As election season heats up, Obama took on Republicans who he says would rather “stand on the sidelines” than do what’s necessary to create jobs.

President Barack Obama tours the ZBB Manufacturing Facility in Menomonee Falls, Wis., and is shown the battery making process by ZBB President and CEO Eric Apfelback, left, and ZBB employee Lonnie Mages, August 16, 2010. (White House Photo/Chuck Kennedy)

While visiting a Wisconsin battery plant that he touted as the future of renewable energy in America, US President Barack Obama predicted that his administration’s clean energy policies will create 800,000 jobs in the next two years.

The President also harshly criticized political opponents who blocked some of his administration’s policies in Congress.

“There are folks in Washington right now who think we should abandon our efforts to support clean energy,” Obama told the crowd at ZBB Energy Corporation’s manufacturing facility. “They’ve made the political calculation that it’s better to stand on the sidelines than work as a team to help American businesses and American workers.”

Obama toured ZBB Energy Corporation’s manufacturing facility, which received $1.3 million in Recovery Act State Energy Program loans in order to fund a $4.5 million factory renovation to triple their capacity to manufacture flow batteries and power systems.

President Barack Obama speaks to workers following a tour at ZBB Energy Corporation in Menomonee Falls, Wis. ZBB is a leader in the design and manufacture of advanced energy-storage products. August 16, 2010. (White House Photo/Chuck Kennedy)

“We expect our commitment to clean energy to lead to more than 800,000 jobs by 2012,” Obama declared. “And that’s not just creating work in the short term, that’s going to help lay the foundation for lasting economic growth.”

The advanced zinc bromide flow batteries and intelligent control platforms manufactured by ZBB, are crucial components to building a smart energy grid and expanding the commercialization of electric vehicles. They allow users to cut costs by shifting energy use to off-peak hours and bank intermittent sources of energy like the sun and wind for future use.

Obama highlighted the major advances America has made in battery technology in just a few short years. “I just want everybody to understand –just a few years ago, American businesses could only make 2 percent of the world’s advanced batteries for hybrid and electric vehicles — 2 percent.  In just a few years, we’ll have up to 40 percent of the world’s capacity.”

In my recent post Thoughts on an Ethanol Pipeline, I described what I feel would be a more rational approach to ethanol policy than some of the policies that have been pursued over the years. This gist is that the Midwest currently produces about 95% of the ethanol in the U.S. (12.5 billion gallons), but they export 70% of that ethanol out of the Midwest. At the same time, they import gasoline that is the energy equivalent of 37 billion gallons per year of ethanol.

It would seem to be a more sensible energy policy to utilize ethanol production closer to the source of production — especially given that the motor fuel demand in the Midwest is far greater than the volume of ethanol produced there. Many readers agreed, and following that essay, they provided a number of excellent comments. I drew on those comments in my latest essay for Forbes: The Midwest Should Use Its Own Ethanol.

Here I want to continue to develop policy recommendations around this theme. Reader Paul Nash came up with a specific plan, which I share below (here is the link to the original comments).

The Rationale for a Policy Change

• The industry wants a pipeline to support a greater market on the east coast.
• This market will likely only grow by either raising the blend mandate, or exporting ethanol
• From a national energy use point of view, it is much better to have the ethanol being used near to where it is produced (Midwest).
• Presently, this is only happening to the extent required by the blend mandate – there is relatively little E85 usage.
• Other than raising the blend mandate, the only real way to grow ethanol use is by E85.
• Many/most flex fuel drivers (today) do not run on E85 because it is either hard to find and/or there is little financial benefit to doing so.
• Some new flex fuel vehicles are optimized for E85, and their drivers will get a financial benefit, but they will only be a small portion of the market.

Specific Recommendations

1. Scrap the VEETC (since there is a mandate already and the VEETC is scheduled to expire at the end of 2010).
2. Maintain a producer’s credit for cellulosic ethanol, until 2015.
3. Double the VEETC credit for E85 sales (as well as for 85% blends of methanol and mixed alcohols).
4. Pay this credit to the retailer, not the fuel blender (if it is a different party).
5. Place an export tax on ethanol equal to all the producer credits (including corn grower’s credit).
6. Do not give any government subsidy for the pipeline – let the industry decide if they want to spend that money, or develop the market in their own backyard.
7. Relax law allowing drivers (not retailers) to blend any amount of ethanol they like into their fuel.  i.e. mix E85 with regular gasoline in any proportion they want.

