The energy policy of the United States is determined by federal, state and local public entities in the United States, which address issues of energy production, distribution, and consumption, such as building codes and gas mileage standards. Energy policy may include legislation, international treaties, subsidies and incentives to investment, guidelines for energy conservation, taxation and other public policy techniques.
Several mandates have been proposed over the years, such as gasoline will never exceed $1.00/gallon (Nixon), and the United States will never again import as much oil as it did in 1977 (Carter),[1] but no comprehensive long-term energy policy has been proposed, although there has been concern over this failure.[2] Three Energy Policy Acts have been passed, in 1992, 2005, and 2007,[3] which include many provisions for conservation, such as the Energy Star program, and energy development, with grants and tax incentives for both renewable energy and non-renewable energy.
State-specific energy-efficiency incentive programs also play a significant role in the overall energy policy of the United States.[4] The United States had resisted endorsing the Kyoto Protocol, preferring to let the market drive CO2 reductions to mitigate global warming, which will require CO2 emission taxation. The administration of Barack Obama has proposed an aggressive energy policy reform, including the need for a reduction of CO2 emissions, with a cap and trade program, which could help encourage more clean renewable, sustainable energy development.[5]
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In the Colonial era the energy policy of the United States was for free use of standing timber for heating and industry. In the 19th century, new emphasis was placed on access to coal and its use for transport, heating and industry. Whales were rendered into lamp oil.[6] Later, coal gas was fractionated for use as lighting and town gas. Natural gas was first used in America for lighting in 1816. [2], it has grown in importance for use in homes, industry, and power plants, but natural gas production reached its U.S. peak in 1973, [3] and the price has risen significantly since then.
Coal provided the bulk of the US energy needs well into the 20th century. Most urban homes had a coal bin and a coal fired furnace. Over the years these were replaced with oil furnaces, not because of it being cheaper but because it was easier and safer.[7] Coal remains far cheaper than oil. The biggest use of oil has come from the development of the automobile.
By 1950, oil consumption exceeded that of coal.[8][9] The abundance of oil in California, Texas, Oklahoma, as well as in Canada and Mexico, coupled with its low cost, ease of transportation, high energy density, and use in internal combustion engines, lead to its increasing use. Following World War II, oil heating boilers took over from coal burners along the Eastern Seaboard; diesel locomotives took over from coal-fired steam engines under dieselisation; oil-fired electricity plants were built; petroleum-burning buses replaced electric streetcars in a GM driven conspiracy, for which they were found guilty, and citizens bought gasoline powered cars. Interstate Highways helped make cars the major means of personal transportation.[10] As oil imports increased, US foreign policy was inexorably drawn into Middle East politics, supporting oil-producing Saudi Arabia and patrolling the sea lanes of the Persian Gulf.[11]
Hydroelectricity was the basis of Nikola Tesla's introduction of the U.S. electricity grid, starting at Niagara Falls, NY in 1883. [4] Electricity generated by major dams like the Jensen Dam, TVA Project, Grand Coulee Dam and Hoover Dam still produce some of the lowest-priced ($0.08/kWh), clean electricity in America. Rural electrification strung power lines to many more areas.[6][12]
Utilities have their rates set to earn a revenue stream that provides them with a constant 10% - 13% rate of return based on operating costs. Increases or decreases of the operating costs of electricity production are passed directly through to the consumers.[13]
The federal government provided substantially larger subsidies to fossil fuels than to renewables in the 2002-2008 period. Subsidies to fossil fuels totaled approximately $72 billion over the study period, representing a direct cost to taxpayers. Subsidies for renewable fuels, totaled $29 billion over the same period.[14]
In some cases, the U.S. has used its energy policy as a means to pursue other international goals. Richard Heinberg, a professor from Santa Rosa, California argues that a declassified CIA document shows that the U.S. used oil prices as leverage against the economy of the Soviet Union. Specifically, he argues that the U.S. intentionally worked with Saudi Arabia during the Reagan administration to keep oil prices low, thus decreasing the purchasing power of the Soviet Union's petroleum export industry. When combined with other U.S. efforts to drain Soviet resources, this was eventually a major cause in the dissolution of the Soviet Union.[15]
