It’s time for the daily report on developments in solar and wind power, alternative fuels, and other news related to the alternative energy sector. President Obama gave a speech today in which he called for the US to reduce its reliance on imported oil by 33% in the next decade or so. The president is looking to Canada, Mexico, and Brazil as US partners willing to share their bountiful supplies in exchange for what he called “American ingenuity.”

Unpacking the president’s speech is an exercise that might be better left to others, but some of his comments can be weighed pretty quickly. The comment about ingenuity, for example, is simply code for new technological breakthroughs that will allow the US to produce more domestic oil. For the most part, Americans believe in technology and putting some of the weight of reducing demand for crude on new technology will resonate with many Americans. It’s well to recall, however, that the horizontal drilling techniques that have yielded our current bonanza of natural gas were developed more than 50 years ago, and it took decades to figure out a way to make the technology pay off.

The president also referred to encouraging more activity on current leases, noting that current leaseholders are sitting on “tens of millions of acres of leases where [the oil industry] is not producing a drop.” He has proposed forcing leaseholders to drill by shortening lease terms and not extending leases unless drilling has started. Pushback on this proposal will come not only from drillers, but from land owners who like having those lease payments rolling in, regardless of whether or not any drilling is taking place.

Renewable biofuels also got some props from the president. In a fact sheet issued by the White House in advance of the speech, corn-ethanol is lauded as “already making a significant contribution to reducing our oil dependence.”  That may be true, but it’s at least arguable. What’s inarguable is that more corn-ethanol has not reduced the pump price for gasoline, and under the current incentive scheme, it’s not likely to. The proper way to think about the ethanol credit is as a farm subsidy, not an energy policy, but no politician can admit this.

Investing in more biofuels plants is also on the agenda, but the fact sheet notes that the Obama administration will “reform our biofuels incentives to make sure they meet today’s biofuels challenges and save taxpayers money.” The government just re-instated a $1/gallon subsidy for biofuels. That isn’t saving anyone money.

Improved mileage ratings for cars and trucks, more support for electric cars, and a commitment by the federal government to purchase alternative fuel, hybrid, or all-electric vehicles by 2015. In the first two months of this year, fewer than 2,000 all-electric cars have been purchased by US drivers. The president’s goal of 1 million electric cars on US roads by 2015 doesn’t appear to have much chance of being met.

The president has also not given up on nuclear power, pointing out that the US gets about 20% of its electricity from nuclear plants and that nuclear energy “has important potential for increasing our electricity without adding carbon dioxide to the atmosphere.” That’s true, but persuading Americans to develop more nuclear power given ongoing events in Japan may elude even President Obama’s formidable rhetorical skills.

In California yesterday, the State Assembly approved a law passed last month by the state Senate that would require one-third of the state’s electricity to be generated from renewable sources by 2020. The governor is expected to sign the bill. The state currently gets about 15% of its power from renewables.

Alt energy providers are expecting a boomlet of sorts. An executive with Suntech Power Holdings Co., Ltd. (NYSE: STP) said that the new renewable portfolio standard “gives us the confidence to make greater investments in our California operations and American manufacturing that will help drive down the costs of solar electricity.”  This, of course, is what the California legislators wanted to hear — more jobs, lower costs, everybody wins.

In China, the government may double its solar PV target from 5,000 megawatts over the next five years to 10,000 megawatts. The impetus for the change is the disaster in Japan. This jibes with the note we had yesterday that China is likely to reduce its 2020 nuclear generation target by 10,000 megawatts. The addition of 5,000 megawatts still leaves another 5,000 to be accounted for. Wind generation seems the most likely candidate.

Wind energy giant Vestas Wind Systems has taken the wraps off a new 7-megawatt wind turbine, which has been specially designed for installation in off-shore wind farms. The diameter of the rotor sweep is more than 530 feet. The first prototype is due in the fourth quarter of 2012 and production is scheduled for the first quarter of 2015, provided Vestas gets enough orders to make the new design pay off.

Paul Ausick

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