michaelminn.net / Energy / Energy Policy

Introduction to US Energy Policy

This tutorial is based on the fifth chapter of Michael E. Kraft's 2015 book "Environmental Policy and Politics", and Brandi Robinson and John A. Dutton's materials for Penn State's GEOG 432 Energy Policy This material is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.

Merriam-Webster defines policy as:

A high-level overall plan embracing the general goals and acceptable procedures especially of a governmental body

Charles L. Cochran and Eloise F. Malone offer a more-specific definition:

Public policy consists of political decisions for implementing programs to achieve societal goals

Breaking that definition down into its pieces:

Regulatory Mechanisms

Schoolhouse Rock: I'm Just a Bill (1976 - Dave Frishberg, Jack Sheldon)

Public policy is formalized with legislation, laws that have been enacted by some type of governing body such as the US Congress, the President, a state legislature, a city council, or some other governing body).

Regulations are the way legislation is actually enacted on the ground. Energy regulations can take many forms.

Taxation

Taxation involves levying a charge on a unit of good or service. Energy taxes can be charged at the point of production or consumption:

Carbon taxes are consumption taxes based on the carbon content of different fuels, and aim to make alternative energy resources (wind, solar, biomass, etc.) more cost competitive. Taxing carbon also raises revenue which can then be funneled back into programs to reduce emissions further.

There's ongoing debate over which policy mechanism, a carbon tax or a tradable permits system, incentivizes innovation and deeper carbon emission reductions. Those in favor of a carbon tax contend that it is straightforward, transparent, and able to achieve desired reductions for a known cost. There's substantial literature supporting a carbon tax over a tradable permit system.

Standards

Standards are measurable goals established to achieve a certain amount of environmental benefit, like the Renewable Portfolio Standards developed across the country by individual states to increase the percentages of electricity generated with renewable energy resources. Standards mandate that a particular activity be done - like in the case of a renewable electricity standard, that 20% of a state's electricity be generated from renewable sources by a given year.

Another type of standard related to energy policy would be the adoption of Best Available Control Technologies (BACT). This is commonly applied to new stationary sources of emissions and can include anything from emission control devices to emission limits or techniques. In other words, if a company would like to build a new power plant, they must obtain a New Source Review permit from the EPA and employ the BACT for emissions.

Incentives and Grants

Incentives and grants can be offered as a carrot rather than a stick to encourage specific actions. These could include direct payments for a specific type of project or research, grant money to support research in part or in whole, tax credits for specific types of purchases or activity, or a price support / subsidy for a specified activity.

It is more difficult to predict an achieved level of success with this type of policy, because participation is voluntary. However, the voluntary nature of this policy instrument makes it a popular intermediate step between no regulation at all and some sort of mandatory compliance mandate like a tax or standard.

The examples from the 2009 American Recovery and Reinvestment Act below illustrate incentives and grants very well. No one is required to comply with any specific standard for renewable energy in this act; however, it offers multiple financial incentives for adopting energy efficiency technologies, conducting research or on-the-ground demonstration renewable energy projects, and many other related activities.

Guidelines

Guidelines, like incentives and grants, represent a voluntary opportunity to encourage citizens, businesses, or communities to adopt certain practices. Guidelines are there to facilitate the adoption of specific practices should someone want to undertake them; however, no one is required to follow them.

Guidelines tend to be a small-scale policy instrument, though EPA and Department of Energy's ENERGY STAR program is a great example of a larger scale, successful guideline related to energy policy. ENERGY STAR was started in 1992, a voluntary labeling program designed to help consumers identify energy efficient products (initially computer and monitors). Now, it has grown into a widespread network of partnerships with businesses and manufacturers. By their own estimates, ENERGY STAR saved consumers and businesses $17 billion in energy costs in 2009.

