How Would Hillary Clinton’s Green Energy Policy Affect The Energy Industry?
In her 2016 presidential campaign, Hillary Clinton has promised a significant overhaul and modernisation of the U.S. energy industry and infrastructure using green-energy initiatives to replace conventional energy production. The plan is based on the promotion of money savings through renewable energy sources and on the threat of global warming.
Global Warming: A Background
Much of the motivation to promote alternative, "green" energy has come as a reaction to the premise of global warming based on the "greenhouse effect." The greenhouse effect is understood as a phenomenon in which certain man-made and natural gases trap heat within the atmosphere, causing the temperature to rise.
The global warming theory traces its origins back as early as 1896, when Swedish chemist Svante Arrhenius proposed that combustion of fossil fuels and its release of carbon dioxide (CO2) could lead to a rise in the earth's temperature. His model predicted that a doubling of CO2 in the atmosphere could lead to a 5-degree Celsius increase in the average global temperature.
The theory was revived by Scripps Institution of Oceanography director Roger Revelle in the 1950s. However, global climate temperatures were cooler in the '60s, and the theory only began to gain more widespread backing in the following decade, when temperatures turned upward again. The revival of an interest in the theory was helped in part by the development in 1975 of the General Circulation Model (GCM), a computer-simulated model that indicated a 4-degree Celsius global temperature increase with the doubling of global CO2 emissions.
The theory gained further momentum in 1988, when NASA physicist and chief of the Goddard Institute for Space Studies James Hansen testified before the U.S. Senate that "global warming is now sufficiently large that we can ascribe with a high degree of confidence a cause and effect relationship to the greenhouse effect."
Global warming and the greenhouse effect then gained international attention at the Rio Earth Summit in June 1992, where scientists, world leaders and civic groups gathered to discuss how to address the matter.
Later that year, Bill Clinton was elected U.S. President and the issue became one of the central themes of his presidency. It was championed especially at that time by Vice President Al Gore, who later released a book and film about the phenomenon. The first Clinton presidency laid the backdrop for the platform of Bill Clinton's wife, Hillary. She is now faced with the challenge of addressing the concerns of the electorate and other world counterparts over the specter of global warming.
Proponents of the global-warming and climate-change theories believe that a man-caused increase in global temperature through emission of greenhouse gases, like CO2 and methane, will cause:
- A melting of polar ice caps, which leads to a rise in sea levels that threatens coastal areas around the world with flooding;
- The likelihood of destructive weather events such as hurricanes, tornadoes, flooding, droughts, heat waves and even extreme cold weather.
What is Green Energy?
According to the U.S. government, green energy is understood to be renewable energy resources and technologies that "provide the highest environmental benefit."
This includes electricity produced from:
- Eligible biomass
- Low-impact small hydroelectric sources
Technically, green energy is defined as a subset of renewable energy, which includes energy that relies on fuel sources that "restore themselves over short periods of time and do not diminish." For practical purposes, green energy could be considered synonymous with renewable energy, from sources that include the sun, wind, moving water, organic plant and waste material (eligible biomass), and the earth's heat (geothermal).
The concept of green energy stands in contrast to so-called "conventional power," which is understood as the combustion of fossil fuels (coal, natural gas and oil) and the nuclear fission of uranium. The burning of fossil fuels in particular is considered to be a source of energy that produces pollution and greenhouse gases, and contributes to global warming. Nuclear fission, while not technically combustion of a carbon-based fuel, has been criticised for producing large amounts of hazardous radioactive waste and presenting a threat of radioactive accidents that could endanger the population.
Both fossil fuels and nuclear fission have also been criticised for producing environmental costs related to mining, drilling and extraction.
Hillary Clinton in her 2016 presidential campaign proposals calls climate change an "urgent threat and a defining challenge of our time" and says she will take bold steps to slash carbon pollution at home and around the world in order to build a "clean energy economy of the future."
