McCain Clinton Obama

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McCain Clinton Obama

• A Comparison of the Presidential Candidates
  Energy and Environmental Policy Positions

George D. Baker Williams Jensen, PLLC 1155 21st
Street, N.W. Suite 300 Washington, D.C.
20036 202-659-8201 gdbaker_at_wms-jen.com
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Overview of 2008 Energy and Environment
Presidential Politics

• Change, Change, Change!!!! (And more change
  after that!)
• All three candidates see need to break from
  status quo politically.
• From many vantage points all three look very
  similar All 3 candidates agree on
• CAFE
• RFS
• Plug-In Hybrids
• Federal and Private Sector Building Efficiency
• Appliance and Industrial Electric Efficiency
• Phase-out of Traditional Light Bulbs
• Smart Grid
• All of these issues were addressed in the
  Energy Independence and Security Act of 2007
• So ignore that rhetoric if you are looking
  for differences between the candidates
• Some of the candidates differences are
  philosophical but others are
  politically strategic

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See, Theyre Different!
Had enough yet?
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Some Preliminary Observations

• No established Energy Thought Leaders in this
  Hunt for the White House!
• None of the three Presidential candidates is an
  acknowledged expert or established leader on
  energy policy
• At best, McCain cut this teeth as a credible
  leader on the global climate issue back in 2002
• All 3 are highly dependent on others for their
  views on energy issues.

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Gore Factor for Democrats

• For Obama and Clinton, Gores leadership on
  global climate issue (and Nobel Prize Oscar) has
  raised the stakes as to what is expected from
  next Democratic Administration. Clinton got
  blasted by Edwards and enviro left early in
  campaign for not being green enough.
• Obama publicly stated that he seeks Gores advice
  and that there is a place in an Obama
  Administration for Gore
• Secretary of State?
• What else fits his world-wide stature?

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Obama

• Obamas Energy/Enviro Brains
• Former Senator Dachle
• Bob Sussman, Senior Fellow, Center for American
  Progress
• Former head of Latham Watkins law firm
  environmental practice
• Bill Clintons Deputy Administrator of EPA
• Jason Grumet, President, Bipartisan Policy
  Center, (Baker, Dole, Daschle, Mitchell)
• Executive Director of National Commission on
  Energy Policy
• Former executive director of Northeast states for
  Coordinated Air Use Management

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• For Obama energy/environment is a metaphor for
  his ability to embrace and effectuate bipartisan
  change
• Claims to have started the serious discussion on
  CAFE reform back in 2006 with Bush which lead to
  EISA of 2007 CAFE reform provision
• Views issue as requiring bi-partisan solutions
  and involvement of all stake holders or nothing
  happens
• Acknowledges sacrifice that energy/enviro
  transformation will involve and sees US as
  wanting to undertake that challenge
• Appeal to independent and young voters
  Conservation is cool, not wimpy

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Clinton

• Clintons Energy/Enviro Brains
• Carol Browner, principal of Albright Group
• Former Administrator of EPA under Bill Clinton
• Former head of Audubon Society
• APX, Inc Board member
• Former legislative Director to Senator Al Gore
• League of Conservation Voters
• Alliance for Climate Protection

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• Todd Stern, senior fellow, Center for American
  Progress
• Partner Wilmer Hale law firm in D.C.
• Clinton White House, Assistant to President
  (1993-1999)
• Senior Clinton White House negotiator at Kyoto
  and Buenos Aires global climate negotiations
• Rep Jay Inslee (D-Washington)
• Represents suburban district outside Seattle
  along Puget Sound
• Issued global climate principles on Earth Day
  with Reps. Waxman and Markey

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• Clinton
• Advocates a new National Energy Council in
  White House to coordinate and devise federal
  policy on energy and environment and demonstrate
  its priority in her Administration across entire
  federal bureaucracy
• Advocates creation of E-8 of developed
  countries to show international leadership on
  energy/environment front. Says her vision differs
  from Bushs major emitters group, because E-8
  will have commitment to take mandatory action
  among themselves to lead the world.

