Editor's note: Green Fuels Forecast today begins an examination of the alternative energy plans of the two men running for president. We first  take a look at the energy plan of Illinois Sen. Barack Obama, who today will accept the Democratic nomination for president. An evaluation of Arizona Sen. John McCain's energy blue prints will appear one week from today when he accepts the GOP nomination. 

(AUG.20.2008) John McCain or Barack Obama: Who will be the green fuels president?

Presidential campaigns are notoriously short on details, as candidates avoid the kind of rhetoric or specific policy proposals that will tie their hands before taking the oath of office.

But this election season has a somewhat different energy, so to speak. Blistering gasoline prices, global warming worries and uncertainty over long-term fuel supplies are sending the automakers scrambling to retool for small cars and alternative fuel powertrains. Not since the late 1970s has the spotlight on energy glared so brightly. 

While the candidates have their differences when it comes to growing the alternative transporation fuels sector and moving away from the oil-based economy in the process, both rely heavily on reducing carbon emissions. Obama's market-based, cap-and-trade system calls for an overall 80 percent reduction in greenhouse gases from present-day levels by 2050.

To reach that massive reduction, Obama's energy and environmental platform will require a greatly expanded green fuels industry, combined with an increase in sustainable mobility throughout North America. The plan would invest $150 billion in advanced energy technologies over the next 10 years. This will allow for a doubling of the federal science and research funding for clean energy projects, as well as investment in job training and transitional programs to help workers and industries adapt to clean technology development and production.

The approximate $15 billion per year investment will be funded, according to the Obama plan, by receipts from the auction of carbon allowances, which they estimate will bring in between $30 billion to $50 billion annually. The balance of the receipts will used for rebates and other transitional relief to help reduce the financial impact to individuals and communities during the changeover to a new, low-carbon economy. Obama estimates that up to five million “green jobs” will be created as a response to his energy plan.

Developing biofuels and their infrastructure

The development of clean, low-carbon energy will necessarily require expanding research in the key area of biofuels. The Obama plan will establish a new fuel standard — the National Low Carbon Fuel Standard — to ensure less carbon-intensive energy is used for future transportation needs.

The National Low Carbon Fuel Standard (LCFS) will help to speed the introduction of low-carbon non-petroleum fuels. As early as 2010, according to the Obama plan, the new LCFS standard will require fuel suppliers to begin reducing the carbon of their fuels by 5 percent within the first five years, and by 10 percent within 10 years. The Obama plan includes incentives to encourage increased private sector investment in advanced low-carbon fuels.
 
The Obama administration will push for clean alternative fuels to be developed and incorporated into the national energy supply “as soon as possible.” The plan calls for at least 60 billion gallons of advanced biofuels to be produced annually by 2030 — on average, that would be enough to displace more than one-third of the current annual gasoline consumption in the US. Theses fuels will include cellulosic ethanol, biobutenol and other new technologies that produce synthetic petroleum from sustainable feedstocks.

“These (fuels) offer tremendous potential to break our addiction to oil,” says Obama, who will also invest federal resources, including tax incentives and government contracts toward the development of the most promising technologies and to build an infrastructure to support them. A substantial portion of the five million new “green” jobs created by his plan will be in the areas of biofuels development and infrastructure creation.

The Obama campaign states that the LCFS will be “an important mechanism in ensuring that efforts to reduce U.S. oil dependence also reduce carbon emissions.” The standard supports the development of clean energy, investment in energy efficiency improvements, and assists the development of the next generation of biofuels and clean energy vehicles. To satisfy the environmental lobby, the plan will include a sustainability provision to ensure that increased biofuels production does not come at the expense of environmental conservation.

To assure that biofuels will be accepted by the driving public, the Obama plan calls for all new vehicles to be flex-fuel models able to run on gasoline or a mixture of gas and biofuel. According to the Obama plan, vehicles with this capability must be available by the end of 2012.

“The question is not if a renewable energy economy will thrive in the future,” Obama has explained, “it's where. And if we want that place to be the United States of America, we can't afford to wait any longer.”

Upping fuel economy with tax incentives/regulation

Because oil is the prime source of energy for today’s commercial and passenger vehicles, Obama’s energy plan sets a lofty goal of weaning the U.S. off imported oil within 10 years by saving as much as the US currently imports from the Middle East and Venezuela combined. To do this, renewable transportation fuels must be developed and produced in large enough quantities to offset petroleum-based fuels. In the interim, fuel economy standards will be raised and injections of investment capital applied to the US domestic automotive industry to spur the development and production of alternative fuel vehicles.

