Security, independence, and sustainability: Imprecise language and the manipulation of energy policy in the United States

Energy Policy 52 (2013) 779–788

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Security, independence, and sustainability: Imprecise language and the manipulation of energy policy in the United States$ Scott R. Littlefield n,1 Hoover Institution, Stanford University, Stanford, CA 94305, United States

H I G H L I G H T S c c c c c

This article examines the impact of imprecise terminology on US energy policymaking. Energy security, energy independence, and sustainability are vaguely defined terms. Coordinated interests manipulate debate and exploit public ignorance. Taxes, regulation, and innovation incentives are used to apply policy prescriptions. Vague terminology stifles meaningful public debate over energy policy.

a r t i c l e i n f o

abstract

Article history: Received 5 May 2012 Accepted 15 October 2012 Available online 3 November 2012

This article examines the impact of imprecise terminology on the energy policymaking process in US, focusing on the manipulation of discourse by different political–economic interests seeking to sway popular opinion. Using the 2012 US Presidential Elections as a backdrop, the analysis highlights the cooption of the concepts ‘‘security,’’ ‘‘independence,’’ and ‘‘sustainability’’ in energy debates by different and often opposing interest groups. The article’s first section traces the malleability of energy terminology to the vagueness of the term ‘‘energy’’ itself and notes how qualifying words like security, independence, and sustainability have been selectively exploited to introduce further ambiguity to an already fungible concept. The second section notes that while energy is a critical and complex factor of macroeconomic production, its main public visibility comes via a few partially representative numbers, like gasoline prices. This mismatch of broad social importance and piecemeal public understanding enables organized interests to leverage vague terminology in support of particular policy ideas. The third section examines three policymaking tools (1) taxation, (2) regulation, and (3) technology promotion and compares these administrative instruments. Ultimately, the article concludes that loosely defined terminology inhibits energy policy discussion and stifles meaningful public debate over and action on energy issues. & 2012 Elsevier Ltd. All rights reserved.

Keywords: Energy policy Interest groups Language

1. Introduction The sustained political prominence of energy policy in the United States has catalyzed an influx of imprecise terminology as observers seek to generalize energy’s complexities and politicians attempt to gain political leverage. Oil and gas discussions have been framed by security concerns due to the dynamic relationship between political-economic outcomes and energy. Similarly, the concept of ‘‘energy independence’’ has gained renewed political life on the lips

$ The author wishes to thank two anonymous reviewers for their insightful comments and suggestions on earlier versions of this article. n Tel.: þ1 650 669 9398. E-mail address: [email protected] 1 Formerly at the Hoover Institution.

0301-4215/$ - see front matter & 2012 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.enpol.2012.10.040

of politicians and political commentators. Longer-term thinking stresses the importance of ‘‘sustainability’’ in energy policy creation. However, in practice such terms are fungible. While a number of authors have sought to coherently define energy terminology (Fialka, 2006; Greene et al., 2007; Hughes, 2009; Hughes, 2012; Orecchini, 2011; Bohi and Toman, 1996; Kruyt et al., 2009; Alhajji, 2007; von Hipple et al., 2011; Greene and Lieby, 2006; APERC, 2007; WEC, 2007), the systematic dilution of meaning in the energy lexicon continues to inhibit productive policy debate. Given energy’s critical economic role, untangling the convoluted vocabulary that has emerged around the subject is of genuine political–economic concern. In the early stages of the 2012 US Presidential election energy policy emerged as a key battleground between Democrats and Republicans. Republican presidential hopefuls have made statements such as: ‘‘America

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can be the world’s next energy superpower, if we give ourselves the chance’’ (Romney, 2012) and ‘‘Contrary to popular belief, America has more energy than any nation on earth. All that’s keeping us from becoming energy independent is a lack of political will to do so’’ (Gingrich, 2012). Such statements build on the Republican energy buzz-phrase from the 2008 election cycle imploring policymakers to encourage oil drilling: ‘‘Drill baby, drill!’’ (Carnevale, 2008). In response to Republican statements Democratic incumbent Barack Obama has advocated an ‘‘All of the above’’ strategy to achieve ‘‘energy independence’’ reflecting his 2008 campaign’s promotion of diverse energy sources (Obama, 2012; Reuters, 2008). Most energy policy proposals appear to value popular resonance over practical substance. As US and global leaders seek to forge meaningful energy policy they must cultivate a clear understanding of the threats their constituencies face and the consequences of action or inaction otherwise their decisions may have net negative impacts. This paper examines the terms energy security, energy independence, and energy sustainability and how they have been abused by US politicians. It argues for the use of coherent terminology in energy policy discussions. While the analysis focuses on the US and the dynamics of the American political system, many of its conclusions are applicable to other countries and regional bodies. Ultimately, this paper argues that language and communication play a vital role in policy making and should be scrutinized in the specific case of energy.

