9.05.12 - XOM-ALL-OF-THE-ABOVE1 - FEATURED

An “All-of-the-Above” energy policy that makes sense for consumers and the economy

The balloon drops and the halls decorated with red-white-and-blue bunting signal that convention time has rolled around again.

America’s two major political parties aren’t just nominating their standard bearers for the November election, they are issuing their platforms as well. Those documents offer a revealing look at where our policy debates may be headed come January.

So it’s been interesting to see that in their platforms’ energy planks, both the Democrats and the Republicans call for what each party describes as an “all-of-the-above” energy policy – a phrase intended to include everything from oil and natural gas to nuclear, coal, hydropower, and renewables.

The specific details of their plans may differ, but the broad language is very similar.

For the most part this development is welcome – the U.S. is blessed with abundant natural resources, after all, and our economy is going to require increasing contributions from a variety of energy sources to support future growth and prosperity. “All of the above” acknowledges that.

Last March ExxonMobil CEO Rex Tillerson discussed the wisdom of an all-of-the-above approach to energy policy, though he added a significant caveat:

In pursuing the “all-out, all-of-the-above strategy,” we need to welcome every voice from every sector of the energy industry as we develop all economically competitive sources.

Note the phrase “economically competitive,” which refers to sources that stand on their own without taxpayer support or market intervention by government. Such measures, though often well-meaning, lead to unintended consequences – consider the recent Solyndra experience or some of the adverse impacts of our nation’s biofuels policies.

Both parties would be wise to keep the phrase “economically competitive” in mind. It can make all the difference between shaping policies that mean well and shaping policies that actually do well for the American economy.


4 Comments

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  1. Peter Bryn says:

    Good article and fair points made. However, I would say that the constant criticisms in the media of the White House’s involvement in Solyndra are unfair.

    I think it an appropriate role for government to invest in companies promoting breakthrough technologies that have the potential to move society forward. Many will fail, and that is expected. Solyndra was a PR nightmare since the President had publically lauded it just before its collapse. However, that doesn’t make the White House’s previous grant to the company a mistake.

    The reality is that many of these start ups will fail, and that’s expected. The reason we continue to fund them is that for every 50 that fail, one will succeed wildly with some game-changing technology and will have made the overall investment well worth it.

    So, while Solyndra may have failed, it is way too early to say that a large investment in a portfolio of clean technologies was a failure.

    • Linda Brown says:

      Peter, we do need alternative energy.
      However, a startup company should rely on private funding instead of taxpayer dollars. Then, if a company can prove it’s value to society, tax breaks would be in order.
      When a government starts making decisions on which businesses should succeed or fail, that starts to fall under socialism.

      • Peter Bryn says:

        Linda:

        Agreed that a government picking winners and losers is not an economically efficient policy, including Solyndra and the US’s focus on corn ethanol.

        Upon re-reading the article, what I was really taking issue with was the article’s statement that energy sources should stand on their own – I believe that’s true only after we internalize the externalities of climate change via a revenue-neutral carbon tax. It’s not correct to say that coal and wind turbines should compete on the same grounds since coal emissions are heating up the atmosphere while wind has no such impact.

        With the carbon tax, I then agree entirely that each source should stand on its own, and the market can then figure out how to best meet demand (and, with today’s technology, it would be with a lot more wind and nuclear than solar, regardless of how much money the government put into Solyndra).

        Thanks for the comment.

  2. TAP Management says:

    According to ExxonMobil’s Outlook for Energy, the international supply of energy will need to exceed current levels by roughly 30 percent in 2040. This increase in supply is due to the expectation that the global population will reach 9 billion by 2040 – a 25 percent increase from 2010.

    Because of this dramatic spike, many industry officials have expressed complaints about an all-in-one energy plan.

    The issue of energy policy has been a big ticket item for the upcoming election. We hope policy makers will take a realistic and pragmatic approach to our nations energy needs. If this does not happen, Americans will suffer.

    Energy should be treated as a non-partisan issue. If not, we will continue to see a lack of progress and political leaders attacking each other on more personal levels. This is a perfect example of what I am referring to:

    http://texog.com/blog/2012/08/16/utility-and-coal-executives-issue-complaints-of-national-energy-policy/

  3. Peter Bryn says:

    Good article and fair points made. However, I would say that the constant criticisms in the media of the White House’s involvement in Solyndra are unfair.

    I think it an appropriate role for government to invest in companies promoting breakthrough technologies that have the potential to move society forward. Many will fail, and that is expected. Solyndra was a PR nightmare since the President had publically lauded it just before its collapse. However, that doesn’t make the White House’s previous grant to the company a mistake.

    The reality is that many of these start ups will fail, and that’s expected. The reason we continue to fund them is that for every 50 that fail, one will succeed wildly with some game-changing technology and will have made the overall investment well worth it.

    So, while Solyndra may have failed, it is way too early to say that a large investment in a portfolio of clean technologies was a failure.

    • Linda Brown says:

      Peter, we do need alternative energy.
      However, a startup company should rely on private funding instead of taxpayer dollars. Then, if a company can prove it’s value to society, tax breaks would be in order.
      When a government starts making decisions on which businesses should succeed or fail, that starts to fall under socialism.

      • Peter Bryn says:

        Linda:

        Agreed that a government picking winners and losers is not an economically efficient policy, including Solyndra and the US’s focus on corn ethanol.

        Upon re-reading the article, what I was really taking issue with was the article’s statement that energy sources should stand on their own – I believe that’s true only after we internalize the externalities of climate change via a revenue-neutral carbon tax. It’s not correct to say that coal and wind turbines should compete on the same grounds since coal emissions are heating up the atmosphere while wind has no such impact.

        With the carbon tax, I then agree entirely that each source should stand on its own, and the market can then figure out how to best meet demand (and, with today’s technology, it would be with a lot more wind and nuclear than solar, regardless of how much money the government put into Solyndra).

        Thanks for the comment.

  4. TAP Management says:

    According to ExxonMobil’s Outlook for Energy, the international supply of energy will need to exceed current levels by roughly 30 percent in 2040. This increase in supply is due to the expectation that the global population will reach 9 billion by 2040 – a 25 percent increase from 2010.

    Because of this dramatic spike, many industry officials have expressed complaints about an all-in-one energy plan.

    The issue of energy policy has been a big ticket item for the upcoming election. We hope policy makers will take a realistic and pragmatic approach to our nations energy needs. If this does not happen, Americans will suffer.

    Energy should be treated as a non-partisan issue. If not, we will continue to see a lack of progress and political leaders attacking each other on more personal levels. This is a perfect example of what I am referring to:

    http://texog.com/blog/2012/08/16/utility-and-coal-executives-issue-complaints-of-national-energy-policy/