As part of that agenda, she pledges to put the country on track to meet or exceed its pollution reduction commitment under the Paris Climate Agreement signed December 2015, and on track to deliver a greater than 80% reduction in U.S. greenhouse gas emissions by 2050. The Clinton campaign asserted that compliance with climate objectives such as the climate change agreement would produce an economic payoff, helping the U.S. industry compete for a US$13.5 trillion market of global clean energy investment.
Clinton's proposals call for an ambitious expansion of green energy that could produce up to one third or more of U.S. power with renewable energy sources over the next decade. This would also include modernising the electric grid, expediting permitting of renewable energy and transmission projects, and repairing and replacing thousands of miles of natural gas distribution pipelines by the end of her first term.
Changing The Power Paradigm
A central premise of the Clinton plan is that the major industrialised nations will soon be competing head-to-head in the market for renewable energy technology, and that the U.S. should enter this market aggressively to assure a fair portion of market share. This would include building advanced clean energy infrastructure, energy efficiency technology and transportation technology with investment from both public and private sources.
Clinton's plan includes investments in half a billion solar panels installed by the end of Clinton's first term, which would represent a 700% increase in solar capacity to 140 gigawatts. The plan also seeks to add generation capacity through wind, hydroelectric and geothermal sources to the national energy grid.
Modifying the transportation paradigm is another key element of Clinton's energy proposals.
Her platform pledges to reduce oil consumption in the U.S. by one third.
The transportation plan involves three major components:
- Mandating more fuel efficient cars and trucks by extending current fuel efficiency standards beyond 2025 and reviewing them to implement possibly stricter requirements.
- Imposing a renewable fuel standard that will improve access to bio-fuels from cellulose and other sources, and promote domestic production of renewable fuels.
- Encouraging local transportation policies that cut oil consumption and pollution. This would include creating a national network of electric and other advanced-energy fueling stations for the national vehicle fleet; using cleaner fuels in ships and trucks; and providing more access to clean public transit options.
Another central element of Clinton's energy plan is to boost energy efficiency of residences and workplaces. She proposes cutting energy waste in American homes, schools, hospitals and offices by one third while also cutting energy use in manufacturing. As part of this effort, the plan calls to develop model building energy codes and appliance standards, and it will link energy efficiency to federal mortgage underwriting. The campaign estimated the efficiency improvement alone could save consumers US$64 billion per year on energy bills.
The plan also calls for making the U.S. a "clean energy superpower" of the 21st century by doing the following:
- Modernising the U.S. electric grid
- Expediting permitting of renewable energy and transmission projects
- Repairing and replacing thousands of miles of natural gas distribution pipelines by 2020.
Cleaner Industrial Standards
Clinton's plan also calls for an overhaul of industrial energy efficiency and use through further investments in industrial efficiency, cleaner fuels, and carbon capture and sequestration in the industrial sector for items such as steel, chemicals, paper and cement. Additionally, it will seek for low-carbon manufacturing to be recognised in the market and rewarded in public and private procurement through a new "Buy Clean" product labeling system.
The Clinton campaign estimates it will double public sector investment in clean energy innovation, in line with commitments made at the 2015 Paris Climate Conference. To support the effort, the plan will make use of a US$10 billion program called "Make it in America Partnerships." The aim is to expand U.S. research and development on clean energy, including storage technology, designed materials, advanced nuclear power, carbon capture and sequestration, and other carbon removal technologies.
States and Cities
To carry out the green energy policy, Clinton proposes a partnership with states, cities and rural communities for implementing infrastructure modifications. This would include US$60 billion in competitive grants to accelerate the deployment of clean power using wind, solar, geothermal, hydroelectric, nuclear, and carbon capture and sequestration technologies.((Retrieved 20 October 2016 https://www.hillaryclinton.com/briefing/factsheets/2016/10/10/hillary-clintons-plan-for-combatting-climate-change-and-making-america-the-clean-energy-superpower-of-the-21st-century/
The plan would encourage rooftop and community solar installations, and seek to accelerate utility-scale renewable energy and transmission siting. The partnership would also aim to reduce energy waste in commercial and public buildings with new energy codes in addition to efficiency upgrades of schools, hospitals and municipal buildings.((Retrieved 20 October 2016 https://www.hillaryclinton.com/briefing/factsheets/2016/10/10/hillary-clintons-plan-for-combatting-climate-change-and-making-america-the-clean-energy-superpower-of-the-21st-century/
Impact On Oil, Gas And Coal Industry: Reducing Dependence On Conventional Energy Sources
While promoting use of new and renewable forms of energy, Clinton pledges to use government action to make conventional sources of fuel, such as oil and gas, less competitive. She has stated that she supports initiatives of the Obama administration, like the Clean Power Plan and new Environmental Protection Agency regulations on oil and gas drilling. This would include reducing and eliminating tax breaks and subsidies currently available to oil and gas industries. As of this writing (October 2016), the government offers around US$5 billion annually in subsidies for fossil fuels production.