Projected Consequences

So, with a $0.90 tax credit on E85, drivers will have a real, immediate, and obvious monetary incentive to use it. Retailers, faced with making good margin on E85, will have good incentive to install pumps. The ethanol industry might even choose to partner with them to help pay for said pumps. The ethanol producers might even set up their own E85 stations at the distillery gate, just like wineries sell at the cellar door.

Fueling stations selling E85 and nothing else, supplied directly by the distilleries, will begin to appear, and would be VERY easy and cheap to set up, and would, of course, be within easy trucking range of said distilleries.

Drivers are legal to use higher mixes, but are not being forced to, and no one is selling higher mixes. The responsibility is purely with the drivers who decide to use higher mixes, or not, so the retailers/oil companies and ethanol industry are not liable for any engine problems (unless, of course, if the ethanol industry claims there won’t be problems).

Now, doubling the credit on E85 to $0.90 is a huge subsidy to the E85 users, but there are not that many of them (presently) so the total amount spent on this subsidy will be far smaller than the $6 billion/yr presently.

This plan leaves the oil refiners out of the ethanol subsidy business, but that is OK as they are mandated to blend x amount of ethanol, this is not destroying their business in any way – it is merely promoting an alternative fuel that they (to date) have refused to promote.

If the retailers and drivers “follow the money”, we would see a rapid increase in E85 usage, and I’ll bet it gets used more in corn country first, which is as it should be.

Conclusions

I agree with most of what Paul suggests, and believe it would create huge new opportunities for the domestic ethanol industry without the need for an E15 mandate. These policies would also move the industry closer to the generally accepted purpose of U.S. biofuel policy, which is to use biofuels to reduce demand for petroleum. The farther biofuels are moved from the point of production, the less petroleum they are able to offset due to the energy cost of moving the biofuels.

However, I don’t believe the subsidy would need to be as high as $0.90 per gallon. I certainly think such a high subsidy would result in explosive growth for the E85 industry, but then we would once again have to contend with a $6 billion ethanol subsidy in just a few years. I think the same goal could be accomplished with a subsidy of around $0.50/gallon.

According to E85.com, over the past year E85 has been anywhere from 10% cheaper to 22% cheaper than gasoline. Given an observed E85 energy penalty of 25-30%, it is likely that E85 would need to be consistently 30% cheaper than gasoline to build a substantial market. (Another possibility is the continued development of engines that can reduce the E85 energy penalty by using higher compression ratios; if you only lose 10% fuel efficiency on E85 then you will happily buy E85 at only a 15% discount to gasoline).

The narrowest spread between E85 and gasoline over the past year occurred in December 2009 when gasoline was $2.56 per gallon and E85 was $2.30 per gallon. To increase that narrowest price spread back to 30% would require an additional E85 subsidy of $0.51 per gallon. At the widest spread over the past year in May 2010, this level of subsidy could have had E85 undercutting gasoline by more than 40%. At that price spread, E85 demand would grow rapidly.

Given the meager level of E85 sales in the U.S. today, this level of subsidy would be far lower than present ethanol subsidies, while providing strong incentives to build out E85 infrastructure and E85 vehicles. Further, it would actually strengthen the energy security of the Midwestern states well beyond the status quo.

Last December, I received an intriguing request from the Public Relations Director at the world’s largest ethanol producer. Nathan Schock asked if I would be interested in posing a video question that would be answered by POET CEO Jeff Broin. He said that any topic was fair game, except for questions dealing with proprietary information.

I considered a number of questions, and wrote an essay detailing my thought process as I ran through a list of potential questions: The Questions I Didn’t Ask. But I had one question that had been weighing on my mind more than any other, and I posed that one in the video I sent in.

Since then, Nathan and I have exchanged a number of e-mails about the status of the question. As the months went by, I began to suspect that even though anything was supposed to be fair game, the particular question I did ask was a bit tricky for them to answer. But today, they answered that question and issued a press release calling for a change in direction on the nature of the ethanol tax credit:

Ask POET Episode 3: the Ethanol Tax Credit

I have long maintained that with the Renewable Fuel Standard (RFS) in place, the ethanol tax credit (the VEETC)  is redundant. I have made this argument many times on my blog (see Strategizing for the Ethanol Industry), and I made the argument at Forbes.

