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Analysis: US energy policy under Bush and Obama

Mark Crosier
Thursday 11 December 2008 09:21

As the world anticipates the inauguration of President Barack Obama in January 2009, now seems like a good time to look back on the environmental legacy of George Bush's eight years in power, writes Mark Crosier.

President-Elect Obama is contemplating perhaps the world's most daunting in-tray, and environmental and energy issues are very near the top of it.

Remarkably, energy policy has been one of the main focuses of Obama's presidential campaign from early on. Remarkably, because those passionate about energy issues have become used to the idea of remaining low down the US presidential priority list since 2000. Obama's emphasis on the importance of a cleaner environment, renewable energy generation and, ultimately, "energy independence" reflect a widespread belief that the Bush Administration and those before it have neglected this area with potentially serious political, economic and environmental consequences in years to come.

Most notably, of course, Bush refused to ratify the Kyoto agreement in 2000, a decision that demonstrated the Administration's scepticism towards man-made climate change. While such scepticism has still not entirely disappeared, even eight years on, it is now widely discredited. Both Obama and John McCain in their presidential campaigns accepted that climate change was real, man-made and required urgent action to solve.

Interestingly, only two major Western nations failed to ratify Kyoto at the time - the USA and Australia. The latter changed its policy and ratified Kyoto after the election of the Labor Party in 2007. Now we may see the US do something similar after its own change of government.

However, energy policy goes well beyond the climate change debate as symbolised by Kyoto, important though that is. Throughout its eight years the Bush Administration continued to emphasise the importance of oil to the US economy. According to the Energy Information Association (EIA), in 2006 the USA consumed in excess of 20 million barrels of oil a day, twice as much as any other country in the world, and produced less than 10 million barrels a day.

George Bush himself, in his 2006 State of the Union address, memorably described America as "addicted to oil". The geopolitical consequences of this addiction are profound and well known. Despite its better judgement, over the past eight years America has continued to find itself reliant on unstable and sometimes outright hostile regimes in the Middle East, as well as in emerging oil-producing powers such as Russia and Nigeria.

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Not surprisingly, both politicians and the general public have concluded that such oil dependency cannot continue. Obama is inheriting a growing political movement to make the US 'energy independent'.

Promises about energy independence have been made before, of course - not least by Bush himself in that 2006 State of the Union speech, when he pledged to replace more than 75% of America's oil imports from the Middle East by 2025. But there are a couple of things that lead many commentators to conclude that this time, Obama has a better opportunity of making it a reality than previous presidents.

First, there is the fact that he is taking power at a time of economic crisis and rising unemployment, which is predicted to increase to 9% in 2009 from 6.5% now. While this may seem like a headache for him, it could also provide the impetus for major, New Deal-style infrastructure projects such as developing nuclear and renewable energy plants.

Second, American domestic politics over the past decade has become increasingly dominated by concerns over outsourcing of industrial and manufacturing jobs to lower-cost countries such as China and India. Obama believes making new jobs dependent on skills and high educational qualifications are the best way round this problem. His investment in cleantech, he said in his speech at the Democratic Convention in August, "will lead to new industries and five million new jobs that pay well and can't ever be outsourced."

Third, Obama is helped by something as simple as good timing. Put plainly, there's an increasing sense that the time is right for clean technologies to emerge into the mainstream, and that the money invested in cleantech since 2001 - including over $10bn by the Bush administration - will finally start coming to fruition.

Ten billion dollars is a huge amount of money, of course. But Obama's plan dwarfs this: he intends to invest $150bn in cleantech and renewables over the next 10 years. This gives some sense of the scale of Obama's commitment to cleantech and renewable energy.

Since George Bush took office in January 2001, the debate on US energy and environmental policy has shifted enormously. For a president who in many respects has paid little attention to this area, it is perhaps ironic that his current levels of unpopularity are in large part down to two policies - an invasion of Iraq justified on some level by regime change to stabilise the Middle East and ensure freer access to oil reserves, and a failed response to the environmental catastrophe caused by Hurricane Katrina, arguably itself a product of climate change.

While Bush's presidency began with his decision not to sign up to Kyoto, the mood at the time of Obama's election victory could hardly be more different. Bush's presidential opponent in 2000, Al Gore, has recently urged Obama to commit to using 100% renewable energy within the next 10 years. Such a statement seems extremely challenging now and would have been virtually unthinkable eight years ago. But the fact that it is even being mooted demonstrates how far American energy policy has moved during President Bush's tenure.

Mark Crosier is CEO of energy sensor firm DeepStream Technology.

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