Dr. Jay Hakes and the Future of Energy

Last Thursday, I attended a very informative meeting sponsored by CareerEco, featuring Dr. Jay Hakes. Hakes was an advisor to the Carter Presidency and later head of the US Energy Information Administration. Now, he heads the Jimmy Carter Presidential Library and is a Midtown resident.

In response to the Arab oil embargo of 1979, Carter introduced a visionary energy plan with a goal of supplying 20% of our domestic energy needs via renewables by 2000! By comparison, the EU currently has set the same goal for themselves by 2020. Back then, the public did not understand such a complicated plan, and its opponents derided the windfall profits tax as if that were the only important aspect of the plan.

Hakes: You can't fit an energy policy on a bumper sticker.

In the late 1970's, the US led the world in solar and wind technology, but in the early 80's the Saudis intentionally flooded the market with oil and tanked the prices in a successful attempt to damage the alternative energy industry. All Federal administrations from Reagan's on have paid lip service to renewable energy, and our technology leadership has subsequently passed to the Germans and the Japanese.

With regards to CAFE (Federally-mandated fuel efficiency standards,) American automakers are not wholly to blame for the lack of progress over the past 2 decades. They have been willing to accept tighter standards, if the Feds also raised taxes on fuel. Our politicians didn't, and they continue to resist.

3 top Federal policy priorities should be:

• continued focus on energy conservation and efficiency
  
• Enact a tough National Renewable (electricity) Portfolio Standard
  
• We need to place a tax on carbon. A direct tax is preferable to a cap and trade system, for many of the same reasons that Thomas Friedman recently described in his NY Times op-ed

As for stimulating our domestic renewable energy industry, it's politically expedient to offer tax incentives. It's always easier to cut taxes than it is to raise them, but they rarely achieve their lofty aims. Due to the temporary nature of these credits and rebates, businesses won't take risks that depend on them.

In addition to these carrots, we have to also implement some sticks--mainly in the form of a carbon tax. Unlike tax incentives, new taxes are usually permanent. Thus, businesses can count on taxes when they make long-term plans and investments; they cannot with the more ephermal tax incentives.

We will have to accept more nuclear power plants to satisfy our needs. It's good that the GA PSC granted permission to pre-charge ratepayers for the construction of Plant Vogle2; it provides a true-cost signal to the regional electricity market and will make renewables more attractive.

My question to Hakes about educating govt officials (e.g., PSC members), business leaders and everyday citizens is most important. Unfortunately, there are few easy answers.

He does not subscribe to Peak Oil theory; we have ample access to unconventional sources such as tar sands--for a price; the PO'ers are advocating for the right policies for the wrong reasons; he respects Matt Simmons but respectfully disagrees.

We need installers of wind and solar systems who have brand name cachet.

All-in-all, Hakes represents an expert, moderate voice in the debate about our energy future. I bought a copy of his book and will comment here further once I finish it.