My argument has been that we don’t need the tax credit with the RFS in place, but if we do have a tax credit it should be directed at building out incentives and infrastructure for E85 – particularly in the Midwest close to the source of the ethanol. The current nature of the VEETC is to pay oil companies for complying with the law requiring them to blend specific quantities of ethanol.  This was the gist of a plan announced today by Growth Energy:

Growth Energy Proposes Fundamental Shift in America’s National Fuel Policy

The “Fueling Freedom” plan calls for the phasing out of current ethanol supports over time, by redirecting a portion of those funds to build out the infrastructure for the distribution and use of ethanol, and shifting the remaining portion away from the oil companies to opening the market. The primary elements of the plan include:

* Funds currently going to the oil industry as an incentive for blending ethanol into gasoline (the VEETC) would be redirected to provide backing for the build out of distribution infrastructure for ethanol – such as tax credits for retailers to install 200,000 blender pumps and federal backing of ethanol pipelines. This will provide Americans the access to choose ethanol in an open and free market, and would allow for the elimination of the tax supports over time in exchange for that level playing field.

* Requiring that all automobiles sold in the U.S. be flex-fuel vehicles – as many as 120 million. This requires no additional cost to taxpayers and a minimal cost (about $120 per vehicle) to vehicle manufacturers.

Growth Energy’s Fueling Freedom plan, once implemented, would build out the infrastructure in the United States to create a path that leads to a genuinely free market – an open market that is free of government supports. Redirecting monies currently paid to oil companies to blend ethanol into gasoline toward infrastructure improvements would enable consumers to choose between gasoline and renewable, homegrown ethanol.

POET also issued a release voicing support for the plan:

POET voices support for Fueling Freedom Plan proposed by Growth Energy

I was told that the development of this plan is why it took longer for my question to be answered; that they didn’t want to answer it when it anticipated the change in strategy that they were working on.

I will note a couple of things related to the announcement. First, I don’t think the fact that it will cost the auto industry an additional $120 to produce E85 vehicles means there will be “no additional cost to taxpayers.” Someone will pay for that, and I don’t think it will be the car manufacturers. I am not suggesting that it is a bad idea (I actually support this) but the cost will be borne by taxpayers in one form or another.

Second, there are phrases in there like “phasing out of current ethanol supports over time” and “eventual phasing out of government support for ethanol.” Those comments will require significant clarification. What exactly does that mean? A cynical person might suggest that the ethanol industry could see that the government was losing an appetite for the subsidies, and by embracing a strategy of “eventual phasing out” they might be able to keep the bulk of the subsidies for many more years. So right away the question becomes “What does your time-line look like for the phase-out?”

We know that the VEETC expires at the end of 2010. We have been hearing for quite some time now that ethanol is competitive with gasoline. We know that the oil industry is the recipient of the VEETC payments. Why then is an “eventual” phasing out required? I think it is time to move on to the question of “What would be the impact if the tax credit is not renewed at the end of 2010?”

In fact, in the answer to my question, Jeff Broin calls on the oil industry to walk away from their subsidies. Given the recurring argument that the VEETC is really an oil company subsidy since they receive the payments, wouldn’t allowing the credit to expire this year mean they are walking away from a subsidy?

In any case, I do thank POET for taking on the question. I believe their answer is a step in the right direction, and I appreciate the opportunity to be involved in the debate.

I have had family visiting me for the past two weeks, which has slowed my posting down a bit. I am trying to finish up the followup story to the essay on the MixAlco process, but it will probably be early next week before that one is ready. Until then, here is a 12-minute radio interview that I did this week for a Midwestern radio program called Farm Talk:

RR Interview on the USDA Report and Future of Renewable Energy

We covered the implications of the USDA report covered in the previous essay, the future of cellulosic ethanol (I mentioned POET in the interview), the proposed ethanol pipeline, and what characteristics I look for in a renewable energy project.

I just listened to the interview, and I did misspeak at one point. I said that the report implies that you could take 1 BTU of fossil fuel and make 1 BTU of ethanol. What I meant to say was “the report implies that you can take 1 BTU of ethanol to make 2 BTUs of ethanol, but this is in fact not true.” Other than that, regular readers will find an emphasis on many of the themes often discussed here.

I have noted before that every president since Nixon has talked about the need to get the United States off of foreign oil and moving toward energy independence. Jon Stewart recently captured this theme in a very funny, but troubling segment:

An Energy-Independent Future

The Challenge

While Jon does a good job of demonstrating that this idea of reducing our dependence on foreign oil has been unsuccessfully pursued by eight consecutive presidential administrations, the question he asked but did not answer was why this has been such a challenge. So I will pick up where Jon left off and explain why we couldn’t get it done and what it would take to get it done. The technical issue isn’t really all that difficult, but the political challenge is enormous.

