Policy and Legislation
Morgan Goodspeed
Avi Mayer
Mark Hall
3 Focus Points
What We Have Now
Why This Is Insufficient
What Needs to Be Done
WHAT WE HAVE NOW
The Energy Policy Act of 2005
$14.5 billion new and extended tax breaks
Nuclear: greater federal backing and
insurance for construction of new plants
Low-carbon: wind, biomass, landfill,
geothermal tax incentives
Coal: $1.8 billion clean-coal and gasification
technologies
Oil: SPR expanded from 700 mil to 1 bil
Energy Policy Act, CON
Transportation: fuel additives increase
according to Renewable Fuel Standards, tax
credits for hybrids, clean-diesel, hydrogen
Efficiency: federal buildings 20%
reduction
Uranium: 100 pounds weapons-grade
may be exported annually
Renewable: 7.5% increase by 2013 is the
objective
Daylight-Saving Time (DST)
A policy, first instituted in 1918, aimed at
better-utilizing daylight hours and conserving
energy by setting-ahead -s in order to
have the rise and set later in the day.
DST Background
Concept first suggested by
Adopted by a number of European countries
during World War I.
1918 – First DST law enacted in the
Established standard time zones.
Set DST to commence March 31.
Repealed in 1919 due to
Reinstituted during
WWII.
Repealed following the war.
I am not
DST
a crook!
Background
1973 – OPEC oil embargo!
Emergency Daylight Saving Time
Energy Conservation Act signed by
Instituted year-round DST for 2 years.
1975 - Congress refused to
renew the Act, again due to
1986 – Public Law 99-359 signed by
Instituted DST from first Sunday
in April through last Sunday
Win one for
in October. the Gipper!
DST Advantages
DoT and DoE studies suggest 10,000 barrels
were saved daily during the 1974 and 1975
trial years.
Current daily use: 20 million barrels (savings
would equal 0.05% of current daily use)
BUT serious problems with making current
determinations based on that data
To be continued…
Energy Infrastructure Siting
Federal government final say
on LNG terminal siting
authority through FERC
FERC request for eminent
domain for onshore sites
Kelo v. City of New London
(public purpose over public
use interesting applications
for the energy industry)
Energy Siting, CON
October House bill gave
the President authority to
site refineries in old
military bases
Greater number of
projects exempted from
traditional environmental
testing under the Energy
Act
EPA
The Environmental Protection Agency
(EPA) is concerned with the country‘s
energy usage.
Fuel Economy
Energy Star Program
Fuel Economy
Test created in 1972
Calculates fuel consumption by using
formulas and equations
Test does not directly measure fuel
consumption
Energy Star
Created in 1992
Focuses on getting products to be more
energy efficient
Saved 10 billion dollars in 1994
WHY THIS IS INSUFFICIENT
National Security
The territorial integrity, sovereignty, and
international freedom of action of the
National Security Background
Oct. 6, 1973 – Yom Kippur War
Soviets ship billions of $ worth of arms to the
Arab states
Oct. 8 – OPEC members demand 100%
increase on posted oil prices
Oct. 17 - OPEC announces it will halt
exportation of oil to countries that
support Israel
National Security Background
Oct. 19 – Nixon requests funding for airlift
to Israel
Same day – King Faisal of Saudi Arabia
announces embargo of oil
shipments to the U.S.
Embargo extended to the Netherlands, Portugal,
Rhodesia and South Africa
Nov. 5 – OPEC members announce 25%
output cut and threaten further
cuts
National Security Background
Price of oil quadruples overnight to $12 a
barrel ($52.98 today)
Price of 1 gallon of gasoline rises from national
average of 38.5 cents to 55.1 cents ($2.43
today)
NYSE shares lose $97 billion ($428.3 billion
today) in value in six weeks
Nov. 27 - Nixon signs Emer. Petroleum
Allocation Act
National speed limit of 55 MPH imposed
Recession
National Security Quotations
‖Now we have a choice. But if we wait, we will live in fear
of embargoes. We could endanger our freedom as a
sovereign nation to act in foreign affairs.‖
(April 18, 1977)
‖Declining domestic oil production, rising oil imports, and
growing Free World dependence on potentially insecure
sources of supply raise a number of concerns, including
vulnerability to a major supply disruption.‖
(January 3, 1989)
National Security Stats
The United States currently imports some
58%
of the oil it consumes,
most of it from Canada, Saudi Arabia,
Mexico and Venezuela.