Additionally, Clinton has proposed to reform onshore coal, oil and gas leases on public lands by raising federal royalty rates. According to campaign statements, she would propose raising royalties for oil and gas development on federal lands to up to 19%, from 12.5% currently. Her platform also opposes offshore oil and gas development in the Arctic and Atlantic oceans.
In addition to regulating CO2 emissions, the Clinton plan calls for cutting methane emissions, which have been identified as the second-largest source of emissions after carbon pollution. The program would cut methane emissions through standards to reduce leaks from both new and existing oil and gas production, and formulate emission reduction strategies for other sectors.
At a 2016 campaign event, Clinton publicly stated her policies would put "a lot of coal miners and coal companies out of business."
The position prompted complaints from coal industry officials and workers. To offset economic hardship in that industry, Clinton has proposed a US$30 billion plan to reinvest in coal-producing communities. It aims to "repurpose" abandoned mine lands and power plant sites for new economic activity, and provide tax credits to attract new jobs and investment.
Efficiency of Renewable Energy
Despite the modernising intentions of the Clinton energy plan, it has come under question by some critics. They argue that it's based on unproven assumptions about the cost and efficiency of renewable energy technology, and that it relies on the imposition of government regulations and actions that ignore market-based pricing for both conventional and alternative renewable sources of energy.
The Clinton campaign has estimated that, in savings alone, the program would generate more than US$70 billion annually, or around 0.4% of GDP. However, the long-term plan to lower CO2 emissions by 80% through 2050 would also generate costs, which according to independent estimates could range from about US$40 billion to US$180 billion annually, representing between 0.2% of GDP and 1% of GDP.
Hillary Clinton's energy plan involves a substantial renewal of energy infrastructure and the structure of the U.S. energy economy as a whole. The plan emphasizes heavy investment in renewable energy sources and usage-efficiency measures in an effort to meet political goals based in large part on global climate policy assumptions.
It would involve both large-scale disincentives and decommissioning for older conventional energy sources, and installation of newer "cleaner" energy sources, some of which may not be fully tested from a standpoint of cost and efficiency. In this respect, the plan would both reduce energy production, capacity, economic activity and employment in the existing conventional energy sector, but also present opportunities for new investment, production and jobs in newer technologies.
Traditional sectors of oil, gas and coal could expect to be the most negatively impacted by the proposals in the Clinton plan, while newer sectors such as solar, wind, hydroelectric, fuel cells and biomass could be expected to benefit. However, as with previous government policies promoting green energy, the adoption of the proposals may depend in large part on the efficiency of renewable technologies and the availability of government funding to promote their adoption.
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Retrieved 20 Oct 2016 https://history.aip.org/history/climate/timeline.htm
Retrieved 20 Oct 2016 http://teachers.yale.edu/curriculum/viewer/initiative_06.05.02_u
Retrieved 20 Oct 2016 https://www.epa.gov/greenpower/what-green-power
Retrieved 20 Oct 2016 https://oilprice.com/Energy/Energy-General/Clinton-Campaign-Pledges-to-Raise-Fed-Royalties-for-Oil-Companies.html
Retrieved 20 Oct 2016 https://www.reuters.com/article/us-usa-election-clinton-idUSKCN0XT0PK
Retrieved 20 Oct 2016 https://www.businessinsider.com/cost-of-clinton-climate-change-plan-2016-8
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