Obama Recycles Waxman-Markey Utility Sector Target – Neglects to Inform Congress, Public

by Marlo Lewis on January 26, 2011

in Blog

Last night’s State of the Union Address shows that President Obama learned only one lesson from the failure that was Copenhagen, the farce that was Cancun, the death of cap-and-trade, and the “slaughter” of House Democrats who voted for Waxman-Markey. Namely, dissemble, repackage Kyotoism in new verbiage, and press on with an agenda that voters rejected in November.

Anyone paying attention to Obama EPA’s campaign to ‘legislate’ climate policy through the regulatory backdoor would expect as much. But — true confession — I was surprised when Obama proposed to restructure the U.S. electric power sector along the lines contemplated by H.R. 2454, the American Clean Energy and Security Act of 2009 (ACESA), the infamous Waxman-Markey cap-and-trade bill.

In his SOTU speech, President Obama said:

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.)

Upon hearing those words, I wondered: How does Obama’s 80% ‘clean energy’ target compare with the projected electric power sector fuel mix under Waxman-Markey?

The U.S. Energy Information (EIA) analyzed the energy market and economic impacts of H.R. 2454 under various “cases” based on different assumptions regarding the cost and performance of new technologies, the availability of “offsets” (credits for contributing to emission reductions abroad or in non-capped domestic industries), and the like.

Let’s stick with the “Basic Case,” which assumes (perhaps unrealistically) that low-emission technologies including nuclear, renewables, and carbon capture and storage (CCS) — a.k.a. “clean coal” — “are developed and deployed on a large scale in a timeframe consistent with the emissions reduction requirements of ACESA without encountering any major obstacles,” such as high cost. This procedure makes sense, because Obama’s proposal also assumes that nuclear, renewables, and CCS can be affordably scaled up over the next two decades.

Under EIA’s Basic Case (lines 1264-1272 of the Excel Spreadsheet), Waxman-Markey would change the mix of fuels used to generate U.S. electricity as follows:


The category “Other” is an assortment of ‘clean’ and ‘unclean’ fuel types, it’s tiny and doesn’t change much under Waxkey, so let’s ignore it. That leaves 4120 bkwh as total generation in 2010 and 4670 bkwh in 2030. The share of ‘clean’ fuels (natural gas, nuclear, renewable) is 51% in 2010, increasing to 70% in 2030.

EIA’s Basic Case also projects that coal with CCS will generate 513 bkwh by 2030 (p. 22). So electricity from all ‘clean’ sources is projected to reach 3786 bkwh in 2030, or 81% of total generation. Bingo!

Okay, Obama’s goal is 80% by 2035, not 81% by 2030, but it’s close enough for gomn’t work. In effect, Obama last night asked Congress to enact the Waxman-Markey emission-reduction target for the electric power sector.

When Obama was a presidential candidate, he acknowledged that under cap-and-trade, U.S. electric rates would “necessarily skyrocket.” He never said this again, but once the public understood that cap-and-trade would impose a stealth energy tax on the economy in the midst of a deep recession, they turned against it in droves.

Obama, however, never abandoned the big-government agenda of which cap-and-trade was an expression. The day after Election Day, he told the Washington press corps: “Cap and trade was just one way of skinning the cat; it was not the only way.  It was a means, not an end.  And I’m going to be looking for other means to address this problem.”

Well, now we know what other means besides EPA ‘lawmaking’ he intends to employ. The good news is this ploy is not going to work. As soon as Tea Party activists recognize the clean energy mandate for the de-facto energy tax/Waxman-Markey knockoff that it is, it’s toast.

Imagine if President Obama had said last night:  

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. This will restructure the electric power sector the same way Waxman-Markey would have if Congress had passed it. It will also cause your electric rates to necessarily skyrocket. As I’ve said before, there’s more than one way to skin a cat.

Such candor would not have won applause.


Previous post:

Next post: