First things first.  In a fairly stunning piece, even to jaded DC insiders, former Congressman William Delahunt (D-MA) is reported to be working for the small coastal town of Hull, on Massachusetts Bay “for help in developing a wind energy project.”

The catch?  “While in Congress, he personally earmarked $1.7 million for the same energy project.”  And it gets worse, as “80 percent” of the funds his firm will receive will be “from the pot of money he created through a pair of Energy Department grants in his final term of office, records and interviews show.”

Now most former members of Congress who end up in law and lobbying firms claim they aren’t actually lobbyists but instead are “strategists.”  And the former Congressman released a statement quoted by the NYT saying:  “I have no federal lobbying relationship with any past or current client.”  That may be news to the town of Hull, who’s town manager is quoted a few paragraphs later using a textbook definition of access-lobbying:

“Obviously he’s got connections into the federal government that we don’t have . . . . We’re hoping he can open doors at the federal level that we could never open.”

So the Hull wind energy project will soon join Solyndra as grist for the argument that the federal government should not be providing incentives for clean energy technology deployment because those incentives are inevitably transformed into “crony capitalism.”  But just as Solyndra was evidence of the misuse of an innovative technology loan guarantee program for economic stimulus rather than evidence of a problem with government incentives; so too is the Hull project actually a fair indictment of earmarking rather than a fatal flaw in the concept of deployment incentives.  The solution?  Programs that provide funding only where the merits of various projects can be clearly compared using  objective metrics rather than “awarded” through either the legislative process or via an opaque administrative ”negotiation.”  Reverse auctions — where bidders commit to delivering X units of energy at Y cost to the taxpayer and only the best deals are then funded — are particularly suitable for such an objective process.

The second piece begins with the type of human interest angle that can obscure rather than teach, as (again, Massachusetts) a hilltop homeowner laments that the local utility wouldn’t run a natural gas line out to his place and he must instead rely on expensive home heating oil.  The real story, as we soon learn, is that home heating oil users are spending between double and triple what their natural gas-using counteparts do.  Some are out of luck due to location; others because they can’t afford the cost of conversion — even though savings due to lower monthly bills may pay for the investment in just a few years.

What’s the current federal policy response to this problem?  It is a well-intentioned effort to help low-income homeowners stay warm in the winter through the much-maligned Low Income Heating Assistance Program, or LIHEAP, whereby taxpayers subsidize the heating bills of qualified consumers.  Unfortunately, that neither fixes the problem nor encourages conservation, but instead simply transfers wealth to homeowners (and ultimately heating oil providers) “trapped in a cycle of spending more and more for heat . . . .”

Is there a better way?  For some, it could be the hugely popular state and local program called PACE — Property Assessed Clean Energy Bonds (see www.pacenow.org).  Designed to let homeowners invest in energy efficiency retrofits in an affordable way, at no cost to taxpayers, this program has been literally sweeping the nation during the last few years.  And if it doesn’t include switching from heating oil to natural gas as an eligible activity, it should.  That would be an obvious energy market intervention worth making.  No earmarks required.

But that’s history, and the annual two-week negotiations over addressing global climate change did end on Sunday with what the WaPo called “a last-minute deal.”  The deal?  An agreement to potentially reach an agreement that would apply something called “an agreed outcome with legal force” to developing nations.  This is arguably an advance on the Kyoto Protocol, which did not require developing nations to commit to reduce their greenhouse gas emissions.   And that’s important because some “developing nations” — namely China and India — are leading the globe in aggregate emissions.  To be fair, their per capita emissions are far lower than developed nations, but that shouldn’t give them a free pass.  The key negotiating issue since the US pointed out the fundamental unworkability of the Kyoto Protocol has been  how to account for developing nations’ exploding emissions without unfairly impeding their economic growth — after all, the developed nations built their economies on cheap fossil fuels and only subsequently has the world (well, most of it) realized that there will be highly negative consequences because of it.

