President Obama makes a direct link between economic growth and clean energy policies. 'Clean energy standard' pushed

President Barack Obama nudged lawmakers on Tuesday night to take another swing at several high-profile energy ideas, including phasing out of billions of dollars in oil subsidies, ramping up use of biofuels and electric vehicles and setting a nationwide goal for “clean energy sources” that includes nuclear and “clean coal.”

Obama suggested the White House will also continue to push efforts to reduce greenhouse gas emissions – although he didn’t use the phrase climate change - and promote clean energy technologies despite the death of cap-and-trade legislation last year.


The president sought to make a direct link between economic growth and clean energy policies, while studiously avoiding picking favorites among several different power sources that can quickly prompt bitter regional fights, as well as partisan ones.

“Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling,” Obama said. “So tonight, I challenge you to join me in setting a new goal: by 2035, 80 percent of America’s electricity will come from clean energy sources. Some folks want wind and solar. Others want nuclear, clean coal, and natural gas. To meet this goal, we will need them all – and I urge Democrats and Republicans to work together to make it happen.”

Prospects for a so-called “clean energy standard” are wide open in 2011 but it could be the most aggressive and politically-feasible way to reduce greenhouse gas emissions on Capitol Hill in this Congress. Attention will be centered first around the Senate and competing bills expected from Sens. Richard Lugar (R-Ind.), Lindsey Graham (R-S.C.) and perhaps even Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.).

But across Capitol Hill, House Republicans have not been so keen to embrace new national energy mandates, even if it covers some of their favorites like coal and nuclear power.

“If the president wants to achieve it, he can achieve it in half of that time, the 2035, he can achieve the 80 percent with nuclear alone,” House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) told POLITICO.

For the third year in a row, Obama also waded into the heated debate over energy subsidies with a call for Congress to eliminate billions of dollars in oil benefits. Past efforts haven’t gone so well. But the president Tuesday repeated his call for the cuts, while shuffling the money toward biofuels and other programs that can help reach a goal of 1 million electric vehicles on the road by 2015.

“I don’t know if you’ve noticed, but they’re doing just fine on their own,” Obama said of the oil companies, briefly stopping to crack a smile. “So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.”

Obama got only polite applause at mention of chopping out the oil subsidies. After the speech, he got panned on both sides of the aisle.

“I’m not sure raising the price of gasoline when the price of gasoline is gong up right now is something the American consumer wants,” House Natural Resources Committee Chairman Doc Hastings (R-Wash.) said in an interview. “That would be the net effect of that. But I don’t think it’s a good idea in general when the economy is trying to recover to increase taxes on any sector of the economy.”

“I’ve opposed the president twice, and it sounds like it’ll be a third year running,” said Sen. Mark Begich (D-Alaska), who noted he was seated next to Rep. Don Young (R-Alaska) and neither of them stood and applauded. “You saw a very bipartisan Alaskan viewpoint there.”

Unlike his last two big speeches to Congress, Obama did not use the words “global climate change,” though he did note that his upcoming budget request would be heavy on clean energy technology spending “that will strengthen our security, protect our planet and create countless new jobs for our people.”

Democrats and environmental groups bashed President George W. Bush when he failed to even mention global warming. But Kerry, who led last year’s unsuccessful cap-and-trade bill bid in the Senate, shrugged off the apparent slight.

“That’s alright,” the Massachusetts Democrat said. “There’s a lot of work that has to be done to revalidate the science and the facts with respect to that. It would cloud the reality that we’re trying to deal with respect to energy. So I’m very sympathetic. I understand that completely. That is not where the country is. That’s not where the issue is right now. It has to be brought back there. And it will be, but that’s a different track on a different issue.”

Obama also did not make explicit mention of the Environmental Protection Agency or its controversial efforts to regulate for greenhouse gases under the Clean Air Act.

But perhaps just as important, the president spoke in broad brush terms about the government-wide review he ordered last week of all federal regulations.

“When we find rules that put an unnecessary burden on businesses, we will fix them,” Obama said. “But I will not hesitate to create or enforce commonsense safeguards to protect the American people. That’s what we’ve done in this country for more than a century. It’s why our food is safe to eat, our water is safe to drink, and our air is safe to breathe.”

House Republicans plan to challenge the Obama regulatory overhaul Wednesday with testimony from White House rules czar Cass Susstein appearing at a hearing in the Energy and Commerce Subcommittee on Oversight and Investigations. And Issa said he had his doubts the administration was all that serious about its work.

“The president had two to three hands on everything,” Issa said. “On one hand, he said he wanted to cut regulatory. But on the other hand, he wasn’t going to let anyone do anything about X, Y and Z that might hurt so much as a flea.”

Environmentalists stung by the loss last year on the cap-and-trade bill were out quick with statements Tuesday embracing the new administration strategy.

“The president got it right,” said Natural Resources Defense Council President Frances Beinecke. “Nothing’s more urgent than creating American jobs and protecting our health. The best way to do that is to invest in a clean energy future that makes our workers more competitive, our companies stronger, our country more secure and all of us healthier.”

Jason Grumet, the president of the Bipartisan Policy Center and a former Obama environmental campaign adviser, said he doesn’t begrudge the president for leaving out EPA and the wonky details surrounding a debate that will be front and center with the House Republican majority.

“I don’t think you want a president to argue in the State of the Union that he’s in favor of maximum achievable control technologies for hazardous air pollutants,” he said. “I certainly think in the language of primetime TV he’s making the important point that while there’s going to be a serious regulatory review, he’s signifying that the administration is going to follow public health provisions to be required by congressional statute.”

Two of the country’s biggest industry trade groups didn’t like what they heard from Obama.

Both the U.S. Chamber of Commerce and American Petroleum Institute pushed back against the president’s call to drain away the industry’s tax breaks, calling it a distraction from more pressing policy decisions, including the Interior Department’s on-again, off-again moratorium on offshore drilling.

“Tonight was a missed opportunity,” said Jack Gerard, API’s president. “The president focused on job growth through federal spending, but was silent on one of the best ways to create jobs: allow more energy development.”

“It is clear from the president’s speech that the Administration believes the answer to our daunting energy challenges is to pick winners and losers,” said Karen Harbert, president and CEO of the Chamber’s Energy Institute. “Raising taxes on the industry that fuels our daily lives shows a profound detachment from our energy and economic reality.”

Joshua Freed, director of the clean energy program at the centrist-left Third Way, applauded Obama’s emphasis on clean energy investments.

“That is critically important,” he said. “We’re not going to get clean energy as cheap as conventional energy without new technologies and real improvements in existing technologies. It reinforces the reality that if the U.S. were a company like Apple or GE, no board of directors would support the idea of cutting R&D and slashing the production of new product lines. Jeff Immelt gets that. The president clearly gets it.”

Third Way is also an advocate of a clean energy standard, recently proposing setting one that mandates 25 percent by 2025 and 50 percent by 2050.

Darren Goode and Robin Bravender contributed.