We Don’t Need a National Energy Bill

Two days before the August recess, the nation’s oil and coal and nuclear companies had run out of time. Despite the vigorous efforts of Republicans, Senate Democrats had stalled a vote on an energy bill. It looked like the Senate would go into the long recess without having a companion bill to the truly pernicious piece of energy legislation embraced by the House months earlier.

And then the Democratic Party, in a move that stunned almost all political observers, agreed to allow last year’s energy bill, a bill fashioned when the Democrats controlled the Senate, to be voted on. With the vast majority of the Democratic Party voting in favor, the bill was soon passed. As more than one environmentalist observed, it was a classic case of snatching defeat from the jaws of victory.

“Never in our dreams did we imagine that we could pass a Democratic bill in a Republican Congress,” Senate Democratic leader Tom Daschle of South Dakota mused to the Associated Press. The chair of the Energy Committee Senator Pete Domenic (R-NM) revealed a far better grasp of politics. “This is a day to smile and smile big”, he declared. “The reason I’m smiling is because I’m going to be rewriting that bill” in the conference, which he will co-lead with Rep. Billy Tauzin (R-LA).

“We’ll write a completely different bill,” Domenici promised. “The final bill will look more like what I produced in committee this spring than it will the bill we are passing tonight.”

Daschle and company argue that they can still stop a bad bill coming out of the Conference Committee this fall. But they know it is much harder to kill a final bill than to derail a draft.

So why did the Democratic Party allow a national energy bill to go forward? Because they truly believe we need a national energy bill, and they don’t want to allow Republicans to portray them as obstructionists.

This is the crux of the matter. And in this the Democrats are wrong. We don’t need a national energy bill.

Any energy-related bill that originates in Washington will constitute a major step backward. By its nature, federal energy policies encourage national, read, “centralizing” strategies. Both parties support a federal energy policy that accelerates the construction of large power plants and high voltage transmission lines and the creation of unelected regional and national bodies whose job it will be to advocate for such construction.

A federal energy policy invariably preempts state and local authority. It lengthens the distance between the energy user and the energy producer and separates by ever-longer distances those who make the decisions from those who feel the impact of those decisions.

Opposing a federal energy policy from the top down does not mean opposing a national energy policy from the ground up. On the contrary. A key characteristic of renewable energy and one of the reasons it is so popular, is that it is a decentralized and decentralizing fuel source. Rooftop solar cells, farmer-owned ethanol plants and wind turbines – these are the technologies that will inhabit a renewable future.

Happily, state and local initiatives in this regard are occurring. Indeed, in the last five years states have begun to design a much more appealing and powerful energy policy than anything contained in either the Democratic or the Republican energy bills.

Many environmental groups consider a federal renewable portfolio standard a centerpiece of the Senate energy bill. Such a law would require all utilities to generate an increasing proportion of their electricity from renewable energy. Let’s ignore for the moment that this provision is almost certainly going to be excised in the Conference Committee. More to the point, a national renewable electricity standard is already emerging from the bottom up. Thirteen states with almost half the nation’s population have enacted such mandates. Many more may soon do so.

A federal renewable electricity standard might be welcome but it is not necessary. Moreover, it has its drawbacks. The Senate version, which requires a 10 percent renewable percentage, preempts state standards. That would overrule Nevada’s 15 percent standard.

The centerpiece for Senator Daschle and many midwestern legislators is the renewable fuel standard. This provision, contained in both the House and the Senate bills, require the oil companies to sell five billion gallons of ethanol by 2012.

Again, this is a worthy initiative. But actions at the state level have already moved us more than half way there as of mid-2003. Fourteen states have begun phasing out MTBE, a widely used gasoline additive that contaminates local water supplies. As this occurs, ethanol use will rise, probably exceeding 3.5 billion gallons by 2005.

Two years ago California’s vehicles were using nary a drop of ethanol. Today they are consuming more than 600 million gallons a year. New York and New England may soon begin to match those numbers as they phase out MTBE.

Even when it comes to research and development, states are viable alternatives to federal agencies. In the wake of deregulation 23 states assess electricity users a small sum to fund energy efficiency and renewable energy initiatives. This year these funds will spend more than $2 billion, a sum that rivals what the federal government is offering (outside of the federal weatherization program).

The only aspect of the federal energy bill that is not and cannot better be accomplished at the state level is a national tax incentive like the wind energy production tax credit. Yet here such bipartisan support exists that an extension could easily be attached to a far less controversial and damaging piece of legislation.

One shouldn’t be pollyannish about state actions. Progress in expanding renewable electricity and renewable fuels has come slowly, at much sacrifice, and only in fits and starts. State budget deficits have led some states to rob from their renewable and energy efficiency funds.

Yet it is at the state and local level that the scale of the problem and the scale of the solution are commensurate. It is at the local and state level that the energy sources available – sunlight, wind power, geothermal, biomass – are also the most popular energy sources. It is at the local and state level that factors such as job creation and economic development can be taken into account, as well as the more qualitative psychic rewards that come from being independent not only of OPEC but of one’s increasingly remote electric company.

Federal energy policy rarely values regional or local benefits; state energy policies often do. For example, state ethanol incentives often are designed to encourage small scale, farmer and locally owned biorefineries. The federal ethanol tax incentive, on the other hand, tends to favor larger absentee owned ethanol facilities.

During the August recess, the Democratic Party would do well to reconsider its fixation on a national energy policy. When the vandals got the handles at the federal level is not the time to give them access to the energy pump.

David Morris is vice-president of the Minneapolis and Washington, D.C., based Institute for Local Self-Reliance (www.ilsr.org) and author of Seeing the Light: Regaining Control of Our Electricity System.