National Security Quotations
‖We value an America that controls its own destiny
because it‘s finally and forever independent of
Mideast oil. What does it mean for our economy
and our national security when we have only 3
percent of the world's oil reserves, yet we rely on
foreign countries for 53 percent of what we
consume? I want an America that relies on its
ingenuity and innovation, not the Saudi royal family.
And our energy plan for a stronger America will
invest in new technologies and alternative fuels and
the cars of the future so that no young American in
37:30 uniform will ever be held hostage to our dependence
on oil from the Middle East.‖
(July 29, 2004)
National Security Quotations
‖To keep our economy growing, we also need
reliable supplies of affordable, environmentally
responsible energy. Nearly four years ago, I
submitted a comprehensive energy strategy that
encourages conservation, alternative sources, a
modernized electricity grid, and more production
here at home, including safe, clean nuclear energy…
Four years of debate is enough! I urge Congress to
12:20 pass legislation that makes America more secure
and less dependent on foreign energy.‖
(February 2, 2005)
Bureaucratic Entanglements
Oil: total refining capacity
lower than 1981 levels due
in part to oil companies‘
business tactics
Nuclear: no new plants
have been ordered since
1978, and none since 1973
have been completed,
mostly for perceived safety
risk
Bureaucracy, CON
LNG: landlocked states
outvote the coastal
states that will be most
affected
Electric grid: local
opposition to state and
federal projects often
because unsightly,
perceived as lowering
neighborhood value
Legislative Shortcomings
Climate-change issues notoriously absent from
most pieces of legislation, environmentalists
unhappy about the disregard for greenhouse gases
Requirements or recommendations? Lacking teeth
behind reduction suggestions and putting resources
into production, exacerbating the problem
Shortcomings, CON
BIGGEST: Where are the
increased CAFÉ standards?
Would do the most to
decrease reliance on
foreign energy
CAFÉ given only $6 million
over 5 years
Politicians claim job loss
and safety as their primary
concerns
Problems with Fuel Economy
Test is outdated
Requirements are too easy
Greenhouse gases aren‘t taken into
enough consideration
WHAT NEEDS TO BE DONE
DST Proposals
Reps. Markey (D-Mass.) and Upton (R-
Mich.) introduce amendment to Energy
Policy Act
Would extend DST by two months.
Claim that measure would save 100,000 barrels
per day
‖The beauty of daylight saving time is that it just makes
everyone feel sunnier. In addition to the benefits of energy
saving, less crime, fewer traffic fatalities, more recreation
time and increased economic activity, day light saving just
brings a smile to everybody‘s faces.‖
DST Eh… nope
Estimates based on thirty-year-old data
‖I want to note that these studies are over 25 years
old and were limited in scope. Congress captured
many of the benefits identified in our studies in the
legislative changes to daylight saving time enacted
in 1986. There have been dramatic changes in
lifestyle and commerce since we completed our
studies that raise serious questions about
extrapolating conclusions from our studies into
today‘s world.‖
- Linda Lawson, DoT
DST Eh… nope
2001 – California energy crisis
State studies potential benefits of DST
‖Our report indicated that if we [extended]
daylight saving time through all of March, there
would be a decline of electricity use at peak
hours of about 3.5 percent. However, overall
electricity use would only decline about one half
of a percent. You're basically shifting non-
critical energy use to later in the day.‖
- Claudia Chandler, Calif. Energy Commission
DST Eh… nope
Objections to the Markey/Upton proposal…
National PTA
United States Conference of Bishops
Jewish groups
Air Transport Association
Private utilities
Groups representing Oracle and Yahoo!