The 1973 oil crisis made energy a popular topic of discussion in the US.[16] The Federal Department of Energy was started with steps planned toward energy conservation and more modern energy producers. A National Maximum Speed Limit of 55 mph (88 km/h) was imposed to help reduce consumption, and Corporate Average Fuel Economy (aka CAFE)standards were enacted to downsize automobile categories.[17] Year-round Daylight Saving Time was imposed, the United States Strategic Petroleum Reserve was created and the National Energy Act of 1978 was introduced. Alternate forms of energy and diversified oil supply resulted.[18]
The United States receives approximately 84% of its energy from fossil fuels.[19] This energy is used for transport, industry, and domestic use. The remaining portion comes primarily from Hydro and Nuclear stations.[20] Americans constitute less than 5% of the world's population, but consumes 26% of the world's energy[21] to produce 26% of the world's industrial output. They account for about 25% of the world's petroleum consumption, while producing only 6% of the world's annual petroleum supply[22] and having only 3% of the world’s known oil reserves.[23]
In the United States, oil is primarily consumed as fuel for cars, buses, trucks and airplanes (in the form of gasoline, diesel and jet fuel). Two-thirds of U.S. oil consumption is in the transportation sector.[24] The US - an important export country for food stocks - converted approximately 18% of its grain output to ethanol in 2008. Across the US, 25% of the whole corn crop went to ethanol in 2007.[25] The percentage of corn going to biofuel is expected to go up.[26] In 2006, U.S. Senators introduced the BioFuels Security Act.[27]
The proposal has been made for a hydrogen economy, where cars and factories are powered by fuel cells, although the hydrogen would still have to be produced at an energy cost, and hydrogen cars have been called one of the least efficient, most expensive ways to reduce greenhouse gases.[28][29] Other plans include making society carbon neutral and using renewable energy, including solar, wind and methane sources.
Automobiles, on the other hand, possibly could be powered 60% by grid electricity, 20% by biofuels and 20% direct solar. Re-design of cities, telecommuting, mass transit, higher housing density and walking could also reduce automobile fuel consumption and obesity.[30] Carpooling, flexcars, Smart cars, and shorter commutes could all reduce fuel use.[31][32]
It should be noted that between 1950 and 1984, as the Green Revolution transformed agriculture around the globe, world grain production increased by 250%. The energy for the Green Revolution was provided by fossil fuels in the form of fertilizers (natural gas), pesticides (oil), and hydrocarbon fueled irrigation.[33] The peaking of world hydrocarbon production (Peak oil) may test Malthus' critics.[34]
Almost all of Canada’s energy exports go to the United States, making it the largest foreign source of U.S. energy imports: Canada is the top source of U.S. oil imports, and it is the largest source of U.S. natural gas and electricity imports.[35]
Buildings and their construction consume more energy than transportation or industrial applications, and because buildings are responsible for the largest portion of greenhouse emissions, they have the largest impact on man-made climate change. The AIA has proposed making buildings carbon neutral by 2030, meaning that the construction and operation of buildings will not require fossil fuel energy or emit greenhouse gases, and having the U.S. reduce CO2 emissions to 40 to 60% below 1990 levels by 2050.[36]
When President Carter created the U.S. Department of Energy in 1977, one of their first successful projects was the Weatherization Assistance Program.[37] During the last 30 years, this program has provided services to more than 5.5 million low-income families. On average, low-cost weatherization reduces heating bills by 31% and overall energy bills by $358 per year at current prices. Increased energy efficiency and weatherization spending has a high return on investment.[38]
The “Energy Independence and Security Act of 2007” has a significant impact on U.S. Energy Policy. It includes funding to help improve building codes, and will make it illegal to sell incandescent light bulbs, as they are less efficient than fluorescents and LEDs.[3]
Technologies such as passive solar building design and zero energy buildings (ZEB) have demonstrated significant new-construction energy bill reductions. The “Energy Independence and Security Act of 2007” includes funding to increase the popularity of ZEBs, photovoltaics, and even a new solar air conditioning program. Many energy-saving measures can be added to existing buildings as retrofits, but others are only cost-effective in new construction, which is why building code improvements are being encouraged. The solution requires both improved incentives for energy conservation, and new energy sources.
The Energy Independence and Security Act of 2007 increases average gas mileage to 35 mpg by 2020. The current administration and 2007 legislation are encouraging the near-term use of plug-in electric cars, and hydrogen cars by 2020. Toyota has suggested that their third-generation 2009 Prius[39] may cost much less than the current model.[40] Larger advanced-technology batteries have been suggested to make it plug-in rechargeable. Photovoltaics are an option being discussed to extend its daytime electric driving range. Improving solar cell efficiency factors will continue to make this a progressively more-cost-effective option.