Production Peaks, Demand Increases

U.S. oil production peaked in 1970 at 9.6 million barrels per day, and today stands at 5.3 million bpd (Source). The average rate of decline since 1970 of U.S. oil production has been about 1.5% (an impressively low decline rate). But by the time U.S. oil production peaked, our oil consumption was already over 15 million bpd, and today stands at 18.7 million bpd (off from the high in 2005 of 20.8 million bpd). An increase in demand at the same time U.S. production has been falling is not a recipe for energy independence.

It is immediately obvious that if we use 18.7 million bpd and produce only 5.3 million bpd, we have to find a way to either

1. Cut petroleum consumption by 13.4 million bpd (a drop of 72% from current rates);
2. Raise petroleum production by that amount;
3. Some combination of the two.

Economic Difficulty and Standard of Living

Since oil production in the U.S. only ever achieved about half of our current consumption rate and has fallen for 40 years, I think Option 2 is out of the question. In fact, I would go so far as to say the U.S. can’t raise production rates much beyond current rates, and with the public souring on offshore drilling we may find it very difficult to maintain current rates.

So that leaves us the option of reducing current petroleum consumption by 72% from current rates. This is of course why energy independence has eluded the U.S. For all of the talk of getting off of foreign oil, who is willing to cut their oil consumption down to about a third of what you currently use? I am not saying it can’t be done, but I am saying it can’t be done painlessly and without making some major adjustments. And that is ultimately why our political leaders have not managed to get it done. They are selling a sacrifice-free pipe dream.

The Game of Politics

In the clip above, presidents mention many different options for reducing our oil dependence. The problem is that they are all more expensive than oil, aren’t fungible with oil, and/or are themselves dependent upon oil. So politicians ultimately only pay lip service to the idea of energy independence (very popular) but don’t take tough measures (very unpopular) to actually achieve the goal.

But if energy independence is something that is very important to us, there is good news. We can probably do it by trimming away a lot of fat. Here is the speech that President Obama needs to make in order to explain how it is going to get done:

My fellow Americans. It has not escaped my attention that we use a lot of oil. Further, I have noticed that we consume over three times what we produce. This is a trend that has worsened over the past eight presidential administrations, but I am here to reverse the trend. Today, I am announcing a program that will move the U.S. on a path to energy independence by rationing petroleum beginning in 2011. Over the next five years we will reduce the amount of petroleum that Americans can use by 17% per year. This of course means that you need to start arranging your life in such a way that a 70% reduction in your petroleum usage over 5 years is manageable. Details of the execution of the program will soon be announced.

I recognize that this calls for sacrifice. If it were easy, energy independence would have already been achieved. But I sense that the public is ready to sacrifice some of their personal comforts for the benefit of an energy independent United States. It is possible that new domestic oil discoveries, renewable energy, nuclear power, and other alternatives are able to reduce the need for the full 70% cut in usage, but these sorts of promises have thus far not moved us very far along the path to energy independence. They have to date merely served as a nice delusion that energy independence can be achieved without sacrifice from most citizens by merely innovating our way out of this problem. Based on the trends for the past 40 years I think that is rooted more in hope than in reality, so we are going to try something a little different this time. This time, Plan A calls for sacrifice, and our former Plan A for the past 40 years – innovating our way out of this problem – will now become our hopeful Plan B.

Conclusion: Reality

So there is the path to energy independence for the U.S. in a nutshell. Based on today’s production/consumption figures, this would require a 70% across the board cut in our energy consumption down to per capita levels of countries like Russia, Jordan, Mexico, and Malaysia (potentially adjusted based on decline rates, new discoveries, and alternative energy). We would still use more oil per capita than Hungary, Chile, Thailand, Brazil, and South Africa, but we would need to come in at significantly less than the consumption of the E.U. (Per capita consumption levels for many different countries on a bbl/person/day level can be found at NationMaster.com).

That is realistically what I believe it would take to achieve energy independence. If you can’t imagine a U.S. president taking those steps, then you can well imagine why our foreign oil consumption has increased over those eight consecutive administrations. What we can expect to happen as we proceed down the path we are going is that eventually the market will force those reductions anyway by simply driving prices so high that we have to voluntarily slash consumption. Until then, if you enjoy the level of mobility you have today, you can thank the oil exporting countries for making that possible.

