Good Energy Policy = Balanced and Diversified

Dear Secretary Bodman:

Thank you for your outreach to democrats, former Energy secretaries and Western
governors. I represent each of these categories and appreciate the fact that
you are interested in what I have to say. Because of its importance to our national
security, our economy and our environmental future, energy policy must be treated
as a bipartisan issue – and we must work together toward goals that will set
the nation on the pathway to energy security.

About Energy Policy

Over the long run, the decisions we make regarding energy use and energy supply
have proven to have huge implications. They have drawn us into international
disputes – arguably into war and occupation. They affect the very underpinnings
of our nation’s economy and the ability of households and businesses to prosper
or even to survive. And they have enormous impact on the environment – from
oil and gas leasing proposed in treasured Western places to the greenhouse gases
that increase in our global atmosphere and may be threatening the very nature
of life on earth.

Despite the fact that our nation has experienced international difficulty,
price and supply vulnerability and environmental damage as a result of our energy
policies, we don’t seem to have learned our lessons. Instead, opponents of new
energy policies often complain about their potential costs. Yet over the past
four years, according to the Industrial Energy Consumers of America, the price
spike in natural gas alone has cost businesses and consumers an extra $150 billion
or more. The price impacts of easily achievable conservation and clean energy
policies would be far below that number, and these policies would create jobs
instead of killing them.

Americans should stop holding themselves hostage to higher oil, gasoline and
natural gas prices that could be having structural impacts on our economy. We
should also recognize that there are huge changes occurring in international
energy markets, from the reduced production at Iraq’s oilfields to the booming
growth of energy consumption in large, fast-growing nations such as China and
India. Our energy policies need to prepare this nation for the markets that
will exist in coming decades. Because of these changes, it will be worth a small
expenditure to bring on diversified domestic energy sources. And, unfortunately,
the bill now making its way through the House of Representatives includes $7.7
billion of subsidies in the wrong places, ignoring important priorities such
as renewable energy production tax credits and incentives for hybrid vehicles.

As of this writing, the energy bill seems to be protecting special interests,
not advancing the national interest.

Secretary Bodman, I will work with you toward accomplishing comprehensive national
energy policy to:

  1. Create energy diversity and enhance domestic supply. The United States may
    never achieve energy independence, but it must make a high priority of reducing
    its dependence on overseas energy sources subject to price and supply disruption.
    It’s time for a large investment in renewables – one that will kick-start
    clean energy production and new storage technologies, from compressed air
    to hydrogen, to make renewables deliverable and reliable. By diversifying
    and domesticating our energy sources, we will create hundreds of thousands
    of high-quality jobs, reduce the export of oil dollars and allow the conservation
    of places – such as New Mexico’s Otero Mesa and Valle Vidal – that shouldn’t
    be drilled for oil and gas. Congress should quickly act on the renewable energy
    production tax credits extended for just 14 months in October of last year,
    with a 10-year renewal that will encourage rational, planned investment in
    sensible energy alternatives, and it should immediately enact an investment
    tax credit for storage options to help us toward the hydrogen economy. These
    actions will sharply reduce the imbalance between natural gas supply and demand
    in the U.S.
  2. Make energy efficiency our first priority. The nation is ready for strong
    energy efficiency leadership from Congress and the current administration.
    The energy efficiency incentives contained in bipartisan legislation proposed
    by Sen. Olympia Snowe of Maine and Sen. Diane Feinstein of California in the
    108th Congress will inspire fast, effective energy conservation and efficiency.
    Major industries dependent on natural gas support immediate investment in
    conservation and efficiency that will reduce pressure on gas supplies, in
    particular. Increasing natural gas supply by building the Alaska gasline is
    a great idea; creating a new dependence on overseas natural gas sources by
    vastly increasing LNG imports is not. The administration should give the natural
    gas legislation proposed by Sen. Lamar Alexander of Tenn. and Sen. Tim Johnson
    of S.D. a good, hard look, and it should recognize that increased automobile
    efficiency and new technologies are a critical part of addressing spiraling
    gasoline prices.
  3. Increase the nation’s attention to its electric grid. Congress has sat too
    long on reliability legislation. The northeast blackout of 2003 was another
    expensive warning that we need to adopt standards for grid management, hold
    grid users accountable and invest in transmission system planning and improvements.
    As a nation, we had the foresight and the common sense to dig deep and build
    an interstate highway system that has become central to the country’s economic
    health. The grid needs similar emphasis. The actions that the Federal Energy
    Regulatory Commission is taking now, to enhance access and affordability of
    renewable energy sources on the grid, are much needed, and the Department
    of Energy should cooperate with FERC on new transmission policies and plans
    throughout the country. Federal support for the development of high-efficiency
    transmission technologies will allow us to make better use of existing transmission
    corridors, as well.
  4. Recognize and regulate the threat of carbon emissions around the world.
    As we diversify our energy sources and create new renewable energy supplies,
    our nation will also make itself a partner with other nations rightly concerned
    about the potential for global warming – the result in part from greenhouse
    gas emissions. While we build a stronger, more diversified energy economy,
    we will increase our ability to create market-based structures to limit and
    eventually reduce U.S. carbon emissions. The bipartisan cap-and-trade proposal
    put forward by Sens. John McCain of Arizona and Joe Lieberman of Connecticut
    would be the sensible place to start. As the world’s leading emitter, we should
    rejoin global negotiations regarding greenhouse gas emissions – perhaps you
    can make the case for a new emphasis on global climate negotiations and partnerships
    with Secretary of State Condoleezza Rice. A nationwide renewable energy requirement,
    like the ones recently adopted by the New Mexico Legislature and Colorado
    voters, is also needed. More than 20 states have adopted renewables requirements.
    Sen. Pete Domenici of New Mexico, chairing the Senate Energy Committee, recognizes
    the importance of national energy policy leadership when he declares that
    he is open to the concept of a renewables requirement in this year’s energy
    legislation. Just as Congress created standards for auto safety and air pollution,
    it will serve the public interest by setting standards for renewable energy
    delivery. (And as a recent report by the Office of Management and Budget indicated,
    with support from former EPA Administrator Bill Reilly, industry often overestimates
    the cost and price impact of federal environmental requirements, while underestimating
    the public health and economic benefits.)

