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Microcosm of energy policy
VIEWPOINT
Microcosm of energy policy The US Congress 1987-88 Warren H. Donnelly Energy policy m self-governing states is produced by a noisy, tumultuous process, as illustrated by the American Congress for 1987 and 1988. Its completed legislation addressed oil and natural gas, nuclear power, conservation and environmental effects. Unfinished business involved promotion of methanol for fuel, costs of coal transport, uranium mining, regulation of nuclear power, expanded regulation of emissions to preserve air quality, and fuel taxes. This picture suggests a fundamental uneasiness on Capital Hill about the environmental effects of producing and using fuels and energy. Also, most of the legislative decisions addressed short-term problems and bore the marks of political compromise. Keywords: Energy policy; Legislation; Congress Warren Donnelly is a Senior Specialist, Congressional Research Service, The Library of Congress, Washington DC 20540, USA.
As much as political economists and planners might prefer to the contrary, the forming and carrying out of energy policy in selfgoverning countries, and I suspect in others too, is the outcome of a noisy, messy and tumultuous process. Fuel suppliers, energy converters, users, and proponents of conservation and protection of the environment, not to mention legislators seeking new things to tax, all struggle to put their imprint upon national energy policy, to push or oppose measures that affect their interests. Consider, for example, energy policy and the 100th US Congress for the two years 1987-88. Parenthetically, I chose this forum simply because I know it better than other representative bodies. For 1987-88, seven items of completed legislation relating to energy addressed the leasing of oil lands owned by the Federal government; a higher filling rate for the Strategic Petroleum Reserve although not as high as desired; an extension and revision of the indemnification for nuclear power plant owners; a speeding up and revision of the Department of Energy's programme for disposal of high level radioactive wastes; a study of the greenhouse effect; and energy efficiency standards for major household appliances
0301-4215/89/020139-02503.00 © 1989 Butterworth & Co (Publishers) Ltd
and for fluorescent lamps. These are listed in Table l. Illuminating other hints of things to come was legislation still in progress as the end of the 100th Congress approached. Notable items included promotion of ethanol, methanol and natural gas to fuel cars; regulation of railroad shipping rates to reduce the charges for shipping coal to utilities; revival of the depressed US uranium mining industry; reorganization of the Nuclear Regulatory Commission; placing the Department of Energy's enrichment services on a firm financial footing (ie increasing the price); an inconclusive debate over causes and remedies for the greenhouse effect and acid rain; and proposed taxes for gasoline, imported and domestically produced oil, and energy in general. Additional details appear in Table 2. These new pieces for the mosaic of US energy policy suggest that during 1987-88 the Congress was working at the margin, experiencing a fundamental unease about the environmental effects of producing and using fossil fuels. However, as the ferociously hot summer of 1988 passed by, disturbing reports of voltage reductions, brownouts and load shedding in electricity did not go unnoticed in Congress. Members 1 39
Viewpoint Table 1. Completed legislation relating to supply and use of fuels and energy (US Congress, 1987-88). Oil Provided for leasing to private producers of Federal oil and gas lands, by competitive bid (PL 100-203) Funded a filling rate of 50 000 bid for the US Strategic Petroleum Reserve (PL 100-203) Natural gas Repealed a Federal ban on the use of natural gas and petroleum as the primary fuel for new power plants and major fuel burning installations (PL 100-42) Nuclear power Extended the nuclear accident indemnification of the Price-Anderson Act (PL 100-408) Substantially revised the Federal programme for disposal of high-level radioactive wastes and spent fuel (PL 100-203) Environment Directed the Environment Protection Agency to develop and propose a national policy on global climatic change. Also, EPA and the State Department are to summarize for Congress by 1991 the international understanding of the greenhouse effect and submit a strategy for international cooperation (PL 100-204) Conservation Set Federal energy standards for major electric home appliances (PL 100-12) and for fluorescent light ballasts (PL 100-357)
from power short constituencies can be expected next year to press for expanded electricity supply, clashing with members more sympathetic to views of conservationists, environmentalists and consumers over who should do what, and when, and how. Out of these clashes may come future decisions. How good these will be when measured against the yardstick of abstract energy policy remains to be seen. One thing,
however, is predictable. The decisions will address short-term problems and will bear the marks of political compromise. They will r e p r e s e n t what is achievable rather than that which is theoretically desirable. Whatever happens, it will be an instructive example of political vector analysis which must be mastered by those who wish to affect and understand national energy policy.
Table 2. Notable legislation in progress relating to supply and use of fuels and energy (US Congress 1987-88). Ethanol and methanol for fuels The House passed a bill to promote the use of methanol and natural gas in cars, while the Senate passed a bill to promote use of ethanol, methanol and natural gas in cars Coal A subcommittee of the House Committee on Energy and Commerce approved a bill that, among other things, would restore some regulation to rail shipping rates so as to reduce the cost of transporting coal to electric utilities Uranium The Senate approved a bill to revive the severely depressed US uranium industry Nuclear power The Senate approved a bill to reorganize the Nuclear Regulatory Commission to replace its five-member commission with a single administrator, and to insulate safety investigations from political interference The Senate also approved legislation to place the Department of Energy's enrichment services on a firm financial footing Environment Debate contained about acid rain, whether the damage that it causes is enough to require immediate remedial actions, and whether Federal efforts should focus on sulphur dioxide emissions or include other acid rain precursors such as nitrogen oxides Bombarded by predictions and warnings about the greenhouse effect, Congress has before it legislation to require extensive regulation of emission sources and to establish a national energy policy to reduce global warming Taxes Congress has under consideration, proposals for a fuels and energy excise tax. Four options include an increased gasoline excise tax, an imported oil tax, an excise tax on domestic oil production and oil imports, and a general energy tax
140
ENERGY POLICY April 1989
Microcosm of energy policy The US Congress 1987-88 Warren H. Donnelly Energy policy m self-governing states is produced by a noisy, tumultuous process, as illustrated by the American Congress for 1987 and 1988. Its completed legislation addressed oil and natural gas, nuclear power, conservation and environmental effects. Unfinished business involved promotion of methanol for fuel, costs of coal transport, uranium mining, regulation of nuclear power, expanded regulation of emissions to preserve air quality, and fuel taxes. This picture suggests a fundamental uneasiness on Capital Hill about the environmental effects of producing and using fuels and energy. Also, most of the legislative decisions addressed short-term problems and bore the marks of political compromise. Keywords: Energy policy; Legislation; Congress Warren Donnelly is a Senior Specialist, Congressional Research Service, The Library of Congress, Washington DC 20540, USA.
