A New Era in Energy?

We’ve viewed somewhat nervously the seeming effort to strip away a forward-looking energy policy in favor of the sparkly but short-sighted goal of replacing our dependence on foreign oil with a dependence on domestic oil. It’s an election year diversion that has taken way too much attention away from broader energy issues, especially since there seems no actual way to achieve the stated goal – lowering gasoline prices - with the stated approach – loads of new drilling. The arguments over drilling have done nothing more or less than successfully sucked the light of a reasonable approach to energy issues into an oily black pool.

So it is heartening to see some Senators – the informal Gang of 10, with five from each party - try to claw their way out of the blackness to find a way back to broader and more urgent energy issues. Calling their bill the New Energy Reform Act of 2008 or New Era, it allows some drilling while proposing a fairly ambitious portfolio.

This is what they propose for new drilling:

It would permit producers to explore beyond a 50 mile buffer zone off Florida's Gulf coast and those of Virginia, the Carolinas and Georgia, if those states opt in to the deal. It requires all new oil and gas production to be used domestically.

Well, not great, but not awful. You’d have to be pretty ideologically pure not to accept it.

Everything else seems a reasonable mix of carrot-without-stick that legislators like to give constituents and a show of support for moving forward with renewable energy sources.

• A tax credit of up to $7,500 per vehicle if you purchase an advanced alternative fuel vehicle and up to $2,500 to retrofit your 1976 Pinto with an advanced alternative fuel engine. ($7.5 billion in research money will go to the struggling auto industry to boost electric vehicles, mostly to improve the batteries that store electricity.) The goal is that 85 percent of new vehicles on the road will be powered by fuels other than gasoline and petroleum diesel within 20 years.
• Continue with renewable energy, carbon mitigation and energy conservation and efficiency tax incentives, including the production tax credit, through 2012 to spur greater investment in renewables. Where to get the money? By stripping oil companies of at least $30 billion in tax breaks. (We’re guessing this obviates the Obama-touted windfall profits tax and still spanks the gas industry for its profitable ways.)
• Provide grants and loan guarantees for the development of coal-to-liquid fuel plants with carbon capture capability.

And nuclear? How could we forget that?

And it supports nuclear energy by increasing staff at the Nuclear Regulatory Commission, providing workforce training, accelerating depreciation for nuclear plants, and supporting research and development on spent fuel recycling to reduce nuclear waste.

This is a pretty good laundry list of nuclear industry wants, though the R&D on nuclear fuel recycling seems to be another feint away from Yucca Mountain. Well, it’s a good goal regardless.

Here’s Sen. Kent Conrad’s (D-S.D.) summation of the bill if you want to start digging a little deeper.

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Here’s McCain on the bill:

"Anybody who says we can achieve energy independence without using and increasing these existing energy resources either doesn't have the experience to understand the challenge we face or isn't giving the American people some straight talk," McCain said.

And Obama:

"Today's announcement includes many of the policies I've been fighting for during my time in the Senate and over the course of this campaign," Obama said. "It would repeal tax breaks for oil companies so that we can invest billions in fuel-efficient cars, help our automakers re-tool, and make a genuine commitment to renewable sources of energy like wind power, solar power, and the next generation of clean, affordable biofuels."

Boy, you have to give these guys credit for staying on message.

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As you might expect from such a compromise, none of the trough feeders like it.

The bill is already generating some heavyweight opposition. The oil industry is warning that revoking its tax breaks could slow its production of new energy supplies. Environmentalists support the tax credits for wind, solar and electric vehicles, but strongly oppose the new offshore drilling and coal-to-liquid fuels provisions.

Sounds like a go to us.

Your Gang of 10, with Mary Landrieu (D-La.) at the podium. They do love their charts, don’t they? The others gang members are Saxby Chambliss (R-Ga.), Kent Conrad (D-N.D. ), Bob Corker (R-Tenn.), Lindsey Graham (R-S.C.), Johnny Isakson (R-Ga.), Blanche Lincoln (D-Ark.), Ben Nelson (D-Neb.), Mark Pryor (D-Ark.), and John Thune (R-S.D.).