It remains to be seen whether this year’s climate confab really moved the ball on this point.  Host South African foreign Minister Maite Nkoana-Mashabane certainly thinks so, as the WaPo quotes him saying, “We have indeed saved tomorrow today.“  Veteran climate watcher Alden Meyer, of the Union of Concerned Scientists, had a different view, noting failure to achieve agreement on reducing the gap between expected emissions and those most scientists believe are the maximum that the climate can endure without expensive and life-threatening damage:  “There’s nothing [in the agreement] that’s going to get the world to lift its game and close that gap.”

Maybe more important news this weekend came from the Nuclear Regulatory Commission, where dysfunction apparently reigns.  Both the WaPo and the WSJ reported Saturday on four NRC Commissioners, two Democrats and two Republicans, writing to the White House accusing Chairman Greg Jaczko of  ”actions and behaviors [that] are causing serious damage to this institution.”  That quote is from the WSJ, which runs an unfortunate lead sentence (“Four of the five members . . .”) — if you didn’t already know that there are only four commissioners and a chairman, you don’t find that out until the end of the piece, so casual readers may have thought there was a hold-out.  The fact is that all four of these highly respected professionals, Democrat and Republican alike, took the trouble of airing their concerns about the NRC’s leadership to the White House.  House Oversight and Government Reform Committee Chairman Darrell Issa, not the fuming four, released the letter to the media.

The bipartisan nature of the criticism made Senator Harry Reid’s (D-NV) otherwise laudable defense of his former staffer ring a bit hollow.  As reported in the WaPo on Sunday, he called the complaints “a politically motivated witch hunt.”  We’re guessing Senator Reid meant that Chairman Issa was hunting witches, not labelling the letter such.  But since loyalty in Washington is often in short supply, we’ll give him a pass either way.  Not so the NRC as a whole, an organization too critical to our energy future to have it’s oversight confined to the weekend papers.  Oversight hearings, anyone?

power plants are already ratcheting back purchases of thermal coal, which produces smog and soot-causing emissions as it is burned to produce electricity, in favor of cleaner fuels.

Globally, however, Day notes that there will be steady or higher coal prices in the form of demand from Asia; China and India are building coal-fired power plants at a furious pace.

This is an important point.   Many clean energy advocates repeatedly claim that China is investing multiples more in clean energy than is the US.  That’s true, but it’s also true that China is investing multiples more in all energy than is the US.   Why?  Because they have to.  The US and the rest of the West are nearly 100% electrified — China, India and the developing world have a ways to go before they hit that.  Indeed, lack of comprehensive electricity is a key determinant of a nation’s status as developed or developing.

So, while US generators are turning from coal, US miners have been exporting coal, including thermal coal, at a near-record pace this year.

And coal’s disadvantage against natural gas — investment in pollution-control technology doesn’t make sense in the face of cheap natural gas — will eventually go away, as natural gas prices eventually will climb.

Day quotes analyst Chris Kostas on the prospect of new emissions rules having an impact on natural gas prices:  “I don’t think that the natural gas market has priced (them) in.”  That may be a minority view, given the long lead time these rules have had, but it is a fact that natural gas settled Friday at $3.58 per million  Btus, and has been stuck down there for months.

 Devon Maylie had a piece in the WSJ reporting from South Africa, where the annual Kyoto Protocol climate change negotiations are making hardly any news.  Maylie notes that South Africa is poised to invest $12 billion in solar, wind and biomass projects to reduce their 90% reliance on coal.  Watch for China’s heavily subsidized renewable industry to soak up much of that new work.

And finally, Guy Chazan reported, also in the WSJ, that EU sanctions against Syria are causing Shell to pull out of the country.  We’ll end on that piece of good news.

Saturday’s WSJ also noted that forecasts of colder temperatures caused natural gas futures to jump 4.2% to $3.923 per million Btus.  ”Frosty Air Heating Up Gas Futures” quoted Matt Smith at Summit Energy:  ”It’s all about the weather.”    The same article reported that US EIA found underground gas inventory up 92 billion cubic feet, “much higher than the five-year average build for the current period.”  If futures can “jump” to only $3.92 per MBtu, the news is really how astoundingly low natural gas prices will probably stay. . . .