As much as political economists and planners might prefer to the contrary, the forming and carrying out of energy policy in selfgoverning countries, and I suspect in others too, is the outcome of a noisy, messy and tumultuous process. Fuel suppliers, energy converters, users, and proponents of conservation and protection of the environment, not to mention legislators seeking new things to tax, all struggle to put their imprint upon national energy policy, to push or oppose measures that affect their interests. Consider, for example, energy policy and the 100th US Congress for the two years 1987-88. Parenthetically, I chose this forum simply because I know it better than other representative bodies. For 1987-88, seven items of completed legislation relating to energy addressed the leasing of oil lands owned by the Federal government; a higher filling rate for the Strategic Petroleum Reserve although not as high as desired; an extension and revision of the indemnification for nuclear power plant owners; a speeding up and revision of the Department of Energy's programme for disposal of high level radioactive wastes; a study of the greenhouse effect; and energy efficiency standards for major household appliances
0301-4215/89/020139-02503.00 © 1989 Butterworth & Co (Publishers) Ltd
and for fluorescent lamps. These are listed in Table l. Illuminating other hints of things to come was legislation still in progress as the end of the 100th Congress approached. Notable items included promotion of ethanol, methanol and natural gas to fuel cars; regulation of railroad shipping rates to reduce the charges for shipping coal to utilities; revival of the depressed US uranium mining industry; reorganization of the Nuclear Regulatory Commission; placing the Department of Energy's enrichment services on a firm financial footing (ie increasing the price); an inconclusive debate over causes and remedies for the greenhouse effect and acid rain; and proposed taxes for gasoline, imported and domestically produced oil, and energy in general. Additional details appear in Table 2. These new pieces for the mosaic of US energy policy suggest that during 1987-88 the Congress was working at the margin, experiencing a fundamental unease about the environmental effects of producing and using fossil fuels. However, as the ferociously hot summer of 1988 passed by, disturbing reports of voltage reductions, brownouts and load shedding in electricity did not go unnoticed in Congress. Members 1 39
Viewpoint Table 1. Completed legislation relating to supply and use of fuels and energy (US Congress, 1987-88). Oil Provided for leasing to private producers of Federal oil and gas lands, by competitive bid (PL 100-203) Funded a filling rate of 50 000 bid for the US Strategic Petroleum Reserve (PL 100-203) Natural gas Repealed a Federal ban on the use of natural gas and petroleum as the primary fuel for new power plants and major fuel burning installations (PL 100-42) Nuclear power Extended the nuclear accident indemnification of the Price-Anderson Act (PL 100-408) Substantially revised the Federal programme for disposal of high-level radioactive wastes and spent fuel (PL 100-203) Environment Directed the Environment Protection Agency to develop and propose a national policy on global climatic change. Also, EPA and the State Department are to summarize for Congress by 1991 the international understanding of the greenhouse effect and submit a strategy for international cooperation (PL 100-204) Conservation Set Federal energy standards for major electric home appliances (PL 100-12) and for fluorescent light ballasts (PL 100-357)
from power short constituencies can be expected next year to press for expanded electricity supply, clashing with members more sympathetic to views of conservationists, environmentalists and consumers over who should do what, and when, and how. Out of these clashes may come future decisions. How good these will be when measured against the yardstick of abstract energy policy remains to be seen. One thing,
however, is predictable. The decisions will address short-term problems and will bear the marks of political compromise. They will r e p r e s e n t what is achievable rather than that which is theoretically desirable. Whatever happens, it will be an instructive example of political vector analysis which must be mastered by those who wish to affect and understand national energy policy.
Table 2. Notable legislation in progress relating to supply and use of fuels and energy (US Congress 1987-88). Ethanol and methanol for fuels The House passed a bill to promote the use of methanol and natural gas in cars, while the Senate passed a bill to promote use of ethanol, methanol and natural gas in cars Coal A subcommittee of the House Committee on Energy and Commerce approved a bill that, among other things, would restore some regulation to rail shipping rates so as to reduce the cost of transporting coal to electric utilities Uranium The Senate approved a bill to revive the severely depressed US uranium industry Nuclear power The Senate approved a bill to reorganize the Nuclear Regulatory Commission to replace its five-member commission with a single administrator, and to insulate safety investigations from political interference The Senate also approved legislation to place the Department of Energy's enrichment services on a firm financial footing Environment Debate contained about acid rain, whether the damage that it causes is enough to require immediate remedial actions, and whether Federal efforts should focus on sulphur dioxide emissions or include other acid rain precursors such as nitrogen oxides Bombarded by predictions and warnings about the greenhouse effect, Congress has before it legislation to require extensive regulation of emission sources and to establish a national energy policy to reduce global warming Taxes Congress has under consideration, proposals for a fuels and energy excise tax. Four options include an increased gasoline excise tax, an imported oil tax, an excise tax on domestic oil production and oil imports, and a general energy tax
140
ENERGY POLICY April 1989