The previous essay sparked a lively discussion about the potential of methanol as a fuel, so I decided to write an essay particularly devoted to methanol. I was especially motivated to write this because of hypocrites who profess to be all about renewable energy and weaning the U.S. off of foreign oil – which explains their rabid support for corn ethanol – and then when the conversation turns to methanol they start to bad mouth it.

When talking about methanol, hypocrites will tell you that “it is toxic.” But these people have never raised that issue over highly toxic denatured ethanol. They speculate that capital costs will be low for cellulosic ethanol but high for methanol. They complain about the lower energy density of methanol, but bring up ethanol and they will tell you all about the possibilities of designing engines to compensate for ethanol’s lower energy density relative to gasoline. Yet they don’t mention any possibility of optimizing engines for methanol. It simply has less energy. End of story.

They will talk about ethanol being pragmatic and practical, ignoring the fact that 1). The energy return on the process is very low, hence practicality is enabled by low fossil fuel prices; 2). The “practicality” is only there because of heavy lobbying which led to very generous federal subsidies and mandates; 3). The vision of next generation practicality is because people sometimes make very wild extrapolations on costs for cellulosic ethanol (which we aren’t allowed to do with methanol, because after all, it isn’t practical).

Ethanol’s “pragmatism” is far more due to the fact that it has lobbying organizations like Growth Energy, The American Coalition for Ethanol, and the Renewable Fuels Association spending millions of dollars per year to constantly tell the public and the politicians how pragmatic ethanol is – which by the way we need to keep subsidizing and protecting with tariffs. Methanol doesn’t have that advantage, thus it is “impractical.”

Let’s address some of the silliness right now.

As has been pointed out, you can buy methanol today for around $1.00 per gallon. This is a big, well-established business that does not receive heavy subsidies and government support as ethanol does. On a per BTU basis, unsubsidized methanol costs $17.61 per million BTUs. You can buy ethanol today – ethanol that has received billions in taxpayer subsidies – for $1.60 per gallon. On a per BTU basis, heavily subsidized and mandated ethanol sells for $21.03 per million BTUs. (See the energy tables here).

Yes, you read that correctly. We are paying 20% more for ethanol enabled via highly paid lobbyists, heavy government intervention, taxpayer funds, and protectionist tariffs than we are for methanol that has long been produced subsidy-free. Yet ethanol is “practical.” (If we make that gallon per gallon comparison that ethanol proponents like to make when comparing gasoline to less energy dense ethanol, then ethanol costs 60% more than methanol).

Of course ethanol proponents will tell you that commercial cellulosic ethanol is just around the corner, as it has been for 100 years. Ethanol fans will point to projections of companies like Fiberight who suggest that someday they will produce cellulosic ethanol for $1.65 per gallon. “Ha! Top that!” – say the ethanol proponents. The problem is that they do not understand the context of such projections. If I plug methanol into that same model – produce it from biomass and assume generous tipping fees – my methanol projections can come in at under $0.50 per gallon. But methanol doesn’t have a big lobby and 42 senators from farm states it can count on for perpetual support.

Ethanol opponents and/or gasoline proponents will point out the issue with ethanol’s 76,000 BTU/gal energy content versus gasoline’s 115,000 BTU/gal energy content. The ethanol proponents will say “but, but ethanol has a higher octane. Therefore you could design an engine with a higher compression ratio to even out that energy deficit.” Then when the talk turns to methanol, those same people will say “But methanol has a lower energy content than ethanol.” These people are no longer interested in optimized engines; they only wish to point out that methanol has lower energy content.

The fact is, methanol simply has not had the same sort of political favoritism, but is in my opinion a far superior option to ethanol as a viable, long-term energy option for the world. Here is why I believe that. As already pointed out, we had a thriving methanol industry long before the government created (and continues to support) via our taxpayer funds a thriving ethanol industry. So in my opinion methanol wins the first generation battle on the technical and economic merits, and loses the very important political battle.

But the next generation is what is going to be important. Biomass only contains 30-50% cellulose, and a very large fraction of the biomass will be inaccessible for a cellulosic ethanol process. After a series of complex steps, a very dilute solution of ethanol can be produced, which then must undergo an energy intensive distillation process. Of course you can use the remaining lignin fraction for process heat, after it undergoes an energy-intensive drying process. So I may project that I can produce it cheaply if I pretend someone is going to pay me a lot to relieve them of their biomass – but I will never, EVER, make it efficiently. That is simply the nature of the beast. But in my opinion a high utilization of the available BTUs will be a very high priority in an energy-constrained future.

