Energy Biz - September/October 2008 - (Page 30) » Financial Front the uncertainty over future climate change legislation and the costs that will be placed on each ton of carbon dioxide emissions. Both the candidates understand the role of coal in today’s economy. It now supplies more than half of the nation’s generation mix. McCain, though, seems to place more faith in emerging technologies that would capture and store carbon releases as well as those that would purify coal before its emissions would leave the smokestack. Obama, on the other hand, says that such modern tools have yet to arrive and therefore the country should not build any new coal plants based upon what will soon be old technologies. “We are going to cap the greenhouse gases that cause global warming,” Obama said in a speech. “We are going to take some of the money that’s generated from fining polluters, and we are going to spend billions of dollars on solar, wind and biodiesel.” The Democratic candidate would, furthermore, limit the tax breaks given to oil companies and use the newfound funds to promote renewable energy and conservation. Republicans are quick to pounce, noting that any tax hike would deter oil and gas development, diminish supply and thereby increase prices to consumers. They, generally, favor increased production and will work with agreeable states to allow drilling in areas that are at least 100 miles offshore. McCain, once opposed to such an expansion, now says that it is imperative given energy shortages and record high prices. “Opening up new areas for exploration and development is not a quick fix, but needs to be part of a long-term strategy,” says Skip Horvath, chair of the Natural Gas Supply Association. It will take up to 10 years to bring the product to market – “just when we will need the natural gas most.” Future Policies The debate only underscores the divide between the parties. Practically speaking, Republicans say more production could add two decades of new oil and gas as well as send a message to hostile foreign nations that this country won’t be held hostage. Drilling may have its benefits, Obama concedes, but he will not to agree to oil and gas leasing rights in sensitive areas. If the country wants to change the current energy paradigm, then he says that it must encourage conservation and more use of renewable fuels. To support that view, Democratic leaders have referenced the U.S. Energy Information September/October 2008 Administration, which says that opening up the Atlantic and Pacific coastlines to more oil and gas production would do little right now to ease price pressures. Obama adds that expanding such rights would be both ecologically destructive and unwise, given that the nation cannot drill its way out of energy dependence. Currently, about 35 percent of the natural gas consumed in the United States each year is produced in the deep waters of the Gulf of Mexico. Proponents of greater drilling rights want more access, saying that about 85 percent of all offshore areas are untouchable. Opponents of more drilling, meanwhile, counter that oil and gas companies have not aggressively explored those offshore areas in which they now have legitimate access. “Instead of giving oil executives another way to boost their record profits, I believe we should put in place a windfall profits tax that will help to ease the burden of higher energy costs on working families, and we should invest in the affordable, renewable sources of energy that Senator McCain has opposed in the past,” Obama says. By the same token, Obama has sharply criticized McCain’s proposal to greatly expand this country’s nuclear generation base. While the Illinois senator says that increasing the presence of nuclear energy is a future option, it is not one he would consider now given the concerns over where to store and how to recycle radioactive nuclear waste. McCain, on the other hand, has called for the construction of 45 new nuclear plants by 2030 and another 10 more in subsequent years. He emphasizes that 104 nuclear facilities now exist in the United States and that they supply 20 percent of this country’s electricity. Those plants are not only safe and efficient, he says, but they are also environmentally friendly and they do not emit any greenhouse gases. “Every year, these reactors alone spare the atmosphere from the equivalent of nearly all auto emissions in America,” says McCain. “Yet for all these benefits, we have not broken ground on a single nuclear plant in over 30 years.” The Arizona senator has long supported using Yucca Mountain in Nevada as a permanent repository for nuclear waste. Energy issues are now top-of-mind. The goal is to expand the nation’s portfolio of fuels and to do so in the most environmentally efficient manner. The candidates are defining their positions. America’s energy policy will assuredly evolve and take the country in a direction that will be firmly embedded for years to come. 30 E n E rgyB i z
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