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07.07

Filling the Gaps Left by the Energy Policy Act of 2005

By Patrick E. Meyer

In January 2007, a diverse bipartisan group of senators (Reid, Bingaman, Boxer, Schumer, Lieberman, Lautenberg, Cantwell, Leahy, Stabenow, Webb, Salazar, and Menendez) introduced the National Energy and Environment Security Act of 2007 (S. 6), which seeks to reduce national dependence on foreign oil and expand non-petroleum transportation options. Among other components, “the bill proposes increased biofuel production, a commitment to energy efficiency measures, rolling back incentives which sponsor the oil industry, and promoting alternative forms of energy, such as wind and solar.”¹

Given that it has not even been two years since the passing of the Energy Policy Act of 2005 (EPAct), one may wonder why such an act is even necessary. EPAct was the first national energy policy in more than ten years — shouldn't it have included such measures? For better or worse, it is becoming increasingly apparent that EPAct's mandates fall short in many areas. As a result, Members of Congress have begun to propose new legislation which will fill the gaps left by the Act. More importantly, many progressive states have concluded that the best opportunities for progress in energy and environmental issues are through state-level policy. Thus, many states have enacted or are progressing on new legislation which includes mandates even more strict than those outlined in federal-level policy. This article will briefly discuss a handful of recent advancements in national and state level energy and environmental policy which fill the gaps left by EPAct.

The National Energy and Environment Security Act of 2007 is designed to fill many of the gaps left by EPAct through five distinct goals: (1) to reduce dependence on foreign and unsustainable energy sources by increasing automobile efficiency, expanding biofuels, and further developing new automobile technologies such as plug-in hybrid vehicles; (2) to reduce national exposure to the risks of global warming by reducing carbon dioxide emissions; (3) to diversify energy sources by developing new energy technologies; (4) to reduce burdens on consumers of rising energy prices though implementation of low-income home energy assistance programs; and (5) to eliminate tax giveaways and prevent energy price gouging and manipulation.² Of course, as Bingaman states, “all of this is a tall order for Congress.” Indeed, how can the Act’s supporters even think that their act will be any more successful in these areas than EPAct was (or wasn't)? Bingaman suggests that these issues be tackled through a series of smaller energy bills which have a greater chance of properly addressing the issues at hand. Since its conception, EPAct has been criticized by some as being so all-encompassing that it does not mandate the incremental steps that are necessary for true progress. Addressing specific issues through small, precise legislation will likely be a more successful approach.

Although EPAct includes mandates for the expansion of alternative fuels and research and development on alternative fuel technologies, it again does not address many of the incremental steps involving the development of technologies or markets in which the technologies can thrive. For example, EPAct mandates that the Environmental Protection Agency (EPA) develop guidance for the development of advanced diesel engines and fuel, but implementation has fallen short in multiple areas.

Federal regulations mandating cleaner diesel engines in new trucks and school buses went into effect in January 2007.³ Specifically, the legislation mandates the utilization of ultra low sulfur diesel (ULSD), which, as of October 2006, has been promoted by the Environmental Protection Agency (EPA) as the new diesel standard. ULSD is considerably cleaner that conventional diesel fuel, and has a maximum sulfur content of only 15 parts per million (ppm), whereas conventional diesel has a much greater sulfur content of 500 ppm.⁴ The environmental benefits of switching to the new fuel are expected to be considerable. According to the Diesel Technology Forum, new engines and fuel in combination could reduce emissions of particulate matter by up to 98 percent over the previous generation. Furthermore, nitrogen-oxide emissions will be reduced by 50 percent. The ULSD policy is still in early stages of implementation; not all retail outlets are required to offer the fuel until the end of 2010. California is the only state to have fully completed the transition to ULSD by September 2006.

The ULSD program is promising, but in reality, fuel labeled as ULSD may accumulate more than the mandated limit of 15 ppm of sulfur when transported through multiple pipelines, tanks and trucks to the final point of sale.⁵ Furthermore, fuel distributors and retailers may be taking delivery of fuel labeled ULSD without having a practical means for verifying the actual sulfur content. In other words, EPAct does not include the necessary legislation to ensure that the ULSD program actually works.

Recognizing that further research and development is needed to ensure that ULSD does indeed meet the mandated sulfur content, Rep. Bart Gordon introduced the Advanced Fuels Infrastructure Research and Development Act (H.R. 547) in January 2007. The Act aims to establish a research, development and demonstration program on low-cost, portable and accurate methods and technologies for testing of sulfur content in ULSD fuel. With such a testing method, mandates which require the utilization of ULSD can be upheld to their true intention. (H.R. 547 passed in the House and was referred to the Committee on Environment and Public Works in the Senate.)

