As we continue our review of energy in the U.S., we now turn to the role of Energy Policy legislation and Executive Branch actions. In a previous lesson, we learned specifically about the role of deregulation and how it relates to renewable energy policy. But on a much broader scale, there have been several times in history when global and national events and conditions led to the creation of overarching energy policy legislation that had significant, cross-cutting impact on energy development and markets. There have been five major, relatively recent policies. In this lesson, we will review those policies and what the key impacts were for each. We will also touch on executive branch actions that have affected the marketplace.
Upon completion of this lesson, you will be able to:
Read | Lesson 10 content and all assigned readings |
---|---|
Discuss | Energy markets |
Write | 325 word (+/- 10%) essay |
We speak often of legislation and regulations, but the executive branch of government- the White House and federal agencies, also play a significant role in energy. For the purpose of this discussion, we consider the government not as the developer of legislation or implementer of law and regulation, but as an organization with energy-related impacts and demands. The U.S. government is one of the largest procurers of the energy in the world, and the single largest user and purchaser of energy in the U.S. The purchasing power of government to simply maintain its operations is large enough to affect and, to an extent, actually shape markets and pricing. Also, goals for improvement in energy performance can have a big impact on the overall energy use in the country.
One type of approach commonly used by the Federal government is the Executive Order (EO). An EO is a directive from the President to the Federal agencies and those entities under Executive Branch jurisdiction. An EO is not binding on the general public. However, EOs do impact the general population by the actions, or lack of actions, of Federal agencies in response to an EO. EOs do not have the force of law and remain in effect once issued until it is revised or revoked by the issuing President or a subsequent President. Congress can memorialize all or part of an EO into legislation, as happened with the energy efficient Federal buildings part of EO 13423 into the energy act of 2007 (see below). Once this happens, the EO or the portion memorialized now has the force of law and can only be changed or undone by Congress.
In the realm of energy, EOs are important in that they drive Federal use and procurement of energy which in turn affects the energy markets, in part because of the great use of energy by government operations.
Before we delve into what goals and commitments the Federal government has made over the years, let us explore how the U.S. government figures into national energy use.
Let us revisit the EIA Outlooks again to get a snapshot of energy use by the government. This short piece from 2019 gives you a good sense of how energy use has changed over the years and gives you an idea of which operations and agencies use the most.
EIA Outlook [1]
This resource by the Bureau of Transportation Statistics might provide more insight into specific fuel use by agency, which may give you a sense as to how agencies use energy.
Bureau of Transportation Statistics [2]
Now that we have a better use of how and how much energy is used by the government, let us explore how the government has addressed their energy usage over time. The best way to explore this is to review the various EOs in the past 20 years. EO 13423 issued in 2007 was the first one that consolidated the various environmental and energy goals of the government into a single, coordinated, and integrated sustainability strategy.
For the five main EOs (13423, 13514, 13693, 13834, and 14057), review the introduction sections, as well as the parts on scope and goals. Feel free to also read the more administrative sections that speak to roles and responsibilities and due dates, etc. if you find it interesting, but these sections are not required.
During the same periods of time when the EOs were being conceptualized and issued, Congress was busy developing pieces of legislation. Although there is no set interval for these actions, there have been some key events and conditions that led to the development of the legislation. Beginning with the 1978 act prompted by the severe Middle East oil crisis that resulted in long lines at the gas pumps, we see legislative actions attempting to solve a problem. We also see a pattern from the early acts to the later ones of first trying to address inherent flaws and weaknesses in our energy infrastructure, and then evolving into trying to further protect the consumer and incentivize more sustainable solutions such as renewable power and more fuel efficient and alternative fuel transportation.
Below are links to the key acts since 1975. For each, there is a summary of its key provisions and why they came to be. Also provided below are some useful links to read more about the legislation. If you are extra ambitious, links are also provided to the legislation itself. You do not have to read the acts themselves, but briefly scanning them will give you some good insight into how complex these pieces of legislation are. Also keep in mind that this Federal effort is superimposed on state level legislation and regulation. As the power sector became more deregulated at the Federal level, it forced the states to take on more responsibility, as we saw in the previous lesson.
Read the summaries below. In order to be able to follow along with the questions to guide your reading, you may wish to open some of the provided links.
Questions to guide your reading:
The primary goals of EPCA are to increase energy production and supply, reduce energy demand, provide energy efficiency, and give the executive branch additional powers to respond to disruptions in energy supply.
The Energy Conservation and Production Act of 1976 (P.L. 94–385) took the Energy Policy and Conservation Act of 1975 one step further by including incentives for conservation and renewable energy and providing loan guarantees for energy conservation in public and commercial buildings.
The National Energy Act (NEA) of 1978 was passed by the U.S. Congress in response to the energy crisis of the 1970s. It was designed to resolve a disjointed national energy policy and empower the United States with greater control of its national energy destiny. The NEA and its progeny established energy efficiency programs, tax incentives, tax disincentives, energy conservation programs, alternative fuel programs, and regulatory and market-based initiatives. Results of the NEA have been mixed. Most of the market-based initiatives have been retained, but many of the regulatory initiatives have since been abandoned.