The Obama plan provides for a Clean Technologies Deployment Venture Capital Fund, which the candidate says will “fill a critical gap in U.S. technology development.” The fund will be arranged so that existing investment funds can join together with US National Laboratories to “ensure that promising technologies move beyond the lab and are commercialized.” More tangibly, the plan will also extend the federal Production Tax Credit (PTC) for 5 years to encourage the deployment of renewable energy technologies.

To push the process along, Obama would increase fuel economy standards by 4 percent every year for nearly two decades while providing financial protection to the US domestic automakers. The plan, which the Obama campaign claims will save nearly 500 billion gallons of gasoline and 6 billion metric tons of greenhouse gases, will establish concrete targets for yearly fuel efficiency increases while giving industry some flexibility to meet those targets.

Overall, the new fuel efficiency standards will effectively double fuel economy within 18 years. Obama’s plan also would retool tax credits and loan guarantees for domestic auto plants and parts manufacturers, so that the new fuel-efficient vehicles can be built in the US rather than sourced from overseas.

Advanced vehicle development is called for as well, via investment in lightweight materials and new engines. To accelerate the adoption of higher-efficiency vehicles, the Obama plan will expand consumer tax incentives by lifting the 60,000-unit per manufacturer cap on buyer tax credits to help encourage more Americans to buy ultra-efficient vehicles.

Opening the door to plug-in hybrids and EVs 

As a US Senator, Obama has supported the continued development of plug-in hybrid vehicles. As President, Obama says he will call for one million, U.S.-made, plug-in hybrids to be on the road by 2015. Providing an example to Washington and the rest of the country, the plan calls for the entire White House fleet to be plug-in hybrids by 2010 (as security permits) and mandate that half of the vehicles purchased by the federal government be plug-in hybrids or all-electric models by 2012. The current federal fleet totals 642,233 vehicles.

Using a portion of the proceeds from the government’s carbon cap-and-trade auctions, the Obama plan will provide for investment in electric vehicle development with specific focus on R&D in advanced battery technology. Using these increased federal funds, Obama believes this will help leverage private sector funds and further support U.S. automakers in bringing plug-in hybrids and other advanced electric vehicles to market consumers. The Obama plan also will provide a $7,000 tax credit for the purchase of advanced technology vehicles, as well as conversion tax credits.

Electricity and the grid

The Obama energy plan sets a goal for 10 percent of electricity generation from renewable sources by 2012, with 25 percent supplied by green energy sources by 2025. To meet this, the plan will establish a 25 percent federal Renewable Portfolio Standard (RPS) that assures these percentages of US electrical power come from clean, sustainable energy sources such as solar, wind and geothermal.

“The federal government is the world’s largest single consumer of energy in the world, spending approximately $14.5 billion on energy consumption in fiscal year 2008,” according to Obama. His energy plan will hold Washington, D.C. itself up as an example of energy efficiency, by requiring 30 percent of the electricity used by the federal government to come from renewable sources by 2020.

The Obama plan calls for immediate efforts to improve the energy efficiency of federal buildings by the retrofitting of existing government buildings to provide a 25 percent increase in efficiency within five years. Furthermore, the plan will require that all new federal buildings be 40 percent more efficient within that same five-year period. The Obama plan will put forward the needed resources to achieve a 15 percent reduction in federal energy consumption by 2015.

With the addition of low-carbon and carbon-free sources of electrical energy, as well as the added load from plug-in hybrid and all-electric vehicles, the national electric grid will need serious upgrades to handle the continuously increasing demand. To address this inevitable burden on the existing electrical infrastructure, the Obama energy plan specifies a transition to a new digital grid.

This involves a large investment in the national utility grid in preparation for these changes, including increased reliability, smart metering and distributed storage. Working with states and local utilities, Obama will direct federal resources to the “most vulnerable and congested urban and rural areas” where significant renewable energy sources are located.

The Obama plan will establish a Grid Modernization Commission to facilitate adoption of so-called “Smart Grid” practices across the nation’s electricity grid “to the point of general adoption and ongoing market support in the U.S. electric sector.”

As part of this revamping of the nation’s electrical infrastructure, Obama will authorize the creation of a Smart Grid Investment Matching Grant Program, which will help to provide reimbursement for up to one-quarter of “qualifying” Smart Grid investments.

