Reports from Cheney task force and national labs present sharply different visions of U.S. energy future
The long-awaited and much-discounted National Energy Policy report, issued on 16 May by a task force headed by Vice President Dick Cheney, was not the one-dimensional document critics and adversaries of the Bush administration eagerly awaited. Much of the criticism since release of the report would seem, in fact, to reflect more what people expected to read than what is actually in the report.
For this reason alone, IEEE Spectrum sees fit to excerpt the report ["A National Energy Policy"], so that readers may judge for themselves. In addition, for a contrasting view, Spectrum is excerpting a report prepared by researchers at several national laboratories and released last November, which presents quite a different outlook on the role fossil fuels need play in the country's energy future ["Clean Energy Scenarios"].
Prior to the release of the Cheney task force's report, environmentalists expected to hear nothing but "drill, drill, drill." But the report acknowledges the savings produced by improved energy technologies over the last three decades, which, with rising incomes, have resulted in U.S. residents paying a smaller proportion of their income for energy than they did before the 1973 oil crisis [see figure].
The report recognizes that big gains in efficiency will continue to be achieved. Accordingly, it recommends sizable tax credits for hybrid-electric vehicles, purchase of solar panels, and use of biomass and sundry other renewable energy and conservation technologies.
It also faces head-on the critical state of the nation's energy infrastructure, especially the yawning gap between the growing demands made on its transmission system and money spent to improve it [see figure]. The report urges broadening the federal government's authority to exercise eminent domain to get new transmission lines built, to the discomfiture of states' rights Republicans.
Yet if the Cheney task force shows some willingness to stand up to close allies, it does not toss out proposals willy-nilly, careless of their real political prospects. On hugely controversial questions such as disposal or recycling of nuclear wastes or tightening costly fuel-efficiency standards for cars, it asks only for reconsideration or further study.
As for development of oil and gas resources, universally expected to be the heart of the report, it does indeed call for opening the Arctic National Wildlife Refuge to exploration and for making public lands generally more available for drilling. But the report recommends no new tax breaks or incentives for the administration's oil industry friends. So, while natural gas developers may be making out like gangbusters in Cheney's native Wyoming, they are benefiting from credits enacted in the late 1980s, and cannot expect further giveaways.
Having given credit where credit is due, it must also be said that the Cheney task force's approach to the electricity problem is, as such, very one-dimensional. Last year, a Department of Energy blue-ribbon panel, convened to study widespread outages, found the nation's grid sorely stressed in every conceivable way. As Spectrum reported [June 2000, p. 44], "Whether the talk is of generation and transmission capacity, distribution lines or control equipment, service personnel or simulation engineers, it is the same story: too few resources to easily satisfy demands made on systems designed for radically different purposes."
As pointed out, too, by the leadership of IEEE-USA, the IEEE's public policy arm in Washington, D.C., what is most needed now--and this is something that gets short shrift in the task force report--are "better ways to operate transmission systems," and "improved transmission, communication, control, and materials technologies and systems."
The Cheney report does pay lip service, but not very forcefully, to the desirability of enacting legislation to establish a national self-managing electricity reliability organization--legislation that has been languishing in Congress for a couple of years, after being introduced with the backing, however ineffective, of the Clinton adminstration.
"Who's in charge?" Spectrum asked in January 2000 [p. 86]. Well, the Bush administration has made a good show of taking charge, and it has persuaded the public, if any persuading was needed, that there is indeed an energy crisis. The latest polls show three-fifths of U.S. residents are convinced action needs to be taken. But what action? Three-fifths also say they lack confidence in proposed administration plans.
In effect, the administration has bundled the very real crisis in electricity with concerns about increased prices for gasoline and home heating oil--increases that may prove quite transitory--to sell the public hard on an all-out effort at new production, with environmental protection given much less emphasis. What the administration seeks from the public, at bottom, is much more production of fossil fuels and streamlined or less onerous procedures for approving new plants and infrastructure.
The national labs' report, "Scenarios for a Clean Energy Future," presents in some ways a radically different view of what the country's energy sector may look like 20 years from now. Instead of an enormous and inexorable increase in reliance on fossil fuels, the labs report believes coal and oil consumption can be held close to current levels [see figures 2 and 3].
The objective enshrined in the Kyoto Protocol of getting greenhouse-gas emissions back to 1990 levels by 2010 has been dismissed by the Bush administration as unrealistic. The labs report, though, sees it as readily doable.
Where the Cheney report basically gives up on ideas of energy independence or energy security, and calls for creative diplomacy to secure new supplies of petroleum from the Caspian area and from South America, the labs report argues that greatly increased reliance on imported oil can be avoided.
Regarding the important transportation sector, Energy Secretary Spencer Abraham has written: "[Will] Americans...agree to steep taxes on gasoline and electricity, and fuel economy standards high enough to ban SUVs?...I doubt it" [ figure]. The labs report, in contrast, emphasizes the enormous environmental costs of gasoline vehicles [ table], and suggests, that gasoline prices--presumably even at current inflated levels--are still too low because they do not adequately reflect those social costs.
Probably the most persistent line of criticism of the Cheney-Bush energy plan is this, that its authors seem to have lost sight of urgent short-term problems that can be effectively addressed with short-term remedies.
Where suppliers are reaping huge windfall profits because of temporary market irregularities, as seen during the last year in the California wholesale electricity price market, every economics student will learn that a suitable windfall profits tax can be enacted or price caps imposed without any adverse impact on development of long-term supplies. But that is a message seemingly lost on the Cheney-Bush team. If, as many expect, the problems afflicting California are increasingly experienced nationwide, the administration may end up paying a high political price.