Jan 25, 2019

Ep 127: Philip Sharp - Former Congressman, United States Congress

Former Congressman
United States Congress
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Show notes

Q: You’re the first congressperson on the show and have served ten terms in Congress.

Q: You were born in Baltimore, but grew up in Indiana. What made your family move to Indiana?

A: Philip Sharp’s father was stationed at the proving grounds north of Baltimore during the Second World War. Sharp’s mother followed her husband there, where Philip was born. The family then moved back to their homeland of Indiana.

Q: What is it like growing up in Indiana?

A: Philip Sharp grew up in a small town with a population of about 8,000 people. His mother was a teacher and his father was a lawyer. Sharp also had a older brother.

Q: You grew up in the town of Elmwood. Did your future career revolving around energy come from Indiana’s history with the energy industry?

A: Philip Sharp was elected in 1974, shortly following the energy crisis of 1973. The Energy in Congress Committee had just been reorganized and Sharp signed up for the committee with no prior background or knowledge or the energy industry.

Q: What brought you into politics?

A: Philip Sharp had an intense focus on politics starting in his hometown and attended the Georgetown Foreign Service School. Sharp worked part time for the Indiana Senator’s office during his time in Washington, which led to his return home to teach and run for office. Sharp achieved a PhD in Government due to his deep general interest in the topic.

Q: What was your first run for office like?

A: In 1970, Philip Sharp ran for his first office as a Democrat in a Republican district. Republicans viewed Sharp as open-minded and he spent a lot of time cultivating his relationship with his constituents and focusing on dealing honestly about issues.

Q: What was it like to prove yourself to a Red District every two years?

A: Philip Sharp’s races were always competitive, but he struggled more in the presidential years versus the non-presidential years.

Q: Early on, you established energy as one of your areas of competency. What is it like to be on the Energy Committee and how do you get up to speed?

A: Philip Sharp spent a lot of time attending the committee hearings and specialized in energy issues, which were very prominent in the 1970’s. Sharp also joined the Interior Committee, but mainly due to its jurisdiction of lands for energy purposes.

Q: Energy was prominent throughout the 1970’s due to the oil crisis. Different countries responded in different ways. What was it in the US after the oil crisis?

A: The Carter administration was focused on developing nuclear and coal as the chief domesticate energy source, but Philip Sharp got involved in the oil industry related to transportation. The CAFE standards were first adopted in the US during Sharp’s first year in Congress.

Q: In the 1970’s, what made people confident that you could set energy standards higher and that people would comply with the CAFE standards?

A: The CAFE standards were set in the law for the first ten years, and then they could be increased but were not at that time; Philip Sharp was interested in both the utility and US automobile industries which were perceived as very sluggish and almost non-competitive. Auto companies overseas were achieving better fuel economy differently, such as building smaller cars, and Americans were viewed as unwilling to change. The design of the CAFE standards was structured around the industry that existed at the time, but was not inclusive to DOT trucks. Sharp realized the difficulty of creating standards that work over time and how they must be adjusted and changed.

Q: Groups of people advertise that most Americans are afraid of nuclear energy. Are people actually afraid of nuclear energy?

A: Philip Sharp noticed, in his time researching the perception of nuclear energy, that locals who lived near the nuclear plants were not necessarily afraid. The renaissance of construction in the early 2000’s was thought to be a big political success due to proposed extensions of existing projects where the public already understood the technology and the threats, and made a lot of money from it. Taxes for the school system, jobs that were created, and connections with local universities provided many benefits to the communities.

Q: What do you remember about the energy industry transitioning from the 70’s, which were booming, to the 80’s, which were in decline?

A: Right when Philip Sharp took office in the 1970’s, electricity demand was growing, but cost to the consumer was generally going down. One change in the 1970’s was the increase of rates when new energy plants were built; this happened at the same time as the oil crisis. Plants were very expensive to built, were not built on schedule, and were not operated well. Some nuclear plants were only operated at 60% capacity due to management’s lack of disciplining the system. In 1979, the Three Mile Island accident happened and was the first time that it was threatened that people would have to evacuate Harrisburg, PA on an emergency basis.

Q: Did energy not seem as relevant in the 1980’s?

