State of the Union Address
Like many of you, ConocoPhillips employees watched President Bush’s State of the Union address with interest. Because we share a common interest in energy-related issues, we wanted to provide our views on the portions of the President’s speech that concern our business.
The President touched on three general areas related to our industry – energy security, renewable fuels and climate change.
Energy Security
While ConocoPhillips disagrees that energy independence is a realistic goal for the United States, we wholeheartedly agree with and strongly encourage diversification of energy sources to provide a more secure energy supply to America. Oil, natural gas and coal will be vital components of energy supply for the foreseeable future, but many other sources are needed, including renewable fuels and wind, solar, nuclear and other alternative sources. ConocoPhillips is working to develop all energy sources, from conventional oil and natural gas and unconventional sources like tar sands, to alternative supplies of energy and renewable sources of transportation fuels.
But these efforts only hit the supply side of the equation. Demand needs an overhaul as well if we are to truly provide a meaningful, lasting energy policy for America. In his speech, the President called for reforming Corporate Average Fuel Economy (CAFE) standards for cars and extending the current light-truck rule. ConocoPhillips agrees that this approach is one part of the solution and believes that this and other efficiency-minded actions by government, manufacturers and consumers are needed to reduce demand.
Alternatives and Renewables
Biofuels received detailed attention in the President’s address. Specifically, he proposed increasing the renewable fuel standard (RFS) mandate from the current 7.5 billion gallons per year to 35 billion gallons per year of renewable and alternative fuels by 2017. Much of this is anticipated to be achieved through increased use of ethanol. ConocoPhillips is one of the country’s larger blenders of ethanol, but we are disappointed that an increased mandate has been proposed. The fuels market is already moving in the direction of blending more ethanol and we don’t believe a mandate is required. In general, we believe that the interests of consumers and taxpayers are best served when the usage of any product – such as ethanol – is determined by demand from the marketplace. It’s also important to point out that significant technological breakthroughs will be required to provide the full volumes of renewable fuels in the Administration’s proposal at a reasonable cost to consumers. Finally, an increased mandate may also suppress the growth of other fuel alternatives.
ConocoPhillips believes that alternatives and renewables hold much promise as a reliable option for American consumers, as well as consumers all over the world. We are working to develop a variety of technologies to bring renewable fuels to market for the nation’s consumers. Already, we have begun production of diesel fuel from vegetable oil in Ireland, and we are working to make similar projects a reality in the U.S. very soon. In addition, we are looking at how we can use biomass such as cornstalks and fast-growing crops like switchgrass to further supplement fuel supplies.
We also are pursuing partnerships with universities where we can sponsor energy-related research. In 2007, we expect to enter into several multi-year, multi-million dollar biofuels research agreements with major universities around the U.S. and the world.
Climate Change
ConocoPhillips believes the issue of climate change requires serious attention. Several proposals have been introduced in Congress, and the President’s goal of a reduction of 175 million tons of CO2 by 2017 is a serious one. We are committed to taking action now to address the issue, and we are working toward an approach within our own operations that builds through slow, stop and reverse phases. We welcome the opportunity to work with lawmakers and the Administration to develop a practical program that balances two goals: the goal of achieving real reductions of CO2 and other greenhouse emissions harmful to the environment, along with the goal of maintaining strong growth within the nation’s economy.
For other observations on the President’s annual address to the nation, see links below to editorials and blog commentary. We have also included a link to the President’s full speech.
Text of the speech
State of the Union policy initiatives (Twenty in Ten)
Energy Initiative speech
New York Times
MSNBC
PBS
Huffington Post blog
Please let us know what you think of the President’s energy priorities by clicking here to join the discussion.
We look forward to continuing this dialogue through our Conversation on Energy, a public outreach program to stimulate discussion among Americans about energy solutions that are secure, reliable, cost effective and environmentally responsible.
|