New Executive Order Could Mean Expansive Government Control Over Energy Use in Manufacturing, Utilities et al


I want to start by saying that the cogeneration being pushed through with this Executive Order is nothing new and it’s a good idea but it has the potential to be another cash for clunkers in the manufacturing industry with President Obama in charge. Its success depends how it’s implemented.

Obama wants to do for all industry what he’s done for the auto industry and it’s going to cost you. The subsidies and grants needed to accomplish his task is equivalent to a bailout for an industry not yet in place, like we did for solar.

As an aside, the auto bailout was a bailout of the UAW, not the auto industry. He left everyone else in the dust. GM would have still existed with a managed bankruptcy. We should have hired Bain Capital to save GM. I don’t trust Obama to do this new venture correctly.

The President’s new Executive Order is entitled, Executive Order — Accelerating Investment in Industrial Energy Efficiency. The “investment” could do to manufacturing what he has done to the auto industry [forcing GM to make the unwanted electric car] by making it even more expensive at a time when our manufacturing has hit its nadir.

If the industries are forced to trash perfectly good energy systems, it could end up being cash for clunkers with taxpayers footing the bill.

CHP, COMBINED HEAT AND ENERGY PROGRAM*** or cogeneration, the latest green buzzword or I should say buzzacronym, will be rushed through. It is, simply put, pushing all manufacturing, utilities and other industries to convert quickly to a system which includes a much larger use of CHP with the intention of reducing our carbon footprint.

It is an admirable project and could be useful if done right. It takes the waste from energy cycles and reuses it. That’s terrific.

The parts I have problems with is rushing it before it has been properly explored; the BIG government appears to be in charge; too few Americans have the expertise; money we don’t have must support it; and there is a cap and trade element.

It is an experimental, expensive and promising project which should NOT be rushed. Congress should be involved in something this expansive.

Obama wants to immediately facilitate investments in American manufacturing to improve efficiency at industrial facilities. CHP, combined heat and power, takes the place of the failed solar. It’s a great idea.

The process combines fossil fuels and renewables to lower energy costs, frees up capital for businesses to invest (after they spend millions or billions to retrofit?), reduces air pollution and creates jobs (it will create temporary construction jobs but afterwards, jobs will be about the same as they are now).

The NY Times had an interesting article about its use in homes which might give insight into the costs and other issues.

The New York Times piece described systems currently used in industry and homes in Europe, but CHP is more untried than tried in America. It will compete with solar in homes as it will in industry.

In Germany, a home system costs from €15,000 to €20,000, or $19,800 to $26,400 and in Britain, a system run by a Stirling engine may cost more than £6,000, or $9,500, including installation. That’s very expensive.

CHP systems are often fueled by natural gas and are noisy, but those are issues for homes and it is NOT what this Executive Order states or even implies.

The President states in his order:

…The Federal Government has limited but important authorities to overcome these barriers, and our efforts to support investment in industrial energy efficiency and CHP should involve coordinated engagement with a broad set of stakeholders, including States, manufacturers, utilities, and others. By working with all stakeholders to address these barriers, we have an opportunity to save industrial users tens of billions of dollars in energy costs over the next decade.

First of all, you have to buy into this saving billions after spending billions. Look at Obama’s track record and tell me if you believe it. This EO allows the federal government to wiggle into controlling how manufacturers, utilities, et al, provide energy.

The President adds:

…it is imperative that we support these investments through a variety of approaches, including encouraging private sector investment by setting goals and highlighting the benefits of investment, improving coordination at the Federal level, partnering with and supporting States, and identifying investment models beneficial to the multiple stakeholders involved.

In other words, the federal government will be in charge and there will be tax money used for subsidies as if the Solyndra investments didn’t teach him anything. He will encourage private sector investment with his Chicago billy club and you know it.

The order will deploy his monolithic agencies to set up models for all and a means to acquire taxpayer and borrowed money.

He wants “40 gigawatts of new, cost effective industrial CHP in the United States by the end of 2020.” We don’t have much of the expertise needed in this country from what I am reading, which means more taxpayer dollars will go overseas to the “experts” in Europe and China, et al, some will be corrupt with no oversight by us. That’s also a lot of gigawatts which is why I am concerned about the level of government control here.

Obama will, among other things, see that “the Better Buildings, Better Plants program at the Department of Energy, which is working with companies to help them achieve a goal of reducing energy intensity by 25 percent over 10 years, as well as utilizing existing partnership programs to support energy efficiency and CHP.” 

A laudable goal.

Obama writes,
“…providing incentives for the deployment of CHP and other types of clean energy, such as set asides under emissions allowance trading program state implementation plans, grants, and loans…”

We are going to possibly have another source of tax money wasted here as we attempt to meet his carbon emissions standards at an unsupportable rapid pace.

Cap and trade is part of this scheme. Incentives for emissions allowances will likely include punitive measures.

The energy efficiency of 80% that CHP purveyors claim has not been realized and is actually much lower. This should be a warning sign.

What this might do to energy-efficiency portfolios is another question.

It will require more government bureaucrats to oversee, regulate, dispense, disperse and study (after the fact).

Whoopee , I can’t wait and apparently won’t have to – this is to take place immediately. Obama’s approach is the kind of thing they do in socialist countries. Obama said he would do for all industries what he did for GM, a failing car company held afloat by taxpayer money and debt.

President Obama is not even “flexible” yet. I want CHP. I think it’s great, but this EO is troublesome. It will all depend on how it is implemented. So far the amount of gigawatts expected and the cap and trade scheme element should be concerning to people.

The Department of Energy was reassuring and I hope they are correct:

CHP technology can be deployed quickly, cost-effectively, and with few geographic limitations. CHP can use a variety of fuels, both fossil- and renewable-based. It has been employed for many years, mostly in industrial, large commercial, and institutional applications.

CHP may not be widely recognized outside industrial, commercial, institutional, and utility circles, but it has quietly been providing highly efficient electricity and process heat to some of the most vital industries, largest employers, urban centers, and campuses in the United States. While the traditional method of separately producing usable heat and power has a typical combined efficiency of 45%, CHP systems can operate at efficiency levels as high as 80%.




  • The concurrent production of electricity or mechanical power and useful thermal energy (heating and/or cooling) from a single source of energy.
  • A type of distributed generation, which, unlike central station generation, is located at or near the point of consumption.
  • A suite of technologies that can use a variety of fuels to generate electricity or power at the point of use, allowing the heat that would normally be lost in the power generation process to be recovered to provide needed heating and/or cooling.

Read more about CHP here.

Read the EXECUTIVE ORDER here.