Market-Based Approaches

Carbon Trading

Market-based approaches seek to leverage private market forces to achieve policy goals. One of the most notable forms of this is a system of tradable permits, also known as a cap-and-trade system. While cap-and-trade has gained much notoriety in recent years as a potential legislative option for handling carbon emissions in the United States, it was first implemented in this country as part of the 1990 Clean Air Act Amendments to address the acid rain problem. This program was incredibly successfully in reducing sulfur dioxide emissions (even more than expected) at only 20-30% of the anticipated costs. this cap and trade approach to addressing an environmental problem.

The European Union, under the Kyoto Protocol, has adopted a similar trading scheme for carbon emissions. The program has been covering emissions since 2005. While it has not enjoyed the same successes in reductions and low costs that the US sulfur dioxide cap and trade program had, it has served as a valuable learning experience as other countries around the world consider carbon trading as an option for reducing emissions.

Net Metering

Another common market-based mechanism for encouraging rooftop solar generation is net metering, where electricity generated by solar panels beyond what is being used by the homeowner is sent back to the power grid, causing the electricty meter to run backwards. This is a great convenience for homeowners that allows them to draw from the commercial utility when the sun isn't shining and have a constant source of electricity, while reducing overall (net) electricity purchased from the utility.

This distributed model of electricity generation is a challenge to the traditional business model of electrical utilities, and utilities have often pushed back against state requrements to offer net metering. One comon justification for this opposition has been that paying homeowners for their generation at the retail rate rather than the wholesale rate is a unfair shift of costs for building and maintining the grid infrastructure back on to the utility and non-solar customers. In a high-profile case in Nevada in 2015, the local utility got the Nevada Public Utilities Commission to reduce net-metering payments from the retail rate to the significantly lower wholesale rate, resulting in a plunge in new residential solar installation. The NPUC later reversed that decision in response to political and public pressure.

Feed-In Tarrifs

An alternative to net-metering is the feed-in tariff, which was a part of the 1978 Public Utilities Regulatory Policy Act. and is an especially popular policy mechanism in Europe. Public utilities are required to allow independent electricity producers to supply (feed-in) electricity to the grid, and the producer is paid a fee (tariff) for that electricity. To encourage renewables, that fee can be made higher for energy from renewable sources and lower from non-renewables. The use of a tariff rather than market rates insulates renewable producers from wild swings in market rates, permitting a stable economic environment that can justify the significant capital investment needed to install solar.

Enforcement Mechanisms

Enactment of policy has no value unless there is an enforcement mechanism to ensure that the affected parties comply with the policy and provide consequences for non-compliance. The type of policy employed dictates the type of enforcement mechanism(s) necessary to keep the policy goals on track.

Generally, for voluntary policy options (such as tax incentives, grant opportunities, and guidelines), there is no real need for any sort of enforcement mechanisms. But, for those policy options that have some sort of mandatory component (taxes, market based approaches, and standards), there needs to be a system in place to ensure that the policy is actually enforced.

Generally, the energy policy document itself will detail who is in charge of ensuring compliance with the policy. The policy may even create a new office or establishment for managing the oversight of the policy (for example - 1974's Energy Reorganization Act established the Nuclear Regulatory Commission).

Enforcement mechanisms often involve legal proceedings in court, and can result in fines, loss of permits, and even criminal prosecution.

Indirect Policy Impacts

Energy policy is part environmental protection and part natural resource policy. The United States, however, has no comprehensive energy policy that compares to the extensive bureaucratic and regulatory machinery that governs environmental quality and natural resources. Rather, energy use is determined largely by the marketplace, with each major energy source shaped in part by an assortment of government subsidies and regulations adopted over decades and primarily for reasons that have little to do directly with the goals of energy policy as we think of them today.

Even without a comprehensive energy policy, federal, state, and local governments influence decision making on energy use in myriad ways. They do so through regulation of the by-products (e.g., air pollution), provision of services (e.g., building highways for motor vehicles), tax subsidies, and energy R&D assistance. The effects of such policies are rarely neutral, and the market is not truly free and competitive because of long-standing policy choices. For example, historically, policies have strongly favored mature and conventional energy sources such as oil, natural gas, coal, and nuclear power. They also have encouraged expansion of energy use rather than decrease in demand through improved energy efficiency and conservation.

