Barack Obama’s election has members of the alternative energy world sounding positively giddy, an enthusiasm not shared by their competitors in the oil industry.
Obama’s energy plans read like a wish list for the companies that make solar cells, wind turbines or alternative fuels.
He wants to pump money into energy research and force all electric utilities to use renewable power. He has proposed creating a cap-and-trade system that would put a price on the greenhouse gas emissions that come from burning fossil fuels.
“This is a gift,” said Lyndon Rive, president of SolarCity, a Foster City company that designs, installs and operates solar power systems. “We could not ask for a president who’s more focused on energy independence and renewable power.”
Oil executives, on the other hand, are feeling far more cautious.
They’re not sure what to expect. Some wonder if Obama will reinstate the federal ban on offshore drilling that ended this fall. During the campaign, he expressed support for oil drilling in America’s coastal waters, but it was tepid at best. And Obama has called for a windfall-profits tax on oil companies. Even though oil and gasoline prices are tumbling, he may follow through.
“It’s clear that with the budget situation, they’re going to be looking for money from somewhere, and there’s been a lot of talk about taxing the industry,” said John Felmy, chief economist for the American Petroleum Institute. “We tried that under (President) Jimmy Carter, and it didn’t work.”
Few people expect energy to be the first issue Obama tackles when he takes office in January. The financial crisis will almost certainly command most of his attention.
The economy’s meltdown has hurt alternative energy companies by cutting off their access to capital. But many entrepreneurs in the field still see the crisis as an opportunity, for the new president and for them. Obama, they say, should use his energy proposals as tools to stimulate the economy and create jobs. Someone needs to build America’s wind farms, solar arrays and biofuel plants, and those jobs can’t be shipped overseas.
“If the issues are not linked, they should be,” said John Woolard, chief executive officer of BrightSource Energy, an Oakland company planning large solar power plants in the California desert. “The build-out of infrastructure and power plants puts people to work.”
Obama may put off tackling some of the thornier energy issues until well after his first 100 days, said former Sacramento Rep. Vic Fazio, a Democrat. Creating a cap-and-trade system may have to wait until later in the first term. Such systems, in which companies buy and sell the right to emit specific amounts of greenhouse gases, are fiendishly complex and can’t be created in a rush. Many Republicans remain leery of them.
“I can’t say we’re going to deal with broader climate change legislation in that time frame,” said Fazio, now a senior adviser on government issues at the law firm Akin Gump Strauss Hauer & Feld. “I think they’re going to focus more on issues that are likely to gain bipartisan support.”
Obama’s plans to boost the use of renewable power might fit that bill. He wants 10 percent of the nation’s electricity to come from renewable sources by 2012. Many states already have such standards, with California law requiring 20 percent by the end of 2010. A national standard would guarantee that developers of wind farms and large solar arrays would have a large market for their electricity.
“If it’s well crafted, it’s a fabulous idea,” said Steve Taber, chief executive officer of Nordic Windpower, which builds wind turbines. “It really creates a stable investment climate for renewable energy, and that’s what’s really needed.”
Even if energy isn’t the first issue on Obama’s agenda, there are signs that he plans to give it high priority. Rumors are circulating that he wants to create an energy security council within the White House, steering energy and climate change policy in much the way that the National Security Council handles security.
“Maybe it’s 50 percent belief and 50 percent hope, but I really think this is going to be a first-100-day issue,” said Arnie Klann, president of BlueFire Ethanol in Irvine.