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The President Addresses an Addiction

Expert perspective: In his 2006 State of the Union Address President Bush declared that ‘we have a serious problem: America is addicted to oil,’” writes Professor Kenneth Richards. “To address this addiction, President Bush announced the Advanced Energy Initiative that will involve a 22-percent increase in funding for the U.S. Department of Energy’s research programs in electricity and low emissions automobiles.

“For electricity, the Bush Administration will target zero-emission coal-fired plants, new solar and wind technologies, and nuclear power that is cleaner and safer. For vehicles, the emphasis will be on better batteries for energy storage, ‘pollution-free’ hydrogen cars, and ethanol.

“On first examination this sounds like a radical departure for a former Texas oilman. But there may be less here than meets the eye. Historically, spending on research in solar and wind power has been a drop in the bucket compared to funding of more conventional approaches. If the 22-percent increase in research funding is allocated in a way that is proportional to past patterns, the Advanced Energy Initiative is unlikely to have an appreciable impact on the development of the technology.

“It was not clear from the announcement whether the Bush Administration considers carbon dioxide, the primary greenhouse gas, an emission. If so, developing zero-emission coal-fired plants will require major advances in geological and terrestrial carbon sequestration. While the technologies and practices associated with sequestration have advanced substantially, even under a rosy scenario, the costs of electricity will rise substantially for true zero-emissions operations.

“President Bush’s announcement was also vague about its concept of a pollution-free automobile. But hydrogen is only a transmitter of energy, like the distribution system that brings electricity to your home. While it is true that hydrogen-fueled automobiles emit only water vapor, the initial production of the hydrogen can be just as polluting as current internal composition technologies. True zero-emissions will require an initial source of energy that is emission-free, such as solar and wind power, again begging the question of how the research money will be spent on developing alternative electricity generation technologies.

“The new initiative for biofuels provided an intriguing possibility. As an alternative or sustainable energy source, ethanol production has been severely criticized. It is argued that over its entire production cycle, ethanol from corn consumes more energy than it produces. Bush promises that the new research program will examine ethanol production ‘not just from corn but from wood chips and stalks of switch grass.’ The goal of the program is to make the new kind of ethanol competitive within six years.

“The 2006 State of the Union speech is perhaps most notable for what it did not say about the Advanced Energy Initiative. It did not say how the 22-percent increase in funding would be distributed among the program components. Perhaps solar and wind were just thrown in as window dressing on expansion of current programs. Mr. Bush did not clarify how the research would be carried out—whether through government, academic, or industry efforts. He also did not indicate whether the funds would be distributed through a peer-reviewed research grant process or pork barrel politics. The speech provided no insight into how the ambitious goal of making wood chip- and switchgrass-based ethanol competitive might be achieved, particularly given the abysmal record of corn-based fuels.

“Mr. Bush also said nothing about energy conservation and he said nothing about the single most effective tool for reducing energy use—taxes. This is perhaps not surprising given that he introduced his discussion of energy by declaring that ‘Keeping America competitive requires affordable energy.’

“Ironically, President Bush’s foreign policy may do more to advance alternative energy than his energy policy. Iran is the fourth-largest producer of oil. If the United States’ and the United Nations’ stance on Iranian nuclear activities leads to the economic isolation of that country, world oil prices may rise even more than in the recent past. In that case, businesses will have a greater incentive to seek and disseminate alternative energy sources and consumers will have and conserve.”.

Ken Richards is an associate professor focused on climate change policy, carbon sequestration economics, and environmental policy implementation. In addition to his work as a professor, he is director of the “IU at Oxford” summer study abroad program, which allows SPEA students to study in Oxford, England during the summer.

Click here to read more about Ken Richards.

Click here to read a transcript of the 2006 State of the Union address.