From
Wikipedia, the free encyclopedia
[edit]
Provisions
The Act was intended to establish a comprehensive, long-range energy policy.
It provides incentives for traditional energy production as well as newer,
more efficient energy technologies, and conservation. More than 1,700 pages
long, the Act has hundreds of provisions. Major items include the following:
 |
Provides
a Commercial Building Deduction for energy efficient building
improvements; |
|
Provides
a tax
credit of up to $3,400 for owners of hybrid
vehicles; |
|
Provides
for $1.65 billion in tax credits for clean
coal projects; [1] |
|
Authorizes
loan guarantees for "innovative technologies" that avoid greenhouse
gases, which might include advanced nuclear
reactor designs (such as PBMR)
as well as clean coal and renewable
energy; |
|
Increases
the amount of biofuel (usually ethanol)
that must be mixed with gasoline sold in the United States to triple the
current requirement (7.5 billion gallons by 2012); |
|
Seeks
to increase coal as an energy source while also reducing air pollution,
through authorizing $200 million annually for clean coal initiatives,
repealing the current 160-acre cap on coal leases, allowing the advanced
payment of royalties from coal mines and requiring an assessment of coal
resources on federal lands that are not national parks; |
|
Authorizes
subsidies for wind
energy, and other alternative
energy producers; |
|
Adds
ocean energy sources including wave
power and tidal
power for the first time as separately identified renewable
technologies; |
|
Authorizes
$50 million annually over the life of the bill for a biomass grant
program; |
|
Contains
several provisions aimed at making geothermal
energy more competitive with fossil fuels in generating electricity; |
|
Requires
the U.S.
Department of Energy to study and report on existing natural energy
resources including wind, solar, waves and tides; |
|
Requires
the U.S.
Department of Energy to study and report on national benefits of demand
response and make a recommendation on achieving specific levels of
benefits and encourages time-based
pricing and other forms of demand response as a policy decision; |
|
Provides
tax breaks for those making energy
conservation improvements to their homes; |
|
Provides
incentives to companies drilling for oil in the Gulf of Mexico |
|
Exempts
oil and gas producers from certain requirements of the Safe
Drinking Water Act |
|
Extends
Daylight
Saving Time by approximately four weeks (see
below); |
|
Requires
that no drilling for gas or oil may be done in or underneath the Great
Lakes; |
|
Requires
that Federal Fleet vehicles capable of operating on alternative fuels be
operated on these fuels exclusively (Section 701.) |
|
Sets
federal reliability standards regulating the electrical grid (done in
response to the Blackout
of 2003); |
|
Nuclear-specific
provisions:[2] |
 |
Extends
the Price-Anderson
Nuclear Industries Indemnity Act through 2025; |
|
Authorizes
cost-overrun support of up to $2 billion total for up to six new nuclear
power plants; |
|
Authorizes
a production tax credit of up to $125 million total per year, estimated
at 1.8 US¢/kWh during the first eight years of operation for the first
6.000 MW of capacity[3] ;
consistent with renewables; |
|
Authorizes
$1.25 billion for the Department of Energy to build a nuclear reactor to
generate both electricity and hydrogen; |
|
Allows
nuclear plant employees and certain contractors to carry firearms; |
|
Prohibits
the sale, export or transfer of nuclear materials and "sensitive
nuclear technology" to any state sponsor of terrorist activities; |
|
Updates
tax treatment of decommissioning funds; |
|
A
provision for the Department of Energy to report in one year on how to
dispose of high-level nuclear waste; |
In Congressional bills an "authorization" of a discretionary program
is a permission to spend money, while an
"appropriation"
is the actual decision to spend it; none of the authorizations above will mean
anything if the money is never appropriated.
[edit]
Provisions in the original bill that were not in the
act
[edit]
Tax reductions by subject area
|
$4.3
Billion for nuclear
power[4] |
|
$2.8
billion for fossil fuel production |
|
$2.7
billion to extend the renewable electricity production credit |
|
$1.6
billion in tax incentives for investments in clean
coal facilities |
|
$1.3
billion for conservation and energy efficiency |
|
$1.3
billion for alternative motor vehicles and fuels (ethanol, methane,
liquified natural gas, propane) |
[edit]
Congressional Budget Office (CBO) cost estimate
The
Congressional
Budget Office review of the conference version of the bill estimated the
Act will increase direct spending by $1.6 billion, and reduce revenue by $12.3
billion between 2006 and 2015. The CBO noted that the bill could have
additional effects on discretionary spending, but did not attempt to estimate
those effects.
[edit]
Change to daylight saving time
The bill amends the
Uniform
Time Act of 1966 by changing the start and end dates of
daylight
saving time starting in 2007. Clocks will be set ahead one hour on the
second Sunday of March (March 11, 2007) instead of the current first Sunday of
April (April 1, 2007). Clocks will be set back one hour on the first Sunday in
November (November 4, 2007), rather than the last Sunday of October (October
28, 2007). This will make electronic clocks that had pre-programmed dates for
adjusting to daylight saving time obsolete and will require updates to
computer operating systems.
