Testimony of Skip Laitner, Director of Economic Analysis, for the U.S. Senate Committee on Energy and Natural Resources hearing to review the status of federal programs targeted at reducing gasoline demand



John A. "Skip" Laitner


This testimony responds to an invitation from the Senate Energy & Natural Resources Committee to explore the economic potential of cost-effective investments in more energy-efficient technologies, especially as those investments favorably impact petroleum prices and improve the robustness of the American economy. As discussed in this testimony, there is a huge potential for cost-effective investments in energy efficiency throughout all sectors of the U.S. economy: on the order of 46 billion barrels of oil equivalent between now and 2030. This is about 2.5 times bigger than what some have suggested might be available from off-shore drilling. And it is about 5.5 times greater than what we will get from the improved CAFE standards enacted by Congress last December. That magnitude of further gains in energy efficiency could generate a significant downward pressure on oil prices, and increase both the resilience and robustness of the American and the international economies — if we choose to encourage those more productive investments.

Policy solutions will play a pivotal role in strengthening the continued development, dissemination, and widespread adoption of energy-efficient industrial and transportation technologies and systems. In that regard, ACEEE recommends 10 policy actions that might be undertaken by this Congress to immediately provide that signal, and more critically, to change the direction of energy usage through increased energy efficiency.

The set of 10 proposals offered here is intended to accomplish two specific objectives. The first is to provide an immediate catalyst by launching an effort over the next few months that can "save oil in a hurry." If undertaken with sufficient robustness, these initial proposals might generate an immediate downward pressure on oil prices to the benefit of consumers and businesses. The second is to begin the process of fundamentally restructuring our transportation infrastructure — a step that will be necessary if we are to change the energy use path that our transportation system is currently on. Many of these suggestions lay the groundwork for a shift in the larger transportation policy, an opportunity that is afforded the next Congress by next year's reauthorization of the transportation bill.