In his state of the union address, President Barack Obama stated he wants 80 percent of our electricity to come from “clean sources” by 2035.

That is a tall order. Credit Suisse estimates it will take $750 billion in capital expenditures to supply just 20 percent of our nation’s power demand from renewable sources. Needless to say, coming anywhere near the president’s goal will require us to rethink our energy policy.

First, it is important to recognize that the demand for electricity is expected to grow 30 percent by 2035. So, the president’s goal of 80 percent “clean power” is even more ambitious than it seems. The Edison Electric Institute estimates we’ll need more than $500 billion in new generating and transmission facilities just to meet our conventional energy needs.

Second, renewable energy – mostly hydropower – currently produces about 10 percent of our nation’s electricity. The U.S. Deptartment of Energy predicts that by 2035, that will grow to about 20 percent. Obama, remember, is calling for 80 percent.

If we are to have any chance of approaching the president’s objective, we need to rethink our renewable energy strategy.

For example, Initiative 937, approved by Washington voters in 2006, requires utilities to buy 15 percent of their electricity from renewable sources by 2020 and it limits the purchase area to western Montana, northern Idaho, Oregon or Washington. Furthermore, the initiative writers specifically excluded hydropower, even though hydropower produces 80 percent of our state’s electricity, as well as pulping liquors, a byproduct of making paper.

Pulping liquor is like black gold. Composed primarily of wood sugars, it is used every day by paper mills to reclaim pulping chemicals, generate electricity and produce steam to dry paper. Burning this byproduct allows paper mills to reduce the amount of electricity they buy and, in some cases, produces surplus electricity the mills then sell back to the grid. Additionally, new technology allows mill owners to cut their natural gas consumption to a fraction of previous levels.

Either way, the result is the same – less demand for electricity and natural gas, which holds down energy prices for the rest of us.

Critics say producing electricity by burning pulping liquors emits excessive greenhouse gases. But the forest products industry has made great strides in reducing its CO2 emissions, more than offsetting the pulp liquor emissions. For example, Longview Fibre Paper and Packaging, which owns and operates one of North America’s largest pulp and paper facilities along the Columbia River in southwest Washington, has reduced its CO2 emissions by more than half since 2000 and has cut its water consumption by one-third since 2005.

The company points out that the pulp and paper industry is the leading producer and user of carbon-neutral, renewable biomass energy, which produces more energy than solar-, wind- and geothermal-generated energy combined. Longview Fibre had planned to build a $100 million biomass boiler in Longview that would produce 65 megawatts of power, burn 37,000 tons of mill waste per month and boost mill productivity 30 percent over three years. However, those plans were jeopardized by new EPA air quality standards announced last December.

Faced with howls of protest from members of Congress, the agency backed off, saying it will issue a new rule July 1 to exclude biomass from those regulations.

The bottom line is Americans must be realistic about their energy future. We need reliable sources of electricity to power our homes, factories, schools and electric cars. If we want more renewable energy sources, we should not impose policies that restrict renewable energy.

Hopefully, the federal government will do its part by rethinking regulations that derail renewable energy projects. Industry is doing its part by retooling plants to cut greenhouse gas emissions. And the Legislature should do its part by changing I-937 and allowing pulping liquors to qualify as renewable is a good start.

Don Brunell is the president of the Association of Washington Business.