Obama's energy policy

¶ … Obama energy policy in relation to the economy of the United State of America's 21st century economy. It begins with a general description of the policies and then proceeds and outlines the various elements of the policy. After the analysis the paper then presents the criticisms that are waged against the policy. A conclusions and recommendations are then presented at the end of the paper. These are geared towards coming up with a perfect energy plan for America in order to safeguard its citizens from the various eminent dangers associated with a poorly formulated energy policies.

For a long time America has seen great difficulties. One of them is their overdependence on Oil. Their overdependence on oil has threatened National security and Economy globally. Severally, Washington DC has not been able to solve the situation due to special interests and political interference through which politicians trick American citizens during elections of solving the problem which they actually don't. American politics has declined due to the oil problem because the results of inaction have become severe. What is to be done should be done openly and fast enough in order to change the whole ranging from improved cars, reduced fuel consumption both in industries and at home.

The Milestones that have been achieved by the Obama administration

It has about thirty five years since the former U.S. president categorically pointed out that the U.S. government's main goal should be to strive in meeting its own energy needs so as to avoid its reliance on energy sources from foreign countries. It is a fact that even the concept of energy security is one that cannot elude the mind of the whole America. The severe oil crisis of last year has contributed to a rapid increase in the level of consumer awareness regarding the need for an efficient energy policy coupled with a better climate change policies.

The Green Objective

Following the various challenges that occurred in the U.S. energy sectors in the last couple of years, the U.S. President Obama's administration launched a spirited work aimed at achieving the best energy policy for the people of America. Among their top priorities are the energy and the climate change issues. In his inaugural speech Obama clearly stated that "We will harness the sun and the winds and the soil to fuel our cars and run our factories"

In order for solutions to be met it would require more than political trickery and over consumption of resources. This would require a united effort between the government, businesses and the entire American people. America has been able to defeat several difficulties & under a good leadership there is no doubt that the Obama government bears the resources, strength and focus to establish a refined economy supported by clean and protected energy.

Barack Obama and Joe Biden have a defined energy plan that would relief low income families. The plan calls the nation to face some of the biggest difficulties as; beating America's dependence on imported oil, speaking on moral, economic and environmental problems that include climate change globally and the construction of clean energy future that would profit all Americans.

The Obama-Biden plan would make it possible for a fast service at the pump. It would assist in creation of five million jobs by skillfully investing $150billion over the next 10 years that would motivate private efforts to create a clean energy future. It would save more oil than America currently imports from both the Middle East and Venezuela. One million plug-in Hybrid cars that could speed 150 miles per gallon would be built in America by 2015; according to the plan. It would make sure that 10% of Americas electricity came from renewable sources by 2012 and 25% by 2025. It would carry out an economy cap-and-trade program to minimize greenhouse gas emissions by 80% by 2050.

The American President Barack Obama plan demands relief for the citizens of America who is suffering the effects of regulatory loopholes which has enabled a serious commerce and has also led to the increase of crude oil prices in the commodity futures market. The mid-to-long-term solutions that the plan proposes are aimed at reducing greenhouse gas emissions, eradicating America's foreign oil dependence and also to boost their economic growth.

The short-term relief of President Obama demands: a $500 of tax rebate for non-married individuals and it also demands a $1,000 for married people which will be used to aid Americans at the gas. The plan also demands that the tax rebate to be fully paid for by profits of oil companies.

The proposals of President Obama which are mid-to-long-term present six strategies that President Obama calls economic, environmental and moral. The strategies presented by the proposals are: lowering the use and cost of energy, to advocate for the sources of energy that are domestic, to improve the efficiency of fuel in vehicles, to focus on diversifying the energy sources of America, to improve and focus on climate change and also to invest in a green energy economy so as to create 5 million employment opportunities.

In the renewable and sustainable energy industry, President Obama demand an investment worth 150 billion dollars over the next ten years which is aimed at creating five million green job opportunities. The investment is also made in energies that are renewable, bio-fuels for the next generation, coal plants that are of low emission, plug-in vehicles and America's electric grid modernization. The investment is also focused on a clean manufacturing program, training of the youth.