A: In 1986, Philip Sharp watched investors pump money into private and government sector oil that was expected to rise, but the price of world oil dropped dramatically. President Reagan also did not want to regulate and intervene in the industry as much. Historically, political interventions in the energy industry have followed a huge increase in the price of oil.

Q: Tell me about the Clean Air Act.

A: For more than a decade, Philip Sharp was involved in efforts to make changes to the Clean Air Act, especially related to acid rain. When the proposal to update the Clean Air Act was approved in 1990, it was the most significant change to the Act since its inception. One of the political ironies was that everyone in the electric utility industry, private and public, was united against the tight ceiling regulations and no amendments were offered or up for vote, even as it was the top lobbied concern. Changes got tougher on many different standards, but there was also a loosening of deadlines as recognition of the trade-offs that were required.

Q: What were your highlights and proudest moments from your time in Congress?

A: Philip Sharp is proud of the work involved in the removal of price controls off of natural gas. In 1954, a Supreme Court decision, the old Federal Power Commission, set how much you could pay to buy out of a field, known as the wellhead price, and could not be changed without the approval of commissioners. Interstate business complicated the market and created a problem of different markets and regulations. In 1978 the perception was that there was a very limited natural gas resource in the US and price control was a big source of conflict. A complex compromise called the NGA was reached, which allowed price increase of newly discovered natural gas or deep gas, which at the time was unreachable. As chairman of the subcommittee, Sharp removed all the price controls on natural gas. Environmental regulation is important, but economic regulation can cause problems.

Q: After you served your 20 years in office, what happened next?

A: Philip Sharp announced in January 1994 that he would not run for office again that year, but was recruited by the Kennedy School of Government at Harvard, to teach. Sharp taught at Harvard for seven years and was then recruited to the Institute of Politics.

Q: What do people seek your expertise for?

A: Philip Sharp created and taught a course at the school about the politics of policy-making and restructuring the electric utility industry. In 1992, Sharp was involved in the Energy and Policy Act, which helped facilitate the development of competition in the electric utility industry. A number of states took the competitive wholesale market into the retail market for the electric utility industry, based on historical jurisdictional differences.

Q: Tell me about clearing out inefficiencies in the electric utility market.

A: Historically, utilities made more money based on the more investments they made; Sharp realized that added cost during expansions led to many of the challenges.

Q: How did you get involved in Researches for the Future?

A: Philip Sharp was nominated to the organization. Resources for the Future (RFF) was created by the Ford Foundation, but was inspired by a report done for President Truman after World War II reporting the concern about a lack of physical resources for the military and industrial needs. The report recommended the creation of an independent research organization. Over time, major resources were defined as air, water, and land and helped develop the subeconomics field of resource economics, or environmental economics. The group looks at public policy issues and regulatory systems based on cost on budget, as well as define determination of trade-offs and methodology of research. One recent focus has been the social cost of carbon.

Q: How does the average person think about the social cost of carbon?

A: Philip Sharp’s research work identifies many uncertainties in the determination of calculated damages and the costs to mitigate those damages. This analysis is a useful input in determining areas of importance, but is not useful for making decisions based strictly on the data. Climate is a challenging topic, but there need to be multiple options for success. Also, due to the extended timeframe of climate change, having a regular reassessment plan is very important. This means figuring out current risks, mitigating them, and then reassessing to repeat the cycle.

Q: In 2005, you took charge of Resources for the Future. At this time, climate change entered the public discourse on a regular basis. What has changed during your time there?

A: RFF, led by Philip Sharp, is very academically-oriented and responds more to expert research than to public discourse. The RIO Summit, attended by President George Bush, led to current meetings on the topic. In the 1990’s, the US adopted an internal climate assessment report. After increased documentation, the data has increased, allowing researchers to focus in on specific areas and impacts. In 2005, RFF already had a team completing analysis on the cap-and-trade system, which was used successfully for acid rain, and determining whether it could be utilized it for carbon.

Q: How do we think about implementation of a policy structure in the US based on its impact to the rest of the world?

A: The Kyoto Treaty was one method of orchestrating a global effort, and encouraged the US to step up to get more involved; Philip Sharp credits the Obama administration for working closely with China to get the conversation on the table. The US cannot leave the current climate agreement until 2020, but the current administration is advertising the future strategy of what they want to accomplish. The US Government must be involved on the international scene in a positive manner. RFF was involved in research related to Trade Sensitive Industries related to rates of carbon.

