DETROIT (AFP)--From oil executives to utility and train
operators, the message to Washington was clear: come up with a plan
to deal with climate change and lay out a comprehensive energy
policy.
Otherwise, the U.S. will lose its competitive edge and have its
national security threatened, they warned Monday at a summit aimed
at developing a new strategy for dealing with the nation's economic
woes.
"You have to have a either cap and trade (system) or else a
carbon tax," John Rowe, chief executive officer of electricity and
natural gas giant Exelon Corp. (EXC), told the Detroit, Michigan
conference.
"It's just basic economics that unless you calculate the
externality - the carbon pollution - in the marketplace, the
markets will not deal with it efficiently."
This unlikely call for more government involvement comes at a
time when President Barack Obama is making a major push to expand
the use of alternative energy sources and launch a cap-and-trade
system for carbon emissions.
While some executives expressed concerns about how those plans
would be implemented, many were equally worried that Obama wouldn't
go far enough.
"If we don't get a consistent energy policy that looks 30 to 40
years out, the U.S. won't be competitive," said Samuel DiPiazza,
chief executive officer of consulting firm PriceWaterhouseCoopers
International.
"The markets have a critical role but they need a
framework."
Unlike most industrialized nations, the U.S. has never
implemented a comprehensive energy policy, despite decades of
hand-wringing in Washington about the country's dependence on
foreign oil.
It has been unwilling to impose the high fuel taxes that helped
Europe rein in vehicle emissions and has instead let its passenger
rail and transit systems crumble while funding the expansion of
roads and highways.
The U.S. also failed to ratify the Kyoto Protocol, which sets
binding targets for reducing greenhouse gas emissions.
Meanwhile, the electrical grid - like much of the nation's
infrastructure - is aging and incapable of handling plans to expand
the use of alternative energy sources like wind and solar
power.
"We need a national energy policy and a national transportation
policy," said Matthew Rose, who heads BNSF Railway, which is
headquartered in Forth Worth, Texas.
"In the past, we've let the market sort out all these issues and
at times the market insufficiently considers national priorities
and the societal impact of market choices."
About half of the nation's electricity is generated by coal and
the aging patchwork of transmission lines currently loses 9.5% of
its power to congestion and other inefficiencies.
One of the biggest impediments to building a "smart" power grid
and cleaner sources of power generation is the "maze of
regulations" and opposition that come from municipalities and
states, said the head of a firm building power plants and other
infrastructure projects.
"Political leaders do not have the time horizon or the technical
expertise to effectively plan infrastructure," said Martin Koffel,
chief executive officer of URS Corp. (URS).
Koffel said the country needs a federal agency to set national
priorities, review projects and have the authority to override
objections from state and local agencies.
"Giving a degree of preemption to a single agency is likely to
result in clear and understandable regulation and without that
policy, you will not attract capital," he said.
With global energy demand forecast to grow by 30% by 2030, the
U.S. must prepare for greater competition for energy resources and
rising emission levels, said Exxon Mobil Corp. (XOM) senior vice
president Michael Dolan.
Sustained growth of lower emission energy supplies can help curb
the environmental impact of this growth and improvements in energy
efficiency could offset two thirds of energy demand growth, he
said.
But the government needs to promote energy efficiency and help
fund research and the development of potential solutions like
carbon capture.
"We do not need to choose between economic growth and
sustainability," Dolan told the conference.
"With stable government policies, long-term vision, the free
exchange of ideas, sustained investment, and the power of human
ingenuity, we can meet the twin energy challenges of our time."