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McCain

• McCains Energy/Enviro Brains
• Doug Holtz, Eakin, Senior Policy Advior to McCain
• currently Senior Fellow at Peterson Institute for
  International Economics
• former Chief Economist for White House Council of
  Economic Advisor for George W. Bush
• John Raidt, Chief Policy Advisor
• Former Chief of Staff of Senate Commerce Committee

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• Bud McFarlane, former National Security Adviser
  to George H. W. Bush
• Jim Woolsey, former CIA Director
• Affirms connection between National
  defense-diplomatic power, energy and environment
• Major theme National Security depends on
  Energy Security
• Phil Gramm
• Current Vice Chair of UBS America
• Former Senator from Texas
• Charlie Black, D.C. lobbyist
• Advisor to George H. Bush campaigns in 1992 and
  George W. Bush in 2000

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• Energy Trade Association Exec like Tom Kuhn,
  President of Edison Electric Institute
• Randy Sheuneman, neo-con foreign policy expert
• Founded Committee for Liberation of Iraq
• Senior defense and foreign policy advisor of
  McCain 2000 campaign
• Senior Congressional staff to Senator Dole and
  Senator Lott

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• McCain revels in his maverick status and
  environment issue helps him do that and attract
  support from Democrats and Independents in
  general election
• Query What does this mean for energy and
  environmental decisions in McCain
  Administration?

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• McCains heroes Teddy Roosevelt and John Muir
• Teddy Roosevelt Conservationist
• Rough Rider
• Nobel Peace Prize Winner
• Sent Great White Fleet around world
• Muir
• Patron Saint of environmentalism and
  conservation
• Founder of Sierra Club (1892)

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• McCain POW history a metaphor for willingness
  to stand up to entrenched industrial and labor
  interests blocking progress on nations
  energy/enviro agenda
• Envision what this means for energy industry in
  McCain Administration?
• Subsidies
• Tax relief
• Anti-competitive behavior
• Protectionism
• Environmental protection vs. energy development

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• But overall, McCain does not view solutions to
  energy/enviro problems as lying in creating new
  controls, but in removing barriers to liberate
  markets to pursue smart and efficient
  technologies.

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OIL Ignored at best, vilified at worst

• None of the candidates mentions a plan to develop
  more domestic oil and gas production or oil
  refining capacity.
• Oil producers and oil refiners viewed as
  problems and as sources of economic and
  national security threats.
• In this campaign the oil industry is an
  undifferentiated convenient political foil and is
  used as an environmental Piñata

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• Domestic oil development is lost within energy
  independence political rhetoric which focuses on
  decreasing oil imports
• No discrimination between major integrated oil
  companies, independent producers, refiners,
  marketers, retailers

20
Surprisingly, given enviro push against oil and
coal, there is little mention by 3 candidates of
need for developing new supplies of clean
natural gas

• No sign of price or supply concerns from likely
  dash to gas as a strategic response to global
  climate by utilities
• No calls for natural gas pipeline construction or
  LNG supply development

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The game through November 08 is all about
electoral politics

• Dont expect profiles in courage on energy
  policy
• None of the three candidates even voted on EISA
  of 2007 on December 13, 2007
• Candidates energy and enviro positions are
  purposefully tailored to produce votes in
  November and prevent downside electoral risks
  among particular constituencies

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Evolution or Flip Flops in Candidates Energy
Views? Dont Take Their Campaign Positions to
the Bank

• Clinton conversion on full auction of global
  climate credits after Edwards criticized her as
  soft
• McCain doesnt talk about his vote opposing ANWR
  in Texas or Louisiana, or his strong opposition
  to ethanol subsidies in 2003 and 2005
• McCain not sponsoring Lieberman-Warner in 2008
• Gently criticizes for economic dislocation and
  lack of role for nuclear power
• Needs to win coal states and Rust Belt states
• Obama no mention any more of support for
  coal-to-liquids
• Recall Ws support for cap and trade regime in
  2000 which became opposition to cap and trade
  after inauguration Day 2001? And Ws recent
  April 16 statement of global climate policy?

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• So lets compare the 3 candidates on specifies of
  some key issues.

