Legacy Issue: How Bush is Preparing an About Turn to Tackle Climate Change

In his quest for a defining legacy beyond the Iraq war, tonight a chastened President George W. Bush in his State of the Union address will put energy security - reducing US dependence on foreign oil — at the heart of his political agenda for his final two years. It is not a new issue for the former oilman. He trumpeted it in 2001, cemented by an energy strategy he summed up as: “We darn sure have to do a better job of finding more supply. We can’t conserve our way to energy independence.” But this year will see a trans. formation in this view. In his past five State of the Union speeches, Mr. Bush made no reference to global warming. Tonight he will make an explicit link between the demands of energy security and the environment, says Tony Snow, White House spokesman

 “Energy and environmental policy are linked, for the simple reason that the president has talked about getting rid of an addiction to oil, and looking for alternative sources of energy which do not contribute to greenhouse gases or global warming.”

The fact that Mr. Bush is even talking about his actions on climate change, and will set out how his own policy helps address it, marks a profound departure from the past. Yet there• remain doubts about whether the White House is willing to embrace more radical energy efficiency initiatives, or abandon its policy of the first six years of seeking to expand the supply of domestic oil.
The shift comes amid radical changes affecting Washington , from the shake-up in Congress in favor of the Democratic party to a freakish change in weather patterns. Last month the capital enjoyed a winter heat wave: Mr. Bush went cycling as temperatures reached the 70s Fahrenheit (above 21 degrees Celsius), way higher than normal. Last year was the hottest in 112 years in the US .
On the other coast, normally warm winters have turned frigid and newspapers have been full of pictures of fresh California oranges on trees covered in icicles. This month the fate of weight-losing polar bears became front-page news when the White House for the first time conceded that climate change was a grave threat to their future. Dirk Kempthorne, interior secretary, said: “We are concerned the polar bear’s habitat may literally be melting.”

Yet the fact that Mr. Bush will be talking about a linkage is one of the clearest signals that he feels the need to defend his efforts to cut greenhouse gases and address his image as a climate change skeptic, impassively looking on as the earth warms. Senior aides say he has been

frustrated by the barrage of leaders admonishing him on global warming, from Tony Blair’s constant solicitations to interventions by Angela Merkel, the German chancellor. Ban Ki-Moon, the new United Nations secretary general, last week also sandbagged him in the Oval Office on climate change.

Finally, it marks an acceptance that Democrats have transformed the Washington agenda, forcing a focus on a different kind of energy policy that gives high priority to climate change and energy efficiency. Interest in that agenda is evident in the box office success of former vice-president Al Gore’s film, An Inconvenient Truth, a story of the impact of climate change that has grossed $24m (12m, €19m) in the US. Last week Nancy Pelosi, speaker of the House of Representatives, created the first ever select committee to focus on climate change and energy independence and called for an energy independence package by July 4.

Within their first two weeks in office, senators have introduced at least eight bills proposing mandatory limits on greenhouse gas emissions, including one from Republican Senator John McCain. That compares with just one substantive carbon bill in 2003 and two in 2005. In the first

100 legislative hours, the House voted to rescind $l4bn in tax breaks for oil companies granted by the Bush administration.

Proposals to raise fuel economy standards for US vehicles, which remain below those of China , are receiving more attention. The powerful House environment and public works committee has seen a U-turn from the chairmanship of Republican Jim Inhofe, who called the threat of catastrophic climate change “the greatest hoax”, to that of Barbara Boxer, who calls it a “crisis”.
“Energy policy has become high politics. The concept of energy independence is embraced across the political spectrum, offering a starting point for talking about energy,” says Daniel Yergin, chairman of Cambridge Energy Research Associates. “The shift in Congress ensures this will be at the center of debate for the next two years. It ties together national security, climate change, the future of the Middle East, the US relationship with Latin America and of course the burning political issue of what people pay the pump.”

The resonance of the phrase “energy independence” is evident in the number of citations In the US press, rising from 1,245 in 2003 and 3,370 in 2005 to 6,082 last year. All the front-runners to be the Democratic presidential nominee in 2008 use it. Hillary Clinton wants to cut dependence on foreign oil in half by 2025. Senator Barack Obama wants to cut oil imports by the amount imported from the Middle East by 2025. Senator Joe Biden has conceded that the overall goal is “grandiose” but important.

Democrats’ embrace of the ideal has convinced Mr. Bush that energy independence offers a chance for bipartisan co operation. “The president wants this as a legacy issue and the Democratic congress needs to show it can get results in the next year,” says Robert Hormat vice-chairman at Goldman Sachs and former economic policy adviser to Henry Kissinger.

