A Bipartisan Approach to Energy
The infrastructure debate in Washington usually centers on planes, trains, and automobiles. However, President Obama recently highlighted America's other great infrastructure challenge — modernizing the way we move kilowatts to power our homes and businesses — by unveiling the first Quadrennial Energy Review (QER). Developed by the U.S. Department of Energy, the QER is a strategic plan for upgrading the nation's energy systems — the vast network of storage, distribution, and transmission facilities that power the U.S. economy. Based on similar exercises at the Pentagon and the State Department, the QER provides a new roadmap for policymakers struggling to understand America's fast-changing energy landscape.
The last comprehensive national energy report was published nearly 14 years ago — well before two key developments that have transformed America's energy landscape: the shale gas and oil boom and the rapid expansion of wind and solar energy. While the QER is not a comprehensive document, it does examine, and calls for measures to improve, America's energy backbone.
With the QER, Congress has an opportunity to move beyond the distracting and highly partisan Keystone XL pipeline debate and focus instead on urgently needed improvements to America's aging energy systems.
Two key Republican lawmakers, House Energy and Commerce Committee chairman Fred Upton (R., Mich.) and Energy and Power Subcommittee chairman Ed Whitfield (R., Ky.), offered an encouraging response to the White House announcement: "We need a modern and resilient energy infrastructure that will meet tomorrow's challenges. We are reviewing the administration's full recommendations, but we have already found common ground where we will work together."
America's energy infrastructure faces several challenges. One is simply to connect the new geography of shale oil and gas development with U.S. consumers. Another is to upgrade the electrical grid to accommodate more "distributed" energy from wind and solar. A third is to protect our energy systems from potential cyber attacks.
The last several years have provided many examples of the vulnerability of America's energy infrastructure. Most dramatic were the power outages and havoc wreaked by Superstorm Sandy on the Eastern Seaboard, where tens of millions of people were left without power for days and businesses suffered devastating losses.
Energy bottlenecks are also increasingly common. For example, a crude-oil backup at Cushing, Okla., due to limited pipeline capacity to transport to Gulf Coast refineries, depressed the price of West Texas oil, resulting in big losses to the local and regional economies.
The QER addresses these significant problems by calling for improved efficiencies in siting and permitting of transmission, storage and distribution (TS&D) infrastructure, and enhanced development of a modern electrical grid to improve electricity reliability.
Moreover, the changing geography of U.S. oil and gas production highlights the inadequacies of our existing energy infrastructure. North Dakota's Bakken shale formations produce 1 million barrels of oil per day, and about 60 percent is moved by rail going to the East and West Coasts. This has created congestion on the rail network, with crude oil sharing limited space with agricultural and other commodity shipments. To alleviate the bottlenecks, the QER proposes a new grant program at the Department of Transportation devoted to improving transportation links.
Rising consumer demand also is placing stress on our energy infrastructure. The just-ended record cold winter in New England produced not only enormous snow banks, but also big spikes in demand for electricity and heating. Thanks mostly to a lack of pipeline capacity for natural gas, New England consumers have some of the highest energy bills in the country. Here again the QER's call for increased efficiency in the siting and permitting of TS&D infrastructure would be very helpful.
The increase in renewable electricity production also has placed new demands on infrastructure. The QER reports, "Solar electricity generation has increased 2-fold since 2008, and electricity generation from wind energy has more than tripled." Before you can introduce lots of wind turbines and solar energy, you first need a better grid and more energy storage to fully utilize these resources.
While the Obama Administration did not issue a comprehensive energy strategy with the QER, it did deliver a smart and digestible plan that is narrowly focused on modernizing our critical energy infrastructure. This should enable Democrats and Republicans in Congress to find common ground on important aspects of energy policy and start building the trust necessary to take on more difficult issues. Ultimately, both parties will have to resolve the biggest sticking point of all: How to capitalize on American's new energy abundance, while also reducing greenhouse gas emissions?
In the meantime, modernizing the nation's energy infrastructure will advance both goals by connecting shale energy to consumers and integrating solar and wind power into the grid.
Derrick Freeman is a senior fellow and director of Energy Innovation Project at the Progressive Policy Institute.