Bipartisan panel recommends US energy strategy

9 December 2004

The National Commission on Energy Policy—a bipartisan group of energy experts from industry, government, labor, academia, and environmental and consumer groups—released a consensus strategy to address major long-term US energy challenges. The report, “Ending the Energy Stalemate: A Bipartisan Strategy to Meet America’s Energy Challenges”, contains policy recommendations for addressing oil security, climate change, natural gas supply, the future of nuclear energy, and other long-term challenges, and is backed by more than 30 original research studies.

The report calls for incentives to increase global oil production, recommends to increase domestic vehicle fuel economy, and to increase investment in alternative fuels. The climate change plan would limit greenhouse gas (GHG) emissions, but a cost cap for doing so would be established. Incentives should be also provided for low- and non-carbon sources like natural gas, renewable energy, nuclear energy, and advanced coal technologies with carbon capture and sequestration.

Among many detailed recommendations, the report supports domestic production of advanced diesel and hybrid vehicles. The Commission concluded that a combination of improved conventional gasoline technologies and advanced hybrid-electric and diesel technologies can significantly increase fuel economy without sacrificing size, power, or safety. “Advanced diesel” has been defined as a diesel passenger vehicle that meets EPA Tier 2 emission standards that are being phased in from 2004 to 2008 (no currently available passenger diesel vehicles meet these standards).

The report gives little prominence to fuel cells and hydrogen technologies. Hydrogen was not deemed as potentially competitive with gasoline by 2020. “The Commission supports continued research and development into hydrogen as a long-term (2050) solution. The Commission also concludes, however, that hydrogen offers little to no potential to improve oil security and reduce climate change risks in the next twenty years,” said the report.

To enhance US oil security, the Commission recommends increasing and diversifying world oil production, strengthening federal fuel economy standards for cars and light trucks beginning no later than 2010 and reforming the 30-year-old Corporate Average Fuel Economy (CAFE) program. Furthermore, production of hybrid and advanced diesel vehicles would be encouraged by $3 billion over ten years in manufacturer and consumer incentives. Incentives would be also provided for the development of non-petroleum transportation fuel alternatives, particularly ethanol and biodiesel from waste products and biomass. These steps could reduce US oil consumption in 2025 by an estimated 10-15% or 3-5 million barrels per day.

To reduce risks from climate change, the report suggests (1) mandatory GHG emission reductions, and (2) international cooperation in GHG reduction programs—both approaches traditionally opposed by the US administration. The Commission recommends implementing in 2010 a mandatory, economy-wide tradable-permits system designed to curb future growth in the emissions of greenhouse gases. The initial costs to the US economy, however, would be capped at $7 per metric ton of carbon dioxide-equivalent. In the next step, the action to reduce US emissions would be linked with efforts by other developed and developing nations to achieve comparable emissions reductions via a review of program efficacy and international progress in 2015.

The report further recommends a number of actions to increase US energy supply through better utilization of natural gas and coal resources, nuclear power, and renewable energy, as well as to strengthen the energy supply infrastructure.

Source: National Commission on Energy Policy | Download report