2. Difficulties in definition Energy is ubiquitous, permeating the earth and extending across the universe in forms as diverse as a star’s radiant heat and the motion of planets. The law of energy conservation states that energy is neither created nor destroyed (Patterson, 2007, p. 6). Nevertheless, energy can be directed and transported. As fuel or electricity, it is possible to leverage energy at varying levels of efficiency. Energy is a critical economic input that powers machines and allows humans to accomplish tasks beyond the limits of their own muscular strength. However, Haas et al. (2008, p. 4012) note: ‘‘what people need and purchase is not the commercial energy itself, but rather energy services provided by the energy system that converts energy sources and flows from nature into these services.’’ The economic, political, and social value of energy corresponds to the readiness and efficiency with which joules, kilowatt-hours, or BTU can be applied to a particular task. Therefore accessibility, transportability, storage, and stability are critical to the value of an energy source as are impacts of its use like greenhouse gas (GHG) and particulate emissions. Politicians and the public ultimately concern themselves with energy because it facilitates the realization of aggregate social utility. In the US, questions of energy security, energy independence, and sustainability often center on fossil fuel use as the country’s critical energy-related vulnerability. As both primary energy sources, such as oil, and secondary sources, like gasoline, fossil fuels dominate American energy consumption (EIA, 2011). While fossil fuels and their derivatives are market allocated commodities, they are not easily substituted between one another or with alternatives in the short-term—there are few readily alternatives when one fuel’s supply drops and it is difficult to swiftly bring new supplies online when demand rises. Given this short-term inelasticity, price responsiveness is key to the smooth flowing of fuel markets. The economy’s flexibility against fuel shocks is determined by (1) consumer preferences and (2) the ability of technology to lower demand by improving efficiency and realize new supplies (Greene et al., 1998, p. 65). Primary and secondary

fuels and fuel markets are thus critical to analyzing the concepts of energy security, independence, and sustainability. 2.1. Energy security Bohi and Toman (1996, p. 1) define energy security as ‘‘the loss of economic welfare that may occur as a result of a change in the price or availability of energy.’’ While some researchers echo Bohi and Toman’s definition (Bielecki, 2002, p. 237; Bryce, 2008, p. 50), others have refined the concept to facilitate measuring it (L¨oschel et al., 2010, p. 1666; Sovacool et al., 2011, p. 5846). Due to the breadth of energy’s integration in economic activity, the scope of energy security policies is also wide. Daniel Yergin, 2006, p. 76) notes four critical principles that underlie energy security: (1) diversification, (2) resilience against market shocks, (3) recognition of the integration of the worldwide energy system, and (4) the importance of information. Moreover, Yergin adds that there is an increased need for the global nature of energy security to be recognized and for the entire energy supply chain to be protected (Yergin, 2006, p. 77). While international entities, especially the US, have sought to protect energy flows through the establishment of military bases abroad and maintaining force projection capacity, global energy security is too atomized to be labeled a ‘‘system’’. Market forces coordinate the economic dynamics of energy around the world; however, the confluence of myriad military and political forces prevent a systematic coordination of energy security. Energy security is a fungible concept (Alhajji, 2007; Kruyt et al., 2009, p. 2167). For the consumer driven International Energy Agency (IEA) energy security is ‘‘uninterrupted physical availability at a price which is affordable while respecting environmental concerns’’ (IEA, 2012). To analyze energy systems Hughes (2012, p. 222) breaks the IEA’s definition of energy security into three dimensions: (1) availability, (2) affordability, and (3) acceptability. This breakdown mirrors the analysis of a 2007 APERC report – which also included a fourth dimension ‘‘accessibility’’ – and highlights the ‘‘security of supply’’ concerns that animate discussions in energy importing countries. In contrast the oil producer cartel OPEC attempts to counter traditional supply-focused conceptions of energy security by highlighting the dynamic interaction between supply and demand security (OPEC, 2012; El-Badri, 2008). As OPEC’s position suggests, energy exporting countries have increasingly advocated for a broader conceptualization of energy security—witnessed in the focus on energy security during the 2006 G8 Summit in St. Petersburg, Russia. This conception of energy security has been labeled ‘‘security of demand’’ (Yergin, 2006, p. 71). In addition to a traditional emphasis on the consumer perspective, the concept of energy security has historically focused on fossil fuels and, in particular, oil (Jansen and Seebregts, 2010, p. 1654; von Hipple et al., 2011, p. 6720). The focus of energy security discussions on crude oil results from it being the most used and traded fuel due to its demand as a transport fuel alongside its geographically uneven distribution and concentration in politically volatile locations (Bielecki, 2002, p. 237). Nevertheless, energy security is about more than the smooth flow of oil and oil products to markets. The security of an energy grid must holistically account for the delivery of energy services to end users. Infrastructural robustness, diversity of energy sources, and reliability are critical components of energy security. Energy security is thus a function of a user’s dependence on potentially erratic energy supplies and distribution systems. 2.2. Energy independence In a November 7, 1973, speech following the first OPEC oil embargo, US President Richard Nixon outlined the concept of

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105 100

Quadrillion BTU

95

Total Energy Consumption

90 85 80

Fossil Fuel Consumption

75 70 65 60

Fig. 1. U.S. primary energy consumption. Data from: EIA, Annual Energy Review, ‘‘Table: 1.1: Primary Energy Overview, 1949–2010,’’ released 10/19/2011, available at: /http://www.eia.gov/totalenergy/ data/annual/pdf/sec1_5.pdf, accessed: 4/30/2012S.

