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Opinion: A New Energy Policy Era is Dawning

President Trump’s enthusiastic support for Congress to begin work on comprehensive infrastructure and stimulus legislation gives new impetus to a wide range of innovative transportation and clean energy policies that are in America’s long-term economic interests.  While Congress is rightly focused on additional measures to limit the coronavirus pandemic and infuse relief into a shutdown economy, bipartisan support is growing for infrastructure recovery legislation as well.

Pre-coronavirus, Congress was engaged in a productive but painstaking debate about speeding the development of low-carbon energy production through increased federal investment in R&D, publicly funded demonstration projects, and incentives to motivate private sector investment.  The focus on investment in energy innovation as a first step in mitigation of climate change was uniting a regionally diverse and surprisingly bipartisan coalition of interests. 

But right now, the energy markets, including suppliers and consumers, are experiencing massive disruption due to simultaneous supply and demand shocks that will have long-lasting impacts. To jumpstart hiring and sustain growth in our infrastructure and energy sectors, we need a mix of direct government investment and large incentives for the private sector.

In short, a new energy policy era has dawned. 

With this shift comes opportunity to create a new bipartisan consensus in pursuit of broader energy and climate goals that are in the long-term strategic national interest.  As future federal policy is developed, efforts to drive a U.S. economic recovery should consider these goals:

  • investing in a more resilient, efficient and technologically advanced U.S. energy and transportation infrastructure;
  • stimulating greater domestic clean energy manufacturing and export capability;
  • developing more secure domestic energy supply chains crucial to national security;
  • creating a lower emitting, more globally competitive energy technology economy that can address climate change.

How these and other goals will manifest in policy terms will be the subject of debate and negotiations in the coming months.  Key questions include how we can build on current energy markets and jobs, leveraging the massive U.S. resource base, entrepreneurial engine, and world-class energy companies to put our regions to work and ensure they are on a long-term path to sustainable prosperity? 

With oil prices plummeting to $20 a barrel, making some U.S. oil production uncompetitive, can a strategic period of government investment help laid off workers and idled industries invest in a new set of technologies, projects, and underlying infrastructure to set them on surer footing for the future?  How do we leverage and support America’s world-leading clean energy technology innovation and development capacity, so our workers, consumers, and industries benefit most? 

The intersection of transportation, infrastructure and public health could take on new importance.  Renewed skepticism toward globalization could spur the return of strategic supply chains, including in the energy sector.

On climate change policy specifically, the decade-long focus on emissions mandates and regulations in key sectors seems far less relevant. Direct investment and private sector incentives in advanced energy will be more important and can be coupled with procurement by the public sector to help new industries grow to enable an energy future that aligns with our long-term clean energy and climate goals.

The clean energy and climate technology landscape itself is vast, including efficiency, renewables, electric vehicles, hydrogen fuels, energy storage, smart grids, advanced nuclear, carbon capture at emitting sources, direct carbon capture from the air, natural carbon solutions, and perhaps even solar radiation management, among many others.  There is no shortage of technology investments that can build strong new industries, helping the U.S. come back strong in the huge global clean energy marketplace.

This new era of energy policy should be channeled to achieve key national objectives shared by both parties.  After the financial crisis of 2008 and during the Great Recession that ensued, Democrats were accused by Republicans of partisanship in creating the 2009 stimulus.  Equally, Democrats complained in 2017 they were frozen out of major tax legislation. 

Given our current crisis, and divided government, bipartisanship is a pre-condition for action.  This may be a blessing, forcing both parties to compromise for the common good. 

Make no mistake, the immediate concern must be containment of the coronavirus, and the near-term health and economic well-being of the American people.  But crises this big inevitably yield profound change.

When it comes to the future of energy and climate policy, the question is not whether we will return to the prior policy dynamic—that is gone. Instead, the question is how will we rebuild strategically, reboot the economy, and lay the groundwork for tomorrow’s competitive clean energy system consistent with our long-term economic, public health, security, and climate goals.

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