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REGIONAL PERSPECTIVES ON 2007 ENERGY ACT
The following is an email-interview with Michael Grainey, Director of the Oregon Department of Energy to get his thoughts on the impacts of the Energy Independence and Security Act of 2007 has on the region. An excerpt of this was included in our February/March 2008 Newsletter.
What effect will the Energy Independence and Security Act of 2007 have on the region?
The Energy Independence and Security Act of 2007 has many important provisions which will benefit the entire region and Oregon in particular. Congress adopted vehicle efficiency standards for the first time in nearly 30 years. These standards will eventually save a million barrels of oil a day. Congress also included a Renewable Fuel Standard, requiring that U.S. fuel nationwide include increasing amounts of biofuels, to an annual total of 36 billion gallons in 2022. That is the equivalent of another 2 million barrels of oil per day. We currently import over 60% of our oil, about 10 million barrels a day. So these are significant steps.
Congress also provided for energy efficiency standards in new appliances, measures for energy efficiency in residential and commercial buildings, and a block grant for state and local governments for energy efficiency.
What effect on Oregon specifically?
Oregonians spends nearly $10 billion a year on energy. Most of that money currently goes out of state and much out of the country. The measures passed by Congress in this bill can help Oregonians keep more of their energy dollars in state, by using energy more efficiency and by developing local, cleaner, renewable energy resources. The measures in the bill also compliment the efforts the State has undertaken, including passage by the Legislature of Governor Kulongoski’s energy package in 2007 to increase renewable energy through a renewable portfolio standard, increased tax credits for renewable energy, a biofuels package to help us reduce our use of oil and other measures.
What is your assessment of the Act in General?
It is a good start but only a start. Congress needs to take the following actions to make this Act a foundation for a better energy future:
- Congress should follow up the Energy Security and Independence Act of 2007 with adequate funding to implement its energy savings programs. For example, the Act establishes a two billion dollar block grant for state and local governments to fund energy efficiency measures each year. There is currently no funding in the President’s proposed Fiscal Year 2009 budget for this important new program. Congress should fully fund this program each year in the annual appropriations process.
- Congress should further increase the vehicle mileage standards. While the standards included in the Act will eventually save about a million barrels of oil a day, additional cost-effective vehicle efficiency standards could save another 2 to 3 million barrels of oil daily. Given the increasing pressures caused by our growing use of imported oil we must do more to reduce our oil consumption. The cost of oil is the primary driver of the cost of all energy. Oil is the number one cause of our balance of trade deficit, and the number one cause of inflation. It also affects the price of natural gas. If Congress will not adopt additional vehicle standards, it should at least direct the US Environmental Protection Agency to allow Oregon, California and other states to adopt together new greenhouse tailpipe emission standards, which will not only reduce global warming but also increase vehicle mileage efficiency.
- Congress should also provide a long term extension of the production tax credit for renewable energy and other tax incentives for renewable energy which expire this year. These incentives are vital to the economic viability of wind and other renewable energy development. Yet these incentives have been on a short time frame, and have required Congressional action to extend every few years. This has created great uncertainty in planning and financing renewable energy projects. In contrast Congress established a tax credit for nuclear energy in 2005, which continues for more than 15 years. Some fossil fuel incentives have existed for decades. Renewable energy deserves at least the same period of certainty and incentive that nuclear energy and fossil fuels receive.
- Finally, Congress should repeal Section 311 of the Energy Policy Act of 2005, which preempted state authority in deciding whether to approve liquefied natural gas facilities (LNG). The Federal Energy Regulatory Commission was given that authority by Congress. Given the three large LNG terminals recently proposed in Oregon, it is unjust that Oregon has no decisionmaking authority on a matter which affects so many of our citizens.
Congress should also clarify that the states, not the federal government, have the primary decisionmaking authority for ocean energy facilities. The welfare of Oregon’s coastline and beaches is of vital interest to the State of Oregon. The State should be able to make the decision on which energy resources are developed in our State and off our coastline.
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