Energy Efficiency May Get Short Shrift After the Election

Ken Silverstein | Oct 09, 2012

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If common ground exists between the Obama and Romney campaigns, it is in the area of energy efficiency. But even such a non-contentious issue must still get parsed out and removed from the back burner where it has long been sitting.

Both candidates, in fact, have a record of providing support to those programs that induce citizens to consume less energy. The central difference between their two agendas is that President Obama has put billions into technologies that are doing everything from weatherizing homes to making cars more fuel efficient to funding the rollout of smart grid tools. Romney, meanwhile, is saying that government has a role in such developments but he has not been specific beyond that.

“I’m told that we use almost twice as much energy per person as does Europe and more like three times as much as does a Japanese citizen,” Romney has said. “I’d like to see our vehicles, and our homes, and our systems of insulation become more efficient. I believe that we have a role in trying to encourage that to happen.”

That statement is consistent with the positions he took when he was governor of Massachusetts. There, he said via a press release in 2006 that his administration would create new electricity energy efficiency programs for homes and businesses as well as well as for current and future state buildings. He furthermore tried to implement electricity rates to encourage energy efficiency during peak times and he supported state tax incentives for the purchase of fuel efficient vehicles.

If elected, Romney would need to scale back that vision. That’s because he is running on a platform of fiscal austerity and such programs will probably require an increasing level of federal dollars to advance.

Despite his public support for energy efficiency measures, the GOP-hopeful comes across as downright disdainful of green energy -- odd, because as governor that too was part of his overall energy agenda. In Massachusetts, he backed diversifying and increasing the energy supply through the use of more hydro and wind power, as well as with biofuels for state vehicles and buildings.

During the first debate, Romney derided Obama for spending $90 billion on “breaks” for green energy -- an amount greater than what the oil and gas industry receive. He said the money went to “losers” like Solyndra.

Capital Avoidance

For the record, Politifact rates that claim a “false.” It notes that 60 percent of the money went to state and local governments so that they could implement energy efficiency measures, as well as build out the transportation and electricity-related infrastructure. Much smaller amounts went to wind and solar.

For its part, the utility world has benefited greatly from the 2009 stimulus. Nearly $90 billion in tax incentives, loan guarantees and government grants have been made available to them. Those are for weatherizing 600,000 homes and expanding renewable energy programs. The money -- $4.5 billion -- is also being used to build out the smart grid, which is allows utilities and customers to work together to save energy and increase reliability.

Obama ran in 2008 on revitalizing the national economy through public investments in transformative technologies. Those national programs would not only take the country to the next level in terms of how it produces and consumes energy but they would also serve to keep commerce flowing at a time when consumers were uneasy about continuing their spending.

“Our homes, businesses and factories account for more than 70 percent of the energy we consume, and we need to invest in energy efficiency in the residential, commercial, and industrial sectors to improve U.S. competitiveness, lower electricity bills, and protect our environment,” President Obama has said.

Indeed, a new study called “The $20 Billion Bonanza” concludes that every dollar invested in energy efficiency programs results in $2 in savings for business and residential utility consumers. The report cites other benefits such as the avoidance of major capital expenditures associated with new power plants and even the retirements of some older and less efficient generators.

The investment would be split between utilities and their customers. The savings would occur on energy purchases as well as on public health benefits to the tune of $37 billion. That would equate to a $20 billion net savings, says the Southwest Energy Efficiency Project that authored the report.

While both presidential contenders agree that those tools have a place on the American landscape, their conciliation may end there. Expect a vigorous debate over the amount of funding, the kinds of technologies and the style of regulations. After the election, energy efficiency may still get short shrift.


EnergyBiz Insider has been awarded the Gold for Original Web Commentary presented by the American Society of Business Press Editors. The column is also the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has been named one of the Top Economics Journalists by Wall Street Economists.

Twitter: @Ken_Silverstein

energybizinsider@energycentral.com



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Comments

The philosophical and the economic

Why is it that all of you seem to believe that it is the responsibility of government to confiscate money from individuals (American taxpayers), for "investments" with crony corporations and industries?  Wind and solar are losers.  Ask Spain how their "green jobs" and their "green economy" worked out for them.  Just as it is not the job of government to inflate my tires, or tell me what I must or must not eat, it is not the job of government to force me to pay for someone else's insulation or solar panels.

Back room deals between legislators; regulators; companies that build "renewable energy" projects or smart meters or install insulation (who want to get on the federal gravy train) are wrong!  It's immoral and unethical.  When environmental groups get in on the action, it's downright hypocritical.  They agree to shut up and not picket, in exchange for RE projects agreeing to buy up land somewhere else, as  "wildlife refuges" to relocate tortoises.  Which die.  Then federal agencies decide to "up the take" of Golden Eagles, Bald Eagles, etc. to keep wind farms in business.  I am not even allowed to pick up a dead eagle, and take it to a taxidermist.  A stuffed eagle or owl on my wall, will put me and that taxidermist in the Big House.  But Big Wind can knock the birds right out of the sky.