Dairy farmers
NASA
Others…
DST Outcome
Markey/Upton amendment reduced by one
month and passed
Implementation contingent upon DoE study
Set to kick in no earlier than March 2007
Benefits still murky
DST Our Verdict
We are
AGAINST
any further extension of DST, unless it is
proven that such an extension would
provide substantial energy savings and
determined that those benefits would
outweigh any costs.
National Security Proposals
Key Points
Use technology to improve conservation
and efficiency
Energy Star
Increase domestic energy production in
environmentally responsible ways
ANWR drilling
Clean Coal Program
Expanding nuclear power
National Security Proposals
Diversify the nation‘s energy supply
Stimulate development of renewable fuels via
tax credits
Hydrogen, ethanol, biodiesel
Modernize the domestic energy
infrastructure
Repeal hindrances to investment
Encouraging development of new
infrastructure, incl. superconducting power
lines
National Security Proposals
Key Points
Short-Term
Release of oil from strategic reserves
Work with OPEC to increase supply
FTC investigation of market manipulation
Long-Term
Development of alternative energies
Improve fuel economy standards
27.5 mpg across the board
Increase conservation efforts
National Security Proposals
H.R. 2730 The United States-Israel Energy Cooperation Act
Establishment of an international grant
fund for R&D of reliable energy sources
‗Findings‘ include
The United States‘ dependency on ―nations that
do not share the interests and values of the
United States‖
DoE projections that see dependence increasing
by 33% over next twenty years
45 cosponsors
Windfall/Gasoline Tax
The big 5--Exxon Mobil, BP Amoco, Royal
Dutch Shell, Chevron, and ConocoPhillips--
$33 BILLION third quarter profits: price
gouging?
Windfall Profits Rebate Act: 3-year, 50% tax
on profits on oil sold at above $40 a barrel,
with exemption for development/exploration
Revenue to be returned to consumers in a
rebate check for taxpayers
Taxes, CON
YES, implement a tax—be it on
profits or a gasoline tax at the
pumps (forcing oil companies
to lower prices and thus reduce
profits that way)
Higher prices will curtail
demand and reduce shortage
BUT, do not return the revenue
and increase consumption:
invest in alternative fuels
Kyoto Protocol Background
Created in 1997
156 member nations
The protocol is an agreement to bring
greenhouse gas emission levels down to
levels relative to those in 1990
Kyoto Protocol Benefits
Encourages the world to work towards
a goal that will benefit us all
Has goals that would significantly affect
the environment in a positive manner
Kyoto Protocol Drawbacks
Lack of power to make nations comply
Weak on developing nations
Goals may not be attainable
Carbon Credit Trading
Similar to the proposal made by the
National Commission on Energy Policy
Puts a price on polluting
Carbon Credit Benefits
Companies are rewarded for using
energy more efficiently
Companies are encouraged to do more
research of alternate energies
If successful, will have a positive impact
on the environment
Helps bring about the goals of Kyoto
Carbon Credit Drawbacks
Too many allowances are being issued
EU-ETS system only covers 40% of
carbon dioxide emissions
Some companies feel that they are at a
competitive disadvantage
International Cooperation
Int’l Cooperation Background
Cold War
Solidifying relationships with allied countries
Presenting opportunities for stability and
cooperation with ―adversaries‖
Post Cold-War
Developing the United States‘ economic
competitiveness by granting U.S. scientists
access to foreign research
Vital for the solution of such large-scale
contemporary problems as AIDS, global climate
change and the proliferation of nuclear materials.
Int’l Cooperation Background
Augments shrinking public research budgets by
leveraging publicly funded research through
information sharing and technology cooperation
Int’l Cooperation Support
―The United States will pursue international
cooperation to affect a more rapid, coordinated
advance for this technology that could lead to the
elimination of air pollutants and a significant
reduction of greenhouse gas emissions in the
transportation sector worldwide.‖
(2003 State of the Union Address)
Int’l Cooperation Support
―Despite [large-scale domestic efforts and initiatives],
our administration knows that such steps, though
important, are not enough. It is critical that we
collaborate with you on an international basis to address
challenges that face all of us in the 21st century.‖
(IAEA Conference, April 2003)
QUESTIONS?