By Joe Kennedy III
America needs a comprehensive national energy policy for the 21st century that moves us beyond decades of reliance on non-renewable and foreign energy sources. Energy in the United States can be cleaner, cheaper, and domestically produced, but only if we are willing to make hard choices, to make significant investments in new energy technologies and industries, and to enact smart policies that harness market forces and American ingenuity on both sides of the meter and the pump.
With climate change threatening irreparable harm on our ecosystems and economy, we need to move away from carbon-intensive sources of energy. I support federal environmental and economic policies that will reward zero- and low-carbon energy producers and make us less reliant than ever on energy imported from regimes that share neither our values nor our interests.
All of these potential solutions must take into account the cost to consumers. Energy drives our economy, and plays an important role in determining where firms locate, where jobs grow, and where people choose to live. We need a balanced approach that makes our local and global environment safe and healthy for our children and grandchildren without saddling families and businesses with unnecessary costs.
A comprehensive energy plan must include the following four components:
Conservation and Energy Efficiency
The cheapest energy is the energy we never use. Every American has the ability to reduce energy consumption simply by powering down unused devices, adjusting thermostats, combining trips or carpooling when possible, and reusing and recycling consumer goods.
In addition to direct energy savings by reducing consumption, efficiency measures using the latest technologies can save up to 40 percent of the energy used to power, heat, and cool our homes, schools, hospitals, factories, and offices. We can improve efficiency through simple low-cost fixes of leaky doors and windows or through new insulation, roofing materials, or high-efficiency water-heaters and boilers. Improved standards for appliances and light bulbs can dramatically cut energy use and save money for consumers. Philips Lightolier, a global leader in LED lighting technology, is based right in Fall River. LEDs already make up 20 percent of the company’s sales, and will be used in the full retrofit of Ernst & Young’s 5,800-employee flagship office tower in Times Square, New York. Installation of Lightolier’s bulbs will save E&Y about $1 million per year.
Government can be – and has been – a first mover in helping stimulate the demand for energy-efficient technologies. The heavy energy demands of military bases and battlefields can be further addressed through new technologies, many of which can then be applied to commercial and residential markets. Government buildings in general are also good candidates for energy-saving retrofits – investing in these improvements now can help jump-start the economy and lead to long-run savings that reduce the cost for government at all levels.
The federal government can also be a catalyst to unlock the long-term benefits to households and small-businesses of energy-efficiency improvements. Many retrofits and upgrades make economic sense, but require initial investment that working families and small businesses cannot afford. By supporting these projects, we can make these investments today and pay for them over time through energy savings – while still putting money in people’s pockets. To start, programs like the Obama Administration’s Homestar Energy Efficiency Retrofit Program should be implemented and expanded. These initiatives are not just good energy policy, but also good economic policy, as they require the creation of hundreds of thousands of good-paying jobs – that can’t be outsourced – to retrofit homes, schools, and commercial properties.
Our modern electric power grid has been called the biggest and most complex machine in the world – delivering electricity from hundreds of power plants over 200,000 miles of high tension transmission lines, to millions of consumers. While the grid is an engineering marvel, it needs to be smarter. We need to make investments in a smart-grid that increase the efficiency of our transmission lines and provide consumers with the opportunity to realize savings by delivering more transparency on usage and price.
Demand response is among the most promising new energy-efficiency technologies and one of the fastest-growing “power sources” in the market today. It is being developed by innovative companies in Massachusetts such as EnerNOC and World Energy, which pay large energy consumers to reduce their electricity demand when prices are high. A grocery wholesaler, for example, that cuts power to its freezers during an hour of peak demand on a hot summer afternoon, may reap significant savings without risking any spoilage.
Transportation produces about one-third of greenhouse gas emissions in the U.S. and consumes 70 percent of all the petroleum we use. Improved fuel-efficiency standards are the best tool we have to reduce our petroleum use, put downward pressure on the cost of gasoline at the pump, and ease pressure on domestic drilling needs. Every increase of one mile per gallon in auto fuel efficiency yields more oil than is contained in two Arctic National Wildlife Refuges. I support the planned increase in Corporate Average Fuel Economy (CAFE) standards – it’s good for consumers, good for Detroit, and good for our long-term economic competitiveness.
