THE MAKING OF THE OBAMA ENERGY PLAN

How Obama Made His Energy Platform 'Pop'; President Has Gained Support by Framing Issues In Terms of Jobs, Security
Steven Mufson and Juliet Eilperin, May 31, 2009 (Washinbgton Post)
and
Obama’s Secret Meeting with the Oil Industry
Robert Rapier, June 1, 2009 (R-Squared Energy Blog)

SUMMARY
A July 8, 2008, meeting between Presidential candidate Barack Obama and a group of energy experts is reported by the Washington Post to have had much to do with the formation of the energy policy that guided the candidate to the Presidency and continues to guide the administration’s decisions.

The group with which Obama met is described as “…a cross section of experts, including top executives from three utilities and two oil companies, the chief energy economist of an investment bank, a climate scientist, a California energy and environment expert, an oil consultant-historian, and several campaign staffers.”

The heretofore secret meeting is reported to have taken place at a hotel in Chicago when oil was near its $144 per barrel peak price. Gas pump prices were over $4 per gallon and voters were hungry for ways to cut prices and increase national security by getting away from dependence on foreign oil.

Obama was reportedly looking for a way to develop an effective political and economic argument against oil dependence and greenhouse gas emissions (GhGs).

As he listened to the experts discuss oil prices, oil drilling offshore and on public lands, energy efficiency and GhG reductions, he reportedly began formulating his pitch to the American public for a New Energy economy.

The result was the presentation of the New Energy economy as one of abundant “green” jobs, stronger and more competitive U.S. companies and freedom from dependence on foreign oil. During the Obama presidency, new initiatives continue to emerge – like the recently announced higher auto fuel efficiency standards – and they continue to be presented in the framework first conceived at the July 8 session. The cap&trade plan contained in the Waxman-Markey House energy/climate bill, presented as a net gain for the administration's 10-year budget, is the boldest example yet.

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Robert Rapier, premier energy expert and blogger, was told in confidence of the meeting last year by an insider. He says he was told there was also a 2nd meeting in D.C. on July 10 but the facts reported by the Washington Post otherwise agree with his information.

Rapier compares the secret Obama meeting to the secret meeting held by Vice President Dick Cheney at the White House in 2001 that reportedly included Cabinet-level officials and major oil company executives and resulted in the formation of subsequent administration energy policy.

But the meetings' differences appear to be far more significant than the similarities.

First and foremost, of course, are the comparative results. The Bush administration's energy policy was essentially to talk New Energy while supporting fossil fuel addiction and delaying New Energy emergence. The Obama administration's policy may someday be characterized as almost exactly the opposite.

A second obvious difference is that details of the Obama session are already emerging, while the Cheney meeting still remains clandestinely clouded in mystery despite efforts to obtain more information.

Third, the Obama meeting was held privately while the Cheney meeting was held on the people’s time in the people’s house.

Last, Obama took his inspiration for a New Energy economy from a meeting reportedly including energy experts from a wide variety of fields (including fossil fuels) while what is known of the Cheney meeting suggests the energy policy that emerged came from an exclusively oil industry bunch.

Secrecy in the Bush era, especially surrounding the Vice President, was a cancerous impediment to the administration’s bond of trust with the electorate that eventually ate away the President’s ability to conduct business efficiently. Hopefully, the Obama administration’s strategists understand that.

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The education of a candidate: As a 2004 candidate for the Senate, Obama had won support from the League of Conservation Voters for his environmental positions. As a Senator from a coal state, he was not overt about energy and climate issues but did recognize their centrality, began educating himself and mentioned climate change in 3 speeches about Hurricane Katrina.

Jason Grumet, now the President’s executive director of the National Commission on Energy Policy, met Senator Obama in 2005 and saw that he immediately understood the urgency of taking action about climate change when many others in Congress did not.

Grumet arranged a Hotel George dinner for Obama with energy experts that included Clinton CIA Director and plug-in hybrid electric vehicle (PHEV) enthusiast R. James Woolsey, Jr., and a steelworkers union leader who opposed strong vehicle fuel efficiency standards. The meeting advanced the Senator’s commitment to vehicle emissions reductions. He worked with Senator Richard Lugar (R-Ind) to make them part of the 2007 energy bill (adding to the Obama nonpartisan profile) and gave an important speech calling for them in Detroit during the campaign.

