ENERGY POLICY
MAY 12, 2006
JOHN BUSH
CAN WE ANSWER THESE
QUESTIONS?
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What is an energy policy?
Does the US have an energy policy?
Does California have an energy policy?
Who makes Energy Policy?
WHO ARE THE ACTORS IN ENERGY
POLICY?
• In theory the elected government establishes the
policy and private enterprise implements it
• Voters generally select from a slate of
candidates endorsed by private enterprise
• Voters are strongly influenced by local and
“pocketbook” issues
• The clearest lead indicator of energy policy may
be the way that private enterprise is placing its
investments
COMPONENTS OF ENERGY POLICY
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A vision—what is to be accomplished?
A strategy—how is it to be accomplished?
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Tactics—what is to be done?
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Technical
Economic
Political
Social
Implementation—how will it be done?
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Qualitative and quantitative goals
Timing of meeting the goals
Legislative framework
Budgets in appropriate time frames
Administrative rules
Management structure
Measurement—how will success or failure be measured?
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Development of appropriate measures
Financial measures
Periodic reports
EXISTING ELEMENTS OF
CALIFORNIA ENERGY POLICY
• Greenhouse Emission Reduction
– Executive Order S-3-05—June 1, 2005
• 2010 reduce to 2000 level
• 2020 reduce to 1990 level
• 2050 reduce to 80% below 1990 level
– California Code of Regulations Title 13 Section
1961.1 August 4, 2005
• Passenger cars 36% reduction by 2016
• Light duty trucks 24% reduction by 2016
• Renewable Energy Increase
– California Renewables Portfolio Standard program—
Public Utilities Code Section 399.11 (2005)
– Electricity target of 20% generation from renewables
CALIFORNIA ENERGY LEGISLATION
2005
• AB 1229 Global Warming Label on cars: revises the
smog sticker- Passed 10/6/05
• SB 1 Million Solar Roofs: Killed in Assembly
• SB 107 Goal of 20% renewable energy for electricity
production by 2010 instead of current 2017: Killed in
Assembly*
• SB 1223: Internet sale of hybrid vehicles*
• SB 757: Goal for statewide reduction of petroleum
demand by requiring purchase of “cost-effective”
alternative fuels*
*likely to be reintroduced in 2006
IS THE ASSEMBLY THE PROBLEM?
• Initiatives: California’s option to by-pass the
Assembly
• The Clean Alternative Energy Act
– Energy Independence Fund: fee paid by producer for
“privilege” --up to 6% of gross value of oil (exempts
strippers)
– Allocated to
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Service debt incurred by other provisions
Reduce gasoline and diesel 57.5%
Research and innovation acceleration 26.75%
Commercialization acceleration 9.75%
Vocational training 2.5%
Administration and “public education” 3.5%
EXAMPLES OF TACTICS
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Diesel and Gasoline Reduction: 10 billion gallons in 10 years
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Loans and buydowns
Production incentives
Incentives to build refueling stations
Incentives to install infrastructure
Research grants to private enterprises
Research and Innovation Acceleration: grants to California Universities
– Renewable energy technologies
– Energy efficiency technologies
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Commercialization Acceleration: loans and grants for start-up costs
Vocational Training: grants to Community Colleges
Administration and Public Education
– Propagandize the people
– Monitor the Assessment
– Administer the Authority
IS THIS GOOD POLICY?
US ENERGY POLICY
• Is California a proper model for the nation?
– 1 Concern for transportation
– 2 Concern for Greenhouse Gas emissions
– 3 Concern for electricity supply (little coal)
• The National policy current priorities:
– 1 Security of oil supply
– 2 Concern for nuclear proliferation
– 3 Concern for economy
– 4 Concern for transportation
PRESIDENT’S NATIONAL ENERGY
POLICY: 2005
Energy Policy Act 2005 left issues unaddressed
• Opening the Arctic National Wildlife Refuge to oil
and gas exploration
• Expediting investments in refineries
• Streamlining the New Source Review process
• Increasing production from the Outer
Continental Shelf
• Accelerating building of the Alaska Natural Gas
Pipeline
• Enacting Clear skies legislation to encourage
investment in cleaner coal technologies
ADVANCED ENERGY INITIATIVE
• Vision: “the principal energy challenges we face”
– “Promoting energy conservation”
– “Repairing and modernizing our energy infrastructure”
– “Increasing our energy supplies in ways that protect and improve
the environment”
• Goals
– “Keep America Competitive”
– “For the sake of our economic and national security”
– Ensure “reliable, affordable, clean supplies of energy”
• Strategies
– “Changing the way we fuel our vehicles”
– “Changing the way we power our homes and businesses”
ADVANCED ENERGY INITIATIVE
FUELING VEHICLES
• Existing technologies
– Increase CAFÉ Standards
– Tax incentives for hybrids and clean diesels
– Clean diesel regulations
– Renewable ethanol and biodiesel
– Tax credit for alternative fuel facilities
• Advanced batteries for plug-in hybrids
• Ethanol from cellulose
• Hydrogen fuel-cell vehicles by 2020
ADVANCED ENERGY INITIATIVE
POWERING HOMES AND BUSINESSES
• Existing technologies
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Make it easier to find and produce natural gas domestically
Expedite permitting of LNG terminals
Establish energy efficiency standards for large appliances
Foster investment in “newer, cleaner coal technologies”
“Encourage investments in safe and reliable nuclear power”
Provide tax incentives for electricity production from renewables
• Clean coal technology research
• Global Nuclear Energy Partnership
• Reduce cost of photovoltaic technologies
IS THIS GOOD POLICY?