Studies from the early 1990s indicated that taxpayers spent as much as $36 billion each year on federal energy subsidies, most of which favored fossil fuels and nuclear energy, although the Department of Energy has long stated that the real subsidies have been much lower (Koplow 1993). In 2005 a major assessment of the federal government's energy programs by the U.S. GAO estimated tax-related subsidies alone at $4.4 billion per year, with most of the benefits (about 88 percent) going to fossil fuel production (U.S. GAO 2005a). But by 2007, Department of Energy data show that subsidies reached a new high of $16.7 billion, with renewable energy sources now topping the list, primarily because of new and environmentally questionable subsidies for corn-based ethanol.

By 2009, at the start of the Obama administration, greater sums yet were invested in energy development as part of the nation's economy recovery policies. Most of them appear to have been successful despite some prominent failures, such as a major loan to the solar energy company Solyndra that the administration's critics cited frequently.

Of course, many other federal and state programs indirectly subsidize the way we use energy, and they have done so for years. One example is government support for highway construction and maintenance and, until recently, comparable neglect of mass transportation systems such as passenger trains and urban light rail systems. While not directly an energy policy, strong spending on highways has encouraged use of motor vehicles and discouraged the use of rail and bus systems. It also has profoundly affected the design and growth of cities across the country, encouraging urban sprawl and making cities more energy intensive than common elsewhere in the world in part because of their dependence on the automobile.

What difference do energy subsidies make for the way we use energy or the price that we pay for it? One example can be seen in the cost of gasoline. The price we pay at the pump, about $3.60 a gallon for regular gasoline in July 2013, is not the true cost of using the fuel. That price does not reflect the full expense of road construction and maintenance or the environmental and public health damage and other negative externalities related to access to the oil, transporting it around the world in supertankers, and ultimately burning its gasoline derivative in our cars, vans, sport utility vehicles (SUVs), and trucks.

Gas taxes in the United States remain well below those of other industrialized nations. In recent years, federal, state, and local taxes (state and local taxes vary widely) averaged about 14 percent of the cost of gasoline or about 48 cents per gallon. In Europe, however, taxes are up to 80 percent of the cost of gasoline paid at the pump, which explains why the cost of gasoline there (and in Japan and Canada) is more than twice as expensive as it is in the United States. The politics of energy in recent years has dictated that only painless measures would be acceptable in the U.S. Congress and at the state and local level.

One comprehensive analysis of the "optimal" gasoline tax based on only some of these factors concluded that it should be close to $1.00 a gallon rather than the then prevailing rate of 42 cents (Parry 2002). Environmental groups put the full social costs of using gasoline much higher, with some even including the national security costs to maintain access to Middle East oil fields. If the United States adopted a cap-and-trade climate change policy, the EPA has estimated that the cost of gasoline would rise by about $0.25 a gallon by 2030, but such an increase would still not be close to reflecting the full cost to society of using gasoline.

The Evolution of US Energy Policy

The Daily Show with Jon Stewart: An Energy-Independent Future (6/16/2010)

The Early 20th Century

To the extent that the nation had any discernible energy policy goal before the 1970s, it was to maintain a supply of abundant, cheap, and reliable energy, preferably from domestic sources, to support a growing economy and to ensure a reasonable profit for producers. Legislation in the first half of the 20th century was focused providing the energy needed for America's development into a modern society. Renewable energy sources other than hydropower were a distinctly minor component in the overall system.

Federal and state regulation of coal, natural gas, and oil, for example, historically has focused on prices and competition within each energy sector. It has served the interests of energy producers by stabilizing markets and ensuring profits and it has tried to meet a larger public interest in ensuring reliable energy supplies at an affordable cost.

Some examples of early energy legislation include:

The Nuclear Age

The development of nuclear power technology in the 1940s resulted in different type of energy policy because of the connection to national security, as well as the complexity and perceived dangers associated with nuclear power.

