National
Energy Policy Development Group: Continue the Status Quo
Just
as the intended progress of the first Clinton Administration toward universal
health care was terminated by reactions to plans developed behind closed doors,
a similar fate befell similar efforts regarding energy policy by the first (G.W.) Bush Administration. The effort in question, the “National Energy Policy”
Report of the National Energy Policy Development (NEPD) Group, was produced in
May 2001. Under the Chairmanship of Vice President Dick Cheney, who personally
signed the cover letter transmitting the report to the President, the NEPD
Group consisted largely of cabinet and cabinet level officers: Secretary of
State Colin Powell, Secretary of the Treasury Paul O'Neill, Secretary of the
Interior Gale Norton, Secretary of Agriculture Ann Veneman, Secretary of
Commerce Donald Evans, Secretary of Transportation Norman Mineta, Secretary of
Energy Spencer Abraham, Federal Emergency Management Agency Joe Allbaugh,
Environmental Protection Agency Administrator Christine Todd Whitman, and
Director of the Office of Management and Budget Mitchell Daniels, also
Presidential Assistants and Deputy Assistants Joshua Bolten, Lawrence Lindsey,
and Ruben Barrales. The Executive Director was Andrew Lundquist, but the style
of the report is such that the reader can hear the Vice President reading it
aloud.
The
report, whose full title is Reliable,
Affordable, and Environmentally Sound Energy for America's Future, is
divided into eight chapters: 1) “Taking Stock: Energy Challenges Facing the
United States”; 2) “Striking Home: The Impacts of High Energy Prices on
Families, Communities, and Businesses”; 3) “Protecting America's Environment:
Sustaining the Nation's Health and Environment”; 4) “Using Energy Wisely:
Increasing Energy Conservation and Efficiency”; 5) “Energy for a New Century:
Increasing Domestic Energy Supplies”; 6) “Nature's Power: Increasing America's
Use of Renewable and Alternative Energy”; 7) “America's Energy Infrastructure:
A Comprehensive Delivery System”; 8) “Strengthening Global Alliances: Enhancing
National Energy Security and International Relationships.”
The
government is acknowledged to have the dual responsibility of providing energy
and protecting the environment (p. 3-8), but the conflicting nature of these
responsibilities is not recognized. Those responsibilities acknowledged, the
text of the first three chapters of this report seems to be largely a catalog
of what has happened in the past, with anecdotal examples of how energy
provision and environmental protection have worked hand in hand. The only red
flags waved regarding the current energy picture are blackouts in California
(not known at the time to be due to Enron) and inadequacies in our energy
infrastructure -- for distributing natural gas, for refining petroleum and
distributing its products, and for generating electricity (attributed to lack
of energy planning rather than the operation of free markets). Though
achievements in energy efficiency are lauded, new goals for them are not set
forth as a way to reduce fossil fuel use in the future. Rather, the need for
32% more energy by 2020 is cited, and along with it 1300 to 1900 new power
plants, though 32% more than our present 2700 plants plus 200 (to replace
retired plants) is only 1064.
The
fourth chapter, however, makes some very positive and needed recommendations
for “Using Energy [More] Wisely”: 1) Requiring Energy Guide labels on a wider
variety of appliances and expanding the Energy Star program to a wider variety
of appliances as well. 2) Providing additional incentives for Combined Heating
and Power. 3) Improving the Corporate Average Fuel Economy (CAFE) standards,
but “without negatively impacting the U.S. automotive industry.” 4) Adding
incentives for hybrid and fuel cell vehicles. One wonders, in fact, why these
recommendations aren't already being carried out.
The
fifth chapter acknowledges that the U.S. is expected to be able to produce only
two thirds of its anticipated energy demand in 2020. “That shortfall can be
made up in only three ways,” the report says: “import more energy; improve
energy efficiency even more than expected; and increase domestic energy supply.
