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Obama’s gambit to marry US policies on environment and energy

True, America is still guzzling fossil fuels. But since taking office just over a year ago, President Obama has quietly set the nation’s energy policy on a new course.

Even as health care dominated the news, Obama energy czar Carol Browner – working with the departments of Interior, Energy, and Transportation – has established a new, unified energy-and-environment policy. But whether this focus on renewable power and energy security can succeed depends largely on whether Congress approves climate-energy legislation that puts a price on carbon emissions, energy experts say.

“For 20 years we’ve been … drifting in the wrong direction,” says David Pumphrey, an energy and national-security expert at the Center for Strategic and International Studies in Washington. “This administration has turned things around. What’s important is that we are … moving in a positive direction now.”

Energy accomplishments so far

He and others tick off the administration’s most significant energy-related accomplishments to date:

• Accelerating adoption of renewable energy – wind, solar, and geothermal power and battery-powered vehicles – and high-speed rail via $90 billion in new spending and tax incentives from last year’s economic stimulus act.

• Defining greenhouse-gas emissions as a danger to human health and the environment, paving the way for the Environmental Protection Agency to regulate them – or for Congress to control them by placing a price on them.

• Unveiling a new “clean car” standard that, for the first time, regulates greenhouse-gas tailpipe emissions. Meshing that with new fuel-efficiency standards for vehicles will save 1.8 billion barrels of oil and nearly 1 billion tons of emissions.

The administration has “been very effective and very activist on their executive policy agenda,” says Kevin Book with ClearView Energy Partners, a Washington market research firm. “Obama has tightened regulations on fossil energy at every level, defined greenhouse gases as pollutants, and, with the stimulus act, made gains for renewable energy.”

Will Congress cooperate?

Now, however, the president faces his biggest energy test for his union of energy-environment policy: getting Congress to pass a comprehensive climate-energy bill that will put a price on carbon emissions – legislation now stalled in the Senate.

Unless there is a price to be paid for carbon dioxide emissions, for instance, construction of coal and natural-gas power plants could surge, while wind and solar power construction dry up.

“Think of it this way: We’re three-quarters of the way through the academic year, and Obama’s team is getting an ‘A-‘ or ‘B+,’ ” says Mr. Book. “But the final exam is worth 50 percent of the grade. The legislation is critical. If they don’t get that done, they will have achieved momentous things that nonetheless will come up very short.”

That’s why, despite widespread doubt that another big bill can get through Congress before the November elections, Mr. Obama seems likely to push now for a vote on a climate-energy bill, says Book.

Obama has already taken two steps intended to make compromise easier (though they angered many environmentalists and Democrats). Late last month he opened parts of the Atlantic, Gulf, and north Alaska coasts to oil and natural-gas exploration. In February, he said the government would add $36 billion in loan guarantees for nuclear-power construction.

“We were thrilled with the president’s overall focus on the power of clean energy,” says Anna Aurilio, director of Environment America’s Washington office. “Where we’ve been completely disappointed is the massive nuclear loan guarantees and the offshore oil.”

Yet the oil and nuclear offerings, which Republican lawmakers wanted, may enable Obama’s Senate allies to craft a deal on carbon-emissions pricing.

Bipartisan energy-climate bill

As soon as April 20, Sens. John Kerry (D) of Massachusetts, Joseph Lieberman (I) of Connecticut, and Lindsey Graham (R) of South Carolina are expected to unwrap a compromise energy-climate bill that puts a price on carbon emissions in exchange for nuclear and oil development gains.

“The administration can only go so far by itself,” Mr. Pumphrey says. “If you want to change the system from one dominated by fossil fuels to one dominated by low-carbon fuels … you have got to have Congress on board.”

Despite Obama’s initial actions, big long-term questions remain. Can he reach his goal of having 1 million plug-in vehicles on the road by 2015? Will that do much to lower US emissions? Can he slash greenhouse-gas emissions 17 percent below 2005 levels, by 2020?

“Unfortunately, they’ve been proactive about things that may only yield marginal improvements,” says W. Ross Morrow, an assistant professor of engineering and economics at Iowa State University in Ames.

Lead author of a recent analysis of Obama’s transportation policy, Dr. Morrow says oil consumption and carbon emissions from transportation “are much harder to reduce than they look.” To reduce transportation emissions 14 percent below 2005 levels, by 2020, could require gasoline prices of more than $7 a gallon, he and his coauthors at Harvard University’s Belfer Center found.

Economic impact

The good news is that even aggressive policies to slow climate change will not necessarily slam the brakes on the economy, Morrow says. High fuel taxes and high prices on carbon emissions would curb US economic growth by no more than one percentage point, Morrow’s study found.

“The changes Obama has made so far won’t get everyone in the country to drive less – something that would have a much bigger impact,” he says. “So we can’t just say, ‘Hey, we have new mileage standards, so we’ve got our oil problem solved.’ “

Among those on the political left, some say Obama can yet pull off an overall energy-climate bill.

“From his experience with health care, the president now realizes it is possible to get landmark legislation through the Senate,” says Bracken Hendricks, an energy expert at the Center for American Progress, a liberal think tank. “I think there are fair-minded Republicans who realize this is important for the country.”

There’s an even more compelling reason for Obama to keeping pushing, says Book.

“You only get an opportunity like this once in a lifetime,” he says of the possibility of shifting US energy use. “We have a chance to write our own policy, craft our own plan. If we don’t do it, our trading partners will be setting the terms for us.”