Under the auspices of the Atomic Energy Acts of 1946 and 1954, federal agencies responsible for the civilian nuclear energy program shielded the technology from the marketplace-and from public scrutiny-to ensure rapid growth of its use. The Atomic Energy Commission (ABC) and its successor agencies, the Nuclear Regulatory Commission (NRC) and the Department of Energy, vigorously promoted nuclear power as a critical component of the nation's mix of energy resources. Congress contributed to those goals by subsidizing nuclear energy through restrictions on liability set by the 1957 Price-Anderson Act (which limits the financial responsibility of plant owners to $10 billion in the event of an accident) and by provision of lavish R8CD funds. All this was considered to be essential to create a new civilian nuclear power industry in light of the uncertainties and risks associated with it.

The Environmental Era

In the 1960s and 1970s, there was a growing awareness of the environmental impacts of industrial activity in general, and energy production in particular. However, modern American life is physically and economically dependent on inexpensive energy, and the contradition between those needs and ideals has resulted in a wild swings in energy policy.

Two fundamentally important pieces of legislation from the dawn of the environmental era were the 1963 Clean Air Act and the 1970 National Environmental Policy Act (NEPA). NEPA mandated arduous environmental impact statements that made clear the environmental consequences of energy extraction and use, whether the sources were oil, coal, or nuclear power. While dramatically improving environmental quality over subsequent decades, these new laws added difficulty and expense to domestic industry in general and the production of fossil fuels in particular.

The 1970s Energy Crisis

The 1973 oil price shock was another dramatic inflection point in energy policy. The Organization of Petroleum Exporting Countries (OPEC) imposed an embargo on the sale of their oil in response to US support for Israel in the Yom Kippur War. This led to a quadrupling of world oil prices and severe economic repercussions.

With the reliability of oil supplies called into question, energy policy initiatives in the 1970s under presidents Richard Nixon, Gerald Ford, and Jimmy Carter were driven largely by concern for the security and stability of the energy supply. Both the federal and state governments made greater efforts to encourage conservation and efficiency of use through a variety of taxation and regulatory actions. Such efforts included adoption in 1975 of the Energy Policy and Conservation Act. That act established the Corporate Average Fuel Economy (CAFE) standards for motor vehicles, extended domestic oil price controls, and authorized the Strategic Petroleum Reserve to stockpile oil for future emergencies (Goodwin 1981; Marcus 1992).

Under the Carter administration, energy policy goals began shifting to provision of secure and clean energy sources, but reliance on market forces remained the preeminent policy approach. President Carter made his National Energy Plan, which he called the "moral equivalent of war," a top policy priority in 1977 and 1978. A small ad hoc energy task force working under the direction of James Schlesinger, Carter's secretary of energy, assembled the plan to meet a presidential deadline of April 1977. The group emphasized a strong governmental role rather than reliance on the private sector, and it looked more to conservation than to increasing domestic supplies for solutions to the energy crisis.

The plan drew little support on Capitol Hill. Congress objected to many of its provisions, and it also was lobbied heavily by oil- and natural gas-producing industries; utilities; automobile companies; and labor, consumer, and environmental groups, all of whom found something to dislike in the plan. As a result, Congress enacted some of Carter's proposals and rejected others without substituting an equally comprehensive energy policy (Kraft 1981).

In the end, Congress approved five key components, which collectively were called the National Energy Act of 1978. Among them was the Natural Gas Policy Act, which partially deregulated and altered natural gas pricing to make the fuel more competitive with other sources. Also in the package was the Public Utilities Regulatory Policy Act (PURPA), which helped create a market for small energy producers using unconventional sources such as solar and geothermal.

Other provisions dealt with energy conservation, power plant and industrial fuel use, and energy taxes. Among other actions, Congress approved tax credits for home insulation, energy efficiency standards for home appliances, and taxes on so-called gas-guzzler cars. Environmental quality was a consideration at the time, but not the main concern. Indeed, Carter's plan aimed to expand use of coal because of its domestic abundance despite the environmental consequences of using such a notoriously dirty fuel. Yet Carter also greatly increased support for renewable energy sources. In 1977 Congress established the Department of Energy, which consolidated previously independent energy agencies into a cabinet department, with the NRC remaining an independent agency charged with overseeing nuclear safety.

