MA must continue to lead on energy

A NEW PRESIDENT always means change in key public policy matters.  Before sharing my thoughts about what this transition means for our energy priorities in Massachusetts, I want to share observations from the front row seat I had for the last transition of Democratic president to Republican.

Around Christmastime in 2000, while still adjusting to the results from the Bush-Gore Florida recount, I got a call from Steve Hadley, who was on the foreign policy transition team of President-elect George W. Bush. I covered international energy and environmental issues for President Bill Clinton, and Hadley asked if I would stay on the staff of the National Security Council for a few months more to help the Bush team with their transition despite our partisan differences. The Bush administration’s first state visit was going to be from Prime Minister Tony Blair of the United Kingdom, and among the top issues he wanted to discuss with the new President was the climate change treaty then pending.  So, on January 22, 2001, when I came to work at the NSC for our Monday morning senior staff meeting in the Situation Room, Condoleeza Rice was sitting at the head of the table where Sandy Berger used to sit.  Over the next four months, I learned a bit about the transition to a new President of a different party, and what we should expect now in the months ahead.

First, the Bush-Cheney team had a few priorities in mind, and we can expect the same from President-elect Trump’s team.  A top item for them was to jump-start natural gas production in the United States. This had them focused on things like eliminating EPA oversight of key water resources and easing the rules for drilling on public lands (mistakes, in my view).  Another priority was to send a domestic political message about supporting coal, so they wanted to take a clear stand against the climate treaty, the Kyoto Protocol (also a mistake).

Now, 16 years later, I’d have to say that natural gas production has generally been a good thing for the United States economically and it has helped lower coal consumption, though certain exploration and production practices raise environmental issues that still need to be addressed.  At the same time, Bush opposition to the Kyoto Protocol didn’t derail international efforts to reduce greenhouse gas emissions. The treaty remained an important vehicle for international cooperation, ultimately leading to the Paris accords signed for the United States by President Obama earlier this year.

 

 

What will the Trump team focus on?  Gas and oil export terminals might become a high priority, or bolstering the US oil and gas industry now flagging due to market saturation (a byproduct of the earlier production push) and pipeline constraints.  (Less clear is what Trump could do to make good on his promise to put coal miners back to work.)  And one can expect less action from the EPA on issues like motor vehicle fuel efficiency and the Clean Power Plan (although it’s important to remember that regulating greenhouse gas emissions was, and remains, a mandate from the US Supreme Court).

 

One consequence of a shift in presidential priorities like this is that states step forward when the federal government turns its attention elsewhere.  The Regional Greenhouse Gas Initiative (RGGI) was born in the wake of the Clinton-to-Bush transition, when Northeast states (led by New York Gov. George Pataki and Massachusetts Gov. Mitt Romney, both Republicans like Bush) felt a cap-and-trade program was needed even if the federal government wasn’t ready to move forward.  Likewise, the Bush years saw a boom in state-level renewable energy mandates and energy efficiency investments.  On vehicle emission and efficiency standards, California’s program pre-dates the federal government’s, so it has the authority to set higher standards and states like Massachusetts are allowed to follow suit, effectively setting a higher standard for much of the country.  And when it comes to the Clean Power Plan, Massachusetts was already far ahead on reducing greenhouse gas emissions.  The truth is that 95 percent of utility and electricity regulation is done by the 50 states, not the federal government.  So look for the states to step up if they sense a pause in federal leadership on these vital issues.

What does this mean for Massachusetts?  It means we have to continue to lead on the low-carbon transition that is taking place regardless of who sits in the White House.  Think of it as an important leadership opportunity.  A number of key priorities are ripe for action in 2017:

One, we need to bring new hydropower resources to our electricity market.  Gov. Charlie Baker and legislative leaders are to be commended for passing major legislation earlier this year mandating big new purchases of hydropower by utilities.  Moving quickly is important so that the new transmission infrastructure needed to bring this clean energy from the North to market can be in place by 2020, when the Commonwealth faces its first statutory test under our nation-leading greenhouse gas emissions requirement of a 25 percent cut.

Two, we need to redouble our efforts on energy efficiency.  For five years in a row, Massachusetts has won the top national ranking from the American Council for an Energy Efficient Economy for energy efficiency efforts.  But this year, for the first time in those five years, California shared our No. 1 status (a distinction they have been trying to reclaim since Massachusetts took it away in 2011).  Our electric and gas utilities, along with a booming economy of energy auditors, insulation companies, and other energy retrofit specialists, are hard at work, bringing our electricity consumption down steadily even as our economy continues to grow.  Let’s send California back down to No. 2 instead of coasting while they try to eclipse us.

Third, with rapid departure of all of the remaining coal and nuclear power plants in Massachusetts, we need to bring more natural gas to our state.  Natural gas provides a flexible backstop to fill in the gaps in our power generation mix as we make the transition to renewable energy and other low carbon sources of power.  It has also emerged as the fuel of choice for home heating, displacing fuel oil – a good thing, in my view. Getting that natural gas to Massachusetts means new pipelines. How these pipelines are financed has become controversial, with the Supreme Judicial Court blocking a state plan to have ratepayers finance them through contracts for gas to generate electricity.  But if new pipeline infrastructure can save consumers money and buffer our economy against winter price spikes, then we should find a way to pay for it and move forward.

Fourth, we need to keep the solar and wind boom going.  Massachusetts has emerged as a top solar market because we have electricity prices higher than the national average and the price of solar has declined dramatically.  In less than 10 years, we have more than 500 times as much solar installed today as we did in 2008. For this trend to continue, we need state government to maintain the right mix of regulation and incentives to keep the growth going.  On wind, Massachusetts utilities have played a key role in power purchase agreements that have led to massive investments in nearby Maine and other places – wind has now become not only very cheap but reliable as a key part of our regional electric grid.

Fifth, we need to keep pushing on new and old ideas that show promise to make a meaningful impact on our state’s carbon footprint.  In addition to hydro, the 2016 energy legislation also means that we will give offshore wind a new push. This holds the promise of new jobs on the South Coast as well as locally sourced clean energy.  Another example is district energy, where buildings in Cambridge and downtown Boston can be heated and cooled by the waste steam generated by the Kendall Power Plant in Cambridge – it’s an old idea but a good one that has recently gotten a makeover. This steam and electricity combination provides lower emissions and more LEED building points than natural gas boilers and other alternatives installed building-by-building.  Finally, building codes can make a huge difference – it is now pretty easy to build a zero-net-energy home with super-insulation and solar panels.  We should continue to raise standards for buildings we build and renovate now that will be around for 50 to 100 years.

It’s too early to tell what will come from Washington under President Trump, but the key lesson from past transitions is this: In our unique federal system, states can and should step forward if Washington loses interest in a challenge – and opportunity – as important as clean energy as a solution to climate change.

Ian Bowles, co-founder of WindSail Capital Group, was Massachusetts secretary of energy and environmental affairs from 2007 to 2011.  He also served on the senior staff of the National Security Council under former presidents Bill Clinton and George W. Bush from 1998 to 2001.