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Issue brief: Energy and Environment

The Electoral Issue:

America's dependence on foreign energy, particularly Middle Eastern oil, harms the environment, destabilizes the economy and ties the United States to countries that do not share its national, economic and human rights interests.

The Challenge:

To achieve energy independence by expanding domestic energy production, and to reduce emissions without harming the economy.


Energy Independence

America consumes 19 million of the 86 million barrels of oil produced in the world each day. In 2011,the U.S. imported 44.8 percent of its oil. More than half (24.1 percent) of oil imports came from the mostly Middle-Eastern countries in the Organization of Petroleum Exporting Countries (OPEC).

Despite the rise in alternative sources of energy and the drop in imports -- the lowest levels since 1995 -- petroleum is still America's most widely used source of energy and the country is still tied to foreign suppliers.

Business and consumers are whipsawed by OPEC price hikes, supply shocks and the international energy market. (see, for example, the energy crises of 1973 and 1979, or the up and down movement of gas prices tied to each new bout of turmoil in the oil-rich Middle East.)

Conservation & Efficiency

America is the second biggest energy consumer in the world just behind China, yet per-capita energy use is more than four times the per-capita-consumption of China, according to the World Bank,. The only countries whose per-capita consumption was greater than America's, with the exception of Canada, were island nations like Iceland, wealthy enclaves like Luxembourg, and Middle-Eastern petro-states like Kuwait.

In a 2012 report from the American Council for an Energy Efficient Economy, the United States ranked ninth among the world's 12 largest economies in energy efficiency - our standing diminished, among other reasons, by a transportation infrastructure reliant mostly on automobiles. Many countries that outperformed the U.S. - Great Britain, Japan, Germany - have a dearth of domestic energy resources that forces them to more aggressively conserve the fuel they import at great cost.

Climate Change

The preponderance of scientific evidence suggests man-made carbon dioxide (CO2) emissions are increasing. According to the Global Carbon Project, in 2010, emissions rose by 5.9 percent (the largest absolute annual increase ever) after dropping 1.4 percent in 2009 due to the recession. These CO2 emissions are, to one degree or another, contributing to a global warming effect. 9 of the 10 warmest years in the modern meteorological record have occurred since 2000. Scientists predict a variety of negative outcomes if temperatures rise to an unacceptable degree, ranging from bad to catastrophic.

Those who dispute these findings usually acknowledge that CO2 emissions are increasing, but question humanity's role. Still others acknowledge that humans may be playing a role, but that the size of that role is uncertain and that spending money to reverse the trend is not economically wise.

GOP nominee Mitt Romney has said, "Do I think the world's getting hotter? Yeah, I don't know that, but I think that it is. I don't know if it's mostly caused by humans. ... What I'm not willing to do is spend trillions of dollars on something I don't know the answer to."

NIMBY ("Not in my backyard")

Consumers want to enjoy the benefits of new energy without being exposed to the potential drawbacks. Nuclear energy is a good example - it is carbon neutral, and cost-effective -- but people worry about the hazards of living near a nuclear plant. Build more nuclear power plants, by all means - but not in my backyard. NIMBY problems also affect the application of natural gas "fracking" technology, which may raise local environmental concerns by compromising the integrity of local bedrock and water reservoirs.

Next page: Political positions


Jargon Watch: "An all of the above approach."

You'll hear this a lot from members of both parties. It sounds good, but it is meaningless rhetoric unless a politician articulates the specific measures they are willing to support and can articulate how they would answer the challenges presented by each approach.

Drill Baby, Drill!

Proponents of domestic energy production support a variety of methods from oil drilling off the coasts to fracking for natural gas to digging for more coal. They argue all of these methods would produce jobs, since you can't outsource jobs done on U.S. soil. Increasing home-grown energy will contribute to an already improving trend.

The USEIA projects that oil imports will drop an additional 20 percent by 2025. By 2020, due to new drilling technology, domestic production will rise 22 percent to 6.7 million barrels per day. During that time, the 19 million barrels America consumes daily will drop by 2 million due to increased efficiency.

