Energy 2020

2
TABLE OF CONTENTS

ENrncv Is Gooo ..................................................................................................................................................................... 4

PRODUCING MORE

PnoouciNc Monr ................................................................................................................................................................... 6
Oit nNo Nn1unnt Gns .......................................................................................................................................................... 6
ENrxcv INorirNorNcr Fxor 0PEC Bv 2u2u ................................................................................................... 9
S1xn1rcic Pr1xoirur Rrsrxvr ......................................................................................................................... 19
Cont............................................................................................................................................................................................ 2u
UNcoNvrN1ioNnt Fossit Furts ................................................................................................................................... 24
0ii Sunir ....................................................................................................................................................................... 28
Nr1unNr Bvoxn1rs nNo 01urx 0NcoNvrN1ioNni uns Rrsouxcrs ................................................. 29
RrNrwnntr Rrsouncrs ................................................................................................................................................... S1
Bvoxoiowrx ............................................................................................................................................................... SS
NnxiNr BvoxokiNr1ic Powrx ............................................................................................................................ SS
Soinx Powrx ............................................................................................................................................................... S6
WiNo Powrx ................................................................................................................................................................ S9
ENrxcv S1oxncr ........................................................................................................................................................ 4u
uro1urxrni Powrx ................................................................................................................................................ 4S
Biornss .......................................................................................................................................................................... 46
Nuctrnn ENrncv ................................................................................................................................................................. 48
At1rnNn1ivr Furts ........................................................................................................................................................... S2
Cni1icnt MiNrnnts ............................................................................................................................................................ S4
PnoouciNc Monr ON Nn1ivr LnNos ......................................................................................................................... S7
MnrriNc AMrnicns Rrsouncr Bnsr ........................................................................................................................ S8
Nn1ioNnt ENrncv A1tns ................................................................................................................................................. 61

CONSUMING LESS

CoNsuMiNc Lrss................................................................................................................................................................... 62
ENrncv IN1rNsi1v .............................................................................................................................................................. 64
Tur Wnv Foxwnxo oN ErricirNcv .................................................................................................................... 6S
AovnNcro Vruictrs .......................................................................................................................................................... 66
ENrncv CoNsrnvn1ioN nNo ErricirNcv.................................................................................................................. 68
ENrncv nNo Wn1rn ........................................................................................................................................................... 7u

CLEAN ENERGY TECHNOLOGY

CtrnN ENrncv TrcuNotocv .......................................................................................................................................... 7S
Frornnt Rrsrnncu nNo DrvrtorMrN1 .................................................................................................................. 74
ARPAE ..................................................................................................................................................................................... 76
LonN GunnnN1rr PnocnnM ........................................................................................................................................... 77
Mns1rn LiMi1ro Pnn1Nrnsuirs ................................................................................................................................. 79
Rrvrnsr Auc1ioNs ............................................................................................................................................................. 8u
3
MODERNIZING ENERGY DELIVERY INFRASTRUCTURE

MoornNiziNc ENrncv Drtivrnv INrnns1nuc1unr ........................................................................................... 81
PnoMo1iNc Drtivrnv INrnns1nuc1unr ................................................................................................................. 82
Etrc1nic nNo Gns TnnNsMissioN ............................................................................................................................... 84
Frornnt CoonoiNn1on .................................................................................................................................................... 8S
Cvnrnsrcuni1v Pno1rc1ioNs ...................................................................................................................................... 86

EFFECTIVE GOVERNMENT

Errrc1ivr GovrnNMrN1 .................................................................................................................................................. 87
Exrcu1ivr BnnNcu Ac1ioNs.......................................................................................................................................... 88
Hvonnutic Fnnc1uniNc .................................................................................................................................................. 92
Puntic LnNos ........................................................................................................................................................................ 9S
Rrcutn1onv RrronM ........................................................................................................................................................ 9S
ENunNcrrrN1 or Rrcuin1oxv Rrvirw nNo ANnivsis ............................................................................ 96
Prxri11iNc Rrroxr ................................................................................................................................................. 96
NiNiNc Rrroxr........................................................................................................................................................... 97
LnNo 0sr Rrroxr ...................................................................................................................................................... 98
NEPA Rrroxr .............................................................................................................................................................. 98
01urx }uoicini Pxocrss Rrroxr .................................................................................................................... 1uS
Aooi1ioNni Rrroxr .............................................................................................................................................. 1u4
CoNsotion1r ENrncv PnocnnMs, Avoio Durticn1ioN, nNo SrrNo Wisrtv.................................... 1uS

ENVIRONMENTAL RESPONSIBILITY

ENvinoNMrN1nt RrsroNsiniti1v ............................................................................................................................ 1u6
ENvinoNMrN1nt IMrnc1s ............................................................................................................................................ 1u6
CtiMn1r CunNcr ............................................................................................................................................................... 1u8

AN ENERGY POLICY THAT PAYS FOR ITSELF

AN ENrncv Poticv Tun1 Pnvs Fon I1srtr .......................................................................................................... 11u
AovnNcro ENrncv Tnus1 FuNo ............................................................................................................................... 11u
ENrncv EcoNoMics ......................................................................................................................................................... 111
EriiovrrN1 Irinc1 ............................................................................................................................................ 112
Fossii Furi Tnxn1ioN .......................................................................................................................................... 11S

CoNctusioN ......................................................................................................................................................................... 11S
ENoNo1rs ............................................................................................................................................................................. 116
4

ENrncv is Gooo

Energyisgood.Energyprovidesthebasisforadvancedcivilizaonandimprovedstandardsofliving.Itallows
ustolivecomfortablyinclimatesthatwouldotherwisebetoohotortoocold.Itallowsustotransportour
selvesandcargoaroundourneighborhoodoraroundtheworld.Itallowsustoproducefoodinthequan
esnecessarytofeedtheworldspopulaon.Itallowsustomanufactureandcommunicateandenables
everyaspectofmodernlife.Americahastremendouspotenaltoproduceenergyandcreategoodjobs.And
thesegoodjobsarenotonlyinenergyproduconalthoughthepeopleofAlaska,Louisiana,NorthDakota,
PennsylvaniaandTexas,tonameafewexamples,willaesttotheirimportance.Thesejobsextendbeyond
energyproducon,owingdirectlyfromtheeconomicgrowthmadepossiblebyit.Wehavetheresources,
thecapacity,andthetechnologicalknowhowtoleadonenergyproduconandbenetoureconomy,our
security,andourenvironment.
Sincethemomenthumansrstharnessedre,energy,alongwithitsbenets,hasposedrisksandhashad
costs.Centuriesago,energypolicywassimplehavereorfreeze.Todayenergypolicyismorecomplex.
Alongwithitsbenets,energyhasrisksandbothdirectandindirectcosts.Tominimizethoserisksandcosts,
weneedtodevelopanduseitwisely.Weneedtobemoreecientinourenergyproduconandusewhile
seekingtoreduceenergysimpactontheenvironment.
Aswerethinkournaonsenergypolicy,itisimportanttofacequesonsabouttherisksofenergyandre
sourcedevelopmentincludingquesonsaboutclimatechange.Weneedtodiscussthesequesonsopenly
andndcommongroundonprudentstepstotakeinthefaceofuncertainty.Whatiscertainisthatwecan
bestaddressenvironmentalchallengesifweareprosperousandsecure.Aordable,abundant,secureenergy
isnottheproblem;itispartoftheanswer.
Itisinournaonalinteresttomakeenergyabundant,aordable,clean,diverse,andsecure.Theseveprin
ciplesarediscussedbelow:
AbundantAsthestandardoflivingrisesaroundtheworld,demandforenergywillconnuetogrow.Any
onewhohaslivedthroughablackoutorgasolineshortageorspentmeinalessdevelopedcountrydoesnt
needmuchexplanaonofthevalueofenergyabundance.Weshouldaimtouseenergymorewisely,and
someofourhabitsdeserveconstrucvecricism,butfewwanttogobacktopoundingclothescleanon
rocksinthestream.Thesimplerealityisthatweusealotofenergybecausewehaveahigh(andimproving)
standardofliving,andweliveinabigcountrywheretransportaoncostsarehigh.Usingenergyecientlyis
partof,notinconictwith,abundantandaordableenergy.Energyconsumponperunitofgrossdomesc
product(GDP)hasfallenfrom17.35thousandBrishthermalunits(Btu)in1949to7.31thousandBtuin
2011,adropofnearly60percent.
1
Weneedtoconnuetodobeer,however,andndnewandcreave
waystoencourageenergyeciency.Reliabilityisalsopartofabundance.Thetruthisthatweneedourener
gyandthesystemsthatdeliverittobereliable.Blackouts,shortages,andsystemfailuresaredangerous
somemesevenlifethreateningandarealsocostly.Thenaonsenergypolicyoughttoplaceahighvalue
onreliabilityofenergyserviceasanelementofabundance.
5
Intiouuction Energy is Good
AordableThedirectcostofenergyaectsthecostofeverything.Thereisnothingelsethatimpactsour
economysodirectly,butissowithinourcontrol.Fromindividualsstrugglingtolluptheirgastanksorpay
theirelectricbills,tobusinessleadersmakinginvestmentdecisionsbasedonthecostofpoweringserver
farmsorsmelters,lowercostisbeer.Therearethosewhobelievethebestwaytoreducetheindirectcosts
ofenergytooursocietyistoraisedirectcoststodiscourageuse,butthisisaselfdefeangpolicy.Lowering
thedirectcostofenergyiskeytohelpingtheU.S.economyrecoverandprosper.
CleanAempngtominimizeindirectcosts(alsoknownasexternalies)bydrivinguppricesisapolicy
doomedtoeconomicandpraccalfailure.Instead,weneedtobecognizantofenvironmentalimpactsof
everytypeofenergyproduconandmakeraonal,informeddecisionsonwhatisacceptable,whatneedsto
bemigated,andhowtodoit.Ourchallengeistoreducethecostofcleanersourcesofenergy,notraise
thecostofexisngsources.Toooen,cleanistreatedasanabsolute,butitisbeerregardedasacom
parison.Abeerdenionofcleanis:lessintensiveingloballifecycleimpactsonhumanhealthandtheen
vironmentthanitslikeliestalternave.
DiverseEverytypeofenergyhasitsownsetsofadvantagesanddisadvantages.Overall,however,themore
diverseoursourcesofenergy,themorerobustandsecureournaonalenergygridsandfuelsupplies.Al
mostmoreimportantly,themorediverseourenergysupply,thegreaterchancewehaveofgamechanging
breakthroughs.Atleastinwords,thereisconsensusthatAmericaneedsanalloftheaboveenergypolicy.
SecureTheUnitedStatesproducesapproximately80percentofitsownenergy.
2
Withinthatgure,howev
er,isasignicantdisparity.Wesupplyvirtuallyallofournaonselectricpowerneedsfromcoal,gas,nucle
ar,andrenewables.
3
Thetransportaonsector,however,isalmostalloildependent,andweimportover40
percentofourpetroleumattremendouscost.In2011alone,theUnitedStatessentmorethan$330billion
overseastopurchaseforeignoil.
4
Toomanyofthesedollarsgotogovernmentsthatarenotourfriendsand
donotenforceenvironmentalorsafetystandards.Weshouldconnuetosteadilyreducethepercentageof
oilinourenergymix,butforthesakeofournaonseconomyandforthesakeoftheworldsenvironment,
weshouldstrivetoproducethelargestpossiblepercentageofouroilneedsdomescally,andtoobtainany
importsfromgeographicneighborsandstrongallies.Tappingourpotenalandrestoringtrustinourpeople
willbeabreakthroughinitselfthatwillenableabrighterfuture.

PnoouciNc Monr

Energyproduconsuppliesgoodjobsformillionsofourcizensandprovidessecurityandprosperityfor
manymore.Abundantandaordableenergyisacorefoundaonforourwayoflife.Inrecentyears,howev
er,wehavetakenenergyproduconforgranted,orinmanycases,restrictedourdomescproducon.We
mustproducemoreenergyhereathome.Wecandoso,andindoingsoconnuetomakeAmericanenergy
produconsaferandwithfewerenvironmentalimpactsthananywhereelseintheworld.Weshouldplace
condenceinAmericaningenuitytobalancebothincreasedandresponsibledomescproducon.
Byproducingmore,thepoliciesadvocatedinthisdocumentwillpayforthemselveswhileadvancingourna
onalenergygoals.
Oit nNo Nn1unnt Gns
NewtechnologiesandstudiesconnuetoprovethatNorthAmericahasavasthydrocarbonbase,withthe
potenaltosubstanallyaectsupplyinworldmarkets.TheEnergyInformaonAdministraon(EIA)an
independentandimparalinstuonwithintheDepartmentofEnergy(DOE)thatcollects,analyzes,anddis
seminatesenergyinformaonreportedin2012thattheU.S.holds220.2billionbarrelsoftechnicallyrecov
erableoil,ormorethanacenturysworthofprojectedimportsfromtheOrganizaonofthePetroleumEx
porngCountries(OPEC).
5
Thisguredoesnotincludethevastsupplyofunconvenonaloilresourcesthat
willbecomecommerciallyviableinthefuture.TheNaonalPetroleumCouncilinafall2011studyarmed
thattheU.S.hasfarmorerecoverableoilthanmanyhaveacknowledged,thanksinparttothedireconal
drillingandhydraulicfracturingtechnologies(fracking)thataredramacallyincreasingoilandnaturalgas
reserves.
6
Weareincreasingoilandgasproducononprivateandstatelands;itiscricalthatweallowthe
sametooccuronfederallands.

TheUnitedStatesshouldestablishanaonalgoaltoproduceenoughaddionaloil,biofuels,andsynthec
fuelstobecomeindependentofOPECimportsby2020.Thefulllmentofthiscommitmentwouldsupport
thecreaonofmillionsofwellpayingjobs,increasefederalrevenues,reduceourbudgetandtradedecits,
andhelpmaintainaordableworldenergyprices.
SomeAmericansmayviewenergypolicyfromaperspecveofscarcity,orientedbytheoilpriceshocksof
1973.Buttheenergymarketandpolicylandscapeisvastlydierenttoday,especiallyinAmerica.Overthe
pastvetosevenyears,domescoilproduconhasdramacallyincreased,andforecastsforthefutureare
verypromising.
By 2020, achieve independence from OPEC imports.

7
Duetosignicantproduconincreasesonstateandprivatelands:
PrimaryenergyproduconinfossilfuelsisatitshighestpointsinceDOEsrecordsbeganin1973.
7
Thenumberofexploratorycrudeoilwellsmorethandoubledfrom2000to2010.
8
Therewereonaveragemorerotaryrigsinoperaonin2012thaninanyyearsince1985.
9
Domesccrudeoilproduconishighernowthanatanypointsince1997.
10
Whiletrendsonstateandprivatelandsarequiteposive,oilproducononfederallandsremainedlargely
atfrom20032011,andsalesofnaturalgasfromfederallandsfellby31percent.
11
Ofequalconcern,the
numberofpermitsissuedforonshoreandoshoreproducononfederallandsakeyindicatoroffuture
produconhasalsodroppedsignicantlysincetheprecedingadministraon.
12
Claimsthatveryrecentfederalpolicieshavehadasignicantroleintheincreaseindomescoilproducon
arethereforedeeplymisleading.About96percentoftheincreaseindomescoilproduconisaributable
togrowthonstateandprivateland.
13
Indeed,theoveralldomescincreaseisinspiteoffederalpoliciesthat
stymieproducon.Weshouldreversethistrendanddevelopfederallands.
TheongoingboominAmericanoilandgasproduconmustbefundamentaltoournaonalenergypolicy.
Wenolongershouldviewenergypolicyfromaperspecveofscarcity,butrather,fromaperspecveofin
creasingabundance.Withtherightpolicies,abundantandaordableenergyisachievable.
Theeconomicwellbeingandsecurityofthisnaondependonmaintainingguaranteedandaordableac
cesstoadiversearrayofstableenergysupplies.Toeecvelyreduceourrelianceonimportedpetroleum,
weneedtoacceleratethedevelopmentofourdomescresourcesinthesafest,mostecient,andmosten
vironmentallysoundwaypossible.
EIA
Piouucing Noie Oil and Natural Gas
8

Booming domestic oil and natural gas production can help pave the way to energy independence from OPEC.
Souice: 0hio EPA
ENrxcv INorirNorNcr Fxor 0PEC Iriox1s Bv 2u2u
TheUnitedStatesconsumesapproximately97quadrillionBtu
14
ofenergyeachyeartopowerallaspectsof
Americanlife,fromdrivingtocookingtousingtheinternet.
15
Approximatelyfourhsofthatenergy78
quadrillionBtuisproduceddomescally.Domescenergyproduconincludescoal,naturalgas,nuclear,
renewables,crudeoil,andothertypesofenergy.
TheU.S.alsoexportsaconsiderableamountofenergyeachyear.In2011,forexample,theU.S.exported
overtwoquadrillionBtuworthofcoalandnearlysixquadrillionBtuworthofpetroleumproducts.Though
engaginginworldenergymarketsisagoodthing,thecurrentstateofthesetradeowsisanetimportsbal
anceof18quadrillionBtuperyear.Inotherwords,weimportnearly20percentofournaonsenergycon
sumpon.
16
Crudeoilimports,atnearly20quadrillionBtu,accountforthevastmajorityofthisdecit.
17
Excludingpetro
leumproducts,theU.S.importedroughly8.5millionbarrelsofoilperdayin2011,innetterms.Justover
halfofthisamount4.6millionbarrelsperdaywasimportedfrommembersofOPEC.
18
Thiscartel,in
whichmanyMiddleEasterncountrieshaveasignicantinuence,isapowerfulforceinenergymarketsbe
causeitproducesabout40percentofglobalcrude.ManyofitsmembersarefriendlytotheU.S.,butseveral
havebeenopposedtotheU.S.overtheyears.Dictatorship,war,insurgency,terrorism,andpolicalturmoil
frequentlycomeintoplayintheMiddleEastandotherOPECcountries,andtoofrequentlyhavethepoten
altoaecttheglobalmarketplace.OurpresentdependenceonOPECmakesitdicultforustoadvance
ourvaluesanddefendourinterests.
Theideaofenergyindependencehascausedagreatdealofconfusionintodayspolicalrhetoric.Presi
dentsandpolicianshavechampionedtheideasincethe1973OPECoilembargoandensuingenergyshort
ages.InadvocangenergyindependencefromOPECimportsby2020,itisimportanttoclarifypreciselywhat
ismeantbyindependence.
Overthepastthreedecades,advancesinenergymarketsandinfrastructurehavecreatedatrulyglobalmar
ketplace,wherethepriceofoilisbasedondemand,supply,andtheperceivedfutureofboth.Ournewreali
tyisthatthepriceofoilissetonaglobalmarket.Wemustacceptthisrealityandsetournaonalpolicies
accordingly.Intodaysworld,isolaonfromthisglobalmarketisneitherpossiblenordesirable;
independencecanandshouldbedeneddierently.WhiletheU.S.cannotreasonablyexpecttocontrol
theglobalpriceofoilorOPECdrivenpriceshocks,wecancertainlyhaveameaningfuleectonpricesand
minimizeourexposuretointernaonalvolality.Wecanfurtherprotectandadvanceourinterestsbyelimi
nangourdependenceonOPECimports.
Skepcswhosaythisisimpossibleareneedlesslypessimiscandsimplybasingtheirconclusionsonoutdat
edinformaon.First,theU.S.hasseenitsreserveporoliogrowsubstanallyinthepastdecade.TheU.S.
intelligencecommunityassessedinitslongrangeforecasngthatthenaoncouldemergeasamajorener
gyexporterby2020.
19
Thisisdueinlargeparttopreviouslysubeconomicresources,likeshaleoil,becoming
economiconprivateandstatelands.Technologyislikelytoallowforexponenallyhigherreservegrowthin
10
comingyears,andamodernseismicassessmentwouldimmediatelyexpandtheU.S.resourcebasebypoten
allyhugemargins.
Second,thetrendsarealreadyinourfavor.Totaldomescenergyproduconisrisingbynearly10percent
overthepast10yearsevenasAmericansbecomemoreenergyecient,technologyimproves,andexplo
raonconnues.
20
Crudeoilproduconisatitshighestpeakin15yearsandexploraonhasdoubledover
thelastdecade.
21
Therewereonaveragemorerotaryrigsinoperaonin2012thaninanyyearsince1985,
despiteregulatoryuncertaintyandrestrictedaccessonfederallands.
22
Basedontheseandothertrends,the
InternaonalEnergyAgencyrecentlypredictedabrightfutureforAmericanenergy,includingdecliningim
portsandrisingexports.
23
Third,theU.S.standstobenetfromgreaterenergyproduconinbothCanadaandMexico.Bothnaons
havesignicantresourcesandareeagertocommercializethemintradeandpartnershipwiththeUnited
States.Energyresourcesarenaturalphenomenairrespecveofpolicalborders.In2011,Canadaproduced
roughly2.9millionbarrelsofcrudeoilperday,whileMexicoproduced2.6million.
24
Whenaddedtotheap
proximatelysixmillionbarrelsthattheU.S.produceseachday,totalNorthAmericanproducon(11.5million
barrels)isfargreaterthanthenaonsnetimports(8.5millionbarrelsin2011)andmorethandoublethe
importsfromOPEC(4.6millionbarrels).ThereisnoscarcityofenergyresourcesinNorthAmerica.Theonly
scarcityisinourresolvetotakefulladvantageofourconnentstremendousresourcebasetoproduce
moreoilwithinourownborders,andtoensurethatCanadianandMexicanexportsarebroughtherewhen
evertheopportunityarises.Ifweaccomplishthat,wecandisplaceourOPECimportsby2020.
Insum,theUnitedStateshasmadetremendousgainsinenergyproduconandtheoutlookispromisingfor
yearstocome.Byisolangtransportaonasthecricalsectorforpetroleumconsumpon,andbysituang
U.S.produconinthecontextofawiderconnentalboom,energyindependencefromOPECby2020be
comesanimminentlyachievablegoal.Weareheadedintherightdirecon,butthiscoursemustconnue.
Wemustpursuetwocricalchangestocurrentenergypolicy:increasedaccesstoreasonablyregulatedfed
eralresources,andmorecollaboraonwithCanadaandMexico.

