August 2008 Newsletter
8/29/08
Dear Friends of the Institute,
With the second session of the 110th Congress coming to a conclusion, members of the House and Senate this year could have the opportunity to cast critical votes on securing America’s energy future. Constituents--as well as investors--are paying close attention because the long-term economic stakes of energy decisions we make in the coming months are significant.
U.S. voters are very concerned by high gasoline prices, and they are rightly puzzled and increasingly frustrated that our elected leaders are not doing enough to meet domestic energy demand that could grow between 20 and 30 percent by 2030.
Congress must decide by December 31 whether to extend tax credits for wind and solar power projects that are critical to growing and diversifying America’s energy mix. Representatives and Senators should give industry the predictability it needs and show Main Street and Wall Street a serious commitment to a more diversified energy market. However, passage of these vital incentives for greater energy production should not be tied to back-door tax increases on energy producers that will lead to less production and higher costs for consumers.
Increasing the amount of electricity that we get from renewable resources is part of the U.S. Chamber of Commerce's Institute for 21st Century Energy agenda for "Securing America's Energy Future." It's one of 13 energy policy pillars that we outlined last month in an open letter to the 111th Congress and the 44th president. Read a summary of our event and watch the event on our Web site.
The deployment of solar and wind technology on a mass scale requires certainty for Americans counting on and investing in these resources. Congress must extend the existing renewable energy tax credits for five to eight years. The almost yearly battle in Congress over renewing these tax credits is counterproductive. These short, "boom and bust" cycles have resulted in inefficiencies in capital formation, investment, production, and project finance.
By September 30, Congress must also decide whether to extend its ban on offshore oil and gas exploration and production. Congress' inaction on making these American resources available is hurting our economy and flies in the face of an energy policy aimed at reducing our dependency on unstable sources of energy. President Bush has lifted the executive moratorium, which restricted access to roughly 85 percent of our offshore oil and gas resources. Likewise, Congress should let the legislative ban expire so that U.S. consumers realize the benefit of more oil and gas supplies, witness new jobs, and ultimately feel less pain at the pump.
U.S. policies concerning oil, gas, and other energy resources have been conflicted, contradictory, and shortsighted, as our open letter points out. Some members of Congress have criticized President Bush and his predecessors for urging OPEC countries to increase their production--which would worsen our dependence on foreign oil-–while consistently voting against measures to increase domestic production. That's puzzling because the latest polls show an enormous shift in public opinion--three out of four Americans now favor increased domestic exploration and production.
Election-year energy rhetoric might score political points, but voters want an energy strategy. Right now policymakers are far behind public opinion.
The shifting sentiment of voters has yielded a multitude of new ideas in Congress for quelling clear public dissatisfaction. But recent proposals in the House and Senate are inadequate to generate the new supplies of energy we require to put America on a path to long-term energy security. We need all forms of energy. Instead of picking and choosing winners and losers, policy makers should pursue a comprehensive common sense policy America requires. Using American technology and innovation, we must come together to accelerate energy efficiency across all sectors; transform the transportation sector through greater use of alternative and renewable fuels; and increase and diversify U.S. energy supplies through the expanded use of nuclear, coal, and renewable energy as well as new domestic exploration and production of oil and natural gas.
While Congress will recess again this fall to campaign, our nation's students are returning to school for the 2008-2009 academic year. We have a growing crisis in our schools which are failing to graduate students with aptitudes in the sciences, technology, engineering, and math. These skills are critical to our nation's competitiveness and the energy business as a whole.
Energy companies across the entire spectrum are facing critical shortages of qualified energy professionals and skilled labor. According to the Center for Energy Workforce Development, the average utility sector employee is 10 years older than the average American worker. Nearly a quarter of oil and gas sector employees will retire by 2009, according to the most recent workforce study by the American Petroleum Institute.
An expansion and diversification of U.S. energy supplies means new opportunities for tens of thousands of skilled workers. The Department of Energy estimates that just eight new nuclear projects beginning construction in 2010 would yield roughly 6,000 jobs for pipefitters, electricians, construction supervisors, engineers, boilermakers, sheet metal workers.
As one of our fundamental energy pillars recommends, we must create the circumstances for America's future generations to learn the skills necessary to succeed in the energy sector. We must actively promote the importance of creating the intellectual capital for sustaining our energy enterprise and innovating our future energy solutions.
New American energy creates new American jobs. And with the potential to expand the use of renewables, nuclear, natural gas, oil, and clean coal here at home we will need the qualified professionals to implement these expansions. It's time for our leaders to act on expanding our nation’s energy supply to sustain our nation’s prosperity and create new opportunities our citizens and businesses.
Sincerely,
James L. Jones, USMC (Ret.)
President and CEO
Institute for 21st Century Energy
Recent Activities at the Energy Institute
On Aug 4, Gen. Jones addressed the Brookings Institute on the importance of the United States demonstrating global leadership on energy security and climate change.
Executive Vice President and Managing Director Karen Harbert on Aug. 4 discussed how the Institute has elevated energy in the 2008 presidential campaign during an appearance on Washington, D.C.’s News Channel 8.
As part of U.S. Chamber of Commerce's 2008 "Vote for Business Bandwagon," Harbert on Aug. 13 addressed the Southwest Louisiana Chamber of Commerce on the role of energy infrastructure in making America more secure and prosperous. See press release, article, and ChamberPost.
On Aug. 18, Vice President Frederick C. Smith highlighted the Institute’s open letter to the next president and Congress outlining 13 pillars for a new, strategic, and long-term U.S. energy policy in remarks at Congressman Kevin Brady’s (TX-8) Energy Capital Solutions Summit in Houston. See the press release and article.
Managing Director and Vice President of Policy Christopher Guith wrote on ChamberPost the contradictions of a proposal by Congressman Ed Markey (MA-7), Chairman of the House Select Committee on Energy Independence and Global Warming, to stop exporting U.S. oil.
Vice President of Climate and Technology Steven Eule toured the Canadian oil sands on an
Aug. 19-22 trip to Alberta and Saskatchewan.
Fuel for Thought
- Non-hydroelectric renewable energy sources accounted for 2.5% of U.S. electricity generated in 2007.
- Geothermal, solar, and wind collectively provided approximately 1.1 % of U.S. electricity in 2007.
- Hydropower represents 6% of the U.S. power supply.
- Wind-generated electricity grew by 60% in the past year.
- Coal, nuclear, and natural gas account for nearly 90% of U.S. electricity generated in 2007.
- Oil represents less than 2% of U.S. electricity generated in 2007, down from 17% in 1973.