Saturday, May 31, 2008

Liveblogging at API/Newsweek Energy Series (Part VI)

There were several questions from the audience, made up of academics, venture capitalists and business folks. One of the most interesting questions was: What do you want the next president to do to address energy in their first 100 days?

Trae Vassallo from KPCB pleaded for a price on carbon dioxide to help the market start to determine the energy winners and losers. David Victor of Stanford said that even if Congress were to come to their senses tomorrow and pass sweeping energy legislation, it’d still take years to implement. This is a slow moving needle. We need massive CO2 reductions at this point. But we also need competitive prices and the ability to compete with other countries.

“The less any policy is anchored in price, the higher the risk. But a price on carbon isn’t enough just on its own. We need a portfolio of crucial technologies.

“I’m optimistic in the long-term, but in the short term – the next few decades – I’m pessimistic. You can build a coal plant in China so cheaply right now. They’re not going to change their trajectory, even if the U.S. does. At this point, we’ve committed ourselves to warming planet.”

Jackalyne Pfannenstiel, CA Energy Commission:

“The new president should not lie to people about the energy situation. The new president needs to say ‘energy prices are high. They’re going to stay high.’ Then they need to explain to people why the prices are high and why that may not be a bad thing. Let’s work with what we have and drive innovation.”

Another question from the audience: Can we really leave this huge problem up to states and municipalities to solve?

David Victor said that it’s dangerous for public policy to be based on what people think is the “next big idea” for solving the energy problem. People grasp on to a solution, think it’s the best idea and then pour money in to it. Silicon Valley acts this way and can be “irrationally exuberant” at times. There has to be a political strategy to go along with the Silicon Valley strategy. He thinks the big question is: How do we keep public policy on the right course without generating massive distortion by telling consumers what to use and how to use energy?

Jackalyne Pfannenstiel of the CA Energy Commission:

“Energy is a global problem and we need to address it globally. But you have to start somewhere. People ask me ‘Does California’s leadership really matter?’ You bet it does! We’re doing things directly applicable elsewhere. California’s policies could be adopted by other Western states. You’re going to get the regional groups working on it, which could set the model for national legislation.”

Andrew Murr of Newsweek commented:

“The Department of Energy could use a green fire lit under it. With all due respect to Chevron, it’s been too petroleum-centric in the past 7 years and we need to branch out. Renewables aren’t just something to talk about.”

Later on in the discussion, Paul Siegele of Chevron disagreed that states or the U.S. can solve this global problem on their own. China and India need to be on board for any change to take place. Different solutions around the world will not work:

“It’s a patchwork of regulations and these state-by-state regulations have increased the cost of gasoline distribution. The successful presidential candidate shouldn’t do much in the next 100 days. They should just think a lot about this problem.”

Photo courtesy of API

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