(I originally published this at my blog infinitetoventure.com in 3 separate posts. Go check it out!)

President Obama made a pretty bold (and frankly unexpected) statement in last week’s State of the Union address:

Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling. So tonight, I challenge you to join me in setting a new goal: By 2035, 80% of America’s electricity will come from clean energy sources. Some folks want wind and solar. Others want nuclear, clean coal, and natural gas. To meet this goal, we will need them all – and I urge Democrats and Republicans to work together to make it happen.

Many journalists and bloggers have already expressed their interpretation of this statement. For my part, I’m not going to comment on what I think future policy decisions will be, or take a normative position on what our energy mix should look like in the future.

I will, however, try to paint a picture of how we’d get to “80% by 2035″ and point out that, while it’s an admirable goal, achieving it wouldn’t be a panacea.

“80% by 2035″ by the numbers
In 2009, the total U.S. net power generation of 3,950 billion kWh came from the following sources:

Obama notably excludes from his laundry list of acceptable sources of electricity both conventional coal and petroleum — in aggregate, 46% of the above. To give some historical context, here’s how the U.S. electricity mix has evolved since 1996:

The compound annual growth rates of these sources are the following:

• Coal + petroleum: 0.1%
• Natural gas: 5.8%
• Nuclear: 1.3%
• Hydro: -2.2%
• Other renewables (mostly wind/biomass): 5.7%
• Other: 1.7%
• Total: 1.3%

What’s clear is that most of the growth in electricity generation has been driven by natural gas and non-hydro renewables. Coal and nuclear are either keeping pace or losing footing. Not surprisingly, most of the capacity added to the U.S. power system over the last 15 years runs on natural gas:

Putting this together with reports on the abundance of shale gas, it’s reasonable to think that natural gas will continue to be the dominant driver of growth in the production of power, despite its already large market share today. If we were to extrapolate the current growth rates of each source through 2035, in fact, we’d arrive at the following mix:

While an admittedly crude extrapolation, this analysis points to the feasibility of Obama’s goal: 24.1% is pretty close to 20.0%. With some additional acceleration in renewables or a few new nuclear plants, we could see ourselves hitting 80% by 2035.

Is this the right metric?

While it’s encouraging to see a pathway to sunsetting the dirtier sources of electricity, we should, however, be cautious in our optimism. Why? Because the above analysis excludes 72% of petroleum’s usage. Most of it goes into planes, trains, and automobiles, not power plants.

In 2009, U.S. primary energy flow across all sources and uses looked like this:

While only 46% of power comes from coal and petroleum, fully 58% of all energy we use comes from these dirty sources. Even more daunting, while there are reasonable substitutes for coal as a power source, there are few good substitutes for petroleum as a transportation fuel.

How would you replace 35.3 quads of petroleum? That’s roughly equivalent to 466 billion gallons of ethanol, which is really the only reasonable substitute at scale today. (I suppose we could all go down the T. Boone Pickens natural gas vehicle route, but I’ve already decried that in another post.) The top two producers of ethanol are the U.S. (11 billion gals/yr) and Brazil (6.6 billion gals/yr). Those numbers are after 30+ years of heavy government intervention and subsidization in both countries. Maybe production doubles or triples over the next 30 years; but, regardless, it won’t make a significant dent in our massive need for transportation fuel.

Furthermore, U.S. ethanol is based on corn, which has 1/7th the energy density of sugarcane and half the productivity per hectare. The Congressional Budget Office has calculated that, to bridge this gap, corn-based ethanol costs the American taxpayer $1.78/gal in subsidies in addition to what he pays at the pump. I doubt this level of subsidy would be tolerated if we chose to scale this industry to even greater heights.

So, in conclusion, while Obama’s 80% by 2035 is admirable and even reachable, it doesn’t address the bigger need: to find a substitute for petroleum in transportation that works at massive scale. Ostensibly, we can get off coal over the next 30 years, but oil is a whole other, probably more significant, problem to address as a nation.

(P.S. Thanks to Chris Nedler of GetRealist.com for his input on this post.)

Alex Taussig is a Principal with Highland Capital Partners and invests in startups tackling problems in some of the world’s oldest and largest industries — including energy, education, and machine automation. You can find this blog post, as well as additional content on his blog infinitetoventure.com. You can also follow Alex on Twitter @ataussig.