Energy Efficiency May Get Short Shrift After the Election
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.
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.