U.S. Lags in Global Clean Energy Technology Marketplace, Senate Panel Told

The U.S. Senate Committee on Environment and Public Works last week continued a series of hearings that assesses how proposed energy and climate change legislation could impact industry and economy. Last week’s hearing was titled, “Ensuring and Enhancing U.S. Competitiveness while Moving toward a Clean Energy Economy.”

Committee Chair Sen. Barbara Boxer (D-Calif.) opened the webcast session by saying that the comprehensive climate change and energy bill passed by the House on June 26 contained several provisions to assist energy intensive industries and those that compete internationally. She said the Senate was carefully reviewing these provisions as it developed its bill. “At the end of the day, our competitiveness in the world economy will depend on how we face the challenge of global warming,” she said.

Ranking Member Sen. James M. Inhofe (R-Okla.) disagreed that the bill would aid industry growth. “This is the faulty logic of cap-and-trade, designed to hide what cap-and-trade truly is—a massive new tax on American families—and what it would do—destroy jobs here at home and send them to China and India,” he said.

Inhofe cited a May 2009 study from the National Black Chamber of Commerce (NBCC) (PDF) that claimed that the Waxman-Markey bill would cause a net reduction of 2.3 million to 2.7 million jobs. “Again, that’s a net reduction, including green jobs,” Inhofe said.

Panelists were split. Harry C. Alford, the NBCC’s president and CEO, cited more findings from the chamber’s study, saying that the bill would result in higher transportation costs, lowered wages, and falling household incomes. “These impacts, the study found, would differ across regions, across industries and across income levels depending on changes in local energy costs and on allocation formulas for permits. And that worries me and my members because the black community suffers mightily when the economy goes south.”

John Doerr, an attorney at Kleiner Perkins Caufield & Byers, told the committee that America was facing a looming crisis concerning its worldwide standing in the green technology. “There is no topic of greater importance for America’s economic future,” he said.

Doerr said that China was leading the “race,” because it understood that its energy future is fundamental, and it was rigid in meeting its commitments to develop and own clean energy technologies and markets. In comparison, only one of the five top wind turbine manufacturing companies was American (GE Energy), and the U.S. was home to only one of the 10 largest photovoltaic producers in the world.

He said that four basic policies could amend the situation: capping carbon emissions and pricing carbon; implementing a renewable energy standard  and a smart grid; setting energy efficiency standards; and getting serious about funding research and development.

John Krenicki, GE vice chairman and president and CEO of GE Energy, went further, saying that for the U.S. to be competitive in a global economy, it would require a big domestic marketplace, a scalable competitive supply chain, best-in-class technologies, strong intellectual property protection, and free and open markets.

Krenicki pointed to the historic U.S.-dominance of nuclear energy technology as an example. He said that almost 90% of the technologies used today were led to commercialization by the U.S. during the nuclear build-out in the  ’60s, ’70s, and ’80s, a period when tens of thousands of people were employed in the U.S. nuclear industry.

“The energy business is a scale driven business. Time horizons are measured in decades; capital investments in billions, and suppliers and competitors engage globally to deliver the lowest unit cost,” he told the committee. “Competitiveness and leadership in this industry require a long-term, sustained, highly committed effort. It requires massive investment, discipline, and vision that spans beyond the next quarter, the next fiscal year, or the next election cycle.”

To get the U.S. in a leading global position concerning clean energy technology, a more stringent federal renewable electricity standard (RES) should be proposed, Krenicki said. “The current RES proposals for 2012—anywhere from 3 to 6 percent of total U.S. electricity generation —are essentially equal to or below the status quo, where renewable energy accounts for about 5% of the baseline requirement as defined in those proposals,” he said. “Therefore, those proposals would not incentivize the addition of a single wind turbine in the United States in the next three years

Policy will play a pivotal role, and not just for wind, he added. The U.S. holds the lead in integrated gasification combined cycle (IGCC), a cleaner coal technology. “But if IGCC is to win globally, it will need supportive policy for immediate deployment in the U.S. combined with support for parallel deployment in China,” he said.

Source: U.S. Senate Committee on Environment and Public Works