Front page in multiple papers Saturday on White House review of all loan guarantees made by DOE under the stimulus bill.  WaPo headline:  ”White House orders audit of Energy Dept. loans: Move comes amid GOP subpoena threat in Solyndra case.”  The story that won’t die, the “review is a tacit acknowledgment that the loan program, defended by President Obama and his senior advisers for weeks, has raised enough internal concern that an outside assessment is necessary to clear the air and determine its future.”  Good luck clearing the air.  Loan guarantee program future is bleak . . . .

Front page Sunday NYT:   “A New York Village’s Debate Over Drilling Turns Personal”:  ”The debate over horizontal hydraulic fracturing . . . has become increasingly contentious across the Eastern United States, with dozens of communities passing or considering bans.”  No real news here, including the allegation that fracking opponents are also generally “antigrowth fanatics, opposing a once-a-year music festival . . . wind turbines . . .even additional Little League fields. . . . .”

And the most important piece of the weekend, Dan Yergin in Sunday’s WaPo, Outlook section.  In “Oil’s new world order,” Yergin makes the point that the global geopolitical balance of power in the oil economy is shifting.  He finds that a “new world oil map is emerging” . . .”centered not on the Middle East but on the Western Hemisphere.”  But don’t breathe a sigh of relief yet, for since “there is only one world oil market” the U.S. “will still be vulnerable to disruptions . . . .”  Darn.

“The world is headed for a “dire future” where high energy prices drag on economic growth and global temperatures rise dangerously, unless significant innovations are made to lower the cost of clean energy and carbon-capture technology, the International Energy Agency said.

Senior officials from the agency painted the gloomy picture of the world’s current trajectory at a two-day meeting with international energy ministers and business leaders in Paris.

Participants concluded that growth in energy demand will be met largely by coal—and that the only hope of keeping global temperatures at safe levels would be in the creation of cheaper technologies to caputre carbon dioxide.”

Just a few inches later, we read “Tokyo Reconsiders Plans to Reduce Emissions”:

“Japan is reconsidering plans to cut carbon-dioxide emissions by 25% by 2020 due to a rethinking of its energy future, and the country is worried that it is spending too much on carbon-credit programs,a  senior government official said.

Japan’s doubts, prompted in part by its nuclear disaster in March, come at a time the European Union is questioning whether it should press ahead with plans to cut greenhouse-gas emissions if others don’t follow suit.”

So on the one hand, future costly calamity awaits, but on the other, current economic maladies reduce interest in spending money to prevent that future.

If only there was a way to make sound economic decisions today that held promise of reducing future high prices and dangerous global temperature rises.  Fortunately, there is.  Our dependence on oil in the transportation sector is both a current drag on the economy and a major contributor to future costly climate change.  Moving from dependence on mostly imported oil to completely homegrown advanced biofuels and domestically-powered electrified vehicles will reduce our balance of payments deficit, insulate us from oil-related economic shocks, lower the cost of clean technology, and help prevent dangerous global climate change.  It’s not a win-win, it’s a win-cubed.

In other Congressional news, E&E reported this morning that the Senate Energy and Natural Resources Committee may not mark up any legislation for the remainder of this month, and the prospects until the end of the year remain cloudy.  The panel’s last markup was in July on oil spill response legislation, with Senators Mary Landrieu and Lisa Murkowski of oil producing states Louisiana and Alaska respectively fighting for a controversial provision directing federal revenues towards offshore production in coastal states.  The markup ended without a vote on the amendment.

Furthering the case for increasing domestic oil production, the Wall Street Journal reports that slipping prices have prompted the Organization of Petroleum Exporting Countries (OPEC) to consider an emergency meeting regarding the price of oil.  Brent crude closed at just under $100 a barrel this week due to poor market performance and partially-restored Libyan output.  Although the current price would have been borderline unthinkable less than a decade ago, some OPEC producers are concerned it will drop further to $85 or $90 a barrel.

Member states are divided in their levels of concern over the matter.  Iran and certain African countries are pushing for an emergency meeting if the price drops below $90, while Kuwait and Saudi Arabia are less concerned.  A Kuwaiti OPEC official argued the prices were too high recently, and while they remain high, negate the need for action.  Saudi Arabia—which increased output from 8.5 million barrels per day before the Libyan crisis to the current 9.8 million barrels per day—will decrease production if they determine necessary.