Despite these policy and institutional limitations, the United States (and other industrialized nations) made great strides in energy conservation in the 1970s and 1980s. Slower economic growth, and the offshoring of old, inefficient heavy industries contributed to the energy savings. Consumer and industry demand for energy-efficient cars, buildings, lighting, motors, and appliances made a difference as well:

These gains were impressive, even if a growing population, a stronger economy, and Americans' penchant for larger vehicles, larger homes, and a wider variety of electrical appliances (from air conditioners to computers, smart cell phones, and large-screen televisions) translated into increased energy use over time (US. Department of Energy 1998). From today's perspective, it would be hard to call many of the energy policies of this era a great success because government programs remained complex, contradictory, and inefficient. Moreover, even with these improvements in energy efficiency, energy use per person in the United States has remained more than double that of Japan and most European nations.

Reagan's Nonpolicy on Energy

Many of the most innovative policies of the 1970s, including government support for conservation and development and use of alternative energy sources, did not last long. What remained in the early 1980s was cut back sharply during the Reagan administration. In a symbolic act of policy change, Reagan ordered his staff to remove solar panels installed at the White House by President Carter.

In keeping with his overall neoliberal world view, President Ronald Reagan strongly opposed a federal role on energy policy and favored reliance on the free market. He sought (unsuccessfully) to dismantle the Department of Energy, whose very existence symbolized federal intrusion into the energy marketplace. Some of his positions were broadly endorsed at the time because energy prices were declining.

In response to these conditions, Congress repealed tax breaks for installing energy-saving devices and approved budget cuts that effectively ended conservation and renewable energy programs (Axelrod 1984; Rosenbaum 1987). Between 1980 and 1990, for example, solar and renewable energy research funding in the Department of Energy declined by some 93 percent in constant dollars, and the department's energy conservation budget fell by 91 percent between 1981 and 1987 (Kraft 2015)

The Reagan administration's energy budget also concealed inconsistencies in its ostensible reliance on free market forces. For example, support for nuclear programs was increased even while virtually every other program was cut back sharply, usually without much attention paid to evidence of program success or failure. Programs to prepare for oil emergencies suffered because Reagan did as little as possible to meet legislative targets for filling the Strategic Petroleum Reserve, leaving the nation vulnerable to oil price shocks.

The Bush I Administration's National Energy Strategy

Energy issues reappeared on the political agenda in the late 1980s as the nation's dependence on oil imports rose once again and concern began to mount about global climate change following the hot and dry summer of 1988. In 1970 the United States imported 23 percent of its oil. By 1991 the figure climbed to 45 percent and by 2008, to 58 percent. This increased reliance on imported oil was due to:

In 1989, President George H.W Bush directed his Department of Energy to develop a National Energy Strategy (NES), which it prepared following extensive analysis within the department as well as nationwide public hearings. Bush defended the NES as an acceptable balance of energy production and conservation, whereas environmentalists argued that the plan tilted too much toward production, risking environmental damage in the process, and that it did little for energy conservation or mitigation of climate change.

Environmentalists successfully opposed opening the Arctic National Wildlife Refuge (ANWR, pronounced "ann waar") to oil and gas exploration, and they pressed hard, but without success, for big increases in the CAFE standards as an alternative to increasing oil supplies. Eventually, the wildlife refuge and the CAFE provisions were omitted from the final legislation to gain support from each side. Both issues would reappear when Bush's son, George W Bush, sent his own energy policy proposals to Congress in 2001. As is usually the case with energy policy bills, in 1991 Congress was besieged by lobbyists, particularly from energy interests and automobile manufacturers, who sought to maintain their advantages under current policies.

The outcome of congressional decision making in the early 1990s was largely political gridlock. There was too little concern and consensus about energy policy among the public and no effective way to restrain the politics of self-interest of energy producers. Thus the final bill displeased environmentalists, and other key players acknowledged that it would be merely a foundation on which to build a more comprehensive energy policy in the future (Idelson 1992a). Nevertheless, the 1992 Energy Policy Act set out some important goals and established unusual incentives for achieving them. The ultimate effects will depend on how well the policy is implemented.

