This op-ed by John Podesta and Tom Steyer appeared in the Wall Street Journal 1/24/2012
In the hubbub around the president’s decision not to approve the proposed Keystone XL pipeline between Canada and the United States, Americans missed the big picture. While conservatives have been fighting to build a pipeline to import more foreign oil and deepen U.S. dependence, the U.S. is poised to transform its energy portfolio by developing domestic resources—renewable and mineral—that will let it become a net exporter of clean energy and energy technology in this decade.
Under President Obama’s leadership, we appear to be at the beginning of a domestic gas and oil boom. After a four-decade decline in oil production, the U.S. is now producing more than half of our oil domestically. This can free us from our addiction to foreign-sourced barrels, particularly if we utilize our dramatically larger and cheaper natural gas reserves. Natural gas now costs the equivalent of less than $15 per barrel, versus the $100-plus barrels we import from the Middle East.
There are critical environmental questions associated with developing these resources, particularly concerning methane leakage and water pollution. Yet as long as we ensure high regulatory standards and stay away from the riskiest and most polluting of these activities, we can safely assemble a collection of lower-carbon, affordable and abundant domestic-energy assets that will dramatically improve our economy and our environment. Under President Obama’s watch, increased domestic production from developing these reserves has already created 75,000 new gas and oil-production jobs since 2009. And we have much further to go.
At the same time, the U.S. is well on its way to becoming a global clean-energy leader. America is the largest clean-energy investor, after reclaiming this title from China last year. Our companies make over 75% of all venture investments in clean technologies world-wide. Overall, because of U.S. public and private investments in clean energy—including renewables, efficiency, transportation and infrastructure—the clean economy grew by 8.3% from 2008 to 2009, even during the depths of the recession.
Expanding these clean-energy investments is good economics. Several technologies, such as solar power, are already cost-competitive with fossil fuels, even without considering the health and other costs of pollution. And they will help preserve and expand America’s middle class, because energy investments are a particularly effective method of “insourcing” manufacturing jobs, which in turn spur jobs in invention, installation and maintenance.
Such jobs provide a strong middle-class income to workers who have technical skills beyond high school but who lack a four-year college degree. What’s more, U.S. clean-energy investment shows moral leadership, as we combine our advanced energy strategies with strong safeguards to protect our citizens and our planet from polluters and the worst impacts of global warming.
Our clean-technology edge is due in no small part to the business community’s overwhelming response to specific policy tools—from government investment in research and development to targeted tax incentives to spur renewable energy manufacturing and installation. For instance, the Production Tax Credit, first passed in 1992, has generated massive amounts of new growth in the wind industry, a sector employing 85,000 Americans. But each time Congress allows this credit to expire after a mere two years, investment grinds to a halt, giving our global competitors the advantage in innovation, manufacturing and installation. The Production Tax Credit is set to expire again this year.
If we want to cement our status as a leader in the global marketplace, we must extend clean-energy programs like the Production Tax Credit and revive the Manufacturing Tax Credit, which helps factories retool for the clean-tech sector. Such programs will give clean-energy entrepreneurs the assurance they need to invest and expand their businesses.
The leadership that Americans are asking for is within our reach. Our economy can go from being weighed down by oil imports to soaring ahead, powered increasingly by domestically produced clean energy, and energy services and technology. The Obama administration has taken a smart approach, but Congress must now work with the president to secure our leadership position going forward.
Mr. Steyer is the founder of Farallon Capital Management LLC. Mr. Podesta, a former White House chief of staff for President Clinton, is chairman of the Center for American Progress.