal oil royalties to the best renewable energy projects and technologies, with the lowest-price-per-megawatt, (MW), bid winning funding.

"It's clear and transparent; the people with the best technology will get the help," Nunes says of the bill, dubbed "A Roadmap for America's Energy Future,"

Depending on how much territory is eventually opened up to drilling, research firms estimate the royalties could be worth $10 billion to $50 billion a year.
As Curwin notes, Nunes' plan would rely solely on new revenues from oil and gas leasing to fund the renewable energy investments, including the always contentious proposals to open up areas of the Arctic National Wildlife Refuge as well as the development of oil shale resources and expanded offshore drilling. While more offshore drilling enjoyed bipartisan support just months ago, in the wake of the BP Deepwater Horizon disaster in the Gulf, the prospects for new offshore oil and gas production are uncertain.

But there are other ways to fund the renewable energy investments Rep. Nunes' and his GOP colleagues envision. Curwin quotes my recent suggestion, along with Breakthrough's Yael Borofsky, that a small fee on each barrel of oil sold could do the trick.

A $5 per barrel fee on all oil consumed in the United States, for example, would raise roughly $40 billion annually for critical national investments in clean energy technologies and industries, and would increase gasoline prices by just 12-15 cents per gallon. That's in the regular 'noise' of gas price fluctuations, which have risen or fallen by 15 cents or more on 14 different occasions in the last two years, according to data from the U.S. Energy Information Administration.

Other alternatives include a very modest fee on carbon pollution ($5 per ton would raise roughly $30 billion annually and increase gas prices by less than a nickel per gallon) a wires fee on electricity sales ($10 billion could be raised annually without costing the average household more than $5 per month on their utility bills), the sunsetting of well-worn subsidies for mature energy sources (including oil, coal, corn ethanol and probably even wind power), or some combination of the above.

At the end of the day, the choice of revenue raiser is important, but not the central issue. With representatives on both sides of the aisle now recognizing the importance of national investments in clean, American energy sources, new opportunities for bipartisan progress on clean energy may be possible where efforts to pass contentious cap and trade legislation have repeatedly failed.

As I told CNBC, Nunes' proposal is a positive step forward, a sign that smart investments to boost U.S. clean energy production, spur innovation to reduce the price of emerging clean energy technologies, and strengthen America's clean energy industries and entrepreneurs are all points that can enjoy bipartisan consensus.

On it's own, a program for strategic, competitive deployment incentives to spur clean energy adoption, similar to that proposed by Rep Nunes and his colleagues, could be a key component of a 21st century clean energy strategy.

A comprehensive strategy to make clean energy cheap and abundant and ensure American leadership in clean energy markets would also include key public investments in clean energy research, energy science and engineering education, advanced manufacturing, and enabling infrastructure, each areas that both Republicans and Democrats can support.

Regardless of what you believe about the urgency or importance climate change, we can agree that making more clean, American energy, making it more affordable, and making it right here in the USA are all in the national interest.

See also:

$40 billion for clean tech at 12 cents per gallon? Yeah, why not?

Time to Bury Cap and Trade and Plan Anew

After "Drill, Baby, Drill," Obama Should Embrace Another GOP Energy Plan

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