The President’s still-evolving energy/climate bill position – praised by Duke Energy CEO James Rogers and former Clinton EPA head/present Obama energy czar Carol Browner and condemned by conservative think tanks and environmental activists – continues to seemingly be anchored in political pragmatism and buoyed by environmental idealism.

In anticipation of the compromises the President knew Henry Waxman (D-Calif), Chair of the House Energy and Commerce Committee, and Ed Markey (D-Mass), co-authors of the current energy/climate legislation, were making to move the bill, he called a meeting of leading Democrats at the White House and asked them to “…do something more than symbolic…”

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COMMENTARY
The measures in the Waxman-Markey House energy/climate bill have met with disapproval at both ends of the political spectrum but it is the fullest expression of the Obama energy plan yet to emerge in concrete terms. It includes provisions activists have struggled toward for a very long time. It includes what would be the first-ever national program to cut GhGs in the form of a cap&trade system aimed at bringing emissions 17% below 1990 levels by 2020 and 83% below 1990 levels by 2050. It also includes what would be the first-ever national Renewable Electricity Standard (RES) and would require regulated utilities to obtain 15% of their power from New Energy sources by 2020.

When candidate Obama took up the New Energy economy banner, the political benefits of it were debatable. Despite the President’s big election win and his continued popularity, they remain debatable. The energy/climate legislation is enduring attack as “cap and tax,” voters aren’t excited about it and, if it succeeds, results won’t be definitively demonstrable for decades.

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The pragmatic Obama has worked the environmental issue cautiously. Example 1: As Senator Obama, he reached across the aisle to Lugar but also joined Senator Jim Bunning (R-Ky) in advocating coal-to-liquids until he backed away, noting coal-to-liquids would require restricted emissions.

Example 2: He took the requisite ethanol pledge ahead of the Iowa caucus, despite widespread disdain for corn ethanol.

Example 3: His courageous opposition to the gas tax holiday that both Hilary Clinton and John McCain advocated during the 2008 electioneering summer was, in fact, based on the practical perception that it would only lead to little savings, more driving and more profits for the oil companies. And yet he continues to oppose a gas tax, though it would probably reduce vehicle emissions even more that strong standards, because it would be a very unpopular burden on drivers.

While the President has won praise for his practical advocacy of the New Energy economy, he has left many of the details and much of the compromising to House leaders Waxman and Markey and Senate Majority Leader Harry Reid (D-Nev). Whether this is a matter of political expediency or practical stewardship remains in the eye of the beholder.

QUOTES
- Unnamed participant in the meeting: "He walked in as if he had just gotten up after a refreshing night's sleep to lead a class. He was clearly there to harvest information and then do something with it."
Candidate Obama after the meeting: "This stuff needs to pop more…We need to find a way to make it pop more."
- Frank Maisano, energy industry lobbyist, Bracewell & Giuliani: "Whether or not you think that is a good idea or not depends on your perspective, but no one can deny that the fight going forward and its political implications will reshape how we look at energy issues…"
- Jason Grumet, executive director, National Commission on Energy Policy: "I'd get the yawn, the glance at the clock, and was told, 'Thanks very much, I'll tell my staff person to get in touch with you.' …[But Obama was different]… If it was going to take years to bear fruit, his response was, 'We'd better do something now.' I was like, 'Wow.' "
- Unnamed senior administration official on the President’s leaving the compromises of the energy legislation to Congress: "This is in keeping with how we have worked with Congress on a number of key issues…If the president draws a bright line and says, 'I have to have this,' the proposal is dead on arrival."

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- Representative Jay Inslee (D-Wash), on the President’s request that they "…do something more than symbolic…" with the energy/climate bill: "It was a personal appeal…He's demonstrated . . . he's willing to put it on the line to get a bill done. You don't do heavy lifting like this without having a president who's willing to put it on the line."
- Robert Rapier: “One thing that fueled the speculation was that Cheney fought to keep the names of the participants and the discussions that took place a secret. But that certainly didn't stop the speculation that the meetings were for planning the U.S. invasion of Iraq and the subsequent division of the spoils among the oil companies…I am glad Obama summoned energy executives to these talks. To formulate a good energy policy you had better be engaging those who provide the energy. I am also sensitive to the fact that this could have been unpopular with his supporters. But I suspect that those who suggested sinister motives behind Cheney's meetings won't do the same over Obama's meetings.”