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Friday, May 05, 2006

Senate Bill Aims at Reducing Oil Consumption, Increasing Efficiency, and Enhancing Energy Security

A bipartisan (although laregely Democrat-dominated) group of senators recently developed and introduced legislation aimed at reducing the United States' dependence on fossil fuels, particularly oil, according to a U.S. Senate Comittee on Energy and Natural Resources press release.

The Enhanced Energy Security Act of 2006 (S. 2747) was introduced Thursday by Senator Jeff Bingaman (D-NM) and was co-sponsored by nine other senators including Evan Bayh (D-IN), Norm Coleman (R-MN), Joe Lieberman (D-CT) and Lincoln Chafee (R-RI), Maria Cantwell (D-WA), Hillary Rodham Clinton (D-NY), Susan Collins (R-ME), John Kerry (D-MA), Bill Nelson (D-FL) and Ken Salazar (D-CO). [While touted as "a display of bipartisanship on a critical national issue" by the press release, you can see from this list of co-sponsors that the support for the bill leans heavily on the Democrat side of the isle].

The bill is designed to "geatly spur energy conservation, with a focus on reducing oil demand through greater fuel efficiency and finding ways to moderate natural gas demand by promoting renewable electricity production," according to the press release.

One of the most important provisions of the bill will be an emphasis on an expanded plan for economy-wide oil savings that will cut oil use, from projected levels, by 2.5 million barrels of oil per day by 2016, 7 million barrels of oil per day by 2026, and 10 million barrels of oil per day by 2031. That represents a significant reduction in oil consumption over the 27.65 million barrels of oil per day that will be consumed in 2030 accoring to the EIA's 'business-as-usual' reference case forecasts in the Annual Energy Outlook 2006.

"Time is running out in this Congress to take action on energy,” Senator Bingaman pointed out. “To be effective in responding to our current energy crisis, we must be focused, we must be realistic, and we must be bipartisan. The bill that we are introducing today accomplishes all three goals, and will help consumers by making them more efficient in their use of oil and natural gas.”"

In contrast to another recently proposed energy bill, the Gas Price Relief and Rebate Act of 2006, which seems to have an overall focus on the short-term and is aimed at 'addressing' high gas prices at the pump - it includes a $100 per person tax rebate to each taxpayer to offset the increased price of gasoline, for example - this act focuses on long-term measures to significantly reduce the United States' use of oil and thus enhance our national security and economic strength.

[The "Gas Price Relief Act" was introduced by Senate Energy Chairman Pete Dominici (R-NM) and co-sponsored by Senators Ted Stevens (R-AK) and Charles Grassley (R-IA, and Chairman of the Senate Finance Committee) last week and was one of 140 ammendments to the bloated Supplemental Appropriations Bill (H.R. 4939). Yesterday, the $109 billion bill passed the Senate without Dominici's ammendment.]

“The high gas prices we are facing today can only be addressed by a serious, long-term effort to reduce our dependence on foreign oil,” Senator Bayh said. “Everything from our national security to our economy is impacted by our energy demands, and it will take an effort equal to that of landing a man on the moon to develop a strategy to meet those needs. The bipartisan energy plan we have introduced today represents a real step toward meeting that challenge.”

In addition to the mandated and measured economy-wide decrease in oil consumption, the legislation includes a variety of measures designed to reduce the country’s almost total reliance on petroleum products in the transportation sector, including:

  • Mandating that each Federal agency achieve at least a 20% reduction in total petroleum consumption, measured from the baseline of fiscal year 1999, not later than 1 October 2009.

  • Accelerating the widespread commercialization of all types of electric drive vehicle technology into all sizes and applications of vehicles, including commercialization of plug-in hybrid electric vehicles and plug-in hybrid fuel cell vehicles, with the application of $1.8 billion in funding from fiscal years 2007 through 2012.

  • Providing up to $1 billion in incentives for the production of cellulosic ethanol from fiscal years 2007 through 2011.

  • Establish a research and development program for lightweight materials for vehicles, and funding it with $360 million from fiscal years 2007 through 2012.

  • Expanding the authority of the Secretary of Energy to provide loan guarantees and competitive grants to automakers and parts manufacturers to convert existing plants or to build new facilities for manufacturing fuel-efficient vehicles and vehicle components.

  • Establishing a trust fund to provide matching funding for building out alternative fueling stations.

  • Providing funds to states for programs to encourage motorists to retire vehicles that are inefficient, and for programs to reduce school bus idling.