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OIL
25
Obama

• Reduce U.S. oil consumption by at least 35 (10
  million bbls/day) by 2030 to offset OPEC imports.
• Opposes drilling in ANWR
• Establish a National Low Carbon Fuel Standard
  to speed introduction of non-petroleum fuels.
  Require refiners to reduce the carbon their fuel
  emits by 10 by 2010 which will in turn reduce
  volume of oil-based gasoline used
• June 14, 2007 Virginia OCS Vote Did NOT vote

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Clinton

• Views oil and gas companies as conspiratorial
  villains and profiteers in league with Dick
  Cheney
• Opposes drilling in ANWR
• Strategic Energy Fund
• 50 billion Apollo/Manhattan project concept
  to achieve energy independence
• 10 billion from increased royalties on oil and
  gas
• drilling on federal lands (not paying
  their fair share)
• 20 billion from removing oil and gas
  subsidies/tax
• benefits
• 20 bill windfall profit tax on oil and gas
  companies
• (50 of profit above average historic
  profit levels)
• June 14, 2007 Virginia OCS vote Did NOT vote

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McCain

• Sees dependency on foreign oil in National
  defense terms (plays to strength citing the
  Putin, Chavez, Castro, China/Sudan)
• Opposed drilling in ANWR
• Does not view solution as drilling for more oil
  domestically or fencing US from world oil market
  with tariffs or subsidies. Sees the solution in
  backing US off of oil, especially US
  transportation. Hence pushes to actually reduce
  volume of oil we need. He does not view the
  answer as conservation as much as it is
  transforming transportation in terms of the
  dramatically reduced need for oil.

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• Despite environmental benefits, no candidate has
  a program for increasing production/supply
  transportation of natural gas
• All three candidates skipped Senate vote on
  Virginia coast OCS (June 14, 2007)

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Obama and Clinton on LNG

• Obama
• Likely to oppose new LNG terminals where locality
  objects (which is most places!)
• Clinton
• Opposes Long Island Sound FERC-approved LNG
  facility likely would support bigger
  state/locality influence in LNG siting decisions.

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McCain on Natural Gas

• Cautions about developing reliance on
  international sources of energy (LNG?)
• Generally supports development of domestic
  natural gas resources
• Does not articulate a specific position that
  directly addresses environmental objections to
  drilling on certain public lands. Cross-currents
  in his views
• Objected to ANWR skipped June 14,2007 OCS vote
• Teddy Roosevelt/John Muir image
• Eliminating barriers how does that relate to
  constrictions of environmental concerns?

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Nuclear Energy
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Obama and Clinton

• Both
• Criticize current nuclear technology based on
  safety, waste storage, right-to-know and
  proliferation concerns
• Oppose Yucca Mountain
• Obama supports local storage with advanced
  dry-cask storage
• Clinton Re-think disposal of waste
• Obama
• Need to overcome the safety/storage/proliferation
  problems before constructing more nuclear
  generation capacity which he recognizes is a key
  to achieving global climate objectives
• Must protect public from nuclear materials
  (accidents, leaks, piracy, terrorism)
• Introduced legislation for tracking, controlling
  and accounting for spent fuel at nuclear power
  plants
• Clinton
• Enhance NRC and local authority re safety and
  security

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McCain

• Strongly favors nuclear power a la French system.
  Sees it as safe and more efficient, and more
  reliable for new baseload electric generation
  than renewables like wind, solar
• Would substantially expand US nuclear electric
  generation as a means of combating global warming
  and reducing dependence on foreign oil
• Sees major impediment to more nuclear as
  political squabble over storage of spent fuel
• Wants solution to safe storage of spent fuel
  (such as Japan and France) that gives host
  states/localities a proprietary interest to
  share in economic benefits of advanced recycling
• Wants conversion of weapons grade material into
  fuel for commercial nuclear reactors
• Would use some funding raised in auction of
  global climate credits for loan guarantees for
  new advanced nuclear power plants and RD for new
  nuclear plant technology

34
Electricity
35
Obama and Clinton

• Support decoupling of utilitys sales and
  profits, and supports providing economic
  incentive for negawatts (investments in energy
  efficiency)
• Supports mandate of 25 RPS by 2025
• Voted for 15 RPS in 2007
• Extend renewable energy tax credits (5 years for
  Obama permanently for Clinton)
• Obama
• Require that at least 30 of the federal
  governments electricity comes from renewable
  sources by 2020
• Clinton
• Establish National net metering standards
• Establish Federal energy efficiency targets for
  utilities

36
McCain

• Voted against RPS legislation (10 in 2005 Did
  not vote on 15 in 2007 on 59-40 floor vote when
  RPS failed to get one more voted needed to get to
  60 to break Republican filibuster)
• Significant support from utilities for both
  affirmative policy reasons and defensive ((reasons