According to an energy analyst with Citigroup, in each of the last four years, U.S. net oil imports have already dropped by one million barrels per day. Energy giant British Petroleum projects that by 2030, the U.S. will generate 94 percent of its energy domestically, up from 77 percent today.

Challenges: Carbon-based fuels are a finite, non-renewable resource. As we drill, frack and dig, finding new sources becomes costlier and dirtier. New drilling technologies that allow oil exploration further offshore or deeper in the earth's crust are more expensive - oil costs have risen in recent years due in part to the increasing complexity of extraction techniques like deepwater and horizontal drilling, reaching a high of $92 this year, according to energy analysts at Bernstein Research, who declared that "The era of cheap oil is over." Some of these new techniques are also dirtier - the EPA estimates that the production process turning tar sands into usable petroleum produces 82 percent more emissions than the refining process for regular crude.

As the world's biggest energy consumer, our continued reliance on carbon-based fuels complicates the development of an international consensus to combat climate change. In addition, concentrating so heavily on carbon-based energy would cede a competitive advantage in the development of environmentally friendly energy, giving countries like Germany and China an advantage. Many analysts expect this section of the global economy to be among the biggest engines of economic growth in the 21st century. Finally, it is also not certain that expanding American production of oil, gas, and coal would have any immediately appreciable effect on energy prices or energy independence in a global energy marketplace.

Downplay Climate Change

Romney and others believe the matter needs more private study before a conclusive human link to carbon emissions can be determined.

Challenges: Delay could be catastrophic if the science is right. At a 2009 conference in Copenhagen, much of the international community set a target to limit the rise in temperatures to only 2 degrees Celsius (3.6 degrees Farenheit). Some scientists have warned that even this goal would present an unacceptable risk.

For all of the instrumental concerns about a quick shift away from fossil fuels toward green energy being too economically disruptive, many scientists forecast far greater economic upheaval if some of the worst effects of climate change come to pass -- desertification, food shortages, disastrously inclement weather, rising sea levels, to name a few.

At the 2009 Copenhagen conference, President Obama, working with other leaders, negotiated a series of non-binding emissions-reductions targets; Mitt Romney has declared his opposition to a unilateral move to curb emissions, arguing that it would be environmentally meaningless and economically harmful if China, India, and other parts of the developing world do not follow suit.


Based on corn, switchgrass, and other crops that can be found in America, biofuels like ethanol from corn are a domestic energy source that we can grow and exploit ourselves.

Challenges: Although ethanol burns cleaner than traditional fossil fuels, the production of the fuel is an energy-intensive process, generating greater carbon emissions than the fuel saves by replacing petroleum. Switchgrass ethanol production is even more energy-intensive. The government subsidizes ethanol production, a costly bit of corporate welfare in an age of austerity, and many have argued that ethanol would not be economically viable in the absence of government support.

Although Congress allowed the ethanol tax credit to expire at the end of 2011, eliminating the most controversial ethanol subsidy in the tax code, ethanol producers still enjoy government assistance in the form of the Renewable Fuel Standard, which requires 37 percent of the 2011-12 American corn crop to be used for fuel production. This sleight of hand was described by the American Enterprise Institute's Aaron Smith: "Removing the tax credit but keeping the RFS is like scraping a little frosting from the ethanol-boondoggle cake." In other words, the mandate has grown large enough to make the tax credits virtually meaningless.

Natural Gas

Hydraulic fracturing technology, or "fracking" generates usable natural gas from underground shale rock deposits by fracturing the rock with a pressurized injection of water and chemicals, freeing gas trapped in the rock and allowing it to be harvested. The technology has opened up huge areas for gas exploration, leading to an energy boom in the American heartland, which has huge deposits of shale. It's domestically available, it's far cleaner than oil and coal - burning gas emits about half the level of greenhouse gases produced by burning coal - and the gas boom could create a lot of new American jobs.

Challenge: We don't fully know what fracking is doing to the bedrock and water table in areas where the technology is being used, but some reports have highlighted the possibility that the fracking chemical mixture could be defiling the water table, creating dirty, even flammable water. Burning natural gas may emit fewer greenhouse gases than burning other fossil fuels, but some have voiced concerns that methane released during the fracking process could be mitigate any emissions reduction secured by using more natural gas (methane is an even more powerful greenhouse gas than carbon dioxide.)