25000

20000 Thousand bbl/day

energy independence. Calling for a Manhattan Project or Apollo program-type of effort to ‘‘meet America’s energy needs from America’s own resources’’ by 1980 (Nixon, 1973, 10). Recognizing the United States’ need to curb energy waste, the President promoted numerous fuel conservation measures under ‘‘Project Independence.’’ In 1977 newly-elected President Jimmy Carter raised the rhetorical bar declaring the ‘‘difficult effort’’ on energy to be ‘‘the moral equivalent of war’’ (Carter, 1977). Carter urged the nation to combat a shrinking energy resource base by becoming more efficient in its energy use and pursuing alternative energy sources. Arguably ahead of his time, Carter struggled to convince Americans to make ‘‘gradual, realistic, and necessary’’ sacrifices to become less dependent on foreign oil. Carter’s frustration was evident in 1979 as he asked ‘‘Why have we not been able to get together as a nation to resolve our serious energy problem?’’ (Carter, 1979). In 1980 the President again urged unity and sacrifice to combat the energy crisis, this time emphasizing the geopolitical dimension of struggles in the Middle East and the Soviet foray in Afghanistan molding the position that would become known as the Carter Doctrine (Carter, 1980). Carter identified a ‘‘clear and present danger’’ to US security arising from foreign oil dependence and, as in 1977, promoted efficiency and alternative fuels to alleviate this issue. Despite the introduction of energy conservation programs under Nixon and Carter, the US’s absolute level of dependence on fossil fuels and relative dependence on imported oil to meet domestic energy consumption needs has grown dramatically since the early 1970s—although relative dependence on OPEC and Persian Gulf sourced crude has declined (see Figs. 1 and 2). By 2006 President George W. Bush summed up the US’s situation in his State of the Union address, noting: ‘‘we have a serious problem: America is addicted to oil’’ (Bush, 2006). Oil dependence conjures economic, political, and security fears that suppliers will distort markets for ulterior reasons. Nevertheless, while energy independence is usually framed with respect to oil imports, energy security and dependence concerns can manifest at any point along the continuum between production and consumption while taking on economic and broader geo-political guises (Lovins and Lovins, 1982). The possible economic costs of oil dependence are three fold: (1) national wealth is transferred to producing states, (2) potential GDP is lowered, and (3) other factors of production are temporarily underemployed (Greene et al., 1998, p. 56, 60). Beyond economics, dependence on external oil suppliers can restrain a country’s foreign policy and fund both military buildup and weapons of mass destruction acquisition by unfriendly regimes (Sovacool, 2007, p. 5507). Alongside the US’s growing

781

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Domestically Sourced Consumption Non-OPEC Imports

10000 Non-Persian Gulf OPEC 5000 Imports from Persian Gulf 0

Fig. 2. U.S. crude oil consumption and import breakdown. Data from: EIA, Annual Energy Review, ‘‘Table 5.4: Petroleum Imports by Country of Origin, 1960-2010,’’ released 10/19/2011, available at: /http://www.eia.gov/ totalenergy/data/annual/pdf/sec5_13.pdfS, accessed: 4/30/2012; (EIA, 2011) EIA, Monthly Energy Review, ‘‘Table 11.2: Petroleum Consumption in OECD Countries’’, released 4/27/2012, available at: /http://www.eia.gov/totalenergy/data/monthly/ pdf/sec11_7.pdfS, accessed 4/30/2012 (EIA, 2012).

dependence on imported oil, America’s trade deficit continues to expand and remaining energy reserves are increasingly concentrated in potentially hostile countries and regions—such as Venezuela and the Middle East (Parry and Anderson, 2005, pp. 11–12). However, in practice it is not clear what energy independence means. Greene et al. (2007, p. 2) note three popular conceptions of oil independence in the US: (1) no imports from the Middle East, (2) no imports at all, and (3) the elimination of oil use. Barring major technological advances the downside of such absolutist and isolationist energy independence would outweigh energy dependence’s drawbacks. As Figs. 1 and 2 indicate, many long-term energy trends would have to be reversed to realize such ‘‘independent’’ outcomes. Autarky prevents global markets from efficiently balancing supply and demand—increasing price volatility and costing domestic producers and consumers. Further, eliminating oil importation or use would deny access to and profits from a unique economic input making society more dependent on imperfect substitutes. More practical conceptions of energy independence are both subtle and dynamic. Greene et al. (2007, p. 2) posit that under practical oil independence: ‘‘For all conceivable future world oil market conditions, the costs of oil dependence to the US economy will be so small that they will have no effect on our economic, military or foreign policy.’’ For an energy policy goal the authors suggest: ‘‘The estimated total economic costs of oil dependence will be less than 1% of US GDP with 95% probability by 2030’’ (Greene et al., 2007, p. 3). This framework can be expanded to all energy/fuel sources, but risks depending on imprecisely chosen numbers. Sovacool (2007, p. 5506) outlines oil independence more qualitatively: ‘‘policymakers must make the ‘oil problem’ small enough that it no longer constrains the country’s foreign policy decisions.’’ Ultimately, both Greene et al. (2007, p. 8, 10) and Sovacool (2007, p. 5506) argue that a less absolutely defined form of energy independence is both possible and desirable for the US. The authors assert that time and corrective policy action are required to put the country on this new track, but argue such a course will improve the country’s future well-being and security. 2.3. Energy sustainability ‘‘Sustainability’’ is often used alongside energy without a clear definition. For many experts sustainability is tied to energy