It bears repeating that there is no free market for oil.  While Congress drags its feet, other countries are utilizing their energy resources and investing heavily in alternative technologies.  Bloomberg released an analysis this week reporting that despite three decades of research and subsidies, ethanol has not emerged as the solution to our energy challenges, and furthermore, as biofuels and petroleum are direct substitutes, ethanol is subject to the oil market’s price fluctuations, as well as shifts in the price of corn.

So what’s a country with growing energy needs to do?  Increased domestic oil production is key, but there’s more which can be done.  As Senator Bingaman said earlier this week, regarding the argument that DOE loan programs shouldn’t be expanded on free market principles, “The problem is the Chinese government doesn’t feel that way. The German government doesn’t feel that way. The Japanese government doesn’t feel that way. And if we’re going to be involved in any of this new technology deployment … as a government we’re going to have to participate with industry and help them do it.”  The same principle applies to electric vehicles, which can meet American mobility needs while drawing on the safety and reliability of electricity.

Today’s installment in the Solyndra saga is courtesy of the National Journal’s Amy Harder.  Headline:  Solyndra Was Banking on Energy Bill, E-mails Show.

Oops. 

As Ms. Harder writes: 

Solyndra could still be in business had Congress passed a comprehensive energy bill last year, recently released e-mails indicate.

A May 2010 e-mail exchange between senior Energy Department advisers . . . show Solyndra’s executives were “counting on” Congress passing an energy bill that would have included major policies promoting renewable energy nationwide.

In September 2009, when the Energy Department awarded a $535 million loan guarantee to the solar-power start-up, the administration and Democratic leaders in Congress were confident they could deliver on President Obama’s campaign promise to put a price on greenhouse gas emissions that causes climate change.

Now maybe folks are spinning this story to reporters, but this is revisionist history and has an additional problem beyond that.  First, if anybody anywhere was “counting on” Congress passing comprehensive energy legislation in either September 2009 or, worse yet, May 2010, they were in total denial about what was — or better put wasn’t — happening in Congress at the time.  The Waxman-Markey bill passed the House on a partisan vote and landed with a thud in the Senate during the summer of 2009.  A similarly uni-partisan Boxer bill was to squeek out of the Senate Enviroment and Public Works Committee in the fall — only to be quickly sunk by Senator Kerry’s announcement that he, South Carolina Republican Lindsey Graham, and Connecticut Independent Joe Lieberman were going to negotiate a new bill.  Those talks sputtered along until Senator Graham publicly walked out in February, dooming all chances for even a long-shot moderate Senate bill.

No member of the Democratic leadership was truly “confident” that they were going to pass energy and climate legislation in fall 2009.  In fact, thanks to the backlash against both the partisan health care bill and the House energy and climate bill, the main speculation was whether Democrats would lose both the House and the Senate in the 2010 elections, or just the House.  Making coal state Senate Democrats vote on a climate bill wasn’t part of the strategy for avoiding that outcome.

But let’s pretend that there was optimism about the prospects for climate legislation.  Even the most aggressive possible outcome — Senate approval of a Waxman-Markey like bill — would not have provided a new market for solar for years.  All of the modeling showed that, after a several year implementation period, some wind would have benefited from the renewable portfolio standard in the bill — but not solar.

So there’s just no way that the DOE and OMB reviewers who signed off on the Solyndra guarantee would have accepted a business plan where success was contingent on passage of some imaginary legislative solar power driver.  Maybe the email leakers think that the public image of Congress is so bad that blaming congressional inaction for the Loan Guarantee Program’s bad bet is a winner.  They should think again.

Even though most regions were able to meet the high demand, outages nevertheless occurred during the sustained heat wave. In Ohio, 33,000 residents were left without power due to the uptick in electricity demand. As a heat wave persists, air conditioners require more energy to cool the same amount of space, so a sustained heat wave would leave utilities unable to consistently manage demand. This happens because as temperatures rise or continue to stay high, heat builds up in the buildings, and air conditioners must work harder to maintain a comfortable temperature. While utility companies have emergency measures in place to account for the occasional peak in demand, this past week’s patterns further exemplify the need to strengthen the nation’s grid.