In fact, energy independence is something both parties could always agree on. President Richard Nixon first put it on the map when he launched Project Independence after oil prices jumped from $3 a barrel to $11. “In the year 1980, the United States will not be dependent on any other country for the energy we need to provide our jobs, to heat our homes and to keep our transportation moving,” he predicted.
Gerald Ford sagely pushed the date back to 1985, but made progress introducing federal standards for energy efficiency for cars. In 1977 President Jimmy Carter called the energy crisis the “moral equivalent of war’ and wore a woolen sweater is the White House in a sign of his personal conservation effort. Two years later he pledged: “This nation will never again use more foreign oil than we did in 1977 - never” and set the goal of “cut ting our dependence on foreign oil by one-half by the end of the next decade”.

All these initiatives, while slowing the rate of growth in US energy dependence, proved quixotic. Oil imports made up 35 per cent of US petroleum supplies in 1973. They have risen steadily since then to 40.5 per cent in 1980 and 66 per cent now, according to the Energy Information Administration. Dependence on imported oil has risen since Mr. Bush took office, when it stood at 58 per cent.

George Shultz, former secretary of state, sees a stark change from three decades ago When he chaired task forces for Nixon on the oil import system and as Treasury secretary coped with the first big oil price explosion. The array of forces in favor of energy independence is stronger now, he says.

“The big difference I think is that in 1968-73, it was largely economic,” he says. “Now there are people concerned about the environment, economics, national security. Those are very different constituencies and there is a chance they can interact together and produce something that will be different.”

These constituencies, which have formed an unusually unwieldy coalition on energy independence, include national security hawks, dubbed “green hawks”, concerned about dependence on oil from a volatile Middle East and oil giants such as Russia that use energy as a political weapon. The group includes Mr. Shultz; John Deutch and James Woolsey, two former CIA directors; James Schlesinger, former defense secretary; and retired officers such as Air Force General Chuck Wald.

“Look where the money from high oil prices is going,” says Mr. Shultz. “ Iran is rolling in money. Venezuela is rolling in money. Russia is consolidating an autocracy using oil money. We just hope Saudi Arabia keeps producing, because it is vulnerable.”

The hawks find themselves strange bedfellows with trade unionists and the powerful Midwest farm lobby, which is eager to fan concerns about foreign oil in order to sustain the massive subsidies for ethanol, a renewable fuel created from corn. Evangelical Christians have joined the coalition in order not to “destroy Creation”: last February 86 evangelical leaders launched the Evangelical Climate Initiative.

US companies have also become more engaged, driven by self-interest, a desire to pre-empt punitive legislation and concern about the sprawling patchwork of regulation introduced by different states, such as Arnold Schwarzenegger, governor of California (see right). A total of 22 states now require a fixed percentage of their electricity to come from renewable sources.

n alliance of 10 of the biggest US corporations yesterday joined environmental groups to demand caps on greenhouse emissions, to cut these by up to 30 per cent over the next 15 years. “Companies have concluded it is not ‘if but ‘what’ in terms of a carbon regime,” says Mr. Yergin. A Cera survey of electric utility chief executives and finance directors showed 85 per cent expected mandated restrictions within 10 years.

The Bush administration has been identified with efforts to boost US supply, to reduce dependence on foreign oil. Now, however, it could face more pressure to focus on energy efficiency, such as raising fuel economy standards.

On renewable fuels, the record has been mixed. The administration has shifted from backing hydrogen fuels in 2003 to ethanol last year. The $2bn it set aside for loan guarantees in renewable fuels has been snarled in bureaucracy. According to the General Accounting Office, the Department of Energy’s budget for energy research and development fell by 85 per cent in real terms from 1978 to 2005 and has generated only “incremental progress in reducing costs for renewable energy technologies”.

The White House therefore needs a bigger commitment to show that it is serious. Mr. Bush is expected to set an aggressive target for how much ethanol US refiners must mix with gasoline, an attractive policy given the popularity of ethanol. “Carrots tend to work better than sticks,” says Mr. Snow. It has, however, ruled out imposing economy-wide caps on greenhouse gases. That sets it on a collision course with Capitol Hill. An industry lobbyist says: “Energy policy has been the creation of Congress. Almost anything Bush says in the speech is irrelevant the day after he says it.”

Oil companies, demonized by many Democrats as “Big Oil”, are fearful of the momentum against them. As Red Cavaney, president of the American Petroleum Institute, put it in a speech last week: “Bad energy legislation has a decades-long shelf life, through both its adverse direct effects as well as its chilling effect on investment through fear of ‘what’s next’.”