Bingaman: Don’t Expect an End to Oil Subsidies Anytime Soon


Last week, President Obama unveiled the big picture for U.S. clean energy policy: transition to 80 percent cleaner energy sources by 2035, 1 million electric cars on the roads and end long-standing subsidies for the oil industry. But this week begins the long saga to actually reach those goals, and the path forward will be wrought with twists and turns and compromises.

One of the first to publicly weigh in on the policy plans, at least the feasibility of ending oil subsidies, is Sen. Jeff Bingaman (D-N.M.), chairman of the Energy and Natural Resources Committee. Bingaman, speaking at the National Press Club in Washington, D.C., said he doesn’t think the idea of turning off oil subsidies will go far.

He’s probably right. Obama’s 2008 campaign pledge to end all imports of oil from the Middle East within a decade haven’t seemed to move forward much.

Bingaman also outlined a legislative agenda that covered a potpourri of energy issues, including energy efficiency standards, tax and rebates for manufactures and consumers, the creation of a “clean energy bank,” boosting spending in research and development, and promoting domestic manufacturing. These themes have been weaved into various speeches by Obama’s administration, including the Q&A held by Energy Secretary Steve Chu a day after Obama’s State of the Union address last week.

The idea of a clean energy bank has been kicked around for a while and is sought after by industry groups such as the Solar Energy Industries Association. Although there isn’t a clean energy bank, the government’s stimulus package served as such in the past two years. The stimulus package allocated $94.8 billion in clean energy investments, which included $22 billion for transportation, $21 billion in electricity and smart grid projects, and at least $18 billion in energy efficiencies for buildings, according to a recent report by SBI Research.

The idea of giving more incentives to consumers for buying fuel-efficient cars also isn’t new either. Electric car/plug-in hybrid carmakers such as General Motors (s GM), Nissan and Tesla Motors (s TSLA) have made the $7,500 tax credit for buying fuel-efficient cars an important part of their advertising. The Obama administration now wants that tax credit to become a rebate; this is part of the plan to get 1 million electric cars on the road by 2015. The plan also calls for grants to communities that pass policies making it easier for electric car deployment, such as building charging networks and maybe setting aside parking space for electric cars.

One of the crucial sticking points in Obama’s plan is how “clean energy sources” are defined. What the term means has been a subject of endless debate since Obama is lumping nuclear and natural gas into the mix, and purists believe the term has been bastardized to win wider political support in Congress (here is a White House fact sheet about Obama’s clean energy plan). To expand the definition means more players will get to dip into the money pot, something that renewable energy advocates in solar and wind would rather not happen. The House of Representatives actually passed an energy bill in 2009 that set out renewable electricity goals, but the bill never passed Senate and died (along with the dream that the country would have a climate change bill).

It’s too early to say which items on Democrats’ wish lists will find more support, given the power shift in Congress. While they visited similar issues before, it’s safe to say that negotiating them the second time around won’t get any easier.

I’ve been following tweets from Grist writer David Roberts, who attended the talk.

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Photo courtesy of Francisco Diez

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