Green Tech

When it comes to energy policy, both presidential candidates want carbon regulations, better efficiency, and more renewable energy. The biggest differences lie in emphasis--drilling, nuclear energy--and what role the federal government should play.

During the second presidential debate on Tuesday, Sens. John McCain and Barack Obama both cited the need for more clean, or green, technologies to reduce the country's oil consumption and address climate change.

On Monday night, a separate debate focused specifically on energy policy was hosted by the Massachusetts Institute of Technology. Former CIA chief and clean-tech investor R. James Woolsey represented the McCain camp. Jason Grumet, founder of the Bipartisan Policy Center, spoke for the Obama side.

Both events provide a bit more clarity on what the candidates might do, once in office.

During the presidential debate (transcript) on Tuesday, energy was a frequent topic and tightly linked to a hoped-for economic recovery around new energy industries.

McCain once again came out strongly for rapidly expanding domestic offshore drilling and a massive build-out of nuclear power.

In response to a question about climate change, McCain touted his early commitment to the issue, plus a climate change bill he proposed with Sen. Joe Lieberman. The bill ultimately failed to become law.

"Now, how--what's--what's the best way of fixing (climate change)? Nuclear power," he said.

Later, McCain said the United States should have a more diverse set of energy sources:

"We can work on nuclear-power plants. Build a whole bunch of them, create millions of new jobs. We have to have all of the above: alternative fuels, wind, tide, solar, natural gas, clean-coal technology. All of these things we can do as Americans, and we can take on this mission, and we can overcome it."

In the Tuesday debate, Obama came out stronger on nuclear energy than he has in the past, according to FactCheck.org. He also agreed with McCain on the need for more domestic drilling but noted that the United States holds a small percentage of the world's oil reserves and that the country "can't drill our way out of the oil problem."

Obama's response to the climate change question:

"It is absolutely critical that we understand this is not just a challenge; it's an opportunity because if we create a new energy economy, we can create 5 million new jobs, easily, here in the United States. It can be an engine that drives us into the future the same way the computer was the engine for economic growth over the last couple of decades. And we can do it, but we're going to have to make an investment.

Digging one level down
Unlike the sharp attacks in the presidential and vice-presidential debates, Monday's debate on energy policy at MIT with Woolsey and Grumet was more congenial.

On the whole, Grumet cited planks from Obama's detailed energy plan, which the Illinois senator unveiled earlier this year. Woolsey spoke in broad strokes on McCain's energy plan, as well as on his criticisms of Obama's plan.

"What we have here, with some exceptions, are two responsible energy programs," Woolsey said. "Centralization and central control is a difference here."

McCain adviser James Woolsey argues a point while Obama adviser Jason Grumet listens during an MIT-hosted debate on energy policy.

(Credit: Martin LaMonica/CNET Networks)

Woolsey cited examples of the federal government favoring energy-related technologies, or companies in research projects, that failed.

Grumet's criticism of the McCain plan is that it lacked enough information to truly judge. He said its "drill, baby, drill" slogan is focused on the past, not the future.

Another difference is McCain's choice of Alaska Gov. Sarah Palin as vice presidential candidate. Palin has touted her experience in introducing more competition into oil and gas company operations in Alaska.

"Sen. McCain's assertion that his vice president, Gov. Palin, would be handling energy policy in this country is a profound difference because Sen. Obama would make this a personal priority," Grumet said, adding that an Obama presidency would respect the scientific process when making environmental policy.

McCain
When describing McCain's policy, Woolsey said the top item is a cap-and-trade program in which large polluters such as utilities would need to purchase pollution rights, which can be bought and sold.

McCain supports a transition to alcohol fuels such as ethanol, as well as battery-powered cars, to replace oil as the fuel for transportation. He has proposed a $300 million contest for the best electric-car battery.

He has called for the construction of 45 new nuclear plants in the next 20 years--a goal that Woolsey admitted is difficult to achieve.

