Thursday, February 12, 2009

Pet Peeves and Unusual Congressional Forbearance

In her February 11, 2009, Conference Report describing the economic stimulus bill, Speaker Nancy Pelosi, states “To put people back to work today and reduce our dependence on foreign oil tomorrow, we will increase renewable energy production and renovate public buildings to make them more energy efficient.” (Emphasis added).

Reading this triggered a couple energy pet peeves of mine. Pet peeve number one is when people say we need to “reduce our dependence on foreign oil” and then use electricity examples as ways of reducing this dependence. Pet peeve number two is when people say we need to “reduce our dependence on foreign oil” and ignore that Canada is a very friendly foreign nation that we share a very long border with and is our nation’s biggest foreign oil supplier. And, in fact, supplies well over 50% of Minnesota’s oil.

These are pet peeves for me for several reasons. First, reducing our oil dependence, no matter where it comes from has merit. So, why blast foreign oil? The obvious answer is that many oil-producing countries around the world are not our friends and buying their product is not in our best interests. Yet, as I just mentioned our largest foreign supplier of oil comes from our friendly neighbor. Thus, what one should say is that “we should reduce our dependence on oil, especially oil from unfriendly countries” or something like that.

Second, oil is a transportation fuel that we use in our cars, planes and trucks. Electricity has yet to become a significant transportation fuel; instead it is used to power our TVs, light our lamps and provide the juice for air conditioning. Thus, while it could be theoretically appropriate to suggest that we can reduce our dependence on foreign oil by using electricity as a transportation fuel, this is not what Speaker Pelosi meant. Or, if it is, then the package she claims will not only jump-start the morbid economy but also will “reduce our dependence on foreign oil” is misguided.

The economic stimulus bill that the Congress passed yesterday allocates about $61 billion to energy-related activities, $29 billion for roads and bridges and $16 billion for transit and high-speed rail. According to Speaker Pelosi’s summary, the $61 billion for energy related activities would be used to:
• Transform the nation’s electricity systems through the Smart Grid Investment Program to modernize the electricity grid to make it more efficient and reliable;
• Support U.S. development of advanced vehicle batteries and battery systems through loans and grants so that America can lead the world in transforming the way automobiles are powered;
• Help state and local governments make investments in innovative best practices to achieve greater energy efficiency and reduce energy usage;
• Spur energy efficiency and renewable energy R&D;
• Provide tax incentives for renewable energy and energy efficiency over the next 10 years;
• Provide grants of up to 30 percent of the cost of building a new renewable energy facility to address current renewable energy credit market concerns;
• Promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation;
• Provide a tax credit for families that purchase plug-in hybrid vehicles of up to $7,500 to spur the next generation of American cars;
• Provide money to improve the energy efficiency of more than 1 million modest-income homes through weatherization;
• Provide money for increasing energy efficiency in federally-supported housing programs;
• And lots of other stuff

Except for battery R&D and tax credits for plug-in hybrid cars, all this money goes towards renewable electricity and energy efficiency. As such, Speaker Pelosi is wrong; it will not reduce our dependence on oil especially from hostile countries.

Perhaps I should cut Speaker Pelosi some slack. Perhaps, I should chalk her description up to standard political rhetoric of destroyed metaphors, sloganeering and sloppy editing.

OK, I’ll do that….but a nagging question remains: in a bill this loaded with programmatic goodies (that should have been vetted by the usual appropriations process, but that’s another pet peeve), why isn’t there more money specifically devoted to reducing our dependence on oil?

Of course, I don’t know but I will postulate three theories. One theory is that the Congress correctly concluded that the biofuels issue has been handled through the Renewable Fuels Standard of the Energy Independence and Security Act of 2007. Another theory is that Federal lawmakers feel that they have done all they can to help the transportation sector with the money they gave General Motors and Chrysler a couple months ago. A third theory is that the DC policy makers realize that dealing with the transportation sector (cars, fuels, etc.) is hugely complex and requires a comprehensive and not the piecemeal approach of the stimulus package.

Whatever the reason for this unusual but wise case of Congressional forbearance; its an example of forbearance Minnesota could learn from.

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