About 86% of all types of energy used in the United States is derived from fossil fuels. In 2007, the largest source of the country's energy came from petroleum (40%), followed by natural gas (24%) and coal (23%). The remaining 15% was supplied by nuclear power, hydroelectric dams, and miscellaneous renewable sources.[41]
The US consumes, in 2006, 20.8 million barrels (3,310,000 m3) of petroleum a day,[42] of which 9 million barrels (1,400,000 m3) is motor gasoline. Transportation has the highest consumption rates, accounting for approximately 68.9% of the oil used in the United States in 2006,[43] and 55% of oil use worldwide as documented in the Hirsch report. With approximately 5% of the world's population, the United States is responsible for approximately 25% of annual global oil consumption and according to 2008 estimates has a per-person daily consumption rate more than double that of the European Union, whose population is significantly greater.[44][45] Automobiles are the single largest consumer of oil,[46] consuming 40%, and are also the source of 20% of the nation's greenhouse gas emissions.[47]
The USA has about 22 billion barrels (3.5×109 m3) reserves while consuming about 7.6 billion barrels (1.21×109 m3) per year.[42] This has created pressure for additional drilling. New oilfields would not solve the oil crisis however, but only delay it.[48] A far simpler solution is to reduce demand. Improving fuel economy is seen as a superior route to energy security.[48][49][50] In a memo to the EPA, Obama has asked the EPA to reconsider denying an exception to California,[51] and also asked that updated fuel standards for 2011 be published by March 30, 2009.[52] European gasoline prices were artificially raised to $4 per gallon through taxation long before they reached $4/gallon in the U.S., leading to better fuel economy.[53][54]
Problems associated with oil supply include volatile oil prices, increasing world and domestic petroleum product demand, dependence on unstable imported foreign oil, falling domestic production (peak oil), and declining infrastructure, like the Alaska pipeline and oil refineries.
American dependence on imports grew from 10% in 1970 to 65% by the end of 2004. At the current rate of unchecked import growth, the US would be 70% to 75% reliant on foreign oil by the middle of the next decade.[55] However, the Energy Information Administration projects that U.S. oil imports will remain flat and consumption will grow, so net imports will decline to 54% of U.S. oil consumption by 2030.[56] According to US Census Bureau import statistics, in 2010, the top crude oil exporters to the United States were Canada, Mexico, Nigeria, Venezuela and Saudi Arabia (in order from most exports to least).[57]
The subject of continued exploration for offshore drilling in the United States is a perennial debate, one which was heavily influenced in 2010 by the BP Macondo oil spill in the Gulf of Mexico.
America is self sufficient in coal.[58] Indeed, it has several hundred years supply of it.[59][60] The United states trend in coal use has been rising for decades. From 1950 through 2006, both coal production and coal consumption in the United States have more than doubled.[61] The population of the US has almost doubled in this time period as well, while the per capita energy use has been declining since 1978.[62][63]
Most electricity (52% in 2000) in the country is generated from coal-fired power plants:[6] in 2006, more than 90% of coal consumed was used to generate electricity. In 1950, about 19% percent of the coal consumed was for electricity generation.[64]
In terms of the production of energy from domestic sources, from 1885 through 1951, coal was the leading source of energy in the United States. Crude oil and natural gas then vied for that role until 1982. Coal regained the position of the top domestic resource that year and again in 1984, and has retained it since.[65] The US burns 1 billion tons of coal every year.
Concern for climate change has led to a call for a moratorium on all coal consumption, unless carbon capture is utilized. Coal is the largest potential source of CO2 emissions.[66][67][68] The simplest, most stable form of carbon sequestration is to simply leave the coal in the ground.[69]
Integrated Gasification Combined Cycle (IGCC) is the cleanest currently operational coal-fired electricity generation technology. FutureGen is an experimental U.S. research project to investigate the possibility of sequestering IGCC CO2 emissions underground.
