Energy and environmental issues in the 2012 US presidential election

energy efficiency, shale gas, renewables, industry, climate change, Solar energy, coalDuring an interview on MTV on October 26, Barack Obama said he was “surprised” that the issue of climate change was never brought up during the three debates with his opponent Mitt Romney, and for good reason, since it is the first time since 1988. More broadly, how were energy and environmental issues addressed during the campaign?

During the interview, Barack Obama readily acknowledges that “we’re not moving as fast as we need to. This is an issue that future generations are going to have to be dealing with even more than the older generation is.” However, during the Denver Democratic National Convention in 2008 when he received the nomination for President, he stated that his election would be later seen as the moment when “the rise of the oceans began to slow and our planet began to heal”. But because of the economic downturn, the debt crisis and the destruction of 5 million jobs, especially in the automobile industry, the US President’s promises on renewable energy sources were postponed in the course of his first term.

Mitt Romney also flip-flopped several times. As governor of Massachusetts from 2003 to 2007, he was an outspoken critic of thermal plants, saying about a coal plant: “I will not create or hold jobs that kill people, and that plant kills people!” However, as a presidential candidate in 2012, Mitt Romney was a firm supporter of that energy source, calling for the promotion of coal, which he dubbed “the energy of the future”, since “we have enough for the next two hundred fifty years”. Coal still accounts for 40% of US electricity production and thus remains a strategic resource.

The future of federal renewable energy grants: major disagreement between the candidates

Solar energy was the first stumbling block between the two candidates. Barack Obama enacted a federal funding scheme known as production tax credit (PTC) in order to sustain photovoltaic and wind electricity generation, in particular so as to help the sector’s start-up companies grow. This tax break is due to sunset on January 1st, 2013, and its future was extensively discussed by both candidates in the course of the campaign, with Barack Obama advocating a twenty-year extension whereas Mitt Romney, on the contrary, called it “boondoggle” and economic nonsense. By doing so, he followed the traditional Grand Old Party line, standing up against “big government” and restricting the federal budget to the state’s sovereign duties.

During Obama’s first term, the US federal state invested 10 billion dollars in renewable energy and energy efficiency projects. According to Mitt Romney, such incentives were addressed to both “winners and losers”, whereas free, undistorted competition should allow market forces to discriminate between “good” and “bad” investments.  The Republican candidate took the example of Solyndra in support of his argument. This solar panel manufacturer, using first-of-a-kind technology and relying massively on PTC, didn’t resist Chinese competition and the falling prices of conventional panels.

Barack Obama retorted that PTC made industrial success stories possible, such as Brightsource, a company currently building the largest solar farm in the world in the Mojave Desert in California. The incumbent also said that the share of wind power in the US energy mix had doubled since he took office, reaching 5% of overall electricity generation (compared with 7% in Germany, ahead of the curve in this area with 16% of its electricity coming from renewable sources).

Reasonable consensus on fossil fuels

Both candidates advocated shale gas drilling and hydraulic fracturing, which could lead to gas being three to four times cheaper than in Europe and provide a competitive edge for US industry while creating jobs in the mining sector. With hydrocarbon prices skyrocketing, voters apparently proved to be sensitive to the issue of energy independence.

Although Barack Obama put a moratorium on deepwater oil drilling after the 2010 Gulf of Mexico spill, he supported onshore drilling, to the extent that the US only imports 42% of its oil in 2012 compared with 60% in 2005. As for Mitt Romney, he promised complete energy independence by 2020 thanks to an alliance with Canada and Mexico. For that to happen, unconventional oil reserves should be better exploited and several pipelines should be built between California and the north-western coast of Canada, in order to transport the yet unexploited hydrocarbons. Barack Obama was somewhat sceptical on this issue and promised to end a number of tax loopholes for oil companies in order to support new energy sources. However, some lobbies in the oil sector said he would sign into law the extension of the Keystone pipeline, which would then connect the Canadian Arctic to Texas.

Overall, the only controversial point between the two candidates was therefore the issue of funding renewables. With President Obama re-elected, players in the sector are hoping for further federal assistance, though not of the extent of the auto bailout in 2008-2009, but at least for the continuation and even the extension of PTC in order to accelerate the development and durability of their fledgling industry.

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