[citation
needed] The date for the end of daylight saving time has
the effect of increasing evening light on
Halloween
(October 31). This section of the act is controversial, primarily because
there is doubt if daylight savings actually results in a net energy savings.
[citation
needed] The additional effort of changing quite possibly
billions of clocks on embedded systems as well as enterprise servers may cause
significant impact to the productivity of any country that adopts these
changes.
[citation
needed]
[edit]
Commercial Building Deduction
The Act contains provisions for commercial buildings that make improvements to
their energy systems.
Energy improvements completed in 2006 and 2007 are eligible for tax deductions
of as much as $1.80 per square foot.
The incentives focus on improvements to lighting, HVAC and building envelope.
Improvements are compared to a baseline of ASHRAE 2001 standards. ==
Many buildings are eligible for tax deductions for improvements completed or
planned within the normal course of business, and can thus "free
ride" for the new incentives.
Achievement of these benefits requires cooperation between the
facilities/energy division of a business and its tax department. A tax advisor
with engineers on staff may serve as a bridge between these two historically
separate business divisions.
For municipal buildings, benefits are passed through to the primary
designers/architects in an attempt to encourage innovative municipal design.
These benefits emanate from the Department of Energy's desire to make all
buildings "zero energy" within 20 years.
[edit]
Energy Management
The commercial building tax deductions can be used to improve the payback
period of a prospective energy improvement investment.
Often the deductions are combined with participation in demand response
programs where buildings agree to curtail usage at peak times for a premium.
The most common qualifying projects are in the lighting area. Industrial
spaces such as Manufacturing, Warehouse and Distribution Centers are typically
lit with 400W Metal Halide fixtures. These fixtures are commonly being
upgraded with Hi-Bay Fluorescent fixtures that can cut energy use in half as
well as qualify the building for tax deductions. In the Northeast paybacks for
this project can get below one year.
[edit]
Criticisms
|
The
Washington
Post contended that the spending bill is really a broad collection
of subsidies for United States energy companies; in particular, the
nuclear and oil industries.[5] |
|
Texas
companies in particular benefit from the bill. This criticism is
heightened by the fact that President George
W. Bush, the House
Majority Leader (Tom DeLay), and the Chairman of the House
Energy & Commerce Committee (Joe
Barton) were all from Texas. |
|
A Philadelphia
Inquirer editorial on July
28, 2005,
suggested Congress had a "let's pass it and claim we did
something" attitude. |
|
Even
supporters of the bill concede that the bill will do little to lower oil
prices immediately, and that any changes the bill has enacted will not
happen overnight. |
|
Speaking
for the National
Republicans for Environmental Protection Association, President Martha
Marks said that the organization was disappointed in the bill: it did not
give enough of a short to conservation, and continued to subsidize the
well-established oil and gas industries that don't require subsidizing.[6] |
|
The
bill has had the unintended effect of causing shortages of E85,
an ethanol and gasoline blend of fuel, in many parts of the country.
Section 701 of the bill requires US Federal fleet flex-fuel vehicles (FFVs)
to operate on alternative fuels 100% of the time. Formerly, such FFVs were
required to be operated by the end of 2005 on alternative fuels only 51%
(i.e., the majority of the time) by Executive
Order 13149.[7].
This effectively means that the US Government's use of E85 has been
doubled, with the unintended results of limiting public availability of
E85 fuel and increasing its price. Although the price of corn has not
changed, from which ethanol fuel is derived, the shortage has removed the
price incentive to switch to alternative fuel. |
|
The
bill did not include provisions for drilling in the Arctic National
Wildlife Refuge (ANWR) even though some Republicans claim "access to
the abundant oil reserves in ANWR would strengthen America's energy
independence without harming the environment.[8]
This claim, however, has been debunked by actual scientific and oil
industry experts.[9]
[10] |
[edit]
Legislative history
The Act was voted on and passed twice by the
Senate,
once prior to
conference
committee, and once after. In both cases, there were numerous
senators
who voted against the
bill.
Below is a list of only those
states
that did not have both senators voting for the bill. All other senators voted
Yes.
[edit]
Analysis
"No" votes came from the northeast states of
Connecticut,
Delaware,
Maryland,
Massachusetts,
New
Hampshire,
New
Jersey,
New
York,
Rhode
Island and
Vermont.
In the southwest, senators from
Arizona
and
Nevada
voted against the bill. On the Pacific Coast, senators from
California,
Oregon
and
Washington
voted against. Both senators from
Florida
opposed the bill.
Both senators from Connecticut changed their votes from Not Voting, to No.