Natural gas production and consumption quadrupled between 1950 and 1970 to 20×1012 cu ft (570 km3), but declined steadily to stabilize in 1986. Since then, the United States imports a rising share of its gas. In 2008 consumption of natural gas stood at 23.2×1012 cu ft (660 km3), while domestic production was at 20.6×1012 cu ft (580 km3). Approximately 3.0×1012 cu ft (85 km3) were imported, mainly by pipelines from Canada, which accounted for 90% of foreign supplies, while the remainder is delivered by liquefied natural gas (LNG) tankers carrying gas from five different countries.[70]
The largest gas producing states in 2007 were Texas (30%), Wyoming (10%), Oklahoma (9%) and New Mexico (8%), while 14% of the country's production came from the federal offshore lands in the Gulf of Mexico.[70] Recent development in hydraulic fracturing and horizontal drilling have increased interest for shale gas across the United States in recent years. Leading fields are the Barnett Shale in Texas and the Antrim Shale in Michigan. Natural gas reserves in the United States were 35% higher in 2008 than two years earlier largely due to shale gas discoveries.[71]
As of 2008, nuclear power in the United States is provided by 104 commercial reactors (69 pressurized water reactors and 35 boiling water reactors) licensed to operate at 65 nuclear power plants, producing a total of 806.2 TWh of electricity, which was 19.6% of the nation's total electric energy generation in 2008.[72] The United States is the world's largest supplier of commercial nuclear power.
As of 2010, the demand for nuclear power is softening in America, and some companies have withdrawn their applications for licenses to build.[73][74] Ground has been broken on two new nuclear plants with a total of four reactors. The only reactor currently under construction in America, at Watts Bar, Tennessee, was begun in 1973 and may be completed in 2012. Of the 104 reactors now operating in the U.S., ground was broken on all of them in 1974 or earlier.[73][74] In September 2010, Matthew Wald from the New York Times reported that "the nuclear renaissance is looking small and slow at the moment".[75]
Following the 2011 Japanese nuclear accidents, the U.S. Nuclear Regulatory Commission has announced it will launch a comprehensive safety review of the 104 nuclear power reactors across the United States, at the request of President Obama. The Obama administration "continues to support the expansion of nuclear power in the United States, despite the crisis in Japan".[76] Following the Japanese nuclear emergency, public support for building nuclear power plants in the U.S. dropped to 43%, slightly lower than it was immediately after the Three Mile Island accident in 1979, according to a CBS News poll.[77]
Renewable energy accounted for about 8% of total energy consumption in the United States in 2009. In the same year, approximately 10% of the electricity produced nationally came from renewable sources.[78] The United States' hydroelectric plants make the largest contribution to the country's renewable energy, producing 248,100MW of the 371,700MW (67%) generated through all renewable energy.[79][80] However, wind power in the United States is a growing industry. Increases in wind, solar, and geothermal power are expected to allow renewable energy production to double in the three year period from 2009 to 2012, an increase from 8% to 14% of total consumption. Most of the increase is expected to come from wind power.[81]
As of the third quarter of 2011, the cumulative installed capacity of wind power in the United States was 43,461 megawatts (MW),[82] making it second in the world behind China. In 2010 Wind power accounted for 2.3% of the electricity generated in the United States.[83] This amounted to 94,650 thousand megawatt-hours of electricity.[84] Driven by state renewable energy targets, fourteen states have installed over 1,000 MW of wind capacity, and a total of 37 states now have installed at least some utility-scale wind power.[85] Texas, with 9,728 MW of capacity, has the most installed wind power capacity of any U.S. state, followed by Iowa with 3,670 MW.[86] The Roscoe Wind Farm (780 MW) in Texas is the largest wind farm in the US as of 2009.[87]
Several solar thermal power stations, including the new 64 MW Nevada Solar One, have also been built. Solar Energy Generating Systems (SEGS) is the name given to nine solar power plants in the Mojave Desert, which were commissioned between 1984 and 1991.[88] The SEGS installation uses parabolic trough solar thermal technology along with natural gas to generate electricity. The plants have a total generating capacity of 354 MW, making the system the largest solar plant of any kind in the world.[88]
The Ivanpah Solar Power Facility is a 392 MW solar thermal power facility which is under construction in south-eastern California.[89] The Solana Generating Station is a 280 MW solar power plant which is under construction about 70 miles (110 km) southwest of Phoenix, Arizona. The Mojave Solar Park is a 280 MW solar thermal power facility under construction in the Mojave Desert in California, which should be completed in 2014.[90] There are plans to build many other large solar thermal plants in the United States.
Photovoltaic (PV) cells convert sunlight directly into electricity and are made of semiconductors such as crystalline silicon or various thin-film materials.[91] The Copper Mountain Solar Facility is a 48 MW solar PV power plant in Boulder City, Nevada. The DeSoto Next Generation Solar Energy Center is a 25 MW photovoltaic solar power facility in Arcadia, DeSoto County, Florida. The 21 megawatt Blythe Photovoltaic Power Plant is the largest PV solar project in California. The 14 MW Nellis Solar Power Plant is located within Nellis Air Force Base in Clark County, Nevada.