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security (Sovacool et al., 2011, p. 5847)—some argue that energy sustainability is energy security extended over time without sacrificing the well-being of present or future generations (Ferguson, 1994, p. 1422). Sustainable development has three dimensions: (1) ecological, (2) economic, and (3) social (Musango and Brent, 2011, p. 86). In practice the difficulty in recognizing individual preferences and the superior lobbying abilities of certain interest groups hinder the realization of Pareto efficiency, where no one is left worse off by policy choices. Moreover, preferences change over time, making Pareto efficiency a moving target. For example, it has been argued that as societies grow richer the marginal utility their people assign to changes in pollution levels increases (Griffin, 2009, p. 2). Before defining sustainability it is crucial that consensus be reached on an ideal vision of the future. While any use of nonrenewable resources is unsustainable over an unlimited time period, eliminating the use of fossil fuels prevents society from leveraging the unique properties of these resources thereby undercutting some of the original rationale for preserving them. A workable balance suggests extending the non-renewable resource base’s life. Ultimately technology is critical to enabling a stable, efficient, and broadly sustainable pattern of future fossil fuel use as it will allow ecological, economic, and social utility frontiers to expand in unison. Advancing energy technology requires an understanding of: (1) long-term demands, (2) non-linear development, (3) the coevolution of technology and the environment, the economy, and society, (4) the dynamic interaction of these factors, and (5) the need for radical change at every level of energy technology (Musango and Brent, 2011, p. 88). To realize a sustainable energy system there are, nevertheless, a variety of promising technological paths that might be followed: (1) renewable energy, (2) improvements in efficiency at all stages of energy production and consumption, (3) diminished environmental impact, (4) increased accessibility of energy, and (5) locally tailored energy systems (Orecchini, 2011, p. 7748). While it is unclear how improvements might be reaped from such paths, it is clear that humanity desires the sustainable use of earth’s resources (Ferguson, 1994, p. 1428). Yet the goal of resource sustainability remains elusive. As with security and independence, policy contention around sustainability arises over what balance will maximize utility.

3. The appeal of misuse In America the loose treatment of terms like ‘‘energy security’’, ‘‘energy independence’’, and energy ‘‘sustainability’’ facilitates policy manipulation. While the flow of energy is critical to economic growth, powering, delivering, and facilitating the manufacture of the goods that permeate daily life, the detailed workings of energy systems are not widely understood (Hughes, 2009, p. 2459; Bryce, 2008, p. 9). Energy is a great enabler and the US public regularly sees elements of energy markets: the price of gasoline, natural gas and electricity bills. Nevertheless, the availability and cost of energy is often taken for granted, except during price spikes or shortages. While the public desires energy services (Haas et al., 2008, p. 4012) the political, economic, and logistical complexities underlying access to a gallon of unleaded gasoline or a kilowatt-hour of electricity are divorced from most people’s daily experiences. Moreover, concepts like security and independence tend to enter into public debate through filtered and manipulated discourse. In UK, Watson and Scott (2009, p. 5094) claim, ‘‘energy security’’ is often used to rationalize policy but ‘‘a mature, reasoned and comprehensive debate on the nature and severity of the different sources of threat toyenergy security’’ is rarely heard. The politicized comingling of energy with loosely or

