In Energy Policy, McCain, Obama Differ on Role of Government

Wall Street Journal

In Energy Policy, McCain, Obama Differ on Role of Government

By STEPHEN POWER
June 9, 2008


Arizona Republican John McCain and Illinois Democrat Barack Obama say a lot
of the same things about energy and environmental policy: Both want to
reduce U.S. reliance on foreign oil and fight global warming. Both want
binding caps on greenhouse-gas emissions. Both see a stepped-up role for
nuclear power.

So does that mean that America will get the same energy strategy no matter
which candidate wins? Not by a long shot.

Sen. McCain's and Sen. Obama's goals may sound similar, but the candidates
would pursue drastically different paths to achieve them. Those differences
are coming into sharper focus, with the end of the contentious Democratic
nomination battle and the surge in oil prices, which on Friday shot up
nearly $11 a barrel.

Sen. Obama is pushing a bigger government role in fostering the development
of technologies to reduce emissions and alternatives to fossil fuels. Sen.
McCain, meanwhile, argues for a more hands-off approach, saying "unintended
consequences" can result from wrongheaded interference in the marketplace.

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For example, while Sen. McCain says he favors an effort to reduce U.S.
dependence on foreign oil, his voting record shows a reluctance to support
mandates, tax credits and other policies often touted by other politicians,
including Sen. Obama, as ways to spur greater use of alternative energies
and energy efficiency.

Sen. McCain argues that many of the steps are little more than subsidies
that enrich special interests. He has long called for scrapping the federal
ethanol tax credit, saying America's corn-ethanol industry can and should
stand on its own. He has also voted against requiring electric utilities to
boost their use of renewable energy sources, preferring to let cities and
states set their own targets for renewable energy.

At a roundtable with business leaders in Washington state last month, Sen.
McCain expressed reluctance to support government incentives such as tax
credits for wind and solar energy. He compared his stance on the matter to
his position on corn ethanol. "I'm a little wary -- I have to give you
straight talk -- about government subsidies," he said. "When government
jumps in and distorts the market, then there's unintended consequences as
well as intended."

Sen. Obama has no such compunction about using the government's means to
achieve his ends on energy and climate change. He says the U.S. doesn't do
enough to move promising but risky clean-energy technologies from the
research lab to the marketplace.

He's promising to invest $150 billion over the next decade in alternative
fuels such as cellulosic ethanol that can be made from materials such as
switchgrass and wood chips. He'd push a requirement that the U.S. by 2025
get at least 25% of its electricity from renewable sources like the wind,
the sun and geothermal energy (which together currently account for less
than 1% of U.S. electricity supply).

Sen. Obama is also framing the climate-change debate in more explicit
language than Sen. McCain. "We can't drive our SUVs and eat as much as we
want and keep our homes on, you know, 72 degrees [Fahrenheit] at all times
and then just expect that every other country's going to say OK. That's not
-- that's not leadership," he told a crowd in Portland, Oregon, last month.

Both candidates' positions have their share of inconsistencies and hedges.
Last year, Sen. Obama, whose home state of Illinois is a big coal producer,
co-sponsored legislation that would subsidize facilities that make liquid
fuel from coal, even though the Environmental Protection Agency has found
liquid coal contains twice the global-warming pollution of conventional
gasoline, when all of its emissions -- from production through development
and consumption -- are measured. After environmentalists protested, Sen.
Obama said he'd support subsidies for the technology only if the resulting
fuel emitted 20% less carbon dioxide than conventional fuels.

On nuclear power, Sen. Obama says he's open to expanding nuclear energy,
which now provides 20% of the nation's electricity, as part of an effort to
increase power sources that emit little or no carbon dioxide. But he also
has said there is no future for expanded nuclear energy until the U.S. comes
up with a safe, long-term solution for disposing of nuclear waste. He
opposes the Bush administration's plan for storing waste at Yucca Mountain
in Nevada.

Sen. McCain has expressed support for the Yucca Mountain proposal. And while
he opposes subsidies for many alternative-energy technologies, he wants
bigger incentives for nuclear energy, arguing that the U.S. "will not
succeed in achieving independence [from] foreign oil nor...in addressing
seriously the issue of greenhouse-gas emissions" without expanding its use
of nuclear power. Many environmentalists see his stance as inconsistent with
his free-market rhetoric.

Sen. McCain's goals in reducing emissions are more modest than Sen. Obama's.
He seeks a 60% reduction from 1990 levels by the middle of the century,
compared with Sen. Obama's more aggressive 80% reduction, which is backed by
many scientists. Sen. McCain also supports a temporary suspension of the
federal gasoline tax, a move that Sen. Obama opposes and that even some
conservative supporters say would encourage motorists to drive more and use
more fuel.

With prices at the pump rising, Congress is under pressure to take action.
This week, the Senate takes up legislation that would allow the Justice
Department to sue members of the Organization of Petroleum Exporting
Countries under U.S. antitrust laws. A spokesman for Sen. Obama says he
supports the measure, while Sen. McCain's spokesman says the senator hasn't
taken a position.