Natural gas is abundant, but still non-renewable. The substance's volatility makes it expensive and hazardous to transport (the gaseous state of matter requires pressurized containers, and the conversion to liquid is an additional expense.) And we don't have a nationwide natural gas infrastructure to supplant our oil infrastructure - you can't put natural gas in cars without converting it to liquid form, and there are only 1,500 natural gas refueling stations in America today, with just over half being open for public use.

Renewables: Wind, Solar, Hydroelectric

Transition to Green Energy

Renewable energy sources like wind, solar, and hydroelectric power provide infinite, clean energy, generating no emissions. From an environmental perspective, these renewables are the ideal energy solution if we can get them to work at the scale we need.

Challenges: Many clean energy technologies are still in their infancy, either too limited in scope or too costly in execution to work at a big enough scale to satisfy America's voracious energy needs. America Renewable energy technologies account for only 14 percent of American electricity production, and most of that comes from hydroelectric dams that are limited in their application. Wind power currently provides only one percent of America's energy diet, and solar power accounts for less than one percent.

Cost is another impediment: electricity generated by solar cells is more than twice as expensive as fossil-fuel electricity. Solar cell and wind turbine technology simply do not produce enough energy-per-dollar to be a viable alternative.

Another problem with many renewables is their lack of applicability to our transportation system. America's energy market can more accurately be seen as two mostly separate markets: the transportation energy market and the electrical energy market. Energy sources that generate electricity are frequently unsuitable for application to our transportation infrastructure. You can't fuel a car with a windmill or a nuclear power plant. Vehicles that use electricity as fuel are an emerging way to reconcile the needs of these two energy markets, but electric cars are relatively new, expensive, and not at all widespread.

Nuclear Power

Countries like France, which generates 78 percent of its electricity at the country's 58 nuclear power plants, have shown what the widespread use of nuclear energy can do for a nation's emissions and energy independence.

The benefits are obvious: nuclear energy is carbon-neutral, which means that there are no CO2 emissions associations associated with its production and the technology to operate at the necessary scale already exists. We could make a big dent in our emissions and our dependence on foreign energy if we decided today to begin building more nuclear power plants. We currently have 104 working reactors that generate 19 percent of our domestic electricity.

Challenges: The technology is carbon-neutral but not without risk - disasters like Fukushima, Three Mile Island, Chernobyl have seared the downside of nuclear energy into the public imagination, giving the issue a NIMBY ("not in my backyard") problem.

Disposal of nuclear waste is another problem - what do we do with the spent fuel rods? Many reactors keep their waste on-site in temporary storage pools. Yucca Mountain in Nevada is the designated national nuclear waste repository, but space at Yucca is limited and no politician hoping to win the swing state of Nevada wants to promote it. Nobody wants the next Yucca mountain in their state.

Keystone XL

In 2008, Canadian energy company TransCanada proposed the construction of a new pipeline linking Canadian tar sands with oil refineries on the Gulf Coast. There is already one pipeline from Alberta to Houston (the original Keystone), but Keystone XL would transport an additional 500,000 barrels of oil per day.

The southern leg was given permit approval in 2012 by the Obama administration, but the northern route was delayed in November 2011 for at least a year by the administration, which stated that the congressionally-mandated 60 day approval deadline did not provide sufficient time for an full environmental impact analysis.

Mitt Romney has promised to green-light the project the day he's sworn in, creating American jobs from construction of the pipeline and refining the oil.

Challenges: Environmental concerns about the project are local and global. Residents of Nebraska object to the pipeline's route across a portion of the Ogalalla aquifer, voicing concerns about an oil spill.

Globally, tar sands are among the dirtiest forms of carbon-based energy - the EPA has estimated that the production and refining process of crude oil derived from tar sands emits 82 percent more greenhouse gases than traditional crude.