non-related issues is also problematic. Bryce (2008, p. 2) notes that after 9/11 ‘‘many Americans have been hypnotized by the conflation of two issues: oil and terrorism’’—which subjectively impacted public impressions of energy policy. Sober analysis of energy issues as they affect people’s ability to consume energy services is thereby drowned out by heavily politicized messages combining visible trends – such as oil prices – with issues in the public consciousness – such as terrorism post-9/11. 3.1. Conflicting goals Energy policy is manipulated through language, with loose terminology deliberately arranged to tap into public sentiment. ‘‘Energy independence’’ combines the critical role of energy with the deep-seated American desire to control its national political, economic, and social destiny while rejecting the potential influence external actors (Fialka, 2006). The phrase ‘‘energy independence’’ has been politically expedient for every US president since Nixon; however, the idea has proven a poor basis for policy. Bryce (2008, p. 7) writes: ‘‘there’s no question that the concept of energy independence resonates with American voters and explains why a large percentage of the American populace believes that energy independence is not only doable but desirable.’’ This reactive embrace of energy policy is fed by widespread ignorance of the integrated and reciprocal nature of international trade. The rhetoric of energy independence, playing on formative elements of American political identity, asserts the US has become subordinated to the whims of exporting nations who can cut supplies at any time. However, this narrative ignores the inverse relationship in which energy exporters are dependent on markets buying their goods to maintain their own economic well-being. Traumas like gasoline station lines in the 1970s had largely to do with poorly designed domestic policies like rationing rather than a market-based lack of supply. Moreover, the embargo, an embrace of efficiency in consuming countries (Shaffer, 2009, p. 37), and a global economic downturn combined to lower global oil demand. Current angst over the international expansion of Chinese oil companies often assumes China would not utilize other sources of oil if denied Sudanese or Iranian crude. However, Chinese companies’ exploration and production activities actually expand the pool of oil on the global market, freeing resources for the rest of the world to consume (Gholz and Press, 2007). Given globalization and functioning energy markets energy security is enhanced by opening up to the world market rather than shrinking from it. In this vein Auerswald (2006, p. 1) notes in theory: ‘‘increasing oil imports do not pose a threat to long-term US security.’’ However, in practice language manipulation perpetuates the close-minded myth of US vulnerability to the outside world’s energy exports and ‘‘rationalize’’ American military intervention abroad. The complexity of energy systems also breeds competition among energy interests. Energy policy is often approached from an economic perspective, with its motives and justifications caged in economic logic. This is not surprising as energy is a major economic input and, with some detracting criticism, a number of studies have even correlated GDP and stock market growth with energy prices (Kilian, 2009, pp. 1054–1055). However, political and military concerns often influence energy policy—such as the US embargo on Iranian crude oil. The idea of energy security is particularly politicized (Bang, 2010, p. 1645; Glachant et al., 2008, p. 13). Given both the geostrategic importance of energy and the ability of states to manipulate its supply and consumption through policy it would be short sighted to only consider energy as an economic issue. Shaffer (2009, p. 1) notes: ‘‘energy and politics are intrinsically linkedy.States are no more likely to refrain from using energy to promote their policy goals than to ignore economic or military means of doing so.’’ Yet just how

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states elect to use energy as a policy instrument is not straightforward. Moreover, energy policy’s broad effects across economic, environmental, and social interests ensure intense debate over its formulation and application. Energy policy is not necessarily determined by the soundness of arguments raised but by the effectiveness of their presentation. James A. Griffin (2009, p. 1) writes: ‘‘The process [of energy policy creation] is guided largely by whatever interest groups are most vocal. The solutions often feature either command-and-control mandates or a grab bag of government goodies in the form of subsidies, tax credits, and grants. The result is a mishmash of legislation that is inconsistent, ineffective, and ill conceived.’’ Further, the sizable economic implications of energy policy motivate powerful forces to self-servingly influence policy discussions. For example, Iowa corn farming lobbyists compete with Kentucky coal mining lobbyists over whether corn-based ethanol or coal-to-liquids fuel offer the best means of securing American ‘‘energy independence’’ from foreign oil (Bang, 2010, pp. 1649– 1650). However, the playing field of policy influence is uneven. Economic resources, member ‘‘buy-in,’’ and organizational strength differ dramatically between groups. Among energy and environmental lobbies there are three general categories: (1) ‘‘business corporations and trade associations,’’ (2) ‘‘not-for-profit interest groups,’’ and (3) ‘‘professional research and governmental organizations’’ (Werner, 1990, p. xi). Business groups – including ‘‘electricity producers, oil and gas companies, chemical manufacturers, and automotive manufacturers’’ (Werner, 1990, p. xv) – tend to enjoy strong financial backing and a clear purpose of maximizing profits. Non-profit groups rely on contributions and grants for funding and are driven by members backing a common purpose. Professional/government groups tend to be populated by people who are interested in energy, but also seek career benefits. Yet, all these groups have special interests and priorities which can conflict when trade-offs between economics, the environment, and social cohesion must be made. Climate change has been a political issue in the US since the 1960s (Yergin, 2011, pp. 441–443). Energy is part of climate discussions as the GHG emissions from burning fossil fuels are argued to be a key catalyst behind global atmospheric change. As debate over ‘‘climate security’’ has taken shape lobbying efforts have been driven by two forces: those supporting the continued use and expansion of fossil fuels, regardless of emission impacts and those fearing the potential consequences of climate change are too dire to continue humanity’s current level of fossil hydrocarbon use. While ‘‘[c]ombating climate change is a top priority for the EU’’ (European Commission 2010), debate in the US still revolves around whether the climate is altering, if this is due to human activity, and what should be sacrificed to halt this trend. Lobbying plays a part in this divergence and GHG intensive industries using fuel like coal have a larger role in America’s economy than in Europe’s (Euractiv, 2005; Klaassen, 2011). America’s greater level of fossil fuel reliance has also been posited as a reason why the US withdrew from the Kyoto Protocol on climate change in 2001 (Lorenzoni and Pidgeon, 2006). Though polls reveal a majority of the US public want more government action on climate change, this issue is politically divisive, with Democrats tending to support action and Republicans dismissing it. The demographics behind stances on climate change are, however, more complex. Those dismissing the threat of climate change tend to be a ‘‘predominantly white, male, politically conservative, and highly religious group [which] holds pro-individualism, prohierarchism, and anti-egalitarian values and have antienvironmental attitudes; they are distrustful of most institutions and rely on radio as their main source of news’’ (Shwoma et al., 2010, p. 473). Ultimately, the course of energy and related climate