The implementation of a cap-and- trade program to minimize the carbon footprints to lower than 1990 levels will all be addressed by climate change. The cap -- and trade concept comes from a microeconomic theory and it is seen as an alternative to direct regulation in which each company would be allocated its own carbon dioxide share and allowance and also equal to its discharge to the atmosphere. The companies that managed to come into the cap would have an excess room in which they could sell to other firms that needed the excess room. The idea behind this theory is that having to pay pollution would give a company motivation to reduce pollution.

A part of the income got from the trade and cap program which will be about 15 billion dollars will channeled and used in the improvement and development of efficiency and clean energy, protection of wildlife programs and also bio-fuels that are for the next generation. The initiative also calls borrowing the partnership and leadership of America with the United Nations Framework Convention on Climate Change in trying to convince the third world countries to reduce and minimize the emissions of greenhouse gas.

The effectiveness of fuels on vehicles will increase by requesting vehicles makers to increase the economies of fuel by 4% yearly and also to emphasize on the improvement and development of autos that are advanced through the investment in the bio-fuel development, authorizing the increase of sale and manufacture of flex fuel vehicle, establishment of a low carbon fuel standard to speed the use of low carbon fuels, and to spread infrastructure.

The layout also demands on the improvement of domestic energy sources by motivating the increase of production of oil through the implementation of a policy known as 'use it or lose it' towards companies with land and also offshore drill, speeding the building of the natural gas pipeline in Alaska and using of presently oil fields.

The country's sources of energy that are diversified will be achieved by promoting the usage of bio-fuels that are renewable, nuclear energy that are safe and clean coal technology. The plan also proposes that 10% of the country's energy will be derived from sources renewable by the year 2012.

The plan also proposes demands for weatherizing the homes of Americans who are low income earners so as to save money on electricity bills therefore setting a federal efficiency standard and a national building efficiency, the development and improvement of green commodities, and the efficient use of energy by the federal government.

The proposals will help the nation to close and prevent energy industry market gap and loopholes and increase transparency to prevent traders from unfairly lining up their pockets while hiking the prices of oil at the expense of the Americans. The proposals will help Americans increase and improve their economy standards on fuel to 4% yearly while on the other hand providing4 billion dollar domestic vehicle makers to reorganize their manufacturing facilities to produce these autos in America. Since the autos can fetch up to 150 million per gallon President Obama believes that they should work to prevent the vehicles from being built in factories overseas but in America.

The proposal is also aimed at achieving the reduction of carbon pollution which threatens the nation's climate and also to sustain their dependence on fossil fuel. Pollutants like nitrogen oxide and sulfur dioxide and other emissions that are harmful have had limits in place for some time. The plan seeks to limit and reduce the amount carbon that polluters are allowed to pump into the atmosphere.

President Obama proposals are very ambitious indeed and they need and demand an altogether effort and partnership between the private sectors, the government, Wall Street and all individual Americans. Through this initiative President Obama puts together the economic revival goal and the climate protection goal. The proposals will help America as a nation become dependent with regard to the importation of fuel as the plan provides for ways that the country through its firms can manufacture bio-fuel, it will also help reduce the emission of carbon and other harmful substances into the atmosphere.

The plan also counts on new limits to encourage increased production of renewable bio-fuels which have lower emissions naturally. Corn and cellulosic ethanol are examples of the renewable bio-fuels. The plan would also give rise to incentives for increased research, flexible-fuel autos that can run on ethanol and investments on cleaner fuels.

In order to achieve the above plans the Obama administration has a special team referred to as the Green Dream team which comprises of various key members and specialist.

Among them are:

Stephen Chu who is the Secretary of Energy

Carol Browner-Assistant to the President for Energy and Climate Change

John Holden-White House Science Advisor

Lisa Jackson-Environment Protection Agency

Todd Stern-Special Envoy for climate change

Nancy Sutley-White House Council on Environmental Quality Chairperson

Criticisms

There are a number of criticisms that targeted the Obama Energy Policy. Despite the fact that the policy is geared towards relieving the U.S. from the overdependence on oil derived from foreign nations. In his speech at the Michigan State University, Obama clearly stated that "

Without a doubt, this addiction is one of the most dangerous and urgent threats this nation has ever faced -- from the gas prices that are wiping out your paychecks and straining businesses to the jobs that are disappearing from this state; from the instability and terror bred in the Middle East to the rising oceans and record drought and spreading famine that could engulf our planet."