Q: In many countries, people would rather have cheap, dirty energy rather than no energy. Do we expect every country to impose limitations on themselves when it comes to energy, at the cost of providing cheaper goods and services to people in poverty?

A: Philip Sharp and RFF has completed long-term research on carbon-dollar tax, but has realized that the long-term adjustments would be miniscule. Pollution in Dehli and Beijing has become a massive political problem. Some countries have been massively subsidizing development of wind and solar energy. Solar energy in America has become dramatically cheaper by mimicking the subsidizations abroad. Accelerated changes have associated cost, so the cost of switching to cleaner energy now versus the cost of rebuilding infrastructure later can be compared. A co-benefit is the personal health aspect.

Q: Might we abandon a city on the cost if the climate changes come quicker than we can reinforce infrastructure? What is the cost of that?

A: Over the last decade, Philip Sharp and other researchers has seen that accelerated changes on a larger scale are happening. One of the arguments next year, in the infrastructure legislation, will be comparing the standard design for levees and updating the design for future risks related to climate change.

Q: You’ve been a long proponent of nuclear. People need cheap, clean, and abundant energy. Does nuclear energy do that? Why is nuclear energy not at the forefront of all climate conversations?

A: As a component policy, or option, Philip Sharp believes that we need to invest in it and have available, but is not convinced that it is cheap. Sharp served on the board for Duke Energy and observed two factors: the demand for electricity is not increasing, and the cheap cost of natural gas without the massive investment for a nuclear plant.

Q: Why can’t nuclear energy compete with coal on an economic level? Can we dissociate the potential of nuclear energy technology from the current technological options?

A: Philip Sharp supports the argument of promoting the potential of nuclear energy. Recent political developments include California’s aim to reach 100% clean energy, which includes nuclear energy and carbon-capture storage (CCS) with natural gas. Congress passed a research bill that uses an existing site facility to test new technologies and advance that research.

Q: Are there other countries that want to be a leader in climate change and promote abundant clean energy that nationalized electric infrastructure to build nuclear plants?

A: Philip Sharp recognizes that China, India, and several other places are currently building nuclear plants, but feels that the US needs to promote the high standard of safety developed domestically in new projects on foreign soil. Lack of safety regulation and oversight can create an accident and hurt nuclear energy politics around the world.

Q: What happened in the 1980’s when other countries decided to go nuclear? Was there a concern about getting the US involved in the process?

A: The US was active through Eisenhower’s Atoms for Peace and monitoring the non-proliferation issues; Philip Sharp’s time on the board with Duke Energy realized the importance and influence of self-regulation feedback.

Q: Should one of the requirements for the next generation of nuclear energy be an unmanned battery dropped underground?

A: The Federal Government has been investing in small modular reactors (SMR’s), but Philip Sharp has identified that economics require multiple sites to start out due to the cost of the manufacturing process. The Federal Government has provided massive subsidizations to nuclear energy and maintained their investments. In France, the government owned the electric utility and built the plants. In the US, private sector can propose a design that meets regulations, but some State involvement is limited. Across the board, safety performance must be a high performance, and there must be economic performance. This requires management by trained people and different standards of design. An MIT study Sharp was involved in looks at ways to minimize the cost of construction through strict contract management. Safety incidents cause the plant to lose economically.

Q: What insight can you leave us with? Where should we go from here?

A: Philip Sharp places the highest value of development in transforming the energy system and agriculture where greenhouse gases come from. This cannot happen overnight, but politicians must be asked what they are doing to support this development. Sharp believes there is no one silver bullet and all energy resources need to be looked at and developed. Having a portfolio of technologies and policies, including but not limited to pricing, and keep re-examining the developments going forward. Having politicians that roll with the punches is valuable in this process.

8 Bullets for Website
- Philip Sharp’s background as a Congressman and participation in the Energy in Congress Committee - Impacts of oil crisis and implementation of the Corporate Average Fuel Economy standards - Lessons learned from economic regulation of natural gas - How price controls of natural gas were removed by Congress - Harvard’s Institute of Politics and energy policy-making - Resources For the Future and the social cost of carbon - Philip Sharp’s research with Resources For the Future on carbon-dollar tax - The importance of a portfolio of energy resources, technologies, and policies.

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