The challenge for our nation is to use technology to maintain and enhance the
diversity of our supplies . . . while maintaining our commitment to
environmental protection.” (p. 5-3)
For oil and gas more imports are seen as the solution, but in other
cases technology is clearly the key: technology to allow access to a greater
underground area with a smaller amount of surface drilling (the case to allow
oil extraction from the Arctic National Wildlife Refuge (ANWR)), “clean coal”
technology to generate more electricity from coal without violating clean air
standards, and advanced nuclear reactor technologies (in addition to increasing
the capacity factors, uprating, and relicensing present nuclear reactors). All
these technologies, however, are geared to increasing energy supply rather than
energy efficiency.
Technology
is also recognized as key to developing renewable and alternative energy
sources, although the latter includes “alternative” uses of nonrenewable fuels
like natural gas and liquid propane. While the virtue of these “alternative”
fuels seems to be solely reduced reliance on imported oil, it is also
recognized that the convenience of gasoline continues to favor continued oil
dependence. However, much of the discussion continues in the vein of the first
three chapters by focusing on what has
or could be done rather than what should be done, and – except for one – the recommendations are
largely administrative. That exception “directs” the Secretary of Energy “to
develop next generation technology, including hydrogen and fusion” – seen
variously as “alternative” and “future” energy sources. Moreover, the “research into alternative and
renewable energy source” is to be funded by “an estimated $1.2 billion of bid
bonuses from the environmentally responsible leasing of the ANWR” – another
example of “revenue neutrality” like the recommendation in chapter two that
energy education programs should be funded by the energy industry. Also discussed in the sixth chapter are the
need to integrate renewable and alternative energy sources into our existing
energy distribution system and the efficiencies that can be obtained by
transforming energy sources into their desired forms at their point of use –
what this report calls “distributed energy” and what Amory Lovins would call a
“soft energy path.”
Our
present dependence on fossil fuels depends not only on the fuels themselves but
also on the infrastructure needed to transport, transmit, and transform them –
oil and gas pipelines, oil tankers, coal trains, refineries, power plants, and
transmission lines. The seventh chapter
is devoted to whatever infrastructure improvements are needed to feed our
growing appetite for fossil fuels – as if we were never going to run out of
them – and to transmit greater amounts of electrical energy over greater
distances in today's deregulated market – in spite of the greater efficiencies
cited in the preceding chapter for “distributed energy” system. Chapter five notes the need for more oil and
gas imports.
The
last chapter acknowledges that even now “we are self-sufficient in virtually
all our energy resources except oil, of which we import 52 percent of our net
requirements, and natural gas, of which we import 15 to 16 percent of our net
requirements. . . .” (p. 8-3) This
statement sets the scene for the energy related part of our foreign policy. We
should increase our present dependence on Canada, Saudi Arabia, Venezuela, and
Mexico for over half our oil imports, and on Canada for most of our gas imports
(because they can be delivered by pipeline), and seek other sources as well,
principally Africa and nations bordering the Caspian Sea. Energy efficiency
technologies are cited, primarily to be exported to developing countries, as
measures to enhance the U.S. economy and to reduce demand for oil on the world
market. Saddam Hussein’s Iraq is not listed on p. 8-5 as opening its “energy
sectors to international investment,” yet it is listed on p. 8-4 as the sixth
largest exporter of oil to the U.S. in 2000.
While
paying lip service to environmental protection and more efficient use of
energy, the NEPD Group's vision of “Reliable, Affordable, and Environmentally
Sound Energy for America's Future” seems largely to be a continuation of the
reliance on fossil fuels which have marked the convenience of our past -- doing
whatever is needed to increase their supply both at home and abroad. There is,
however, one recommendation that recognizes that this “business as usual”
approach can not go on forever: “. . . that the President seek to increase
international cooperation on finding alternatives to oil, especially for the
transportation sector.” The more solid Republican Congressional majorities
accompanying the second (G.W.) Bush Administration are now paving the way
toward implementing the recommendations of the NEPD Group, particularly
drilling in the Arctic National Wildlife Refuge. Also being implemented is the
addition of mercury as a target pollutant from power plant emissions. The NEPD
Group’s Report is available on-line at
www.whitehouse.gov/energy/.