This is to clearly outline the need for America to come up with its own alternative sources of energy.However, despite the eminent good that is the motivation behind the policy, a lot of criticism has dogged the whole policy: The policies have been outlined with the bad parts being stated in the process. Some of the criticisms are outlined below:

The immediate provision of Emergency Energy Rebate:

This policy is intended to help Americans through the compensation of the usually high cost of gas and energy. The aim is to adequately revamp the American economy. The provision of $500 to individuals and $1,000 to all families. The idea would lead to a general rise in gas demand and a leaning on profits derived from windfalls. These particular ideas had been tested but failed in all occasions (Loris, 2008).According to one Don Boudreaux, an economist. The idea can be compared to trying to using jet fuel in putting out fire.

The tapping of the Strategic Petrol Reserve

The SPR was created in the early 70s at a time when there was an embargo on the Arab oil. The SPR which is a fuel reserve that is maintained by the federal government is meant to be used by the U.S. To counter the deficit shocks that can cause serious disruptions in the oil supply to the American consumers. The SPR is meant to inject between 3-4 million barrels of fuel to the American oil stream on a daily basis. This idea is however constrained by the size of the reserve itself. An analysis has shown that such a reserve would only suffice the demand of oil to the Americans for a period of only six months. After the six-month period, the high oil prices would automatically resume. The SPR would run dry and it would fall short of its originally intended purpose. The resulting implications of this would affect America's national security and economy at unprecedented levels.

The cracking down on speculators

This move is intended to help in curbing the role of speculators in the rise of oil price levels. The notion in itself has been found to be truly misleading. As outlined by Kreutzer ()m an economist, this idea would act as a perfect primer on the important role played by the speculators in aiding American consumers who rely on the pump. Further works by Foster () also postulates that the exact role of speculators in increasing the price of oil is very marginal and should not be a cause of any legitimate concern. Their role in the dynamics of demand and supply has therefore been proven to be very minimal and hence harmless to the consumer. The Obama policy is therefore wasting resources in ensuring that his policy is implemented.

Capping -- and -taxing policy this policy is intended to affect the way trading is conducted in America. The overall intention is reduce the greenhouse gas emission by over eighty percent by the year 2050. The Obama policy cap-and-trade policy would have serious ramifications on the American economy. This is because it is more demanding in terms of resources as compared to the failed Lieberman-Warner cap-and-trade legislation which was shot down at the senate floor in June, 2008. The Lieberman-Warner cap-and-trade legislation proposed a seventy percent reduction of greenhouse gasses come 2050.The Heritage Foundation carried out a research on the economic implications of the Lieberman-Warner climate change legislation that shown the extent of ramifications that the cap-and-trade legislation would impose on the American economy. As an illustration they found out that the Lieberman-Warner bill would have imposed a bout $4.8 trillion on the American GDP by 2030 and close to 1 million jobs would b lost in certain years. One would only wonder what Obama policy would have. The Heritage research on the Lieberman-Warner bill also projected a huge leap upwards in the prices of energy such as gasoline. The question one would ask is if the Obama policy would be lowering oil prices or increasing them instead Renewable Fuels Mandates and Fuel Economy Standards

In the Obama energy policy, about ten percent of America's electricity will be derived from renewable sources by the year 2012, and twenty five percent by 2025.However now that food prices have soared dramatically, there is bipartisan acknowledgement as well as statements from various environmental and global hunger groups regarding the fact that that the ethanol mandate has been an total failure.

In addition Obama proposal suggest that they should be to a million plug-in hybrid cars. The cars should be able to cove approximately 150 miles per gallon. This should be realized by 2025.The policy further suggests that all the hybrid cars be manufactured in America. There is however a lot of questions regarding this move especially the source of electricity to be used by the hybrid cars. "Plug-in hybrids are perhaps not good for all areas. States that are heavily coal, that equation doesn't work out very well for the environment." As noted by Howard Learner, executive director of the Environmental Law & Policy Center, a Chicago-based advocacy. It is also obvious that the hybrid cars are more expensive due to the high manufacturing costs associated with their production.