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Coal
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Obama and Clinton

• Both
• Oppose any new coal plants without CCS technology
• Support CCS development and sale of CCS
  technology to the world
• Obama
• Previously strong advocate of coal-to-liquids
  technology development if it achieves 20 carbon
  life cycle preference over traditional fuels
• Clinton
• Energy efficiency can reduce need for new power
  plants (cites TXU scrapping 8 of 11 coal-fired
  units for 400 million investment in efficiency)
• Would mandate state PUCs to ensure that before a
  new coal plant is built the same benefit could
  not be achieved through efficiency
• Would fund 10 large scale CCS projects and
  require CCS to be used at all new plants when CCS
  is available

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McCain

• Supports clean coal technology and carbon capture
  sequestration development, and export of such
  technology to the world
• But has severely criticized subsidies for Coal
  Gasification Carbon Capture project as a taxpayer
  rip-off (November 19, 2003)

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Bio Fuels/Ethanol
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Obama and Clinton

• Obama
• Supports but recognizes limits of corn and
  technical problems of cellulosic, as well as
  distortions of commodity markets and
  environmental opposition. Shows sympathy for
  enviro critics of ethanol
• Supports incentives to develop advanced
  bio-fuels like cellulosic to mitigate
  dislocations caused by corn-based ethanol and to
  back out petroleum-based transportation fuel
• Supports subsidies to incentivize local biofuels
  development and infrastructure
• Clinton
• Supports now (Iowa primary!) opposed in 2005
  EPAct debate as a harmful mandate to New York

42
McCain

• Supports now (Iowa!) I support ethanol and I
  think it is a vital alternative energy source not
  only because of our dependency on foreign oil but
  its greenhouse gas reduction effects. August
  07 speech in Grinnell, Iowa
• But is vague regarding interplay of subsidies
  and removal of barriers concept
• November 2003 .I have yet to hear any
  plausible, substantiated argument in support of
  ethanol.Ethanol is a product that would not
  exist if Congress didnt create an artificial
  market for it. No one would be willing to buy it.
  Yet thanks to agricultural subsidies and
  ethanol producer subsidies, it is now a very big
  business tens of billions of dollars that have
  enriched a handful of corporate interests
  primarily one big corporation, ADM. Ethanol does
  nothing to reduce fuel consumption, nothing to
  increase energy independence and nothing to
  improve air quality.
• Plain and simple, the ethanol program is
  highway robbery perpetrated on the American
  public by Congress. I maintain you cannot claim
  to be a fiscal conservative and support the
  profligate spending and corporate welfare in
  this bill.

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• In case you thought McCain was having a bad
  ethanol day back in November 2003, recall his
  statement referring to several things including
  ethanol, on June 28, 2005 regarding the 2005
  energy bill
• The bill contains numerous provisions that will
  distort competitive markets for energy through
  subsidies, tax breaks, special projects, mandates
  and outlandish amounts of federal spending, and
  it is unlikely to have any positive short-term
  effect on energy prices.
• NOTE This was Hillary Clintons position in
  2005 as well.

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Clean Technology
45
Obama

• Cap and trade regimes carbon price is not
  sufficient to drive development of new
  transformational technologies.
• Talks about need to fight Valley of Death
  between invention and commercialization/deployment
  
• Views himself as different from the other
  candidates in focusing beyond RD to
  commercialization of new technology.
• Clean Technology Deployment Venture Capital
  Fund to partner with existing investment funds
  and National Labs to ensure promising
  technologies move from US labs to
  commercialization in the U.S. first, (not abroad
  first)
• Modeled on CIA In-Q-Tel program, a non-profit,
  independently managed venture capital fund for
  development of CIA intelligence technologies that
  private sector would not focus on
• 10 billion invested annually for 5 years and
  reinvestment of profits in fund
• Characterizes this as a de facto Green
  Investment Fund
• Create Green Jobs Corps to teach disadvantaged
  youth job skills for new clean energy sector

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Clinton

• Supports major RD program for transformational
  technologies as part of her 50 billion Strategic
  Energy Fund paid for by oil industry taxes and
  windfall profit tax
• Proposed creation of ARPA E-8, modeled after
  successful DARPA in DOD
• Carbon Reduction Mortgage Association (Connie
  Mae) by directing Fannie Mae and Freddie Mac to
  originate residential energy efficiency
  improvement loans up to 1 billion annually for
  lower and middle class homeowners
• A very retail idea on the campaign trail