For methanol, we can produce it from biomass via a similar process to how it is produced for $1.00 per gallon today. There are numerous biomass gasifiers out there. Some are even portable. They do not require high fossil fuel inputs and they utilize a much larger fraction of the biomass. They aren’t limited to cellulose. They gasify everything – cellulose, hemicellulose, lignin, sugars, proteins – all organic components. And if there is also a heating application, the combined heat and fuel/power efficiency of a biomass to methanol via gasification route is going to put cellulosic ethanol to shame. In any case, the efficiency of biomass gasification to methanol is going to put cellulosic ethanol to shame, because it doesn’t have to deal with all of that water present in the ethanol process.

Methanol production is a relatively simply process. Here is something you will never see for cellulosic ethanol:

That is a modular unit for methanol production. In that case, the fuel is natural gas, but I also know of modular biomass gasifiers that could easily be converted to produce methanol as a final product. In this case, you handle the biomass logistics by taking the process to the biomass. Cellulosic ethanol is far too complex to achieve that. The utility requirements alone will prevent development of a modular cellulosic ethanol process.

Finally, ethanol is inappropriate as a replacement for distillate fuels. Methanol, on the other hand, is easily converted to di-methyl-ether (DME), which is a very nice distillate replacement. China already has a big head start on the rest of the world, as they saw the potential for DME while the U.S. was spending billions to build an ethanol industry. (See my story: Keep Your Eye on DME).

So the next time an ethanol hypocrite tells you how good ethanol is relative to gasoline, but then turns around and tells you how bad methanol is relative to ethanol, you may want to explain that they have confused political favoritism for technical merits. (Or you can conclude that they have a vested ethanol interest). When they explain how first generation corn ethanol is paving the way for cellulosic ethanol, point out that both first generation and second generation methanol will beat the cost of ethanol on a per gallon – and more importantly on an energy equivalent basis. When they argue about methanol’s toxicity, ask them about the last time they drank denatured ethanol or gasoline (or how many people are impacted each year by alcoholism). When they point out that subsidized ethanol is becoming more competitive with gasoline, ask them if they have priced unsubsidized methanol lately. Such is the nature of hypocrisy. Their solution is good, and yours is bad even if it shares the same qualities as theirs.

The fact is, it isn’t a bias against ethanol that causes me to favor methanol. I favor methanol because my view is long-term, and not based on political favoritism or a half-cycle of the very cyclical energy industry. Ethanol has yet to even see one full cycle of the energy roller-coaster, which oil refiners can tell you is brutal. Ethanol producers are further tied to the cyclical nature of commodity foods. For these reasons, I simply do not believe ethanol will be a viable long-term answer to oil depletion, and the only reason it appears to have promise now is we have the luxury of subsidizing and mandating the industry which remains heavily reliant on cheap corn and cheap energy.

Now if someone can figure out how to efficiently gasify biomass and convert it to ethanol (which was the Range Fuels model), I will certainly change my tune.

Gov. Robert McDonell (R-VA) remains a strong supporter of off shore drilling.

The April 20 oil spill in the Gulf of Mexico may have spread beyond American shores and into its political landscape as well.

Less than a month after President Barack Obama announced that he will lift the moratorium on off shore oil drilling in certain federally protected waters, the accident in Louisiana may have served as a “game changer” for that policy shift.

The White House announced on Friday that they will freeze off shore drilling expansion pending an investigation into the cause of the Louisiana spill.

Virginian politicians, representatives from the State where the moratorium lift was expected to commence, have mixed feelings about slowing down off shore exploration.

Gov. Robert F. McDonnell (R-VA), who labeled off shore drilling as one of his administrations primary objectives during his campaign, remains resolute in lobbying for oil and natural gas drilling.

Before heading to an industry conference promoting drilling, McDonell told reporters that he views the oil spill as an opportunity for America to better their safety efforts in the future. “What we do as Americans is we find out what went wrong and how can we do things better,” McDonnell said. “I think that’s the spirit of the American people.”

McDonell would like to see drilling commence next year or by 2012 at the latest.

Other Virginian representatives seemed more cautious in the wake of recent events.

Virginia Beach Mayor Will Sessoms seems like he is doing an about-face on off shore drilling.

“It’s alarming to me,” Sessoms said. “It gives me great concern,” he added, while noting that the spill served as a wake-up call and that drilling plans should be put on hold. In the past, Sessoms had supported drilling. Hoping to boost the city’s tourism industry by pushing down gas prices, Sessoms helped the city pass a resolution in favor of drilling.