0
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19921993199419951996199719981999200020012002200320042005200620072008200920102011
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11
The United States can displace OPEC imports by 2020 with North
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12
Inordertoreachthisgoal,thefederalgovernmentneedsto:
Expeditefederalpermingandreviewdecisionsforenergy,naturalresources,andrelatedinfrastruc
tureprojects.
PermittheconstruconoftheKeystoneXLPipelineandencouragetheconstruconandfulluliza
onofotherpipelinestofacilitateenergycommerceamongandbetweentheU.S.andourNorth
Americanneighbors.
RequirethattheDepartmentoftheInterior(DOI)outlineplansfordevelopmentofOuterConnental
Shelf(OCS)resourcestomoreaccuratelyesmateavailableresourcesandsetminimumproducon
targetstakingintoaccountnecessaryenvironmentalrequirements.Althoughthesetargetswouldbe
setadministravely,theyshouldbeachievableandbinding.Ifandwhenactualproduconisproject
edtofallshortofsuchtargets,addionalleasing,onshoreoroshore,shouldbemadeavailableto
compensatefortheshorall.
The federal government can help achieve energy independence from OPEC by 2020
by permitting oil and gas development offshore in a fair and responsible way.
Souice: B0I
13
Streamlineandsimplifythefederalpermingprocesstoensurethatoshoreleasesaredeveloped
specicallyrepealingmanyoftherecentaddionalrequirementsonshallowwaterGulfofMexico
drillers(predominantlyinvolvingnaturalgasdevelopmentandproducon).Leveltheplayingeldfor
independentoperatorsbyreducingredundanciesinpaperworkandrefrainingfromnocetolessee
regulaoninsteadofformalrulemaking.
ExpandOCSleasingtotheEasternGulfofMexicoandpartsoftheAtlancOCS(othecoastsofVir
ginia,NorthCarolina,SouthCarolina,andGeorgia).
Passorganiclegislaonforaconsolidatedoshoreregulator,witharearmedandstrengthened
statutoryauthoritytodeveloposhoreresourcesexpediouslythroughacertainandfairperming
process,whileincenvizingsafetyandbestenvironmentalpracces.
Directashareofrevenuestoparcipangoshoreenergyproducingstatesincludingoshorewind,
dal,andwavegeneraonandestablishpermanentrevenuesharing(asisestablishedforonshore
development)fromleasing,bonusbids,rents,androyaltyreceiptsat27.5percentwithprovisionfor
directparalpaymentstoaectedcoastalcommunies.Allowanaddional10percenttobedi
rectedtostatefundstosupportenergyresearchanddevelopment(R&D),alternaveandrenewable
energy,energyeciency,andconservaon.ExpandstateterritoriallimitsmandatedbytheSub
mergedLandsActto12milesoshore,reducingfederalmanagementburdensandallowingforstate
resourcedevelopment.
Amendlawtoprovideforanupdatedliabilityregimetoensurethatnooilspillvicmevergoesun
compensated,thatU.S.taxdollarsareneverrequiredtocompensateforaspill,andthatoperators
facesubstanalconsequencesformajoravoidableincidents,whileensuringtheU.S.oilandgasin
dustryremainscompevethroughouttheworld.
Establishparallelfourorveyearprogramsforfederalonshoreleasinganddevelopment.Require
administraveestablishmentofachievable,bindingproducontargetstobereconciledwithavailable
resourcesandenvironmentalconsideraons.
Restoreonshorerevenuesharingfromthecurrent52percentto48percentfederalstatesplittoan
even50percentto50percentsplit.
Provideregulatorycertaintyfortheconnueduseofcarbondioxideasacommodityforenhancingoil
andgasrecoverybyconnuingtotreatinjeconsitesasClassIIwellsundertheUndergroundInjec
onControlprogram.

14
DirecttheStateDepartmenttopriorizenegoaonwiththegovernmentofMexicotoallowforex
pandedforeigninvestmentinMexicospreviouslystaterunoilelds,evenasMexicoisalreadycon
sideringitsownpolicychangestoenablesuchinvestment.ExploreamendingtheNorthAmerican
FreeTradeAgreement(NAFTA)tofacilitatethefreetradeofgoodsandservicestoassistMexicospe
troleumrevival.
USGS estimates show undiscovered, conventional oil and gas resources in 10

priority geologic provinces of Mexico, Guatemala, and Belize.
Souice: 0SuS
15
CarefullyobserveandevaluateDOEprocessingofapplicaonsforexportsofLiqueedNaturalGas
(LNG),and,asnecessary,updateandclarifyLNGexportrulestoprovidecertaintybothtogas
dependentindustriesandtopotenalinvestorsinexportfacilies,ensuringthattheU.S.movesto
wardimprovedtradebalanceandenergysecurity.Attheveryleast,expeditetheprocessforLower
48LNGexportstoalliesoftheUnitedStatesthatfaceemergencyorchronicshortagesbutwithwhom
wedonothavefreetradeagreements.
ReinstatetheDOIRoyaltyinKind(RiK)programwithimprovedmanagementandoversight.
25
This
wouldparallelpraccesofoilproducingstatesandcreateamoreecientmeansforfederaltaxpay
erstobenetbytheirresources,includingthefulllmentoftheSPRtoitsstatutoryandinternaonal
mandates.
Includeprovisionstostreamlineapprovals,improveexploraonandhelpfundimprovedeconomic
andenvironmentalplanningtoincreaseenergyproduconfromIndianreservaonsandNave
ownedlandsnaonwide.AidshouldalsobeprovidedtohelpIndianTribesandNaveCorporaons
partnerwithrmsandbenetfromenergydevelopmentsontheirlands.Thisisimportantbecause
the44.5millionacresownedbyIndiantribesintheLower48andtheaddional44millionacres
ownedbyNaveCorporaonsinAlaska
26
representsomeofAmericasbestprospectsforcoal,oiland
naturalgasdiscoveries.Bysomeesmates,theselandsholduptoahofthenaonsunulized
energypotenal.IndianandNavelandsalsocontaintopprospectsforrenewableenergydevelop
ment,rangingfromApachebiomassprospects,toBlackfeetwindresources,toUteandPueblosolar
prospects,todozensofhydroelectricsitesinAlaskaownedbyNaveCorporaons.
A tanker docked at the Nikiski,
Alaska LNG plant.

Souice: Alaska Natuial uas Tianspoitation Piojects, 0ffice
of the Feueial Cooiuinatoi.
16
Open2,000acresinthenonwildernessporonoftheArccNaonalWildlifeRefuge(ANWR)coastal
plain(1002area)toexploraonandproducon.(The1002areaisoutlinedinredintheadjoiningg
ure.)Todothis,weneedto:
o Requiremelyleasesales
o Streamlineandsimplifythepermingprocess
o Designateafund,incooperaonwiththeNorthSlopeBoroughandderivedfromafraconofthe
statutoryrevenueshare,tomigatetheeectsofexploraonanddevelopment
o Providefora50percentto50percentfederalstaterevenuesharingsplitratherthanthe10per
centto90percentfederalstatesplitasprovidedforundercurrentlaw
TheNaonalPetroleumReserveAlaska(NPRA)mustbeimmediatelyplacedintofullavailabilityfor
oilandnaturalgasleasing,consistentwithitsstatutorydesignaon.Thereservemustbethoughully
developedwithroads,bridges,andpipelinefaciliestopromotebroadonshoredevelopmentofthe
diuseresourcebase,whilesimultaneouslyaccommodangthetransportaonofoilandnaturalgas
fromoshoreeldsintheChukchiSeatotheTransAlaskaPipelineSystem(TAPS).Roadlessopons
fortheNPRAshouldbeexpresslywithdrawnfromconsideraon.Theleasingdeferralinandaround
TeshekpukLakethrough2018shouldbehonored.

Congress should act to keep the promises contained in legislation decades ago
authorizing the development of oil and gas resources on the coastal plain of ANWR
and in NPRA. The responsible development of the oil and gas resources contained
in these basins is important to achieving energy independence from OPEC by 2020.
1
7
Arctic National Wildlife Refuge (ANWR) Coastal Plain (1002 area), Northern Alaska
Souice: 0SuS
1
8
Souice: 0SuS
19
S1xn1rcic Pr1xoirur Rrsrxvr
TheStrategicPetroleumReserve(SPR)wasestablishedin1975bytheEnergyPolicyandConservaonAct.Its
purposeistoprovidethenaonwithanemergencystockpileofcrudeoilincaseofserioussupplydisrup
onsandemergencies.HousedinenormouscavernsalongtheGulfCoast,theSPRs700millionbarrelscon
stuteenoughoilforapproximately80daysofimportproteconor35daysoftotalconsumpon.
TheSPRscomparavelyshortintervalsofsupplyhighlightwhyitcanandshouldbetappedonlyrarely.In
fact,coordinatedreleaseswiththeInternaonalEnergyAgency(IEA)havebeenorderedbythepresidenton
onlythreeoccasions:duringtheOperaonDesertStorm(1991),aerHurricaneKatrina(2005),andduring
theLibyancivilwar(2011).Thislaerreleasewasparcularlycontroversial.
TheSPRisthelargestemergencystockpileofoilaroundtheglobe.TheSPRisnotanATM.Itisthereforeim
peravethatthefederalgovernmentreviewSPRreleasecriteriaandclarifythatthereleaseofSPRoilshall
occuronlywhenthereisasignicantsupplydisrupon,andnotsimplyanincreaseinenergyprices.Forex
ample,aerHurricaneSandy,DOEreleasedasmallporonoftheNortheastHomeHeangOilReserve,a
specializedsupplyofdisllateheangoilstocksalsomanagedbyDOE,toosetgenuinefuelsupplydisrup
onsinhardhitareas.
Evenasdomescoilproduconrises,theSPRsstrategicimportanceformigangriskisjustasrelevant.
Geopolicalinstability,parcularlyintheMiddleEastandAfrica,presenttheriskofasevereandprolonged
oilsupplydisrupon.Thefarhigheroilpricesthatarelikelytoresultfromsuchadisruponargueforthe
preservaonoftheSPRatitscurrentlevel,atleastinthenearfuture.Whilepricespikesto$100abarrel
wereonceunheardof,todayaseveredisruponcouldyieldpricesfarabovethatlevel.Shouldthatever
cometopass,theSPRwillbeoneofthefewoponsavailabletohelpmigateshorttermeconomicdamage.
Intheabsenceofasupplydisrupon,itisshortsightedtotreattheSPRasamechanismforloweringgas
prices,especiallygiventhesizeandcomplexityofglobaloilmarkets.Ifwebecomeaccustomedtoreleasing
oilfortemporarypotenalpricereliefatthepump,wemaybecaughtunpreparedwhentheSPRistrulynec
essary.
Strategic Petroleum Reserve crude oil pipelines, Bryan Mound, Texas
Souice: B0E
20
Cont
Coalisanabundant,secure,andaordableenergyresource.Formorethanacentury,coalhasallowedour
familiesandbusinessesaccesstoenergyandatcurrentlevelsofconsumpondomesccoalreserves
promiseastablesupplyofenergyfor200ormoreaddionalyears.
27
Asadirectresultofthisabundance,
coalhasremainedoneofthemostaordablefossilfuelsonthemarketandavoidedthepricevolalityasso
ciatedwithsomanyothercommodies.
Overme,coalhasalsobecomeacleanerenergyresourceasitsenvironmentalperformancehasdemon
stratedsubstanalimprovement.Therateofemissionsperunitofoutputfornitrogenoxideandsulfurdiox
idefromcoalredelectricgeneraonhavedroppedapproximately78percenteachsince1990,andfurther
reduconsarepossible.
28
Becauseofcoalsdomescabundance,relaveaordability,andincreasingcleanliness,itwillremainacor
nerstoneofenergysupplyintheU.S.Intheyearsahead,theopportuniesforcoalaresignicant.Thediver
sicaonofitsuseincludesnotonlyelectricpowergeneraonbutalsosynthecgas,chemical,ferlizerand
liquidfuelproducon.
Pollution emissions have decreased even as total coalfired plant power
generation has increased at about twice the rate.
Souices: NETL, EIA, Annual Energy Review, EPA National Air Pollutant Emission Trends. Peicent change on a ielative basis (1,uuu ton Billion kWh) foi emissions.
Piouucing Noie Coal
21
TheUnitedStatesneedstoestablishlongtermpoliciestopromotetheconnued,responsibleproduconof
coal,improveitsenvironmentalimpact,diversifyitsuse,andensurerobustaccesstoexportmarkets.
By2020,wemustdiversifycoalulizaonwhileconnuingtoimproveitsenvironmentalperformance.To
reachthisgoal,balancemustberestoredbetweencoalsroleinprovidingaordableenergyforrobusteco
nomicgrowthandtheenvironmentalstandardswerightlyexpectfromtheproducersandusersofthisre
source.Theseeortswillhelptoensurethatcoalremainsacontributortothereliabilityofournaonselec
tricgrids,animprovementtoourbalanceoftrade,andacreatorofjobsintheminingsectorandelsewhere.
Inordertoaccomplishthisgoal,policiesmustbeputintoplaceto:
Repealprohibionsonthefederalgovernment,andtheDODinparcular,procuringcertaincoal
derivedfuels.
Establishlongtermprocurementcontracngauthorityforthefederalgovernment,whichwillfacili
tateprivatesectorcondenceintheexistenceofmarketsforalternave,coalderivedfuels.
Supportulizaonofcapturedcarbondioxideasacommodityforenhancedoilrecovery.
Prohibitpreempveandretroacvevetoesofminingprojectpermits.
29
ReformDOEscoalrelatedR&Dprograms,whichhavebecomenarrowlyfocusedoncarbondioxide
emissionreduconstotheexclusionofotheropportunies.Theseprogramswouldbenetfromre
newedemphasisonbroaderenvironmental,gasicaon,andliquefacontechnologydevelopment
opportunies,inaddiontocarboncapture,ulizaon,andsequestraon.
Enableeciencyimprovementsatcoalredpowerplantsbyreformingregulaonsthatdiscourage
investmentsinsuchupgrades.Specically,thisshouldincludereformstotheNewSourceReview
(NSR)ProgramthatmightnarrowlyexempteciencyimprovementsfromtriggeringNSR.
Ensurethatnewregulaonsdonotjeopardizethereliabilityoraordabilityofelectricity,bothof
whichrelyheavilyuponcoalforbaseloadpowergeneraon.
Provideregulatorycertaintyregardingthedenionofstreamsandthecircumstancesunderwhich
coalproduconcanandshouldtakeplacenearthem.
PreventaemptstomergethesubstanveworkofagenciesliketheBureauofLandManagement
andtheOceofSurfaceMiningReclamaonandEnforcement,whichservefundamentallydierent
missionsthatareequallyimportant.
By 2020, diversify coal utilization while continuing to improve its
environmental performance.
Piouucing Noie Coal
22
Pursuepermingreformacrosstheboard,butforcoalinparcularfocusoneliminangduplicave
requirementsundertheSurfaceMiningControlandReclamaonActandtheNaonalEnvironmental
PolicyAct(NEPA)inawaythatconsolidates,butdoesnotdeteriorate,theinputofthevariousfederal
agencies.
Encouragecoalexports,whichwillbenettheU.S.balanceoftrade,createjobsinthesector,anden
surethatglobalsuppliesofthisvaluableenergyresourceareresponsiblyminedhereathome.
Polk Power Station in Tampa, Florida

Integrated Gasification, CombinedCycle (IGCC) plants use gas and steam turbines
to generate electricity. Integration of the gasifier, gas turbine, and steam turbine
(for reclaiming lost heat in the exhaust) allows for high efficiencies while also re
ducing environmental impacts. IGCC is one of many technologies referred to as
clean coal.
Souice: B0E
Piouucing Noie Coal
2
3
Nap shows coal fielus of the 0.S. classifieu by coal iank anu aieas of coopeiative stuuy of coal iesouices anu quality. Foi each categoiy of
coal iank, uaikei coloi inuicates aiea of coal outcioppings anu lightei coloi inuicates aiea of subsuiface coal. Also shown aie states with
longteim, cuiient (light blue) oi pievious (light pink) coopeiative ielationships with the 0.S. ueological Suivey in the National Coal Re
souices Bata System foi the longteim stuuy of coal iesouices anu quality. Nouifieu fiom Tully (1996) anu N.B. Caitei (0.S. ueological Sui
vey, wiitten commun., 2uu2). (Some States contain coal fielus that aie too small to show iank colois.)
Souice: 0SuS
24
UNcoNvrN1ioNnt Fossit Furts
TheUnitedStateswillneverrunoutofenergy.Thebestevidenceofthisisourunconvenonalenergybase.
Oilscarcityisamyth.Inaccessibleandsubeconomicresourcesconnuallybecomeaccessibleandeconomic
overme.Wehavealwaysfoundmoreenergyasweneeditbecauserisingglobaldemandandimproving
technologyenableexplorersandproducerstounlockaccesstonewresources.Praccaloilscarciesdooc
cur,arecreated,andcanhappenagainasaresultofgovernmentpoliciesespeciallythosethatimpedede
velopmentaswellasgeopolicaleventsandnaturaldisastersthatremovesupplyfromthemarket.
30
Not
withstandingmarketdisrupons,theoilresourcebaseisinnodangerofrunningout,asdepictedbelow.
Opponents of oil production often cite proved reserves colored red at the top of the pyramid
to propagate the myth that oil is scarce. Proved or proven is a technical term referring to ac
tual assets owned by companies that are economically recoverable. As global demand increases
and technology advances, the universe of economically recoverable energy resources expands
down the pyramid. The oftcited two percent of the worlds reserves factoid compares the tiny
red pyramid to other claimed proven reserves globally, but neglects the vast resources compris
ing the base of the pyramid.
Souice: Investors Business Daily
Piouucing Noie Unconventional Fossil Fuels
25
ThehistoryoftheBakkenShaleoilresourcedemonstratesthisphenomenon.Fromthe1980sthroughthe
early2000s,thepresenceofthishugeunconvenonaloilresourcewasknownbutlargelyignoredinenergy
policydiscussions.Neitherthepriceofoilnorthemostadvancedtechnologiesweresucienttodevelopthe
resourceeconomicallyandtheBakkenwasthereforeclassiedassubeconomicunderthesecondions.
Sincethen,however,priceshaverisenandtechnologyhasadvanced,makingtheBakkeneconomicandre
coverable.Asadirectresultofthisformaon,NorthDakotasoilproduconhasgrowndramacallyinrecent
years,anditrecentlysurpassedAlaskaasthesecondlargestoilproducingstate.
Withvirtuallyeveryseriousenergyforecastprojecngthatoilwillbeusedlongintothefuture,itiscrical
thatourunconvenonalresourcesbeassessedandtakenseriously,notjustaspotenalsoluonsbutaslike
lysoluonstoourfutureenergyneeds.ArecentreportbyIHS,Inc.(IHS)foundthatunconvenonaloiland
gasdevelopmentwillcontributemighlytooureconomyintheyearsahead.By2020,thermforecaststhat
theirproduconwillgeneratethreemillionjobsthroughoutoureconomy;$111billioninyearlyrevenuesfor
federal,state,andlocalgovernments;and$172billioninyearlycapitalexpenditures.Thesebenetsconn
uetoexpandthrough2035.
31
Itismetoreconciletherealityofourresourcebasewithmisleadingpolicalstatementsofenergyscarcity,
themostegregiousofwhichistheorepeatedline:Americauses20percentoftheworldsoilbuthasonly
twopercentoftheworldsreserves.Thisassessmentdoesnotaccountforenergyresourcesthathavenot
beendrilled;suchstatementsdistractfromameaningfulenergypolicydiscussion.
Private sector estimates project unconventional fossil fuel production to far sur
pass conventional fossil fuel production in the near future. This rapid growth will
create jobs and fuel our economy.
Souice: IBS
2
6
2
7
28
0ii Sunir
Ournaoncontainsthelargestdepositsofoilshaleintheworld.TheGreenRiverFormaon's11million
acresinColorado,Utah,andWyomingcontaintheequivalentofmorethanonetrillionbarrelsinoil.
32
As
sessmentsuctuate,butDOEesmatesthatcombinedU.S.oilshaledepositsmayholdasmuchassixtrillion
barrelsofoilequivalent.
33
Whilemostofthesearenonrecoverable,thefactthatglobalprovencrudere
servesamounttoamere1.5trillionbarrelsshouldgiveuspause.
34
Whetherrecoverablebarrelsfromthese
depositsstandat800billionor1.8trillion,AmericatrulyistheSaudiArabiaofoilshale.
35
Forourcountryto
takeadvantageoftheseresourcesweneedto:
Codifytheoilshaleleaseprogramandrestoreleasingacviesthatwereunderwaypriortobeing
haltedinFebruary2009.
Accelerateoilshaleperming/leasinginthewestUtah,ColoradoandWyomingwithacompre
hensiveplanforaddressingwaterscarcityrisksandimpacts.
RenewR&Dfundingforviscous(heavy)oiltechnology/produconresearchattheDepartmentofEn
ergy.

The Greater Green River
Basin in Colorado, Utah,
and Wyoming contains
oil shale deposits greater
than one trillion barrels
of oil.
Souice: 0SuS
29
Nr1unNr Bvoxn1rs nNo 01urx 0NcoNvrN1ioNni uns Rrsouxcrs

TheU.S.containsanesmated200,000trillioncubicfeet(TCF)ofmethanehydratesmethanenaturalgas
lockedinsolid,icelikestructures,undergroundorundertheseaoor.
36
AccordingtotheUSGS,Alaskaalone
containsbetween560and600trillioncubicfeetofmethanehydrateonshore
37
andapproximately160,000
TCFoshore.
38
Oncesafelyunlocked,AlaskasmethanehydrateresourcescouldpowerAmericafornearly
1,000yearsatcurrentratesofgasconsumpon,accordingtotheAlaskaDivisionofGeologicalandGeophysi
calSurveys(ADGGS).
39
Importantstepsweneedtotaketoaccesstheseresourcesinclude:
Expediteresearchonmethanehydratewellowstoprovethatmethanewillconnuetoowto
thesurfaceaerdrillingeorts.Increasefundingforenvironmentalreviewsoftheeectsofliber
angmethanehydrates,theresulnglandimpacts,andforresearchalreadyunderwaybytheDOE
NaonalEnergyTechnologyLaboratory(NETL).
RenewthehydrogenfuelsresearchprogramtogaugetheeconomicfeasibilityofpoweringAmerica
byhydrogenfuels.
Fundgreaterresearchintotheuseofammoniaasapowerfuelsourceofthefuture.
Provideroyaltyrelieffromdrillingonfederallandsfortherstveprojectsunlatotalof25TCFof
gasisproducedfromfederalresources.
National 0ceanic anu Atmospheiic Auministiation (N0AA) photogiaphs of methane gas hyuiate foim
ing below a iock oveihang at the sea flooi on the Blake Riuge uiapii, off the coast of South Caiolina. This
image maikeu the fiist uiscoveiy of gas hyuiate at the sea flooi on the Blake Riuge.
Souice: N0AA
3
0