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policy in the US reflects the interplay of the country’s ingrained political and economic interests and the dynamic struggle between consolidated corporate power and the general public’s diffuse power. Moreover, the polarization attending contemporary US politics inhibits productive discussions of broad policies dealing with climate change, where Europe has had more success (European Commission, 2010). Instead debate in the US centers on specific project proposals where climate looms in the background – such as the Keystone XL pipeline project. While broad national debates around climate policy tend to focus on mitigating GHG emissions through taxation or command and control regulation (explored in Sections 4.1 and 4.2), climate change concerns catalyzed one of America’s major energy policy debates of 2011 and 2012 with direct links to the 2012 presidential election. Applied for in 2008 the Keystone XL pipeline sought to connect the oil sands of Alberta, Canada, to refineries on the US Gulf Coast (Eilperin and Mufson, 2011). However, an environmentally grounded opposition held that the Keystone pipeline endangered an aquifer and, more importantly, would encourage Canada to pursue a GHG intensive course of oil development. Pipeline supporters argued that Keystone would create thousands of new jobs and provide the US market with oil from a friendly neighbor (Jindal, 2012). Moreover, project backers posited that the oil sands would be developed and sent westward to the Chinese market without the pipeline. Thus climate security was posed against economic and military-based ‘‘continental energy security’’ concerns, which favored increasing the US’s energy dependence on Canadian crude oil. Ultimately the proposal was lodged between a Democrat-led, environmentally based coalition against Keystone and a Republicanled, business-friendly group in favor of the pipeline (Eilperin and Mufson, 2011). On November 10, 2011, the State Department took a politically expedient decision to delay making a decision until after the November 2012 presidential elections. Subsequently on December 23, 2011, Congress passed the Temporary Payroll Tax Cut Continuation Act of 2011 giving President Obama 60 days to determine whether Keystone was in the ‘‘national interest’’. On January 18, 2012 the State Department in communication with the White House denied the pipeline application on the basis of insufficient time (U.S. Department of State, 2012). This decision revealed a discontinuity between the longer-term demands of energy policy and relatively short electoral cycles (Ferguson, 1994, p. 1424). Beyond the issue at stake, Republicans and Democrats were engaged in a political tussle for electoral position inviting stereotypically ineffective outcomes (Griffin, 2009).

4. Fuzzy language and policy Among US policymakers the availability and affordability of energy resources embodied in energy security are seen as vital to economic performance. Relatedly, champions of energy independence posit that the leverage of foreign fuel suppliers over the American economy should be minimized by limiting fuel use or import—especially that of oil. Finally, sustainability demands that energy security and independence be maintained into the future. Despite some consensus over the beneficial impacts of adjusting fuel markets, interest groups have stoked disagreement over how to make these changes. This section outlines the tools used by different lobbies and groups to mold US energy policy. Policy prescriptions for realizing energy security, independence, and sustainability can be roughly divided into two camps: advocates of increasing supply and advocates of curtailing demand. Through contrasting mechanisms both approaches loosen the energy market and lower the price at which fuel volumes will clear. Supply expansion promotes increased consumption by making more fuel

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available and allowing the economy to expand with this new production input at the same level of energy intensity. In contrast demand contraction lowers consumption forcing the economy to contract or use energy less-intensely (USDOE, 2008). For the fossil fuel market, short-term demand reduction appears more burdensome than supply expansion as it does not force a systematic change in the workings of the oil, coal, and natural gas-reliant economy. However, there is the long-term danger that supply expansion will exhaust non-renewable resources. This supply-demand argument informs the perception of resource peaks—the point at which physical reserves start to decline and supply cannot be expanded. Supporters of supply expansion argue that ‘‘peak’’ theories around a commodity like oil have existed for decades but are constantly pushed back by new resource and technological discoveries (Yergin, 2011, p. 227-8, 236-7). In contrast demand contraction advocates hold that rates of non-renewable fuel consumption should be decreased before viable reserves run out. Time horizons are the key to understanding these different energy policy strategies. Individual policymakers often support a mixture of such supply expansion and demand contraction policy choices. However, within the American political system there are myriad layers of complexity that make generalization difficult. On fossil fuels Republicans tend to support supply side energy solutions with Democrats favoring demand side responses (Jindal, 2012; Thomas, 2012). Yet Republicans have used both supply and demand mechanisms to promote nuclear energy, as have Democrats seeking to expand renewable energy development (Efstathiou and Snyder, 2010). Moreover, it is critical to overlay regional and constituent interests on top of party affiliation to best characterize energy policy preferences (Smith and Power, 2010). In practice language informs policy outcomes based on how well it can be leveraged in any given situation to lure voters’ sympathies. For example, an oil supply expansion may be politically attractive as the resulting depressing of price is logically straightforward and highly visible to the public in the short-term, while the sustainability costs are typically borne out diffusely over the longer-term. Moreover, well-organized actors like oil companies who stand to benefit from the process of supply expansion are incentivized to push resources into promoting this strategy through lobbying (Mayer, 2008). By contrast the shortterm strain and longer-term uncertainty of demand contraction afford it less popular resonance and a weaker lobby base. While policymakers may support differing visions of how energy supply and demand should be adjusted to realize security, independence, and sustainability, they share a common tool set for enacting policy. Three main, and often overlapping, vehicles for promoting change in the energy space are taxation, regulation, and, over the longer-term, technological development. The remainder of this section lays out how these policy tools are used to encourage different energy outcomes and the pitfalls that accompany these approaches.