The Federal-State Partnership

We here in the states stand ready to assist in this new national energy policy.
In fact, in the absence of congressional consensus on energy policy, and in
the face of the administration’s over-emphasis on oil and gas development, the
states have been leading. New Mexico, a longtime energy state, now calls itself
the Clean Energy State because our legislature and myself have created a strong
partnership around development of new clean energy policies that we think will
help turn today’s oil- and gas-based economy into a broader and possibly longerlasting
diversified energy economy.

We have adopted a wide variety of policies intended to increase clean energy
development, from tax credits to net metering to energy efficiency to renewable
energy requirements for utilities. And we are pushing proposed electric generating
facilities to consider gasification options as well as dry cooling that will
save millions of acre-feet of precious Western water.

Here in the Southwest we have significant wind energy potential. We could become
the Persian Gulf of solar energy development, offering a more reliable, price-predictable
and secure energy source. So we are investigating the feasibility of concentrated
solar power and providing incentives for households and businesses to create
distributed electric generation through net metering and other incentives.

The Western states are acting as regional clean energy partners as well. Last
year the Western Governors’ Association (WGA), acting on a resolution co-sponsored
by California Gov. Arnold Schwarzenegger and myself, set ambitious but achievable
clean energy goals for the 18 Western states. We started a process for the West
to produce 30,000 megawatts of clean energy by 2015, with a 20 percent increase
in energy efficiency by 2020. The support for this approach was unanimous, bipartisan
and regionwide. Why? Because Westerners, like other Americans, recognize that
it is critical for this nation to diversify and domesticate its energy sources.
This is not an effort to prevent other types of electric generation, but instead
to ensure that we are mapping out and building the foundation for clean energy
sources – included zero-emission coal – to become a large part of the Western

To achieve the WGA targets, however, the states need the federal government’s
support. In the area of clean coal, as an example, I am encouraged by the support
offered by the White House and the Department of Energy for new zero-emission
coal-gasification technology. But clean coal technologies need to be tested
and implemented not only in the East and Midwest, but also in the West, where
higher elevations and different coal types could significantly affect gasification.

We also need help with transmission. Out West, where the wind blows and the
sun shines, we can produce vast amounts of energy for our fellow Americans.
But we need help getting the energy we produce to the markets that demand energy.
As mentioned, FERC has become the de facto leader in removing obstacles to national
renewable energy development, but it can do more in national transmission planning
and project development. Without this kind of leadership, our vast renewable
energy resources will not be developed.

How to Do It

The nation’s new approach to energy policy will require a new attitude from
the DOE and the administration. The administration should not have spent three
fruitless years arguing against my air conditioner efficiency standards in court.
These standards, though high, represented efficiency equivalent to the removal
of 1 million cars from America’s highways, at reasonable and cost-effective
expense to consumers. Instead of battling measures such as cost-effective appliance
efficiency standards, the administration should recognize that industry and
consumers will benefit from activist energy policy. As energy becomes more and
more international, it is increasingly important for our national leaders to
adopt policy that protects the nation’s economic and environmental interests.

The administration’s energy bill is seeing its third year of absence from the
president’s desk. The bill’s failure to move down Pennsylvania Avenue is a direct
result of the majority’s failure to work the issues with the minority – not,
as too often and unconstructively stated by the president, obstruction by the

Americans know we need new energy policy. According to polls – including a
recent poll here in New Mexico that showed the vast majority of New Mexicans
identifying energy issues as our most challenging problem, beyond drought and
the economy – the public is also aware that the administration’s approach to
energy has been tilted toward big existing industries rather than toward the
development of new technologies and renewable energy.

The time has come for our congressional leaders, and the administration, to
throw out the most extreme proposals that have prevented the adoption of legislation.
We need to come together around the sensible center.

We also need to recognize that getting ourselves out of our overdependence
on certain energy sources will cost money. The president’s budget is a tight
one, and his targets for deficit reduction will be hard to achieve under any
circumstances. But a nation that fails to invest in its energy future is a nation
whose economy, people, businesses and environment will remain vulnerable and
pay a significant ongoing penalty.

One last word: I hope you can help defuse the hostile relations that persist
among some U.S. energy producers and advocates of clean energy. The existing
energy industry has provided our nation with fuel to grow and become great.
It has the expertise and the resources to help us into a new energy future.

Clean energy advocates hold out promising ideas and policies that will diversify
and strengthen our nation’s energy portfolio, with significant economic and
environmental benefits. It is unfortunate, and certainly unconstructive, for
industry leaders and clean energy advocates to be so loudly and publicly at
loggerheads in the media and in the halls of Congress. The Secretary of Energy
can play the pivotal role in quieting the noise, creating open dialogue, listening
carefully and balancing the nation’s energy policy so that we accomplish great
things, together.

Secretary Bodman, you have enormous influence at this critical juncture in
the nation’s energy history. Your steady leadership and renowned management
skills will be needed, and tested, in the years ahead. You can count on me,
and many other Americans, to help if you call, and to support you in your implementation
of forward-looking policies that build our energy future.