Should America Get Behind The Fuels Of The Future Or The Past?

One of Yogi Berra’s famed quotes is about to apply to America’s energy policy:  “When you come to a fork in the road, take it.”

The truth is, America’s been staring at a fork in the road for a few decades.  Every president since Nixon has talked about freeing the country from its dependence on foreign oil.  And each recent administration has understood that our energy policy affects more than the price of a gallon of gas or a kilowatt of electricity.  It affects job growth, technological innovation and environmental progress (or decline).

The last few months of the budget and debt debate gives us a good picture of the paths America could take.

One path, embraced for years by both parties, entails government investments in new, clean, efficient and affordable energy.  It harnesses the creative talents of our top scientists, engineers, businesspeople and research centers.

The other, most recently articulated in Representative Paul Ryan’s budget, is driven only by a doctrinaire obsession with cutting government – no matter what we sacrifice in doing so.  According to that view,  the government need not invest, because the private sector has it all figured out.  That’s a stunning philosophy given that some of the most important breakthroughs – the Internet, our space program, wind and solar energy development – have happened because government and industry worked hand-in-hand.

The President recently called for a $2 billion Clean Energy Trust that would fund energy research and development.  That’s exactly the kind of thing we need in order to continue the clean energy technology revolution that will make it possible to reduce imports of foreign oil and weaken the threat of rising greenhouse gas emissions. The budget is tight, so how do we find the money for it?  By using money collected from oil companies when they drill for oil and gas on federal lands.  Put another way, we can use some of the proceeds from the fossil fuel industry to help accelerate the transition to a clean, low-carbon energy economy. 

While technology entrepreneurs, university presidents and economic development experts are calling for energy policies that would invest in our economic future, Rep. Ryan’s budget is a disappointing blast from the past:  Give the oil companies their subsidies and trash new ideas and solutions that will be the foundation of global job growth for the next 50 years.

For example, with Rep. Ryan’s plan, government investment in wind power technology that has helped companies reduce the cost of wind power 65% between 2001 and 2004 and establish the US as one of the world’s leaders in wind power would not be reduced.  It would be eliminated.  Same for spending on solar energy research.  Never mind that experts predict wind, solar and other “new” energy sectors will see much faster growth in coming decades than the fossil fuel industries.

How about investing in oil?  Rep. Ryan says “you bet.”  The $40 billion in subsidies and tax breaks for companies that he calls “competitive” would stand. (He has not explained why companies that are so “competitive” need these subsidies, but that’s a different story.) On top of that, Rep. Ryan’s plan gives the five largest oil companies an additional tax cut courtesy of the lower corporate income tax rate – presumably to make them even more competitive.  When the largest oil companies made approximately $341 million per day in the first six months of 2012, there is no sound reason for Rep. Ryan to bestow them with more tax breaks.

But aside from the usual argument about whether America should get behind the fuels of the future or the past, what’s most troubling about the recent debate is the effort to cut government funding of energy innovation.

Our government has invested billions upon billions over the last century in technology innovation, from the pharmaceutical and aviation industries to semiconductors and the GPS network.  Each of these investments was based on the idea that the nation has a vested interest in technological progress and that the government has a role to play in helping it happen.  Most of these investments have spurred economic growth and strengthened America’s global standing.  Imagine if the US government spent nothing on health or drug research.  Imagine if the Department of Defense never launched the GPS network, or charged every app developer or smart phone user a fee to recoup the $1 billion it takes to run the system per year.

The idea that government should invest in and spur innovation is not a liberal idea, nor is it an environmental one.  It’s one that has been shared by most presidents and their Congressional colleagues since the industrial revolution.

That is the real fork in the road America faces:  Should the United States, the wealthiest and most powerful nation in the world, abandon its role in shaping an economic future that helps American companies and workers compete in the global marketplace, OR should we use our economic and political might to push the future forward and reap the economic and environmental benefits of a modern energy policy?  Do we want progress and jobs, OR do we want to be stuck with dirty energy and a lackluster economy for years to come?

EDF is pleased to see that the U.S. Senate made the right choice yesterday by rejecting Rep. Ryan’s budget.

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