4.1. Taxation Taxation and subsidization alter the market equilibrium for energy through the price mechanism. Demand and supply change as the price of energy shifts and either substitutes or abstinence are increasingly embraced or consumption levels rise. In altering prices, fiscal manipulation is a powerful tool for modifying behavior. As Bryce (2008, p. 41) notes: ‘‘The truth about energy supplies is that they have always been rationalized by price.’’ Nevertheless, in traditionally tax-shy America taxation has become especially controversial as witnessed by the rise of the tea party movement and an anti-tax pledge signed by most congressional Republicans as of 2011 (Epso, 2011).

Supply side proposals often extend tax breaks to energy producers, lowering their effective tax rate to promote production and increase energy availability. Portions of the 2007 Energy Independence and Security Act which sought to repeal some oil and gas tax incentives ran aground in trying to undo this mechanism (Bang, 2010, p. 1651). The proposal to repeal tax incentives drew strong opposition in the Senate from Republicans and oil state Democrats who framed their resistance in terms of security and the interests of their constituencies. Cutting supply side taxes to increase oil production has the short- to mediumterm impact of increasing available petroleum, thereby lowering prices and accelerating the depletion of economically recoverable reserves. Longer-term, increased production of non-renewable energy compromises sustainability and raises prices while increasing dependence on oil and increasing oil price-related insecurity for the less flexible economy. (Parry and Anderson, 2005, p. 15). In contrast focusing on alternatives or efficiency would likely promote a more sustainable energy outcome. While expanded fuel resource availability can foster a reprieve from supply concerns, the longer-term consequences of fiscal policies designed to encourage short-term fuel abundance undercut future energy security, independence, and sustainability. On the demand side a number of proposals have sought to manipulate energy consumption levels through changing energy taxes along the production and consumption chain. By accounting for negative externalities from energy use, these policies aim to make the market run more efficiently. For example, Parry and Anderson (2005, p. 14) suggest a tax of ‘‘$5 a barrel to begin with and increasing gradually thereafter, to accelerate energy conservation measures and remind people of the full costs of oil use.’’ While such a large tax would be nearly impossible to enact in the US’s current anti-taxation political environment, various researchers have attempted to validate oil or gasoline tax increases on the basis of climate impact (Sterner, 2007), defense costs (Delucchi and Murphy, 2008; Council on Foreign Relations, 2006, p. 37), and infrastructure needs (Crane et al., 2012). Nevertheless, disputes over the nature of externalities and their causes make it difficult to define ‘‘efficient’’ tax rates. This confusion is evident in attempts to quantify the cost of conflict in the Middle East in the 2000s. As Delucchi and Murphy (2008) note: ‘‘estimates of the military cost of oil use in transportation range from essentially zero to upwards of $1 per gallon.’’ (2253-4) Revenue neutral taxes have been suggested as a means of countering externalities without simply filling government coffers. These might, for example, combat climate change by adding a carbon tax to fuel based on GHG emission levels but directing revenues gathered toward lowering taxes elsewhere in the economy (Griffin, 2009, p. 163). Both supply and demand side tax policies risk unhealthily distorting the energy market. While fiscal policy makes theoretical sense where price setting mechanisms ignore externalities, finding the utility maximizing level of tax or subsidy is difficult. Bohi and Toman (1996, p. 123) note: ‘‘circumstances are unlikely to weigh in favor of energy consumption taxes unless and until a stronger case can be made regarding the seriousness of energy market shocks and their macroeconomic consequences.’’ While taxation can effectively combat externalities it is ill-suited to fighting against monopoly power-based distortions in the global marketplace (Greene et al., 1998, p. 59). Moreover, equality can be difficult to mete out as fuel use and impacts may fall unevenly across the population (Bohi and Toman, 1996, p. 127). Finally, the broader interactions of tax policy must be considered. In 1979 President Carter imposed an import tax on Brazilian sugar canebased ethanol to boost the production of US corn-based ethanol which was subsequently forced into the market through regulation in the 1990s and 2000s (Yergin, 2011, pp. 449–455). This was