USGS: Assessment of Gas Hydrate Resources on the North Slope, Alaska, 2008
Souice: 0SuS
31
RrNrwnntr Rrsouncrs
Cleanenergyisatermthatiswidelyused,butnotwelldened.Toooen,cleanisappliedtowhatever
resourceortechnologyispolicallyfavored,oristreatedasanabsolutewhenitshouldbeacomparave
term.
Cleanenergyshouldhaveaspecic,veriabledenionbasedonactualimpacts.Cleanshouldbede
nedaslessintensiveingloballifecycleimpactsonhumanhealthandtheenvironmentthanitslikeliestal
ternave.
40
By2020,thefederalgovernmentshouldimplementthisdenionofcleanenergyacrossallits
programsandpolicies.
Aerestablishingamoreappropriatedenionforcleanenergy,weshoulddevelopmoreecientand
lessinvasivewaystopromoteitspecically,byavoidingfederalmandates.Inorderfornewcleantechnolo
giestosucceed,theircostsmustfallandtheymustbeallowedtomatureinawaythatenablessustainedpri
vateinvestment.Theymustbefreedfromboomandbustcyclescausedbychangesingovernmentpolicy
ortheunintendedconsequencesofgovernmentspending.
Perpetualrelianceonproduconanddeploymentsubsidiescanactuallyinhibitthelongtermgrowthand
developmentofnewenergymodes.Instead,thefederalgovernmentshouldfocusitsaenonandlimited
resourcesonR&Dforcleanenergy.Deploymentassistanceshouldbeprimarilytechnicalinnature.Financial
assistanceshouldbeallowedonlyforcompellingapplicaonsthatmakethemostcommercialsense,suchas
whenthecostofcompengenergyishigherthanthenewtechnology,yetsomeotherbarriersllinhibitsits
adopon.
Finally,wemustleaveroomfornewandbigideas,products,andservicestocomeforwardandtakeholdso
thatthecostofnewenergytechnologycannaturallydecline.By2020,thefederalgovernmentneedstosup
plantitsrenewableresourcesprogramsandpolicieswithanewsystemthatismorecosteecveandtech
nologyneutral.
Gengthedenionsrightandreformingthefederalgovernmentsroleinsupporngcleanenergytechnol
ogiesiscricaltoanaonalenergypolicy.Recommendaonsforreformarediscussedatlengthbelowand
underCleanEnergyTechnology.
By 2020, implement this deinition of clean energy across all federal programs
and policies.
By 2020, supplant federal renewable resources programs and policies with a new
system that is more costeffective and technologyneutral.
Piouucing Noie Renewable Resources
32
Toaccomplishthesegoalsby2020,thegovernmentshould:
Idenfyandremovebarriersinfederallawandpolicythatarehinderingrapidandcompevede
ploymentofcleanenergy.Forexample,provideforswiandcertainleasingandpermingstructures
forwind,solar,andgeothermalleases.Createfairandcompeveroyaltysystemsfortheseenergy
sourcesonpubliclands.
Establishaprogramofhighlyexpeditedpermingofrenewableenergyprojectsonreclaimedmine
lands(abandonedandotherwise).
Establishthroughlegislaon,asnecessaryanacceleratedpermingprocessforoshorewindand
marinehydrokinecs,includinganEnvironmentalImpactStatement(EIS)forsuchprojects.
Idenfynancingchallengesforrenewableenergyandeciencyiniavesandsubsequentlydevelop
instuonsandmeanstolowertheirnancingcosts.
33
Bvoxoiowrx
Hydropowerisoenexcludedfromconsideraonasarenewableresourcebecauseithasbeenpolically
controversial.Policalconsideraonsshouldnotbeusedtoexcludeaparcularresourcefromthedenion
ofcleanorrenewable.Hydropoweristhelargestsourceofclean,renewableelectricityintheUnited
States.Today,wehaveover100gigawasofhydroelectriccapacity,
41
providingabouteightpercentofthe
naonselectricityneedsandgenerangelectricitywithoutanyemissionsintotheair.
42
Furtherdevelop
mentofthiscosteecve,cleanenergyoponwillsupporteconomicdevelopmentandlocaljobcreaon.
Someoverlookthetremendouspotenalofhydropowerunderthemistakenassumponthattheresourceis
tappedout.Tothecontrary,hydropowerisanunderdevelopedresource.DOEsesmatesindicatethat
therecouldbeanaddional300gigawasofhydropowerthrougheciencyandcapacityupgradesatex
isngfacilies,poweringnonpowereddams,newsmallhydrodevelopmentandpumpedstoragehydropow
er.
43
Thisesmateisequaltoalmost30percentoftotalU.S.capacityfromeveryresource,notjusthydro
power.
44
Onlythreepercentofthecountrysexisngdamsareelectriedandbetween20,000and60,000
megawasofnewcapacitycanbederivedfromeciencyimprovementsorcapacityaddions.
45
Addional
hydropowercanbecapturedthroughexisngconduitsandnewsmallhydrodevelopment,andhydroelectric
pumpedstorageprojectscanhelpintegrateintermientrenewableresources,suchaswind.Toadvance
andcapitalizeonhydropowerspotenal,weneedto:
Recognizehydropowerasarenewableresourceforpurposesofanyfederalprogramorstandard.
FederalEnergyRegulatoryCommission(FERC):Exploreapotenaltwoyearlicensingprocessforhy
dropowerdevelopmentatexisngnonpowereddamsandclosedlooppumpedstorageprojects.
Allowtheconsideraonofconduithydropowerprojects(manmadewaterconveyancessuchastun
nels,canals,orpipelinesthatareoperatedforwaterdistribuonandnotelectricitygeneraon)on
federallands.DirectFERCandtherelevantfederalagenciestodevelopacoordinatedandmoree
cientapproachtoenvironmentalreviewofthesetypesofprojects.
IncreaseFERCsratedcapacityforsmallprojectsfromveto10megawas.
ProvideFERCwiththeauthoritytoextenditsthreeyearpreliminarypermittermsforuptotwoaddi
onalyearsinordertoallowapermieesucientmetodevelopandlealicenseapplicaon.
FERCandtheBureauofReclamaon:CompleteanewinteragencyMemorandumofUnderstandingto
improvethecoordinaonandmelinessofnonfederalhydropowerdevelopmentatReclamaon
projects.
ProhibitFERCfromassessingfederallandusefeesonhydropowerprojectswhenthelandatissueis
nolongerownedbythefederalgovernment.

34
AuthorizeFERCtosetmelinesforagencysubmissionsinthehydropowerlicensingprocess.
DOE:Developandimplementaplantoincreasethenaonsuseofrenewablehydropowerthrough
R&D,andprovidetechnicalassistanceonapplicableenvironmentalanalyses.
DOE:Studythepotenalquantyofhydropowerthatmaybederivedfromexisngconduits.
DOE:Studyandidenfyfederalandnonfederallands,inconsultaonwithUSGS,thatarelocated
nearexisngorpotenalsitesofintermientrenewableresourcedevelopmentandarewellsuited
forpumpedstoragesites.

35
NnxiNr BvoxokiNr1ic Powrx
TheElectricPowerResearchInstutehasesmatedthatournaonsoceanresourcescontainenoughener
gytoproduce2,640millionmegawahoursofelectricityperyear(TWh/yr).
46
Ofthisavailableenergy,1,170
millionmegawahoursperyeararerecoverable,equivalentto30percentofourannualelectricitygenera
on.
47
Toreachthispotenalwemustacceleratethedevelopmentofrenewablewave,current,anddalen
ergyacrossthenaon.Tomovetowardthatgoal,weshould:
Promoteincreasedresearchintomarinehydrokinecdevicesandgridintegraon.Authorizethe
transferofenvironmentaldatadevelopedduringresearchtootherinterestedenes,andassistin
dustrywithenvironmentalstandardcompliance.
Developorsupportuptofourtesngfaciliesformarinehydrokinectechnologies.
Establishamarinebasedenergydevicevericaonprogram.
Developthemacenvironmentalimpactstatementstocovermarinehydrokinecprojectstoexpe
ditepermingandreducethecostofNEPAreview.
Wave current marine hydrokinetic device, Maine

36
Soinx Powrx
Solarpowerhasmanyadvantages.Solarenergyproduconmeetsthehighestenvironmentalstandards
whileproducingnegligibleemissions.Solarenergyisamongthemostabundantofrenewableenergy
sources.Solarenergycanbeusedforelectricity,light,orheat;providingaplethoraofoponsforresidenal,
commercial,andindustrialsectors.Itschallengeshavebeenrelatedtocostsandintermiency,and,toan
extentinsomeapplicaons,wateruse.
Dierenttechnologiesareusedtoconvertsolarenergyintootherusableformsofenergy:photovoltaics(i.e.
solarelectric),solarheangandcooling,andconcentratedsolarpower.Thesetechnologiescanbeusedin
myriadways.Photovoltaicscanbedeployedlocally(e.g.onarooop),orevendirectlyconnectedtoadevice
orappliance.Concentratedsolarpowercanbebuiltasacentralulitystaon,inthemannerofatradional
powerplant.Ulityscalesolarplantsinthefuturemayemployenergystoragedevicestosupplyenergyeven
aerthesunsets.Theexibility,abundance,andlowenvironmentalimpactofsolarenergyproduconmake
itanaracvepowersupply.Moreover,diversifyingourenergysupplythroughsolarpowerisanimportant
goalforournaon.
Whensolarpowerisasourceforgeneraonofelectricity,thechallengeofitsintermientnatureismani
fest.Asapraccalmaer,electricitycannotbestoredthesamewayasothercommodies.Electricsupply
anddemandmustbematchedinstantaneously.Electronstravelatthespeedoflightacrossnetworksof
wirestopowerourhomes,buildings,stores,andfactories.Wevaluetheondemandnatureofelectricity;we
needourelectronicsandappliancestobehighlyreliable,andoperableattheickofaswitch.Likewise,the
failureofelectricitytooperateconsistentlyandondemandsuchasduringablackoutorbrownoutis
simplyunacceptableinmodernlife.
Solar power is abundant and produces zero carbon dioxide emissions at the source.
Souice: Nevaua State 0ffice of Eneigy
37
Theelectricgridsoperatebythesamelaws.Elaboratenetworksofelectricitygridsworktomeetconstantly
uctuangrealmedemandforelectricity.Inordertomeetdemand,thissystemneedstobeabletocount
onelectricitysupplybeingreadyinstantaneously.Asaggregatedemandorelectricityloaductuates,
thesystemsadjusttomeetthatdemand.
Unfortunately,todayelectricitygridscannotreadilyintegratesolarpowertosupporttheinstantaneousde
mandforpower.Ifthereweremoreeecveandeconomicwaystostoreelectricity,solarpowercould
beerovercomeitsintermiencyandwouldbemorecompeve.Today,however,electricitystorageor
backuppowersupplycomeatasignicantcost.Duetothiscost,solarpower(andotherintermientsources
suchaswind)arebeerulizedasacomplimenttoother,moreconsistentpowersources.
Technologiesthatbringdownthecostofstoringsolarenergyareneeded.Costeecveenergystoragewill
likelyunlockthefullpotenalofsolarpower.Ratherthanforcesolarpowerintotheelectricitysupply
throughmandatesorquotas,weshouldendeavortousesolarpowerwhereitnaturallyts:inremoteappli
caons,tocomplementbaseloadandintermediatesupply,andtodiversifyourenergyporolio.Meanwhile,
weshouldconnuetofundR&Dtodiscoveranddeveloptomorrowssolartechnologies.

Typical summer day electricity load, California 2009
Souice: National Renewable Eneigy Laboiatoiy
By 2020, energy storage should be a costeffective means for leveling demand.
38

DOE researchers demonstrate the intermittency in power output from solar and
wind resources.
Souice: Pacific Noithwest National Laboiatoiy
48

Daily profiles of wind power projected by 7X output in April 2005 for the year 2011 in
Tehachapi, California (Courtesy of ISO California).
5 MW photovoltaic power over a span of six days in Spain (Courtesy of AES).
39
WiNo Powrx
Windpowerisabundantandrenewable.Further,windturbinesdonotproduceairpolluonwhentheygen
erateelectricity.Onland,turbinesgroupedinwindfarmsturnwindenergyintoelectricity.Windfarms
presentuniqueenvironmentalfootprintchallengesduetotheheightandplacementofturbines.Oshore
windfarmscanharnessevenstrongerwindswhilepresenngdierentenvironmentalchallenges,andhigher
xedcosts.Windpowerisusuallylesscostcompevethantradionalgeneraon,butallformsofwind
powerareusefultoolsformeengenvironmentalstandards.Developingtechnologytomakewindpower
morecostcompevehasbeenanaonalgoalfordecades.
Windpowerisintermient.Thewindsareunpredictable.Moreover,windspeeductuatesonmulpleme
scales:hourly,daily,andseasonally.Duetothisunpredictablevariability,windpowermustbestoredinor
dertomeetelectricitydemand.Aspreviouslynoted,storingelectricityisverychallengingtoday.Tomake
windpowercostcompeveweshouldfocusonR&Dforenergystoragetechnologies.

By 2020, energy storage should be a costeffective means for leveling demand.
Searsburg wind
farm, Vermont.
Souice: EPA
40
ENrxcv S1oxncr
Broadlyconsidered,baeriesstoreenergyinoneformchemical,mechanical,electrostac,orthermal
thenconvertthatenergyintoelectricity.Atypicalleadacidbaerystoresenergyinchemicalform,then
transformsitintoelectricalenergythroughelectrochemicalprocesses.Capacitorsandywheelscanalso
storeenergyforlateruse.Capacitorsstoreenergyinelectrostacformandreleasetheenergyaselectrical
power.Flywheelsstoreenergyinmechanicalformusingaspinningwheelortube,andthenconverttheen
ergytoelectricalpowerviaagenerator.Baeriesandotherenergystoragetechnologieshavemyriaduses,
includingthepossibilityoflargescalepowerstoragetechnologythatwouldhelptolowerthecostand
overcometheintermiencyofwindandsolarpower.
Manyfederalprogramssupporngbaerytechnologyandresearchalreadyexist.Currently,sixagenciessup
port39programsthattheGovernmentAccountabilityOce(GAO)categorizedasfollows:
49
Basicresearchtoexploreanddenesciencorengineeringconcepts,orinvesgatethenatureofa
subjectwithouttargenganyspecictechnology.
Appliedresearchtodevelopnewknowledgetocreatenewandimprovedtechnologies.
Demonstraonstooperateneworimprovedtechnologiestocollectinformaonontheirperfor
manceandassessreadinessforwidespreaduse.
Theseprogramsshouldbeconsolidatedandourgovernmentssupportshouldbeconcentratedbehindbasic
research.Basicresearchensuresatechnologyneutralapproachtofederalprograms,andshistheburden
ofcommercializaontotheprivatesector.By2020,weshoulddirectfederalfundingofenergystoragepro
jectstowardbasicresearch.Priorizingbasicresearchprovidesthebestopportunitytodevelopthelong
Sandia National Laboratories advanced sodiumsulfur battery energy storage system
Souice: Sanuia National Laboiatoiies
41
awaitedbreakthroughsdesiredtomakewindandsolarpowercostcompeve.Thebasicresearchneednot
bedirectlyedtoenergystorage;physicalchemistry,polymerchemistry,nanotechnologyresearch,andre
latedeldsalsohavethepotenaltotransformenergystoragetechnology.
Beerenergystoragetechnologiesarekeytothefutureofsolarandwindenergy.Butthereisasoluonat
presentforthevariabilityandintermiencyofthesesources.Intermientresourcescanbemixedwithcon
trollable,reliableresourcestoformadiverseenergyporolio.Sometechnologiesarebeersuitedtosupply
baseloadelectricity,whileothersarebeerusedtocomplementbaseloadsupply.Indeed,solarandwind
cancomplementhydropowerwellareliable,aordable,controllable,andrenewableresource.
By 2020, federal funding should be directed to technologyneutral basic research

supporting energy storage.
Xcel Energy windtobattery project, Minnesota
Souice: EIA
4
2
43
uro1urxrni Powrx
GeothermalpowerisanemergingfactorinthediversicaonofU.S.energysupply.Geothermalprovides
electricity,heang,andcoolingformillionsofAmericansanditsuseisexpanding.U.S.geothermalnetelec
tricitygeneraontotaled10.9Gigawahours(GWh)duringthersteightmonthsof2011,up10percent
fromthesameperiodin2008.
50
Althoughitmaynotbeaswellknownasotherresources,geothermalpower
isindeedoneofthemainrenewableenergysourcestogenerateelectricityintheU.S.
Currentgeothermaltechnologylimitscommercialpowerplantstoareaswithaccessibledepositsofhigh
temperatureandrelavelyshallowgroundwater.However,newenhancedgeothermalsystems(EGS)tech
nologypromisestoexpandpowergeneraonbeyondnaturalgeothermallocaons.Nowinearlydevelop
ment,EGSallowswatertobepumpedundergroundtobeheatedbytheearthandthenusedtogenerate
steamgeneratedturbineelectricityuponrecovery.CurrentcostesmatesforEGSarehigherthanforcon
venonalgeothermalplantsandothermorematurerenewabletechnologieslikehydropowerandwindpow
er.Topotenallybringgeothermalinlinewiththecostsoffossilfuelsinthefuture,thefederalgovernment
canfundmoreresearchtopursuethesesupporngobjecves:
Mapsubsurfaceheatzonesandlocangtheresourcefulhotrocks.
Understandtheseismicimpactsofgeothermalprojectstopromoteenvironmentalstewardship.
Reducetheriskofdrillingnonperformingwells.
Reducedrilling,fracturing,andwaterretrievalcostswithtechnology.
Expandtheuseofgeothermalheatpumpsforheangandcoolinginbothcommercialbuildingsand
homes.
Streamlinelandleasingandpermingviastatutorychanges.

By 2020, increase access to federal lands for geothermal power development,
especially in the West.
4
4
World's largest electricitygenerating geothermal plant, The Geysers, California

Souice: NREL
4
5
46
Biornss
Biomassisorganicmaerthatcanbeprocessedintotransportaonfuel,usedtogenerateelectricity,orhar
nessedinotherwaystoprovideenergy.Innovavetechnologiesarestarngtoallowbiomasstoemergeasa
viablesourceofrenewablechemicalsaswell,furtherextendingitsrangeofpotenalapplicaons.
Biomasshasbeenanimportantresourceforcenturiesandhasaccountedforroughly49percentofthere
newableenergyconsumedintheUnitedStatesin2011.
51
Whilebiomassitselfmaynotbeafamiliarterm,
itsusesalmostcertainlyare.Forexample,anyonewhousesawoodstovetokeepwarmisusingbiomassfor
energy.
Beyondwood,biomassincludeswoodwaste,plantedcrops,cropresidues,andfoodandanimal
wastes.Everythingfromtreebarkandswitchgrasstolandllgascountsasbiomassandcouldbeculvated
tohelpmeetournaonsenergyneeds.
Biomasshasmanybenetsasanenergyresource.ItisrenewableandabundantthroughouttheUnited
States.Itisoenalowcostsourceofenergy,parcularlyforruralcommunies.Inthetransportaonsector,
itishelpingtodiminishourdamagingdependenceonforeignoil.
Mostbiomassbasedtransportaonfueliscurrentlymadefromcornandconvertedintoethanol,analcohol
thatcanbemixedintogasoline.Soybeanoil,vegetableoil,shoil,andanimalfatscanallbeconvertedinto
biodiesel.Cungedgefeedstockssuchasalgaeholdsignicantpromiseaswell,andcouldulmatelyyield
nearlyidencalreplacements(dropins)fortodaysliquidfuels.
Scientists at Los Alamos National Laboratory (LANL) have used genetic engineering
to develop cuttingedge algae technology. Algal fuels are a potential dropin fuel of
the future.
Souice: LANL
47
Thereareavarietyoffederalprogramsandregulatoryregimesdesignedtoincreasetheuseofbiomass.In
the113
th
Congress,weshouldconnuetondcosteecvewaystoulizethisresource,whilealsomaking
severalcommonsensereformstoexisngpolicies.
Includebiomassaspartofanalloftheabovestrategy.ManyinCongresswoulddenerenewable
energyaswind,solar,andgeothermalexclusively.Butbiomassisatleastequallycapableofproviding
morerenewableenergyforourcountry.Thefederalgovernmentshouldensurethatbiomassispart
ofanalloftheaboveenergypolicytothegreatestpossibleextentacrossallitsprogramsandregula
ons.
Standardizethedenionofbiomass.Whileitiseasytounderstandbiomassasaconcept,dening
theterminfederallegislaonhasprovenfarmoredicult.AreportbytheCongressionalResearch
Servicefoundthatatotalof14biomassdenionshavebeenincludedinlegislaonandthetax
codesince2004.
52
Congressshouldstandardizethosedenionstobebroad,inclusive,andcon
sistentwithoneanother.Thiswouldhelpensurethatagreateramountofbiomassiseligibleforpro
jects,increasetheoponsavailabletoprojectdevelopers,andminimizecomplicaonswithinfederal
regulaonsgoverningitsuse.
Encouragecoringforpowergeneraon.Biomassisoenusedasastandaloneenergysource,for
exampleintheformofwoodpellets.Itcanalsobeusedinconjunconwithotherresourcessuchas
coal,andcoredtoprovideelectricity.Thisapproachoersthepotenaltoreducecertainemissions
whilealsoincreasingournaonsrenewableenergygeneraon.Congressandfederalagenciesshould
encouragecoringthroughallrelevantlegislaon,programs,incenves,andregulaons.

Wood pellets are one example of biomass used for energy.
Souice: Tennessee valley Authoiity (TvA)
48
Nuctrnn ENrncv
With104nuclearpowerplantsin31states,nuclearenergyaccountsfornearly20percentofournaons
electricity. Nuclearpowersupplies13.5percentoftheworldselectricityand66newnuclearpowerplants
areunderconstruconin14countries.
Nuclearpowerisoneofthemostreliablesourcesofbaseloadelectricity,oneofthelowestcostproducers
ofelectricityatanaverageof2.19centsperkilowahour,andoneofthecleanestsourcesofenergy,
emingnopollutantsorgreenhousegasesinelectricitygeneraonandwithlifecycleemissionscompara
bletowindandhydropower.Inaddion,thenuclearindustryisasourceofgoodpayingjobsandlarge
scalejobcreaon.NuclearenergymustremainaviablecontributortoAmericaspowersupply.
Atthesameme,weneedtoadvancethenextgeneraon(andbeyond)ofrobustnucleartechnologies,in
cludingsmallmodularreactors,GeneraonIVtypereactorsandfuturefusionreactors.Wealsoneedtoad
dressthebackendofthenuclearfuelcycleandfulllthefederalgovernmentsresponsibilitytotaketleto
usedcommercialnuclearfuelandhighlyradioacvewaste.
Steam emissions from Vogtle nuclear plant, Georgia

Souice: B0E
Piouucing Noie Nuclear Energy
49
Thegovernmentneedstotakethefollowingstepstoachievetheseobjecves:
Authorizeaquasifederalentytomanagethebackendofthefuelcycle(e.g.,FedCorporan
IndependentGovernmentAgency(IGA)).
DOE:Connuetoconductnuclearenergyresearchprogramswithemphasisonthefollowing:
o Reducethecostsofnuclearreactorsystems
o Reduceusednuclearfuelandnuclearwasteproductsgeneratedbyciviliannuclearenergy
o SupportR&Dforreactorlifeextensionforconnuedsafeandrobustoperaon
o Supporttechnologicaladvancesinareasthatindustrywouldnotundertakebyitselfbecauseof
technicalornancialuncertainty(e.g.,wastefuelreprocessingandfastreactortechnologies)
o Developguidelinesforadvancedfuelreprocessingandrecyclingforusednuclearfuel
PromotenewtechnologiesusedinSmallModularReactors(SMRs)andsupporttheeventualdeploy
mentofSMRs.Thesereactorshavethepotenaltoreplaceagingpowerplantsthatarenearrere
ment,incrementallyaddgenerangcapacityasneeded,providestrongexportpotenaltoforeign
markets,andprovidereliableogridpowersupply.SMRscouldalsobeulizedbythemilitaryand
othergovernmentinstallaonsasasecureandreliablebackuporbaseloadpowersupplywiththe
potenalofprovidingelectricityneedsforthesurroundingcommunies(thisapplicaoncouldalso
accelerateoveralldeploymentandcommercializaonofthesereactors).Themodularityofdesign
andtheabilitytoconstructallaspectsofanSMRintheUnitedStatesalsomeansmorejobshereat
home.LightwaterSMRconceptsbuildonexisnglightwaterreactortechnologywhileothers(future
concepts,suchasgascooledreactors)employverydierenttechnologies.Thus,beyondfundingfor
R&D,wealwaysmustensurethattoday'sregulaonsevolvetomeettomorrow'stechnologies.Asthe
nascentSMRindustrydevelops,itneedstocomplywithsafetyregulaonswhilestrivingtominimize
plantlifecyclecosts.Agenciesshouldcloselymonitorhowregulaonsaectoperangcostsandsafe
tymargins.
Explorenuclearpowerplantsthatemployhightemperaturereactorconcepts(e.g.,NextGeneraon
NuclearPowerPlants).AmendtheEnergyPolicyActof2005toremovethelocaonalrequirementfor
theNextGeneraonNuclearPlantprojectandallowittobebuiltwhereveritcanbeputtouse.
PreservetheIntegratedUniversityProgramthattrainsengineersandscienstsinnuclearengineer
ing,nonproliferaon,nuclearforensics,andnuclearsafeguardmissions.
RevisetheloanguaranteeprogramtorequiretheOceofManagementandBudget(OMB)totake
eachnuclearloanguaranteeapplicaononacasebycasebasistodeterminethecreditsubsidycost.
Assumeddefaultrates,usedtodeterminethecreditsubsidycost,shouldberealiscandtailoredto
matchthecircumstancesofeachspecicapplicant.

