A Fiat Multipla Bi-power car being refueled. Credit: Andreas Geick

America’s presidents can’t make up their minds about how to reduce dependence on oil imports.

President Bush was a enthusiastic support of fuel cells, until he was an enthusiastic supporter of ethanol made from switchgrass. President Obama has come out strong for biofuels and electric cars, but he didn’t mention those in his State of the Union address this week. Now he wants researchers to invent new ways to use natural gas to power vehicles.

The hope is to create a market for natural gas, which is pouring from the ground in record amounts in the United States, and in turn driving down natural gas prices to levels not seen for 10 years. 

It’s easy to use natural gas in internal combustion engines, but it’s hard to store much of it on board a car, so natural gas vehicles typically have a much shorter range than gasoline powered ones. The White House announced today that the Advanced Research Projects Agency for Energy (ARPA-E) will announce a research competition for either improving natural gas powered vehicles, or developing a cheaper way to turn the gas into an energy dense liquid fuel. (The announcement referred to ARPA-E’s previous funding rounds as “competitions,” so it’s likely this will just be another funding round, not something like the DARPA challenge competition to develop autonomous vehicles.)

The White House also announced a plan to encourage the use of natural gas in trucks: 

Reducing our dependence on oil by encouraging greater use of natural gas in transportation: The President’s plan includes: proposing new incentives for medium- and heavy-duty trucks that run on natural gas or other alternative fuels; launching a competitive grant program to support communities to overcome the barriers to natural gas vehicle deployment; developing transportation corridors that allow trucks fueled by liquefied natural gas to transport goods; and supporting programs to convert municipal buses and trucks to run on natural gas and to find new ways to convert and store natural gas.

Will natural gas transportation prove a fad? Unlike fuel cells, advanced biofuels, and electric cars, natural gas vehicles are already sold in large numbers, particularly outside of the United States. In the long term, especially if natural gas remains cheap, they will find a market in the U.S., too. But if political support for it depends on quick and widespread adoption, or on breakthroughs in turning the gas into liquid fuel, the support won't last, and we can look for some other transportation solution to be highlighted in the next State of the Union speech. 

Credit: Whitehouse.gov, Pete Souza

President Obama seems to have a newfound love of oil.

In his State of the Union Address last night, he emphasized the development of domestic energy supplies, particularly oil and natural gas, but also solar and wind power. 

Although he called on Congress to pass legislation creating a clean energy standard, as he did last year, it was clear that he's focusing on supporting clean energy by doing things within his administration that don't require Congressional support.  

Last year Obama mentioned the word "oil" twice, the first time to call for the United States to end its dependence on it, and the second time to call for funding clean energy development by decreasing tax breaks for oil companies.

This year he mentioned oil nine times (10 if you include a reference to a regulation that categorized cow milk as an oil). Gone was any sense that oil was an addiction, as his predecessor George Bush had called it, or something the United States had to reduce its dependence on. He praised the fact that the U.S. produced more oil last year than it had for eight years, and he said that he is opening more areas for offshore drilling. When he called for the development of alternatives to oil, his reason was that we just don't have enough of it in the United States. 

Although Obama sounded supportive of oil, he did call for an end to subsidies for oil companies and for Congress to "double down" incentives for clean energy. He also said he would continue efforts to make sure oil companies can contain oil spills like the one in the Gulf of Mexico. 

Last year, Obama said that U.S. oil dependency could be broken by turning to biofuels and electric vehicles. He didn't mention either this year. This is in spite of the fact that progress has been made on both fronts. 

Last year was the first full year of sales for new electric cars from GM and Nissan, and several more automakers will start selling electric vehicles this year. The first commercial cellulosic ethanol plants could also start operation this year. Sales of electric vehicles, however, have been slower than expected. And, by now, cellulosic ethanol plants were supposed to have been making hundreds of millions of gallons of ethanol, according to a federal mandate.

While Obama didn't mention electric vehicles, he did talk about high-tech batteries, saying that the U.S. is "positioned" to become the leading manufacturer of these batteries. Presumably, he's referring to electric car batteries and the large factories for making them that the government has subsized. The U.S. certainly is building a lot of battery factories. But it will be difficult for a new U.S. battery industry to compete with the established battery industry in Asia, and in any case, the success of the new factories will largely depend upon sales of electric vehicles increasing dramatically.

If Obama's biggest emphasis last year was on biofuels and electric cars, this year it was on natural gas. He praised domestic natural gas as a resource that is both clean and cheap, and he said that exploiting it could employ 600,000 jobs by 2020. He didn't say how many of those would be new jobs.

Although Obama praised natural gas, he didn't mention any specific support for the industry. Indeed, his only pledge was that he would regulate it, requiring companies to disclose the chemicals they use in the fracking process for extracting natural gas from shale.

Some support for natural gas could come from the clean energy standard—in lieu of a cap and trade system for reducing carbon dioxide emissions—that Obama asked Congress to pass last year, and again this year. The standards would have supported natural gas over coal, since burning it emits about half the carbon dioxide emissions as coal. 

Although Obama mentioned the clean energy standard, that's not really where he focused his attention last year. Instead, he's been working to push forward clean energy by means that don't require Congressional approval, such as new EPA limits on power plant pollution and tougher fuel economy standards. He spoke of working without the support of Congress in his speech, declaring that his administration would allow more construction of clean energy on federal lands, and that the U.S. Department of Defense would increase its use of clean energy sources. Expect Obama to continue this strategy, especially in an election year, when Congress is expected to get even less done.

Prospects for passing some sort of long-term energy policy were good just two years ago, but a lousy economy and some aggressive lobbying by opponents of climate change policy derailed those efforts, and there's no reason to think things will get back on track in 2012.

The closest possibility may be clean energy standards legislation being crafted by Jeff Bingaman, a Democratic senator from New Mexico. But Republicans have already lined up against such a measure, and even existing clean energy policies are being questioned, especially after the failure of the solar cell maker and loan guarantee recipient Solyndra. (See "Solyndra: We Told You So.") Election year politics may force legislators to steer clear of hot button issues like climate change.

In the absence of a comprehensive energy policy, expect increased use of natural gas, which is cheap because of large newly economical resources in the United States, and decreased use of coal, which is the subject of new EPA regulations. Without policy support, or sudden, big improvements to battery technology, it's hard to see electric vehicles taking off quickly, and as the cellulosic ethanol industry has been slow to get going, don't expect biofuels to make a big dent in gasoline consumption. Indeed, the country may grow yet more dependent on oil as large new resources are exploited in places such as North Dakota and Texas, and friendly neighbors such as Canada. Some experts are starting to suggest that within a decade or two, the Americas would no longer need to import any oil. That might sound good, but oil prices will still depend on the worldwide market for oil—as long as demand is growing as it has been in recent years, prices will stay high, and volatile, even if the U.S. starts sending more money to Brazil and Canada and less to the Middle East.

Looking ahead, we can also expect to see more failures in the solar industry, as low prices force many out of business. One thing that will be interesting to watch is the extent to which the survivors manage to succeed, even in a climate of reduced government incentives. The U.S.-based solar panel manufacturing giant First Solar recently announced that it plans to stop targeting fickle subsidized markets, and instead sell to places where its technology makes economic sense on its own merits. Prices for solar panels may have decreased enough in recent years that the industry can survive on its own--serving areas with lots of sun and high electricity prices—albeit at a smaller size than it could with government support.