Bipartisan successes on energy

Don’t look now, but bipartisan support in past Congresses for both energy efficiency and new energy production are helping the American economy and consumers  when they really need it.

This summer, for example, as much of the country suffered from a record heat wave, here is one thing that didn’t happen: you didn’t read any stories about sweltering neighborhoods without air conditioning and other electricity services. Why did the lights and AC stay on?
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Two potent but widely unappreciated forces deserve significant credit: energy efficiency investments by America’s electric utilities and performance-based federal efficiency standards that date back to the Reagan administration.

Utilities helped by finding a host of ways to get more work out of less energy, relieving stress on the grid while saving customers money. In the Pacific Northwest, for example, utilities have helped their customers cut growth in electricity use in half while lowering the regional electricity bill by more than $2 billion over the past three decades. 

Every region in the nation now has a similar story, and most utilities, including those in our home states, treat cost-effective energy efficiency as an investment priority that competes directly and effectively with power generation. Industry-wide, efficiency investments topped $4.4 billion last year, and the biggest winners were utility customers who lowered their bills. The utility industry has continued investment in efficient new generation and transmission, helping to meet peak load conditions along with these efficiency improvements.

Efficiency gains spread more rapidly when converted into minimum performance standards. For example, the Department of Energy’s 2006 standard for new central air conditioners is saving already more than 1,000 megawatts of power; savings from air conditioner standards dating back to the 1980s total 6,000 MW. Other appliance efficiency standards adopted during and after the Reagan years also reduced peak power demands this summer — taken together, the savings now exceed 60,000 MW . 

These standards don’t ban any particular technologies; they just phase in requirements that product manufactures deliver equivalent or better energy services with less electricity. The federal light bulb efficiency standard also doesn’t ban any kind of bulb and will result in more customer choices, including innovative new made-in-America incandescent bulbs, for those who prefer them to the fluorescent alternatives. More-efficient bulbs typically will pay for themselves by lowering electricity usage in a year or less.

The benefits from reducing blackouts extend to everyone: They protect sensitive populations from heat-related illness, they cut costs for low-income consumers and they protect business from loss of power and higher electric bills. The lights and factories that didn’t go dark this past summer are among the best reasons to celebrate the bipartisan contributions of inexpensive energy efficiency.

Likewise, it might startle people to realize that U.S. domestic production of both oil and natural gas has risen quickly in the last few years — for the first time in decades, in the case of oil — in part due to bipartisan support for increased oil-and-gas production in the 2005 energy bill (under a GOP Congress) and 2007 legislation (when Democrats were in charge). Both bills got more than 70 votes in the Senate.

While some increased production is of course in response to high global oil prices, taken together these bills provided incentives for new shale gas development and offshore oil-and-gas production. For example, the 2005 bill permits facilities for natural-gas storage at market-based rates, encouraging greater gas development, while both bills include incentives for domestic oil production. This includes production in the Bakken Shale in North Dakota and in the Gulf waters off the Mississippi Coast, promoting critical jobs during tough economic times.

Efficiency has a valuable role over time in transport, including new automotive fuel-economy standards passed in the 2007 energy bill, in reducing U.S. oil use as well as imports. According to a recent Energy Information Agency report, “the decline in U.S. oil import dependence since 2005… results from a variety of factors. Chief among those is a significant contraction in consumption. This downward trend in consumption started two years before the 2008 [economic] crisis and reflects factors such as changes in efficiency and consumer behavior as well as patterns of economic growth.”

The same EIA report found that domestic oil production has increased for the first time in decades since 2005: “Strong gains in the deepwater Gulf of Mexico and the Bakken formation brought decades of contraction in domestic oil production to a sudden halt, and even led to a rebound. U.S. crude oil output increased by an estimated 334,000 barrels between 2005 and 2010, further eroding the need for imported crude oil.”

In part due to better efficiency and more domestic production, EIA found that “U.S. net imports [imports minus exports] of petroleum products plummeted in 2010 to their lowest level seen in the data history that begins in 1973.”

The effectiveness of efficiency standards in both the electricity sector and in transport and increased domestic production of oil, natural gas and other forms of energy production are bipartisan success stories, helping average Americans right now in this tough economy.  

Congress can embrace these examples as a basis for new bipartisan efforts to use efficiency and production together to improve our energy security, economy, job creation and trade deficit, and help hard-pressed consumers. 

Dorgan and Lott are senior fellows at the Bipartisan Policy Center and co-chairmen of its Energy Project.