In many situations, states have realized that they must take energy policy formulation and implementation into their own hands for there to be substantial progress. Renewable portfolio standards (RPS) is one such area. RPS requires that electricity providers include a specified amount of renewable energy as part of its portfolio of generating fuels. There are a number of RPS enacted by states across the nation, which vary greatly in terms of requirements. The quantity of renewable energy development required, and the date by which such development must occur, often differ among states. Furthermore, different states have very different definitions of “renewable” and “non-renewable” sources. For example, some states include hydropower as a renewable energy source while other states do not. Other discrepancies exist with technology used to generate electricity; Maine, for example, includes cogeneration — whether from renewable sources or not — as an RPS source, whereas most other states do not.⁶

As of June 2007, 20 states and the District of Columbia had enacted a Renewable Portfolio Standard (RPS). Together, these states account for more than 42 percent of the electricity sales in the United States.⁷ Since the passing of EPAct and the realization that a national-level RPS will not be developed in the immediate future, there has been a flurry of activity among state-level energy policy makers. The most recent state to enact a RPS is Minnesota, which in February 2007 set some of the most stringent standards known in the United States: 30 percent renewable energy from the state’s largest utility, Xcel Energy⁸, by 2020, and 25 percent by 2025 for all other utilities operating in the state. Additionally, other states recently enacted an RPS: Arizona (15 percent renewable by 2025, enacted November 2006), Delaware (10 percent renewable by 2019, enacted July 2005), Washington D.C. (11 percent renewable by 2022, enacted April 2005), Maryland (9.5 percent renewable by 2022, updated legislation effective July 2007), Montana (15 percent renewable by 2015, enacted June 2006), Nevada (20 percent renewable by 2015, enacted February 2006), and Washington (15 percent renewable by 2020, enacted November 2006). (For the full list of RPS throughout the nation, go to the DSIRE database.)

Many states have taken the initiative to enact their own renewable energy incentive programs which go a level above the incentives included in EPAct. For example, as of March 2007, Colorado state legislation mandates a mandatory green-power option for large municipal utilities. Under the legislation, municipal electric utilities serving more than 40,000 customers in Colorado must offer a green-power program that gives retail customers the option of supporting emerging renewable technologies.⁹

In April 2007, Massachusetts enacted an energy reduction plan for state buildings, which mandates that all agencies involved in construction and major renovation projects of over 20,000 square feet to meet the Leadership in Energy and Environmental Design (LEED) standards which ensure high-performance, energy efficient and more sustainable building design.¹⁰ Also in April 2007, Vermont enacted a similar energy reduction plan for state buildings which aims to reduce non-renewable energy purchases and increase overall energy savings. Specifically, the plan mandates that all state agencies and institutions constructing state-owned facilities over 5,000 gross square feet be designed and constructed consistent with state-formulated standards at least as stringent as LEED.

It has become clear that the Energy Policy Act of 2005 alone will not achieve the nation's energy objectives. But, with progressive new federal policy aimed at tackling each issue one at a time, and progressive state policies aimed at mandating renewable energy development or outlining incentive programs, the gaps left by EPAct are being filled. EPAct was useful in establishing many baselines and over-arching policy initiatives; now, smaller, issue-specific federal or state policy can effect real change in energy and environmental policy. Indeed, the most memorable legacy of EPAct will likely not be the act itself, but the windows it has opened for a new generation of incremental progressive policies.

References

1. Catherine Brahic, "U.S. and European politics turning green," NewScientist: Environment, 09 January 2007. Full resource.
    

2. "Bingaman on National Energy & Environmental Security Act of 2007," Floor statement of Senator Jeff Bingamin on S. 6 to the U.S. Senate Committee on Energy & Natural Resources, 05 January 2007. Full resource.
    

3. Chris Woodyard, "Cleaner diesel engine rules take effect," USA Today Online, 28 December 2006. Full resource.
    

4. C. Gable and S. Gable, "Ultra Low Sulfur Diesel 101," About.com: Alternative Fuels, 2006. Full resource.
    

5. Rep. Bart Gordon, Advanced Fuels Infrastructure Research and Development Act (H.R. 457), U.S. House of Representatives, introduced 18 January 2007. Full resource.
    

6. "State Energy Alternatives: Portfolio Standards," U.S. Department of Energy, Energy Efficiency and Renewable Energy Program [online], 2007. Full resource.
    

7. "Information Resources: States with Renewable Portfolio Standards," U.S. Department of Energy, Energy Efficiency and Renewable Energy Program [online], 2007. Full resource.
    

8. Xcel Energy is a leading combination electricity and natural gas energy company, which offers a comprehensive portfolio of energy-related products and services to 3.3 million electricity customers and 1.8 million natural gas customers. The company has regulated operations in 8 Western and Midwestern states, and revenue of more than $9 billion annually; and own more than 34,500 miles of natural gas pipelines.
    

9. "Mandatory Green Power Option for Large Municipal Utilities,"  Database of State Incentives for Renewables & Efficiency [online], 2007. Full resource.
    

10. "State Buildings Energy Reduction Plan," Database of State Incentives for Renewables & Efficiency [online], 2007. Full resource.

Patrick E. Meyer is IEEE-USA Today's Engineer Students' Voice Editor, and a doctoral student at the University of Delaware. Comments may be submitted to todaysengineer@ieee.org.