The 1992 act, a massive measure running to some 1,300 pages, called for:

These were significant achievements, yet problems remained. The market forces that determine energy prices still did not adequately reflect either the environmental or national security costs of using energy. The 1992 act did not raise the CAFE standards for motor vehicles, which was the top priority of environmental groups, nor did it do much to reduce the use of oil.

The Clinton Administration Tries Its Hand

These deficiencies of the 1992 act were apparent when President Bill Clinton assumed office in January 1993. Environmental groups, still unhappy with the act, urged the president to create a high-level energy task force to review conflicting studies and build political consensus for a more effective energy policy. Clinton's transition staff promised a series of actions to accelerate energy efficiency in buildings and appliances, government purchase of alternative-fuel vehicles and energy-efficient computers, and research support for conservation technologies and renewable energy sources. The president announced in his Earth Day address in April 1993 that he would issue executive orders promoting such actions where possible. One such order directed all federal agencies to achieve by 2010 a 35 percent improvement in energy efficiency and a 30 percent cut in greenhouse gas emissions.

President Clinton learned early in his administration that solving the nation's energy problems entailed overcoming serious political obstacles. As part of his deficit-reduction package announced in early 1993, for example, the president had proposed a broad energy tax based on the heat output of fuel, or British thermal units (BTUs). He expected the tax to raise some $72 billion over five years while simultaneously reducing the use of fossil fuels, thus curbing pollution and reducing oil imports. The proposal bore some resemblance to the carbon tax (based on carbon dioxide emissions) that had long been advocated by environmentalists.

Despite these high hopes, however, Clinton's BTU tax was an instant political failure. It was greeted by a tidal wave of opposition on Capitol Hill, reflecting complaints from industry groups and others (farmers, energy-producing states, and states reliant on home heating oil) that the plan would cost them too much money, reduce their competitiveness, and put people out of work. The National Association of Manufacturers, the U.S. Chamber of Commerce, the Chemical Manufacturers Association (later renamed the American Chemistry Council), and the American Petroleum Institute, among others, worked actively to defeat the tax through sophisticated use of satellite feeds, talk radio, opinion polls, a blizzard of newspaper editorials, and mass mailings to citizens urging them to protest the tax. In the end, Congress agreed only to a 4.3 cent per gallon increase in the federal gas tax, despite the lowest market price for gasoline in a generation.

The Clinton administration's Clean Car Initiative, later renamed the Partnership for a New Generation of Vehicles (PNGV), was expected to help achieve some of the same objectives as the rejected BTU tax and ultimately assist the nation in raising fuel economy. The PNGV called for the federal government to coordinate its R&D spending with the three largest U.S. automobile makers (Ford, General Motors, and DaimlerChrysler). Announced in 1993, the program was intended to produce a "supercar" that could get 80 miles per gallon with low pollutant emissions and without a loss in performance, passenger capacity, or safety. It enjoyed some success, and it may have moved some automakers, particularly Honda and Toyota, to begin selling fuel-efficient hybrid vehicles in the U.S. market in 2000. However, the Bush administration in 2002 ended the PNGV program and substituted an initiative to develop hydrogen-based or fuel cellpowered vehicles, termed FreedomCAR (Freedom Cooperative Automotive Research). President Obama cut funding for that program in his first year in office and directed funding toward development of electric vehicles and other technologies.

Clinton's Democrats lost control of the Congress in the 1994 elections, and a reactionary House majority unified under Newt Gingrich's conservative Contract With America had little taste for conservation or compromise. The Republican Congress enacted legislation that blocked the Department of Transportation from reviewing or changing fuel economy standards for vehicles in an effort to prevent President Clinton from raising mileage standards. The average fuel economy of U.S. vehicles dropped to its lowest level since 1980. For the 2003 model cars and passenger trucks, the EPA reported an average of 20.8 miles per gallon, some 6 percent below the high point of 15 years earlier. Before Americans began buying so many SUVs, the average was 22.1.

