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.

GE Chairman and CEO Jeffrey Immelt is betting that wind power will be able to compete with conventional sources of energy, without government help.

At a company meeting held today at a gas turbine factory in Greenville, South Carolina, Immelt told employees that he's ordered the company to increase production capacity of wind turbines. He said that costs have come down to the point at which the technology will be able to compete in many areas of the world without subsidies. He seemed confident that wind turbine orders will increase, even though the valuable production tax credits, which have driven a boom in wind turbine installation in the United States, are set to expire next year.

Immelt's remarks were made at a two day event meant to highlight GE's emphasis on advanced manufacturing. He noted that all of the massive gas turbines produced at the Greenville facility will be exported out of the United States this year, to places such as India and Saudi Arabia. On the production line was a recently completed steam and gas turbine system destined for Iraq. Earlier this year, GE announced that it would soon introduce a new power plant designed to help buffer variability from wind farms.

Immelt said that in some cases—such as with gas turbines and solar panels—it's vital to co-locate manufacturing with research and development. His company has extensive testing facilities at the Greenville factory, which engineers can use to examine new designs before and after incorporating them into production turbines.

Today, GE announced a new power plant that is 61 percent efficient and can quickly ramp up to produce power, allowing it to make up for variations in power output from wind turbines.

Here's why this matters:

Wind power is variable. It depends on how fast the wind is blowing. These fluctuations could destabilize the grid and cause blackouts, especially as more wind turbines are attached to the grid. To make up for this variability, grid operators turn to natural gas peaking power plants that are designed to quickly ramp up power production. The problem with these plants is that they are very inefficient—the best ones from GE convert only 46 percent of the energy in natural gas into electricity, and older ones can have efficiency as low as 28 percent. So-called baseload natural gas power plants are far more efficient, but they take too long to change power output to keep up with changes in the wind.

The new generator can change power output quickly, and it can generate about two times more power from a cubic foot of natural gas than old, inefficient peaking plants. It's also more efficiency than even baseload plants. The new power plant could make the inefficient ones unnecessary, reducing carbon dioxide emissions. The higher efficiency could also reduce power costs.