New Energy Act a Colossal Failure

The Energy Policy Act of 2005, signed by President Bush on August 8, 2005, represents a colossal failure of the U.S. Congress and Bush Administration to effectively address the long-term energy needs of the United States or the soon-to-be crisis of global climate change. The law is largely a collection of hand-outs to conventional energy industries. Over half of the tax breaks, $8.7 billion, go to the fossil fuel, electric utility, and nuclear industries. Nearly $1.7 billion of taxpayer money will go to an oil and gas industry that is awash in profits from record prices--this is 67% more than the $1.0 billion in support of energy efficiency.

Even the bill's most fervent supporters admit that it will do little or nothing to address the nation's dependence on foreign oil or the rising oil prices that are largely a result of that dependence. Indeed, it is not without irony that the day the Energy Policy Act was signed into law, crude oil hit a new peak of $63 per barrel--and is now inching towards $70.

Our policymakers, financed by the donations of petroleum and utility interests, continue to focus largely on supply rather than demand. This strategy is doomed to failure. The longer we put off a real investment--an Apollo-Project-scale initiative on energy conservation and efficiency improvements, as well as renewables--the more difficult that transition will be and the more American society will suffer. This is irresponsible, pure and simple, and the failure to reduce consumption will sentence all of us to much more difficult and painful solutions down the road--not to mention the impacts of global warming, which is resulting from the current energy path.

Had the U.S. followed the energy policy path begun by President Carter in the late 1970s, it is quite likely that today we would be well on our way to a sustainable energy future with far less dependence on foreign oil. When President Reagan effectively put the brakes on advances in energy conservation and renewables, he put us on a path of not only greater dependence on foreign oil, but also backlash against America's arrogant energy consumption (6% of the world's population consuming 25% of its energy) that has likely contributed to the hatred of Americans that we saw on 9/11 and that is fueling terrorism today.

While there is support for efficiency and renewables in the Energy Policy Act, it represents only about 30% of the total tax incentives. And many of the conservation and renewable energy components of the Act are poorly designed or shortsighted. The residential tax credits for solar energy systems and energy conservation measures are cost-based, rather than performance-based. This means that homeowners are rewarded for how much they spend, not for how much energy they save; in this way it is like the solar tax credits of the 1970s that nearly put the solar water heating industry out of business by opening the door to fraud (see EBN Vol. 9, No. 6). The tax credit for hybrid vehicles is capped at 60,000 vehicles--significantly fewer than one year's worth of these vehicles. The wind energy production credits are extended for only two years--hardly the security wind farm developers need to carry out long-term plans for investment in these facilities.

The Energy Policy Act tries to revive a nuclear industry that can probably never survive without being on the public dole. The billions in subsidy included in the law is money down the drain for one simple reason: vulnerability to terrorism. In my opinion it is not a matter of whether a terrorist action at a nuclear plant will occur, releasing significant amounts of radiation, but a matter of when. And when that happens--whether this year or in ten years--the nuclear industry will likely shut down. Once Americans see the devastation wrought by releasing a significant portion of a plant's radiation--rendering hundreds or thousands of square miles uninhabitable--they simply won't accept the risk. It won't matter whether they're from blue states or red, whether they're rich or poor, they won't accept the risk. (And no, my concern about nuclear plant safety was not eased by the provision in the Energy Policy Act that allows nuclear plant employees and certain contractors to carry firearms!)

Our lawmakers and the Bush Administration owe the American public an apology for bowing to the demands of corporate donors, such as General Motors and Exxon-Mobil, rather than serving the interests and needs of the people they were elected to serve and generations not yet born. Each year that goes by without significant attention to the looming energy crisis increases the difficulties we will eventually face in transitioning to a post-petroleum age.

-Alex Wilson