Over 100 schools in Detroit last week were closed due to the lack of air conditioning installed in the buildings. The city, however, is opening up cooling stations to protect its citizens from the heat.  In a city where public facilities may be lacking in amenities such as air conditioning, governments are trying to take action to protect their residents.  If energy supply is incapable of cooling these safe havens, the effects could be devastating.

Investing in smart-grid technologies could help future crises from stretching the loads of electricity generation capabilities.  Smart metering could help producers manage energy demand more efficiently and help utilities better supply their customers. Such infrastructure could also help with energy storage, allowing for more on-demand potential.   This technology can ultimately allow electric vehicles to send energy back to the grid that is in excess of its operating needs.   Supplementing traditional sources of energy with renewable sources can also help to reduce the possibility of brownouts and blackouts by adding generating capacity to the grid. Sometimes the features of these energy sources will, to an extent, be somewhat complementary to the weather conditions.  Solar energy, for example, operates at its best in the months with the strongest sun (and, of course, reasonable levels of heat); even a small amount of solar, therefore, can help to offset the stress put on the grid by an increase in air conditioner use.

One factor that played out in the utilities operators’ favor is the weak economy.  Many folks are taking extra precautions to keep their bills low.  Hopefully, however, utility providers will not be able to rely on this cause for reduced demand in the future, and must look to more comprehensive strategies for grid preparedness.

This week, the Senate will attempt to reconcile a way to cope with severe weather in order to minimize its negative impacts on our nation.  Utilities should pull together and follow suit to further strengthen their systems to do the same. This past week may have seemed like an anomaly, but increasing demand for energy combined with a rising population will require greater strength and reliability of the electric grid.

At heart, the OES plan is the transfer from petroleum to alternative fuel technologies, fundamentally changing how energy will be consumed by the Armed Forces.  The strategy hits on the standard tenants of reducing fossil fuel dependency: “More fight, less fuel” (energy efficiency); “More options, less risk” (energy diversification); “More capability, less cost” (energy investment for the future).

Yet beyond its military impact, OES is in the unique position of significantly shaping the future of national energy supply.  The military’s significant demand for alternative energy technologies can spur renewable fuel innovation forward.  How so?  Alternative energy technologies – ranging from photovoltaics, to second generation biofuels, to natural gas and electric vehicles – all require substantial learning investments before they can reach grid parity.  As a result, current alternative fuels and technologies are still magnitudes higher in costs than their fossil fuel substitutes.  At a time when scrutiny over the national budget may require renewable subsidies to be slashed, the military is bearing the risk and price tag of this catalytic start-up cost.  Ultimately, however, it will be consumers who reap the benefits of these investments:  key breakthrough technologies discovered will spread to the commercial sector, and economies of scale will drive down the costs of solar and hybrid innovations.

Continued ambition for energy research and financing is vital for energy security, not only for effective military operations, but also for impetus of future energy growth tomorrow.

Supporters of the ethanol industry, such as Senator Amy Klobuchar (D., Minn.), are concerned that the proposed changes in the industry would be too drastic. Similarly, Agricultural Secretary Tom Vilsack alleged that an end to these subsidies would cost jobs. It is unlikely, however, that the elimination of the subsidies will impose detrimental impacts on to ethanol industry due to the existence of federally-mandated policies requiring the purchase of ethanol.  Energy legislation currently mandates gasoline retailers to use corn ethanol: this year, the amount was 12.6 billion gallons, and the amount is set to increase to 15 billion gallons by 2015.

Senator Lamar Alexander (R., Tenn.) is one political figure who has shown his support for eliminating permanent energy subsidies, but recognizes that it is important not to divert resources away from energy innovations.  Since the ethanol market already has federally mandated quotas, new legislation should be aimed at decreasing the national debt, but also towards more effective allocation of federal dollars.  Diverting funding to research and development on energy practices that will enhance long-term efficiency, and decrease dependence on foreign assets, will aid the US economy, and help to further decrease debts and trade deficits.