Oil price fall, crisis may delay US climate, energy policy

WASHINGTON: The financial crisis and falling oil prices risk setting back attempts by the next US president and Congress to promote renewable energy and the fight against climate change, analysts say.

"Either candidate is going to have a very difficult time promoting a new alternative (energy) if oil comes back down because it (the price) is not going to be seen by most Americans as a crisis any more," said Charles Ebinger, director of the Energy Security Initiative at the Brookings Institution.

The price of oil has fallen from its high of 147 dollars a barrel earlier this year to around 65 dollars a barrel recently. Ebinger predicts further falls to about 50 dollars in 2009.

"It's going to be more and more difficult with lower prices to convince people to stop using conventional fuel and use more expensive renewables in the near term," he added.

"The difficulty Mr McCain or Obama will have is keeping energy or the environment at the center (of their agendas) when it's believed by households to be the least of the problems they are confronting compared to losing their retirement, savings, jobs and so forth," he said.

Americans vote in presidential elections contended by Democrat Barack Obama and Republican John McCain on November 4.

Ebinger's analysis is shared by some on the Republican side.

"If the economy is weak, it will be very hard to make the case for an aggressive policy that puts the economy further in jeopardy," said Frank Maisano from powerful lobbying firm Bracewell Giuliani.

The law firm represents a number of electricity producers.

McCain and Obama are both committed to putting in place a system of emissions trading and fixing a target for reducing carbon dioxide, ideads opposed by President George W. Bush.

Barack Obama wants to reduce carbon dioxide emission by 80 percent in the next 50 years, while McCain wants a cut of 60-65 percent.

The Democrats, who are expected to increase their majority in the Congress in the elections, are divided on the energy issue, according to Maisano.

Democrats from coal-producing states such as Western Virginia or Montana or those from car-producing states such as Michigan will probably oppose environmental or energy measures that damage their industries.

"The largest question is how the Democrats will work through those issues ... I don't think anyone knows even those who are going to be involved in it," he said.

Ebinger believes it will be difficult for the next president to convince Congress to spend money on renewable energy efforts or climate change because of the existing large budget deficits and focus on the economy.

Obama has pledged to spend 150 billion dollars on a program to promote technology for renewable energy, which he hopes will generate thousands of new jobs.

McCain has promised to build 45 new nuclear power stations.

Obama and McCain also support the idea of having a commercially available electric car in the next two to three years with batteries that can be quickly recharged from the mains.