50
Connuesupporngbothdomescandinternaonaleortstorealizecommercialscalepowerfrom
fusionenergy.Promotethetransioningofthedomescfusionprogramfromitssciencefocus(how
doweachievefusion)toamoreenergyfocusedprogram(fusionmaterialsandtechnology)witha
strongsciencecomponent.Supportconnuednancialinvestmentintofusionenergythatwillmake
fusionaviableandecientenergysourceinthefuture.
Supportinternaonalcollaboraonstopromotethesafetyof,andtechnologicaladvancementsin,
nuclearenergyandpowerproducon.TheseincludeacviesattheInternaonalAtomicEnergy
AgencyandtheNuclearEnergyAgencythatfosterSMRdesignandlicensing,advancedreactortech
nologyR&D,andsafeandecientconnuedoperaonofcurrentreactors.
ExplorethepotenalforU.S.parcipaonindomescandinternaonalnuclearenergymarkets.
Idenfyandconductgovernmentandindustrydialogueregardinginherentissuesofsafety,security,
intellectualproperty,treaesandeconomicstabilityandgrowth,inordertoachievethegreatestcon
tribuontonaonalsecuritythroughdevelopmentanddeploymentofversaletechnology.

Bellefonte Nuclear Plant Unit 1, Alabama
Souice: TvA
5
1
Source: Nuclear Regulatory Commission
52
At1rnNn1ivr Furts
Withpetroleumaccounngforover90percentoftheenergyconsumedinthetransportaonsectoreach
year,
53
thediversicaonofourfuelmixhasbeenanaonalpriority.Inrecentyears,however,thealterna
vefuelspoliciesoftheU.S.havecometorelyonburdensomemandates,inappropriaterestricons,ander
racsubsidizaon.Implementaonoffederalbiofuelmandateshaslikelycontributedtohigherfoodprices;
fraudulentacvitythathasharmedboththoseseekingtocomplywithfederalrulesandthoseaempngto
commercializenewfuels;andpotenalanduncertainliabiliesforfuelretailersandvehiclemanufacturers.
Thesediculesarecompoundedbytheabsenceofaneecvedenionforthefeedstocksuponwhich
alternavefuelsproduconrelies.Thisisanunworkablesituaonthatwillulmatelyharmconsumers
throughoutthecountryifitisnotreformed.
Thereare,however,manyopportuniesremainingforalternavefuels.Fromalgalbiofuelstonaturalgas
andcoalderivedproducts,aswellascombinaonsoftheseandotherfeedstocks,thepotenaloponsfor
diversicaonofourtransportaonsectorsenergysupplyhaveperhapsneverbeengreater.Theseopportu
niescanallbepursuedinconjunconwitheortstoremedytheproblemscreatedbycurrentpolicies.To
ensureconnuedgrowthinthealternavefuelsmarket,thegovernmentneedsto:
ReformtheRenewableFuelsStandard(RFS),asexpandedbytheEnergyIndependenceandSecurity
Actof2007,toensuremoreequitabletreatmentofthevariousfeedstocks.WhiletheRFShasin
creasedtheusageofbiofuelintheUnitedStates,ithasalsoledtoanumberofunintendedconse
quences.Congressshouldreformthestandardtoensurethattheseproblemsareresolvedinstead
ofworsenedintheyearsahead.
IncreaseR&Dfordropinreplacementfuels,whichareslllargelyintheprecommercialphaseof
development.Theadvantagesofthesefuelsparcularlytheircompabilitywiththecurrentvehicle
eetandexisngfuelinginfrastructuremeritamuchlargershareoffederalbiofuelR&D.
Facilitatedemonstraonsofcungedge,alternavefuelsinavarietyofgeographicalsengsand
climates.
Authorizeentryintolongtermcontractsforthefederalprocurementofnew,alternavefuelsinor
dertocreateareliablemarketforsaleandcercaonoffuels.
RepealSecon526oftheEnergyIndependenceandSecurityActof2007,asthisprovisionhasproven
unworkableandcannotbesquaredwithanalloftheaboveenergypolicy.
Piouucing Noie Alternative Fuels

53
Establishmetricsforevaluangprogressandperformanceatfederalagencies.Achievingthedeploy
mentofcostcompevealternavefuelsisagoodgoaltohave,butactualmeasurementofanypro
gressbeingmadebytheDepartmentofEnergy,theDepartmentofDefense,andothershasproven
elusive.Congressshoulddevelopandimplementmilestonesagainstwhichtheeecvenessoffeder
alprogramscanbejudged.Specically,whetherornotalternavefuelpriceshavereachedparity
withconvenonaloponsbyafuturedateshouldbemonitored.
Pearson Fuels station offering alternative fuels, California

Souice: B0E
Piouucing Noie Alternative Fuels
54
Cni1icnt MiNrnnts
Mineralsarethebuildingblocksofournaonseconomy.Fromrareearthelementstomolybdenum,werely
onmineralsforeverythingfromthesmallestcomputerchipstothetallestskyscrapers.Mineralsmakeitpos
sibleforustoinnovateandinventandintheprocesstheyshapeourdailylives,ourstandardofliving,and
ourabilitytoprosper.
ThereisnoquesonthatanabundantandaordablesupplyofdomescmineralsiscricaltoAmericasfu
ture.Andyet,despitethat,ourmineralrelatedcapabilieshavebeenslippingfordecades.Rareearthele
mentsgarnermostoftheheadlines,butaccordingtotheUSGS,theUnitedStateswas100percentdepend
entonforeignsuppliersfor19mineralsin2011andmorethan50percentdependentonforeignsources
forsome24more.
54
Forthemostpart,thisisnotbecausetheU.S.lacksreservesofthesemineralsthatarecapableofbeingde
veloped.Itisbecauseourmineralspolicieshavefailedtokeepupwiththerestoftheworld,andthosein
vesnginproduconoftheseresourceshavedecidedtolookelsewhere.AccordingtotheMetalsEconomics
Group,theU.S.aracted20percentoftheworldwideexploraoninvestmentdollarsin1993.
55
Today,that
haserodedtojusteightpercent.
Thistrendcanandshouldbereversedthroughclearprogrammacdirecontorevitalizethedomesccri
calmineralsupplychain.SuchaconisneededtokeeptheU.S.compeveandensurethatthefederalgov
ernmentsmineralpoliciessomeofwhichhavenotbeenupdatedsincethe1980sarebroughtintothe
21stcentury.
Thereestablishmentofcricalmineraldesignaon,assessment,producon,manufacturing,recycling,analy
sis,forecasng,workforce,educaon,research,andinternaonalcapabilieswithintheUnitedStatesises
senalforeconomicprosperityandresourcesecurity.Toaccomplishtheseobjecves,thegovernmentneeds
to:
Developarigorousmethodologyfordeterminingwhichmineralsarecrical,andthenusethatmeth
odologytodesignatecricalminerals,monitortheirstatus,andupdatedesignaonsinamelyman
ner.
EstablishasthepolicyoftheUnitedStatesthepromoonofanadequate,reliable,domesc,andsta
blesupplyofcricalminerals,producedinanenvironmentallyresponsiblemanner,tostrengthenand
sustainournaonseconomicsecurity.
Completeacomprehensivenaonalresourceassessmentwithinfouryearsforeachdesignatedcri
calmineral,includingeldwork.
Piouucing Noie Critical Minerals

55
Opmizetheeciencyofpermingwithoutreducingtheenvironmentalstandardsthatmustbe
adheredtoinordertofacilitateincreasedexploraonforandproduconofcricalmineralsbyre
viewingrequirements,quanfyingdelays,recommendingimprovements,anddevelopingaperfor
mancemetricforevaluangprogress.
ConductR&Dtofacilitatetheecientuseandrecyclingofcricalminerals,aswellasalternaves
thatcanreducethedemandforthem.
Undertakeannualreviewsofdomescmineraltrendsaswellasforwardlookinganalysesofcrical
mineralproducon,consumpon,andrecyclingpaerns.
Provideforworkforceassessments,curriculumdevelopment,workertraining,andassociatedgrants
toacademicinstuons.
Promoteinternaonalcooperaonwithalliesoncricalmineralsupplychainissuesandprovidean
avenuefortechnologyandinformaontransferviadiplomacchannels.
U.S. Now Reliant Upon China For Rare Earth Supply
Souice: 0SuS
Piouucing Noie Critical Minerals
56
USGS Mineral Commodity Summaries 2012

Souice: http:mineials.usgs.govmineialspubsmcs2u12mcs2u12.puf
57
PnoouciNc Monr ON Nn1ivr LnNos
ThefederalgovernmentshouldremoveunnecessaryburdensandobstaclesforNavegroupsseekingtode
velopnaturalresourcesonNaveCorporaonorIndianReservaonlandsacrossthenaon.
Thereare5.35billionbarrelsofoil,37.7trillionmillioncubicfeet(mcf)ofconvenonalnaturalgas,andmore
than53billiontonsofpotenalcoalreservesonNaveLandsintheconnentalU.S.
56
Thecombinedvalueof
theseresourcesisover$875billion.
57
OnAlaskanNaveLands,the92,000acresontheArcccoastalplain
likelycontainameanesmateofanother2.67billionbarrelsofoilandhundredsofmcfofnaturalgas.
58
Triballandsarealsorichwithrenewableresources.Theylikelycontainmorethan4.9percentofthecoun
trystotalrenewableresources,potenallyproducing23.3billionmegawahoursofelectricity.Triballands
arelikelytohold19percentofthenaonsgeothermalenergyresources,vepercentofitsfuturesolar,3.2
percentofitswindandconvenonalhydropower,andabout1.1percentofitsbiomass.
59
Fordecades,tribeshavefaceddelaysandredtapeseekingfederalapprovaltoenterintoagreementstoex
ploreforanddeveloptheirownenergysources.Theyarechallengedbysubstanalcapitalshortagesforen
ergydevelopmentandtransmissioninfrastructure,andtheyhavefacedregulatoryandpermingdelays.
DOEandDOIarenowprovidingbeertechnicalassistancetohelpNaveenergyplanning,butfarmoreis
neededtosucientlysupportenergydevelopmentonNaveLands.Congressforseveralyearshasbeen
consideringaseriesofamendmentstoIndianenergytribalstatutesandpoliciestospeedsuchdevelopment.
TopromoteenergyproducononNaveLands,thefederalgovernmentshould:
ProvidemoreassistancetoNavesandNavecorporaonstoplanoilandgas,renewableenergy,
andelectricitygeneraonandtransmissionfaciliesonandacrossNaveLands.
AllowtribestomoreeasilyenterintoTribalEnergyResourceAgreements,envisionedbytheEnergy
PolicyActof1992.Theseagreementshastentheapprovalofrightsofwayacrossenergylandsaswell
asenergyprojects.Moreover,theycreatetribalenergydevelopmentorganizaonswhenneeded.
Speedtheapprovalofpreliminarypermitsandlicensesforexploraonanddevelopmentfortribes.
PermittribesandNavecorporaonstoconductdemonstraonprojectstodevelopbiomassre
sourcesontriballands.
ProvideR&Dfundingforlessconvenonalrenewableresourcesandfossilfuelssuchasmethane
hydrates,shaleoilandgas,andsubsurfacecoalgasicaononNaveLands.
58
MnrriNc AMrnicns Rrsouncr Bnsr
Ournaonhasbeenblessedwithabundantresources,andthedrivetosurveyournaturalresourcebase
mustberecaptured.Unlweemploythelatesttechniquestodeterminetheextentofthenaonsholdings,
ournaturalresourcepolicycannotbecomprehensive.Understandingthefactsisthefoundaonofsound
policy.Toprovideafoundaonforfuturepolicyprescripons,thefollowinginventorystepsmustbetaken:
ReformUSGSprogramstorestoretheagencysfocusongeologicalsurveyingandrequirethatthe
agencyimplementmorerobust,comprehensiveinventoryingofalltechnicallyrecoverableU.S.ener
gyandmineralresources,withupdateseveryvetosevenyears.Resourcessurveyedinthisinvento
ryshouldincludealloil,shaleoil,oilshale,naturalgas,shalegas,naturalgasliquids,coal,methane
hydrates,otherleasableminerals,saleableminerals,hardrockminerals,andothers.AllBLMandoth
erfederallands,aswellasallNaveLands,shouldbefullysurveyed.
Employthirdpartycontractorstoundertakeseismicdataacquisionandobtainthecoresamplesfor
theUSGSinventory.
Createarenewed,robust,andecientstorageandcataloguingsystemforthegeologicalandgeo
physicalsamplesanddataneededfortheUSGSinventory.
Createmeasurestoinventoryexisngdataanduniformlypublishinformaononresourcesonstate
andprivatelandsinthefollowingregions:Marcellus,EagleFord,Fayeeville,andBarneShales;the
Bakkenformaon;andenhancedoilrecoveryinproducingstatessuchasTexas,Louisiana,California,
Oklahama,Kansas,Arkansas,NewMexicoandColorado.
The USGS has mapped

96 percent of Afghani
stan using hyperspectral
imaging, but only five
percent of the U.S. has
been mapped using the
same technologies. A
similar effort should be
undertaken domestically.
Souice: 0SuS
Piouucing Noie Mapping Americas Resource Base
5
9
6
0
61
Nn1ioNnt ENrncv A1tns
TheEIAshouldreneitsexisngworktoproduceandmaintainanuptodate,comprehensiveNaonalEner
gyAtlas.Thisreadilyaccessibleprojectwouldbuildonexisngreportsassessinghydrocarbons,cricalmin
erals,andrenewableresources.
60
Leveragingthefullpowerofourimagingandsurveyingcapabilies,it
wouldbuilduponworkalreadycompletedbytheNaonalRenewableEnergyLaboratory,theIdahoNaonal
EngineeringandEnvironmentalLaboratory,DOI,otherfederalagencies,andstateagencies.
Moredatawillbeerinformthepublicdiscourse.Weknowthatsolarresourcesaremostheavilyconcentrat
edintheAmericansouthwestinstateslikeArizonaandNewMexico,whilegeothermalpotenalisconcen
tratedinthewestandnorthwestinstateslikeAlaska,Oregon,andHawaii.TheGreatPlainsdominatewind
potenal,whilemanypromisingshalegasplaysarefoundinAppalachia.Anallinclusiveatlasprovidingato
talpictureofpotenalresourceswouldinformandstrengthenthenaonsenergydiscussion.
Piouucing Noie National Energy Atlas
62

CoNsuMiNc Lrss

Wastenot,wantnotisanexpressionmanyAmericanshaveheardathomefromayoungage.Duetoour
naonssizeandhighstandardofliving,wemustbeconsciousofourenergyconsumpon.Asourstandard
oflivingrises,energydemandwillintensify.Weusealotofenergybecausewehaveahighandimproving
standardofliving,andweliveinabigcountrywheretransportaonconsumesagreatdealofenergy.Thus,
weshouldaimtouseenergymorewiselybyusinglessandlessenergypercapitaandperunitofgrossdo
mescproduct.
Usingenergyecientlyispartof,notinconictwith,abundantandaordableenergy.Energyexpertshave
correctlycalledenergyeciencythehfuel.
61
Usingenergymoreecientlyisakintodevelopingmore
fuel.
Successesthusfarshouldbecelebrated.U.S.energyconsumponperunitofgrossdomescproducthasfall
enfrom17.35thousandBrishthermalunits(Btu)in1949to7.31thousandBtuin2011,adropofnearly60
percent.
62
Wemustgivecreditwherecreditisdue,includingtosuccessfulgovernmentprogramsthathave
spurredeciencyupgradesnaonwide.
Sll,itshouldbenotedthatalargepartofthedropinoverallenergyconsumponisaneectoftherecent
economicrecession,fromwhichwearesllrecovering.Weneedtoconnuetodobeerandndnewand
creavewaystoencourageenergyeciency.
Theprospectofevengreatereciencyisbright,anditsbenetsareclearfortheeconomyandtheenviron
ment.Thechallengeisdoingsoinanoninvasivemanner.Energypolicyshoulddriveconservaonwithout
detracngfromourstandardofliving.Eciencyinnovaonsthatprovethemselvestobuyerswillprosper,
justasinnovaonsinotherendeavorshavebecomepartofoureverydaylives.
0
2
4
6
8
10
12
14
16
18
20
1949 1959 1969 1979 1989 1999 2009
T
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o
s
a
n
d
B
t
u
P
e
r
R
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a
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o
f
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D
P
(
C
h
a
i
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e
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2
0
0
5
)
U.S.EnergyIntensity'sSteadyDecline
EIA
63
Althoughmanythingscometomindwhenwethinkofeciency,acommonsensedenionisgeng
morefromlessarelaonshipbetweeninputsandoutputs.Thereareasmanywaystoaccomplishthisre
sultastherearecreavepeopleworkingtogetheraccumulangknowledgeandenabledbyprosperityand
technology.
63
Eciencyisamulsidedcoinandshouldnotbereducedtoaslogan.
Thereisonedenionofeciencythatmustberejected:themisguidedideathatreducingoverallenergy
consumponinabsolutetermsnecessarilyenhancesthenaonseciency.Ahouseholdthatcutsitsusage
ofgasolineiscertainlyconservingenergy,butifthemembersofthathouseholdarespendingmoremetak
ingalternavetravel,orsimplytakingfewertrips,thentheyalsomaybeaccomplishinglessintheirlives.
Americansareandshouldbefreetopursuehappiness,aerall.
Energyconsumponandthedireconofthenaonseconomyaretypicallycorrelatedinposiveterms.The
naonstotalenergyconsumpondeclinedfrom101.3quadrillionBtuin2007to94.6quadrillionBtuin
2009,forexample,coincidingwithaperiodofextraordinaryinternaonaleconomicweakness.Asthemar
ketplacerecovered,however,consumponroseto97.3quadrillionBtuin2011.
64
Thismakessense,intuively.Agrowingeconomyusesmoreenergy;aslowingorshrinkingeconomyuses
less.Wasngenergy,certainly,isneverdesirable.
International Energy Agency Assessments of Global Energy Intensity By Country

(1980 vs. 2010)
Source:IEA,WorldEnergyOutlook2012,Figure9.2.Seealso:p.273.
Tonne of Oil Equivalent per thousand dollars of GDP (2011 dollars, market exchange rate)
64
ENrncv IN1rNsi1v
OnecommonmeasureofenergyeciencyisaainedbydividingenergyconsumponbytheGrossDomesc
Product(GDP).Thisisalsoknownasenergyintensityandenablesustodeterminehowmuchenergyisre
quiredtogenerateonedollarintheeconomy,broadlyspeaking.Lessismore.Althoughitisanimperfect
measurementaswithallindicators,therearelimitaonstotheanalysisitisnonethelesshighlyusefuland
instrucve.
65
Astechnologyimprovesandourworkforcebecomesmoreeducated,theeconomysproducvityrises,and
moregoodsandservicesareproducedforless.Thelessenergyrequiredtoaddonedollartotheeconomy,
themoretheeconomyisabletogrow.Eveninmesofeconomichardship,eciencycansllincrease.In
fact,scarcitycandriveeciencyevenfurtherasrmsadapttonewchallengesandcircumstances.
TheAmericanstoryonenergyconsumponandeconomicvitalityisamodelfortherestoftheworld.Energy
eciency,measuredasthousandBtuperreal(2005)dollars,hasimprovedinvirtuallyeveryyearsince1949,
whentherecordsbegin.Theamountofenergyrequiredtoproduceonedollarhassteadilyfallen,evenas
consumponhasmorethantripled.EnergyconsumponperunitofGDPhasfallenfrom17.35thousandBtu
in1949to7.31thousandBtuin2011,adropofnearly60percent.
66
ItisforthisreasonthattheInternaonalEnergyAgency(IEA)recentlysingledouttheUnitedStatesforour
advancementsinthisarea.InitslatestWorldEnergyOutlook,theIEAnotes:AmongOECD[Organisaonfor
EconomicCooperaonandDevelopment]countries,theUnitedStateshasachievedthebiggestimprove
mentinenergyintensityinrecentdecades,albeitfromrelavelyhighlevels.Itsenergyintensitydeclinedat
anaveragerateof2percentperyearfrom1980to2010.
67
Incrementalimprovementshaveproducedpro
foundchangeoverme.
AccordingtothelatestdomescprojeconsfromtheEnergyInformaonAdministraon,energyintensity
willconnuetrendingdownward.(CarbondioxideemissionsperdollarofGDParecloselylinkedtoenergy
intensityandwillalsoconnuetodecline.)Evenenergyusepercapita,whichhadlongbeenrelavelystable,
willalsoaccelerateitsmilderdecline.Gainsineciencyaccruedespiteeconomicgrowthandtheexpansion
oftheU.S.populaon.
68
Thisissomethingofwhichwecanallbeproud,butthereissllalongwaytogo.Othernaons,suchasthe
EuropeanUnionandJapan,reportlowerenergyintensies.Thereareseveralreasonsthatthisisthecase.
Overseasgovernmentsareoenmorewillingtointerveneintheeconomyandimposestrictermandates
thatmakeenergymoreexpensiveforconsumers.Thisapproachcanleadtodistoronsandnegaveexter
nalies.Initsreport,theIEAalsodiscussesaseriesofbarrierstogreatereciencygains,includingthedi
culesassociatedwithmeasuringeciency,lowlevelsofawareness,theproblemofsplitincenves,riskper
ceponandaversion,andothers.
69
Policymakerscanhelpremoveormanagethesebarrierscharngacoursetoanevenmoreecientecono
mythatpreservestheAmericanfreeenterprisesystemandulizes,ratherthanabandons,thefreemarket
approachthathasmadeussostrong.
Consuming Less Energy Intensity
65
Tur Wnv Foxwnxo oN ErricirNcv
ThedrivetowardincreasingeciencyisanAmericansuccessstory.Weseethisacrosssectorsinavarietyof
ways:
TheNextGeneraonNuclearPlantholdstremendouspromiseandisatestamenttotheingenuityof
21
st
centuryengineering.Thisdesignremainsoperaonalforalongerperiodofmeandalsoproduc
eshydrogen,inaddiontoitshighlyecientelectricityproducon.SocalledGeneraonIVplants
areaninternaonalendeavor,inwhichtheU.S.isaleader.
70
Morebroadly,asnuclearpowerhasin
creaseditsshareoftotalU.S.generaon,itscapacityfactorameasurementofeciencyhasalso
substanallyincreased.
71
Therecentdroughtandspateofwildreshasbroughtwatereciencytotheforefront.Asweexplore
elsewhereinthisdocument,understandingtheenergywaternexusiskey:waterisusedinsome
formormethodintheproduconofallenergysources.Upgradedfaucets,pipes,toilets,andother
xtureshavesavedover250billiongallonsofwater,accordingtotheEPA.
72
Inthenaturalgasarea,combinedcycleunitshavegreatlyincreasedtheeciencyofelectricitypro
ducon.From2005to2010,thecapacityfactorforthesekindsofplantsincreasedfromabout40per
centto50percentduringpeakhours.
73
ThebuildingsectorusesmorethanaquarterofU.S.energyeachyear.Technologicalimprovements
canenhancetheeciencyofresidenalandcommercialbuildings,parcularlyinthespaceheang,
cooling,andvenlaonareas.
74
Mandatesarenotapanacea,however,andtypicallyhavenegave
externalies.
Technologyprovidesnumerouspathwaystowardgreatergainsineciency.Hydroelectricplantscan
bemodernizedwithmoreecientturbines,forexample.TheAdvancedEnergyTrustFund
describedintheseconbelow,AnEnergyPolicyThatPaysForItselfcancontributetothenaons
R&Dpotenal.
Consuming Less Energy Intensity

