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The Energy Policy Act of 2005

The Energy Policy Act of 2005

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Published by Carlos Rymer

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Categories:Types, Research, Science
Published by: Carlos Rymer on May 14, 2009
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06/16/2009

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The Energy Policy Act of 2005: A FailedBipartisan Compromise
Carlos RymerIntroduction to Environmental PolicyMPA-ESP ProgramAugust 6
th
, 2008
 
Executive Summary
The Energy Policy Act of 2005 provides a few positive steps to address the energy challengefacing the U.S., but it fails to prescribe a long-term, realistic plan to diversify energy production,eliminate fossil fuel dependence, and secure long-term economic growth. With special interestsdominating the political scene, the Act is riddled with provisions that largely satisfy specialinterests. Some of these provisions are having significant negative economic effects and prolonging inaction on key issues. Nevertheless, we have an incredible opportunity to meet thegrave challenges we face and create lasting prosperity by focusing on renewable energy, energyefficiency, and improved public transportation. The key requirement is be bold policy that prioritizes solving the various challenges we face over the interests of powerful groups.
Introduction
The Energy Policy Act of 2005 (the Act) intended to change the United States’ (U.S.)energy policy to “ensure jobs for [the nation’s] future with secure, affordable, and reliableenergy” (109
th
Congress, 2005). With increasing concerns about the U.S.’s heavy dependence onforeign oil (now around 60%) and increasing oil prices (Gold, Lichtblau, and Goldstein, 2005),the Act was signed into law with bipartisan Congressional support to increase domestic energysupply and strengthen energy security through tax incentives, research and development, anddirect fiscal spending (Pew Center on Global Climate Change, 2005). The Act’s implementationwill require $3.8 billion in direct spending and will create tax revenue losses of approximately$12.3 billion over the ten years after enactment (Congressional Budget Office, 2005). With oil prices over $100 per barrel (as of writing of this document), the federal fiscal costs associatedwith the goals of implementing the Act to increase domestic energy supply and alleviate energy prices are justified.The Act provides direct funding, tax incentives, and mandates for energy efficiency, fossilfuels, nuclear energy, renewable energy, advanced vehicle technologies, and the nationalelectricity grid (109
th
Congress, 2005). While the Act intends to ensure energy security in theU.S. through these various provisions, it in fact fails to adequately address the challenges the
 
nation faces in order to secure reliable and affordable energy supply (Cooke, 2005). By largelyfocusing on energy sources such as fossil fuels and biofuels, not only does the Act fail to addressshort-term issues, but it also fails to tie energy supply to climate change and food security, issuesthat are now adding pressure to the world’s economic problems (Associated Press, 2007;Hanson, 2008). In effect, the Act failed to provide a focused strategy that would lead the U.S.towards energy security and a strong, low-carbon economy.
Important Provisions of the Act
In order to achieve energy security and create jobs in the U.S., the Act sets forth a longlist of provisions in the areas of energy efficiency, fossil fuels, nuclear energy, renewable energy,vehicle technologies, and electricity markets. While several agencies, ranging from theEnvironmental Protection Agency to the Bureau of Land Management, are responsible for implementing specific provisions of the Act, most of the responsibility lies with the Departmentof Energy, as is explicitly mentioned in the Act (109
th
Congress, 2005). Nearly all provisions not pertaining to the Department of Energy are not specifically related to the goal of this bill.Instead, they focus on issues like Indian energy programs, demonstration projects, land leases,and other provisions for special interests. The table below summarizes the key provisions for each area that pertain directly to the Department of Energy (Library of Congress, 2005).
Table 1. Key Provisions of The Energy Policy Act of 2005EnergyEfficiency
Improve energy efficiency and conservation across the nation throughfederal and state programs, energy assistance, research and development,energy efficient products, and public housing programs.
Fossil Fuels
Provide subsidies, tax breaks, and research and development, and projectfunding for unconventional and conventional fossil fuels, as well as cleancoal projects.
NuclearEnergy
Approve, supervise, and provide loans for new nuclear power projects, aswell as funding for research and development.
Renewable
Help deploy renewable energy technologies through tax credits and

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