Estimates of how many American jobs Keystone would create vary greatly - a study commissioned by TransCanada promised an additional 20,000 American jobs associated with the construction and fabrication of the pipeline, and a U.S. Chamber of Commerce analysis was even more sanguine, forecasting 250,000 permanent jobs. But the State Department has estimated that only 5,000-6,000 permanent jobs would be created. Even TransCanada's analysis concluded that most of the 20,000 jobs would be temporary, with only "hundreds" of permanent positions resulting from the Keystone XL.

Cap and Trade

Finally, a significant bloc of policymakers insist that climate change is happening, that human CO2 emissions are the chief contributors to it, and that we must do something to stop it. President Obama acknowledges man-made climate change as a reality, and has taken steps to jump-start green energy and increase energy efficiency, but his biggest energy initiative - a Cap and Trade system to limit America's greenhouse gas emissions - died in the U.S. Senate in 2009.

A cap and trade system uses market forces to limit emissions its proponents, including president Obama, believe are contributing to global warming. It limits the amount of carbon emissions corporations and energy producers are allowed to emit ("Cap"), allowing companies to purchase carbon credits within that limit and trade those credits with other companies in a marketplace ("Trade"). The bill uses the market to encourage efficiency. If you are inefficient it costs you; if you are green, you can make money. The idea was crafted as a market-based solution that attempts to limit emissions by leveraging private capital to spur the development of energy alternatives.

In 2009, the House of Representatives passed the American Clean Energy and Security Act, but it was defeated in the Senate.

Challenges: Critics call the proposal "cap and tax," saying it would impose growth-killing new costs on energy companies that would be passed along to consumers.

The Congressional Budget Office analysis of the 2009 cap and trade bill estimated that each household in America would see an additional $175 in energy costs per year. The cost to the entire economy - families, businesses, and the government - would be $22 billion per year.

Due to the sustained efforts by foes to paint cap-and-trade as an tax increase, the idea has become a political nonstarter. It failed in a Congress controlled by Democrats who are generally more supportive of renewable energy, and with Republicans controlling the House and poised to gain seats in the Senate, cap-and-trade is officially off the table for the time being. Supporters must explain why the shift to renewable sources is worth the added energy costs in the short-term, and what they will do to surmount Cap and Trade's formidable opposition.

Carbon Tax

A carbon tax would impose a tax on carbon emissions, using the revenues to subsidize development of renewable, clean energy technologies. By making the use of carbon-based energy less commercially attractive, a carbon tax could expedite the shift to renewable, green energy.

Challenges: This solution provokes the same economic complaints as cap and trade - that it would sap economic growth and impose a tax on American families and high energy users like manufacturers . A cap and trade system was originally conceived as a conservative, market-based alternative to a direct tax on carbon emissions. If cap and trade is no longer politically viable, a carbon tax is even less so.

Subsidize Green Energy

President Obama promotes subsidies to companies researching, developing, and harnessing new energy technologies to allow the development of promising ideas that would never get developed or brought to a large enough scale without assistance. Some advocate stripping carbon-based fuel energy of their federal subsidies and redirecting that money to green energy companies. Governor Romney supports retaining these subsidies Others would just expand green subsidies without trimming other subsidies.

Challenges: How are you going to pay for it? The tax code is already rife with subsidies. And with the controversy surrounding Solyndra's bankruptcy and other federal loan guarantees to green energy companies, we've seen how dicey it can be for the federal government to prop up an industry that remains in its infancy - A lot of good money could end up being thrown at bad business models.

Regulations to Promote Conservation

In 2011, the Obama administration proposed a rule that would double fuel-economy standards by 2025 - the 2011 model year average was 27.8 miles per gallon, the new rules would require auto fleets to average 54.5 mpg. A law passed in 2007 requires energy companies to quadruple their production of renewable transportation fuels by 2022. Some states are requiring electrical companies to buy up to 60 percent more energy from renewable sources by 2020. The cumulative effect of these statutory nudges is becoming clear: the EIA has predicted that the U.S. will be 42 percent more energy-efficient by 2035.

Challenges: Conservation is helpful, and it can certainly play a big role in making America greener and more energy-efficient, but it is not a silver bullet - our economy is a thirsty machine, and we can only conserve so much without seriously crimping our economic growth. Reducing American demand for energy is a constructive goal, but the more meaningful adjustments must come on the supply side of our energy ledger.

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