Inside Obama's green plan for energy and the economy

Times staff writer Edward Silver posts this detailed look at Sen. Barack Obama's proposals on energy -- and which companies could benefit most from the candidate's blueprint if he wins the White House.

For Barack Obama, climate change is change we can believe in.

Speakers at the Democrats’ convention this week, by and large, have taken as dim a view of fossil fuels as the Iraq war. If you were quaffing your brew at each mention of "alternative energy" from the podium, you’d have a lot of recycling to do by now. The green theme climaxes tonight, with environmental hero Al Gore setting the stage for the candidate’s address.

Since he launched his campaign, Obama has offered remarkably detailed proposals and demonstrated fluency in the language of energy and carbon. He promises a broad agenda aimed at growing sustainable industries quickly. That means jobs, profits and a balm for the planet, but it’s a riddle when, or if, that growth would offset the financial costs of change.

If he takes the helm, Obama’s blueprint may be welcomed by an admiring Congress. Then comes the hard part: implementing it.

Like rival John McCain, Obama proposes a market in permits to emit greenhouse gases, commonly termed "cap and trade." His approach is stricter, however, and his final goal -- an 80% reduction from 1990 levels by 2050 -- more ambitious. Even though emissions limits are defined by the government, cap and trade is widely seen as a fair, market-driven way to, in Obama’s words, make "dirty energy expensive."

Coal generates half the country’s electricity, but with carbon costs imposed, new plants won't be built. Under Obama, investors may shun coal producers that only sell domestically while favoring those that feed booming demand overseas, such as Peabody Energy Corp. Meanwhile, firms that crack the engineering challenge of burying coal emissions underground would get more than a few contracts.

Assuming that a Congress renews key tax incentives, utilities would hurry to add renewables to their mix, playing into the hands of wind energy specialists such as Vestas and solar companies like Energy Conversion Devices Inc., Sunpower Corp. and private BrightSource Energy.

Obama is not a friend of nuclear power but urges the industry to solve its chronic waste storage and other problems. With coal in the doghouse, though, the pressure to go nuclear would build. That’s where natural gas comes in. In his energy factsheet, Obama makes special mention of the cleaner-burning fossil fuel, the No. 2 source of U.S. electricity. He promotes drilling in the Barnett shale in Texas, among other places. After all, the Illinois senator doesn’t see renewables contributing more than 10% of our power supply by 2012, and even that may be a reach.

If natgas is a fossil fuel even Democrats can love, politics may favor such players as Chesapeake Energy Corp., Devon Energy Corp. and T. Boone Pickens’ Clean Energy Fuels Corp. . . .

Ironically, Pickens and Chesapeake Chairman Aubrey McClendon donated generously to Swift Boat Veterans for Truth, the conservative group that tried to shred Democrat John Kerry's military credentials in 2004. Energy crises, apparently, make strange bedfellows.

Cap and trade auctions would channel $30 billion to $50 billion into public coffers annually, Obama estimates. He’d invest some of that in clean-energy research, efficient-use programs and subsidies for Americans' rising energy bills. He’d spread the largesse by funding a Clean Technologies Venture Fund and earmarking $150 billion over a decade to underwrite the green transition in the private sector.

Obama says his "overarching goal" is ending U.S. reliance on Middle East and Venezuelan crude. Not much controversy there. Yet he’s not enamored of U.S. oil companies either. He backs a windfall profits tax, and his aide Jason Grumet has spoken critically about the wave of mergers that gave us modern Big Oil.

Obama has several strategies to loosen oil’s vise. He has backed corn ethanol but now emphasizes cellulosic fuels made from materials no one eats, such as wood chips and switchgrass. A speculative solution, certainly, but indications of support could give a boost to big DuPont & Co., little Bluefire Ethanol Fuels Inc. and Verenium Corp., as well as private firms such as Mascoma Corp. and Range Fuels.

He backs raising auto mileage standards 4% a year and would push to make all new vehicles flex-fuel-capable. Advanced battery technology is a priority in Obama’s plan, to make plug-in hybrids kings of the road. Potential beneficiaries: General Motors Corp., if its much-anticipated Volt makes it to market, and brainy battery makers like A123 Systems, which is competing for the Volt contract and plans an IPO this year.

To keep the technology and jobs in Detroit, the candidate would extend tax credits and loan guarantees to U.S. automakers for retooling. And to sweeten the deal for consumers -- think of the premium you have to cough up to purchase a Prius -- Obama favors a $7,000 tax credit per plug-in vehicle.

Conservation may be the most effective way to loosen the hold of fossil fuels, and Obama knows it. One plank in his energy platform is a drive to weatherize homes. Another piece is more complex: using regulation to flip the logic of profitability for utilities. Instead of more consumption equating to bigger bottom lines, he wants to reward power sellers for husbanding their resources.

To that end, Obama has become a booster of the "smart grid," an electricity network that manages use while it brings renewables on line. With the right technology, for example, a utility could shift demand away from peak times and bring energy produced by customers into the pool. Rooftop solar owners, that means you.