66
AovnNcro Vruictrs
SomuchofAmericasenergyconsumponoccursinthetransportaonsector.Cars,trucks,airplanes,and
othermeansoftravelconsumeroughly71percentofthenaonspetroleum,includingimports.Noother
sectorevencomesclose.
75
Approximately13.3millionbarrelsoftransportaonfuelprimarilymotorgaso
line,disllatefueloil,andjetfuelwereconsumedeachdayin2011.
76
Therearesignicantopportuniesinthetransportaonsectortoimproveuponeciencyandenvironmen
talperformancewhileprovidingmorenotlesschoicesforconsumers.Already,andwithoutgovernment
intervenon,theadoponofalternavefuelandadvancedvehicletechnologieswithincompanyeetshas
resultedinnotableprogress.Oneexampleistheincreasinguseofnaturalgasbylonghaultruckers.
Alternavefuelvehiclesoerachanceforourcountrytodiversifyourfuelmixandbreakourdependenceon
foreignoilandachieveenergyindependencefromOPECimportsby2020.Someofthemostpromisingap
proachesforconnuedadvancementinthissectorinclude:
DOE:ReformtheVehicleTechnologiesProgram,whichshouldfocusonarangeofadvancedvehicle
technologies,systems,andcomponents.TheseacviesshouldbelimitedtoprecommercialR&D,
wherethegovernmentsroleisappropriateandmostbenecial.Exisngauthoriesshouldbere
pealedandconsolidatedtoprovidethisprogramwithclearandconsistentcongressionaldirecon.
DOE:ReneexisngprogramsincludingtheTitle17loanguaranteeprogram,toallowawiderrange
ofvehicletechnologiesandprojectstoqualify.
TerminatetheAdvancedTechnologyVehiclesManufacturing(ATVM)incenveprogram,whichhas
awardedonlyveloanssinceitsinceponandjustonesmallloansinceMarch2011.Theprogramhas
notbeeneecve,andtoday,becauseofrisingfueleconomystandards,ithasalsooutliveditsuseful
ness.AllunobligatedfundsthathavebeenappropriatedtoATVMshouldberescindedandreturned
totheTreasury.
Plugin hybrid vehicles have an

engine powered by liquid fuel
and an electric motor powered
by a rechargeable battery pack.
Source: NREL
Consuming Less Advanced Vehicles
67
Congressshouldconsiderreformofthecurrent,upto$7,500taxcreditforelectricvehiclestomakeit
moretechnologyneutral.Modicaonsshouldnotaddtothedecit.Thecreditshouldalsoramp
downandsunsetby2020.
Modifycurrentfueleconomystatutesandregulaonstoprovideparityforalternavefueltechnolo
gies,includingnaturalgasvehicles.Currentstatutesandregulaonsfavorelectricvehicles,butthe
moreproperfocusisoverallvehicleeciencyandenvironmentalperformance.
Afullreviewofthecurrentfueleconomyregimeshouldbecompletedbymid2015,andbeupdated
everytwoyearsthereaer.ItshouldevaluatethecostsandbenetsofstandardsforrecentModel
Yearsincludinganyimpactsonsafety,newandusedvehicleprices,newandusedvehiclesales,con
sumerchoice,actualconsumerfuelexpendituresavings,andindustryemploymentandbeusedto
informthestringencyoffuturestandards.
Solar powered electric vehicle charging station

at Argonne National Laboratory (ANL)
Souice: ANL
Consuming Less Advanced Vehicles
68
ENrncv CoNsrnvn1ioN nNo ErricirNcv
Theenergywedontuseisanotheruntappedresourceatourdisposal,asnotedabove.Achievementsinen
ergyeciencyarefundamentallytheresultoftheaccumulaonofknowledgeandtechnologicalprogress,
bothofwhichareenabledbygreaterprosperityandsecurityinafreemarketeconomy.Wemustnottake
energyeciencyforgranted;energyeciencysvastpotenalforsavingsdemandsouraenon,ande
ciencygainsshouldbecelebratedmuchaswewouldanewenergyproject.
Energyeciencyfacestheproblemthatitcanbedicultorimpossibletoquanfyitsbenetsthecosts
avoidedandenergysavedduetoincreasedeciency.Howcanandshouldwemeasureacvitythatdidnot
occur?Thistaskislessdicultwhenthereareadequatedata,butwhatifthedataareincompleteorother
wiseinadequate?Datacolleconandbenchmarkingareespeciallycrucialpiecesoftheeciencypuzzle
whenaddressingtheenergyconsumponofbuildings,forexample.
Thereisalsomuchdebateaboutthefederalgovernmentsroleinenergyeciency.Manybelievethatthe
governmentshouldleadbyexampleandconnuetofocusonmakingitsownbuildingsmoreecient,there
byprovidingalargemarketandopportuniesforustoinnovateandlearn.Othersplacetheirsupportbehind
mandatestodrivethebehaviorofcizensorprivatesectorinstuons,althoughthoseoenproveunpopu
larandgiverisetomanychallenges.
Moreover,weknowthattherearerstcostbarrierstobeovercome,andwehaveonlyjustbeguntoexplore
thewaysthatsmartsystemscanworktosaveenergy.Buildingcodesareandshouldbepartofthediscus
sion,butcodesareonlyasgoodastheirenforcement,whichdropsowhenstateandlocalbudgetsare
squeezedbyaweakeconomy.
Onethingiscertain:eciencyandconservaonacrossallsectorsmustbepartofanalloftheabovesolu
on.By2020,thefederalgovernmentshouldshitoawholesaleeciencyapproachthatwouldintegrate
exisngsilosofeciencymeasuressuchasbuildingcodes,lighng,andappliancessothattheyworkasa
systemtoincreasetheoveralleciencyofbuildings.
By 2020, shift to a wholesale eficiency approach that encourages integrated

systems rather than silos of eficiency.
Consuming Less Energy Conservation and Eficiency
69
Toachievethisprogress,thegovernmentshould:
CommissionareviewbytheGAO,followedbyformalhearings(oralessformalprocessinvolvingci
zensandinstuonalstakeholders)ofcurrentfundingandpastperformanceofresidenal,commer
cialandindustrialenergyeciencyprogramsatDOEandproposeappropriateauthorizaonlevels
basedonthisreview.Whereverappropriate,amajorpriorityshouldbestreamliningandconsoli
dangtheseprogramsandleveragingtheworkofpublicprivatepartnerships.
Encourageenergyeciencyupgrades,viapublicprivatepartnershipsorothernancingmechanisms,
forbothresidenalandcommercialbuildings.Newhomeconstruconisonlynowshowingsome
signsoflife;indeed,recentyearshaveseennewconstruconcomealmosttoahalt.Prospectsfor
newlyconstructed,energyecientcommercialbuildingsareslightlybeerthanforresidenalbuild
ings,but,betweennowand2020,themostcosteecveapproachwilllikelybeinretrongour
exisngbuildingstock.
Whileenergyeciencyupgradesareavaluableendeavor,apersistentdisconnectremainsinsome
areasofthemarketwhenitcomestodeploymentoftheseupgrades.Thisappliesspecicallytoener
gyecientappliancesandequipment.Anumberofbarriersexistthatdiscouragedecisionmakers
andpurchasersfromprocuringecientsystemsthatareiniallymoreexpensive.Thisissomemes
referredtoasasplitincenve,andariseswhenthereisdicultymovangonepartytoactinthe
bestinterestofanotherwhenupfrontcostsareanissue.
77
Forexample,landlordsmayhavelilein
cenvetopurchaseenergyecientbutcostlyappliancesforanewtenantwhopaystheulitybills.
Weshouldaddressthesediculesandseehowwemightbeerencourageinformeddecision
making,reducerisk,anddecreasepaybackperiodsforthosewhoareresponsibleforpurchasinge
cientequipment.
Energyeciencytaxextendersshouldbeconsideredaspartofabroaderoveralltaxreformeort.
Thereareseveraltaxincenvesforupgradesrangingfromnewenergyecienthomeappliancesto
majorcommercialrenovaons.However,thelegislaveprocessprovideslilecertaintyastowhether
theseprogramswillconnuefromyeartoyear.Itmaybeworthwhiletoconnuetaxincenvesfor
energyeciencyupgrades,buttheyshouldbeaddressedaspartofascallyresponsiblepathfor
wardandinthecontextofothersubsidies.

Consuming Less Energy Conservation and Eficiency
70
ENrncv nNo Wn1rn
Together,energyandwaterresourcesarethefoundaonofournaonseconomyandareessenaltoour
naonsfutureandinternaonalsecurity.Allformsofenergyproducon,energydistribuon,fuelextracon,
andfuelrenementrequirewateroraectwaterresourcesinsomeway.Everyaspectofextracon,treat
ment,conveyance,anduseofwater,aswellasthetreatmentofwastewater,isdependentonsucientand
reliableenergy.Moreover,energyusebythesesystemsissignicantregionally.
Toimprovethefundamentalrelaonshipbetweenenergyuseandwateruse,thegovernmentshould:
Idenfyallexisngfederalresearchauthoriesandacviesthatarecurrentlyauthorizedtoaddress
theinterdependencyofenergyandwatersystemsbutarenotacvelydoingso.
EnsurethatDOEandDOIhavetheauthoritytofacilitatemulagencyeortstodevelopenergyand
waterinterdependencyR&D.
DOEandDOI:Developplanningtoolstoavoidmulusewaterconictsandtoensurethatenergyand
waterinterdependenciesarecoordinated.
Modifyexisngfederalprogramsorregulaonstoincorporateembeddedenergyeciency.
Researchwaterwasteandconsumponchallengesforhydraulicfracturing,andprovidesafetyand
environmentalregulaonsthatproperlybalancewaterwasteandsafetyconcernswithbenetsand
economicprosperity.Asthistechnologyevolves,regulaonsneedtoadaptaccordingly.Someareas
withoutwaterresourcesareofparcularconcern.
Developincenvesforwateruliesandwateruserstocapturewatereciencyenergysavings.
Encouragetheuseofenergyrelatedequipmentandbuildingsstandardsthataddressembeddeden
ergyinwater.
Authorizeacoordinatedresearchinvestmentbymulplefederalagenciesinthedevelopmentand
implementaonofcertainenergywatertechnologies.Thesetechnologiesshouldaddresstheinterde
pendencyofenergyandwatersystemsandmulpurposewaterandenergysystemplanning.
Consuming Less Energy and Water
7
1
Sandia National Laboratories Sandia National Laboratories Sandia National Laboratories

Souice: http:www.sanuia.goveneigy Souice: http:www.sanuia.goveneigy Souice: http:www.sanuia.goveneigy wateiuocsEW_RoaumapSum_Solai8 wateiuocsEW_RoaumapSum_Solai8 wateiuocsEW_RoaumapSum_Solai8 u6.puf u6.puf u6.puf
7
2
Examples of Interrelationships Between Water and Energy

Souice: B0E Repoit to Congiess on the Inteiuepenuency of Eneigy anu Watei, Becembei 2uu6
73

CtrnN ENrncv TrcuNotocv
Americahasledtheworldinsciencadvancementandinnovaonforthepastcentury.Wemustbuildon
thisfoundaonbysupporngthenextgeneraonofenergyresearchandtechnology.
OneofthemostpromisingagenciestosupportenergyrelatedR&DistheAdvancedResearchProjectsAgen
cyEnergy.KnownasARPAE,itislocatedwithinDOE,andisnowfundingpotenallytransformaonalener
gytechnologies.
Governmentprogramssupporngcleanenergyhavehadmixedsuccess.WhileDOEsLoanGuaranteePro
gramwasoriginallywellconstructed,recentchangestoitsdesignhaveledtofailuresthatletaxpayerson
thehookforhundredsofmillionsofdollarsinlosses.
Inorderfornewclean
78
technologiestosucceed,theircostsmustfallandtheymustbeallowedtomaturein
awaythatenablessustainedprivateinvestment.Governmentprograms,andtheunintendedconsequences
oftheirspending,causeboomandbustcyclesinemergingtechnologies.Whileemergingtechnologiescan
prosperbyrelyingongovernmentprovidednanceforsetperiodsofme,perpetualrelianceonsubsidies
canactuallyinhibitthegrowthanddevelopmentofnewtechnologies.By2020,weneedtoeliminatemostof
thegovernmentscurrentsubsidiesandimplementanewsystemofcleanenergynancethatiscost
eecve,technologyneutral,andconducivetoprivateinvestment.
Inthissecon,reformsforexisngnancemechanismsarediscussed,andnewer,morecosteecvemech
anismsareproposed.Overthenextdecade,asnewmethodsaredeveloped,theyshouldbeconsideredwith
thesamegoalsinmind:tospurgrowth,tofundbasicresearch,toreiningovernmentspending,toremain
technologyneutral,andtoavoidstymieingprivatesectorinvestment.
By 2020, eliminate the dependency on government subsidies and
implement a new system of clean energy inance that is costeffective,
technologyneutral, and conducive to private investment.
74
Frornnt Rrsrnncu nNo DrvrtorMrN1
Advancinglongtermbasicresearchmustbeapillarofanyenergypolicy.Longtermbasicresearchprovides
thefoundaonuponwhichfutureinnovaonisbuilt.TheepicenterofthiseortshouldbeinAmericasuni
versies,inthenaonallaboratories,andtheninsomeformforprivateindustrieswillingandabletoinvest
inresearch.By2020,thefederalgovernmentshouldsignicantlyincreasemanyofitsbasicresearchbudg
ets.Givenfederalbudgetconstraints,newappropriaonsshouldbefullyosetbyreducingspendingelse
whereorbydedicangaporonofnewenergyproduconrevenuesforthispurpose.
79
Ascricallyimportantasresearchfundingistoanaonalenergypolicy,itisequallyimportanttoavoidover
lyprescripvedireconsorlimitaons.Tothegreatestextentpossible,decisionsonthemeritsofresearch
proposalsshouldbeletotheuniversies,laboratories,andgovernmentprogramoceswithexperse.
Anumberofrecentreportshavestressedtheimportanceofanexpandedfederalcommitmenttoenergy
relatedR&D.Oneexampleisthe2010AmericanEnergyInnovaonCouncilreportentled,ABusinessPlan
forAmericasEnergyFuture.
80
Withintheparametersdescribedabove,weshouldincreasefundingforener
gyR&Dasproposedinthisreport.
Thedevelopmentpathforinnovaveandtransformaonalenergytechnologiestypicallyconsistsofseveral
enablingstages:basicandappliedR&D,demonstraon,andnalcommercializaon.Acollaboraveeort
betweenindustry,academia,naonallabs,otherR&Dinstuons,andfederalandstateagencieshasoen
proveneecveinthepast.Inially,expendituresbyfederaland/orstategovernmentagenciesareoen
requiredforsuccessfulcollaboraveeortsbyanycombinaonoftheaforemenonedenes.
IndustryshouldplayandindeedhasbeenplayingakeyroleinsponsoringtheseR&Deortsaspartof
theirownbusinessdevelopmentandopportunies.Collaboravedemonstraonprojectshavefrequently
ledtodramacreduconintechnologydevelopmentcostsandtheeventual,successfulscaleupandcom
mercializaonofnewandinnovavetechnologyconcepts.PreviousandongoingcollaboraveR&Deorts
haveledtonotablesuccessesindeployingnewenergystorage(e.g.,advancedbaeries),anarrayoftheex
isngecientrenewableenergytechnologies(e.g.,advancedphotovoltaicsolarenergycells)andother
cleanenergytechnologies(e.g.,saferandmoreecientnuclearpowerplants).
Thefederalgovernmentisheavilyengagedinfundamentalresearch,parcularlythroughitssystemofNa
onalLaboratories.Theseeortsareoenworldclassandlaudable,butwemustdoabeerjobofnding
mechanismstoidenfyanddisseminatethepromisingresultsintermsofbothknowledgeandtechnology
totheprivatesectorforcommercializaon.FederalpoliciesfocusonfederalR&Dprogramsandinstu
ons;weneedtoexpandourfocustoincludetechnologytransferfromthoseinstuonstotheprivatesec
tor.
Clean Eneigy Technology Federal Research and Development

75
Weneedbothathoroughreviewofhowthefederalgovernmentistransferringideastotheprivatesector
forbroaderdevelopment,andhowfederalR&Dinstuonscollaboratebetweenandamongstthemselves.
Weshouldexploreallideasforbringingprovencommercialexperseandpraccalknowledgetobear,in
cludingideasonhowtoenlistasvolunteerssomeofthenaonsbestandbrightesttechnologistsandentre
preneurstoassistthesefederaleorts.
By 2020, signiicantly increase funding for basic science research as well as

transformational research, development, and demonstration programs.
Clean Eneigy Technology Federal Research and Development
76
ARPAE

Establishedaspartofthe2007AmericaCOMPETESAct,ARPAEismodeledaertheDefenseAdvancedRe
searchProjectsAgency(DARPA)andfocusesontransformaonalenergytechnologies.Thesearehighrisk
technologiesthatindustryislesswillingtoinvestinonitsown.ARPAEisdesignedtobemorenimblethan
normalgovernmentaloperaonsinwhereandhowitprovidessupportforprojects,includinggreaterexibil
ityinthehiringandretenonofthebrightestmindsasprogrammanagers.TheUnitedStatesremainsaglob
alleaderbecauseofourabilitytoinnovatenotsimplyimprovingsomeoneelsesideaandARPAEhas
shownearlypromiseforspurringinnovaonandincenvizingresearch.GovernmentfundingofARPAEs
programsshouldconnue.
Clean Eneigy Technology ARPAE
77
LonN GunnnN1rr PnocnnM
DOEsloanguaranteeauthoriesandtheuseofthemspandierentAdministraons,dierentCongress
es,andincludetwoseparateprograms,eachwiththeirownuniqueaributes.Specically,DOEhasoverseen
implementaonoftheoriginalprogram,knownasSecon1703,andthesmulusprogram,knownasSec
on1705.TheformerwascreatedbytheEnergyPolicyActof2005.ThelaerwascreatedbytheAmerican
RecoveryandReinvestmentActof2009.Beyondthepolicalparentageofthesetwoprograms,thetwopri
marydisnconsbetween1703and1705arerelatedtoeligibilityofapplicantsandpaymentofcreditsubsi
dy.
Regardingeligibility,1703isavailabletoallinnovavetechnologiesthatreducegreenhousegasemissions,
while1705isavailabletorenewableandelectrictransmissionprojectsonly.Regardingcreditsubsidy,1703
allowsappropriaonstocovercreditsubsidycosts,butinpracceapplicantshavelargelydecidedtoselfpay
theseamounts.Conversely,when1705wascreated,a$6billionappropriaonwasincludedtopayforappli
cantscreditsubsidycosts,though$2billionand$1.5billionweresubsequentlydivertedtocashforclunkers
andastatebailout,respecvely.Themostimportantdierencebetweenthetwoprogramsisthatnotasin
gleloanguaranteehasbeenclosedunder1703.The1705program,ontheotherhand,hasguaranteed$16
billioninloanswithhundredsofmillionsindefaultsalready.
Simplyput,workingunder1705,theDOELoanProgramsOcehadtoolileme,toomuchmoney,andtoo
feweligibleapplicants.
Thesefactors,especiallyincombinaonwithoneanother,explainwhythe1705programhasalreadyseen
severalhighprolefailures.ThesedefaultshavegivenrisetocallsforthewholesalerepealofDOEsloan
guaranteeauthories,includingtheoriginal1703program.Thesereaconsareunderstandable,parcularly
givenquesonsaboutwhetherunderlyingtermsandcondionsapplicabletoboth1703and1705loan
guaranteeswerefollowed.Itshouldberecognized,however,thattheseloanprogramshaveanimportant
roleinfederalenergypolicy,parcularlyonecommiedtonewerandcleanerresources,butonlyiftheyare
implementedinawaythatbeerprotectstaxpayersfromunwiseorpoorlystructuredinvestments.
Loan programs have an important role in federal energy policy, but only when
implemented to protect taxpayers from unwise or poorlystructured investments.
Clean Eneigy Technology Loan Guarantee Program
78
Theexisngloanguaranteeprogramneedstobereformedanditsrecentfailuresprovideseveralunfortu
natelessonsthatcanserveasthebasisforsuchreforms.Thesechangeswouldensurethedevelopmentofa
stableanddiverseporolioofcommerciallyviabletechnologies,whichwouldinturnallowexpeditedde
ploymentandlowercostsforconsumers.Inaddiontoremedyingthemistakesmade,anumberofreforms
shouldbepursuedtopreventsimilarsituaonsinthefuture:
Managementoftheloanguaranteeprogramwouldbenetfromestablishingriskprolesfordierent
categoriesofprojects.Thesecategoriescouldlookatwhetherornototakeagreementsarein
place,thecreditrangoftheapplicants,andotherfactors,whichwouldallowfordierentlevelsof
scrunyasapplicaonsforsupportareconsidered.
Morerobustduediligenceandmonitoringmechanismsshouldbeputinplace.
Applicantscreditsubsidycostsshouldbeselfpaidandnevercoveredbytaxpayers.
Earlywarningsystems,consistentwiththerecommendaoncontainedinTheIndependentConsult
antsAuditoftheDOEloanprograms,
81
shouldbeimplemented.
Concentraonriskshouldbemigatedbyresisngeortstodeviatefromthebroadereligibilitycrite
riacontainedintheoriginalloanguaranteeprogramfromthe2005EnergyPolicyAct(the1703pro
gram).
Transparencyshouldberestoredtotheprocessesforsolicing,evaluang,andassigningriskproles
toprojectsseekingsupport.
Achiefriskocershouldbeappointedtoobjecvelyoverseeallprogrammacacviesinvolvingthe
commitmentoftaxpayerdollars.
Anemphasisonloweringthecostofcapitalforalreadyviableprojects,ratherthanforcingunproven
andriskytechnologiesintothemarketplace,shouldberestored.
Agua Caliente Solar Project,

California. Supported by the
DOE LPO, the project has installed
nearly 3 million solar panels.
Souice: B0E
Clean Eneigy Technology Loan Guarantee Program
79
Mns1rn LiMi1ro Pnn1Nrnsuirs
Easyandaordableaccesstocapitaliscricalforanysustainableindustryinthefreemarket.Largecorpora
onswithestablishedtrackrecords,includingmanyenergycompanies,areabletotapthesesourcesof
funds.Thetaskismuchharderforsmallercompanieswithunproventechnologyandunsteadycashows.
Suchcanbetheplightofrenewableenergy.Thechallengesofcapitalformaonarealsoafactorforhighly
regulatedcompanies,suchasenergypipelines.TheUnitedStatesshoulddowhatitcanespeciallywithin
thecontextoffreemarketsandprivateinvestmenttohelpcompaniesthataredevelopingalternave
sourcesofenergy.
Themasterlimitedpartnership(MLP)isaspecialbusinessstructurethatpermitsacompanytoraisecapital
likeacorporaonbutpaytaxeslikeapartnership.Insteadofpayingcorporateincometax,acompanydis
tributesitscashowonaquarterlybasistoitsinvestors,whocanbuyinonthepublicmarketandpaytheir
owntaxesonthesedistribuons.Companiesthathavethesteadycashowsofpipelinesandsimilaropera
onshavefoundMLPstatustobehelpful.
Renewableenergycompanies,withafewexcepons,arenoteligiblefortheMLPstructureandarenotable
totakeadvantageofabusinessframeworkthatholdsadvantagesinbothcapitalraisingandtaxaon.Inor
dertooerMLPstorenewableenergycompanies,Congressshould:
ConsiderwholesalereformoftheInternalRevenueCodeaspartofabroaderapproachtoresolvein
consistenttaxcharacteriscswithintheenergysector.
MakeMLPsmorewidelyavailablebyamendingtheInternalRevenueCodeof1986toextendtheMLP
structuretoincludebiodiesel,biomass,hydropower,solar,wind,andvirtuallyeveryotherkindofal
ternaveenergysource,withtheexceponofnuclearenergy.
Clean Eneigy Technology Master Limited Partnerships