47
McCain

• Wants to avoid federal government picking
  winners and losers, i.e. Synfuels Corporation or
  Hydrogen fuel.
• Government must set achievable goals, but the
  markets should be free to produce the means.
• Would cut federal subsidies to energy industries
  that can now stand on their own and would use
  that money to fund new green technology (plug-in
  vehicle batteries etc.)
• Would ethanol qualify as a mature industry
  capable of standing on its own?
• See himself as supporting commercialization, not
  just RD
• Echo of Obama?

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Global Climate
49
Obama and Clinton

• Supports aggressive Cap and Trade regime
• Target reduce emissions to 1990 levels by
  2020 and reduce emissions 80 below 1990 levels
  by 2050
• 100 auction of allowance
• Support Lieberman-Warner bill and dragging it
  to left.
• Support re-engagement by US with
  UN/Post-Kyoto negotiations and special
  negotiations between G-8 plus Brazil, China,
  India, Mexico, South Africa negotiations
• Obama
• Major emphasis on adaptation supports major
  federal spending to facilitate adaptation in
  coastal areas, wildlife and eco-sensitive areas
  affected by global warming
• Clinton
• Proposes new National Energy Council in White
  House to focus action and policy

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McCain

• Supports cap and trade regime serves his
  maverick persona among Republicans well and
  attracts support from Independents and Democrats
• Was there first with McCain-Lieberman Climate
  Stewardship Act in 2003 and 2005 (Senate
  rejected twice) which would reduce GHG emissions
  by 60 with a cap and trade regime
• Now softening position for election and
  distancing himself from Lieberman-Warner in 2008
  (not a co-sponsor)
• Still supports cap and trade regime, but
  
• Must be flexible
• Must work for US economy and not cost jobs and
  cause destructive price increases
• Not fail like EU program
• Must develop new technologies including coal/CCS
  and nuclear in a big way
• Need to include China, India and rest of world
• Wants reasonable time frame linked to
  availability of technology
• Bush April 16 Global Climate Statement helps
  McCain even though Bush did not endorse cap
  trade regime

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Energy Taxes
52
Obama and Clinton

• Both
• supported repeal of 16 billion in favorable oil
  and gas industry tax provisions in 2007 energy
  bill
• Support extension of expiring energy tax credits
• Clinton
• Supports new windfall profit tax on oil and gas
  industry

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McCain

• No New Taxes!
• Improve and make permanent the RD tax credit to
  promote energy independence
• Offered amendment with Senators Kyl and Lieberman
  to suspend federal 18.4 cent gasoline tax and 24
  cent diesel tax (gas tax holiday) from Memorial
  Day through Labor Day.
• Has political problem with Democrats and
  Republicans
• Has pay-go problem for Highway Trust Fund
• Clinton hinted at support for the idea

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Bottom Line

• Lots of similarities but also significant
  differences between all three candidates
• Different elements of energy industry may
  conclude their interests are served by any of the
  three
• Your preference may be influenced for reasons
  beyond the candidates respective energy/enviro
  position
• Corporate or individual tax policy position
• Facilitating or blocking power of one-party
  control of Congress
• International or defense policy
• Sense of History
• First woman?
• First African-American?
• War hero?
• State of General Economy
• Pure Partisan politics

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So What can you do?

• First, pick a candidate!
• Fund your candidate
• Network for your candidate among your personal
  and business contacts
• During campaign, advise/provide politically
  helpful policy concepts to your candidate
• Share your expertise
• Prepare longer-term policy positions / ideas /
  initiatives to advocate to new Administration
  immediately after the election to influence its
  early first term agenda

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• Network with key advisors of your candidate to
  lay groundwork for policy in their Administration
• Join the candidates team
• Tie-in with Congressional and State proponents of
  your candidate
• Support Congressional and state political
  leadership who may be influential with your
  candidates Administration
• They will be a key conduit for influencing the
  new Administration
• Identify and groom potential appointed officials
  to serve in key posts in next Administration
• Professional expertise is great, but not always
  sufficient
• Correct party is necessary
• Political involvement is helpful