Three minutes into Tuesday night's debate, Sen. John McCain answered a question about the worsening financial crisis by talking not about banking or regulation but about energy. "I have a plan to fix this problem, and it's got to do with energy independence," he said. "We've got to stop sending $700 billion a year to countries that don't like us very much."
Indeed, both candidates raised the energy-economy connection several times, as McCain and Sen. Barack Obama talked up their separate plans to reduce foreign oil imports, develop alternative energy, and promote green jobs in the United States.
Neither candidate, however, addressed the most daunting challenge these plans face in light of the country's economic downturn: how to finance them. Renewable energy sources and alternative vehicles will require money to scale up, and right now there's not a lot of it to go around, either on Wall Street or in Washington.
In the first presidential debate two weeks ago, Obama had suggested that the tanking economy might force him to scale back his ambitious proposal of investing $150 billion over 10 years in renewable energy. When pressed by moderator Jim Lehrer to say if he would be willing to give it up, Obama at the time responded: "Not willing to give up the need to do it, but there may be individual components that we can't do."
Last night, however, there were no such acknowledgments of new limitations from either candidate. When McCain was asked to prioritize spending for energy, healthcare, and entitlement programs, he replied, "I think you can work on all three at once." In response to a question about combating climate change, he said, "Now what's the best way of fixing it? Nuclear power."
But as many energy experts acknowledge, nuclear power plants are extremely capital intensive, given their long construction timetables, labor costs, supply problems, and other unique issues. Some analysts, in fact, have suggested that the nuclear sector, compared with other types of energy, could be particularly hurt by the current economy, since it takes nuclear plants a significant amount of time to pay back construction costs.
Tuesday's debate certainly saw a fair share of time dedicated to energy issues, with both candidates mentioning such complicated issues as offshore oil drilling and nuclear fuel reprocessing.
Many pundits seized on McCain's reference to Obama as "that one." But when he used that phrase, McCain was accusing Obama of supporting "pork barrel" energy bills that, in his words, "have all kinds of goodies and all kinds of things in them for everybody."
The truth is, in many ways, more muddled. The energy industry is heavily and broadly subsidized. In 2005 and 2007, Obama voted in favor of two large energy bills that offered incentives to a number of alternative industries, including biofuels and nuclear, as well as to more traditional industries, like coal. McCain voted against the 2005 bill and missed the vote on the 2007 bill. In a speech on the Senate floor after the 2005 bill passed, he decried it as a $16 billion giveaway to "wealthy producers and corporations," derisively renaming it the "Lost Energy and Economic Opportunity Act of 2005."
But many observers feel differently. The 2005 energy bill included some key loan guarantees that utilities would need to be able to finance new nuclear plants. As of now, a number of new plans have been proposed, but none has won final approval.