| "Energy Independence" is an idea that's been | | | | green, efficient economy and create as many as |
| kicked around for a long time. Back in 1973 during | | | | five million new jobs. Sounds great! How will she |
| the Arab Oil Embargo that sent prices rising, gas | | | | do it? Here is the outline: |
| lines lengthening and speed limits dropping, Richard | | | | - A new cap-and-trade program that auctions |
| Nixon first brought up the idea of an energy | | | | 100% of permits alongside investments to move |
| independent America. It seemed to make sense | | | | us on the path towards energy independence; |
| at the time. The Arab world was punishing us for | | | | - An aggressive comprehensive energy efficiency |
| their losses during the Yom Kippur War with | | | | agenda to reduce electricity consumption 20% |
| Israel. Curtailing their control over our energy | | | | from projected levels by 2020 by changing the |
| production was logical. After all, we were | | | | way utilities do business, catalyzing a green building |
| importing nearly 35% of our oil from the Middle | | | | industry, enacting strict appliance efficiency |
| East. | | | | standards, and phasing out incandescent light |
| Since then, every president has paid lip service to | | | | bulbs; |
| the concept of energy independence but have | | | | - A $50 billion Strategic Energy Fund, paid for in |
| you noticed that it hasn't gotten any better? In | | | | part by oil companies, to fund investments in |
| fact, since Nixon's first, tentative words on the | | | | alternative energy. The SEF will finance one-third |
| subject, we have increased our dependence on | | | | of the $150 billon ten-year investment in a new |
| foreign oil. We now import over 60% of our oil | | | | energy future contained in this plan; |
| each year and pump prices go up far more than | | | | - Doubling of federal investment in basic energy |
| they go down. In other words, we have had an | | | | research, including funding for an ARPA-E, a new |
| "energy crisis" of one sort or another for 35 | | | | research agency modeled on the successful |
| years and for reasons of diplomacy, | | | | Defense Advanced Research Projects Agency; |
| environmentalism, real politic, industrial | | | | - Aggressive action to transition our economy |
| intransigence, consumer inertia and who knows | | | | toward renewable energy sources, with |
| what else, very little has been done to solve the | | | | renewables generating 25% of electricity by 2025 |
| problem. | | | | and with 60 billion gallons of home-grown biofuels |
| True, alternative fuels like ethanol seem promising, | | | | available for cars and trucks by 2030; |
| and we are doing better at harnessing wind and | | | | - 10 "Smart Grid City" partnerships to prove the |
| solar power. Hybrid, electrical, fuel cell and biodiesel | | | | advanced capabilities of smart grid and other |
| vehicles are slowly making their way into the | | | | advanced demand-reduction technologies, as well |
| marketplace while the President has started an | | | | as new investment in plug-in hybrid vehicle |
| initiative to increase CAFÉ standards by | | | | technologies; |
| 20 miles per gallon within the next 10 years. We | | | | - An increase in fuel efficiency standards to 55 |
| are doing better at recycling and using energy | | | | mpg by 2030, and $20 billion of "Green Vehicle |
| efficient devices. All of that is great but most of | | | | Bonds" to help U.S. automakers retool their plants |
| these efforts depend on emerging technology and | | | | to meet the standards; |
| none of it deals with the problem that exists right | | | | - A plan to catalyze a thriving green building |
| now: Energy prices are out of control and the | | | | industry by investing in green collar jobs and |
| most vulnerable sector of the economy, the | | | | helping to modernize and retrofit 20 million |
| sector most likely to be harmed by this, is small | | | | low-income homes to make them more energy |
| business. | | | | efficient; |
| In 2006, back in the good old days of $76 per | | | | - A new "Connie Mae" program to make it easier |
| barrel oil prices, the Small Business Committee of | | | | for low and middle-income Americans to buy |
| the U.S. House of Representatives issued a report | | | | green homes and invest in green home |
| called Impact of Rising Energy Costs on Small | | | | improvements; |
| Business. It is an interesting read for any small | | | | - A requirement that all publicly traded companies |
| businessman. The conclusions of that report are | | | | report financial risks due to climate change in |
| as follows: | | | | annual reports filed with the Securities and |
| The impacts from the perceived and actual status | | | | Exchange Commission; and |
| of our energy supplies are significant.Last month | | | | - Creation of a "National Energy Council" within the |
| [July, 2006], the Federal Reserve Chairman | | | | White House to ensure implementation of the plan |