Woolsey said Obama's plan is more detailed. But he said that reflects the overall philosophy of McCain, who intends to give states leeway to implement policy.

"Sen. McCain believes in general direction," he said. "It should stick to a general direction, such as cap and trade, and leave the detailed manifestations of standards and so forth--which type of renewable fuels and so on--up to local decision making."

Obama
At the federal level, Grumet said Obama supports a renewable portfolio standard, a mandate already in place in several states that would require utilities to get 10 percent of their electricity from renewable sources such as solar, wind, or geothermal by 2025.

On fuels, he said the U.S. should adopt a low-carbon standard, in which ethanol and biodiesel are measured on the total carbon emissions, from production to consumption. Corn ethanol has been criticized because its net carbon emissions are similar to gasoline, while ethanol from wood chips, grasses, or wastes is better in that regard.

Obama has proposed spending $15 billion per year for 10 years on energy programs, such as efficiency and research. This would be paid for by auctioning polluting rights in a federal cap-and-trade carbon emissions regime. Grumet also said Obama believes that scaling back subsidies to oil companies should help fund clean-energy industries.

"We have to pull these technologies forward with neutral performance standards, like a renewable portfolio standard that doesn't say how you have to make low-carbon energy. But it does say that you must make it. And we have to support those regulations with significant incentives," Grumet said.

As part of the recently passed bailout bill, subsidies for renewable energy were extended at the last minute. The law renews tax credits for solar power for eight years and for wind for one year. Also included is a tax credit for people who purchase a plug-in vehicle, an idea that both candidates had previously backed.

John McCain says nation must drill new oil wells now, while supporting innovative transportation technologies and "the use of wind, tide, solar and natural gas."

(Credit: Declan McCullagh/CNET News)

ST. PAUL, Minn.--John McCain formally accepted the Republican Party's presidential nomination here on Thursday in a speech extolling the virtues of both oil drilling and green energy.

The Arizona senator received one of his loudest rounds of applause when he lashed out at his Democratic rival, Barack Obama, and characterized the dispute over oil drilling as a matter of international relations and security as well as economics.

"We are going to stop sending $700 billion a year to countries that don't like us very much," McCain said. "We will attack the problem on every front. We will produce more energy at home. We will drill new wells offshore, and we'll drill them now."

He added: "Sen. Obama thinks we can achieve energy independence without more drilling and without more nuclear power. But Americans know better than that. We must use all resources and develop all technologies necessary to rescue our economy from the damage caused by rising oil prices and to restore the health of our planet."

McCain's speech comes a day after Alaska Gov. Sarah Palin, his vice presidential pick, said her state was ready to provide more energy for America. "The fact that drilling won't solve every problem is no excuse to do nothing at all," she said.

McCain went out of his way to tout green technology. In addition to building more nuclear power plants, he said: "We will develop clean coal technology. We will increase the use of wind, tide, solar, and natural gas. We will encourage the development and use of flex fuel, hybrid and electric automobiles."

A comparison of McCain and Obama's energy plans shows that the Republican opposes existing federal government ethanol production targets and would eliminate a tariff on Brazilian ethanol, a move that would expose U.S. producers to more competition. Obama supports the ethanol regulations (one factor that has led to higher corn prices), wants to raise automotive fuel-efficiency rules, and is not willing at the moment to support expanding nuclear power.

Last month, Obama signaled he might be open to new offshore drilling in some circumstances.

Republican vice presidential candidate Sarah Palin on Wednesday called for more domestic oil and natural gas drilling, pulling the McCain ticket further from the clean-tech industry.

In her acceptance speech at the Republican National Convention, Palin touted her accomplishments in laying more pipelines and creating more competition among oil companies as governor of Alaska.

Alaska governor Sarah Palin

If elected, she said that a McCain-Palin administration would tap more oil and gas from Alaska, while investing in nuclear energy and so-called clean coal, where pollution is stored underground at coal power plants.

"We Americans need to produce more of our own oil and gas. And take it from a gal who knows the North Slope of Alaska: we've got lots of both.

