ASEAN KEY DESTINATIONS
Green Energy is the World's Priority, Still
The BP Oil disaster has brought home one very strong point, we need to change the way we power our lives, from the electricity that runs our homes to the what powers our vehicles we can no longer accept the dangers of an Oil based society.
What the BP disaster may also do is create an increased financial cost on Oil companies to maintain higher safety standards as well as making larger provisions for accidents.
This shift in the cost structure of Oil creates a bigger viable market for alternate energy sector. Comparative costs will start to shift in favor of alternate energy this year, 2010.
Electric Cars, Solar Power and better batteries will become a major market globally faster than many have estimated, Green Energy, like all other business is powered by the basic economic rules. We at Ebeling Heffernan and Heffernan Holdings have been making changes to our investments over the last few years that reflect what will be a new era in energy.
Many of the alternate energy companies that we own, invest in or cover via our news service are now highly competitive against their Oil based rivals, the strongest growth over the next few years will be the Solar Power Generation sector, Smart Grid Infrastructure (Products and Services), Electric Vehicles and Battery Technology.
Everyone should be repositioning their portfolio’s to reflect this new reality.
31 years after Jimmy Carter rose the prospects, Barak Obama yesterday repeated the decades old call for a shift away from Oil.
“We are at a turning point in our history … This intolerable dependence on foreign oil threatens our economic independence and the very security of our nation.
“The energy crisis is real. It is worldwide. It is a clear and present danger to our nation. These are facts and we simply must face them.”
Barack Obama, 2010? No, these are the words of Jimmy Carter, 31 years ago in an evening broadcast to the nation that became known as the “malaise” speech, a dour appraisal of the 1970s oil shocks and recession, Jimmy Carter made these statements.
Carter’s address was a wake up call for America to stand on its own feet and to avoid the prospect of again being held hostage to Middle Eastern and other oil producers.
His solution was a range of measures to stem oil imports, to find more oil at home and to move the economy towards a renewable energy future. By 2000, he pledged, a fifth of US energy needs would be met by solar sources.
“From now on, every new addition to our demand for energy will be met from our own production and our own conservation,” Carter insisted.
And why not? Americans had put a man on the moon, after all, and in the American century, ingenuity and innovation were talismans that defined a nation.
“We are the generation that will win the war on the energy problem and in that process rebuild the unity and confidence of America,” said the former Georgia peanut farmer, thumping his fist.
Needless to say, Carter failed, although he did create a Department of Energy, pushed research into alternative energy sources and even fixed solar panels to the roof of the White House.
But fast forward to 2010 and the US is as reliant on foreign oil as it ever was. Accounting for just 2 per cent of known global reserves, America chews up 20 per cent of global oil production. Oil remains the bedrock of US economic growth, providing 40 per cent of America’s $US500 billion annual energy needs; renewable sources, including solar, about 7 per cent.
So when the 44th President opted for the Oval Office this week to brief Americans on the Gulf of Mexico oil spill, the expectation was that he would use America’s worst environmental disaster as leverage for ramping up his clean energy rhetoric.
His motivation obviously differed from that of his Democrat predecessor, climate change now the predominant driver in that hoped-for transformation.
But though he defined a clean energy future “to seriously tackle [America's] addiction to fossil fuels”, Obama declined to map out a path to getting there.
Contained in his 18-minute prime-time address was nothing so prescriptive as Carter’s proposed import caps, price controls and conservation targets. Yet there was eerie similarity in Obama’s words as he, too, conjured America’s technological knowledge as the elixir that would drive change in America’s energy landscape.
“The one answer I will not settle for is the idea that this challenge is too big and too difficult to meet,” Obama insisted. “You see, the same thing was said about our ability to produce enough planes and tanks in World War II. The same thing was said about our ability to harness the science and technology to land a man safely on the surface of the moon.
“And yet, time and again, we have refused to settle for the paltry limits of conventional wisdom … Even if we’re unsure exactly what [the future] looks like. Even if we don’t yet know precisely how we’re going to get there. We know we’ll get there.”
Just as the Iran hostage crisis proved Carter’s downfall, so the gulf oil disaster has loomed as Obama’s potential undoing, except for the fact that his administration has several big political ticks against its name: its $US800 billion stimulus rescued the economy from likely depression, its healthcare reform was the most comprehensive in decades and it stands on the verge of clinching significant regulatory reform of Wall Street.
Nevertheless, it could be how Obama ‘’sells” those triumphs to the electorate in the lead-up to November’s crucial midterm congressional elections – and how he placates anxieties over the nation’s debilitating debt – that will determine, ultimately, whether America gets comprehensive climate change legislation in the near future.
With the pace of economic recovery sluggish at best, the imposition of a carbon tax or cap and trade system is unlikely to pass muster among the jittery incumbents of Capitol Hill.
“Not in a wobbly economy,” says a Democrat insider of the policy challenge. “Americans are very ambitious when things are going really well. But that’s not now.”
At best, Obama and his party might expect a solid campaign to mitigate Democrat losses in November. But truth is, the next US Congress will be even more hostile to ambitious energy legislation.