Increase Domestic Supply

Just recently, President Obama changed his position on off-shore drilling, but the only part in his eight-page energy plan in which offshore is mentioned is of its usage or loses of its initiative. In the plan, it is stated that "oil companies to diligently develop these leases or turn them over so that another company can develop them." This plan has a general view that that. oil and gas play a critical role in U.S. energy policy and includes a mention of drilling activities in Bakken Shale (Montana and North Dakota), Barnett Shale formation (Texas), Fayetteville Shale (Arkansas) and most importantly the National Petroleum Reserve-Alaska (NPR-A)

Increase Nuclear Power

President Obama recognized that "It is unlikely that we can meet our aggressive climate goals if we eliminate nuclear power as an option." The problem however is that plan deems the geologic repository at Yucca Mountain unsuitable It however he will lead the efforts of the federal government in looking for safer and better long-term storage facilities. If given a chance the plan would not lead in the right direction through the increase of supply together with the support for nuclear energy.

The other bad part his plan is that it keeps on reiterating the similar mistakes of the failed policies introduced that were introduced in the 1970s.

The Obama's energy policy can be viewed as a three thronged plan. The first plan is dedicated to the reduction of America's dependence on foreign oil. The second plan is dedicated towards the establishment of alternative sources of energy while the final one is dedicated towards the confrontation of the eminent global climate change. The main objective is the green objective which is crucial in determining to some extent of Obama's administration's success. The main indicators of President Obama's commitment to the green objective is the fact that he has shown that there is an urgent but yet a systematic adoption of various large scale investments that are meant to improve the efficiency of energy usage while at the same time coming up with better renewable energy alternatives. Their main motivators in the achievement of these plans are the administration's concerns with the status of energy security, the change in climate and the eminent competitiveness of the country with the rest of the world.

Major challenges

The President Obama made his first move towards the achievement of the Green policy through the EPA., he directed the EPA so as to ensure that they reconsider an earlier application made by California and other thirteen states that demanded stricter regulations to limit the emission of Greenhouse gasses by motor vehicles. This move was targeted at setting more strict fuel efficiency requirements for the whole of America.

Summary

The following are the undertaking by the U.S. government towards the Energy policy

A $3.4 Smart Grid Investment Grant (as part of the American Recovery and Reinvestment Act of 2009)- expected to affect about forty nine states and has the capacity to reduce electricity use by over four percent by 2030

The starting of the Advanced Research Projects Agency-Energy (ARPA-E).A project falling under the Department of Energy (DoE) and in conjunction with the Department of Defense (DoD).It is modeled according to the Defense Advanced Research Projects Agency

An efficient home report detailing on how the federal government can aid in the creation of c a "self-sustaining home energy efficiency retrofit industry

The creation of new efficiency standards for home appliances

Creation of a National Fuel Efficiency Policy that would be applicable to cars whose models would run from ears 2012-2016 and which would in the end require cars to have a mean fuel efficiency of about 35.5 mpg by the year 2016

Three unique measures aimed at increasing the production of biofuels: These are the renewable fuels standard, biofuels working group and biomass crop assistance program. Obama also created an interagency task force to aid in creating a federal strategy for carbon capture and subsequent storage Establishment of the Environmental Protection Agency ruling (also referred to the Mandatory Reporting of Greenhouse Gases Rule)-It requires the reporting of greenhouse gas emissions by all the major emitters in the U.S.

Clean Energy and the Recovery Act

Most of the Obama Administration's initiatives were started as a result of the American Recovery and Reinvestment Act (2009) and most of their investments were mostly for clean energy. The White House through the Recovery Act gave over $80 billion for use in clean energy investments. The breakdown was as follows:

11 billion -- used for a smart grid to be used in connecting rural energy-producing sites with various cities,.This is also to support the smarter use of energy within various U.S. homes, $5 billion-used to weatherize all the homes categorized under the low-income bracket, $4.5 billion-used in reducing the reduce the federal government's energy bill through designing federal buildings to be more energy efficient.

$6.3 billion- for supporting both state and local energy undertakings

$600 million-used in training people to be engaged in green jobs

$2 billion-for promoting investment in various battery storage technologies.

Sometime in March this year, the Energy and Commerce Committee release a special report targeted towards the creation of clean energy with the ultimate objective of creating more jobs, and aiding in the alleviation of the nation's overdependence on foreign oil. Global warming was also part of the agenda in the draft.