Our opponents say, again and again, that drilling will not solve all of America's energy problems - as if we all didn't know that already.

But the fact that drilling won't solve every problem is no excuse to do nothing at all," she said.

McCain, too, has called for more domestic oil and gas production but has opposed drilling in Alaska's North Slope. He advocates a massive increase in nuclear power, with the goal of building 45 new reactors by 2030.

In policies generally favored by the clean-energy industry, McCain supports national cap-and-trade carbon emissions regulations and tax credits for people who purchase fuel-efficient cars. Both McCain and Palin promised investments in renewable sources of energy--solar, wind, and geothermal.

The two presidential candidates' energy policies fall along philosophical lines, with Sen. John McCain calling to scale back government ethanol policy and Sen. Barack Obama promising expanded support for renewable energy, according to an analysis published Wednesday.

After examining voting records and public statements, research firm New Energy Finance concluded that there are significant differences between the energy stances of Democratic candidate Obama and Republican candidate McCain.

A McCain White House would favor free-market economics and rein in the role of federal government policy on energy. Obama, meanwhile, would seek a more active role for government in promoting the clean energy industry.

"The fiscally conservative, small government-minded McCain has long eschewed subsidies, earmarks, and heavy regulation, and his energy policy is no exception," according to the report. "By contrast, liberal Obama prefers to have the federal government take a more direct role in the U.S. energy sector."

A summary of the presidential candidates' energy policies, with Barack Obama favoring support of the clean energy industry and John McCain calling for less government assistance. Click to enlarge.

(Credit: New Energy Finance)

McCain is opposed to existing federal government ethanol production targets and has said that he would eliminate a tariff on Brazilian ethanol, a move which would expose U.S. producers to more competition.

He also advocates expanded domestic oil drilling and a massive increase in nuclear power plant construction, with the goal of building 45 new reactors by 2030.

In sharp contrast to McCain, Obama's voting record has been solidly behind the renewable energy industry. A Senate effort last year to extend an investment tax credit around solar and wind energy projects failed to pass by one vote; McCain did not vote.

Obama has voted for the investment tax credit, set to lapse at the end of this year, and favors a renewable portfolio standard (RPS), which would mandate that utilities generate 25 percent clean energy by 2025.

Obama supports the continued ethanol mandate and has called for more aggressive fuel-efficiency standards. Obama has not ruled out further expansion of nuclear power but his support is pending new technology development for storage of nuclear wastes, according to New Energy Finance.

Where both candidates align is on the question of regulating greenhouse gas emissions, with both advocating a cap-and-trade system although different methods for auctioning off polluting rights.

Both have proposed expanded research into so-called clean coal technology for storing carbon dioxide emissions from coal plants underground. And both favor tax breaks for fuel-efficient cars.

Regardless of the outcome, U.S. citizens can expect energy and environment to be a center-stage issue during the fall presidential campaign, although paying for any policies once in office will be a challenge.

New Energy Finance applauds various aspects of both candidates policies but argues that McCain's is "incorrect" in believing that the clean energy industry is mature enough to thrive with relatively little government assistance.

Meanwhile, Obama has garnered the support of a number of clean-tech investors because of his policies; high-profile clean energy venture capitalist Nancy Floyd spoke at the Democratic National Convention and endorsed Obama.

New Energy Finance CEO Michael Liebreich summarized their policies this way:

"We expect either a President Obama or a President McCain to pursue more vigorous policies on clean energy and emission reductions than President Bush has done for the last eight years. Obama is arguably being more imaginative, but he is also taking more of a centrally planned approach. McCain's regional approach, and in particular his insistence on tariff reductions, has much to recommend it. But neither candidate has yet put forward a fully comprehensive plan, and we are hoping to see them developing their policies more completely--particularly towards the encouragement of renewable power generation and energy efficiency--during the final few weeks of the campaign."

