Conference Energy Bill Misses the Big Targets

July 28, 2005

WASHINGTON, D.C. — As Congress prepares to vote on the energy bill conference report, the American Council for an Energy-Efficient Economy's (ACEEE) preliminary analysis shows that the conference bill would save substantially less energy than the Senate version and would fall especially short on the key challenge of stemming growth in oil consumption.

"The conference report, while it makes some progress on energy efficiency, ducks the nation's most important energy challenges," said ACEEE Deputy Director Bill Prindle. "This bill fails to turn the tide on rising oil imports, high energy prices, or greenhouse gas emissions. Unless Congress tackles these issues in a tougher way, the nation will continue to suffer economic damage from high energy prices, geopolitical instability from oil dependence, and environmental deterioration."

ACEEE's preliminary analysis shows that the oil savings in the bill are especially weak. While the Senate bill would have saved about one million barrels per day, or about 4% of total oil demand in 2020, the conference report would save only about 100,000 barrels per day, less than one-half of one percent of 2020 oil use. The Senate provision was dropped in conference.

The greatest energy savings in the bill come from the energy efficiency standards, which legislate or create rulemakings for 15 new products, including commercial refrigeration, commercial heaters, ceiling fans, traffic signals, and other home and business products. ACEEE estimates that these standards would save about 30,000 Megawatts of capacity and 90 billion kilowatt-hours in 2020, which would offset about 3% of total U.S. power plant capacity and 2% of total U.S. electricity use.

Tax incentives—for new homes, retrofits and equipment replacement in existing homes, commercial buildings, home appliances, and hybrid and other efficient vehicles—comprise the other major source of energy savings, providing about 0.5 Quads of energy savings, which is just under one-half of one percent of projected 2020 energy use.

Other efficiency provisions that would save significant energy include:

  • Increased R&D spending authorizations, though these must be implemented through appropriations
  • Improved appliance labeling
  • Voluntary agreements to increase industrial energy efficiency
  • A study and pilot program for states to expand use of Energy Efficiency Resource Standards (EERS)
  • Requirements for states to facilitate development of combined heat and power and other distributed generation technologies
  • A national public education campaign on energy efficiency

While these efficiency provisions save modest amounts of energy, Congress dropped more substantial provisions in the Senate bill, including the one-million-barrel-per-day oil savings target, efficiency standards for vehicle tires, combined heat and power incentives, and a requirement for states to consider energy savings targets for utilities (similar to the standard President Bush approved when governor of Texas). These and other provisions would have doubled overall energy savings and increased oil savings tenfold. ACEEE's earlier analysis of an enhanced bill that would tackle these issues more seriously showed that it could produce four times the total energy savings and 15 times the oil savings of the conference report.

"This bill leaves American consumers and the economy with no real relief," said Prindle. "Since Congress has not led on the major challenges, state and local governments will need to ramp up their efforts. And Congress will likely have to revisit key energy issues like oil dependency and natural gas prices again soon."

ACEEE's preliminary analysis of the energy efficiency provisions in the energy bill conference report can be found here.

The American Council for an Energy-Efficient Economy is an independent, nonprofit organization dedicated to advancing energy efficiency as a means of promoting economic prosperity, energy security, and environmental protection.