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Renewable energy creates Obama paradox

By Dan Juneau -   Feb 03, 2011

In my column last week, I dwelled on how desperately President Obama wants a renewable energy bill as part of his legacy - - perhaps the defining accomplishment in that legacy (especially considering the lack of popularity of ObamaCare). He also knows that, if the economy doesn’t start doing better and if business continues to view his policies as detrimental, his re-election odds are problematic.

Several events of the past week added more emphasis to those viewpoints.

In his State of the Union Address, the president hammered hard again on his renewable energy theme. He couched it in terms of the “new economy” waiting to be unleashed with huge new government “investments” that will “win the future.” In his address, Obama also slammed the oil and gas industry as being part of the “old economy” and seemed to almost welcome its demise.

On a separate front, Obama’s environmental czar, Carol Browner, announced her resignation from the administration. To many individuals, that bit of news likely didn’t mean much. But in the context of the president’s energy policy and the role it plays in the economy, it was big news indeed. It is a clear indication of a paradox Obama is dealing with, one that could determine if he serves one term or two.

Browner was widely rumored to be a leading candidate to take over as Obama’s new chief of staff. Instead, Bill Daley from Chicago got the job. Daley isn’t a prototypical Chicago political hack. He moves in high echelon business circles - - particularly on Wall Street. Daley’s appointment was a clear signal that Obama understands fences need to be mended with the business community before 2012. Daley hadn’t sat in his new chair long before Browner was gone. I don’t think that was a coincidence.

Obama also repeated some hazy comments about “regulatory reform” in his address. One of the biggest obstacles between his administration and the business community right now is the announcement by the Environmental Protection Agency (EPA) that it is moving forward with regulations on greenhouse gas (GHG) emissions. These regulations, if implemented, could greatly increase energy costs for consumers and businesses and, if adopted, the consequences of those cost increases would lie squarely at Obama’s feet.

Let’s connect the dots. Obama wants to be closer to business. His new chief of staff has impeccable business credentials. The leading zealot for environmental regulations in the administration not only does not get the chief of staff job but shortly after it is filled, she is gone. The head of EPA, Lisa Jackson, is an Obama team player - - unlike Browner who had a “higher agenda.” It doesn’t take a clairvoyant to see some bargaining in the works.

Obama - - through Jackson - - ”delays” implementation of the new GHG standards until after 2012. Through Daley, he starts working major elements of the business community to support an energy bill with higher elements of renewable energy in it. He tries to keep the oil and gas and coal industries out of the loop but finds that difficult to do considering the new makeup of Congress. Does he then simply push his “green energy” proposals and fail or does he cut a deal with Congress and business to allow more domestic production of all sources of energy in a new energy bill?

There is a new element that impacts that decision: if the current unrest in the Middle East threatens to shut off a significant amount of our energy supplies, can Obama continue his attack on domestically produced oil, gas, and coal while preaching the “green energy” sermon?

Stay tuned.

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