Working government is not an oxymoron: How savings from federal agency actions on energy efficiency could save us $2.6 trillion

Blog Post | September 10, 2014 - 10:18 am

“Washington, D.C.” has become a synonym for “dysfunction” in the last few years, prompting many who care about energy efficiency policy to turn their attention to states. But that view is due to a focus on Congress and on President Obama’s interactions with Congress, where the epithet is mostly deserved. If you look beyond the white marble dome to the federal agencies, there is lots of action on energy efficiency. Turns out, previous congresses have left a lot of unfinished business, notably from the [no-glossary]Energy Independence and Security Act of 2007,[/no-glossary] signed by President George W. Bush. Federal agencies under President Obama have, for the most part, been turning those legislative provisions into real savings for the American people.

The economic and environmental impacts are impressive. In Government Works: Federal Agency Actions on Energy Efficiency, we looked at four sets of actions on energy efficiency that agencies have taken since 2009 or could do in the next few years (most of which are already underway). We estimate that collectively these policies could save the American people $2.6 trillion (for sticklers, that is net present value of savings after needed investments for measures taken through 2040). They could cut cumulative carbon dioxide emissions by 34 billion metric tons, more than the total emissions from fossil fuels in this country over six years. They could reduce oil use by 3.4 million barrels a day in 2030, and 4.7 million barrels a day in 2040. And they could cut electricity demand in 2030 by one-fourth. The energy savings from the existing and prospective policies are illustrated here (for comparison, total U.S. energy consumption in a year is almost 100 quadrillion Btu):

Half of those energy savings are from policies that have not been issued yet. To achieve them the agencies will have to work even harder and to continue to make smart choices. The biggest opportunity for savings is the carbon dioxide emissions standard for existing power plants (EPA’s Clean Power Plan), as customer efficiency cuts the need for fossil fuel power plants and thus cuts their emissions. But the rule will only reap the savings if the Environmental Protection Agency continues to look at the electric system as a whole, as it did in its recent draft rule, while adding more guidance to the states on how they can achieve and document the savings. The second fuel economy standard for heavy-duty trucks and buses also could leap-frog the first, but only if it too looks at the system as a whole, in this case the engine, tractor, and trailer.

The Department of Energy (DOE) has—at long last—been churning out appliance and equipment efficiency standards that should save consumers over $450 billion, but it needs to step up its pace. And multiple agencies are years behind in policies that can use major advances in building technologies and building energy codes to slash utility bills for owners of new homes—especially DOE on manufactured housing efficiency standards, and the Department of Housing and Urban Development and Department of Agriculture on criteria for new homes with federal loans. They are working to catch up.

Agency action is not a panacea. More legislation is needed to achieve efficiency’s potential and to achieve the more ambitious national goals such as doubling energy productivity by 2030. But even in the current legislative gridlock, federal agencies are showing that government, using energy efficiency policies, can work—for consumer pocketbooks, for jobs, for the environment, and for national security.