DENVER--The Democratic Party has boasted that its convention here will be "the most environmentally-sustainable" gathering in the party's history, complete with a director of sustainability, low-power lighting in some areas, and calculations of carbon footprints.

Some of the goals include diverting 85 percent of waste that would normally go to a landfill, finding hundreds of people to sort waste into recycling-compost-landfill containers, and devising what The Wall Street Journal described as "lean 'n' green" catering guidelines that say food described thusly must not be fried and shall contain three of the following colors: red, green, yellow, blue/purple, and white.

That was the claim. And it has worked to a large extent: a troika of trash containers (again, recycling, compost, and landfill) dot the convention complex, even in areas that aren't officially part of the event. Drinking straws are made from corn and biodegradable. Room keys for hotels are made of wood. Delegates are buying carbon offsets.

But reality doesn't always match expectations. Bikes aren't permitted inside the convention's security perimeter, so golf carts and other vehicles are used. The wooden card keys proved buggy, and some were replaced with more-reliable plastic. Fried mini-donuts were prominently on sale inside the Pepsi Center. Party VIPs and celebrities told their decidedly non-green town cars and GMC Yukon XL mega-SUVs--rented from limo provider A Class Above Transportation--to idle, with engines and air conditioning on, in the nearby pickup area. (What self-respecting conference-goer wants to climb into a GMC Yukon when it's a toasty 93 degrees in the shade?)

Plus, a gathering of tens of thousands of people (and perhaps 70,000 for Barack Obama's Thursday acceptance speech) generate a whopping amount of trash. Even if it's sorted, recycling Obama-Biden signs takes energy, as does trucking in what the Journal reported to be 900 volunteers to monitor waste cans and perform the trash-separation, thereby taking them away from tasks that might be more productive.

Let us stipulate that the Democratic Party, perhaps because it was good marketing or perhaps because it was a sound principle, made an effort to promote recycling here. But whopping huge mounds of trash remain unavoidable--and the presence of idling SUVs--show that the concept remains more of a slogan than reality. (Then again, probably the only way to hold a "green" convention is to do it entirely over the Internet.)

These and the other photos were taken at the Democratic convention near the Pepsi Center. When you have tens of thousands of people, huge mounds of trash are inevitable.

(Credit: Declan McCullagh/CNET News)

(Credit: Declan McCullagh/CNET News)

(Credit: Declan McCullagh/CNET News)

(Credit: Declan McCullagh/CNET News)

(Credit: Declan McCullagh/CNET News)

(Credit: Declan McCullagh/CNET News)

Clean-tech venture capitalist Nancy Floyd spoke at the Democratic National Convention on Tuesday, saying Barack Obama's energy proposals would make the U.S. economy more competitive.

The speech by Floyd, founder and managing director at Nth Power, is a sign that clean energy and the environment are high-profile issues in this year's presidential campaign. Indeed, Hilary Clinton used her speech to tout "green collar" jobs.

Nancy Floyd, managing director of clean-tech venture capital firm Nth Power.

(Credit: Martin LaMonica/CNET News)

Floyd has been doing energy investing for decades and often called on policy-makers to support the domestic renewable energy business.

In her talk, she took the same tack, arguing that Spain, China, Germany and other countries are taking the lead in the green technology field because of "smart, stable, forward-looking energy policies."

She said that the Obama energy plan, which he detailed in a speech in Michigan earlier this month, has the elements to support entrepreneurship in the field and address pressing environmental problems. An excerpt:

Green technology is where the computer industry was in 1984, the year the Macintosh computer was introduced. Think about how far we've come since then. That's how far-reaching and how transformational green technology will be. Thousands of new companies. Millions of new jobs. In fact, investments in wind and solar technologies have already created 2.4 million jobs.

Obama's proposals call for giving U.S. consumers a tax credit for purchasing fuel-efficient vehicles, a renewable energy mandate for electricity utilities, and a cap-and-trade system to regulate carbon emissions.

Floyd appears to represent many of her fellow clean-tech investors political leanings this year. A poll by Earth2Tech found that a majority of clean-tech venture capitalists support Obama.

