Experts talk cleantech on Capitol Hill

The U.S. Congress got a little help from its friends in the energy industry today, with a Senate committee holding a summit on the future of energy in the country ahead of an expected vote on a bill supporting renewable incentives.

Speakers at the Committee on Energy and Natural Resources summit stressed the importance of energy efficiency, as well as the need for research, and funding, into multiple sources of power.

Daniel Yergin, chairman of Cambridge Energy Research Associates, said five years down the road we could see big surprises in biofuel or in electricity in transportation, but he said the low-hanging fruit is closer at hand.

"In the near-medium term, it does seem to me the big source that we have, if we can figure out how to handle it because it's so — it's not one thing — is efficiency."

"It gives us time to address these other things."

The House of Representatives also held a hearing this week, with the head of the Renewable and Appropriate Energy Laboratory at the University of California at Berkeley saying that the government needs to triple its investment in energy research and development (seeKammen: U.S. energy R&D investment lags).

At today's Senate summit, Yergin was joined on a morning panel by speakers including John Deutch, professor of chemistry at the Massachusetts Institute of Technology and former head of the Central Intelligence Agency, and Dan Reicher, director of Climate Change and Energy Initiatives at Google.Org.

"It's not sexy, but energy efficiency I do think is the fastest, cheapest near-term resource that we've got," said Reicher.

Reicher also touched on enhanced geothermal, which Google.org put some cash into just last month (see Google pushes for enhanced geothermal).

According to some of the speakers, simply extending the renewable tax credits, due to expire at the end of this year, may not be best way to move forward.

"An on-again, off-again production tax credit is not a way to promote stable development of renewable energy," said Yergin. "The PTC needs a longer-term horizon."

A bipartisan group of senators is backing a bill that would boost financing for research and development in cleantech, as well as extend production tax credits. But it would open up parts of the Gulf of Mexico for domestic oil drilling that are currently closed to exploration (see U.S. renewables could get compromise plan).

The $84 billion New Energy Reform Act of 2008 would be funded from leasing and royalty revenues from the new drilling, as well as a repeal of a manufacturing tax credit to oil companies.

Reicher said the biggest impediment to achieving a more sustainable future in the country is not technology or financing, but policy, particularly at the national level.

"The current regulatory model for electricity is broken," he said. "It does not encourage utilities to help people save energy, it retards renewable energy development, it discourages modernization of the grid, it fails to cut greenhouse gas emissions."

"We need to fundamentally rethink this model."

In addition to calling for a price on carbon, Reicher said the country needs large scale public and private investment in electricity infrastructure and modernization of the power grid. But upgrading the grid presents a number of bureaucratic hurdles, with each state government holding authority over its part of the transmission system.

Deutch, the former head of the CIA, had an opinion on that front.

"I'm going to get myself into trouble here," he said. "I'm a great believer that FERC should have authority on all electricity." FERC is the Federal Energy Regulatory Commission.

"Locations, grid — like we have for natural gas — the ability to set high-grid power lines. I think the authority of FERC should be greatly expanded in this regard relative to the states."

Even with a streamlining of the bureaucracy, an upgrade to the nation's grid will be costly.

A report earlier this year from the Department of Energy said wind power could provide up to 20 percent of the nation's total electricity needs by 2030, but that scenario would cost at least $43 billion to implement, including the cost of new transmission lines (see Wind power push could depend on incentives).

The Senate could vote on the New Energy Reform Act as early as next week.