Las Vegas Sun

March 19, 2024

New energy strategy embraces oil as bridge to alternative fuels

Nevada, a leader in solar and geothermal power, has high stake in weaning nation off traditional fossil fuels

Steven Chu

Steven Chu

The solar power that Nevada hopes to make its chief cash crop is on course to be price-competitive with fossil fuels within a decade, according to Energy Secretary Steven Chu. But to get there, it’s going to need a helping hand from fossil fuels.

That is the philosophy behind a new strategy taking shape in Washington, as steep gasoline prices, a war in oil-rich Libya, and concern over nuclear power following the Fukushima disaster in Japan, have politicians promoting more stable, domestic energy sources.

“Our best opportunities to enhance our energy security can be found in our own backyard,” President Barack Obama said Wednesday in a speech during which he reiterated his goal of reducing long-term oil dependency while providing more immediate relief at the pump with incentives to increase domestic oil production.

It’s a nod to the importance of oil in the energy equation.

Democrats have spent the past few years trying to paint the industry as parasitic pariahs, gobbling up subsidies, belching smog and forcing clean energy alternatives out of the political marketplace.

But oil is a necessary bargaining chip to woo Republican votes needed to bankroll the Obama administration’s research and rollout of renewable energy initiatives.

It isn’t that Republicans oppose renewable energy; on the contrary, Nevada’s conservative contingent has voted regularly in favor of promoting the solar, wind and geothermal industries that have a growing footprint in the Silver State.

But for Republicans, renewables can’t fly on their own. They espouse what U.S. Sen. John Ensign calls the “everything but dangerous foreign oil” approach, which includes: deep-sea drilling, drilling in the Arctic National Wildlife Refuge, harvesting oil from shale deposits, coal, nuclear, natural gas — and off the back of those, “aggressive investment in renewable and green energy — solar, wind, geothermal, hydropower, fuel cells and electric vehicles.”

The president hasn’t gone that far: He remains a booster of nuclear power and natural gas but he’s not, for example, promoting a rampant expansion of drilling beyond the areas already licensed — a source of frustration to Republicans, and even some Democrats, such as Sen. Mark Begich of Alaska, who say the president isn’t going far enough on oil and gas.

Obama buttressed talk of “incentives” to reduce the country’s dependence on foreign oil by a third by 2025 with reminders of the country’s limited capacity — the U.S. has only 3 percent of the world’s oil reserves — and the need to get ahead of other countries on developing alternatives if we’re to profit from them.

Nevada has a high stake in that global race. It’s not just solar. Nevada also leads the nation in geothermal development, which experts estimate could supply 20 to 25 percent of the state’s power once current projects are developed.

“This is a place where America has the lead and Nevada has the lead of the leader,” Karl Gawell, executive director of the Geothermal Energy Association, said Thursday.

But some Nevadans fear losing that momentum, as the president broadens his definition of what’s an acceptable energy source in the race to go local.

“It would be my hope to move toward renewable energy, but it’s apparent that he’ll never get something like that through (Congress),” said Nevada Democratic Rep. Shelley Berkley of Obama’s plans. “So he’s preparing alternatives to alternative energy. It’s not the way I’d like to be going.”

The “incentives” Obama called for aren’t tax breaks or subsidies. The president still hopes to reduce those dramatically under his fiscal 2012 budget. Rather, it’s shorter offshore and public land drilling leases for slow-moving ventures, and extended terms for companies who engage in rapid development.

“Politically, it’s smart for the president to talk about doing a better job of developing oil and gas,” said Senate Majority Leader Harry Reid, who also agreed that it’s important for the nation to curb its foreign oil dependency. “This is an exchange of dollars that we don’t need to make,” he said.

But even if the president’s hoping to score a few political points with Republicans, it’s doubtful it’s going to be enough to get a major energy overhaul done.

That means, as now, the president’s energy strategy will be debated not as separate legislation but through the budget. First up: cuts to the Energy Department’s research and development programs needed to make energy alternatives cost-competitive, and loan guarantees needed to get renewable ventures up and running, which are on the block for the rest of this fiscal year.

Nevada’s Republicans have voted for those cuts as presented in the House’s budget bill, House Resolution 1; Nevada’s Democrats cited them as reasons to vote against the budget. But they are still on the table as lawmakers look for another $33 billion in spending cuts.

For now, the administration is hoping for as much help as it can get from Congress — across the board.

“We hope the Congress will support us, but some of the things, for example, research ... is relatively speaking, very inexpensive,” Chu said. “Once you get the ability to do that research, the companies don’t need any other help. Then it’s just making money.”

But, the energy secretary seemed to suggest, while the government’s got research priorities that do seem to favor Nevada’s homegrown industries, states can’t count on the government to pick and choose.

“We expect dramatic improvements in solar energy in the coming decade ... but ultimately, this is going to be a market decision,” Chu continued. “We would hope that renewable energy, energy storage, and energy transmission is under control so we can actually begin to wean ourselves away from fossil energy, nuclear energy and those things. But for now ... you really want a diverse portfolio.”

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