In this new environment, the Clinton administration was able to take some modest steps toward strengthening U.S. energy policy:

Energy Policy under Bush II

From the first days of President George W. Bush's administration, it was clear that new energy policy priorities would prevail. For example, the president decided to keep some Clinton administration energy efficiency rules for appliances but to oppose higher standards for new central air-conditioning systems. The rules were set to go into effect in February 2001 after years of development and negotiations with the affected industries.

Controversies over the administration's energy policies did not let up over the next seven years. Most of the attention focused on Bush's national energy plan, which he announced in May 2001. Prepared by a task force chaired by Vice President Dick Cheney, the plan called for significant increases in the use of fossil fuels and nuclear energy as well as easing of environmental regulations that might inhibit new energy production.

The Cheney task force consulted closely with major energy producers but not with environmental interests. Its recommendations to the president focused heavily on increasing energy supplies rather than reducing demand through conservation. Because of that strategy, it argued the nation needed to build 1,300 new power plants by 2020. Cheney himself dismissed the idea of conservation as a concern, saying "The aim here is efficiency, not austerity...Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy."

The Bush energy proposal initially did not fare well in Congress. The Republican House of Representatives approved it after what the press called "aggressive lobbying by the Bush administration, labor unions and the oil, gas and coal industries." The House bill included generous tax and research benefits for the oil, natural gas, coal, and nuclear power industries, and it permitted oil and gas drilling in ANWR, a perennially contentious issue. Those same proposals, however, could not pass muster in the Senate, but environmentalists were not successful there either. In a replay of the 1992 energy debate, the Senate defeated efforts by environmentalist groups to increase auto fuel efficiency and also rejected Bush's proposal to drill in ANWR. Despite extended negotiations, neither side was prepared to compromise given the intense and conflicting views within the core constituencies of each political party.

It is a telling comment about US. energy politics that members of Congress could not muster support for a national energy policy even in the aftermath of California's well-publicized struggle with an energy crisis, new concern over the integrity of the nation's electric power grid, and another war in the oil-rich Middle East.20 In the hope of generating more support for his bill, the president tried to link it with national security concerns following the terrorist attacks of 2001, but he was largely unsuccessful in doing so (Cooper 2002).

That energy/security relationship was more broadly endorsed several years later as a number of conservative organizations began warning about the nation's dependency on imported oil. Competing energy bills were debated repeatedly in Congress for the next four years with similar partisan divisions. Democrats favored increases in auto and truck fuel efficiency standards and they opposed drilling for oil in ANWR. Republicans were equally adamant that ANWR must be opened to energy development, but they opposed any increase in fuel efficiency standards (Guber and Bosso 2007; Kraft 2013a). Intense lobbying by car manufacturers, labor unions, the oil and gas industry, and environmentalists continued.

The political dynamics of the energy debate changed in 2000s as gasoline and other fuel prices, and public discontent over them, rose. By summer 2005 Congress surprised many when it managed to resolve differences between the two political parties and approve the Energy Policy Act of 2005, the first major overhaul of U.S. energy policy since 1992. The bill passed with bipartisan support and President Bush signed the measure in August, saying it would spur new domestic production of oil and natural gas and encourage expansion of renewable sources of energy. The emphasis in the 1,700-page law, however, clearly was on expansion of conventional fossil fuel sources and nuclear power:

Consistent with the president's initial proposal, the law did include items that drew significant criticism:

Some provisions of the new law, however, pleased environmentalists:

Late in 2007 Congress finally agreed on another modest energy package, the Energy Independence and Security Act of 2007, which included

The push for renewable biofuels also pushes energy policy into the realm of agricultural policy. For example, the 2008 Farm Bill included:

Energy Policy Under Barack Obama

As gas prices soared to new highs in 2008, energy issues once again rose to some prominence across the nation, and increasingly they were linked to climate change. States continued a trend of approving new requirements for use of renewable energy (Betsill and Rabe 2009; Rabe 2004, 2013), and a climate change bill reached the floor of the U.S. Senate for the first time.

