Senator Bingaman Addresses Energy Summit in New Mexico



Location: New York
Author: Jon T. Brock
Date: Thursday, December 4, 2008

Recently, I have found myself channel surfing CSPAN programs late at night. I had no idea how many different organizations there were in the United States interested in advising the new Obama Administration. It seems there must be thousands of pages in reports awaiting President-elect Obama and his cabinet on January 20, 2009 that will "give him the answer" on how to solve the economy, improve healthcare and education, address the next steps for the war on terror, and yes, move America towards "energy independence."

The latter is of utmost importance to yours truly and UtiliPoint's IssueAlert readers, as we are solely dedicated to the utility and energy industries. Therefore, I found the news that Jeff Bingaman, United States Senator from New Mexico and Chairman of the Senate Energy and Natural Resources Committee, would be addressing an energy summit in my home city of Albuquerque too interesting to pass up.

Yesterday I attended The Energy Summit in the Sandias, put on by Technology Ventures Corporation (TVC, funded by Lockheed Martin and the U.S. Department of Energy) and sponsored by WIRED, Idaho National Laboratory, Los Alamos National Laboratory, and Sandia National Laboratories. With over 200 attendees, the sold-out Summit's purpose was to address the allure of alternative energy and the reality of transmission. It had an array of experts and panelists speaking on nuclear energy, bio-fuels, solar energy, wind energy, and transmission issues dealing with transporting the alternative energy to market. Of course, one of the nuclear energy panelists found it amazing that nuclear was being put in the "camp of alternative energy."

The keynote address was aimed at energy markets in the United States and was given by Senator Bingaman, who focused his speech on six areas that the 111th Congress being sworn in on January 6, 2009 need to focus on. The following is a summary of those six areas given by Senator Bingaman.

1. Deployment of Clean Energy Technologies

The United States needs to address:

* a national renewable portfolio standard (RPS)
* a robust transmission grid (three main issues are planning, siting, and cost allocation)
* building out a SmartGrid of the future (especially as it relates to funding)
* CO2 capture and storage projects
* financing the energy sector

1. Energy Efficiency

The United States should look for energy efficiency gains in:

* Transportation—CAFÉ standards have been increased but need additional incentives for efficiency in transportation
* Building Sector—current laws are weak on incenting energy performance ratings in building
* Appliances—need energy efficiency standards for appliances in the home
* Industrial—need to re-double efforts to reduce the industrial sector's energy intensity

2. Maintain Adequate Supplies of Conventional Fuels

The United States cannot ignore that traditional fossil fuels will be our main source of energy for some time. Therefore, we need to incent production both on and off-shore.

4. Energy Innovation

The United States needs to dramatically increase funding focused on new energy science/technology innovation and also needs to begin training new resources to apply to the energy markets.

5. Energy Markets More Transparent

Many have heard of the "new fundamentals" in the energy markets that will result in new forces in energy trading. The United States will need to explore these and entertain potential new oversight in these markets.

6. Balance Between Energy Needs and the Environment

Building consensus on the balance between energy needs and the environment is not going to be easy. The cap and trade bill was something that both John McCain and Barack Obama were supportive of in their presidential campaigns. The cost of any cap and trade system will be influenced heavily by the quality of the technologies used. Therefore, investment will be required in those technologies. Theoretically, a well-designed energy bill should reduce the complexity of a cap and trade bill.

And with that, Senator Bingaman was off to another function at Sandia National Labs. As the day progressed and I heard from many experts on alternative energy, it struck me that we have a lot of smart people in this country focused on energy. The investment is not always there, especially in this economy. Many have spoken of FDR and put President-Elect Obama and the new administration in a similar position of having the opportunity, if not the obligation, to come in and "jump-start" the country. I even heard an analogy in the transmission portion of the Summit comparing the interstate highway effort to what we could do with the transmission grid (build a multi-lane system now instead of just for renewables in the short-term).

The point of all my rambling is that the energy markets will need investment. The cost of capital is high and banks are not necessarily in lending moods, despite the bailout. Some, including the power company that provides my electricity, have suggested a mandatory wires charge to fund innovative energy technology research and development. Some, such as Battelle Energy Labs, get their funding from the government. Some, such as TVC, help raise investment capital to commercialize technologies from publicly funded science-based research and development institutions, such as the various energy labs. Not to add to your reading President-elect Obama and cabinet, but the energy industry will need investment and incentives in order to move our nation closer to energy independence and developing a "smartgrid" that our grandchildren will look back and say in the words of Ray Gogel from Xcel Energy, that was when "Thomas Edison met Bill Gates." We have answers. The question is, do we have the political and capital will to make it happen?

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