While many headlines from Sen. Barack Obama's speech on energy policy on Monday focused on tapping the Strategic Petroleum Reserve, a look at the details shows a significant pledge to clean technologies.

The presumed Democratic nominee for president delivered a speech in Lansing, Mich.--an area hit from the declining auto industry--to unveil his New Energy for America plan.

Overall, it calls for investing $150 billion over 10 years to create new clean-energy jobs and to cut U.S. dependence on imported oil from the Middle East and Venezuela.

Short-term measures are geared at lowering gasoline prices by tapping the petroleum reserves. They also include a tax rebate.

The medium and long-term plan calls for policies to promote renewable energy, clean-tech jobs, and energy efficiency. Specifically, the plan's goals are:

• Putting 1 million U.S.-built plug-in hybrid cars on the road by 2015 through loan guarantees for retooling automakers and a $7,000 consumer tax credit.

• A mandate that 10 percent of electricity come from renewable sources by 2012 and 25 percent by 2025.

• Cap and trade-based climate regulations to reduce greenhouse gas emissions 80 percent from 1990 levels by 2050. A portion of the proceeds from auctions would go toward next-generation biofuels.

For many clean-tech entrepreneurs and investors, these are the sorts of policies they are seeking. A recent poll by Earth2Tech found that a great majority of clean-tech venture capitalists favor Obama over McCain.

His rival, presumed Republican nominee Sen. John McCain, also supports alternative energies and plug-in vehicles but political coverage of his energy policies focuses on his support for expanded oil drilling and nuclear power.

For more details on the comparison between McCain and Obama's plans, see this Bloomberg article and this CNN article.

Presumed Republican presidential nominee John McCain on Monday proposed a $300 million prize to develop a car battery that will "leapfrog" today's plug-in hybrids.

In an energy policy speech at Fresno State University in California, McCain also called for an overhaul to existing policies that favor domestic ethanol production--one of the biggest differences he has with his expected opponent, Senator Barack Obama.

Senator and presidential hopeful John McCain

(Credit: McCain's Senate site)

McCain said that, if elected, his administration would issue a Clean Car Challenge that would give give a $5,000 tax credit to people who purchase "zero-emissions cars."

There would be a sliding scale so that vehicles, regardless of type, with lower carbon dioxide emissions will have larger tax credits.

His $300 million car battery prize is meant to spur creativity among automakers to make energy-efficient products.

"This is one dollar for every man, woman, and child in the U.S.--a small price to pay for helping to break the back of our oil dependency--and should deliver a power source at 30 percent of the current costs," he said.

Diverging ethanol plans
In the same speech, McCain repeated his opposition to policies that encourage corn-ethanol and said the U.S. should eliminate a tariff on ethanol from Brazil because it hinders free trade.

He said he would provide incentives to automakers to manufacture flex-fuel vehicles that can run on ethanol or gasoline. He said Brazil, which gets about half of its auto fuel from sugar cane ethanol, has shown that a country can change its fuel mix in just a few years.

"Instead of playing favorites, our government should level the playing field for all alcohol fuels that break the monopoly of gasoline, lowering both gasoline prices and carbon emissions. And this can be done with a simple federal standard to hasten the conversion of all new vehicles in America to flex-fuel technology--allowing drivers to use alcohol fuels instead of gas in their cars," he said.

By contrast, Senator Obama is in favor of continued supportive ethanol policies.

The New York Times on Monday detailed the Illinois senator's close ties to ethanol, including maintaining Tom Daschle, the former Senate majority leader who now serves on the boards of three ethanol companies, as an adviser.

Domestically producing ethanol "ultimately helps our national security, because right now we're sending billions of dollars to some of the most hostile nations on earth," the Times quoted Obama saying during a campaign stop last August.

While some people wonder whether there's too much hot air in the clean-tech sector, the man who has advised California Gov. Arnold Schwarzenegger on environmental matters says the industry is just beginning to reach its potential.

