House Climate Bill Wouldn’t Cut U.S. Oil Dependence Much

Climate Bill Wouldn’t Cut U.S. Oil Dependence Much
By Renee Schoof
McClatchy Newspapers
July 3, 2009

WASHINGTON — Despite its title as the “American Clean Energy and Security Act,” the energy and climate bill that the House of Representatives passed recently takes only a modest step toward reducing U.S. dependence on foreign oil.

Two studies project that the legislation would cut oil use in the future, but not enough to make much of a dent in dependence on oil from unstable or unfriendly foreign suppliers. Some experts say that other steps will be needed to cut U.S. oil use significantly.

The nonprofit American Council for an Energy-Efficient Economy examined the bill’s efficiency provisions and concluded that they would save 1.4 million barrels of oil per day in 2030. That’s roughly 10% of the projected use of 14.3 million barrels a day in that year, according to the government’s Energy Information Administration.

The Environmental Protection Agency put the oil savings at 700,000 barrels a day by 2030. The EPA looked mainly at the bill’s terms that would put a declining cap on the amount of emissions of heat-trapping gases allowed each year and create a pollution-permit trading system.

EPA’s analysis showed only a modest decrease because the bill would have little impact on the price of gasoline — and thus little impact on people’s driving behavior and choice of cars. EPA estimated that gasoline prices would go up about 25 cents a gallon in 2030 as a result of the bill.

EPA also projected that U.S. oil use would hold fairly steady from now to 2050.

The House-passed climate legislation focuses primarily on electricity generation. Its backers said they sought the quickest and cheapest ways to bring down U.S. emissions to 83% below 2005 levels by 2050.

U.S. electricity generation is half from coal and the rest mostly from nuclear energy, hydro and renewable energy. Only about 2% is from oil.

House Speaker Nancy Pelosi’s office said that the bill, when combined with the 2007 energy bill and the president’s fuel efficiency plan, would cut the use of oil by 5 million barrels a day in 2030.

The Rocky Mountain Institute, a nonprofit energy policy center, has argued that the climate bill would help establish clean sources of electricity, but wouldn’t solve the problem of U.S. oil dependence.

Amory Lovins, an energy expert who leads RMI, said he didn’t object to the House bill’s focus on climate, but he argued that other policies are needed to break dependence on oil. And a reduction of oil use would sharply reduce greenhouse gas emissions, he added.

“We just want to make sure the policy apparatus can walk and chew gum at the same time — that by focusing on climate, which is an urgent issue, it does not delay similarly urgent consideration of breaking oil dependence,” he said.

Lovins argues that energy efficiency and greater use of natural gas and biofuels not related to food could displace much U.S. oil use.

A move away from oil could be sped up with policies like “feebates” for cars: People who buy inefficient cars would pay a fee, and those who buy more efficient ones would get a rebate. Lovins said such a program in France has been a “stunning success” in getting people to buy fuel-efficient cars.

The Obama administration has shifted U.S. energy policy’s emphasis to efficiency and renewable energy “to a much greater extent than we’ve seen previously,” Lovins added. “I think that ultimately will bear fruit for getting us off oil as well as reducing carbon emissions. But this does take a more specific focus on oil dependence than what we’ve gotten in the climate bill.”

A gathering of energy, security and environmental experts brought together by RMI and the Brookings Institution in December produced some consensus ideas for how to cut U.S. oil use.

They said that the United States should reduce the use of cars through increased funding for public transit and other measures; increase the fuel-efficiency of cars; reduce the amount of fuel needed to move freight; and encourage development of alternative sources of energy for transportation.

Anne Korin of Set America Free, an alliance that promotes ways to reduce dependence on foreign oil, argued that the climate bill does very little to increase energy security. She argues that Congress should require all new cars to be equipped to run on ethanol as a way to help break the near total dependence of U.S. transportation on oil.

A recent report by Environment America, an advocacy group, tallied the costs of continued U.S. dependence on oil and other fossil fuels.

The report, based on an analysis of government energy data, found that by 2030, the United States is expected to spend $360 billion more per year on fossil fuels than the $921 billion it spent in 2006. If oil prices rise, the spending increase could soar to $750 billion more per year, the group estimated.

More than 70% of fossil fuel spending each year is for oil, and oil prices are expected to rise much more than coal prices.

“The United States cannot afford to wait to break our dependence on fossil fuels,” the report concluded. “The cost of fossil fuels to our economy and our environment will continue to mount in the years to come unless the nation takes bold steps now to embrace the benefits of a clean energy future.”