U.S.-EU Energy Council Convenes

Today, the U.S. is hosting the leadership of the EU for the U.S.-E.U. Summit.

All of the media covering this event is focusing - for good reason - on the implications for the debt crisis, as in this Reuters article: "Obama to press EU leaders over debt crisis."

Overlooked in all this, however, is that there is also a meeting of the U.S-EU Energy Council, co-hosted by Secretary Clinton and Chu. Although it may not be at the top of the headlines, a series of bureacratic reshuffling, in both the U.S. and the EU, show how important Energy policy is to both of these countries. The Lisbon Treaty fundamentally reshaped the EU governance on energy and climate issues by creating a Commissioner for Climate Policy and by giving a greater role to energy policy.

Even more recently, we have seen the creation of a Bureau of Energy Resources within the State Department, as blogged on ASP's Flashpoint by Veronique Lee.

The U.S.-EU Energy council should focus on ways to jointly develop new, cleaner technologies, as well as ways to help deploy it around the world.

'via Blog this'

Despair - can this Congress do anything?

Sometimes our political system just drives you crazy. Those of us who want to get something done on climate change, whether mitigation or adaptation, struggle to see how anything can get through. We want to do something, but we're constrained by the system we're in.

There's a temptation to say that we should just focus on adaptation, because mitigation is going to be too hard to get through. But, then something like this comes along and it kills your will on getting anything done. Even climate observation - not even climate adaptation - gets killed.

House Republicans just killed a budget neutral proposal  to institute a climate service at NOAA. It was pure adaptation - and it didn't pass. Despair.

The problem is not dependence on imported oil - its ALL oil

I see, via Real Clear Energy, that Jim Powell of the Cato Institute has an article over at Forbes, saying "Why 'Dependence' On Foreign Oil Is A Bogus Worry".

He's right that dependence on imported oil is not a problem. But, he doesn't complete his thought. It is dependence on ALL OIL that is the problem. Politicians like to blame foreign oil, but the truth is that its our dependence on oil at all that is harming both the American economy and America's national security.

So long as American businesses and consumers are completely dependent upon oil for 94% of their transportation, fluctuations in price will disproportionately affect those who need oil. This is not a commodity with easy and available substitutes.  

We're seeing it now with prices back up over $100 per barrel. This acts exactly as a tax increase: we don't have any other option. That harms our economy. Note that it is not whether the oil is imported or produced here at home: consumers are still bearing the burden.

There is a better way - we should reduce overall dependence on oil by increasing fleet fuel economy and by promoting alternatives that can break the monopoly that oil holds.

Huntsman: "we need to break oil's monopoly as a transportation fuel"

-Cross-posted from ASP's Flashpoint Blog -

Yesterday, Jon Huntsman gave a major speech on energy policy in New Hampshire. The former Governor of Utah and Ambassador China - and currently low-polling Republican Presidential candidate - laid out a vision for America's energy future. Much of it is standard Republican objectives (reducing regulations, producing more at home, etc), but I wanted to flag an important component that he brings up: "breaking oil's monopoly as a transportation fuel".

Unlike many other candidates in the Republican primaries, he is not of the "Drill, Baby, Drill" crowd, saying "we cannot simply drill our way to energy security". That is a key point to this. Even if we produced 100% of the oil we consumed, the U.S. economy would still be stuck with the global market for oil, and all the price fluctuations that go along with that.

So - to reduce that dependence, Huntsman proposes to open up we need to open up the transportation fuels market to competition. I will quote from his speech at length:

America's prosperity has always flowed from competition, and I believe it's time to let creative destruction loose in our energy sector.  Energy security, as Winston Churchill said, "lies in variety and variety alone."

Yet the current system of transportation fuels is essentially closed to competition because of gasoline's de facto monopoly for light-duty vehicles and diesel's near-monopoly for heavy-duty vehicles.

The concentration of distribution ownership is similar to the broadcast network domination in the early 1970s, which triggered market-opening FCC rules and an antitrust consent decree.

Accordingly, the Federal Trade Commission and Senate Judiciary Committee must commence an expedited review of the fuel distribution network.

Breaking oil’s monopoly will also require the repeal of regulations that prevent a truly open and fair market.

This proposal is broadly in line with a problem I identified in the ASP white paper "America's Energy Choices". Because oil is 92% of our total transportation energy, American consumers are at the mercy of broad fluctuations in the oil market. With competition, they could choose which fuel or mode of transportation offers the best combination of value, cost, and time.

This is an energy plan that is thoughtful, and Gov. Huntsman deserves credit for it. You can see the speech in full after the jump: