Energy policy of the United States
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The energy policy of the United States is determined by federal, state, and local entities. It addresses issues of energy production, distribution, consumption, and modes of use, such as building codes, mileage standards, and commuting policies. Energy policy may be addressed via legislation, regulation, court decisions, public participation, and other techniques.
Federal energy policy acts were passed in 1974, 1992, 2005, 2007, 2008, 2009,[1] 2020, 2021, and 2022, although energy-related policies have appeared in many other bills. State and local energy policies typically relate to efficiency standards and/or transportation.[2]
Federal energy policies since the 1973 oil crisis have been criticized over an alleged crisis-mentality, promoting expensive quick fixes and single-shot solutions that ignore market and technology realities.[3][4]
Various multinational groups have attempted to establish goals and timetables for energy and other climate-related policies, such as the 1997 Kyoto Protocol, and the 2015 Paris Agreement.
History
In the early days of the Republic energy policy allowed free use of standing
Coal provided the bulk of the US energy needs well into the 20th century. Most urban homes had a coal bin and a coal-fired furnace. Over the years these were replaced with oil furnaces that were easier and safer to operate.[16]
From the early 1940s, the US government and oil industry entered into a mutually beneficial collaboration to control global oil resources.
Following
Hydroelectricity was the basis of Nikola Tesla's introduction of the US electricity grid, starting at Niagara Falls, New York, in 1883.[22] Electricity generated by major dams such as the TVA Project, Grand Coulee Dam and Hoover Dam still produce some of the lowest-priced ($0.08/kWh) electricity. Rural electrification strung power lines to many more areas.[13][23]
A
The
On August 4, 1977, President
On June 30, 1980, Congress passed the Energy Security Act, which reauthorized the Defense Production Act of 1950 and enabled it to cover domestic energy supplies. It also obligated the federal government to promote and reform the Strategic Petroleum Reserve, biofuels, geothermal power, acid rain prevention, solar power, and synthetic fuel commercialization.[28] The Defense Production Act was further reauthorized in 2009, with modifications requiring the federal government to promote renewable energy, energy efficiency, and improved grid and grid storage installations with its defense procurements.[29][30]
The
In some cases, the US used energy policy to pursue other international goals.
The 2005
The
In February 2009, the
In December 2009, the United States Patent and Trademark Office announced the Green Patent Pilot Program.[37] The program was initiated to accelerate the examination of patent applications relating to certain green technologies, including the energy sector.[38] The pilot program was initially designed to accommodate 3,000 applications related to certain green technology categories, and the program was originally set to expire on December 8, 2010. In May 2010, the USPTO announced that it would expand the pilot program.[39]
In 2016, federal government energy-specific subsidies and support for renewables, fossil fuels, and nuclear energy amounted to $6,682 million, $489 million and $365 million, respectively.[40]
On June 1, 2017, then-President Donald Trump announced that the U.S. would cease participation in the 2015 Paris Agreement on climate change mitigation agreed to under the President Barack Obama administration.[41] On November 3, 2020, incoming President Joe Biden announced that the U.S. would resume its participation.[42]
The Energy Information Administration (EIA) predicted that the reduction in energy consumption in 2020 due to the COVID-19 pandemic would take many years to recover.[43] The US imported much of its oil for many decades but in 2020 became a net exporter.[44]
In December 2020, Trump signed the
Under President Joe Biden, one-third of the Strategic Petroleum Reserve was tapped to reduce energy prices during the
Biden also signed the
In August 2022, Biden signed the CHIPS and Science Act to boost DOE and National Science Foundation research activities by $174 billion[60] and the Inflation Reduction Act to create assistance programs for utility cooperatives[61] and a $27 billion green bank,[62] including $6 billion to lower the cost of solar power in low-income communities and $7 billion to capitalize smaller green banks,[63] and appropriate $270–663 billion in clean energy and energy efficiency tax credits,[64][65][66] including at least $158 billion for investments in clean energy, and $36 billion for home energy upgrades from public utilities.[67][68][69] The Biden administration itself claimed that as of November 2023[update], the IIJA, CaSA, and IRA together catalyzed over $614 billion in private investment (including $231 billion in electronics, $142 billion in electric vehicles and batteries, and $133 billion in clean energy generators) and over $302.4 billion in public infrastructure spending (including $22.7 billion in energy aside from tax credits in the IRA).[70][needs update]
Department of Energy
The Energy Department's mission statement is "to ensure America's security and prosperity by addressing its energy, environmental and nuclear challenges through transformative science and technology solutions."[71]
As of January 2023[update], its elaboration of the mission statement is as follows:
- "Catalyze timely, material, and efficient transformation of the nation's energy system and secure US leadership in clean energy technologies.
- "Maintain a vibrant US effort in science and engineering as a cornerstone of our economic prosperity with clear leadership in strategic areas.
- "Enhance nuclear security through defense, nonproliferation, and environmental efforts.
- "Establish an operational and adaptable framework that combines the best wisdom of all Department stakeholders to maximize mission success."[71]
Import policies
Petroleum
The US bans energy imports from countries such as Russia (because of the Russo-Ukrainian War),[72] and Venezuela.[73] The US limits exports of oil from Iran.[74] The US imports energy from multiple countries, led by Canada, although it is a net exporter.
Export
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In 1975, the United States implemented a crude oil export ban, which limited most of the crude oil exports to other countries. It came two years after an OPEC oil embargo that banned oil sales to the U.S. had sent gas prices skyrocketing. Newspaper photographs of long lines of cars outside of gas stations became a common and worrisome image.[75]Congress voted in 2015 to repeal a 40-year ban on exporting U.S. crude oil. Since that year, crude exports have skyrocketed nearly 600% to 3.2 million barrels per day in 2020, according to data from the U.S. Energy Information Administration.[76]
Strategic petroleum reserve
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The United States Strategic Petroleum Reserve stores as much as 600M barrels of oil.[48][needs update]
Energy consumption
Over two-thirds of the energy used by homes, offices, and other commercial businesses is electric, including electric losses.[84][85] Most of the energy used in homes was for space heating (34%) and water heating (19%), much more than the amount used for space cooling (16%) and refrigeration (7%).[86] Businesses use similar percentages for space cooling and refrigeration. They use less for space and water heating, but more for lighting and cooking.[87]
Most homes in the US areSources
Energy in the United States came mostly from fossil fuels in 2021: 36% originated from petroleum, 32% from natural gas, and 11% from coal.[92] Renewable energy supplied the rest: hydropower, biomass, wind, geothermal, and solar supplied 12%, while nuclear supplied 8%.[92]
- Coal: 11.4Quad (11.4%)
- Hydro: 2.5Quad (2.5%)
- Geothermal: 0.209Quad (0.2%)
- Wind Power: 2.74Quad (2.7%)
- Solar: 1.04Quad (1.0%)
- Biomass: 4.98Quad (5.0%)
- Nuclear: 8.46Quad (8.4%)
- Natural Gas: 32.1Quad (32.1%)
- Oil: 36.7Quad (36.7%)
Utilities
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In the U.S., utilities are regulated at the federal level by the Federal Energy Regulatory Commission. in each state, a public utility commission (PUC) regulates electricity, gas, and other forms of power.[94]
States began deregulating electricity systems in the 1990s as a way to promote competition and lower costs. Transmission lines and distribution services are still provided by local utility companies. Wholesale markets were created to determine power plant investments and allow utilities to acquire power for customers. Those wholesale markets are operated by regional transmission organizations (RTOs).[95]
Deregulation led to the creation of independent energy suppliers and allowed customers to choose their electric supplier.
Energy efficiency
Opportunities for increased energy are available across the economy, including buildings/appliances, transportation, and manufacturing. Some opportunities require new technology. Others require behavior change by individuals or at the community level or above.
Building-related energy efficiency innovation takes many forms, including improvements in water heaters; refrigerators and freezers; building control technologies heating, ventilation, and cooling (HVAC); adaptive windows; building codes; and lighting.[96]
Energy-efficient technologies may allow superior performance (e.g. higher quality lighting, heating and cooling with greater controls, or improved reliability of service through greater ability of utilities to respond to time of peak demand).[96]
More efficient vehicles save on fuel purchases, emit fewer pollutants, improve health and save on medical costs.[96]
Heat engines are only 20% efficient at converting oil into work.[97][98]
Energy budget, initiatives and incentives
Most energy policy incentives are financial. Examples of these include tax breaks, tax reductions, tax exemptions, rebates, loans and subsidies.
The Energy Policy Act of 2005, Energy Independence and Security Act of 2007, Emergency Economic Stabilization Act of 2008, and the Inflation Reduction Act all provided such incentives.
Tax incentives
The US Production Tax Credit (PTC) reduces the federal income taxes of qualified owners of renewable energy projects based on grid-connected output. The Investment Tax Credit (ITC) reduces federal income taxes for qualified tax-payers based on capital investment in renewable energy projects. The Advanced Energy Manufacturing Tax Credit (MTC) awards tax credits to selected domestic manufacturing facilities that support clean energy development.[99]
Loan guarantees
The Department of Energy's
Renewable energy
In the United States, the share of renewable energy in electricity generation has grown to 21% (2020).[100] Oil use is expected to decline in the US owing to the increasing efficiency of the vehicle fleet and replacement of crude oil by natural gas as a feedstock for the petrochemical sector. One forecast is that the rapid uptake of electric vehicles will reduce oil demand drastically, to the point where it is 80% lower in 2050 compared with today.[101]
A
Biofuels
The federal government offers many programs to support the development and implementation of biofuel-based replacements for fossil fuels.[103]
Landowners and operators who establish, produce, and deliver biofuel crops may qualify for partial reimbursement of startup costs as well as annual payments.[103]
Loan guarantees help finance development, construction, and retrofitting of commercial-scale biorefineries. Grants aid building demonstration scale biorefineries and scaling up of existing biorfineries. Loan guarantees and grants support the purchase of pumps that dispense ethanol-including fuels.[103]
Production support helps makers expand output.[103]
Tax credits support the purchase of fueling equipment (gas pumps) for specific fuels including some biofuels.[103]
Education grants support training the public about biodiesel.[103]
Research, development, and demonstration grants support feedstock development and biofuel development.[103]
Grants support research, demonstration, and deployment projects to replace buses and other petroleum-fueled vehicles with biofuel or other alternative fuel-based vehicles including necessary fueling infrastructure.[103]
Producer subsidies
The 2005 Energy Policy Act offered incentives including billions in tax reductions for nuclear power, fossil fuel production,
Federal leases
The US leases federal land to private firms for energy production. The volume of leases has varied by presidential administration. During the first 19 months of the Joe Biden administration, 130k acres were leased, compared to 4M under the Donald Trump administration, 7M under the Obama administration, and 13M under the George W. Bush administration.[105]
Net metering
Net metering is a policy by many states in the United States designed to help the adoption of renewable energy. Net metering was pioneered in the United States as a way to allow solar and wind to provide electricity whenever available and allow use of that electricity whenever it was needed, beginning with utilities in Idaho in 1980, and in Arizona in 1981.[106] In 1983, Minnesota passed the first state net metering law.[107] As of March 2015, 44 states and Washington, D.C. have developed mandatory net metering rules for at least some utilities.[108] However, although the states' rules are clear, few utilities actually compensate at full retail rates.[109]
Net metering policies are determined by states, which have set policies varying on a number of key dimensions. TheElectricity transmission and distribution
A similar situation exists in natural gas transport, which requires compressor stations along pipelines that use energy to keep the gas moving. Gas liquefaction/cooling/regasification in the liquified natural gas supply chain uses a substantial amount of energy.
In October 2023, the Biden administration announced the largest major investments in the grid since the
The Federal Energy Regulatory Commission (FERC) is the primary regulatory agency of electric power transmission and wholesale electricity sales within the United States. FERC was originally established by Congress in 1920 as the Federal Power Commission and has since undergone multiple name and responsibility modifications. Electric power distribution and the retail sale of power is under state jurisdiction.
Order No. 888
Order No. 888 was adopted by FERC on April 24, 1996. It was "designed to remove impediments to competition in the wholesale bulk power marketplace and to bring more efficient, lower cost power to the Nation's electricity consumers. The legal and policy cornerstone of these rules is to remedy undue discrimination in access to the monopoly owned transmission wires that control whether and to whom electricity can be transported in interstate commerce."[122] The Order required all public utilities that own, control, or operate facilities used for transmitting electric energy in interstate commerce, to have open access, non-discriminatory transmission tariffs. These tariffs allow any electricity generator to utilize existing power lines to transmit the power that they generate. The Order also permits public utilities to recover the costs associated with providing their power lines as an open access service.[122][123]
Energy Policy Act of 2005
The Energy Policy Act of 2005 (EPAct) expanded federal authority to regulate power transmission. EPAct gave FERC significant new responsibilities, including enforcement of electric transmission reliability standards and the establishment of rate incentives to encourage investment in electricity transmission.[124]
Historically, local governments exercised authority over the grid and maintained significant disincentives to actions that would benefit states other than their own. Localities with cheap electricity have a disincentive to encourage making
Local constituencies can block or slow permitting by pointing to visual impacts, environmental, and health concerns. In the US, generation is growing four times faster than transmission, but transmission upgrades require the coordination of multiple jurisdictions, complex permitting, and cooperation between a significant portion of the many companies that collectively own the grid. The US national security interest in improving transmission was reflected in the EPAct which gave the Department of Energy the authority to approve transmission if states refused to act.[126]
2022 Inflation Reduction Act
The Inflation Reduction Act of the Biden administration has fast-tracked transmission projects by helping purchase $30 billion in wholesale electric transmission contracts, as well as publishing a national transmission needs report.[127]
The U.S. transmission grid capacity would have to triple in order to meet the global target of net zero carbon emissions according to a Princeton University study.[128][129]
Greenhouse gas emissions
While the United States has cumulatively emitted the most greenhouse gases of any country, it represents a declining fraction of ongoing emissions, long superseded by China.[131][132] Since its peak in 1973, per capita US emissions have declined by 40%, resulting from improved technology, the shift in economic activity from manufacturing to services, changing consumer preferences and government policy.[133]
State and local government have launched initiatives. Cities in 50 states endorsed the Kyoto protocol.