| projected that higher energy rates will create | | | | across the Executive Branch; |
| some inflation in the economy. He cited the | | | | - A requirement that all federal buildings designed |
| cumulative impacts of escalating energy prices as | | | | after January 20, 2009 will be zero emissions |
| causing consumers and businesses to spend less, | | | | buildings. |
| and to pass on costs to others. U.S. industries are | | | | OK, more new technology and an emphasis on |
| also showing signs of deflation due to energy | | | | environment over economics. Again, there is |
| problems. Last month, the manufacturing sector | | | | nothing wrong with any of these per se, high |
| growth index was the lowest since the previous | | | | mileage standards and renewable resources are |
| August. Industry officials attributed energy costs, | | | | great, but does anything on this list address the |
| along with other inflationary impacts, such as | | | | issues at hand? Do they take advantage of |
| interest rate increases, as impediments to | | | | existing technologies to deal with the core issues |
| expansion. | | | | facing America as its energy bills mount up? Will |
| Given the impacts from the energy crisis, including | | | | they lower the exorbitant pump prices that we |
| inflation and slowed economic growth, these firms | | | | are all paying today? No, they won't. Perhaps we |
| - in an attempt to cover rising production costs - | | | | need to cross the aisle and see what the other |
| have constricted operations while limiting their | | | | end of the American political spectrum can offer. |
| investment and expansion plans. Facing an | | | | John McCain has net yet offered a |
| increasingly unequal playing field, the extreme | | | | comprehensive energy plan. However, his |
| volatility of energy prices only creates larger | | | | speeches, statements and proposals do offer |
| financial burdens and operational disruptions for | | | | some insight into the Senator's point of view on |
| small firms when compared to their corporate | | | | energy and the environment. Some of the things |
| counterparts. | | | | he has mentioned include: |
| The current energy crisis is just one more in a | | | | - A cap-and-trade system to cut carbon dioxide |
| series of challenges that have recently befallen | | | | emissions 30% below 2004 levels by 2050; |
| small businesses. These firms already face rising | | | | - The construction of new nuclear power plants |
| costs from many aspects of their enterprises, | | | | and economic incentives for communities that |
| particularly health care, pensions, and regulatory | | | | host nuclear waste repositories; |
| requirements - all which deplete key resources | | | | - Research and development of new energy |
| from their operations. On top of these demands, | | | | technologies; |
| energy affects entrepreneur's human, capital, and | | | | - Work with China to share clean coal technology; |
| raw materials. If these conditions continue, the | | | | - The development of ways to break down |
| economic climate will become increasingly harsh | | | | carbon dioxide into useful components; |
| for this country's small businesses and | | | | - New fossil fuel exploration and extraction; |
| entrepreneurs. (Impact of Rising Energy Costs on | | | | - The development of plug-in and |
| Small Business, House Small Business Committee, | | | | battery-powered electric, hybrid fuel-electric and |
| U.S. House of Representatives, August 2006) | | | | hydrogen fuel cell vehicles; |
| Does any of this sound familiar to anyone? It | | | | - Support for alternative fuels, like ethanol from |
| should, given the facts that small business is the | | | | various crop sources, and biodiesel from wastes; |
| least able to absorb high energy costs and that it | | | | - Support for government spending on research |
| dominates many energy-intensive industries. The | | | | and development, pilot projects and other |
| energy crisis is squeezing profit margins of small | | | | initiatives to spur development of energy |
| firms from different sources. Consequently, they | | | | products that can compete in the free market; |
| are at a competitive disadvantage to their large, | | | | - Support for an increase in fuel efficiency. At one |
| corporate counterparts who, through economies | | | | time McCain supported raising the fuel economy |
| of scale, can afford equipment and technology to | | | | of vehicles to 36 mpg by 2016; |
| reduce energy use. Firms with larger capital and | | | | - Make permanent a tax credit that businesses |
| production resources also maintain a greater | | | | can use for research and development; |
| capacity to negotiate favorable prices for inputs | | | | This sounds good, has long-term prospects as well |
| from suppliers and to control the price of | | | | as shorter-term solutions, but since this is gleaned |
| products sold. In other words, large companies | | | | from a number of speeches, statements and |