Of all sixteen states with at least one senator that voted no, only one of
these had anyone on the conference committee. Not only was senator
Ron
Wyden the only senator from these states on the conference committee, he
was also the only senator on the conference committee to vote against the
bill's final passage.
[edit]
Senator Wyden's Objections
Senator
Ron
Wyden (D-
Oregon)
spoke in opposition to the bill including references to the occupation of Iraq
and serious flaws in the policy of the energy bill.
[11]
- "Our dependence on foreign oil will not be reduced as a result of
this legislation. As a result, we have not reduced the prospect of going to
war once again in the Persian
Gulf in the next decade."
The Senator referred to the relationship between the energy bill and fighters
in terrorism.
- "the Senate is about to pass a pre-9/11 energy policy. After 9/11, it
became clear that energy policy was a national security issue and that
reducing our dependence on foreign oil had to be a national security
priority. That hasn't been done."
- "So today Americans continue to pay what I call a terror tax--the
price we pay in insecurity for our dependence on foreign oil. I call it a
terror tax because when each of us pulls up to the corner gasoline station
and pays $2.40 a gallon, or so, for gasoline, a portion of that money goes
to foreign
governments that in turn send it out the back door to Islamist
extremists who use the money to perpetuate hate and terrorist
acts."
"This legislation does virtually nothing to reduce our dependence on
foreign oil."
Wyden offered an amendment during the conference committee to increase the
automobile efficiency standards by 1 mile per gallon for 5 years in a row,
offering that this would decrease demand for foreign oil. This amendment was
not accepted despite evidence that this was easily in reach of the industry.
Referring to unnecessary subsidies, Wyden quotes the President as saying,
"when oil is trading at upwards of $55 a barrel, the oil companies are
not in need of any more incentives."
The senator concluded by saying:
- "the most patriotic thing this Congress could have done in the summer
of 2005 was to write an energy bill that did three specific things: reduce
our dependence on foreign oil, lower gasoline prices for working families
and businesses, and end the energy subsidy smorgasbord that has offered
these heaping helpings of taxpayer dollars to the energy industry for
decades."
- "I am sad to say, as one who was involved in this from the outset as
a member of the committee and the conference committee, that the final
product does not accomplish any of those three things. It doesn't reduce our
dependence on foreign oil. Nobody has to take my word for it. That has been
on the front pages of the papers all this week. It doesn't lower gasoline
prices. And, again, you don't have to take my word for it. The President has
already stated that. It doesn't end the subsidy buffet for the big energy
interests, and you won't have to take my word for that either. You are going
to hear those special interests breaking out the champagne bottles all over
town in the next few days."
Wyden was the only member of the conference committee to vote against the
bill.
[edit]
Senator Clinton's Objections
Senator
Hillary
Clinton's vote was notable because it changed from
Yes on the first
vote, to
No on the final vote.
[12]
In the
Congressional
Record, she points out various failings of the bill, and repeatedly
mentions that the bill will do nothing to reduce dependency on foreign oil.
She said "I oppose the bill for two reasons. First, it contains a number
of highly objectionable provisions. Second, it simply ignores several of our
most pressing energy challenges, such as our dependence on foreign oil."
The Senator cited problems in the bill including:
|
"billions
in subsidies
for mature energy industries, including oil and nuclear power" |
|
"exempt[s]
hydraulic fracturing from coverage under the Safe
Drinking Water Act" |
|
"exempt[s]
oil and gas construction sites from stormwater runoff regulations under
the Clean
Water Act" |
|
"accelerates
the siting procedures for liquid natural gas terminals and weakens the
State role in the process" |
|
removes
moratorium on oil
drilling off most of the U.S. coast by authorizing an inventory of oil
and gas resources there |
Senator Clinton objected to the following items being removed in conference
committee or omitted from the bill:
|
"a
provision that would reduce U.S. oil
consumption by 1 million barrels of oil per day by 2015" |
|
"a
modest provision to increase the percentage of electricity generated from renewable
sources to 10 percent by the year 2020" |
|
"a
mandatory program to start reducing the greenhouse
gas emissions that are contributing to climate
change" |
Senator Clinton concluded by saying,
- "I see a major missed opportunity. By the President's own admission,
this bill won't do anything to reduce gasoline
prices, but we know for a fact that it will give billions in tax breaks
to companies like Exxon
Mobil. It doesn't do nearly enough to push the development and
commercialization of clean, next-generation energy technologies, but it
gives huge tax
breaks to nuclear power, a technology that has been with us for 50
years. And given what we now know about the looming threat of climate
change, it makes no sense to make energy policy without integrating a
cost-effective strategy to reduce greenhouse
gas emissions. But that is exactly what this bill does."
Boy,
am I ever about to give you a great excuse to miss a few appointments! This
year Daylight
Saving Time has been re-jiggered on the calendar in order to help
save energy, but PC and consumer devices don't all know about the change.
