The Energy Policy Act of 2005 (Pub.L.
109-058) is a
statute that was passed by the
United States Congress on
July 29,
2005 and signed
into law by
President
George W. Bush on
August 8,
2005 at
Sandia National Laboratories in
Albuquerque, New Mexico. The Act, described by proponents as an attempt to
combat growing energy problems, provides tax incentives and loan guarantees
for energy production of various types.
-
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:[1]
-
-
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[2] ;
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 U.S. 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.
-
$4.3 Billion for
nuclear power[3]
-
$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)
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.
-
Further information:
Time in the United States
The bill amends the
Uniform Time Act of 1966 by changing the start and end dates of
daylight saving time from 2007. Clocks were set ahead one hour on the
second Sunday of March (March
11, 2007)
instead of the 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).
Lobbyists for this provision included the Sporting Goods Manufacturers
Association, the
National Association of Convenience Stores, and the National Retinitis
Pigmentosa Foundation Fighting Blindness; lobbyists against included the
U.S. Conference of Catholic Bishops, the
United Synagogue of Conservative Judaism, the National
Parent-Teacher Association, the Calendaring and Scheduling Consortium, the
Edison Electric Institute, and the
Air Transport Association.[4]
This section of the act is controversial; some doubt exists as to whether
daylight saving results in a net energy saving.[5]
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.
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.
-
The
Washington Post contended that the spending bill is a broad
collection of subsidies for United States energy companies; in particular,
the nuclear and oil industries.[6]
-
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. The fact that the bill passed 66-29 with
wide support from Democrats for the bill has not calmed this criticism.
-
A
Philadelphia Inquirer editorial on
July 28,
2005, suggested
Congress had a "let's pass it and claim we did something" attitude.
-
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.[7]
-
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.[8].
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."[9]
This claim, however, has been rebuffed by scientific and oil industry
experts.[10]
[11]
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.
"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.
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.[12]
-
"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 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.
Senator
Hillary Clinton's vote was notable because it changed from Yes on
the first vote, to No on the final vote.[13]
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."
Senator Clinton's source for these findings
and calculations is the Energy Policy Act of 2005.
June 28,
2005, 10:00 AM
Yeas - 85, Nays - 12
The conference committee, including 14
senators and 51 house members. The senators on the committee were: Republicans
Domenici, Craig, Thomas, Alexander, Murkowski, Burr, Grassley and Democrats
Bingaman, Akaka, Dorgan, Wyden, Johnson, and Bacus.
July 29,
2005, 12:50 PM[14]
Yeas - 74, Nays - 26
Legislative
History
|
Stage |
House of Representatives |
Senate |
|
Initial Debate |
|
Introduction |
April 18, 2005 |
June 9 |
|
Committed |
April 18 |
June 14 |
|
Committee Name(s) |
Energy and Commerce
Education and the Workforce
Financial Services
Agriculture
Resources
Science
Ways and Means
Transportation and Infrastructure |
|
|
Committee Stage |
April 18 to 19 |
|
|
Committee Report |
April 19 |
|
|
Floor Debate |
April 19 to 21 |
June 14 to 23
Cloture invoked June 23,
[15] |
|
Passage |
April 21,
[16] |
June 28,
[17] |
|
Conference Stage |
|
Conference Demanded/Accepted |
July 13 |
July 1 |
|
Conference Meetings |
July 14 to 24 |
|
Report Filed |
July 27 |
|
Final Passage |
|
Final Debate |
July 28 |
July 28 to 29
Budget Act waived, July 29,
[18] |
|
Concurrence and Passage |
July 28,
[19] |
July 29,
[20] |
|
Presented to President |
August 4 |
|
Signed |
August 8 |
-
nei.org,
nei.org
-
UtiliPoint
Issue Alert: New Nuclear Plants Coming to the United States?, January
17, 2007
-
Detailed
2005 breakdown nei.org -
PDF, 29kB)
-
Alex
Beam. "Dim-witted
proposal for daylight time", Boston Globe, 2005-07-26.
-
Ryan
Kellogg; Hendrik Wolff (2007-01). "Does
extending daylight saving time save energy? Evidence from an Australian
experiment". CSEM WP 163. University of California Energy Institute.
-
Washington
Post
-
MSNBC
-
Executive
Order 13149, at the U.S. Dept. of Energy,
April 21,
2000
-
nationalcenter.org
-
[1]
-
[2]Energy
Information Administration: Annual Energy Outlook 2006
-
Senate
Record
-
Congressional
Record
-
Votes
from all Senators
-
92-4
senate.gov
-
249-183
clerk.house.gov
-
85-12
senate.gov
-
71-29
senate.gov
-
275-156
clerk.house.gov
-
74-26
senate.gov