80
Rrvrnsr Auc1ioNs
Cleanenergytechnologiesasdenedabove
82
deservesupportfromourfederalgovernment,andsincethe
1970stheyhavereceivedit.Unfortunately,ourscalcircumstanceshavechanged.Moreover,newtechnolo
giessuchaswindandsolarhavenotenjoyedthemarketpenetraonmanypredicted.Itisprudenttouse
publicresourcestosupportcleanenergydevelopment,butonlywhenourresourcesserveasacatalystfor
nascentbutpotenallytransformavetechnologies.Perpetualsubsidiesaresimplyimpossibleintodayss
calenvironment.
Asweapproachacrossroadsofourenergyfuture,wemustcomprehensivelyevaluateexisngandproposed
cleanenergysubsidyprogramsinlightofthesequesons:cantheprogramjumpstartatransformave
technology?Fromitsincepon,cantheprogramleadtoitsownphaseout?Willsubsidycostsinexorablyde
clineoverthelifeoftheprogram?Anideathatdeservesfurtherreviewandpromisesposiveanswersto
thesequesonsisthereverseaucon.
Reverseauconsfeaturemulplesellerscompengtobeselectedbyonebuyer,incontrasttoatradional
auconwheremulplebuyersbidforacceptancebyasingleseller.Theyareroughlyanalogoustocon
tracngscompevebiddingprocess.Thecontractorusescompeonamongstpotenalsupplierstodraw
outthelowestpriceorbestvalue.Inthecontextofcleanenergysupply,biddersareoengeneratorsofre
newableelectricity,andtheycompetetoreceivethesmallestsubsidyfromthegovernment.
Thisapproachhasbeenusedinseveralcountriestoassistcleanenergy.Andreverseauconsareawidely
usedcommercialtoolinanumberofcontexts.Theideadeservesseriousconsideraon,andDOEcouldbe
empoweredtoleadtheway.Inordertoproperlyconsiderthisidea,thegovernmentshould:
TasktheCongressionalBudgetOceandEIAwithdeterminingthecostofsupplanngexisng
nancemechanismswithreverseaucons.
Makeallexisngfederalenergyprogramssubjecttoapotenalshitothereverseauconmecha
nism,withininialreviewsandforecasts.
Invesgatehowreverseauconscouldposivelyaectthequalityorspeedoftechnologydevelop
mentwithintheenergysector.
Clean Eneigy Technology Reverse Auctions

81

MoornNiziNc ENrncv Drtivrnv INrnns1nuc1unr

Thenaonsenergydeliveryinfrastructurehasnotbeenrenewedattheratethatitisaging.Wearenowliv
ingonprudentinfrastructureinvestments,toomanyofwhichweremadegeneraonsago,butthissituaon
cannotandwillnotconnueindenitely.Ourenergydeliverynetworks,especiallyelectrictransmissionlines
andgasandoilpipelines,requireconnuouslyintensivecapitalinvestmenttoensureunfalteringreliability
andoperaonalreadiness.Reliableenergydeliveryitselfamajorcontributortoenergysecurityrequires
abundantandaordableenergyfromadiversityofsources.Italsobenetsfromandmusthavesteadilyin
creasinginvestmentincungedgeinformaontechnologythatenablesreliabilityandeciency.
83
Todays
challengesforenergydeliveryareconsiderable.
Newpaernsofenergydiscoveryandusearerequiringnewinfrastructure.Atthesameme,exisnginfra
structuremustbemaintainedandexpanded.Forexample,thewelcomenewoilandgasproduconinthe
BakkenFormaonrequiresnewpipelines.Andincreasingrelianceonnaturalgasforpowergeneraonand
asatransportaonfuelalsomeansaheightenedinterdependencybetweennaturalgasdeliveryandpower
generaon.
Thesecircumstanceslikelyimpactthereliabilityaswellastheaordabilityofenergy.Veryoentheupfront
costsofneworimproveddeliveryfaciliesaremorethanosetbysavingsonthecommoditydelivered.
Electrictransmissionservice,forinstance,contributesjustafraconofthedeliveredcostofelectricity,on
average10percentandfrequentlyless.Moredependableandrobustdeliverynetworksexpandgeographic
marketsforcommoditysupply,andthisresulngcompeonfrequentlyreducescosts.
Finally,whileenergydeliverynetworksatthedistribuonlevelarehistoricallysubjectprimarilytostatelaw
andregulaon,increasinglyregionalmarketsforenergycommodiesandtheheightenedsensivityofthe
economytosupplydisrupons(asevidencedduringtheaermathofHurricaneSandy)underscorethatthe
federalrolemustbeprudentlyandfaithfullyexecuted.Nowmorethanever,thefederalgovernmentmust
partnerwithratherthandictatetothestatesandprivatesectortoencourageandenablestronganddurable
energydeliverynetworks.
Despitethischanginglandscape,however,federalregulatorydecisionstoooenfallshortofsupporngthe
naonsenergydeliverynetworksandcanevenobstructtheinvestmentsneededtomaintainthem.Thena
onalimportanceofenergydeliverynetworksrequiresecientprivateinvestmentanddemandsgovern
mentspolicysupport.Weneednewapproachesthatunleashinvestmentandrewardinnovaon,andwe
mustenactlawsthatenablethefederalgovernmenttomakeastrongercontribuontothesecurityandreli
abilityofthenaonsgridnetworks.
82
PnoMo1iNc Drtivrnv INrnns1nuc1unr

Electrictransmissionlinesandnaturalgasandoilpipelinesmustbeupgradedandimproved.Thebenetsof
moremodernandrobusttransmissionsystemsforstrengtheningthereliabilityofserviceanddiversifyingthe
sourcesofenergysupplywouldbenotable.Withbeerinfrastructure,morepeoplewouldhaveaccessto
morepowerthatismorereliableandondemand.New,alternavetransmissionpathsreducetheriskofdis
rupon.Accordingly,peoplegetenergyatlowercostsandwithgreaterreliability.Governmentmustdoits
parttopromoteenergydeliveryinfrastructureandshowitsvalue.By2020,thefederalgovernmentmust
takeclearanddecisivestepstoenablegreaterlevelsofinvestmenttoupgradeenergydeliveryinfrastructure
andmigateriskfromdegradaon.Thiswillmeanagreaterlevelofpartnershipwiththeprivatesectorand
statestoidenfyandremovebarrierstoenergydeliveryinfrastructureimprovements.
Withrespecttoelectrictransmissioninparcular,althougheciencyanddemandresponsehaveanim
portantroletoplayintheelectricsupplybalance,bytheirnaturetheycannotsubstuteforphysicalinfra
structureatleastnotindenitely.Inrecentyears,growthindemandforelectricityhasbeensuppressedby
thepoorperformanceofoureconomy.Withtherightoveralleconomicpolicieswecanexpecttheeconomy
toimproveideallysoonerratherthanlater,butcertainlyby2020.Asoureconomicrecoveryconnuesand
energyneedscorrespondinglyintensify,thefederalgovernmentmustencourageandnotimpedeenergyde
liveryinfrastructure.

Transmission infrastructure is sorely needed. Transmission infrastructure is sorely needed. Transmission infrastructure is sorely needed.
Souice: Lawience Beikeley National Laboiatoiy, B0E
By 2020, upgrade energy delivery infrastructure to mitigate risk from degradation.
Noueinizing Eneigy Beliveiy Infiastiuctuie Promoting Delivery Infrastructure
8
3
84
Etrc1nic nNo Gns TnnNsMissioN

CongressshouldclarifyandrearmthatFERChascrucialrolestoplayinencouragingandenablingelectric
andgastransmission.FERCshouldworkappropriatelywiththestatesandregulatedenestostrengthen
energydeliverynetworksacrossournaon.Congressshould:
Establishapolicy(orpolicies)thatsetsoutgoalsforandcallsaenontothebenetsofinterstate
transmission,suchas:diversicaonofrisk;enhancementofcompeonconsistentwithexisng
stateandregionalregulatoryframeworksandmigaonofmarketpower;abilitytocolocatefacili
esonexisngrightsofway;compenglandusepriories;theneedsofloadservingenes;and
thecontribuonofdemandresponse,energyeciency,anddistributedgeneraon.
Highlighttheneedforelectricmarketparcipantstondcommongroundonpolicyandcostalloca
on;recognizethatcostsmustbereasonablyproporonatetomeasureableeconomicandreliability
benets;andaccordduedeferencetocostallocaonproposalssupportedbybroadagreement
amongaectedstates.
EncourageFERCtospurthedevelopmentofnewdeliveryinfrastructure,andrearmitsobligaons
underSecon219oftheFederalPowerAct.
Developaprogramtohelpupgradenaturalgasandliquidfuelpipelinenetworks,giventhenaons
aginginfrastructureandrisingexplosionrisk.
EncourageDOEandFERCtoidenfyimpedimentsinandbarrierspresentedbyfederallawandpolicy
toaconsthatstatesandinterestedparesdesiretotaketoprotectandenhanceenergydelivery
networksthatarerighullyunderstatejurisdicon.Thiswouldinclude,forexample,hardeningtrans
missionanddistribuonassetsinancipaonofstormsandeortstorecoverserviceaerstorms.

Noueinizing Eneigy Beliveiy Infiastiuctuie Electric and Gas Transmission
85
Frornnt CoonoiNn1on
Toooenthefederalgovernmentitselfstandsinthewayofcruciallinearenergydeliveryfaciliessuchas
pipelinesandelectrictransmissionfacilies.Althoughfederalagenciesmustconnuetomeettheirresponsi
biliesunderthestatutestheyadminister,Congressmustbringordertothevarioustransmissionprojectre
viewprocesses.Tobegin,CongressshouldauthorizeFERCastheleadfederalcoordinatorforelectrictrans
missionandpipelineinfrastructuretohelpmaintainreliability,alleviatecongesonandenablestrandedre
sourcestosupplydemand.CongressshouldallowFERCtoestablishbindingdeadlinesonotherfederalagen
ciesandtorequireasingleenvironmentalreviewdocument.

McNaryJohn Day Transmission Line, Washington
Souice: B0E
Noueinizing Eneigy Beliveiy Infiastiuctuie Federal Coordinator
86
Cvnrnsrcuni1v Pno1rc1ioNs
Americanssharethesamegoalswhenitcomestocybersecurity:keepourcomputersystemsandournaon
safefromcyberintrusions.Thenaonneedsprivatecompanieswhichownmostofthecricalinfrastruc
tureinourcountrytotalkwitheachotherandwiththegovernmentaboutthecyberchallengestheyface
aswellasthepotenalstrategiesandsoluonstocombatthreats.Tothatend,thefederalgovernmentmust
formapartnershipwiththeprivatesector.Federallawshouldencouragethevoluntarysharingofmuch
neededinformaonbyremovinglegalbarrierstoitsuseanddisclosure.Atthesameme,thelawmustalso
safeguardprivacyandprohibittheinformaonfrombeingusedforcompeveadvantage.
Itisequallyimportanttodecidewhatthefederalgovernmentcanandmustdo,aswellaswhatthefederal
governmentcannotandshouldnotdo.Weneedtoavoidnewlayersofbureaucracyandregulaonthatwill
servelilepurposeandachievemeagerresults.Fourcrucialareasforaenonare:informaonsharing,re
formoftheFederalInformaonSecurityManagementAct(FISMA),criminalpenales,andaddionalre
search.Inthatspirit,therearecommonsenseapproachestoaddressoureverincreasingcyberthreats:
Improvecybersecuritybycollaborangwithprivateownersofcricalinfrastructureandeliminang
barrierstoenhancedinformaonsharing.

Createexpeditedinformaonsharingfortheprivatesectorusingexisngstructuresandreporng
relaonships.
Strengthencriminalstatutesforcybercrimes.
UpdatetheFISMA.PreservetherolesoftheNaonalInstuteofStandardsandTechnologyindis
seminangsecuritystandardsforthefederalgovernment.
LeverageandstrengthenexisngprogramsincybersecurityR&D.
FERC:Produceanesmateofthecostsandbenetsofoponstohardentheinfrastructureandre
porttoCongress.ConsultwiththeElectricReliabilityOrganizaon(ERO),DOE,andelectriculies.
Noueinizing Eneigy Beliveiy Infiastiuctuie Cybersecurity Protections
87

Errrc1ivr GovrnNMrN1

Thesystemofenergylawsandregulaonsiscomplicated.Rulesareconstantlyadoptedandupdatedand
newlawsareregularlypassed.Amidstallthisincrementalacon,itisnecessarytotakeastepbackfrom
metomeandreviewwhetherthesystemasawholeisworkingproperly.Unfortunatelytodaysfederal
government,onthewhole,toooenstymiesmuchneededprogress.
Weneedtoputthefederalgovernmentshouseinordersothaturgentlyneedednewenergyprojectscan
proceed.Todaysalltoocommoncycleofredtape,uncertainty,anddelaymustbebroken.
Thegovernmentneedstodoabeerjobofstrikingaprudenalbalancebetweenenergyrequirementsand
environmentalconcerns.Toooenenergyandresourceprojectsbecomeensnaredintheadministrave
state,andathicketofrulessocomprehensiveitisunintelligible.Properstewardshipoffederalpubliclandis
afundamentalpartofresponsibleenergyandresourcedevelopment.Morerobustpartnershipswiththe
statesarenecessarytoensurebalance.Weneedtomodernizeregulatoryandperminglawsandrestore
accountability.Weneedtoworktoempowerruralcommuniesthroughpartnershipwiththestates.Only
whenthegovernmentandstatessolidifyacohesive,ecientrelaonshipwillourcizensreapthefullpo
tenalofournaonalresources.
Describedbelowarewaysthefederalgovernmentcanandshouldimproveitsperformancewithrespectto
energypolicy.
88
Exrcu1ivr BnnNcu Ac1ioNs
Congresscannotreformenergypolicyalonetheexecuvebranchimplementsthelaw.Moreover,the
courtshaveunderscoredtheconsiderablepowerpreviouslydelegatedtoexecuveandindependentagen
cies.TheAdministraon,anditsdepartmentsandagencies,shouldtakestepstoreformitsmethodsandpro
cessesthroughwhichenergypolicyisimplementedandadministeredinordertoachieveournaonsenergy
potenal.Theexecuvebranchneedsto:
DOE&DOI:Promoteenhancedoilandgasrecoveryfromexisngwellsthroughnewtechnologyby
oeringabbreviatedleasingandpermingprocessesforpreviouslyexploredordevelopedelds
whereenhancedoilrecoveryisapplicable.
DOI:Examinethestatusofpubliclandsandleasestoidenfyimpedimentstofederaloilandgasleas
ingandproducon.Currentpoliciesmustbemodiedtoremovethoseimpediments,consistentwith
establishedlawandgoodenvironmentalpracce.Specically,DOImustestablishareviewprogram
andanacceleratedauconscheduleforpreviouslyandconsistentlynominatedleaseparcelsthat
haveyettobeputupforsale.
Commerce:CedeallauthorityoverOCSissuestotheDOI.ThismustincludeafulltransferoftheNa
onalOceanicandAtmosphericAdministraon(NOAA)anditsfunconstoDOI.
DOE:Conductareviewofprogresstowardimplementaonofpriorenergyplansandomnibusenergy
legislaon,suchastheEnergyPolicyActof2005.
Acrosstheexecuvebranch,theremustbemoretransparencyfromFederalAdvisoryCommiees
andtheirsubcommiees.TheuseoftheFederalAdvisoryCommieeAct(FACA)mustbereformed.
ThePresidentsbudgetmustcitetheCongressionalauthoritybehindallDOEfundingpriories.Con
gressshouldalsoreviewforduplicavebudgetaryauthories.
TheNaonalPetroleumReserveAlaska(NPRA)mustbeimmediatelyplacedintofullavailabilityfor
oilandnaturalgasleasing,consistentwithitsstatutorydesignaon.Thereservemustbethoughully
developedwithroads,bridges,andpipelinefaciliestopromotebroadonshoredevelopmentofthe
diuseresourcebase,whilesimultaneouslyaccommodangthetransportaonofoilandnaturalgas
fromoshoreeldsintheChukchiSeatotheTransAlaskaPipelineSystem(TAPS).Roadlessopons
fortheNPRAshouldbeexpresslywithdrawnfromconsideraon.Theleasingdeferralinandaround
TeshekpukLakethrough2018shouldbehonored.
Effective uoveinment Executive Branch Actions
8
9
90
THISPAGEINTENTIONALLYLEFTBLANK.
91
Effective uoveinment Executive Branch Actions
DOD:Reducefuelandenergyintake.
o Createdirecveswithinacquisioncontractstopermittheuseofawardfeeclauses.Theseclaus
eswouldallowcontractorstoshareingovernmentsavingsifthecontractorexceedscontractre
quirementsforfueleciencyinamannerthatresultsinprovablelifecyclecostsavingstothe
government.
o Connuetoimproveenergyeciencyatdefenseinstallaons.
o CodifyseconsoftheDOD/DOEinteragencymemoonenergy.
84
o DevelopahierarchyofgoalsforenergypolicyatDOD.Idenfyandcoordinatetherolesandre
sponsibiliesofeachmilitaryservicethatwillachievethesegoals.Theoverarchingstrategymust
focusonsupporngDOD'smission.
DOD:ApplyOperaonalEnergyconceptsthroughoutDODwherepraccal.OperaonalEnergyisan
approachtoenergyeciencyandgreening.Militaryoperaonsinvolvediversecapabiliesthatde
penduponavarietyofenergyaributesrangingfrompowerandspeedforvehiclesandaircra,to
sizeandweightofsoldierequipmentandpowersupplies.Notonlyaretheenergyneedsdiverse,but
therightbalanceofcapabiliescanvarywithmissionandcircumstances.Forexample,fueldelivery
canbeverydicultandhazardoustoforwardlocaons,thereforeincreasingthevalueofenergyal
ternavesandenergyecientsystems.Combatplaormscarryaneverexpandingarrayofsensors,
computers,weaponsandcommunicaonsystems,raisingtheimportanceofenergynetworkingand
control.Themilitarychallengeistoopmizethesecombinedenergyconsideraonsinagivencircum
stancetoachievethegreatestnetoperaonalbenet.AnOperaonalEnergyapproachrecognizes
thatthesoluonisnotassimpleasminimizingconsumponorunitenergycost.Instead,Operaonal
Energysoluonsrequiresignicantanalysis,planningandcommonunderstandingabouthowenergy
factorsintoanyendeavor.
Allagenciesshouldreviewpoliciesaecngenergyexportsandremoveunnecessaryimpediments.
Energyexportsaregoodforoureconomy.
85
Acrossthefederalgovernment,defertostateagenciesforenergyprojectlicensingauthoritywhen
possibleandwhenfederalandstateregulaonsexhibitsimilaroroverlappingobjecves.
86
BLM:fulllthefederalgovernmentsresponsibilitytocleanuplegacywellsinAlaskaandreclaim
thesesites.
92
Hvonnutic Fnnc1uniNc
Thecombineduseofhorizontaldrillingandhydraulicfracturing(fracking)techniqueshasallowedtheoil
andgasindustrytodevelopandproduceresourcesthatwereunrecoverablelessthan10yearsago.From
2007through2011,shaleoilproduconincreasedmorethanvefold,from39milliontoapproximately217
millionbarrels,andshalegasproduconincreasedmorethanfourfold,fromabout1.6trillionto7.2trillion
cubicfeet.
87
Frackinghasbeenusedbytheoilandgasindustryfordecades.Forexample,frackinghasbeenusedonAlas
kasNorthSlopesincethe1970s,withoutincident,asatooltoaidintherecoveryofoil.
88
Asfrackinghasbe
comemorewidespreadasameanstoproduceshaleresourcesintheconnentalU.S.,cricismfromvarious
groupshasledtocallsforregulaonbythefederalgovernment.However,statesalreadyhavestatutoryand
regulatoryregimesinplacethateecvelymanageandoverseefrackingoperaons.Indeed,stateshave
modernizedlawsandghtenedregulaonssincethe2007produconboom.Blanketrulesimposedbythe
federalgovernmentmaynotaddresswellconstruconorenvironmentalconcernsacrossallthestatesand
geographicareaswhereshaledevelopmentisoccurring.
Exisngstateregimesshouldbereviewedtodetermineifthereisanyneedforfederalregulaon.States
havesuccessfulregulatoryregimes.Parcularlygiventhefederaldecit,agenciesshouldfocusondirecng
limitedresourceswheretheyaremostneededandwarranted,notwherestatesarealreadyeecvelyregu
langandpolicingtheiracvies.
Todate,22states,represenng94percentofdomesconshoreoilandgasproducon,havevoluntarilysub
miedtheiroilandgasregulatoryprograms(includingsixstateregulatoryregimesspecictohydraulicfrac
turing)forreviewbytheStateReviewofOilandNaturalGasEnvironmentalRegulaons(STRONGER).
STRONGERisanonprot,mulstakeholderorganizaonsupportedbytheInterstateOilandGasCompact
Commission,GroundwaterProteconCouncil,AmericanPetroleumInstute,theU.S.EnvironmentalProtec
onAgency,andU.S.DepartmentofEnergy.TheSTRONGERreviewprocessinvolvestheevaluaonofstate
regulatoryprogramsagainstguidelinesdevelopedthroughamulstakeholdercollaboraveeort.
Thefederalgovernmentshouldconsidertheecacyofthistypeofselfpolicingprocessbeforemandang
newblanketregulaonsthatmaynotworkineverystate.Theeconomicbenetsassociatedwiththeshale
boomintheU.S.areclear:morejobs,higherwages,andincreasedrevenuestofederal,stateandlocalgov
ernments.Insteadofimpornggreateramountsofnaturalgas,wearenowonthevergeofbeingabletoex
portsomeofoursurplusinexchangeforevenmorejobsandevenmorerevenues.Industrialconsumers
arebenengfromgreatlyreducedenergycosts,andnaturalgashasbecomeincreasinglyviableasatrans
portaonfuel.Thesebenetsshouldnotbetakenforgrantedorputatriskunderanewfederalregime
thatonlymakesitharderorimpossibletoproduceournaonsabundantshaleresources.
Effective uoveinment Hydraulic Fracturing

93
Puntic LnNos
Economicusesoffederallandsarenowheavilyrestrictedbyregulaon(regulatorytakings),whichhas
causedsignicantharmtomanyruralcommunies.Atthesameme,manyofthesecommuniesare
watchingforestsonpubliclandsbedestroyedbywildres,insectepidemics,andoutbreaksofforestdisease.
Thiscausesthepublictoquesonifstateorcountygovernmentswouldntbebeerstewardsoftheland.
ItisimperavethatDOIpartnerwithstatestoachievethebestpossibleuseofpubliclands.Currentfederal
regulaonspitDOIagainstthestatesinneverendinglegalandpolicalbalesoverlanduse.Thisarrange
mentiswastefulandcontrarytoDOIsmission.
DOIshoulddevelopagreementswithstateandlocalgovernmentstodeterminethebestmanagementprac
cestoimproveeconomicacvityanddevelopment,whereacceptable,inandaroundfederallandunits.
TheU.S.ForestService(USFS)shouldbetransferredfromtheDepartmentofAgriculture(USDA)toDOI
whichwouldallowtheFederalLandManagementAgenciestobeunderthejurisdiconofonedepartment.
DOIsexperienceinlandmanagementwouldprovideanimprovementovertheUSDA,whichhasproven
whollyinadequate.ThistransfershouldbeauthorizedbyCongressandimplementedimmediately.
DOIhasaclearlegalobligaontoconveylandstotheStateandNavesofAlaska.Alaskaenteredtheunion
in1959,buttheStateissll5.13millionacresshortofevententaveconveyanceofland,havingreceived
just59.3percentofitslandsbynalpatentpromised54yearsago.Atthisrate,theStatelikelywontgain
nalconveyanceofallitslandunlitcelebratesitsCentennial.AlaskaNavecorporaonsalsosllawait
tentaveconveyanceof1.97millionacres,havingreceivednalpatenttojust32.3millionacresofthe45.7
milliongrantedNaveslargelythroughtheAlaskaNaveClaimsSelementwhentheyseledtheiraborigi
nallandclaimsin1971.In2004,CongresspassedtheAlaskaLandConveyanceAcceleraonActtospeedup
suchconveyances.Thecurrentbudget,asdidlastyearsproposal,however,woulddefeatthepurposeofthe
Act.
89
Thefederalgovernmentmustfulllitslandconveyanceobligaonsimmediately.Notonlyisthisanunful
lledpromise,butthefederalgovernmentcannotactuallypayforandmanagethelanditcurrentlyoversees.
Byconveyingtheland,thegovernmentwillsasfyitsdebtsanddischargepropertyitcannotaordto
properlyprotectandsupervise.
Effective uoveinment Public Lands
9
4
Percentage of Federal Land Ownership By State

Source: Library of Congress
95
Rrcutn1onv RrronM
Thoughtleadersfromacrossthespectrumhavedecriedtheregulatorymorassandcalledforreform.Asnot
edlegalscholarRichardEpsteinhasobserved,lawsandregulaonsmustbeinternallyconsistent,prospec
veinapplicaon,andsimpleinform.However,proceduresthemselvesoenbecomebothsorigidand
interminablethatendlessmeislostinnonstopmaneuvering,whichinvitesmassivejudicialappealsthat
[can]resultinremandsforyetanotherroundofadministraveproceedings.Toooen,ligaononlycom
poundstheinialdelay,andexposes[a]rmtotacitretaliaoninsomeunrelatedproceedingoverwhichthe
agencyalsohasvastdiscreononhowtoproceed.
90
PresidentClintonrebuedanoverbearingregulatorysysteminhisintroducontoExecuveOrder12866,an
orderdesignedtoreformtheregulatoryregime.Hiswords,wrienin1993,sllapplytoday:
91
IthasbeenreportedthatJackWardThomas,13
th
ChiefoftheUSFSunderPresidentClinton,notedafew
yearsagothatcourtbaleshaveedthatagencyinaGordianknotcreangaviciouscycleofincreasing
costs,medelays,andinabilitytocarryoutmanagementacons.
92
Thisobservaonappliesalltoowellto
federalagencieswithresponsibiliesinthearenaofenergyandnaturalresources.
Thefederalgovernmentneedstoenactmeaningfulandmeasuredregulatoryreform.Insodoing,weshould
alsoreformtheconvoluted,defactoclimatepolicyoftheUnitedStates,asestablishedthroughligaonun
dertheCleanAirAct,theEndangeredSpeciesAct,NEPA,andotherstatutes.Weshouldfacilitatemoretrans
parentdebateonanddevelopmentofpoliciestoaddresstheemissionsblamedforglobalclimatechange.
TheAmericanpeopledeservearegulatorysystemthatworksforthem,notagainst
them,aregulatorysystemthatprotectsandimprovestheirhealth,safety,environ
ment,andwellbeingandimprovestheperformanceoftheeconomywithoutimposing
unacceptableorunreasonablecostsonsociety;regulatorypoliciesthatrecognizethat
theprivatesectorandprivatemarketsarethebestengineforeconomicgrowth;regu
latoryapproachesthatrespecttheroleofState,local,andtribalgovernments;andreg
ulaonsthatareeecve,consistent,sensible,andunderstandable.Wedonothave
sucharegulatorysystemtoday.
Effective uoveinment Regulatory Reform
96
Thereisagreatdealofworktobedone.Allofthefollowingreformscanandshouldbeexecutedby2020:

ENunNcrrrN1 0r Rrcuin1oxv Rrvirw ANo ANnivsis

Iniatearegulatorymoratoriumacrosstheboardforareasonablemetoassesstheimpactofregu
laonsontheeconomygenerallyandenergysecurityspecically.Duringthemoratorium,agencies
shouldidenfyduplicaveorburdensomeregulaonsthatshouldberemoved.

