During the annual State of Union address on January 25, 2011, United States’ President Barack Obama spoke briefly about energy policy and a future energy transition. I will focus on a short excerpt of the speech here:
State of the Union: “We need to get behind this innovation. And to help pay for it, I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. (Applause.) I don’t know if — I don’t know if you’ve noticed, but they’re doing just fine on their own. (Laughter.) So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.
Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling. So tonight, I challenge you to join me in setting a new goal: By 2035, 80 percent of America’s electricity will come from clean energy sources. (Applause.)
Some folks want wind and solar. Others want nuclear, clean coal and natural gas. To meet this goal, we will need them all — and I urge Democrats and Republicans to work together to make it happen. (Applause.)”
First the President is calling for elimination of subsidies to oil companies. Some of these subsidies include decreased royalties and depreciation rules that are not too dissimilar to non-oil energy generation projects. The point of the excerpt I will briefly focus on here is the President’s challenge to generate 80% of US electricity from “clean energy” sources by 2035. The President then defines these clean energy sources where the only one not in commercial production is “clean coal” which we can assume is discussing the capture and sequestration of carbon dioxide from coal-fired power plants.
If you add up the amount of electricity from the “clean energy sources” that President Obama lists, you see that in 2009 approximately 54% of electricity already comes from these sources: 23% natural gas, 20% nuclear, 7% hydroelectric, and 4% renewables other than hydropower. So in effect the President was asking to capture and sequester carbon dioxide from approximately 60 percent the 45% of electricity that comes from using coal. In 2008 the percentages of ‘clean energy’ were as follows: 21% natural gas, 20% nuclear, 6% hydroelectric, and 3% renewables other than hydropower. US coal power accounted for 50% of total electricity.
If you see the effect of recession on electricity consumption, you see that it was effective at decreasing the use of coal-fired electricity as in 2008 coal power amounted to 1,986 TWh (1 TWh is one billion kWh) of electricity versus 1,764 TWh in 2009. The total electricity generation in the US was 4,119 TWh and 3,953 TWh in 2008 and 2009, respectively. Increasing percentages of alternatives can come from decreased, or conserved, generation of total electricity as well as switches in use of technology. Of course the decrease in electricity generation and consumption is broadly associated with no or less economic growth, something most people don’t see as a solution.
Thus, the President’s goal (at least as discussed in the State of the Union) for clean energy was relatively narrow in that it focused on electricity and not energy sources in general. He did mention biofuels and reducing imported oil but gave no new specifics in the speech. His statements on clean electricity can broadly be interpreted as promoting carbon capture and sequestration technologies. This is not a large difference from what was already happening through funding and research projects supported by the US Department of Energy. Targeting 2035 provides plenty of time to develop technology over the next 10-15 years while then retrofitting existing and building new coal-fired power plants that capture carbon dioxide from 2020-2035.
So the President’s speech was inspiring for clean energy advocates and coal purveyors. Not so inspiring for oil companies, but perhaps provides them direction to focus more on natural gas than oil in the US. This is not too hard given the increasing plays for natural gas from shale that the large companies (e.g. ExxonMobil acquisition of XTO, a company with assets in shale natural gas) are already moving on. In all, the discussion of a move to ‘clean energy’ was primarily stating what is already being done.