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Robert FriBack to OpinionRobert Fri

Give me one good reason for a new energy policy

Jeff Immelt, the chief executive officer of General Electric, wants a new energy policy. In a widely reported speech delivered on September 24, Immelt said of U.S. energy policy that “it’s just stupid what we have here today.” Others have used more gracious language, but what he says is hardly a surprise. Every president since Nixon has promised the nation a new energy policy – and has failed to deliver one that lives up to expectations. By now we should have learned that, while we may not like the energy system we have, we haven’t yet come up with a good enough reason to change it in any fundamental way.

Our current energy policy relies on fossil fuels – oil, natural gas and coal – because they are wonderfully suited to providing the energy services we value. Petroleum fuels more than 95 percent of the transportation system because it is concentrated energy in a form that is easy to move around. Coal produces most of our electricity because it’s a relatively inexpensive raw material. Natural gas is far more convenient than coal or even oil for heating homes and businesses.

Of course, burning fossil fuels creates pollution, so it’s our policy to clean up the waste products. Power plants have huge devices to scrub pollutants from coal combustion, and our cars carry around catalytic converters that neutralize engine exhaust. Cleaning up costs something, and the electric power and automobile industries complain about that. Nevertheless, every president in the last 40 years has preferred to spend on cleaning up rather than to change the energy system to eliminate pollution in the first place.

In short, while today’s energy system is much cleaner and more efficient than it was in 1970, it’s not fundamentally different. Imagining an energy system that really is different is not the problem, however. The National Research Council published a study last year called America’s Energy Future that laid out the road map (full disclosure: I participated in that project). The study concludes that, over the next decade or so, energy efficiency and renewable energy — mostly wind power– can stop the growth in energy demand and begin to move coal — the biggest source of carbon dioxide emissions– out of electric power production. By 2035, it is technically possible to have a completely new electric power system and to carve about half of the oil out of transportation. And that’s with technologies that are ready to go to market today, or are nearly so. I don’t want to minimize the enormous challenge of turning this scenario into reality. But could we have a different and more efficient energy system? You bet.

So why don’t we? I think it’s because most of the reasons to make a real change simply aren’t compelling enough to overcome the value built into the energy system we have.

For example, one of Immelt’s reasons for wanting a new energy policy is that he’d like the government to help General Electric compete more effectively in global energy markets. He believes that a big local market is necessary for global technology leadership, so it’s not surprising that he wants the government to put a price on carbon dioxide emissions as a way of creating a U.S. market for cleaner technology. But the question is whether we’re prepared to pay for a fundamental change in our domestic energy system solely to promote our competitive position. I see no evidence of that.

Ditto getting off imported oil. Depending on oil imported from some pretty unstable countries does seem like a bad idea. Not surprisingly, successive presidents have used reducing oil imports as the main impetus for a new energy policy. Yet, history shows that we’re simply not willing to change our driving habits or move toward vehicles that don’t run on oil. Instead, we impose auto efficiency standards that reduce the amount of gasoline used per mile. That helps, of course, but it still leaves all those gasoline-powered cars on the road.

This is not to say that reducing our oil use and improving our competitive position aren’t worth doing. I just don’t think we should kid ourselves that their perceived value is enough to drive an overhaul of our existing energy system.

Climate change could be the game changer, though. A strong climate policy absolutely requires backing fossil fuel out of most of the energy system, and that means making the fundamental change that’s eluded us so far. In the process of dealing with climate change, we’ll have to create incentives for technological innovation that would both keep Immelt happy and greatly reduce our dependence on petroleum. It‘s a win-win solution.

But not an easy one. My reading of the science is that the risks of climate change are real and substantial, and that we can’t opt out of the challenge of managing them. The last Congress sure couldn’t get there, though, and I can’t predict when it will. Still, I am confident that until we take the issue of climate change seriously, the U.S. energy system of tomorrow will look a lot like the one we have today. Jeff Immelt will not be pleased — and neither should the rest of us.

Robert Fri is a visiting scholar at Resources for the Future, a nonprofit organization that studies natural resource and environmental issues. He has served as director of the National Museum of Natural History, president of Resources for the Future, and deputy administrator of both the Environmental Protection Agency and the Energy Research and Development Administration. Read his full bio.