If energy was a hot-button issue before, it’s even hotter now after elections that strengthened Democrats in Colorado and in Washington.
Conventional political wisdom holds that Democrats will favor alternative and renewable energy, while taking a tougher look at the environmental impact of traditional energy sources – oil, natural gas and coal.
Yet some energy issues such as wind power and more oil and gas drilling have bipartisan support, and Democrats alone may not set the agenda.
“Responsible politicians in both parties recognize that America has been sleepwalking to disaster,” said Colorado energy analyst Randy Udall, “and that a new emphasis on energy efficiency, renewable energy and domestic production is needed.”
Here are a few of the sectors and companies that could see changes under the new political regime.
Biofuels
Colorado has several ethanol and biodiesel plants, as well as a research hub at Golden’s National Renewable Energy Lab.
Colorado already has a strong foothold in the industry of making liquid fuels from crops, with several ethanol and biodiesel plants in operation, more under development and a research hub at the Golden-based National Renewable Energy Laboratory.
“Biofuels should do well in the next Congress. President Bush has already indicated his strong support for development of ethanol made from cellulosic (non-corn) biomass,” said Brent Erickson of the Washington-based Biotechnology Industry Organization.
“If you couple that with the stated support of key Democrat leaders, such as the new incoming speaker, Rep. Nancy Pelosi, and the changes in committee leadership, that adds up to strong bipartisan support,” Erickson said. “Where key energy and ag committees are concerned, we will no longer see Southern Republican chairmen – who tended to be pro-oil – but corn-state Democrats in control.”
Clean coal
Denver-based companies that process coal
to reduce pollutants could benefit from an expected power-plant emissions review.
Democrats are expected to take a strong look at the carbon emissions and pollutants from 153 new coal-burning power plants proposed for the next quarter century.
That could benefit Denver-based companies Evergreen Energy, formerly KFx Energy, and ADA-ES, both with coal-treatment processes that attempt to reduce pollutants and improve coal-burning efficiency.
“Our hope is that Congress would look at the coal-fuel cycle as part of an overall agenda to address global-warming and emissions issues,” said Mark Sexton, chief executive of Evergreen Energy.
Oil and gas
Big Oil may be “a big loser” as congressional drilling limits are feared. Industry officials hope changes won’t inhibit extraction.
Industry officials are concerned about possible congressional initiatives to limit drilling on public lands and in coastal waters, as well as to assess windfall-profit taxes on oil and gas production.
“The American public’s vision of a clean-energy future that is very different from current policies is a big winner, and Big Oil is a big loser,” said Gene Karpinski, president of the League of Conservation Voters.
Local petroleum official Marc Smith said he hopes that Colorado Gov.-elect Bill Ritter’s positions on environmental safeguards on drilling and the possibility of higher severance taxes won’t inhibit oil and gas extraction.
“My understanding is that he is pro-business and cares deeply about Colorado’s families and consumers,” said Smith, executive director of the Independent Petroleum Association of Mountain States. “I think he’ll understand that the wrong policies would decrease supplies and increase prices.”
Xcel Energy
The utility’s carbon-reduction plan and other measures are expected to win accolades, but its support for an emissions proposal isn’t.
Xcel, Colorado’s largest gas and electric utility, has recently embraced a carbon-reduction plan that is likely to win it kudos from majority Democrats in Congress and the Colorado legislature.
But Xcel’s support for a proposal that would reduce utilities’ carbon emissions without imposing taxes on utilities – in the form of draft legislation by Republican U.S. Senator Norm Coleman of Minnesota – could run into trouble in the new Congress.
The proposal will face competition from several Democratic initiatives that would impose caps and taxes on carbon from coal-burning power plants.
Xcel chief executive Dick Kelly said he’s not concerned by the political shift in Washington and Colorado.
“Having a Democratic Congress and Democratic administration and legislature in Colorado will not change the Xcel Energy agenda,” he said. “We recognize that climate change is happening, and we’re committed to reducing our impact on the environment by calling for a comprehensive federal climate-change policy, building a (clean-coal) plant in Colorado and increasing our use of renewable-energy resources.”
Wind power
Despite a growing embrace of the industry, Congress has failed to enact a long-term tax credit that makes wind energy cost-competitive.
Wind energy has enjoyed strong bipartisan support in Washington and Colorado in recent legislative sessions. Xcel Energy is the nation’s largest purchaser of wind power, primarily to serve customers in Colorado and Minnesota.
But Congress, to the dismay of wind-energy producers, has repeatedly failed to enact a long-term tax credit that makes wind energy cost competitive with coal-fired generation.
The American Wind Energy Association, an industry support group, said it expects favorable attention from the Democratic Congress.
“Following the election, prospects for more action on issues such as climate change, clean air, a national renewables portfolio standard, an incentive for residential wind-energy systems and a long-term extension of the production tax credit will be stronger than before,” the group said in a statement.
Staff writer Steve Raabe can be reached at 303-954-1948 or at sraabe@denverpost.com.
Staff writer Christine Tatum can be reached at 303-954-1503 or ctatum@denverpost.com.
