EXECUTIVE SUMMARY:
1. Amid skyrocketing oil prices, the debate on energy policies has been elevated as one of the key issues in the 2008 U.S. presidential election.
2. John McCain has taken the initiative in the belief that he is stronger on energy than Barack Obama. McCain’s plans present more substantive solutions for America’s energy problems, but Obama’s suggestions are more environmentally conscious.
3. The debate has illustrated both sharp differences and common ground between the two presidential contenders. They agree on the need for more energy self-sustainability and less dependence on foreign oil, so a robust debate on how to confront these challenges can only be positive.
In the past few weeks energy policy has been elevated to the forefront of the presidential campaigns of Senators John McCain and Barack Obama and will likely remain a key issue beyond the elections. With gas prices ever spiraling to record highs the American people are demanding something be done.
John McCain has pushed the energy issue to the vanguard of the debate. This is an area, McCain advisers believe, where he can defeat Obama. By tying energy to national security and also to economic issues, such as reducing the price at the pump, McCain is trying to make the issue his own. In a speech given on June 23 in Arlington, Virginia, McCain explained the link between energy policies and national security, “When we buy foreign oil from these (Venezuela and the Middle East) and other sources, there are many consequences - all of them far-reaching and none of them good. Worst of all, by relying on foreign oil, we enrich bad actors in the world, some of whom finance terrorists.”
The McCain campaign team is working hard to position the Republican presidential nominee as the authority on energy security. On June 24 Brian Rogers, a spokesman for the McCain campaign, fired another barrage of attacks on Obama. Rogers told reporters that Obama was the “Dr No” of energy security. Whereas McCain plans to renew offshore oil exploration, build forty-five new nuclear reactors and offer a $300 million incentive to build a longer lasting car battery, Obama is short on ideas but full of objections.
However, aware of McCain’s strategy to portray him as weak and idle on an issue that affects Americans every time they refuel their cars, Obama has recently hit back. The Senator stated that McCain’s battery contest proposal was no more than a gimmick. He also stressed that his rival’s plans to end the moratorium on offshore drilling would not have any meaningful affect for at least ten years. Instead, Obama proposed investing over $100 billion in the next decade to create sustainable energy programs that would also create thousands of jobs. He is also says he is in favour of reducing America’s energy use as an alternative to building more nuclear power plants and recommencing offshore drilling. The Illinois Senator opposes McCain’s nuclear plan, citing the environmental risks of nuclear waste.
“These are not serious energy policies,” Senator Obama stressed, “They are not new energy policies. And they are certainly not the kind of energy policies that will give families the relief they need or our country the oil independence we must have.”
If there are any benefits of the high cost of energy it is that it has finally awoken the American people and politicians to the critical need for more self-sustainability and energy security. America is the world’s third largest oil producing nation, yet it imports 60 percent of its oil. To put it another way, the US produces 10 percent of the world’s oil, but consumes 24% of it. Renewable energy supplies 7 percent of America’s use with hydroelectric and biomass making up 90 percent of these renewable sources. Wind power only makes up 4 percent of that renewable energy and solar even less at 1 percent. So, there is certainly room for improvement in both renewable and non-renewable domestic energy.
In contrast to McCain’s car battery prize proposal, Obama has lauded the merits of using ethanol instead of petroleum. He favours producing more corn ethanol, despite the fact that corn ethanol generates less than two units of energy for every unit used to produce it; the energy ratio for sugar cane is more than 8 to 1. This is one of the reasons why McCain, unlike Obama, advocates eliminating the multibillion-dollar annual government subsidies that domestic ethanol has long enjoyed. Accordingly, the Arizona Senator opposes the 54-cent-a-gallon tariff that the US places on the much more productive sugar cane ethanol. Yet, although McCain favors the more energy efficient method of ethanol production, Obama can claim to be supporting domestic production over the imports that are advocated by his rival.
Like McCain, Obama has also begun to link energy independence to national security. The Senator from Illinois has argued that embracing ethanol “ultimately helps our national security, because right now we’re sending billions of dollars to some of the most hostile nations on earth.” America’s oil dependence, he added, “makes it more difficult for us to shape a foreign policy that is intelligent and is creating security for the long term.”
However, biofuels have recently become a controversial issue in and of themselves. According to an Oxfam report released this month the replacement of traditional fuels with biofuels has dragged more than 30 million people worldwide into poverty. Oxfam says so-called green policies in developed countries are contributing to the world's soaring food prices, which hit the poor hardest. The charity also says biofuels will do nothing to combat climate change. Moreover, the report's author, Rob Bailey, criticized rich countries for using subsidies and tax breaks to encourage the use of food crops for alternative sources of energy like ethanol: exactly what Senator Obama has supported.
The energy debate has illustrated both sharp differences and some common ground between John McCain and Barack Obama. They agree on the vital need for increasing domestic energy production and breaking America’s dependence on foreign oil. How this is to be achieved is where the differences reveal themselves. McCain’s plans to build forty-five new nuclear reactors and resume offshore drilling will certainly boost US energy production but it comes with environmental costs. Obama’s plan to invest $100 in renewable and alternative energy is more environmentally friendly, but it will not nearly go far enough to break America’s dependence on oil producing nations. That said, the debate can only be a good thing, as research into improved and new energy technologies has never enjoyed so much funding and attention. It seems that record high oil prices can in fact do some good.
Paul Hughes is a research assistant with the North America Section at the Henry Jackson Society.