There are also many large plants under construction. The Desert Sunlight Project is a 550 MW solar power plant under construction in Riverside County, California, that will use thin-film solar photovoltaic modules made by First Solar.[92] The Topaz Solar Farm is a 550 MW photovoltaic power plant, being built in San Luis Obispo County, California.[93] The Blythe Solar Power Project is a 500 MW photovoltaic station under construction in Riverside County, California. The Agua Caliente Solar Project is a 290 megawatt photovoltaic solar generating facility being built in Yuma County, Arizona. The California Valley Solar Ranch (CVSR) is a 250 megawatt (MW) solar photovoltaic power plant, which is being built by SunPower in the Carrizo Plain, northeast of California Valley.[94] The 230 MW Antelope Valley Solar Ranch is a First Solar photovoltaic project which is under construction in the Antelope Valley area of the Western Mojave Desert, and due to be completed in 2013.[95]
With 2,957 MW of installed geothermal capacity, the United States remains the world leader with 30% of the online capacity total. As of early 2009, 120 new projects are underway.[96] When developed, these projects could potentially supply up to 3,979 MW of power, meeting the needs of about 4 million homes. At this rate of development, geothermal production in the United States could exceed 15,000 MW by 2025.[97]
President Barack Obama's American Recovery and Reinvestment Act of 2009 includes more than $70 billion in direct spending and tax credits for clean energy and associated transportation programs. This policy-stimulus combination represents the largest federal commitment in U.S. history for renewable energy, advanced transportation, and energy conservation initiatives. As a result of these new initiatives, many more utilities are expected to strengthen their clean energy programs.[98] Governor Jerry Brown has signed legislation requiring California's utilities to get 33 percent of their electricity from renewable energy sources by the end of 2020.[99]
In recent years there has been an increased interest in biofuels - bioethanol and biodiesel - derived from common agricultural staples or waste. Increased domestic production of these fuels could reduce US expenditure on foreign oil and improve energy security if methods of producing and transporting the fuels do not involve heavy inputs of fossil fuels, as current agriculture does.
Most cars on the road today in the U.S. can run on blends of up to 10% ethanol, and motor vehicle manufacturers already produce vehicles designed to run on much higher ethanol blends. Portland, Oregon, recently became the first city in the United States to require all gasoline sold within city limits to contain at least 10% ethanol.[100] Ford, DaimlerChrysler, and GM are among the automobile companies that sell “flexible-fuel” cars, trucks, and minivans that can use gasoline and ethanol blends ranging from pure gasoline up to 85% ethanol (E85). By mid-2006, there were approximately 6 million E85-compatible vehicles on U.S. roads.[101]
The Renewable Fuels Association counts 113 U.S. ethanol distilleries in operation and another 78 under construction, with capacity to produce 11.8 billion gallons within the next few years. The Energy Information Administration (EIA) predicts in its Annual Energy Outlook 2007 that ethanol consumption will reach 11.2 billion US gallons (42,000,000 m3) by 2012, outstripping the 7.5 billion US gallons (28,000,000 m3) required in the Renewable Fuel Standard that was enacted as part of the Energy Policy Act of 2005.[102]
Expanding ethanol fuel (and biodiesel) industries provide jobs in plant construction, operations, and maintenance, mostly in rural communities. According to the Renewable Fuels Association, the ethanol industry created almost 154,000 U.S. jobs in 2005 alone, boosting household income by $5.7 billion. It also contributed about $3.5 billion in tax revenues at the local, state, and federal levels.[101]
In recent years, there has been criticism about the production of ethanol fuel from food crops.[103][104][105] However, second generation biofuels are now being produced from a much broader range of feedstocks including the cellulose in dedicated energy crops (perennial grasses such as switchgrass and Miscanthus giganteus), forestry materials, the co-products from food production, and domestic vegetable waste.[106] Produced responsibly they are sustainable energy sources that need not divert any land from growing food, nor damage the environment.[107][108]
There are many different types of energy efficiency innovations and these include: efficient water heaters; improved refrigerators and freezers; advanced building control technologies and advances in heating, ventilation, and cooling (HVAC); smart windows that adapt to maintain a comfortable interior environment; a steady stream of new building codes to reduce needless energy use, and compact fluorescent lights. Improvements in buildings alone, where over sixty-percent of all energy is used, save tens of billions of dollars per year.[110]
Several states, including California, New York, Rhode Island, and Wisconsin, have consistently deployed energy efficiency innovations. Their state planners officials, citizens, and industry leaders, have found these to be very cost-effective, often providing greater service at lower personal and social cost than simply adding more fossil-fuel based supply technologies. This is the case for several reasons. Energy efficient technologies often represent upgrades in service through superior performance (e.g. higher quality lighting, heating and cooling with greater controls, or improved reliability of service through greater ability of utilities to respond to time of peak demand). So these innovations can provide a better, less expensive, service.[110]