Requireacomprehensivereviewofallfederalregulaonsoverseenbyabiparsancommieeof
MembersofCongress,asselectedbyCongress.
Promoteagencyanalysisofthecumulaveeectsofregulaonsandcloselyassociatedregulaons.
RequirerobustStatementsofEnergyEects(ExecuveOrder13211)forsignicantregulatoryacons
(ExecuveOrder12866)andforthecumulaveeectsofcloselyrelatedregulaons.
RequirethefunconalequivalentofaNEPAanalysistomeasurethecumulaveaordability,employ
ment,andreliabilityimpactsofagencyrulemakings.Makethatprocesspartoftheadministraverec
ordsothatitprovidesmorerobust,legalrecourseforthoseadverselyimpactedbyagencyrule
makings.Alternavely,requireastatementofenergyimpactssubjecttojudicialreviewtoaccompany
decisionsandregulaonsaecngthedevelopmentofenergyinfrastructure.
EnsurethatAgenciesundertakeandpublishbalanced,transparentandfullysubstanatedanalysisof
thecostsversusthebenetsofregulaons.Inassessingbenetsofrules,agenciesmustfocuson
measurablebenetsandavoidspeculaveassessmentsbasedonthenonuseofresourcesoropin
ionsurveys.

Prxri11iNc Rrroxr

Expeditefederalpermingandreviewdecisionsforenergy,naturalresources,andrelatedinfrastruc
tureprojects.

o Directagenciestoexpeditehighpriorityinfrastructureprojects.
o Developafederalgovernmentwideplandelineangcleardeliverablesandmelines
toreducethemeittakestomakepermingandreviewdecisions.
o Establishspecicandmeasurableacons.
o Requiretransparencyandaccountability.
o Modernizeandexpediteenvironmentalreviews.
o Coordinatesafeandresponsibleenergydevelopmentonpubliclands.
o Limitthemeduringwhichlawsuitscanbeledagainstprojects.
o Limittheabilityofplainstohavetheiraorneysfeespaidbythefederalgovernment.

97

Reformenvironmentalperming,whichhasbecomeunnecessarilydicult,meconsuming,expen
siveanduncertain.
93
Toimprovethisprocess:

o Expeditepermitsandotherfederalaconsnecessaryforenergyrelatedprojectsthathave
naonalsignicance.
o Designateprojectsofimminentnaonalinterest,forwhichexcessiveorrepevejudicialreview
wouldbecurtailed.
o FormaninteragencytaskforcechairedbytheWhiteHouseCouncilonEnvironmentalQualityto
ensurethatfederalagenciesresponsibleforpermingenergyrelatedfaciliesarecoordinang
theireorts.Thistaskforcewouldensurethatfederalagenciessetupappropriatemechanismsto
coordinatefederal,state,tribalandlocalpermingacvityinparcularregions,suchasAlaska,
whereincreasedacvitymightbeexpected.
94

EstablishanexpeditedpermingprocessforcleanenergydevelopmentonreclaimedAbandoned
MineLand(AML)sites.

NiNiNc Rrroxr

PreventEnvironmentalProteconAgency(EPA)eortstotakeoverbondingofhardrockminingoper
aonsunderSecon108(b)oftheComprehensiveEnvironmentalResponse,Compensaon,andLia
bilityAct(CERCLA),becauseBLM,USFS,andmanyofthestatesalreadyadministersucientpro
gramsinthisarea.
EstablishaGoodSamaritanprogramforqualiedgroups(e.g.environmentalnongovernmentalor
ganizaons,localcizens,andothers)toreclaimAMLsitesasapublicserviceandavoidthecreaon
ofliabiliesforthoseundertakingsucheorts.Thesegroupswouldbeexpresslyexemptfromany
liabilityunderCERCLA.Toavoidunduerisk,robuststandardswouldbesetforoversightofreclama
onacvies.

Environmental permitting has become unnecessarily dificult, timeconsuming,
expensive, and uncertain. It must be reformed.
Federal rules [result] in a 7 to 10year waiting period before mine development
can begin.
The United States is tied for last place with Papua New Guinea.
Behre Dolbear Group, 2012 Ranking of Countries for Mining Investment
98
Codifymodernstandardstoensuretheavailabilityofdomesccoalsupplies,clarifystandardsforim
pactsonwaterways,andseektoremedytheconfusioncreatedbydecadesofligaon,rulemaking,
andotheracviesregardingimplementaonoftheSurfaceMiningControlandReclamaonAct.
EvaluatetheimpactonsmallminersofcertainMineSafetyandHealthAdministraonregulaons
thatmaybemoreappropriatelyimposeduponlargeoperaons,andconsiderprovidingfordierent
treatmentofsuchoperaonswhileconnuingtoensuresafetyandhealthofallinvolveddepend
ingontheirscaleandtheresourcesavailabletotheoperatorsforcompliance.

LnNo 0sr Rrroxr

Preventwildlandsandroadlesspoliciesfromstoppingaccesstonaturalresourcesonfederallands.

Limitfuturefederaladministravelandremovalstoareaslessthan5,000acresandrequireCongres
sionalracaonwithinabriefme,suchas90days.Toadministerthisprogram:
o Createalandswapsystemwherebylandsremovedfromproducveusemustbereplacedbyced
ingfederallandstostateorprivateownership.
o Studyinterestinfederallandsalestostatesorprivatebidders.
NEPA Rrroxr
Simplifythejudicialreviewprocesstolimitfrivolousenvironmentalligaononleasesandpermits
thatcauselengthy,costlydelaysforenergyandnaturalresourceproducon.
ProvidemandatorymelinesforcompleonoftheNEPAprocessandestablisha60daydeadlineon
legalchallenges.
RequireappealsfromaconsofUnitedStatesDistrictCourtsaroundthenaontobeledintheUnit
edStatesCourtofAppealsfortheD.C.Circuit,withtheexpectaonthatthatCourtwillbringacon
sistent,expertanalysistoNEPAappeals.
Currently,thereisasixyearfederalstatuteoflimitaonsforcivilsuits,whichappliestoNEPAchal
lenges.ThiswasnarrowlyreformedfortransportaonprojectsinSecon6002ofthesocalledSAFE
TEALUAct(23USC139)duringthe109thCongress.Asaresult,thepracceofwaingtolelaw
suitshasbeencurtailedandtheabilitytoimposedelaysthroughlastminuteligaonreduced.This
policycouldbereplicatedfordevelopmentof,andinfrastructureprojectsrelatedto,energyandoth
ernaturalresources.

99
TheinteragencyprocessassociatedwithcompleonofNEPAanalysescanbecumbersomeandme
consuming.ThiswasnarrowlyreformedfortransportaonprojectsinSecon6002ofthesocalled
SAFETEALUAct(23USC139)duringthe109thCongress.Specically,thatlegislaondesignateda
leadagencyandrequiredearlyconsultaonwithotherparcipantsinordertospeeduptheprocess
withoutharmingit.AccordingtoaSeptember2010reportbytheFederalHighwayAdministraon,
thischangehascutthemetocompleteNEPAreviewsforaectedprojectsnearlyinhalf,from73to
justunder37months.Thispolicycouldbereplicatedfordevelopmentof,andinfrastructureprojects
relatedto,energyandothernaturalresources.
Requirebondstobepostedbythoselingadministraveandjudicialappealsofrecordsofdecision
onplansofoperaonandauthorizaonsfordevelopment.Thesebondscouldbeusedtopaydamag
estoprojectdevelopersfordelayscausedbyunsuccessfulappeals.
WhiletheprocessofreviewestablishedbyNEPAisessenaltothedevelopmentofresponsibledevel
opmentplans,inmanywaysthestatutesimplementaonhasbeenusedtodelayratherthanim
proveoutcomes.Thesereformscouldbeneteortstoreestablishabalancebetweenmelyenergy
andnaturalresourcedevelopmentandaconnuedcommitmenttoensuringresponsiblebehavior:
o Strengthentheroleoflandmanagementagenciesastheleadagenciesformanagementofenvi
ronmentalreviews.
o DirectagenciestoworkconcurrentlytocompleteNEPAreviewinascoordinatedandecienta
manneraspossible.
o Requirecoordinaonamongfederal,state,andtribalauthories.
o Injudicialreview,deferenceshouldbegiventostatecooperangagenciestothesameextent
thatitisaccordedtofederalagencies.
o GivegreaterweightinNEPAdocumentstocommentsfromdirectlyaectedparesandcommu
nies.
o RequireNEPAdocumentstodiscloseandquanfyhowproposedaconsdecreaseorincreasereli
anceonforeignsourcesofenergy,naturalresources,orothernaonalneeds.Forprojectsthat
increasethecountrysrelianceonforeignoilandminerals,requiremigaonmeasurestooset
theincreasedreliance.
o IntegratelanddisposalaconsintotheProposedAconforcertainprojects.Previouslyminedar
easarebeerdisposedofbyexchangingwiththeprivatesectorforlandswithhighvalue(habitat,
recreaonalpotenal,orscenicareas,etc).
o Establishspecicandmandatorymelinesforconsideraonofpermits.

100
White House Council on Environmental Quality: A Citizens Guide to the NEPA

1
0
1

Sample NEPA Timeline for BLMManaged Transmission Line Project
Souice: BLN Wyoming
1
0
2
Souice: 0.S. Bouse Committee on Natuial Resouices

103
01urx }uoicini Pxocrss Rrroxr
AmendtheEndangeredSpeciesAct(ESA)tolimitcizensuitprovisions;requirethatspeciesbeinac
tualandimminentdangerofdeclineduetodirecteectsofhumanacvity;andrequirestrongereco
nomicanalysis.
AmendtheEqualAccesstoJusceAct(EAJA)to:
o LimittaxpayerfundedfeerecoveryforsuitsonNEPA,ESA,theCWA,andtheCleanAirAct(CAA).
o IssueCongressionalndingsthatthepurposeofEAJAaswellasenvironmentallawispublicinter
est,notfundingthegrowthofenvironmentalnongovernmentalorganizaons(ENGOs)fortheir
ownsake.
Equal Access to Justice Act Flow Chart

Souice: uA0 analysis of B0}, Tieasuiy, 0SBA, anu B0I infoimation
104
Aooi1ioNni Rrroxr
ProhibittheFishandWildlifeServices(FWS)newvoluntaryguidelinesforlandbasedwindturbines
thatwouldinjecttheagencyintothereviewofprojects.Theseguidelineswouldretroacvelyapplyto
allwindprojectsandresultinthreeyearsofpreconstruconstudiesandtwotoveyearsofpost
construconstudiesforeachproject.ThisnewinseronofFWSintothereviewprocessisunneces
saryandburdensome.
Curtailtheuseofguidancedocumentsandtheirroleinestablishingregulatorypolicywithoutac
countabilityandotherprovisionsofstandardrulemakingestablishedbytheAdministraveProcedure
Act.Inparcular,EPAsCleanWaterAct(CWA)guidance
94
shouldbeoverturned,asitwouldvastly
expandtheregulatoryburdensconfronngeverythingfromagriculturetoconstrucontomining.
ThePresidentshoulddirectfederalagenciestoapplythelawsevenhandedlywithrespecttoall
meansofenergyproducon.
o Althoughitisappropriatetoencouragenewtechnologiesthatdeliverdemonstrableenvironmen
talbenets,itisnotappropriatetodiscriminateagainstlegalandestablishedfuels.
o Inthisregard,thePresidentshoulddirectagenciestoenableestablishedfuelstoconnuetopro
videforthegeneraonofelectricity.Forexample:reformrulesgoverningNSRundertheCAA,and
promoteexploraonanddevelopmentofnaturalgassuppliesthroughtheuseofnewtechnolo
giessuchashydraulicfracturing.
Promoteconnuedbenecialusesandrecyclingofcoalcombusonbyproductswhileensuringre
sponsiblehandlinganddisposal.
ReformtheprocessforEPAvetoesofdredgeorllpermits(Secon404(c)oftheCWA)toclarifythat
vetoesareimpermissible.ReformtheAquacResourceofNaonalImportancedesignaonprocess
topreventEPAfrommakingsuchdesignaonsunlessanaquacresourceofgenuine,quanably
naonalimportanceistrulyjeopardized.
AmendtheFederalPowerActtoincludeareliabilitysafetyvalvethatempowersFERCoritsdesig
natedelectricreliabilityorganizaontoensurethatreliabilityconcernsareaddressedbyagencies
whentheydevelopormodifytheirrules.

105
CoNsotion1r ENrncv PnocnnMs, Avoio Durticn1ioN, nNo SrrNo Wisrtv
TheGAOhasissuedanumberofreportsshowingsignicantredundancyamongfederalenergyprograms.
GAOsmostrecentannualduplicaonandoverlapreportidened94federaliniavesforgreenbuilding
across11agencies;37environmentallaboratorieslocatedin170buildingsacross30cies;and14diesel
emissionreduconsprogramsacrossthreeagencies.
96
Areportfocusedonrenewableenergyfoundthat23
agenciesand130subagenciesimplementednearly700renewableenergyiniavesinFiscalYear2010.
97
Thereisaroleforthefederalgovernmenttoplayinthepromoonofalternaveformsofenergy.However,
tomaximizetheeecvenessofthatroleandtosafeguardtaxpayerdollars,itisimportantforpolicymakers
toconsolidatetheseprogramstothegreatestpossibleextent.GiventheemergingsprawlthatGAOandoth
ersarealreadyidenfying,Congressshouldprovidestatutorydireconrequiringmanyoftheseprogramsto
bemergedorterminated.
DOEshoulddevelopbeermechanismsforsengobjecve,longtermstrategicgoalsandevaluangpro
gresstowardthem.Todaysevaluaonsaretoooensporadicandnarrow.Althoughoutsideevaluaonsare
valuable,insideDOEthereshouldbeanenduringtoplevelplanning,evaluaon,andtechnicalassessment
funcon,insulatedfrompolicalinuence.
GAOshouldbetaskedwithreviewinghowmuchofDOEsexpendituretopromotepromisingnewenergy
technologiesisactuallymakingittothebenchthatis,totheeortsofresearchersandtechnologistsde
velopingbreakthroughsratherthanadministravechargesandoverheads.By2020,signicant,measurable
progressshouldbemadetoensurethatexpendituresmakeittothebench,followingrecommendaons
madebyGAO.
GAOshouldalsoexaminethelevel,appropriatenessandeecvenessofDOEsexpendituresforpromoonal
andeducaonalacvies.
Effective uoveinment Consolidate Energy Programs, Avoid Duplication, and Spend Wisely
106

ENvinoNMrN1nt RrsroNsiniti1v
Everythingwedohasenvironmentalconsequences.Wenevernocenorconsidermostofthese.Everything
wedoalsousesenergy,andtheenvironmentalconsequencesofenergydevelopmenttendtobemorevisi
blethantheconsequencesofmanyofourotheracons.
Eortstoincreasedomescenergyproduconalmostuniversallydrawconcernsaboutenvironmentalim
pacts.Wehavesomeofthehighestenvironmentalstandardsintheworldandotherslooktousforbest
pracces.Weshouldbeproudofthis,andstrivetoconnuetohavethebestenvironmentalstandards. We
absolutelyshouldpaycloseaenontotheenvironmentalconsequencesofenergydevelopment.Indoing
so,however,weneedtomakeourevaluaonsfairlyinrespecttoactualimpactperunitofenergyproduced,
thepraccalityandcostofalternaves,andtheeectofnothavingsucientaordableenergy.
ENvinoNMrN1nt IMrnc1s
Evencasualobserversarebynowfamiliarwiththeenvironmentalimpactsofoil,gas,andcoaldevelopment.
Butwhilegreenerresourcesareoenpresentedasthesoluonforeveryenvironmentalchallengethatwe
confront,therealityisthatnoformofenergyespeciallywhenscaledtomeettheUnitedStatessignicant
energydemandisperfect.
Windfarmsresultinthedeathofbirdsandbats,andcancreatenoiseandvisualimpacts.Biofuelshaveseen
opposiongrowovertheconversionoffoodcropsintotransportaonfuelandtheconversionofwildlands
tocropland.TheLosAngelesTimeshaspublishedanumberofarclesaboutsolardevelopmentinCalifornia,
includingoneentledTheSolarCompromise:SacricingDeserttoSavetheEarth.Manyrenewablesre
quiresignicantamountsoflandtodevelop,andsomehaveproposedpunglargeswathsofplaceslikethe
MojaveDesertolimitstotheirdevelopment.
Thepointhereisnottodisparageanyresource,butsimplytopointoutthatthereneverhasbeen,andmay
neverbe,aperfectformofenergy.Inrecognionofthis,ourobjecveforallformsofenergydevelopment
shouldbeimprovedenvironmentalperformancewhileensuringthatsuppliesareadequatetomeetdemand
andsupportconnuedeconomicgrowth.Tobalancetheseobjecves,developmentmustbeallowedtopro
ceed,thoughnotwithoutsensibleregulaonsinplacetoguardagainstaccidentsandenvironmentaldegra
daon.Ourgoalshouldbetomeetanyandalldemandforenergythroughproduconthatmeetsthestrong
estpraccableenvironmentalstandards.
Manyindustrieshavemadesignicantprogressoverme.Oilisanexample.Thesurfacefootprintofoilde
velopmenthasdramacallydeclined,evenassubsurfacedrillableareashavegreatlyexpanded.Thesizeof
drillingpadshasdecreasedmarkedly,andtodayitispossibletodrillmulplewellsperpad.Advancesinseis
mictechnologyallowabeerfocusonatargetedarea,furthershrinkingsurfaceimpacts.
107
AlaskasNorthSlopedemonstratesthereducedimpactsofdevelopment.Inthe1970s,atypicalpadatPru
dhoeBaywas65acresinsize,withwellsspaced160feetapartanda2milesubsurfacedrillablearea.
98
By
1999,whentheAlpineeldcameonline,padsizesweredownto13acres,wellscouldbespacedjust10feet
apart,andthesubsurfacedrillableareahadexpandedtoeightmiles.
99
Iceroadsandseasonalclosuresare
commonstandardtoprotectsensiveareas,whilepipelinesarebuilttoavoidimpactonwildlifecrossings
andsubsistencehunters.Aerfourdecadesofdevelopment,itisatestamenttotheseadvancesthatthe
NorthSlopeissllamagnicentareathatteemswithwildlife.
Addionalprogresscanbemade,notjustintheoilindustry,butineveryenergysector.Connuedaempts
tokillprojectswithouthavingalternatesourcesofabundant,aordableenergy,however,isasirresponsible
asitwouldbetoproceedwithoutaenontominimizaonofadverseimpacts.Theeectscanbeeconomic
intheformofjobsnevercreated,revenuesnevergenerated,securitygainsneverrealized,andlevelsof
prosperityneverreached.Ulmatelyabadeconomyisbadfortheenvironment.Whenpeoplesrstcon
cernisndingajoborprovidingforthefamily,theyarenotgoingtoworryaboutmarginalenvironmental
impacts.AccordingtoapollreleasedinNovember2012,justonepercentofrespondentslistedtheenviron
mentandpolluonastheUnitedStatestopnoneconomicproblem.
100
Thebestwaytomakeenvironmentalprogressisnottodenyaccessandneededpermits,ortolaunchcount
lesslawsuits,butinsteadtosetreasonableperformancestandardsandensureindustriescomply.Inrecent
years,toomanyhavelostsightofthisapproach,prompngcompaniestoleaveourshoresandproducere
sourcesinothercountries,withtheassociatedeconomicbenetsaccruingabroadratherthanhereathome.
TheUnitedStatesshouldbeproudofitsrecordontheenvironment,becauseitisarecordoftremendous
progressmostoenforgedthroughbiparsanlegislaonandsensibleregulaon.Riversnolongercatchre
becauseofthewastedumpedintothem.Ourskiesarebluelessoencloudedbyparculatemaeror
haze.Emissionsfrompowerplantshavedeclinedconsiderably,andvehicleeciencyhasbeenincreasing
since2005.
101
TheairinAmericaisdramacallycleanerthanitwasthirtyyearsago,whiletheairpolluonin
China,acountrysooencitedasamodel,hasbecomeamajorhealthhazard.Sll,thereismoreworkwe
cando,andthekeytosuccesswillbestrikingtherightbalancebetweentheneedforenergyproduconand
thedesireforenvironmentalstandards.
Transportation across
the tundra of Alaskas
North Slope is limited to
ice roads in the winter
months. The use of ice
roads, which melt in the
summer, minimizes envi
ronmental impacts.
Souice: 0SuS
Enviionmental Responsibility Environmental Impacts
108
CtiMn1r CunNcr
Attheforefrontofmanyconversaonsaboutenvironmentalresponsibilityisclimatechange.Regreably,in
thisconversaon,adhominemaacksandreferencestothelatestinstanceofextremeweathertoooen
replacewhatshouldbebalancedevaluaonandraonaldiscourseinformedbysoundscience.Addionally,
thedierencebetweenfactsandtheoriestendstobelostand,atthemoment,thediscussionistoopoorly
framedtoallowmeaningfulpolicalprogress.
Itisunderstandablethattheoriesdieronwhatmayhappeninthefuture.Thecomplexityofthisproblemis
underscoredbythefactthatwehaventevenreachedaconsensusonwhathasalreadyhappened,which
greatlycomplicatesaemptstopredictthelikelyimpactsofclimatechange.
Prediconsrelyoncomputermodels,whichdependontheaccuracyofthedataonwhichtheyarebuiltand
theassumponsofthemodels.Thevariablesofclimatechangearefarmorecomplexthanthoseusedin
modelspredicngcommodityprices,naturaldisasters,orhousingmarketrisks,andcomputermodelshave
beendramacallywrongonalloftheseandotherissues.Thisdoesnotmeanthatmodelsarenotextraordi
narilyvaluabletools,butratherthatitisreasonabletoviewprediconsofcomplexmaers,suchashowcli
matechangewillimpactourworld,withcauon.
Therearemanyaconsthatwecantaketomigategreenhousegasproduconandrespondtoachanging
climate,parcularlythosewithbroadbenetslikeeciencyimprovements,diversicaonofenergysup
plies,orincreasingresiliencetoadverseweather.Thesenoregretsclimatepoliciesdeservemoreaenon.
Becauseclimatechangeisaglobalconcern,however,ifwepursueburdensomeandcostlylegalandregula
toryresponsesthatareunlikelytobematchedbyothercountries,weputourselvesatacompevedisad
vantagewithoutmakingameaningfulimpactonglobalgreenhousegasemissions.Weneedtoleadaconn
uedandcarefulevaluaonofalloponstoallowustoaddressclimatechangeinwaysthatbenetbothour
environmentandoureconomy.
Congresshasalreadydefeatedproposalsthatwouldhaveincreasedthecostofenergy,reducedconsumer
choice,orresultedinregressiveburdensforAmericanconsumers.TheEPA,however,connuestomovefor
wardwithcommandandcontrolregulaonswithcoststhatvastlyoutweightheirpotenalbenet.These
acvieshavegivenrisetoadefactoclimatepolicyimposedbyunelectedbureaucrats.Wecanstarttoim
provethissituaonbyinventoryingalliniavesthatarealreadyunderway.Anymeasuresdevelopedby
electedrepresentavestoaddressclimatechangeshouldalsopreemptunnecessaryregulatoryburdens.
Thefederalgovernmenthasaroletoplayinadvancingnewer,cleanersourcesofenergycapableofreducing
greenhousegasemissions.Infact,manyoftheproposalscontainedinthisdocumentwouldexpandthatrole
inaconstrucvewaywhilemaintainingtheequalgoalsofabundant,aordable,diverse,andsecureenergy.
Forexample,signicantprogresscanbemadebyfundingearlystageR&D,loweringthecostofnancingfor
especiallypromisingnewventures,and,whenthereisstrongagreementfordoingso,providingprudent
temporarysubsidiesthathaveassociatedrevenueosets.Reducingregulatoryandotherbarrierstodeploy
Enviionmental Responsibility Climate Change
109
ment,therebyenablingstatestotrynewpolicies,andfacilitangclimatechangeadaponarealsonecessary
componentsofanyaconplan.Butthesepoliciesoencostmoneyandrequireastrongeconomyfueled
byaordableenergytoundertake.
Suchabalancedenergyapproachwouldavoidmassivenewregulatoryburdensandrelyinsteadonpolicies
capableofaracngpopularsupport.Itwouldforgotheimposionofcostlyshisintheenergymarketfor
whicheverydayconsumerspaytheprice.Itwouldshelvetherelianceuponmandates,taxes,fees,andother
bluntinstruments.Americanprivatesectoringenuityandnaturaltechnologydeploymentwouldplayalarger
rolethanthegovernmentpickingwinnersandlosers.
Enviionmental Responsibility Climate Change