Sens. Mark Warner (D-VA) and James Webb (D-VA) are taking the White House’s wait-and-see approach. Warner’s spokesman Kevin Hall said that Obama’s delay was “appropriate”. Similarly Webb stated that “the facts must be ascertained to determine how the disaster off the Gulf Coast could have been prevented” according to his spokeswoman Jessica Smith.

Congressman James Moran (D-VA) is concerned that, similar to the Gulf of Mexico episode, expanded off shore drilling may lead to tragic results for Virginia's wildlife.

Environmentalists are using the oil spill as a rallying cry against expanded off shore drilling.

Congressman James Moran, (D-VA), chairman of the appropriations subcommittee for the interior and environment, wrote a letter to Interior Secretary Ken Salazar, urging him to reconsider allowing offshore drilling. “Regardless of ideology, this situation should give everyone pause regarding expansion of offshore drilling,” Moran said.

“Virginia’s fishing and coastal tourism industries are vital to the Commonwealth’s economy. Should exploration off Virginia’s coast result in a similar disaster, the impact would be devastating to our economy and coastal communities’ way of life,” Moran said in a public statement.

Sen. Lindsay Graham (R-SC) alleges that too many of his peers are concerned about their political careers to properly address climate/energy reform.

Senator Lindsey Graham (R-SC), the Republican representative on the bipartisan triumvirate crafting the highly anticipated Kerry-Lieberman-Graham climate/energy bill may pull his support for the proposal. Graham claims to have lost confidence in the bill due to his perception that this session of Congress is dedicating too much of its focus to immigration reform rather than energy.

“This has destroyed my confidence that there will be a serious commitment and focus to move energy legislation this year. All of the key players, particularly the Senate leadership, have to want this debate as much as we do. This is clearly not the case”, Graham said in a letter sent to 200 business, environmental and religious leaders on April 24.

Graham claims that immigration cannot be tackled in the short period left to the Congressional session.

“Expecting these major issues to be addressed in three weeks — which appears to be their current plan based upon media reports — is ridiculous,” Graham wrote.

The Republican Senator charges Democrats with turning their attention toward immigration in an effort to curry political favor before the November elections.

“It also demonstrates the raw political calculations at work here. Let’s be clear, a phony, political effort on immigration today accomplishes nothing but making it exponentially more difficult to address in a serious, comprehensive manner in the future,” claims Graham.

Full text of the letter follows:

April 24, 2010

Dear Xxxxx,

I want to bring to your attention what appears to be a decision by the Obama Administration and Senate Democratic leadership to move immigration instead of energy. Unless their plan substantially changes this weekend, I will be unable to move forward on energy independence legislation at this time. I will not allow our hard work to be rolled out in a manner that has no chance of success.

Recent press reports indicating that immigration — not energy — is their priority have not been repudiated. This has destroyed my confidence that there will be a serious commitment and focus to move energy legislation this year. All of the key players, particularly the Senate leadership, have to want this debate as much as we do. This is clearly not the case.

I am very disappointed with this turn of events and believe their decision flies in the face of commitments made weeks ago to Senators Kerry, Lieberman and me. I deeply regret that election year politics will impede, if not derail, our efforts to make our nation energy independent.

I truly appreciate Senators Kerry, Lieberman, and their staff for the long hours of work. They have been tremendous partners who have negotiated in good faith and stood ready to make the tough choices necessary to bring forward a comprehensive energy bill.

I continue to believe our nation’s reliance on ever-increasing amounts of foreign oil poses a direct threat to our national security and economic well-being. I know we can create thousands of jobs by pushing for a renaissance in nuclear power, expanded offshore drilling, and unleashing America’s innovative spirit. One only needs to look to China and Europe, where 21st Century clean energy jobs are currently being created while we fail to act.

Like you, I share the belief that becoming energy independent and better stewards of our environment are complementary — not competing — standards. I was greatly looking forward to the opportunity to address these issues on the floor of the U.S. Senate as we pushed energy independence legislation forward into law. But it appears President Obama and the Senate Democratic leadership have other more partisan, political objectives in mind.

Moving forward on immigration — in this hurried, panicked manner — is nothing more than a cynical political ploy. I know from my own personal experience the tremendous amounts of time, energy, and effort that must be devoted to this issue to make even limited progress.