In the first round of CAFE standards in the 1970s, raising fuel efficiency in American cars by 7.6 gallons over six years caused oil imports from the Persian Gulf to fall by 87 percent. That America’s economy grew by 27 percent during that same period is proof that improved efficiency does not preclude economic growth. I support the Obama Administration’s plan to raise CAFE standards to 35.5 miles per gallon by 2016, and 54.5 miles per gallon in 2025.
Policies that promote better gas mileage, as well as alternative fuels, should be accompanied by programs aimed at the cost-effective early adoption of new technologies. Partnership with commercial and freight companies can help smooth the transition to cleaner transportation that uses domestic energy resources.
Increased investment in modern transportation networks will help end our reliance on foreign oil, and support livable communities that make it easy for people to get around without a car. Our first priority should be significant reinvestment in our existing transit systems to improve service quality, but we should also be investing in an expansion of systems where it makes economic sense.
Increasing our investment in wind, solar, geothermal, hydro-power, and biofuels will further reduce our dependence on foreign oil and fossil fuels and slash greenhouse gases and other emissions. In 2011 alone, close to 7,000 megawatts of new wind energy came on line, more than enough to power every household in Massachusetts. Some 29 states have set renewable portfolio standards (RPS). We have made significant progress in installing new renewable capacity but have a long way to go before meeting our nation’s renewable energy potential. Setting a national RPS would help spur new development of renewable energy.
I support the long-term development of the offshore wind industry in the Northeast, including the Cape Wind project, which alone will nearly double the amount of renewable power produced in Massachusetts. The Production Tax Credit for wind-energy projects has successfully increased the amount of wind power and led to significant price reductions. I support extending this tax credit to promote further renewable production. The oil and gas industry – one of the most profitable sectors in the history of global commerce – currently receives $4 billion annually in direct federal subsidies. We should re-direct these funds to other priorities.
We must also address the need for new transmission lines to carry green power to the market. We should fast-track the permitting of new transmission lines if at least 50% of the energy on those lines will be generated from renewables.
Nuclear, though not a renewable resource, should also play a role in our energy future because of its ability to create baseload power without greenhouse emissions. While we should re-assess the safety of existing and planned nuclear power plants – as well as long-term nuclear-waste storage – nuclear generation can be a reliable and low-cost source of electricity.
Domestic Oil and Gas Resources
Fossil fuels are still an important part of our energy economy – used to power our vehicles and in the creation of plastics, pharmaceuticals, fertilizers, and other essential products – but we must harvest them cleanly, efficiently and responsibly. Shale oil and shale gas have changed the energy landscape, bringing natural gas prices to record lows, and making the U.S. a net exporter of petroleum products for the first time in decades. Under President Obama, the number of oil drilling rigs has quadrupled, and the U.S. now has more rigs than the rest of the world combined. I support prudent and responsible development of domestic fossil fuels today, while working to transition away from them in the medium term.
The keys to responsible development of domestic fossil fuels are proper oversight and fair rates for leasing federal land, as well as the effective and efficient permitting of projects to avoid potential irreversible impacts to land and water supplies. With the rise in the exploration and development of shale gas and shale oil through hydraulic fracturing, we must ensure that the proper safeguards are in place to protect the environment. We need to ensure that the regulators watching over the oil, gas, and coal industries are truly independent and empowered to crack down on abuses. The Obama Administration’s reforms to the Minerals Management Service offer a good model. Additionally, we need to reform the Mineral Leasing Act of 1920 to ensure that the U.S. no longer receives pennies on the dollar for leasing federal land to oil, gas, and coal companies. We should dedicate some portion of federal revenues from lease auctions, royalties, and market-based leases to support renewable energy and provide-relief to low-income households struggling to heat or cool their homes under the burden of high energy costs.
Planning for our energy future cuts across broad economic, environmental, and national security concerns. We cannot function as a modern society without affordable and adequate energy resources. We cannot survive as a people by polluting our air and water and raising global temperatures in blind pursuit of energy supplies. And we must not maintain our energy security by sending our sons and daughters overseas to defend access to foreign sources of energy. Only a comprehensive energy policy will ensure the proper balance.