Energy Plan: No Visionaries, Please

By Meteor Blades

After nearly two years of “debate,” Congress is reaching the end game on legislation that started out as the Bush-Cheney Energy Plan, and remains pretty much that. The President could sign this monster package of mostly backward-looking policies before November 1. There’s enough lard in it to fry up a catfish for every American man, woman and child. But, of course, its largesse won’t be distributed quite so equitably.

Just about everywhere you look, there’s something to dislike in the Energy Bill. Section 223, for instance, would repeal the Public Utility Holding Company Act of 1935. While it might seem that an energy-related law that’s nearly seven decades old should be repealed, it’s worth checking out Public Citizen’s PUHCA for Dummies for a detailed counter argument.

Dozens of other sections and subsections deserve a pummeling as well. Like fuel economy standards. Like the “clean” coal initiative. Like continuing subsidies for nuclear power. The “hydrogen economy” proposals are flawed, too. Indeed, a book-length blog is needed to evaluate this bill thoroughly. Obviously, I don’t have space for that. So let’s take a closer look at just one example, the breathtaking kowtowing to the oil and gas industry.

Although Republican leaders face a filibuster over their determination to allow oil exploration and drilling in the Arctic National Wildlife Refuge – at last count, 43 Senators oppose the idea - they plan to try to include this in the final bill anyway. Buried under the emotional discussion of this pristine region, however, are plans to open up more public lands in the Rocky Mountains for natural gas exploration.

Natural gas prices have been on the rise. Many factors account for this. Increasingly, for practical and environmental reasons, electricity generated in the U.S., particularly in the Northeast, South, and on the West Coast, comes from natural gas-fired plants. Lack of adequate storage, pipeline capacity and liquid natural gas facilities for imported gas also boosts prices.

But the industry has focused mainly on one argument: Their surefire way to bring down prices is to let drillers take their augurs and bits into America’s protected areas.

The Administration parrots industry’s ludicrous claims that too much public land is off limits. Indeed, last year the Bush Administration said that "…about 40 percent of the natural gas resources on federal land in the Rocky Mountain region have been placed off-limits" to development (National Energy Policy, p. 5-10). This was way off the mark.

In fact, according to a Department of Interior study conducted under the Energy Policy and Conservation Act and released on January 16, more than 90 percent of the natural gas resources in the Rockies are available for leasing and development. The EPCA report concludes that, of the 138 trillion cubic feet of “technically recoverable” gas resources within its study area, only 15.9 TCF are actually off-limits to development, or 7 percent of the total resources in the study area. In other words, environmental safeguards preclude less than 1 percent of the nation’s “technically recoverable” natural gas resources from development.

Peter Morton of the The Wilderness Society notes that there are more than 94,000 producing wells on public land. Between 1997 and 2003, the oil and gas industry leased more than 37 million acres of federal minerals in the Rocky Mountains states. In 2001, the Bureau of Land Management permitted a record 4,850 drilling projects on BLM lands, up from 3,400 permits issued in 2000.

The industry’s response: Give us more. Knock down environmental obstacles. Speed up the permitting process. Their point of view is summed up in a report released last Tuesday by the National Petroleum Council and given a thumbs-up by Department of Energy chief Spencer Abraham.

There are alternatives – short term and long term – to plundering that small fraction of America’s public lands which remain shielded from oil and gas development.

In 2000-2001, California used public education about conservation and efficiency to lower electricity use by almost 7% in just 12 months. The DoE estimates that increasing energy efficiency throughout the economy could cut energy use by 10 percent or more by 2010 and about 20 percent by 2020. And, frankly, DoE is underestimating by at least half, as Amory and Hunter Lovins at the Rocky Mountain Institute have been proving for decades. Simple efficiency measures can permanently reduce utility bills for consumers and business. In contrast, drilling more gas wells on protected public land will result in, at best, temporary savings.

Efficiency and conservation get lip service from the Bush Administration, but when it actually comes down to doing something effective, like raising efficiency standards of air conditioners, the special interests of corporations trump everything else.

Even the NPC report recommends some attention be paid to conservation. But almost every other recommendation in its report is undercut by a study conducted for the Energy Foundation by the
American Council for an Energy-Efficient Economy. The ACEEE recommends efficiency targets for utilities, appliance efficiency standards, building energy codes, renewable energy targets, and tax credits for efficient and renewable energy technologies.

Says Neal Elliott, Industry Program Director at ACEEE and co-author of the study: "Contrary to what many are saying, there is something we can do about natural gas prices right now. Increased efficiency and renewable energy can reduce natural gas prices quickly and affordably."

Typical analyses of the natural gas situation look only at supply solutions that will take five or more years to make an impact. The ACEEE study focuses on results during those next five years.

Among other things, ACEEE’s analysis shows that natural gas expenditures by electric power generators would decrease by $6.2 billion in 2004 and by as much as $10.4 billion by 2008 merely by adopting energy efficiency and renewable energy policies. This reduction would likely reduce electricity rates as well.

Obviously, conservation and improved efficiency cannot meet all our energy needs. As novice financial investors are always warned: diversify. That’s exactly what we need in our energy “portfolio.” To do so, we must escape from the Old Paradigm entrenched in the Bush-Cheney Energy Plan.

Two excellent and comprehensive alternatives are the National Energy Policy Initiative sponsored by the Rocky Mountain Institute and Consensus Building Institute, and the Natural Resources Defense Council’s A Responsible Energy Policy for the 21st Century.

For a marvelously well-written and thought-provoking piece about smart energy, distributed power and other near-future possibilities, I cannot recommend highly enough Steve Silberman’s July 2001 article in Wired magazine.

Posted September 27, 2003 08:53 PM | Comments (27)