Regardless of who sets up shop in the Oval Office in January, sweeping changes in federal energy and climate policy are expected to give the clean-tech industry a big boost, says Terry Tamminen, former director of the California Environment Protection Agency and now a clean-tech adviser for Pegasus Capital Advisors.

"We need to take California's standards and federalize them," said Tamminen, who until last year served as environmental adviser to Schwarzenegger and is considered a driving force behind the governor's green policies.

Video: California's green guru Terry Tamminen talks to News.com. Click on the image above to watch.

(Credit: Tanja Aitamurto)

California has made sustainable-energy moves, with laws aimed at limiting greenhouse gases and encouraging the adoption of alternative-energy sources such as solar power. Today, 28 states have plans to reduce emissions of greenhouse gases, and 7 have put them into law, with more expected to come this year.

"So by the time the new president takes office in January 2009, the majority of the U.S. population will live in a state that is doing what it would do if it was a separate country under the Kyoto accord," Tamminen said in an interview with CNET News.com. "It's very much due to California's leadership."

The result of the policy is that California today has the lead in energy innovation and efficiency, he said, even though the state may be "a year or two late" on its own goals, mainly due to transmission bottlenecks.

Tamminen keeps a scorecard on the green profile of the presidential candidates. Even though he thinks any of the three will be much more active than President Bush, there are differences. He gives Hillary Clinton and Barack Obama a "B," but to John McCain, he gives an "F."

The two democratic candidates run about equal, Tamminen's said, but at the moment, he thinks Obama has a slight edge, as he's made climate policy more of a campaign issue.

"I believe it will be an issue that he will tackle in his first couple of months as president," he said.

The goal will be to establish a plan for the reduction of greenhouse gas emissions on a federal level, much like California's plan to reduce emissions 20 percent by 2010, and 33 percent by 2020.

"That would spur all kinds of investments," Tamminen said, "because investors then know that there is certainty that there is going to be demand for their product, whether it's wind turbines or solar, or what have you."

In his book Lives per Gallon, Tamminen calculates that the American oil industry gets about $100 billion in subsidies--mostly tax credits--every year. That money could be better spent on things like charging stations for electric cars, hydrogen stations, and fuel stations for natural gas, he argues.

"Some financial incentives wouldn't hurt," he said. "We have been subsidizing fossil fuels for so long, so it's just about leveling the playing field."

Tamminen's office resides on Main Street in Santa Monica, Calif., in a building once owned by the governor (a giant painting of the Terminator still hangs by the entrance). For more than a year, Tamminen has been working as an adviser on clean tech for private-equity fund Pegasus Capital Advisors and venture capital firm VantagePoint Venture Partners.

Tamminen on Al Gore
Earlier this year, his name was first on a list of 50 people who might be able to save the planet published by the Guardian, a British newspaper. But he is not nearly as well-known as a man further down the list, former U.S. Vice President Al Gore.

"I know Al, and I respect him, and I tried to help him get elected in the year 2000, but I have to be candid and tell you that I have been very disappointed in him," Tamminen said.

Tamminen argued that politicians should concentrate on finding solutions. Gore, he said, is still trying to define the problem--first with the film An Inconvenient Truth and now with a $300 million ad campaign.

"I've said to Al, 'Look, you must get out there and start talking about the solutions,'" Tamminen said.

While many people are looking for a single solution--the Bush administration has put all bets on ethanol, according to Tamminen--there should be much wider acceptance of approaches to climate issues.

"There is no silver bullet," he said. "All different technologies will be commercialized," from biodiesel made of algae to solar paint developed with nanotechnology. "I don't think we even have begun to scrape the surface of solar power."

Ultimately, Tamminen said, innovation will be driven by urgent needs.

"Climate policy is what's pushing those technologies out to the commercial forefront much faster," he said. "We will have periodic shortages of gasoline during the next few years, and when that happens, the person who invented how to get liquid motor fuel out of algae, out of agricultural waste, is going to look like a genius."