Light Duty Fuel Economy
Energy Policy Act of 2005 Enacted — Contains Useful Provisions But Leaves Many Opportunities on the Table
On August 8th, President Bush signed the Energy Policy Act of 2005 into law after 4 ½ years of work by Congress. The new law deals with a wide array of topics including energy efficiency, renewable energy, coal, oil, gas, and nuclear power. From an energy efficiency perspective, highlights of the new law include establishment of new appliance and equipment efficiency standards on 16 products, and tax incentives for efficient appliances, air conditioners, furnaces, new homes, commercial buildings, as well as new hybrid and efficient diesel vehicles.
WASHINGTON, D.C. — Hurricane Katrina, in addition to causing massive destruction and human tragedy on the Gulf Coast, is creating aftershocks in energy markets that will affect most Americans for the coming months or longer. Early energy market trends include:
Gasoline prices spiking above $3, causing panic buying in several states. Heating oil prices have already reached $2.50 per gallon in some areas. Surging wholesale prices indicate further increases are coming.
Washington, D.C. — Proposed changes to the nation's passenger truck fuel economy standards fall far short of a solution to current energy problems, claims the American Council for an Energy-Efficient Economy (ACEEE). Worse yet, they offer the auto industry greater wiggle room to avoid making honest efficiency improvements in their vehicles.
In April, the U.S. House of Representatives passed a comprehensive energy bill that does relatively little to promote energy efficiency. According to ACEEE's analysis, this bill will produce only about 57% of the energy savings of the bill passed by the House last year. The reduction in energy savings is primarily due to the fact that tax incentives for efficient new homes, commercial buildings, appliances, and combined heat and power (CHP) plants included in last year's bill were dropped this year.
WASHINGTON, D.C. — Painfully high gasoline prices have failed thus far to spur federal legislative action to address what looks increasingly like a long-term problem. Though futures prices for both gasoline and crude oil fell on the N.Y. Mercantile Exchange yesterday, they remain at historically high levels (in nominal terms). Crude futures prices topping $50 through 2009 suggest gasoline prices twice those of the past decade and call for steps now to protect our economy by reducing demand.
World oil prices broke the $50 barrier in September, and natural gas prices are headed back above $7/MCF just in time for the heating season. Federal Reserve and private economists say these energy prices are taking a toll on economic growth, and that the number one way to boost the economy is to drop energy prices. Industry experts say that high prices are driven more by surging demand than by supply problems, which suggests that the best way to bring down energy prices is to reduce energy demand.
Extension of Dual-Fuel Loophole to Increase Oil Consumption by 40-110 Million Barrels Over Next Four Years
WASHINGTON, D.C. — The Bush Administration today extended for four years a policy that increases U.S. oil consumption by allowing auto manufacturers to gain fuel economy credits for making vehicles that can run on ethanol, but rarely do. The American Council for an Energy-Efficient Economy (ACEEE) estimates that extension of the "dual-fueled vehicle" loophole in the federal fuel economy ("CAFE") program will cause the United States to consume an extra 40–110 million barrels of oil in 2005–2008.
After three years of Congressional work, the massive federal energy bill is two votes short of passage in the Senate. The bill was voted out of conference in November and quickly passed by the House. In the Senate, however, it fell two votes short of the 60 needed to end debate, mainly due to issues unrelated to energy policy such as liability waivers for toxic fuel additives. The Senate leadership is expected to bring it up again after Congress convenes at the end of January.
WASHINGTON, D.C. — The energy bill released this weekend by the House-Senate conference committee achieves only a fraction of the energy savings needed to meet the critical challenges facing America: protecting national security, restoring electric system reliability, and keeping consumer energy bills affordable, according to the American Council for an Energy-Efficient Economy (ACEEE), a nonprofit research organization.