A wide range of energy efficient technologies have ancillary benefits of improved quality of life, such as advanced windows that not only save on heating and cooling expenses, but also make the work-place or home more comfortable. Another example is more efficient vehicles, which not only save immediately on fuel purchases, but also emit less pollutants, improving health and saving on medical costs to the individual and to society.[110]
In March 2009, Vice President Joe Biden announced plans to invest $3.2 billion in energy efficiency and energy conservation projects in the United States. The Energy Efficiency and Conservation Block Grants program, funded by President Obama's American Recovery and Reinvestment Act, will provide grants for projects that reduce total energy use and fossil fuel emissions, and improve energy efficiency nationwide.[111]
DOE and the U.S. Environmental Protection Agency (EPA) have released an updated version of the National Action Plan for Energy Efficiency "Vision for 2025: A Framework for Change", which lays out a proposed energy efficiency action plan for state policy makers. If implemented by all states, the plan could lower energy demand across the country by 50%, achieve more than $500 billion in net savings over the next 20 years, and reduce annual greenhouse gas emissions equivalent to those from 90 million vehicles. The report, which was released under the National Action Plan for Energy Efficiency initiative, was produced by more than 60 energy, environmental, and state policy leaders from across the country. The updated action plan encourages investment in low-cost energy efficiency programs and shows the progress that the states are making toward their goals, while identifying areas for additional progress. The report is accompanied by two technical assistance documents that offer cost-effectiveness tests for energy efficiency programs and best practices for providing data to businesses.[112]
An incentive resulting from US energy policy is a factor that provides motive for a specific course of action regarding the use of energy. In the U.S. most energy policy incentives take the form of financial incentives. Examples of these include tax breaks, tax reductions, tax exemptions, rebates, loans and specific funding. Throughout US history there have been many incentives created through U.S. energy policy. Most recently the Energy Policy Act of 2005, Energy Independence and Security Act of 2007, and Emergency Economic Stabilization Act of 2008, each promote various energy efficiency improvements and encourage development of specific energy sources. U.S. Energy policy incentives can serve as a strategic manner to develop certain industries that plan to reduce America’s dependence on foreign petroleum products and create jobs and industries that boost the national economy. The ability to do this depends upon which industries and products the government chooses to subsidize.
The 2012 budget that President Obama submitted to Congress calls for a 70 percent increase over the 2011 allocation for federal research and development activities related to renewable energy. The Office of Science in the Department of Energy would receive $2.0 billion for basic energy sciences to discover new ways to produce, store and use energy. Included in that amount are allocations of $457 million for solar energy; $341 million for biofuels and biomass R&D, including a new reverse auction to promote advanced biofuels; and more than doubling investment in geothermal energy to $102 million. The budget includes funding to accelerate the deployment of new models of energy research pioneered in the last several years, including $550 million for the Advanced Research Projects Agency–Energy, a program that supports breakthrough ideas.[113]
Public investment can enable the development of infrastructure projects through the use of public funds, grants, loans or other financing options. These funds provide a means for allocating the capital necessary for the development of renewable energy technologies. In February 2011, the U.S. Department of Energy launched its SunShot initiative, a 10-year $27 million program to cut the total costs of photovoltaic solar energy systems by 75% by 2020.[114]
Federal tax incentives can be designed to accelerate market adoption, create jobs, encourage investment in a public good (reduced pollution) or encourage investment in renewable technology research and development. The Production Tax Credit (PTC) reduces the federal income taxes of qualified tax-paying owners of renewable energy projects based on the electrical output (measured in kWh) of grid-connected renewable energy facilities. The Investment Tax Credit (ITC) reduces federal income taxes for qualified tax-paying owners based on dollars of capital investment in renewable energy projects. The Advanced Energy Manufacturing Tax Credit (MTC) awards tax credits to new, expanded, or re-equipped domestic manufacturing facilities that support clean energy development.[115]
The Department of Energy’s Loan Guarantee Program, established by the Energy Policy Act of 2005 and enhanced by the American Recovery and Reinvestment Act of 2009, attempts to pave the way for investor support of clean energy projects by providing a guarantee of financing up to 80% of the project cost. The program is scheduled to end on September 30, 2011, unless Congress passes further legislation.[116]
A Renewable Portfolio Standard (RPS) is a mandate that requires electricity providers to supply to their customers a minimum amount of power from renewable sources, usually as a percentage of total energy use. As of June 2010, such standards have been enacted in 31 U.S. states and the District of Columbia.[117] Congress has considered a national RPS since 1997: the Senate has passed legislation three times, and the House once.[118] As of April 2011, both houses have not acted in unison to pass legislation.