The 2008 presidential election also gave new impetus to the search for national energy policy, with both John McCain and Barack Obama urging action on climate change, and leading corporations beginning to endorse the necessity of climate change policy.22 However, the Republican Party continued to emphasize the need for increasing domestic oil and gas supplies (particularly for offshore drilling) and building additional nuclear power plants while Democrats urged support for conservation, efficiency, and renewable energy and linked such a strategy to creation of green jobs; by fall of 2008, however, they too endorsed renewed offshore drilling with significant restraints to protect the environment. Former Vice President Al Gore even called in mid-2008 for a crash program to produce all electricity from carbon-free sources within 10 years.23

These debates continued through 2009 in the midst of a severe recession, with the House narrowly approving a major climate change and energy bill in June that would impose mandatory caps on emission of greenhouse gases. The House bill ran to more than 1,400 pages and integrated the climate change components with a diversity of other energy measures, including the first national renewable energy target; spending on new energy projects; and subsidies for low-carbon agriculture, electric vehicle development, and clean coal research. However, the same kinds of regional and partisan divisions evident in earlier periods were evident in 2009 as well, with Democrats from the older industrial Midwest and agricultural states worried about the impact on their local economies even as the U.S. EPA pegged the cost of the bill for the average household at only about $80 to $111 a year by 2020. The Senate was less receptive to the bill, and President Obama was too preoccupied with economic recovery and health care policy concerns in 2010 to provide the leadership essential to win Senate approval.24

In another action, the Obama administration substantially altered energy policy in early 2009 by including about $80 billion in spending, tax incentives, and loan guarantees to promote energy efficiency, renewable energy sources, fuel-efficient cars, mass transit, and clean coal as part of the economic stimulus bill, the American Recovery and Reinvestment Act of 2009; $39 billion of that amount went to the Department of Energy. By its size alone, the measure constituted the biggest energy bill in U.S. history. It provided:

As with the Gingrich revolution and Bill Clinton sixteen years earlier, the Republican takeover of the House in the 2010 midterm elections effectively crippled the Obama administration's ability to promote progressive energy legislation for the remaining six years of his term. In 2013, the Obama administration finally settled on a series of actions that the president could launch without approval by Congress. These included new EPA regulations on carbon dioxide emissions from existing power plants, a variety of spending initiatives to spur the development of new renewable energy technologies, and continued development of renewable energy resources on public lands. The administration signed on to the 2016 Paris Accord to address climate change. By many measures, these varied energy policy actions may well be one of the Obama administration's most notable legacies.26

State and Local Energy Policy

Some of the most promising energy policy initiatives, much like environmental protection actions, occur outside Washington, DC. State and local policymakers can more easily build consensus for innovations than is possible in the contentious arena of national politics where partisan and ideological battles often make agreement difficult (Betsill and Rabe 2009; Rabe 2013).

By 2012, 29 states with about 60 percent of the nation's population had enacted Renewable Portfolio Standards (RPS), which are mandates developed by state governments to generate a set percentage of their electricity from renewable sources. In the absence of that state being able to produce renewable sourced electricity at home, they also have the option to buy Renewable Energy Certificates (RECs) from other electricity suppliers. The benefits of a RPS system include improved air quality, reduced greenhouse gas emissions, and, potentially, job creation in the emerging renewable sectors. (interactive state map from Climate Central)

California has been a leader in energy and environmental initiatives:

Private Policy

The term policy is often use as a synonym for public policy, which imply government action of some kind.

However, institutions, organizations, and privately held companies all establish their own internal policies related to environmental stewardship and energy use. Corporations often adopt internal energy and environmental policies to govern their procedures and practices and to promote themselves as socially responsible in an increasingly environmentally conscious society.

These policies can be driven by economics, as reduced production inputs can mean reduced production costs and improved profits. However, such policies can also be primarily public-relations greenwashing efforts that are intended to hide negative environmental impacts from customers.

Some examples of corporate policies include: