New U.S. Energy Law Promises Efficiency, Savings and Fewer Greenhouse Gases

President Bush today signed into law a new energy bill that achieves more than any energy legislation in recent history, but less than the version first passed by the U.S. House of Representatives earlier this month.

The compromise version of the Energy Independence and Security Act of 2007 (HR 6), which was approved by the Senate last week and passed by the House yesterday, boosts the fuel-economy standards for cars and light trucks to 35 miles per gallon by 2020—the first such increase since 1975—and mandates using 36 billion gallons of homegrown biofuels such as ethanol by 2022.
_{Photo by Susan Marton}

Increased Fuel-Economy Standards to Save Oil and Money
The increase in fuel-economy standards alone is expected to save consumers $22 billion in 2020—up to $1,000 annually in gasoline prices for each American family—and reduce U.S. oil consumption by 1.1 million barrels per day in 2020 – half of what we currently import from the Persian Gulf. The new standards also will cut greenhouse gas emissions as much as taking 28 million of today’s cars off the road.

"This bill is a huge Christmas present to the hardworking American families suffering under record high energy prices,” said Sierra Club Executive Director Carl Pope. “It will offer them over $20 billion in relief at the pump and some $400 billion in additional savings through greener buildings, more efficient appliances, and better light bulbs. It will also help us begin fueling our cars with greener fuels from the Midwest instead of expensive imported oil from the Middle East. And as it becomes ever clearer that urgent action is needed to combat global warming, this bill will make real progress by achieving a quarter of the cuts we need by 2030 if we are to avert the most catastrophic effects of a warming climate.”

The new energy law also:

• Calls for phasing out inefficient lighting products and improving the efficiency of other home appliances such as dishwashers, clothes washers, refrigerators and freezers;
• Encourages development of commercial buildings that produce as much energy as they use;
• Requires federal agencies to reduce their energy use;
• Institutes programs to train workers for 3 million green collar jobs over the next 10 years; and
• Permanently authorizes Energy Savings Performance Contracts (ESPCs), an innovative financing tool for upgrading the energy efficiency of federal buildings.

The Politics of Energy Efficiency
Getting the bill through Congress was a tough battle. The version passed by the House on December 6 was blocked the next day in the Senate when a small group of Republican senators mounted a filibuster to keep the legislation from coming to a vote. Efforts to end the filibuster failed by just one vote, but supporters of the bill were finally forced to accept a scaled-down version that would pass both houses of Congress and avoid a presidential veto.

One of the provisions dropped from the bill in exchange for passage was a measure that would have required public utilities to get 15 percent of their energy from renewable energy sources, such as wind and solar power. Another dropped provision would have ended billions of dollars in tax breaks and subsidies for the oil and gas industry, and would have reinvested that money in renewable energy research and development. President Bush had threatened to veto the bill if it eliminated tax breaks and subsidies for oil and gas companies.

The new law authorizes a Commercial Building Initiative (CBI), which combines research and development to create and deploy new commercial buildings that would use energy efficiency and clean energy sources to produce zero greenhouse gas emissions.

“With commercial buildings accounting for 18 percent of the nation’s total energy use and about 45 percent of the nation’s energy use by buildings, ensuring that new commercial construction produces ‘zero-energy’ buildings would be a huge step forward,” said Kateri Callahan, president of Alliance to Save Energy.

Full Benefits Require Full Funding
Yet, while getting the bill passed and signed into law is a significant achievement, it is only half the battle. The rest comes down to money. For the American people to realize the energy gains promised by the new law, Congress and the president must fully fund the energy-efficiency programs it authorizes.

“Without further action, we will not realize fully the energy and money savings this bill promises the American people,” Callahan said. “For example, full funding of the CBI could reduce commercial building energy use by 25 percent below current levels. But without such funds we likely will forego these significant savings.”