Energy Independence and Security Act

What a name for an energy bill. Only in America.

President Bush has promised to sign this important legislation soon. The legislation is wide ranging.

The bill bans incandescent light bulbs by 2012, forcing consumers to use more efficient compact fluorescents or LED’s. It requires an improvement in the efficiency of new cars from an average of 25 mpg to 35 mpg. It requires a 6 fold increase in biofuels. It requires energy consumption labels for televisions and computers. It requires dishwasher and washing machine suppliers to use less water, which would reduce the energy used to pump water, as well as to heat it.

What the bill won’t do is make America energy independent. And of course without independence, it does little to improve security.

But still it is a very important, long time coming piece of legislation. The impact of it will certainly be continental, if not world wide. Incandescent light bulb manufacturers will lose their last major market, as the rest of the world has long since switched. It will drive the development of new efficient lighting. It will drive the development of more efficient appliances, which will find their way onto world markets. Even the labelling of TV’s might cause a few people to pause before they buy their plasma screen.

Conservation through regulation is something that has been going on at the State and Provincial levels for a long time. California has successfully beaten court challenges by auto companies to fuel efficiency standards. Quebec has adopted the California standards. Ontario has banned incandescent bulbs by 2012 – now we avoid the cross border shopping problem. Regulations work, and they are far and away the least cost way to solve climate change problems, while saving people money.

One energy analyst estimates that the cost of a new car built to meet the new efficiency standard will increase by $1500, but that the car will save the consumer $5,000 in fuel over the life of the car. And presumably that analysis was using today’s fuel prices – the savings could be much more if oil prices continue their assent. The bill will save US consumers $400 billion in energy costs by 2030.
The ethanol mandate is a challenge. Already ethanol is consuming 14% of the US corn crop. Interestingly, the mandate calls for 60% of the supply to come from cellulosic sources – wood, corn chaff, straw. The technology to do this is still in development, and not yet proven on a commercial scale. The mandate might be just what is needed to move the development forward.

The bill is a major step forward. It is not perfect – timelines could be shorter, targets more aggressive, but with the tedious and challenging US legislative system, it is still a major accomplishment.

George Bush’s legacy just rose a notch. And I never thought I would say that.

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