Additionally, the plan calls for programs to be conducted to allow for the deployment of advanced techniques for managing peak load reductions and energy efficiency savings at the electric customer’s point of use — including smart metering, demand response, distributed generation and electricity storage systems.

Finally, the Obama plan will establish demonstration projects specifically focused on advanced technologies for power grid sensing, communications, analysis, and power flow control, which will include “the integration of demand-side resources into grid management.”

These efforts, according to the Obama campaign, will greatly improve electric grid reliability and security, offer a tremendous increase in capacity required by the addition of renewable generation, and provide greater customer choice and energy affordability.

On the supply-side, the Obama plan proposes to develop and deploy so-called clean coal technology by investing in technology aimed at carbon capture and storage technologies. “The technologies hold enormous potential to reduce our greenhouse gas emissions,” says Obama, “as we power our economy with domestically produced and secure energy.”

As a proponent of clean coal technology, Obama would direct his administration to provide incentives to accelerate private-sector investment in commercial scale zero-carbon coal facilities. To accelerate development of the necessary technologies, according to his campaign, Obama will instruct the Department of Energy to enter into public-private partnerships to develop five “first-of-a-kind” commercial scale coal-fired powerplants with carbon capture and sequestration, “in order to maximize the speed with which we advance this critical technology.”

Making way for EVs by conserving energy elsewhere

Paving the way for added electrical demand from plug-in hybrids and all-electric vehicles, the Obama plan has set what the candidate himself says is an aggressive energy efficiency goal — to reduce electricity demand by 15 percent from Department of Energy’s projected levels by 2020.

The Obama campaign estimates that such a program could save consumers up to $130 billion and reduce carbon dioxide emissions by more than 5 billion tons through 2030. According to Obama, a portion of this goal would be met by setting annual demand reduction targets that utilities would need to meet, with the balance coming from more stringent building and appliance energy efficiency standards.

By 2030, the Obama plan would require the all new buildings to be carbon-neutral, or produce zero emissions. Initially, over the coming decade, the plan calls for improving the energy efficiency of all new buildings by 50 percent, and improving the efficiency of existing buildings by 25 percent nationwide to help meet the 2030 goal.

Expanding the production and use of natural gas

T. Boone Pickens is getting a lot of attention for his energy plan to massively ramp up compressed natural gas infrastructure for vehicles. But Obama has similarly moved to expand the fuel for transport.

Taking advantage of the tremendous domestic supply of natural gas, the Obama energy plan calls for the exploration of existing leased land, using a “use it or loss it” approach. By requiring domestic oil and gas companies to either develop leases or turn them over to another company, Obama hopes to promote the development of natural gas and oil reserves.

To promote responsible domestic production of oil and natural gas, an Obama administration would set up a process for early identification of any infrastructure obstacles or possible federal permitting process delays to drilling in several areas, including the unconventional natural gas supplies in the Barnett Shale formation in Texas and the Fayetteville Shale in Arkansas.

Obama has floated plans to prioritize the construction of the Alaska Natural Gas Pipeline, working with stakeholders to facilitate construction of the pipeline. According to the Obama campaign, the pipeline would have a daily capacity of four billion cubic feet of natural gas, or almost seven percent of current U.S. consumption.

Toward a hydrogen economy

While the Obama energy platform does not name hydrogen specifically, the candidate’s green fuels initiative does support the funding and promotion of low- and no-carbon fuel technologies, of which hydrogen is a top choice. As future hydrogen production will be closely tied to low-carbon electric generating plants, Obama’s desire to put more solar, wind and nuclear plants online can be taken as indirect endorsement of future hydrogen-powered vehicles.

The Obama plan considers nuclear power to be legitimate source of non-carbon electrical power. In fact, Obama says that it is unlikely that we can meet our aggressive climate goals if we eliminate nuclear power as an option. His administration will not, however, move on the expansion of nuclear power until certain key concerns are addressed. Top among these concerns are the security of nuclear fuel and waste, waste storage and proliferation.

The Obama energy plan calls for the safeguarding of nuclear material both abroad and in the U.S. as a top anti-terrorism priority. As for waste storage, an Obama administration will lead federal efforts to look for safe, long-term disposal solutions based on objective, scientific analysis. For current waste stored at the nation’s current nuclear powerplants, Obama will develop requirements to ensure that this waste is contained using advanced dry-cask storage technology.