  • The bill is similar to legislation that Sens. Bayh, Brownback, Lieberman and Coleman introduced last year called the Vehicle Fuel Choice Act (S.2025, see earlier post). That bill provided a mix of energy policy and energy tax incentives aimed at moving our economy toward both more efficient use of oil and a more diverse future mix of transportation fuels, including biofuels. Introduced by Senator Bayh, the bill had 20 cosponsors.

    According to the press release, because S. 2025 included both policy and tax provisions, it was referred in November to the Senate Finance Committee where it stalled and still sits to this day.

    Many of the provisions of S. 2025 are in the jurisdiction of the Senate Energy Committee, not the Finance Committee. The Enhanced Energy Security Act of 2006 basically takes the energy-related provisions contained in S. 2025 and repackages them in a bill that has now been referred to the Energy Committee.

    The new bill also includes a number of provisions "aimed at relieving demand and price pressure on natural gas, encouraging states to strengthen their programs on demand-side management, and better educating consumers about energy efficiency measures that they can take," according to the press release.

    In addition to this bill, Sen. Bingaman introduced legislation (S. 2748) that will extend a variety of tax provisions contained in the energy bill enacted last year (the Energy Policy Act of 2005) to encourage efficiency investments and the development of renewables. The bill is also co-sponsored by 10 senators on a bipartisan basis and will provide new incentives to help Americans buy more fuel-efficient vehicles. The cost of these incentives will reportedly be offset by closing various tax loopholes for large oil companies.

    This bill looks to me like an excellent start towards reducing our addiction to oil. This bill is quite similar to the 'Gas Price Relief Act' introduced by Republicans Dominici, Stevens and Grassley last week. Both contain the exact same funding for plug-in hybrids and cellulosic ethanol (our two best near-term options to reduce transportation-related oil consumption). However, the overall focus of that act seemed to be on the short-term - i.e. reducing the price at the pump. It included a wasteful $100 rebate for each taxpayer to 'reduce the impact of high gas prices' as well as a focus on anti-price gouging measures. I can't help but see these as short-term, knee-jerk, ineffective measures that will do little but placate the masses.

    What is a $100 check for each taxpayer going to do to help alleviate our addiction to oil in the near or long-term? And are anti-price gouging measures really going to do anything to reduce our oil consumption?

    I can't help but contrast this with the sensible long-term focus of the 'Enhanced Energy Security Act' - i.e. large, incremental, long-term, economy-wide oil consumption reduction targets. The focus should be right there - on strategies to implement a lasting and real reducting in our oil use - not on alleviating consumers' concerns about prices at the pump with stop-gap short-term and very spendy rebate checks: assuming ~150 million working Americans - i.e. about 1/2 the total population - a $100 check for each of them would cost Uncle Sam $15 billion, money that could clearly be better spend! Besides, high gas prices are exactly what we need to encourage reduced consumption, and if anything, we should be increasing gas prices with a gas tax and funneling that extra revenue into investment into research and infrastructure improvements designed to speed up the transition away from oil.

    And of course, Dominici, Stevens, et al. tried to use the prevelent consumer discontent to try to slip a provision opening ANWR for oil exploration into their ammendment as well... How many times must we say NO to these slippery attempts to open up ANWR [and of course I remain skeptical that drilling in ANWR has anything to do with energy security].

    That's another thing that strikes me about the 'Enhanced Energy Security Act' - the sponsors have the courage and respect for the process to put it forward as a full bill of its own, for an up or down vote, rather than attaching it to any spending bill they can (as with the pro-ANWR crowd).

    I have to say I hope this passes and will be calling my senators to urge them to vote for it if it ever gets out of committee. I would encourage you to do the same as well...

    [BTW, the provisions contained in this bill are very similar to the 'Program to Mitigate the Consumption of Oil' that Jim Fraser of the most excellent Energy Blog recently wrote up. I'd encourage you to check out this short read if you haven't yet.]

    [A hat tip to Green Car Congress]


    Anonymous said...

    This bill is a good sign, I hope. But these co-sponsors can do more to help renewable energy. Bingaman has already come out against the Stevens amendment to the Coast Guard bill that would kill Cape Wind.

    We have to urge our senators to stand up against this amendment. You can do so from greenpeace's website with this link:

    Jesse Jenkins said...

    Hello anonymous.

    I am wholeheartedly with you on this issue [see previous post] and have called and emailed my senators as well.

    I'll echo your call for action again: please act now if you haven't already and call and email your senators today. It will take all of five minutes. Make your voice heard!

    If you want more info before or after you call your senators, check out my previous post and the links therein...