The Energy Policy Act (EPAct) of 1992 (Public Law 102-486(PDF)) aims to reduce U.S. dependence on petroleum and improve air quality by addressing all aspects of energy supply and demand, including alternative fuels, renewable energy, and energy efficiency. EPAct 1992 encourages the use of alternative fuels through both regulatory and voluntary activities and approaches the U.S. Department of Energy (DOE) carries out. It requires federal, state, and alternative fuel provider fleets to acquire alternative fuel vehicles. EPAct 1992 also defines "alternative fuels" as: methanol, ethanol, and other alcohols; blends of 85% or more of alcohol with gasoline (E85); natural gas and liquid fuels domestically produced from natural gas; propane; hydrogen; electricity; biodiesel (B100); coal-derived liquid fuels; fuels, other than alcohol, derived from biological materials; and P-Series fuels, which were added to the definition in 1999. Under EPAct 1992, the US Department of Energy (DOE) has the authority to add more alternative fuels to the list of authorized alternative fuels if certain criteria are met. DOE's Clean Cities initiative was established in response to EPAct 1992 to implement voluntary alternative fuel vehicle deployment activities.
This act was intended to further promote coal, oil, and gas development, but also provided for incentives such as tax credits for renewables. This act also had several provisions for clean fuels and alternative fuel vehicles. Another key component was a continuing effort to address the public utilities’ issues with power generation. This included provisions to fix problems caused by earlier legislation that deregulated parts of the power generation sector.
Signed on December 19, 2007, the act aims to increase U.S. energy security, develop renewable energy production, and improve vehicle fuel economy. Additionally, the act strived to increase the production of clean renewable fuels; protect consumers; increase the efficiency of products, buildings, and vehicles; promote research on and deploy greenhouse gas capture and storage options; improve the energy performance of the Federal Government. Regarding the Federal government performance, the act memorialized as law portions of Executive Order 13423.
Overall, this bill continues the pattern seen throughout the development of legislation of increasing renewables, providing for more energy security by promoting domestic oil, gas, and coal production, and ensuring more reliable and affordable energy. This bill amends the Energy Conservation and Production Act, the Energy Policy and Conservation Act (EPCA), and the Energy Independence and Security Act of 2007 with respect to energy efficiency in buildings and appliances.
The Energy Act modernizes and refocuses the Department of Energy’s research and development programs on the most pressing technology challenges — scaling up clean energy technologies like advanced nuclear, long-duration energy storage, carbon capture, and enhanced geothermal. Crucially, across all of these technologies, DOE is now empowered to launch the most aggressive commercial scale technology demonstration program in U.S. history. The bill sets up a moonshot of more than 20 full commercial scale demos by the mid-2020s.
The Inflation Reduction Act (IRA), which was signed into law in August 2022, will cut Americans’ energy costs, create good jobs and transform U.S. efforts to address the climate crisis. It is the largest single step that Congress has ever taken to address climate change. The IRA includes nearly $370 bilion in investments in disadvantaged communities, prioritizing projects that repurpose retired fossil fuel infrastructure and employ displaced workers, setting the U.S. on a course toward a fair, equitable and economic clean energy transition.
In this lesson we learned about energy policy in the U.S. and the role of deregulation in renewable energy policy. In this assignment, you will draft a summary discussing key aspects of these policies.
This assignment will help you practice synthesizing your knowledge and presenting a concise written summary of key principles relating to energy generation and the four factors.
For this lesson’s assignment, imagine you are an expert providing consultation to the Congress in developing the “EGEE 401 Energy Policy Act of 2023.” You are tasked with writing the summary section identifying key provisions of the act. In 325 words (plus or minus 10%), write this summary, with an opening statement of the overall intent of the act, and continue with statements or bulleted points of the key provisions. For example, what would you say about power generation and the grid? Renewable energy? Climate change? Coal, oil, and gas? As part of your introduction, comment on key aspects of earlier legislation that informed your approach. In your essay, include something for about how your new legislation will support accessibility, security, reliability, and/or sustainability. You might want to review the most recent entry above (Energy Act of 2020) for some hints!
Links
[1] https://www.eia.gov/todayinenergy/detail.php?id=40192
[2] https://www.bts.gov/content/us-government-energy-consumption-agency-and-source-0
[3] https://www.govinfo.gov/content/pkg/STATUTE-89/pdf/STATUTE-89-Pg871.pdf
[4] https://www.congress.gov/bill/94th-congress/house-bill/6860
[5] https://www.energy.gov/sites/prod/files/FEA%20History.pdf
[6] https://what-when-how.com/energy-engineering/national-energy-act-of-1978/
[7] https://afdc.energy.gov/laws/key_legislation#epact92
[8] https://www.congress.gov/bill/102nd-congress/house-bill/776
[9] https://www.congress.gov/bill/109th-congress/house-bill/6
[10] https://cms.ferc.gov/sites/default/files/2020-04/epact-fact-sheet.pdf
[11] https://www.energy.senate.gov/services/files/36ED1777-1CED-4FBD-AC03-0FCC685F8E49
[12] https://www.congress.gov/bill/110th-congress/house-bill/6
[13] https://www.epa.gov/greeningepa/energy-independence-and-security-act-2007
[14] https://www.epa.gov/laws-regulations/summary-energy-independence-and-security-act
[15] https://www.energy.senate.gov/2015/7/the-energy-policy-modernization-act-of-2015
[16] https://www.ase.org/resources/energy-policy-modernization-act-2015
[17] https://www.energy.senate.gov/services/files/32B4E9F4-F13A-44F6-A0CA-E10B3392D47A
[18] https://www.whitehouse.gov/briefing-room/presidential-actions/2021/12/08/executive-order-on-catalyzing-clean-energy-industries-and-jobs-through-federal-sustainability/
[19] http://www.whitehouse.gov/briefing-room/presidential-actions/2021/12/08/executive-order-on-catalyzing-clean-energy-industries-and-jobs-through-federal-sustainability/
[20] https://www.wri.org/update/brief-summary-climate-and-energy-provisions-inflation-reduction-act-2022