In 2007, we spent hundreds of hours over many months with President Bush’s Secretary of Homeland Security Michael Chertoff, Secretary of Commerce Carlos Gutierrez, and nearly every member of the U.S. Senate searching for a way to address our nation’s immigration problems. Unlike this current “effort,” it was a good-faith attempt to address a very difficult national issue.

Some of the major provisions we embraced in 2007 — such as creation of a Virtual Fence using cameras, motion detectors and other technological devices to protect our borders — have been scrapped for the time. Other issues we found agreement on at the time, such as a temporary guest worker program, have unraveled over the past three years.

Expecting these major issues to be addressed in three weeks — which appears to be their current plan based upon media reports — is ridiculous. It also demonstrates the raw political calculations at work here.

Let’s be clear, a phony, political effort on immigration today accomplishes nothing but making it exponentially more difficult to address in a serious, comprehensive manner in the future.

Again, I truly appreciate the tremendous amount of time you have committed to the effort to make our nation more energy independent. I look forward to continuing to work with you so that when the U.S. Senate finally decides to address this issue we will be prepared for battle and confident of a successful outcome in the effort to make our nation energy independent once and for all.

Lindsey O. Graham
United States Senator

Honoring Earth Day, the White House and Secretary of Energy, Steven Chu (left), announced that over $3.2B will be dedicated toward making communities more energy efficient.

In recognition of Earth Day, Secretary of Energy Steven Chu issued a statement today:

Forty years ago this week, America celebrated the first Earth Day. Because of the leadership of that generation, we have made remarkable progress in cleaning up the air we breathe and the water we drink and in protecting our natural resources.

Today, we are driven by new challenges. America is deeply dependent on foreign oil. Our climate is changing as a result of our carbon emissions, and in order to mitigate the considerable risks of climate change, the world must transition to a sustainable energy future. This will require nothing short of a new industrial revolution. America’s future prosperity may well depend on whether we lead or follow in the new industrial revolution.

Through the American Recovery and Reinvestment Act, this Administration has made a historic investment in clean energy and the jobs of the future. Just yesterday, we announced awards for innovative new efforts to bring home energy efficiency “tune-ups” to the doorsteps of the American people. You can find the details here — http://www.energy.gov/news/8870.htm

We’re off to a strong start, but solving the energy and climate challenge is going to take all of us doing our part, and I look forward to your questions today.

The link mentioned in Chu’s statement refers to the press release issued yesterday by the Department of Energy announcing that 25 communities will share in $452 M under the “Retrofit Ramp Up” (RRU) section of American Recovery and Reinvestment Act (ARRA).  RRU is the portion of ARRA dedicated toward making commercial and residential buildings more energy efficient.

“For forty years, Earth Day has focused on transforming the way we use energy and reducing our dependence on fossil fuel – but this year, because of the historic clean energy investments in the Recovery Act, we’re poised to make greater strides than ever in building a nationwide clean energy economy,” said Vice President Biden.  “This investment in some of the most innovative energy-efficiency projects across the country will not only help homeowners and businesses make cost-cutting retrofit improvements, but also create jobs right here in America.”

“This initiative will help overcome the barriers to making energy efficiency easy and accessible to all – inconvenience, lack of information, and lack of financing,” said Energy Secretary Steven Chu.  “Block by block, neighborhood by neighborhood, we will make our communities more energy efficient and help families save money.  At the same time, we’ll create thousands of jobs and strengthen our economy.”

In addition to disbursements made pursuant to ARRA, the 25 rebuilding projects will further be supported by an additional $2.8B in leveraged money.

With its legislature scheduled to adjourn, Earth Day becomes a pivotal day in the Badger State.

With Wisconsin’s State legislature scheduled to adjourn on April 22, 2010, Earth Day becomes a pivotal day for Wisconsin to determine if they will pass the proposed “Clean Energy Jobs Act” or else the bill dies.

Under the The Clean Energy Jobs Act, Wisconsin would be mandated to get 25% of its energy from renewable sources by 2025.

“You know, were urging them not to kill one of the strongest clean energy bills ever in the state of Wisconsin on Earth Day,”  policy director for Clean Wisconsin Keith Reopelle says.   Reopelle and his environmental advocacy group believe that the new bill will create 16,000 new jobs.

Opponents of the measure argue the change would ultimately lead to a $15 billion increase for local business which would be absorbed by consumers.

“This bill really deserves to die,” executive director of Wisconsin Industrial Energy Group Todd Stuart says.

Stuart also claims that very few jobs would be created through the bill, despite its title.