Energy for an Energy Plan

Governor Kitzhaber is contemplating an energy policy to reduce carbon emissions, such as those emitted from PGE's coal-fired electricity-generating plant in Boardman, which is already scheduled to close down.Governor Kitzhaber has prevailed in persuading lawmakers to approve high-profile initiatives in education, early childhood learning and health care. Now he wants to tackle energy, which could prove a more elusive and tougher sell.

Earlier this year, Kitzhaber handpicked three dozen industry insiders to recommend innovative policy ideas and create a 10-year energy plan. Teams worked for four months, focusing on: 1) consumption/energy efficiency, 2) supply side/resource mix, 3) siting, 4) transportation, and 5) governance.

The group sent its recommendations to Kitzhaber, which now have been made public. Their major theme is reducing carbon dioxide emissions through energy source conversion, more reliance on renewables, and ditching power generation based on high-carbon fossil fuels. Most Oregonians may not know that more than half of the state’s electricity comes from coal-burning power plants.

One big hurdle in accomplishing carbon reduction is already surmounted as PGE has agreed to close down its Boardman coal-fired plant. But even that decision raises thorny questions as the utility looks for a way to replace a source of reliable energy to serve its base load.

Legislators had a previous taste of energy politics when they considered, but didn't act, in the 2009 session on a cap-and-trade proposal, intended to use market forces to encourage businesses with options to switch to energy sources with lower carbon emissions.

Since then, interest has grown in the merits of a carbon tax, which is a more direct disincentive for using fossil fuels. It also is a tax, which raises political flags.

The notion that renewable energy such as wind, solar and geothermal power could save the day has dissolved. Renewables can and will play a role, but they need back-up sources to ensure reliability. Because the big opportunities for wind and solar installations are east of the Cascades, they also can require huge investment in new or improved transmission systems. And financing of large wind projects has come under fire as lawmakers have trimmed incentives such as the Business Energy Tax Credit.

A glut of domestically produced natural gas has made gas-fired plants, both to meet base-load and peak-load requirements, attractive. While they have a cleaner emission profile, they are still fossil fuels and don't satisfy for some the quest for a more sustainable energy future.

Despite the potential pitfalls, Kitzhaber seems determined to press ahead. He recently hired an experienced lobbyist, Margi Hoffmann, as his new energy policy advisor. Hoffmann knows the legislature and the legislative process. More important, she has lobbied energy policy, including the cap-and-trade proposal. She knows first-hand where the political land mines are buried.

But all the political energy in the world may not be enough to convince lawmakers, especially if there is split control in the 2013 session, to swallow a major energy policy initiative. A sluggish economic recovery and weak job growth in rural parts of the state don't create an ideal stage for a carbon-reducing energy initiative that could cost major utilities and employers a lot of money.

Basking in the success of his third term, Kitzhaber has shown himself a political phoenix. He has displayed the political skill and daring that were the promise of his first two terms. However, health care transformation and K-12 reform may wind up as mere kid's play when it comes to the sharp-elbow debate over energy policy.

Kitzhaber may have the energy for the debate, but lawmakers may not have the stomach.

 

- CFM Strategic Communications represents TransCanada, which operates natural gas pipelines in east-central Oregon.