ACEEE Advises House on Energy Efficiency and National Energy Policy

February 10, 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 national energy policy at hearings held today by the House Energy and Commerce Committee. ACEEE's testimony can be found at http://aceee.org/tstimony/0502eenep.pdf.


In his testimony, Nadel emphasized three major points:


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

  • Congress needs to take serious action on oil consumption in the near term, beginning with setting a target of saving one million barrels of oil per day by 2013. Rising energy demand is driving oil prices higher than necessary; cost-effective, practical steps to slow the growth in U.S. oil use would moderate prices, help the economy, and protect national security by reducing oil import dependence.

  • The 108th Congress' House energy bill (H.R. 6) contained some sound building blocks to support these goals, but they need to add significant new measures to save oil, and should also update and refine a variety of existing efficiency provisions.


ACEEE's list of recommended policy solutions includes:


  • Setting an oil-savings goal of one million barrels per day by 2013; ways to reach this goal could include rating fuel economy for freight trucks, creating revenue-neutral "feebates" for passenger vehicles, and modifying fuel economy test methods to better reflect real-world performance, while savings in the buildings and industrial sectors would also contribute to meeting this goal.

  • Updating appliance efficiency standards from H.R. 6 language, based on new consensus agreements.

  • Setting end-use efficiency resource targets for electric and gas utilities, along the lines of those set in Texas.

  • Reducing barriers to high-efficiency combined heat and power systems (which can cut power generation waste in half) by encouraging simplified grid connection rules and changing environmental rules to reward efficient generation.

  • Refining the tax incentives in H.R. 6 for high-efficiency technologies.


ACEEE research results have shown that energy efficiency is the most viable near-term strategy for moderating natural gas prices, and also is vital for stabilizing longer-term gas markets. Our proposal is based on a recent ACEEE analysis, which illustrated that if we reduce gas demand by as little as 4% 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 consumers and businesses, especially 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 testimony, other key natural gas research results and references are available on the Web at http://aceee.org/energy/natlgas.htm.