FINAL
ENERGY BILL APPROVED
Industry Comment 12//19/2007
FINAL ENERGY BILL
APPROVED: Life after Death
No sooner did Congress dash hopes of
passing any energy legislation in 2007, then suddenly a slimmed-down
energy bill (H.R.6) was approved. The impact of the ”new” 2007 energy
bill will be difficult to judge in view of the fact that the effective
dates for many provisions are years ahead and will require subsequent
funding approvals from Congress
(...you see, there is life after death in Washington).
The energy bill is best characterized by Mae West: "two plus two
makes five, if you know how to work it right." In this case,
Congress apparently has added "two plus two" to arrive at 22.
On December 19, 2007, President Bush
signed the bill into law. It is aimed primarily at reducing U.S. oil
dependence by, among other things:
(1) Establishing higher standards for
vehicle fuel economy
(2) Setting tougher standards for
appliance makers (see the “Energy Star” label program)
(3) Phasing out traditional light bulbs
(4) Mandating a five-fold increase in the
use of biofuels, especially ethanol.
What Happened To H.R. 6?
(... apparently it’s had a major face lift!)
The new bill even has a much shorter
title: the “Renewable Fuels,
Consumer Protection, and Energy Efficiency Act of 2007,” as opposed to
the paragraph-long title of its predecessor. H.R.6,
after facing several defeats in the Senate and House, passed without two
major provisions:
(1) The Senate dropped a provision that
would have extended tax credits to wind, solar and biomass power
producers and raised taxes on oil and gas companies by about $13 billion
over 10 years to help cover the credits.
(2) Senators also dropped a requirement
that some utilities produce 15 percent of their power from renewable
sources.
With the disappearance of these two
measures the legislation was finally passed by the U.S. House and Senate.
The bill contains the first change in new vehicle fuel economy
requirements in 32 years. The legislation also requires that biofuels be
blended with gasoline to reduce the amount of petroleum needed for U.S.
transportation. It boosts the requirement for production of biofuels to
36 billion gallons by 2022 (interim amounts are 9 billion gallons in
2008 and 15.2 billion gallons in 2011), with 20 billion coming from
non-corn-based or "advanced" biofuels, up from the current 6-billion
gallon level. Ethanol is a big winner in this legislation since it is
now the principal additive to gasoline. The increased production of
ethanol and other biofuels should give a sizeable boost to companies
like Archer Daniels Midland and Pacific Ethanol.
Lighting manufacturers are not immune
from the new law since it phases out traditional light bulbs. However,
the world's largest light-bulb maker, General Electric, successfully
argued for exemptions from the mandate for certain specialty lamps.
Appliance manufacturers face the first limits on the amount of water
used in new washing machines and dishwashers. And heating and cooling
appliance makers will have to improve the efficiencies of their products
as well.
Allocation of future research dollars
seems to be one of the hallmarks of this legislation. And although funds
are earmarked for research into better batteries more energy-efficient
lighting, smart grid technologies as well as less-energy dependent forms
of transportation, Congress still has to appropriate the money. In
theory, consumers stand to benefit from research and development grants
(if they are in fact ultimately receive Congressional funding approval)
into solar, wind, geothermal and other renewable sources. But these
changes, like the efficiency mandates, could take years to make their
way into commercially viable products and therefore have a noticeable
impact on the environment.<
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