One poll, conducted for National Public Radio of the 70 most tightly contested districts in the House of Representatives, pointed to the possible loss of 30 Democrats. (Other polls have been even more calamitous in their predictions.)
“Paranoia is striking deep among Democrats, and this poll will only aggravate the disorder,” wrote the Washington Post columnist E. J. Dionne. “In those competitive districts, Democratic incumbents will be tempted to hunker down, distance themselves from the President, urge their leaders to be cautious and run for the hills to seek refuge from a looming Republican wave.”
All of which sounds hardly threatening to the behemoth that is the oil industry.
While Obama has imposed a six-month moratorium on new deep-sea exploration in the gulf as a result of the Deepwater Horizon disaster, no one doubts that America’s overwhelming thirst for oil will continue to drive the hunt offshore.
Proponents of an oil-led future point to the mishap as a rarity and their argument could be strengthened by findings of incompetence or criminal neglect unique to this case. Certainly, the ill-fated well’s legacy will be a more rigid – and more expensive – regulatory regime.
But that alone won’t make America’s domestic oil production a less attractive proposition. The notion of peak oil and the increasing cost of retrieving oil from deeper and less accessible pockets within the earth’s crust will be the prime drivers of the market, along with demand rising in tandem with the gathering economic recovery.
“We’re going to be with oil for a while,” suggests the Claremont Institute fellow and conservative broadcaster Bill Bennett. Though he concedes, “the whole issue of [offshore] drilling has to be addressed.”
Meanwhile, millions of dollars are being spent in media campaigns to sway Congress. In duelling full-page advertisements in the national press, Big Oil and clean energy advocates faced off yesterday.
“Senators: the energy policies that helped create the mess we’re in today won’t secure America’s future … We need a real solution that protects American workers and our environment,” a coalition of green business and conservation groups said.
“Oil and natural gas are vital domestic resources that power our way of life. We are committed to ensuring this energy is available – safely and with care for our environment – to all Americans today and into the future,” the American Petroleum Institute said.
Which all makes for a tense few weeks leading up to Congress’s summer recess, and as the window for a legislative breakthrough narrows. And while the oil continues to gush freely into the Gulf of Mexico any hard and fast push for a clean energy bill is likely to attract resentment – from the millions of Gulf Coast inhabitants who derive their livelihoods from the industry and from those who represent them in Washington.
“The house is burning down,” Senator George LeMieux of Florida said this week. “We’ve got to take care of the house burning down as the first and number one priority. I’m a supporter of alternative energy and energy independence and cleaner energy. I want to have that discussion. But I’m focused on trying to keep that oil off our beaches.”
Political nervousness points to legislation passed by the House last year withering on the vine. The American Clean Energy and Security Act, which was sponsored by the Democrats Henry Waxman and Ed Markey, includes a cap-and-trade scheme aimed at reducing US greenhouse emissions to 3 per cent below their 2005 levels by 2012, and to 83 per cent below 2005 levels by 2050.
Two prospective Senate bills are also in the wings including a draft filed last month by the Democrat John Kerry and the independent Joe Lieberman that proposes setting a price on carbon dioxide emissions produced by coal-fired power plants and other big polluters as a means of cutting emissions by 17 per cent by 2020 and by more than 80 per cent by 2050.
An assessment of the Kerry-Lieberman ”American Power Act” by the Environmental Protection Agency suggests that pricing carbon dioxide between $US17 and $US23 a tonne would mean an impost on US households of $US79 to $US146 a year, little more than the cost of a first-class stamp a day.
But Republican support is unlikely. The bill’s only Republican sponsor, South Carolina’s Lindsey Graham, withdrew his support last month, saying it would be impossible to pass the legislation in the current political climate. The Republican Senate leader Mitch McConnell was pointed: “Whatever its intentions, this bill is little more than a job-killing national energy tax.”
It seems unlikely the Senate Majority Leader, Harry Reid, could confidently take an energy and climate bill containing a price on carbon to the Senate floor any time soon. Yesterday, he remained noncommittal, despite the President’s pledge earlier this month that “a price on carbon pollution” was likely the best option for accelerating America’s transition to renewable energy.
After Senate Democrats met to consider their options, Reid simply reported: “There [were] a number of discussions about how to do what’s best for the country. Of course, pricing carbon was a part of the discussion.”
Though uncertainty prevails, an emerging certainty is the prospect of watered down legislation making its way to Congress.
Democrats will be keen to honour their commitment to a clean energy future and could seek the help of some moderate Republican senators such as Scott Brown, the former male pin-up who replaced the late Ted Kennedy in Massachusetts, to clinch less ambitious legislation that embraces non-binding reductions in emissions while increasing incentives for the renewable sector.
The compromise, according to the Republican Richard Lugar, could raise fuel-efficiency standards for cars and trucks, set targets for buildings to become more energy-efficient and help energy-intensive industries pay to become more efficient.
That would supplement Obama’s plan of increasing America’s reliance on natural gas and nuclear energy: the administration has signed more than $US8 billion in loan guarantees for firms to build two new nuclear plants. But it’s a long way from binding commitments to reduce emissions.
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