Addressing the Hard Truths About Energy

Chairman Jeff Bingaman (D-NM)

National Petroleum Council Report

July 18, 2007

In 2005, at the request of Energy Secretary Bodman, the National Petroleum Council started studying the future of oil and natural gas to the year 2030. (The council is a federal advisory committee to the Secretary, and its members are mainly oil and gas industry executives.) The group’s final report, Facing the Hard Truths about Energy, was released today. Here is Sen. Bingaman’s reaction:

“This report underscores the urgency for America to move faster and go farther to secure its energy future. I agree with its conclusion that greater energy efficiency is required throughout all sectors of our economy. I also am pleased that the study recognizes the need to boost science and engineering and create long-term opportunities for R&D in all phases of the global energy system. The Senate faced and addressed those ‘hard truths’ in the energy bill (HR.6) it passed last month, and in the America COMPETES Act (S.761) that currently is being conferenced. Building a cleaner and more energy self-reliant future is a grand challenge for our country and I hope this study energizes us to keep making progress toward that important goal.”

The NPC proposed five core strategies to help the United States meet the energy challenges identified in its report. Fortunately, through legislation, Congress recently already addressed these recommendations; even more legislation that will move America further down the path to energy self-reliance is pending final action:

Moderate the growing demand for energy by increasing efficiency of transportation, residential, commercial, and industrial uses.

The Senate-passed version of H.R. 6 makes substantial strides in improving energy efficiency throughout the economy, including:

The first increase in fuel economy standards in more than 20 years, which is estimated to save up to 2.5 million barrels of oil per day, and save consumers $79-98 billion at the pump, based on a $3.00 gas price.

A variety of measures designed to promote improved efficiency for buildings, appliances, and lighting, estimated to save at least 50 billion kilowatt hours per year, or enough to power roughly 4.8 million typical U.S. households. The legislation’s measures would also save 17 trillion BTUs of natural gas per year, or enough to heat about a quarter-million typical U.S. homes. And it will conserve at least 560 million gallons of water per day -- or 1.3 percent of daily potable water usage across the nation.

Improve the efficiency of the federal government itself, requiring a 20 percent reduction in petroleum consumption by 2015. It also requires a 30 percent reduction in energy use in federal buildings over the same period -- enough to save 60 trillion BTUs of energy and almost $4 billion in taxpayers’ money.

Expand and diversify production from clean coal, nuclear, biomass, other renewables, and unconventional oil and gas; moderate the decline of conventional domestic oil and gas production; and increase access for development of new resources.

The Senate-passed version of H.R. 6 would dramatically increase the amount of biofuels in U.S. markets, tripling the amount of domestic renewable fuel content by 2022 -- equivalent to about a million barrels a day in petroleum savings. The measure also provides significant incentives for the development of advanced biofuels from non-traditional feedstocks beyond corn starch, which predominates today’s market.

During consideration of H.R. 6, the Senate also debated a number of relevant proposals that may once again be taken up later in the 110^th Congress, including:

A proposal to establish a national Renewable Electricity Standard, which would require 15 percent of domestic electricity to come from sources such as solar, geothermal, biomass and wind power.

A bipartisan initiative to jump-start the development of advanced geothermal energy resources.

Measures to promote additional clean coal research, development and deployment, premised on effective carbon capture and storage.

A set of tax incentives designed to promote wider adoption of -- and U.S. leadership in -- renewables, energy efficiency and advanced technology vehicles.

With regards to increasing domestic oil and gas supplies, just last December President Bush signed into law the bipartisan Gulf of Mexico Energy Security Act, which opened up an additional 8.3 million acres for oil and gas leasing.

Integrate energy policy into trade, economic, environmental, security, and foreign policies; strengthen global energy trade and investment; and broaden dialogue with both producing and consuming nations to improve global energy security.

The Senate-passed version of laid out a series of initiatives to integrate energy policy into the foreign policy of the United States. This included a direction to the President to work with foreign governments, particularly governments with high or rapidly growing energy consumption, to establish strategic energy partnerships and crisis response mechanisms. It called on the President to establish a regional-based ministerial Hemisphere Energy Response Forum to develop and implement energy crisis sustainability, and development initiatives. The bill also provides for the development and coordination of a comprehensive and integrated research program that assists the people of the United States and the world to understand, assess, and predict human-induced and natural processes of abrupt climate change.

In addition to pending legislation, a bipartisan group of Senators -- including Chairmen Bingaman, other members of the ENR and the chairmen of the Finance, Foreign Relations and Homeland Security committees -- earlier this spring called on the Bush Administration to hold an energy summit with China as soon as this year, citing global climate change concerns, China's potential as a strong market for new U.S. energy technologies.

Enhance science and engineering capabilities and create long-term opportunities for research and development in all phases of the energy supply and demand system.

The America COMPETES Act (S.761), currently in conference with the House, would increase research investment across federal agencies involved in energy supply and demand, including a doubling of funds for the National Science Foundation and Department of Energy’s Office of Science; strengthen educational opportunities in science, technology, engineering, math and foreign languages; and further enhance America’s innovation infrastructure. In addition, provisions in the Senate’s H.R. 6 would further enhance the Department of Energy’s existing workforce training programs, and create a national energy efficiency and renewable energy worker training program.

Develop the legal and regulatory framework to enable carbon capture and sequestration (CCS). In addition, as policymakers consider options to reduce CO₂ emissions, provide an effective, global framework for carbon management, including establishment of a transparent, predictable, economy-wide cost for CO₂ emissions.

The Senate-passed version of H.R. 6 lays the groundwork for U.S. leadership in groundbreaking research on carbon capture and sequestration -- a technology key to realizing the promise of clean coal, as power plants account for about one-third of U.S. carbon dioxide emissions from fossil fuels. The legislation expands and improves the Department of Energy’s existing research in this area, and requires a national assessment of capacity to sequester carbon. Chairman Bingaman and Sen. Specter, along with a bipartisan group of their colleagues, have introduced global warming legislation (S.1766) designed to bring market forces to bear on solving the climate crisis by putting in place a cap-and-trade program for carbon emissions, spurring the development of new energy technologies and tackling important climate adaptation issues.

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