Energy Lessons from Rita and Katrina

As the aftershocks of both Hurricane Katrina and Rita to break across U.S. energy markets, with gasoline prices now topping $3/gallon, and with home heating oil and natural gas prices projected to reach all-time highs this winter, it has become clear that the U.S. Congress must chart a new course of American energy policy.

Few in Congress would argue that the recently enacted Energy Policy Act of 2005 contains strong enough measures to address the problems we face in energy prices, energy imports, global warming, or national security. Katrina’s economic and energy impacts put the nation’s unsustainable appetite ever more costly oil and natural gas in stark relief. This disaster is a wake-up call that fundamental and sweeping changes are needed in U.S. energy policy. As Senator Pete Domenici (R-NM), chair of the Senate Committee on Energy and Natural Resources recently observed: “The Senate owes it to the American people to address the challenge of spiraling gasoline prices and the contributing factors. … I am very proud of the Energy Policy Act of 2005. A number of good and important policy goals were achieved there, but some of the harder choices were not part of that bill. … The things that were not politically possible two months ago are still before us and require an answer. We can either ignore them or we can act. I say we act.” We agree – but with the major caveat that the answers are to be found in greatly improved energy efficiency and expansion of renewable sources of energy and not in more drilling. Supply side strategies are not solutions. At the least, it is imperative that Congress enact aggressive fuel efficiency standards for automobiles and trucks. The new light-truck CAFE standards recently proposed by the Administration are not only grossly insufficient, but could actually result in a decline in overall fleet efficiency and therefore create even greater demand for petroleum. Research in the last two decades has proven that it is technically and economically feasible to achieve fuel economy standards of 40 mpg within a decade, and that was at prices less than half of current levels. Therefore, at a bare minimum, CAFE standards for cars and light trucks should be no less than 40 mpg by 2015. Beyond CAFE, Congress should also enact another provision considered during the earlier energy policy debate — a mandatory target for an overall national reduction in the level of oil consumption. We would suggest that the reduction target should be set at a level equivalent to at least two million barrels per day by 2015. Congress should also set energy savings targets for electric and gas utilities, based on the Energy Policy Act provision that calls for a pilot program in this area. The devastation caused by Hurricane Katrina, beyond its current tragic effects, is a postcard from the future on the increasing intensity we can expect from such storms as global warming increases ocean temperatures. Recent MIT research confirms that hurricane intensity has been growing over the past 30 years, consistent with the accepted predictions of climate scientists. Added to the other evidence of global warming, including retreating glaciers, massive and persistent droughts, and record-setting temperatures, we have had more than sufficient warning that our nation cannot afford further delay in seriously addressing climate change. The United States must confront the threat of global warming by setting mandatory limits on the production of greenhouse gases that do not merely curb the intensity of carbon dioxide, methane, and other greenhouse gas emissions but actually reduce their levels significantly. To achieve these emission reductions while preserving economic prosperity, it is essential to both greatly improve the efficiency with which energy is used in every sector of the economy and to substantially and rapidly expand the percentage of energy produced from renewable energy sources. Research shows that aggressive pursuit of efficiency and renewables can reduce carbon emissions while improving, rather than harming, economic prosperity. To stimulate markets for efficiency and renewables, Congress should increase the efficiency and renewable tax incentives that were included in this year’s energy bill. We recommend that efficiency and renewable incentives be increased to the levels in the Senate version of the bill. Congress also needs to greatly increase longer-term research, development, and deployment funding for efficiency and renewables. The energy bill increases authorizations substantially — we recommend that Congress appropriate funds at these levels, beginning with the FY2006 appropriations bills. We further recommend that the Congress enact a Renewable Portfolio Standard to require that the nation’s power generators produce a substantial portion of their electricity from renewables sources. While the Senate approved an RPS provision calling for 10% renewables by 2020, we recommend that the level be no less than 20% by that date. Congress cannot afford to wait until the energy problems we are seeing in the wake of this month’s devastating hurricanes sink out economy, further damage our energy security and worsen the catastrophic effects of global warming. The time to act is now. About the authors… Bill Prindle is the Deputy Director of the American Council for an Energy Efficient Economy in Washington, DC. Ken Bossong is coordinator of the Sustainable Energy Coalition. His views are not necessarily those of the Sustainable Energy Coalition or its member groups.
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