| can more easily weather this storm than small | | | | position that McCain has made both as a senator |
| companies. No surprises there. Sometimes size | | | | and as a presidential candidate, it is difficult to |
| does matter. Still, it ought to raise some hackles | | | | know how his final energy plan will work out. While |
| that the pinch that you and your business are | | | | it is certain that the cap-and-trade systems would |
| feeling today was predicted two years ago! How | | | | lead to higher costs (the Environmental Protection |
| many small businesses have had to close behind | | | | Agency estimates that McCain's proposal would |
| the energy policies (or lack thereof) to which we | | | | add another $0.68 per gallon of gas by 2050), it is |
| have been subjected? | | | | also certain that a sizable portion of what we can |
| That is not so easy to determine since a business | | | | consider McCain's proposal works with resources |
| closing is usually the result of a number of factors. | | | | and technologies that we have today. Unlike the |
| It is a dead certainty, however, that energy costs | | | | other contenders for the Oval Office, McCain |
| figure prominently in a large number of such | | | | sees energy as a security issue as well. A great |
| closings. What is clear is that the current crop of | | | | deal of the money we spend on foreign oil goes |
| presidential hopefuls doesn't seem to have any | | | | to terrorist organizations. In a way, we are |
| real plans to do anything decisive about this | | | | funding both sides of the Iraq War! McCain at |
| problem. | | | | least understands that this has to stop and it has |
| With his Plan for a Clean Energy Future, Barack | | | | to stop soon. Taking advantage of domestic oil |
| Obama is obviously more interested in climate | | | | fields and building nuclear reactors while engaged in |
| change than energy independence and lower gas | | | | research and development is a sensible way to go |
| prices. A look at his campaign website, | | | | since it offers a reasonably short-term solution |
| BarackObama.com, shows that his platform calls | | | | for current problems and it allows us to find truly |
| for an 80% reduction in carbon emissions by | | | | viable answers to the long-term energy problems |
| 2050; a ten-year, $150 billion research and | | | | that we face. |
| development effort to find "Clean Energy" | | | | Will any of these positions make their way into |
| alternatives including bio-fuels, renewable energy | | | | law? Any one of the three would have to |
| and clean coal technology; support next | | | | convince Congress that their plan is the right one. |
| generation biofuels as well as a low-carbon fuel | | | | Partisanship, vested interests, lobbyists and other |
| standard and an increase in renewable fuels by | | | | obstacles will stand in the way for good or ill, but |
| 2030; reduce oil consumption by at least 35% by | | | | that is the nature of our system of government. |
| 2030 with higher fuel economy standards, doubling | | | | We are not yet there, however. We still have |
| them within the next 18 years. Finally, he wants | | | | candidates to nominate and an election to finish. |
| to increase energy efficiency by 50% by 2030 | | | | How these candidates approach the energy issue |
| and restore the U.S. to a leadership position on | | | | will have ramifications for years to come. It is as |
| the issue of climate change. | | | | important as taxes, defense, gun control or any |
| While there is not one thing in this plan that one | | | | of the other hot-button political issues we face |
| can disagree with, they are all good ideas and | | | | this year. |
| should go forward, one has to ask how much of | | | | Far be it from this Blog to tell you who to vote |
| this depends on technology that is currently tried | | | | for, but before you throw your support behind |
| and true and how much of it depends on | | | | one candidate or another, consider how their |
| developing new technology? If a plan depends on | | | | positions will affect your livelihood. As a small |
| something yet to be invented or perfected, then | | | | business owner you can no longer afford to be a |
| that plan has some serious faults to it. Of course, | | | | straight-ticket kind of voter. You need to look at |
| the primary fault is that it does nothing to | | | | who will create the best climate for you to do |
| address the problems that we face here and | | | | business. Can you afford more of the same |
| now. Perhaps his opponent can do better: | | | | pie-eyed promises of new technology solving all |
| According to her campaign website | | | | our problems or do you want solutions for |
| (HillaryClinton.com), Hillary has a bold and | | | | problems you are facing today? Think carefully. |
| comprehensive plan to address America's energy | | | | There is a lot riding on your decision. |
| and environmental challenges that will establish a | | | | |