Such an agenda might draw companies such as EnerNOC Inc. and Itron Inc. into the limelight. The former enables customers to get paid for conserving, and the latter automates meter reading. Up-and-coming architects of the smart grid include Gridpoint Inc., Silver Spring Networks and Trilliant Inc.

Think of Obama’s mutifaceted program as a manual for turning around a supertanker. It can’t be done hastily and changing course will make waves. But he’s betting that most Americans believe he’s pointing the ship in the right direction.

Top photo: Barack Obama. Frank Polich / Getty Images.  Bottom photo: Workers on the Orion Altair natural gas rig in Edna, Texas. Eddie Seal / Bloomberg News

Comments

[short this, buddy]

WTF, dude? where is our 50% federal tax credit for installing solar panels at point of use? where's our 60 c/watt feed in tariff like 40 other countries have? where's our moratorium on all new fossil fuel plants and on all "renewables" which destroy the environment? we need independence from your boys in Big Energy, fellas, even if they are greenwashing their monopolies with windmills. i don't want to pay Pickens any more than I want to pay Saud or Chavez - got that?

there is nothing "green" or "alternative" or "independent" about either candidate's so-called plans. they want to maintain, strengthen and re-entrench Big Energy monopolists (yes, that includes Big Renewables), instead of enabling every structure to strive towards self-sustainability and even an income stream from investing and doing the right thing.

why can't WE get a giant piece of the energy pie, guys? why should Brightsource get my money instead of me? Pickens? DuPont? Come on - that money should be spent to BENEFIT AMERICANS by building point of use infrastructure that frees us from poisoning and hijacking by Big Energy mercenaries.

that would be change i could believe in.

[Eric Jacobsen]

Before this energy problem is corrected, it will take a lot of time. Not ten year's, more like 20 years. While raching our goals, we will expereience gas shortages, 40 to 50 degree temps in many home during the winter months, more jobs will be lost than we realize. China and India alone in the next few years will be using 75% of all the energy needs in the world. If you don't understand this fact, you have your don't have a clue where this world is heading. Granted, we are going to have change, but most American's really don't know the future change that is in store for us. In a few short years this country will no longer be a super power. Like it or not, we are headed that way now. How we adopt to the new super power(s) demands in the future will determine the quality of life we will all have. So, buckle up and get ready for a great ride. It just might be all downhill. This nation is broke, and our world bankers just might call their notes to be paid and if not, then you will do what we say. It's not if, but when. Think before you respond, check the facts, look at the bottom line. All of our politians are playing a shell game with us. It's 50/50 that we can stop this shell game in time. For me, I don't need the government to provide for me and my family. If things really get bad, I will survive. I will be moving back to the farm and I know how too protect my rights. I have a plugged gas and oil well just waiting for a rainy day. So it's going to be a very interesting future. Good Luck America.

[martscan]

Highly informative, excellent article.

[SHANE ALGARIN]

It's well past the time for the Democrats and Republicans to grow a spine and win back our respect. They can be much more persuasive with honesty, rather than deception. The offshore drilling ban has been around for decades. High gas prices have not. A ban on offshore drilling is not a significant explanation for high gas prices.
The top reasons for high gas prices:

1. Lack of competition translates into paying more at the pump. (Exxon merges with Mobil, ChevronTexaco, BPArco, etc )

2. CAFE standards are too weak. Future technology is promising, but fuel efficiency could double using old technology.

3. If the dollar was as strong today as it was when Bush took office, $140 would fetch closer to 2 barrels of oil.

4. Were the diplomatic skills of this administration up to par, oil prices would be far more stable. Invading Iraq has only brought instability. Angering Russia by placing our military and our missiles at their doorstep only brings more instability.

It seems like our President wants high oil prices. But that would make him an oil man...inconceivable!

ATTACK DOGS BRAVE ENOUGH TO STAND UP TO BIG OIL ARE NEEDED! Instead we get politicians too eager to roll over. Call or send a message to congress and the administration that we're on to their game. We know the real reasons for high gas prices. Finally, sign the petition http://www.thepetitionsite.com/1/real-reasons-for-high-gas-prices or start one of your own.

[jmanley]

If the government wants to bail out Ford or GM, let's get double our money by requiring the company to produce only hybrid and electric vehicles going forward. That way our taxpayer investment at least goes towards developing technologies to move us towards energy independence.

[Joe Bruin]

To those naysayers:

There exists a thin film company, Nanosolar, that can produce solar panels that are cost competitive with coal WITHOUT the need of cap and trade. If the U.S. government really wanted to produce cheap electricity that is greeen, it can. Nanosolar has raised $500 million dollars. Venture capitalists are extremely confident in this company. Cheap, green electricity is a reality today. We have the technology and it's only going to get better. Google Nanosolar if you don't believe me.

[WhiteSites]

This article gave very little into the details of Obama's green plan. Obama seems to be focused on replacing every light bulb in a government building to hep save energy. This makes sense to all Americans. I think Obama has many more plans that include incentives for people who want to turn their backyard into a wind farm, or solar farm. Obama doesn't want to talk about technologies that are over most american's heads. Lets face it, more americans still think a hybrid runs off batteries and you have to plug it in a night.

[mike]

HERE HERE!! Great words "short this, buddy" >>>>>BELOW>>>>>>