Energy policy: The view from Washington
Energy and environmental legislation will be slow and may stall. Engineers should work ahead of it to serve their clients.
Energy policy is of growing concern to engineers. The price of energy drives cost-benefit analyses for facilities decisions. Higher energy costs means quicker payback for more efficient technologies. Buildings that use fossil fuel-based electricity have larger carbon footprints and are subject to more intense regulatory scrutiny. So what is on the policy horizon?
Tax credits for energy-efficiency and renewable energy investments were extended for seven years as part of the 2008 economic bailout bill. In 2009, Obama signaled new energy and climate priorities with cabinet appointments to the Dept. of Energy (DOE) and U.S. Environmental Protection Agency (EPA) and an executive order on emissions reductions for federal facilities. The DOE and EPA issued rulemakings that strengthened energy and emissions regulations. Stimulus funding sent billions to energy-efficiency and renewable energy projects. And, expectations grew for definitive climate legislation when the House passed the American Clean Energy and Security (ACES) Act of 2009 .
But where is the legislative process today? Stalled—and significant progress seems unlikely until after 2012. When the House passed the ACES Act, some energy reform advocates thought it a sign of things to come. But the White House signaled well before the bill passed that they would spend little political capital on energy legislation in 2009. Healthcare was the legislative priority for this year—and perhaps early 2010 as well.
Looking at 2010
Congressional aides have a saying: “No energy legislation in even-numbered years.” The reason is simple: elections are in even-numbered years.
If Senate Republicans vote as a bloc on energy, Democrats will need all their votes—and then some—to hit the 60 votes required to end a filibuster. Because the threat of a filibuster is now in effect the same as the real thing, no bill will be brought to a vote without 60 votes already confirmed. The Senate leaders could decide to make an issue of it and bring the bill to the floor to embarrass the Senate GOP; however, that strategy would be self-destructive because too many Democrats represent states that either mine or use large quantities of coal.
The calendar tells as disconcerting a tale. The 2010 session begins in January, with elections in November. Little will happen after the summer recess because members need to campaign, so the window for action is from January through July.
Healthcare legislation is both vital to Democrats and unpredictable. Senator Joe Lieberman of Connecticut has promised to stop any bill that is likely to get support from the Democratic left. Some Democrats are skeptical of a public option. The Republican Senators from Maine who could help reach 60 are against a public option. Whatever emerges from such murky waters will probably emerge slowly. And financial regulation promises to be about as difficult. How much more can the Senate get done between January and the end of July? No one knows—but I doubt very much, especially on a topic as contentious as energy.
What might happen on the floor after the election is anyone's guess. But if the conventional wisdom is correct, the Democrats will lose seats, which will shift the politics and embolden the Republicans. Party strategists will be focused on 2012 and the presidential elections, so the White House-deprived GOP will not suddenly be more given to bipartisanship.
The international arena is another route for action, and the administration is saying that it intends to use it. The President will attend the United Nations Framework Convention on Climate Change summit in Copenhagen . China will join the United States there in calling for meaningful reductions in CO2 emissions.
No one can know how quickly the negotiations will go. What we do know is that the Kyoto Protocol expires in 2012. So the options are to:
Finish the negotiations by 2012 and bring a treaty to the Senate
Complete the negotiations and bring the treaty to the Senate in 2013 after the election
Complete the negotiations after the 2012 election.
The last option will be unacceptable to advocates of action, but they cannot determine the pace of negotiations or the receptivity of the U.S. Senate. Should the President see a big win coming in 2012, he might decide 2013 is better timing. A bandage can be stuck on the Kyoto Protocol—formal or informal—so we can limp to ratification in 2013. Or, Obama may feel he has to roll the dice in 2012 if negotiations are completed. But treaty ratification requires two-thirds of Senators present. It is hard to see how a forceful agreement can get through the Senate without a big Democratic win in 2012. The international route offers the chance to take the case to the public, but not to transform the formal energy regime until the American electorate acts more decisively on the issue.
Strategies for change
What paths are open to the advocates of reform?
First, they can take the case for change on energy policy to the American people. Meaningful change through legislation or diplomacy lacks the required votes. Advocates should ask the public for the votes.
Second, the case for change should be sharpened. The nation has a lot on its plate and is becoming risk-averse. On top of healthcare and financial regulation, America has two wars afoot and a crisis with Iran brewing. The future of the financial and economic crises is uncertain. Unemployment is expected to remain high. Crises on Social Security, the budget, the national debt, and possibly inflation or stagflation are all on the path ahead—and these are the things we know about. Advocates of change should work to explain precisely how reform is going to work.
The President has pointed to energy-efficiency technologies as a basis for a new era of economic growth. The concept is inspiring, coherent, and completely plausible. But its friends—and I count myself among them—need to prove it will work.
Third, because no legislation or treaties are required to move on energy standards, regulation, and cooperative public-private sector programs to promote technology and added efficiency, expect administrative action. The electorate and American industry recognize that the country is in a bind on energy. The climate change issue is compelling for many. But energy security, national security, and economic security are now elements of the energy equation. Taken together, they form powerful reasons to make progress. The energy bureaucracy is equipped to lead, and private industry is ready to cooperate.
So what does all this mean for the engineering community?
First: Do not confuse legislative deadlock for government inaction, or congressional posturing for action. The action will be elsewhere.
Second: Engage the bureaucracy. New rules have been proposed and more are coming. The bureaucracy will be asking for views from the private sector. Share them. Engage.
Third (and perhaps most important): Start preparing now for what promises to be a long, complex, multipolar process of energy reform. The system we have in place has deep roots and will not change easily. Important forces of 21st century life are driving change, but the experience will be wrenching. Standing aside means being left out. But engaging will take time, intelligence, patience, and tenacity.
Change is coming to the world of energy policy— whatever the timeline. But the policy situation is but a prelude to more radical change prompted by the inexorable rise in energy costs that will be driven in coming years by global markets. Today's energy regime is a transition between a comfortable energy past and an uncomfortable energy future. The engineering community should welcome the policy debate as a spur to preparation for the vastly new energy world that lies ahead.
Cavey is president of the Global Strategy Initiative, which focuses on the interaction of science, applied technology, and public policy. He was previously vice president for international public and government affairs at American Standard Companies, senior associate at the Carnegie Endowment for International Peace.
- Events & Awards
- Magazine Archives
- Oil & Gas Engineering
- Salary Survey
- Digital Reports
Annual Salary Survey
Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.
There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.
But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.
Read more: 2015 Salary Survey