In the United States biofuel subsidies have been justified on the following grounds: energy independence, reduction in greenhouse gas emissions, improvements in rural development related to biofuel plants and farm income support. Several economists from Iowa State University found “ there is no evidence to disprove that the primary objective of biofuel policy is to support farm income.”[119]
Consumers who purchase hybrid vehicles are eligible for a tax credit that depends upon the type of vehicle and the difference in fuel economy in comparison to vehicles of similar weights. These credits range from several hundred dollars to a few thousand dollars.[120] Homeowners can receive a tax credit up to $500 for energy efficient products like insulation, windows, doors, as well as heating and cooling equipment. Homeowners who install solar electric systems can receive a 30% tax credit and homeowners who install small wind systems can receive a tax credit up to $4000. Geothermal heat pumps also qualify for tax credits up to $2,000.[121]
Recent energy policy incentives have provided, among other things, billions of dollars in tax reductions for nuclear power, fossil fuel production, clean coal technologies,renewable electricity production, and conservation and efficiency improvements.[122]
Although exceeded by China,[123] the United States has historically been the world's largest producer of greenhouse gases.[124] Some states, however, are much more prolific polluters than others. The state of Texas produces approximately 1.5 trillion pounds of carbon dioxide yearly, more than every nation in the world except five (and the United States): China, Russia, Japan, India, and Germany.[125]
Despite signing the Kyoto Protocol, the United States has neither ratified nor withdrawn from it. In the absence of ratification it remains non-binding on the US. Many cities, however, have adopted Kyoto. As of March 11, 2007, 418 US cities in 50 states, representing more than 60 million Americans adopted Kyoto after Mayor Greg Nickels of Seattle started a nationwide effort to get cities to agree to the protocol.[126]
The Obama Administration has promised to take specific action towards mitigation of climate change. In addition, at state and local levels, there are currently a number of initiatives. As of January 18, 2007, eight Northeastern US states are involved in the Regional Greenhouse Gas Initiative (RGGI),[127] a state level emissions capping and trading program.
On August 31, 2006, the California Legislature reached an agreement with Governor Arnold Schwarzenegger to reduce the state's greenhouse-gas emissions, which rank at 12th-largest carbon emitter in the world,[128] by 25 percent by the year 2020. This resulted in the Global Warming Solutions Act which effectively puts California in line with the Kyoto limitations, but at a date later than the 2008–2012 Kyoto commitment period.