The proposed American Clean Energy and Security Act of 2009 is a perfect example of moves by the Obama administration to ensure that the nation achieves its clean energy initiative. It is expected that the Congress would pass this legislation by December.

It is indeed true that the process of shifting to cleaner energy shall be long and very costly. The over effects of its adoption are in the long run better and cheaper as compared to the current energy options of the world today. The policymakers must therefore ensure that appropriate measures are taken in order to ensure that the current energy concerns are translated into better techniques and ways for the purpose of our future generations.

The latest trends and changes of the Global Energy Scenario

It is very obvious the role energy plays for the livelihood of everyone on this planet. The energy is responsible for the operations in all the world factories. The same energy is needed n powering the engines of cars and trucks. Yet again it is the same energy that we use in heating, cooling and cooking in our homes. Apart from mentioning all the good that comes out of the energy, it is imperative to speak of some of its consequences such as the impending damage that it does to the world climate. Of all sources of global Greenhouse gas emissions, energy accounts for over sixty percent (Takagi, 2009).The America energy sector is know to contribute to the country's eighty percent of Greenhouse gasses. The currently expanding population also symbolizes a major increase in the demand of energy. This therefore demands for better and cleaner energy sources so as to avert the obvious consequences related to the currently "dirty " energy sources. The major incidences that have in fact broken the previous global records of energy crisis are just an indicator for the need of better energy policies. The averaged WTI oil price for the year v2008 was $100 per barrel which by itself is an historic record high. It is however calming since the price later on fell to affordable levels.

Until the policies have been fully implemented, it is imperative for the U.S. government to ensure that it maintains a good policies to safeguard the nation against negative factors such as geopolitical risks, shortage of skilled manpower in the various oil field, the increasingly dominant tension associated with resource nationalism and the various incidences of very prolonged refining capabilities.

Changes in readiness for the Green energy

Studies suggest that there are various changes that have been adopted by individuals as a result of the impending energy crisis that is facing America and the rest of the world. The American motor vehicle owners have been shown to be changing their behaviors The American automobile society has released new statistics which show that the fact that the gas price per gallon is $.4 per gallon prompted the various automobile owners to change their behavior. The statistics shown that the average mileage covered per month by Americans who own cars have been dropping off since the month of November, 2006 (Takagi,2009). Most of the major oil trading corporations have also started selling off their gas stations. A perfect example would be the ExxonMobil which has sold of about 2200 of their stations and Shell which is to sell off about 2400 of their stations. This is a clear indication of a general withdrawal from the gas selling business.

There have also been changes by various corporations for the impending energy crisis. The perfect example is the move by Tata group, an Indian conglomerate to manufacture very energy efficient and small cars referred to as "Nano." The car is very affordable and sells off at a price of about $2,000.This is also in their bid to replace their domestic Indian automobile market with their own cars as opposed to the American cars.

Recommendations

It is worth noting that the short-term implications of adopting the energy security policies are severe. These include the eminent financial crisis associated with it, the volatility of energy prices and the very short time that remains for the achievement of COP15 Copenhagen. It is therefore imperative that a workable coalition is formed between Energy security, economic growth and environment (Takagi, 2009).As clearly pointed out by the White House National Security Advisor John Holden: "Without energy, there is no economy. Without climate, there is no environment. Without economy and environment, there is no material well-being, no civil society, and no personal or national security. The overriding problem associated with these realities, of course, is that the world has long been getting most of the energy its economies need from fossil fuels whose emissions are imperiling the climate that its environment needs."(Holden, 2009)

Collaborations and Leadership aimed at achieving a Green energy globe

US/Japan

There was a greater vision by both various world leaders to come up with better economic security by way of a well formed and liberal economic system. In order to realize this particular vision, they came up with the Bretton Woods system that was to act as a supervisor of all the financial interactions between the various world industrialized nations. In a similar move by the Obama administration, they have come up with a well articulated low-carbon plan for the future. The move clearly points out the role of policy makers in ensuring that the long-term energy goals are set then the existing energy policies be appropriately updated and better incentives provided. The overall plan is to ensure that there is a better tradeoff between the impending climate change and the global energy consumption. The Obama administration is therefore keen in achieving this in an aggressive way with a global perspective.