National Commission on Energy Policy: Minimize Greenhouse Emissions

Three and a half years after the National Energy Policy Development Group, under Vice President Dick Cheney, unveiled their “National Energy Policy” report in May 2001, the National Commission on Energy Policy (NCEP) published what they considered to be “A Bipartisan Strategy to Meet America's Energy Challenges.” Since the “National Energy Policy” formulated by Cheney's group had lain dormant during that time, the NCEP titled its document Ending the Energy Stalemate. In spite of its name, the National Commission on Energy Policy was funded in 2002 by the William and Flora Hewlett Foundation, The Pew Charitable Trusts, the John D. and Catherine T. MacArthur Foundation, the David and Lucile Packard Foundation, and the Energy Foundation. Led by well-known energy writer John P. Holdren, former US Environmental Protection Agency Administrator William K. Reilly, and Exelon CEO John W. Rowe, the sixteen commissioners came from varied walks of life, from business to the Natural Resources Defense Council. While not agreeing on each recommendation in isolation, they “reached consensus on the report and its recommendations as a package, which taken as a whole offers a balanced and comprehensive approach to the economic, national security, and environmental challenges that the energy issue presents to our nation.”

The recommendations of the NCEP are structured around the six chapters of their report: “Enhancing Oil Security,” “Reducing Risks from Climate Change,” “Improving Energy Efficiency,” “Expanding Energy Supplies,” “Strengthening Energy-Supply Infrastructure,” and “Developing Better Energy Technologies for the Future.” They were based on the general principles that “a strong economy, affordable energy, and adequate energy supplies were essential. . . .,” that “markets . . . should be relied upon wherever possible,” and that “gradual adjustments are generally preferable to dramatic interventions.” But it is also stated that “commissioners rejected the proposition that uncertainty justifies inaction in the face of significant risks.” While not accepting that global oil production has peaked, the Commission recognizes in its first chapter that “the global oil system is under considerable strain.” Moreover, the next two decades will see an increase of 50% in the demand for oil, both globally and domestically. For the U.S., this means nine million barrels per day (MBD), and the Commission feels that as much of this as possible should be met by increased vehicular efficiency. This would require raising the Corporate Average Fuel Economy (CAFE), which have stagnated since 1985, though the commissioners could not agree on a numerical amount to raise them. They assess that a maximum of five MBD can be achieved in this way, and that an additional half MBD can come from biomass fuels. To meet the rest of the increased demand for oil, they call for maximizing oil production in much the same way as that advocated by the Cheney report. The Commission further encourages the filling of oil reserves the world over but feels that attempts to achieve independence of imported oil, while “rhetorically seductive,” are neither practical nor in the country's best interest.

The Commission's emphasis on meeting the increased demand for oil by maximizing the efficiency of using it and developing nonpetroleum fuel alternatives is motivated by their advocacy of reduced greenhouse gas emissions, a concept that consistently underlies the next three chapters. In fact, the second chapter is devoted exclusively to the threat of global warming, and a permit trading incentive program to limit greenhouse emissions is advocated. A reduction of 2.4% per year per dollar of Gross National Product, recognized to be less than what the Kyoto Protocol would have required, is proposed. The third chapter is devoted to improved energy efficiency, which the Commission expect to offset 25% of the increase in energy demand over the next two decades. They note that in situations where energy decisions are made by people not benefiting directly from them (such as by renters whose utility bills are paid by their landlords), incentive measures need to be provided. While “no single technology, resource, or policy can solve all energy problems,” the Commission is mindful of the need to limit greenhouse gas emissions in meeting energy needs that cannot be met by more efficient energy use. To this end, the Commission advocates increased use of the lowest-carbon fossil fuel (natural gas), use of carbon-reducing procedures (coal gasification with carbon sequestration, and noncarbon energy sources (including both renewables and nuclear fission), with tax credits for all new noncarbon sources. The case of transportation presents separate problems and merits a separate section. Here the Commission advocates cellulose ethanol over all other nonpetroleum transportation fuel alternatives.

The fifth chapter focuses on protecting energy infrastructure and strengthening it, with particular emphasis on improving the reliability of the electrical grid. Additions to the energy infrastructure such as a nuclear waste repository, liquid natural gas facilities, wind power “farms,” and additional electric transmission lines are needed to “ensure adequate and reliable supplies of energy, achieve desired reductions of greenhouse gas emissions, or diversify transportation fuels.” (p. 84) The final chapter begins by summing up the essence of this "Bipartisan Strategy to Meet America's Energy Challenges”: “. . .the overarching energy imperative is to maintain and expand the benefits to Americans and others around the world from reliable energy supplies and their productive application, while controlling and reducing energy's costs and risks in the economic, environmental and national-security domains. The latter include, especially, the economic and security costs and risks of U.S. and world dependence on oil, the health impacts from combustion of fossil and biomass fuels, the proliferation risks from nuclear energy, and the impacts on global climate from the emissions of greenhouse gases from fossil fuel use.” (p. 98). To achieve this goal, the NEPC looks to improved technology and better use of existing technology; and to achieve these technological improvements, they recommend tax incentives to increase investment by the private sector and a doubling of government investment in ERD³ (energy research, development, demonstration and (early) deployment). The National Commission on Energy Policy report is available on-line at www.energycommission.org