On February 16, 2007, the United States, together with leaders from
Arjun Makhijani argued that in order to limit global warming to 2 °C, the world would need to reduce CO2 emissions by 85% and the US by 95%.[138][139][140] He developed a model by which such changes could occur. Effective delivered energy is modeled to increase from about 75 Quadrillion Btu in 2005 to about 125 Quadrillion in 2050,[141] but due to efficiency increases, the actual energy input increases from about 99 Quadrillion Btu in 2005 to about 103 Quadrillion in 2010 and then to decrease to about 77 Quadrillion in 2050.[142] Petroleum use is assumed to increase until 2010 and then linearly decrease to zero by 2050. The roadmap calls for nuclear power to decrease to zero, with the reduction also beginning in 2010.[143]
In 2012, the National Renewable Energy Laboratory assessed the technical potential for renewable electricity for each of the 50 states, and concluded that each state had the technical potential for renewable electricity, mostly from solar and wind, that could exceed its current electricity consumption. The report cautions: "Note that as a technical potential, rather than economic or market potential, these estimates do not consider availability of transmission infrastructure, costs, reliability or time-of-dispatch, current or future electricity loads, or relevant policies."[145]
In 2022, the EPA received funding for a green bank called the Greenhouse Gas Reduction Fund to drive down carbon dioxide emissions, as part of the Inflation Reduction Act, the largest decarbonization incentives package in U.S. history.[62][63] The Fund will award $14 billion to a select few green banks nationwide for a broad variety of decarbonization investments, $6 billion to green banks in low-income and historically disadvantaged communities for similar investments, and $7 billion to state and local energy funds for decentralized solar power in communities with no financing alternatives.[146][147] The EPA set the deadline to apply for the first two award initiatives at October 12, 2023[148] and the latter initiative at September 26, 2023.[149]
See also
- United States hydrogen policy
- 2000s energy crisis
- Carbon tax
- Carter Doctrine
- Climate change policy of the United States
- Economics of new nuclear power plants
- Electricity sector of the United States
- Emissions trading
- Energy and American Society: Thirteen Myths
- Energy in the United States
- Energy law
- Energy policy of the Obama administration
- Energy policy of the Soviet Union
- List of United States energy acts
- List of U.S. states by electricity production from renewable sources
- United States House Select Committee on Energy Independence and Global Warming
- United States House Select Committee on the Climate Crisis
- United States Secretary of Energy
- World energy consumption
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Table 7: Total energy: 29,568.0 trillion Btu, Loss: 7,014.1 trillion Btu
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{{cite web}}
: CS1 maint: numeric names: authors list (link) - ^ Energy Policy Act of 2005 Fact Sheet (PDF). FERC Washington, D.C. August 8, 2006. Archived from the original (PDF) on December 20, 2016. Retrieved December 7, 2016.
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● Data for 2020 is also presented in Popovich, Nadja; Plumer, Brad (November 12, 2021). "Who Has The Most Historical Responsibility for Climate Change?". The New York Times. Archived from the original on December 29, 2021.
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- ^ Makhijani pg. 3
- ISBN 978-1-57143-173-8
- ^ Makhijani Fig. 5-5, 5-8
- ^ Makhijani Fig. 5-7
- ^ Makhijani Fig. 5-8
- ^ Makhijani Fig. 5-5
- ^ Romm, Joseph. "Cleaning up on carbon", June 19, 2008
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- ^ "Biden-Harris Administration Launches Historic $20 Billion in Grant Competitions to Create National Clean Financing Network as Part of Investing in America Agenda". US EPA. July 14, 2023. Retrieved August 14, 2023.
- ^ "Biden-Harris Administration Launches $7 Billion Solar for All Grant Competition to Fund Residential Solar Programs that Lower Energy Costs for Families and Advance Environmental Justice Through Investing in America Agenda". US EPA. June 28, 2023. Retrieved August 14, 2023.
Further reading
- Matto Mildenberger & Leah C. Stokes (2021). "The Energy Politics of North America". The Oxford Handbook of Energy Politics.
- Oil and Natural Gas Industry Tax Issues in the FY2014 Budget Proposal Congressional Research Service
External links
- US Department of Energy
- Energy Information Administration
- USDA energy
- United States Energy Association (USEA)
- US energy stats
- ISEA – Database of U.S. International Energy Agreements
- Retail sales of electricity and associated revenue by end-use sectors through June 2007 (Energy Information Administration)
- International Energy Agency 2007 Review of US Energy Policies