Q and A on the subject of clean tech legislation

Here’s a panel I attended at the recent Pacific Crest Technology Leadership Forum in Vail, Colorado. There were two experts on the panel: Steven Kalland, Director of the North Carolina Solar Center and Gregg Rothschild, Chief Counsel and Deputy Chief of Staff of the House Energy and Commerce Committee. I found this presentation to be very interesting and informative – kind of a behind the scenes look at what’s going on at the state and federal levels when it comes to renewable power sources.

Enjoy…

I’ve put each specific question that was asked, followed by the basic bullet-point answers given. The complete answer can be found in MP3 format below the bullet points.

Q: What’s driving states to adopt clean tech?

• Economy is struggling, jobs can be created with new clean tech initiatives
• Gas is too expensive, people are complaining
• Fear of the unknown regarding climate change

Audio from Steven Kalland: http://old.crunchgear.com/audio/cleantech01.mp3

Q: What are some of the connection and transmission challenges for RPS (renewable power sources)?

• Interconnection issues. How do you hook these systems to the existing grids?
• Large-scale transmission is still a challenge.

Audio from Steven Kalland: http://old.crunchgear.com/audio/cleantech02.mp3

Q: States are being proactive. Why haven’t we seen much action on the federal level?

• We might see movement this fall from republicans. It’s an issue they think they can win. Obama recently commented that we should open up drilling, despite saying earlier that “we can’t drill our way out of these problems.”
• If the democrats are willing to take drilling off the table, they’ll want something in return. Specifically, things like renewable energy spending.
• Gas prices will drive the renewable energy issue from both sides, politically.

Audio from Gregg Rothschild: http://old.crunchgear.com/audio/cleantech03.mp3

Q: What is the long term picture? Have the dynamics changed fundamentally on this issue for the long term?

• It depends on who’s president. Obama used to focus on climate change, now he’s more focused on the addiction to foreign oil.
• The debate has shifted from climate to production.
• If Obama wins, there will be enormous momentum behind increasing production, particularly alternatives and subsidies. McCain is different. He doesn’t favor subsidies.

Audio from Gregg Rothschild: http://old.crunchgear.com/audio/cleantech04.mp3

Q: Is it likely that we’ll see federal level tax credits aimed at reducing energy consumption?

• It’s been done with appliances and has been discussed with buildings in general.
• Obama favors 15% energy consumption reduction.
• There’s a massive disparity between states when it comes to per capita energy use, which creates slack in the system.

Audio from Gregg Rothschild and Steven Kalland: http://old.crunchgear.com/audio/cleantech05.mp3

Q: Are you sensing more support for longer term tax credits?

• Nobody wants to cut spending or raise taxes. Democrats passed a rule that no bill can go to the floor unless it’s paid for within the 6 year to 11 year window.
• That could change as more and more constituents complain about high energy prices.

Audio from Gregg Rothschild: http://old.crunchgear.com/audio/cleantech06.mp3

Q: What do you think about a cap and trade issue now that gas is $4 per gallon? What about a federal climate bill?

• It’s not a good idea to tax economic activity.
• It’s unlikely to see a climate bill anytime soon, although it Obama is elected president, the sheer force of his presidency may be enough to move democrats to pass such a bill. If McCain is elected, all bets are off.
• States have been proactive because things move slowly at the federal level.
• State utilities actually are interested in a federal bill so that they know what standards they’ll have to meet.
• A federal standard would facilitate regional energy trading, which would be an improvement over the patchwork of state utility regulations.
• Some states are wary that a federal bill might dumb down regulations that they’re already exceeding.

Audio from Gregg Rothschild and Steven Kalland: http://old.crunchgear.com/audio/cleantech07.mp3

Q: Why isn’t job creation being discussed more? A lot of jobs could be created by encouraging renewable power sources.

• Job creation is one of the highlight arguments from proponents of renewable energy. Some people might see that as government intervening with the market, though the market left to its own devices will sort everything out.
• The concept of renewable energy isn’t marketed correctly at the state level. Also, people think that most of the jobs could get outsourced anyway. There would be a lot of HVAC-type installer jobs created, though.
• Obama said that it’s clean tech that will save the auto industry and the economy of Michigan.

Audio from Gregg Rothschild and Steven Kalland: http://old.crunchgear.com/audio/cleantech08.mp3

Q: What about a carbon tax?

• It’s not a popular choice. More popular is a cap and trade system, where utilities that couldn’t meet certain standards could trade with other utilities for credits.
• A cap and trade bill will likely be passed.
• A short-term benefit is that most utilities would become more efficient right away since that’s the lowest hanging fruit as it pertains to meeting standards.

Audio from Gregg Rothschild and the panel’s moderator: http://old.crunchgear.com/audio/cleantech09.mp3

Q: We’ve been talking about clean tech policy at the state and federal level. What about the global picture?

• Nancy Pelosi would call it “horribly embarrassing,” although republican leaders in the House think that too much clean tech in the US might encourage companies here to do more of their manufacturing overseas in countries with less strict policies.
• The toughest thing about climate change is going to be the cost. Politicians want to be re-elected and it’s tough to tax economic activities.

Audio from Gregg Rothschild and Steven Kalland: http://old.crunchgear.com/audio/cleantech10.mp3

Q: How will adding all these plug-in hybrid cars effect the current energy grid?

• It’s tough to imagine a million hybrids on the road, as Obama encouraged, without big changes to the grid.
• We’ll need a smart grid to better manage the energy. The current grid is too dumb to handle all those cars plugging in all the time. We’re nowhere near ready to handle all the additional capacity that we’ll need.

Audio from Gregg Rothschild and Steven Kalland: http://old.crunchgear.com/audio/cleantech11.mp3

Q: You mentioned high gas prices. Is there an assumption that oil prices will stay this high over the long term?

• Policy in this country has always been a fireman action versus a policeman action. We tend to react when there’s a crisis instead of trying to prevent it first.
• High gas prices have pushed up prices of a bunch of other stuff, too.
• No evidence that gas prices will go down substantially any time soon.
• Even if gas prices go down, people still don’t forget about how high the prices were. Gas prices would have to go down a whole lot for people to forget. It happened in the eighties, though, after the previous oil crisis.

Audio from Gregg Rothschild and Steven Kalland: http://old.crunchgear.com/audio/cleantech12.mp3

Q: What should we look forward to in the future?

• Overcoming the challenges of alternative energy transmission and storage.
• Plug-in hybrids are great, but we need a smart grid.
• Ethanol subsidies will stay at current levels for a while.

Audio from Gregg Rothschild and Steven Kalland: http://old.crunchgear.com/audio/cleantech13.mp3