Meanwhile, the landscape is denuded to cover it with solar panels, windmills, transmission lines (with all the associated right-of-way).  All in the name of climate change?  Greenhouse gases?  The RE industry is altering ecosystems beyond repair, PRIOR to doing the science.  I live in the desert.  If I want to go out on public lands and dig up a Joshua tree or barrel cactus, I will get arrested!  This has nothing to do with saving the planet.

It has everything to do with separating me, and my country, from our money and having the UN redistribute it to authoritarian dictatorships in third-world countries.

Worse, it tells business and industry that if they pony up campaign funds, they are entitled to a free ride on the backs of taxpayers.  If there are legitimate products and industries, there will be legitimate investors.  If there is no market for them, without forcing taxpayers and ratepayers to buy, then the Emperor has no clothes!

Sooner or later, you run out of other people's money.  Well, that's already happened.  Now, the taxpayers are being forced to pay back loans, that our government takes out, to pay for all these projects.  Plus interest.

Give it up! 

regarding short shrift conclusion

hi ken here, good comment/question as to why it would EE would get short shrift in a second Obama administration: I could have stated it better. But no matter who wins, Congress is sharply divided along philosphical lines. So, with that, the R's and the D's must still reconcile their views. Here again: money, technologies and regs.

Green Energy

Ken,

You were misleading when you said Romney "Despite his public support for energy efficiency measures, the GOP-hopeful comes across as downright disdainful of green energy."  His actual response (not verbatim) was that he was in favor of green energy.  The "disdain" you are positing was for the large amount of money invested into "losers" in the green energy business as clearly demonstrated by Solindra and others. 

Energy Efficiency May Get Short Shrift After the Election

Ken -- Great article, but I don't get your post-election short-shrift position -- unless you're expecting a Romney victory?? What am I missing here? 

Energy Efficiency May Get Short Shrift After the Election

Ken -- Great article, but I don't get your post-election short-shrift position -- unless you're expecting a Romney victory?? What am I missing here? 

Energy efficiency poorly done by government

Energy efficiency is certainly the goal to aspire to. But government money has NOT done the job right: http://www.sfgate.com/green/article/Energy-stimulus-program-plagued-by-problems-2324325.php "Free handouts" do not insure a good job as written in the article above. The Inspector General testified before the House Oversight Committee about the huge problems. It makes no sense to promote "energy efficiency" with a "wave of money" that has no boundaries. Fact: we need "money efficiency" from the federal government. Then we can all take care of our own companies energy efficiency with our very own cash. What a concept! Subsidies: http://www.instituteforenergyresearch.org/wp-content/uploads/2011/08/Federal-Electric-Subsidies.png

Economic Efficiency

A sane person!

Inspector General

I've written about the inspector general and his analysis of the stimulus. See below link. Thanks Ken

 

http://energybiz.com/article/10/09/inspector-general-critiques-stimulus

Major Savings

Ken: Great article yesterday on Energy Efficiency and US politics. A subject truly close to my head and heart when it comes to energy issues of significance in the USA --and by extension.. most other industrialized and industrializing nations.

Energy Efficiency... TOGETHER with Conservation Techniques are the twin low hanging fruit of a more sustainable energy future and a drive towards the goal of the USA being somewhat more energy independent of outside energy sourcing. (I don't see total energy independence for any country as being the goal.... we do live in an open trade world). A person just has to make a visit or three to Japan to see what a well designed set of Government driven policies for energy efficiency and conservation can do to change the energy demands in the Retail and Commercial/Business sectors of an Industrial society.

They are miles and decades ahead of the USA on both counts. Technology guizmos abound in the home and small and mid sized businesses that have dramaticlly reduced peak and average daily consumptions of electricity and , to some degree, other energy heavy arenas like cars and light industrial manufacturing complexes. Most of that has been done through a well manged series of tax incentives, tax credits, some regulatory push and finally by a massive array of informational programs initially pushed by Government... but then adopted and pushed by business leaders, Prefecture Governments etc.

Personally, I see the role of Governments of all types in the USA (and especially the Federal Administration) as being similar to the Japanese Model--with the addition of subsidizing some specific and focused R&D programs. Massive subsidises of actual projects is not, in my opinion, the role of the Government. Governments should be setting the table---but the dinner must be eaten by individuals, businesses and industry... as they are the ones that can benefit through the price savings mechanism.

I hope that the two candidates for the Presidency get together on these twin issues. Studies abound everywhere (just see Japan results), that show that we can lessen electricity and other energy demands alone through all of these methods by at least 10 % over a decade plus.

Best Regards Thomas S Drolet