In the non-binding 'Washington Declaration' agreed on February 16, 2007, the United States, together with Presidents or Prime Ministers from Canada, France, Germany, Italy, Japan, Russia, United Kingdom, Brazil, China, India, Mexico and South Africa agreed in principle on the outline of a successor to the Kyoto Protocol. They envisage a global cap-and-trade system that would apply to both industrialized nations and developing countries, and hoped that this would be in place by 2009.[129][130]
Chemistry Professor Nathan Lewis at Caltech estimates that to keep atmospheric carbon levels below 750 ppm, a level at which serious climate change would occur, by the year 2050, the United States would need to generate twice as much energy from renewable sources as is generated by all power sources combined today.[131] However, current research indicates that even carbon dioxide concentrations in excess of 450 ppm would result in irreversible global climate change.[132]
The book, Carbon-Free and Nuclear-Free, A Roadmap for U.S. Energy Policy,[133] by Arjun Makhijani, argues that in order to meet goals of limiting global warming to 2 °C, the world will need to reduce CO2 emissions by 85% and the U.S. will need to reduce emissions by 95%, which can be extended to within a few percent plus or minus of carbon free with little additional change.[134] The book calls for phasing out use of oil, natural gas, and coal which does not use carbon sequestration by the year 2050.[135] Effective delivered energy is projected to increase from about 75 Quadrillion Btu in 2005 to about 125 Quadrillion in 2050,[136] but due to efficiency increases, the actual energy input is projected to increase from about 99 Quadrillion Btu in 2005 to about 103 Quadrillion in 2010 and then to decrease to about 77 Quadrillion in 2050.[137] Petroleum use is projected to increase until 2010 and then linearly decrease to zero by 2050. The roadmap calls for nuclear power to decrease to zero at the same time, with the reduction also beginning in 2010.[138]
In his book Hell and High Water, author Joseph Romm calls for the rapid deployment of existing technologies to decrease carbon emissions. In a follow-up article in Nature.com in June 2008, he argues that "If we are to have confidence in our ability to stabilize carbon dioxide levels below 450 p.p.m. emissions must average less than [5 billion metric tons of carbon] per year over the century. This means accelerating the deployment of the 11 wedges so they begin to take effect in 2015 and are completely operational in much less time than originally modelled by Socolow and Pacala."[139]
Texas Billionaire T. Boone Pickens has promoted the Pickens Plan with a television advertisement campaign questioning the current state of energy in the US. He is an advocate of renewable energy sources and proposed building a 4000 MW wind farm in the state of Texas. Even Indiana, estimated to have a potential for developing only 30 MW of wind power in 1991 using 50 m high wind turbines, was in 2006 estimated as having the potential for 40,000 MW of wind power, using higher, 70 m turbines, and possibly twice that with modern 100 m high turbines.[140]
Long distance electric power transmission results in energy loss, through electrical resistance, heat generation, electromagnetic induction and less-than-perfect electrical insulation.[141] In 1995, these losses were estimated at 7.2%.[142] Energy generation and distribution can be more efficient the closer it is to the point of use, if conducted in a high-efficiency generator, such as a CHP. In the generation and delivery of electrical power, system losses along the delivery chain are pronounced. Of five units of energy going into most large power plants, only about one unit of energy is delivered to the consumer in a usable form.[143] A similar situation exists in gas transport, where compressor stations along pipelines use energy to keep the gas moving, or where gas liquefaction/cooling/regasification in the liquiefied natural gas supply chain uses a substantial amount of energy, even though the scale of the loss is not as pronounced as it is in electricity.
Distributed generation is a means of reducing total and transmission losses.
Electricity:
Electricity - production by source:
Oil:
Heat Engines are only 20% efficient at converting raw energy (oil) into work.[145][146] Electric transmission (production to consumer) loses over 23% of the energy due to generation, transmission, and distribution[147]
| US carbon dioxide emissions (thousands of metric tons of CO2)[148] | ||
| Year | CO2 | Change from 1990 |
| 1990 | 4,825,360 | 0.00% |
| 1991 | 4,835,750 | 0.22% |
| 1992 | 4,811,240 | -0.29% |
| 1993 | 5,093,340 | 5.55% |
| 1994 | 5,191,960 | 7.60% |
| 1995 | 5,191,790 | 7.59% |
| 1996 | 5,296,900 | 9.77% |
| 1997 | 5,563,500 | 15.30% |
| 1998 | 5,513,530 | 14.26% |
| 1999 | 5,608,310 | 16.23% |
| 2000 | 5,803,410 | 20.27% |
| 2001 | 5,757,010 | 19.31% |
| 2002 | 5,805,750 | 20.32% |
| 2003 | 5,799,240 | 20.18% |
The US results from the 1st Annual World Environment Review, published on June 5, 2007 revealed that:[149]
An April CBS News/New York Times poll collected a wide range of data that demonstrates the public’s desire for serious action on global warming. By an almost two-to-one margin (63 percent to 32 percent), the public endorses the idea that protecting the environment is so important that “requirements and standards cannot be too high” and that “continuing environmental improvements must be made regardless of cost.”
The public is also quite clear on its priorities when it comes to promoting energy conservation versus increasing the supply of oil, coal, and natural gas. When asked which of these should be the higher priority, the public chooses energy conservation by a very wide 68 percent-to-21 percent margin.[150]
The public also predominantly believes that the need to cut down on energy consumption and protect the environment means increased energy efficiency should be mandated for certain products. Ninety-two percent of Americans now support such requirements.[151]
The Obama administration includes Dr. Steven Chu, to head the U.S. Department of Energy.
As of February, 2008, the goals linked from the DOE website are:[152]
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