The village of Kivalina, Alaska (population 386) lies on a narrow, 8mile barrier
reef in the Chukchi Sea, just north of the Arctic Circle. Kivalina is being forced to
adapt to erosion.
Souice: Alaska Bepaitment of Commeice
110

AN ENrncv Poticv Tun1 Pnvs Fon I1srtr

Thefederalgovernmentaccruestensofbillionsofdollarsfromresourceproduconeachyearintheformof
rents,royales,bonusbids,andcorporateincometaxes.Energyproduconsdirectscalbenetsshouldbe
recognizedasatremendousopportunity,especiallywhilethegovernmentrunsrecorddecits.
AovnNcro ENrncv Tnus1 FuNo
Eecveimplementaonofthepoliciesoutlinedinthisdocumentwillresultindramacincreasesindomes
cenergyproducon.This,inturn,willcreateaddionalrevenuefortheFederalTreasury.Themajorityof
thisrevenueshouldbeappliedtodecitreducontoensureasoundnancialfoongforournaon,buta
percentageshouldalsobeallocatedtoanewAdvancedEnergyTrustFund.
TheTrustFundwouldbeaseparateTreasuryaccountthatisadministeredbytheDepartmentofEnergyand
usedtopayfortheprovisionsinthisplan.Fundsshouldbeappliedtothemostpromisingandcosteecve
proposalsinmanytechnologyneutralcategories,includingrenewableenergy,energyeciency,alternave
fuels,andadvancedvehicles.

The Advanced Energy Trust Fund will promote innovation for the next generation.
Todays youth, such as these students at The Thomas Jefferson High School for
Science and Technology (TJHSST) in Virginia, will discover and create tomorrows
technologies with the support of the Fund.
Souice: T}BSST
111
ENrncv EcoNoMics
ThetroublingscalandeconomicsituaonintheUnitedStateshasdrawnaenontotheboomintheener
gysectorledbyinnovaon,newtechnology,andrisktakingwithprivatecapitallargelyonstateandprivate
land.Ononelevel,theindustryisgrowingandsupporngmillionsofjobsaroundthecountry.Onanother
level,thevariousincenvesprovidedbythefederalgovernmenttoenergyrelatedindustriesboththose
basedinhydrocarbonsandinrenewableshaveledtocallsforcutsinordertoreducethebudgetdecitand
derivemorebenetsinrelaontothefederaldollarsspentandrevenueforgone.Policymakingrequires
carefulconsideraonofthefactsandthetotalityoftheeconomicsatwork.

Job growth from natural resources and mining development throughout the country.
Souice: BLS, Beta Labs, Change in Employment, Natuial Resouices anu Nining (Naich 2u11 to Naich 2u12)
An Eneigy Policy That Pays Foi Itself Energy Economics
112
EriiovrrN1 Irinc1
EnergyplaysauniqueroleintheU.S.economy.Itisaninputintoeverysector,includingitself.Powergener
atedfromcoal,naturalgas,petroleum,wind,solar,andothersourcesisacomponentpriceinthevastarray
ofproductsandservicesthatcompriseU.S.producvecapacity.Becauseenergyisaninputintoeverysector,
energysectorlaborcostsaretransferredthroughouttheeconomy.ThemetricofsuccessforanAmerican
energyboomshouldnotbehowmanypeopleitemploysdirectly(althoughinmanyareasdirectenergyem
ploymentisabrightspotinanotherwisechallengingeconomy).Instead,U.S.energyshouldbeseenandval
uedinlightofitseectonthenaonsoveralleconomiccondion.ExpandingU.S.energyshouldbeconsid
eredforwhatitis,anengineofeconomicgrowthandnotjustanotherfederaljobsprogram.
Jobsarenotcreatedinisolaon.Whenanoilandgascompanybeginsexploraonandproduconinaparc
ularregion,itdirectlyemployspeople.Butjobsinrelatedindustriesarecreatedorsupportedindirectly,such
asmanufacturingjobsforneededequipmentortheadvancedITapplicaonsthatarebehindsomuchofthe
energyproduconboom.Theindirectlysupportedworkersthenusetheirwagestopurchasegoodsandser
vices,whichfurthercontributestojobsinotherindustries.
Onewayeconomistsmeasuretheimpactofaparcularindustryisbyesmangtheemploymentmulpli
er,orhowmanyjobsarecreatedelsewherefromasinglejobcreatedinthatindustry.Oneprominentstudy
recentlyexaminedthesemulpliersacrossthewidersector.Itaributedamulplierof3.0tothedeepwater
oilandgassectorand4.1tounconvenonaloil.Thismeansthatforeachjobcreatedinthesesectors,3.0
and4.1totaljobs,respecvely,arecreatedthroughouttheeconomy.
102
Weseeasimilarphenomenonintherenewablessector,thoughitislesspronounced.Themulplierforsolar
photovoltaicprojectsduringconstruconis3.3,butdropstoanegligibleamountduringtheoperangphase.
Oncesolarpanelsareinstalled,veryfewworkersareneededformaintenanceandoperaons.Windprojects
haveamulplierof2.0duringeitherphase.Mulplieresmateswillvary,buttheideathatjobsinenergy
produconcreatemorejobsinothereldsisnotindispute.
103
Jobsintheenergysectorarelucraveforthelaborforce.Starngmediansalariesforgraduatesfromtop
miningengineeringschoolsaremorethan$10,000higherthanthenaonalannualmeanwage.
104
Moreover,
theenergysectorisanareawherewecanconnuetoleadandexcelintheareasofscience,technology,en
gineeringandmath(STEM).Thisisamajorbenetinlightofthebroadconsensusthatexistsinfavorof
boosngotherwisedecliningSTEMcapabiliesrelavetoourinternaonalcompetors.

113
Fossii Furi Tnxn1ioN
SirWinstonChurchillonceobservedthatsomeofhispolicalopponentssawprivateenterpriseasa
predatorygertobeshotoracowtheycanmilkratherthanwhatitreallyisthestrongandwilling
horsethatpullsthewholecartalong.
105
ThefamedPrimeMinistermadethatstatementdecadesago,but
hiswordscouldjustaseasilydescribemanycontemporarypolicymakersjudgmentofthefossilfuelindustry
and,inparcular,theirviewsonhowheavilyitshouldbetaxed.
Eortstoincreasetaxesonoil,gas,andcoalproducershaveswelledinrecentyears.Mostvisiblearepolicies
suchascapandtrade,whichareexplicitlydesignedtoincreasethecostofthevastmajorityofournaons
energysupply.Lessfamiliar,butalsoofpotenallysignicantconsequence,arechangesbeingpushedfor
variousprovisionsoftheInternalRevenueCode.
ThePresidentsFiscalYear2013budgetrequestseekstoterminatewhatitclaimsareseveralfossilfuelsub
sidieswithinthetaxcode.Thebudgetstatesthatthesetreatmentsareinecientandyetsomehowable
toimpedeinvestmentincleanenergysourcesandundermineeortstoaddressthethreatofclimate
changeatthesameme.TheWhiteHouseesmatesthat,ifenactedintolaw,itsplanwouldraisefederal
revenuecolleconsbyover$4billionperyear
106
enoughtoeraseroughly0.4percentofthefederalde
citforFiscalYear2012.
107
Indiscussingtaxtreatmentsforthefossilfuelindustry,wemustkeepinmindwhatisactuallyonthebooks,
becausetherhetoricinthisdebateisoendetachedfromreality.Asseronsthatbillionsoftaxpayerdollars
arepaidoutinsubsidieseachyeararefalse;therearetypicallynocashcreditsdisbursedfromtheTreasury
toindividualcompanies,letalonetheindustryasawhole.Pejoravetermssuchashandoutsand
corporatewelfarearerounelymisapplied,aswell,withnodisncondrawnbetweenprivatedollarsnot
takenbythegovernmentandthepublicdollarsannuallydistributedfromit.
Therealityisthatfossilfuelproducersareeligibleformanyofthesametaxtreatmentsavailabletootherin
dustries,orsimilartreatmentsthathaveacomparableeect.Someprovisions,suchasforenhancedoilre
covery,arephasedoutatevenmoderateprices.Themanufacturingdeduconforoilandnaturalgasisactu
allylessthantherateformanyotherindustries,includingthosewithhigherprotmargins.Thesocalled
dualcapacityprovisionensuresthatacompanysposttaxearningsfromacvityinanothercountryarenot
taxedagainintheUnitedStates.Anotherallegedsubsidy,percentagedepleon,isequivalenttocapitalde
preciaonandavailableonlytosmallerscaleproducers.
WhatallofthesetreatmentshaveincommonistheirabilitytoslightlyreducetheUnitedStatescorporate
taxburden,whichwouldotherwisebethehighestinthedevelopedworld,
108
foranincrediblycapitalinten
siveindustry.This,inturn,helpsincreaseourcompeveness,ourabilitytoaractinvestment,andourdo
mescenergyproducon.Fossilfuelproducerssllulmatelypaybillionsofdollarsintaxeseachyear,and
thegovernmentreceivesaddionalbillionsinrevenuefromleasesales,royales,andfueltaxes.

114
Economicsalsoindicatesthatsizeabletaxincreasesonfossilfuelproducersareilladvised,ashighertaxeson
agoodorservicewillresultinlessofitnotmore.Itdeeslogicthattaxhikeswouldspurnewenergypro
duconorlowerenergyprices,whichshouldbeamongthegoalsofanyraonalenergypolicy.Inthecaseof
fossilfuels,highertaxeswouldhurtmarginalproducon,loweringoutputandincreasingourdependenceon
foreignsuppliers,andalsoreducecompaniesabilitytomakethecapitalexpendituresneededtobringre
sourcestomarket.
Fortunately,thereisabeerpathforward.Ifrevenuesarethequeson,theanswerisincreaseddomesc
producon,throughtheopeningofnewlandsandreformsthatmakeiteasiertoproduceonlandsalready
leased.Increasedproduconwillsimultaneouslycreatejobsandrestrainworldenergyprices,whilehigher
taxeswouldaccomplishneither.
ThenextstepwillbetoreformourtaxcodesoitiscompevewithothernaonsincludingCanada,which
recentlycutitsnaonalcorporateratetojust15percent.
109
Thebestapproachwouldbetoundertakecom
prehensivereformthatbeginstoaenthecodeinexchangeforloweroverallrates.Inthemeanme,itis
simplynotappropriatetopunishahandfulofcompaniesinjustonesectorofoureconomy.Toconnuethat
wouldbetheverydenionofcounterproducveespeciallywhenitcomestoenergy.

115

CoNctusioN
Americasenergypolicymustbereimaginedaswemovetowardtheyear2020.Dramacchangeshavetak
enplaceinglobalandnaonaleconomiccondions.Theresaheightenedawarenesstowardourenergypro
duconandconsumpon,whichmovesustowardsgreaterenvironmentalresponsibility.Americasenergy
infrastructurehasaged,thepriceofoilishigh,andthechallengesofreliableandsecureenergysupplieshave
neverbeengreater.
Simultaneously,technologicalbreakthroughshavevastlyimprovedthecostofproducingpreviouslyuneco
nomicformsofenergy.Justaseverypresidentoverthelast40yearshasgrappledwithenergypolicy,sothe
presidentandCongresswillberequiredtoworktogethertorenewenergypolicyforthenaon.
Aordableenergyisvitaltooureconomicwellbeing:aprudentbalancingofenergygoalswiththeproper
standardsforenvironmentalregulaonismorepressingthanever.Yetournaonistoooenhamstrungby
regulatoryoverreach,permingdelays,andligaonthatseekstoapplyenvironmentallawswellbeyond
theiroriginalintent.Toooen,necessaryandworthwhileprojectsarerendereduneconomicbyarion,and
endlessroundsofadministravedisputesandlawsuits.Theseneverendingcyclesstandinthewayofmely,
ecient,andurgentlyneededinvestmentsinenergysupplyandconservaon.
Nevertheless,thefutureisbright.Weuseenergymoreecientlyandwearewitnessinggainsinelectricity
andnaturalgasastransportaonfuels.Wemustconnuetofundandeventuallyincreasefundingforscien
cresearchcricaltoconnuedprogress.Onlybasicandrigorousresearchwillproducethedramac
breakthroughsweneedtoreachafutureinwhichcleanenergyandenergyindependencearemorethan
justaslogan.
Ifwemaketherightenergychoicestodayandaccomplishthegoalsdelineatedhereinby2020,wecanse
cureafutureinwhichenergyisaordableandabundant;theairandwaterarecleanerinourowncountry
andaroundtheworld;andAmericansenjoyahealthyeconomyandpreservetheirabilitytoliveandtopur
suehappiness.
Thepolicyideasinthisdocumentareintendedtopromptthinking,engageahealthydialogue,andoutline
ideasthatmaybeexecutedrstthroughdiscussion,thenthroughlegislaontoreimagineandrenewtheen
ergypolicyoftheUnitedStates.
116

ENoNo1rs
1.EIA,AnnualEnergyReview2012,Table1.5.EnergyConsumpon,Expenditures,andEmissionsIndicatorsEsmates,19492011.
2. EIA,MonthlyEnergyReview,December2012,Table1.1PrimaryEnergyOverview.
3. EIA,ElectricPowerMonthly,March2012,Table1.1Preliminary2011Data.
4. EIA,AnnualEnergyReview2011,Table5.20.ValueofCrudeOilImportsfromSelectedCountries,19732011.
5. Thiscomparisonmeasures2011UStechnicallyrecoverableoilandtheaverageofUSimportsfromOPECfrom2007through
2011.SeeEIA,AssumponstotheAnnualEnergyOutlook2011,Table9.1;EIA,U.S.TotalCrudeOilandProductsImports,
hp://www.eia.gov/dnav/pet/xls/PET_MOVE_IMPCUS_A2_NUS_EP00_IM0_MBBL_A.xls,accessedOctober252012.
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sources.September,2011.
7. EIA,MonthlyEnergyReviewDecember2012,Table1.2.PrimaryEnergyProduconbySource.
8. Id.,Table5.2.CrudeOilandNaturalGasExploratoryandDevelopmentWells.
9. Id.,Table5.1.DrillingAcvityMeasurements. Datafor2012islimitedto11months,usingthelatestdataavailableatmeof
publicaon.
10. Id.,Table3.1.PetroleumOverview.
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12. BLMOil&GasStascshp://www.blm.gov/wo/st/en/prog/energy/oil_and_gas/stascs/Table04.html(onshore);Bureauof
OceanEnergyManagement,OuterConnentalShelfLeaseSaleStascs,hp://www.boem.gov/OilandGasEnergyProgram/
Leasing/RegionalLeasing/OCS_Lease_Sale_Stascs.aspx(oshore).SeealsotheBureauofSafetyandEnvironmentalEnforce
ment,hp://www.data.bsee.gov/homepg/data_center/plans/apdcombined/master.asp.
13. Humphries,Marc.USCrudeOilProduconinFederalandNonFederalAreas.CongressionalResearchServicereportR42432.
May2012.
14. TheBrishthermalunit(symbolBtuorsomemesBTU)isatradionalunitofenergyequaltoabout1.055KJoules.
15. EIA,MonthlyEnergyReview,December2012,Table1.1.PrimaryEnergyOverview.
16. Id.,Table1.4b.PrimaryEnergyExportsbySourceandTotalNetImports.
17. Id.,Table1.4a.PrimaryEnergyImportsbySource.
18. Id.,Table3.3aPetroleumTrade:Overview.
19. NaonalIntelligenceCouncil,GlobalTrends2030:AlternaveWorlds;p.35.
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3.1.PetroleumOverview.
22. EIA,MonthlyEnergyReviewDecember2012,Table5.1.DrillingAcvityMeasurements. Datafor2012islimitedto11months,
usingthelatestdataavailableatmeofpublicaon.
23. InternaonalEnergyAgency,WorldEnergyOutlook2012.
117
24.EIA,MonthlyEnergyReview,December2012,Table11.1b.WorldCrudeOilProducon:PersianGulfNaons,NonOPEC,and
World.
25.DOIsRiKprogramappliestooilowedtotheU.S.governmentbyproducersleasingfederallyownedlandontheOuterCon
nentalShelf.RiKpermitsthegovernmenttoobtaineithertheprovided12.5to16.7percentoftheoilproducedoritsequiva
lentdollarvalue.
26."ANCSALAND."CIRI.N.p.,n.d.Web.11July2012.<hp://www.ciri.com/content/history/ancsa_land.aspx>.
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28.EPA,TableofNaonalAggregatedEmissions,EmissionRates,HeatInput:1990,2000,2005,2010and2011.hp://
www.epa.gov/airmarkt/quarterlytracking.html
29.Suchvetoesareoutsidethelaw,butanexplicitprohibionwouldreinforcetheillegalityofpreempveandretroacvevetoes.
30.SeeEnergyIndependenceFromOPECImportsformorediscussionofcommodiesmarketsandpriceshocks.
31.IHS,AmericasNewEnergyFuture:TheUnconvenonalOilandGasRevoluonandtheUSEconomy.
hp://www.ihs.com/info/ecc/a/americasnewenergyfuture.aspx
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34.CentralIntelligenceAgency,TheWorldFactbook.CountryComparison:Oilprovedreserves.
hps://www.cia.gov/library/publicaons/theworldfactbook/rankorder/2178rank.html
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wouldbelesslikelytoburnlargeamountsofwood.Burningwoodresultsinworseparculatemaerandaendantasthma
andotherhealthimpactsthanfueloil.Italsocandenudeforests,reducingspecieshabitatsandremovingnaturalcarboncap
ture.Underthesecircumstances,fueloilwouldbeacleanerenergysource.Iffueloilcouldbereplacedbyelectricitybroughtto
theareafromanenvironmentallyresponsiblehydroelectricgeneraonproject,thatwouldbeanevencleanersourceofener
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118
41.Convenonalandpumpedstorage.EIA,AnnualEnergyReview2011,p.256.Figure8.11a,ElectricNetSummerCapacity,Total
(AllSectors),20032011.Releasedate:September27,2012.
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al.,FeasibilityAssessmentoftheWaterEnergyResourcesoftheUnitedStatesforNewLowPowerandSmallHydroClassesof
HydroelectricPlants.DOE.(January2006);U.S.DepartmentofInterior(DOI)etal.,PotenalHydroelectricDevelopmentatEx
isngFederalFacilies(2007);andU.S.BureauofReclamaon,HydropowerResourceAssessmentatExisngReclamaonFacil
ies(2011).
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al.,FeasibilityAssessmentoftheWaterEnergyResourcesoftheUnitedStatesforNewLowPowerandSmallHydroClassesof
HydroelectricPlants.DOE.(January2006);U.S.DepartmentofInterior(DOI)etal.,PotenalHydroelectricDevelopmentatEx
isngFederalFacilies(2007);andU.S.BureauofReclamaon,HydropowerResourceAssessmentatExisngReclamaonFacil
ies(2011).
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er.
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November14,2012.
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servesandUndiscoveredResources,2012.
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MODERNIZING ENERGY DELIVERY INFRASTRUCTURE

Intiouuction Energy is Good

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By 2020, achieve independence from OPEC imports.

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By 2020, federal funding should be directed to technologyneutral basic research

World's largest electricitygenerating geothermal plant, The Geysers, California

Steam emissions from Vogtle nuclear plant, Georgia

Piouucing Noie Nuclear Energy

Source: Nuclear Regulatory Commission

Piouucing Noie Alternative Fuels

Pearson Fuels station offering alternative fuels, California

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Examples of Interrelationships Between Water and Energy

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Clean Eneigy Technology Master Limited Partnerships

Clean Eneigy Technology Reverse Auctions

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Effective uoveinment Regulatory Reform

White House Council on Environmental Quality: A Citizens Guide to the NEPA

Souice: 0.S. Bouse Committee on Natuial Resouices

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Effective uoveinment Regulatory Reform