ACEEE Advises Senate on Energy Efficiency and Natural Gas Policy

January 24, 2005


WASHINGTON, D.C. — American Council for an Energy-Efficient Economy (ACEEE) Executive Director Steven Nadel presented recommendations on the critical role that energy efficiency should play in natural gas policy at the Senate Energy and Natural Resources Committee natural gas policy conference today. ACEEE's recommendations are based on comments provided to Chairman Pete Domenici (R-NM) on January 7. This filing can be found at: http://aceee.org/energy/natlgas.htm.


In his testimony, Nadel emphasized two major points:


  • Energy efficiency policy action is the best way to bring down natural gas prices over the next five years. Recent ACEEE analysis, using the same computer models employed by the National Petroleum Council, showed that reducing natural gas and electricity by 4–5% over the next five years could reduce gas prices by about 25% before 2010, saving over $100 billion for American consumers and businesses.


     


  • The Senate energy bill from 2004 (S. 2095) contained sound building blocks for such an effort, but new measures should also be added in the areas of appliance efficiency standards, an efficiency resource standard that would set energy savings targets for utilities, and tax incentives for consumers' largest gas-saving opportunities.


ACEEE's full list of recommended policy solutions includes: setting end-use efficiency resource targets for electric and gas utilities; creating tax incentives for high-efficiency technologies; accelerating federal appliance efficiency standards; supporting advanced building energy codes; expanding support for combined heat and power (CHP); increasing funding for energy efficiency research, development, and deployment; and conducting a national efficiency and conservation campaign.


ACEEE research results have shown that energy efficiency is the most viable near-term strategy for moderating natural gas prices, and is vital for stabilizing longer-term gas markets. Our proposal is based on a recent ACEEE analysis, which illustrated that if we reduce gas and electricity demand by 4–5% over the next five years, we would reduce wholesale natural gas prices by more than 25%. These savings would put over $100 billion back into the U.S. economy at a cost of $30 billion in new investment, of which less than one-quarter would be federal and state public funds.


Moreover, this investment would help bring back U.S. manufacturing jobs that have been lost to high gas prices, and would help relieve the crushing burden of natural gas costs experienced by many lower-income households. Importantly, much of the gas savings in our analysis comes from electricity efficiency measures, because so much electricity is generated by natural gas, often inefficiently.


Along with this filing, other key natural gas research results and references are available on ACEEE's Web site at http://aceee.org/energy/natlgas.htm.