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a boon to US farmers but the country’s consumers lost out in aggregate due to paying higher prices for ethanol. Similarly distorting the tax incentives afforded to fossil fuel exploration and production may lead to a significant uptick in GHG emissions and therefore undermine public welfare (Mann, 2007). In the run up to the 2012 US Presidential election, tax incentives have proven to be a contentious issue with Obama calling for green tax credits and an end to fossil fuel production subsidies and Republicans criticizing a loan guarantee the President approved for the now-bankrupt solar energy company Solyndra (Cooper and Weisman, 2012; Goldenberg, 2012). Ill-considered fiscal policies risk catalyzing broad and unintended economic consequences and can provide a vehicle for lobbies to boost special interests’ fortunes at a cost to the rest of society. Altering tax codes can exacerbate existing problems and create new issues. For better or worse, energy taxes modify people’s preferences and thereby increase the market’s elasticity (Council on Foreign Relations, 2006, p. 65). Parry and Small (2005, p. 1287) argue that the US ‘‘undertaxes’’ fuel consumption by a factor of two to one due to (1) limited pressure for fuel taxes that do not fund road infrastructure expenditures, (2) the broad demographic impact of such taxes in such a car dependent country, and (3) the influence of interested business lobbies—in contrast to the UK which is seen to ‘‘overtax’’ fuel use due to political and demographic differences with the US. While special interests charge debate over the merits of cutting supply-side taxes versus raising demand-side rates, tightening the definitions of and recognizing the interdependence between energy security, independence, and sustainability will help to realize economically, environmentally, and socially beneficial energy taxation policies. 4.2. Regulation Regulation represents a second means by which energy security, energy independence, and energy sustainability are promoted in the US. Federal and state mandates range from fuel efficiency and pollution standards to speed limits. Regulation attempts to address energy issues outside of the direct pricing structure to limit the negative impacts of energy use. Nevertheless, regulations can affect the price of energy by making the process of bringing it to end users more expensive. Although mandates may be aimed at symptoms of energy insecurity, dependence, and unsustainability, they can foster suboptimal solutions that only address these symptoms while exacerbating problems or inhibiting solutions to problems that do not impact the designated symptom. As with taxation, mandates are prone to being hijacked by special interests that exploit legal loopholes and erect expensive barriers to entry. Supply side regulation has been used to make more energy available in the US Regulatory mandates can promote technological development, as renewable portfolio standards have in a number of states by legislating minimum electricity market shares for renewable energy (Hughes, 2009, p. 2460). Over the short-term, oil supplies can be boosted by mandating advanced recovery in future and existing wells, and loosening environmental legislation that limits current oil and gas production and has hindered the development of oil and gas shale resources (Sovacool, 2007, p. 5510). Related proposals include lowering restrictions on exploration and production and opening up areas to oil and gas development that are currently off-limits—such as offshore portions of Southern California, the Atlantic Coast, and the Alaskan Arctic National Wildlife Refuge. Regulation to lower energy demand has a long history in the US and as fuel price and scarcity concerns came to the fore in the 1970s such mandates were a prime lever used by policymakers to wean the economy from oil. In conjunction with higher prices,

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programs like Corporate Average Fuel Economy (CAFE) standards for new cars and a lower, 55 mph, highway speed limit shrunk US oil consumption going into the 1980s (EIA, 2011). While lower speed limits have been abandoned, programs, like CAFE standards, have strengthened. The French and Canadian example of ‘‘feebates’’ – which balance fees levied on vehicles with fuel efficiencies below a certain level with rebates afforded to vehicles above that level – has been considered by both Californian and Federal policy makers as an alternative to CAFE standards and unpopular fuel taxes (Anderson et al., 2011, p. 102; Cohen and Lowe, 2010). Further suggestions have ranged from bolstering public transport infrastructure, incentivizing telecommuting, and promoting optimal tire inflation to mandating residential and industrial efficiency through building code adjustments (Sovacool, 2007, pp. 5508–5509). In attempting to mold human behavior directly and generically mandates and command-and-control regulations can be inefficiently restrictive. Unlike fiscal levers, mandates inhibit individuals and companies from making cost–benefit based decisions—their behavior is simply restricted. This is useful in cases where an absolute ban is desired but problematic where a high cost might be economically justifiable and a tax may offset social and environmental degradation while still allowing a private firm to realize profit.

4.3. Technological development While conservation mandates and energy taxation can dramatically lower energy consumption in the short-term, longer-term technological development arguably holds the greatest promise for the US and the world to achieve a more comfortable relationship with energy (Hughes, 2009, p. 2460; Parry and Anderson, 2005, p. 15). Technology can both expand supply and contract demand for energy, developing more efficient, cheaper, cleaner fuel extraction technologies while making the components and systems that deliver energy services more efficient. Yet technological development is uncertain in both its nature and timing (Moors, 2011, p. 41). Energy policy needs to be grounded in reality and open to technological change. Unforeseen breakthroughs in nuclear fusion over the next ten year may enable the production of vast amounts of cheap electricity, dramatically changing society’s relationship with energy, or we may simply be using a refined version of our current energy mix in a century’s time. While market forces will catalyze some of this development, the scale of problems confronting humanity may justify government involvement in promoting development. Furthermore, policymaking tools – taxation, subsidies, and regulation – and dangers – special interests, ignorance, and poor planning – remain constant. Theoretically technological development promotes energy sustainability, as new fuel sources couple with greater energy production and consumption efficiencies to prolong society’s ability to enjoy energy services into the future. Such advances also increase the elasticity of both supply and demand in the energy market (Greene et al., 1998, p. 65). Considering energy security, Bohi and Toman (1996, p. 123) note: ‘‘The only policy recommendation that would reduce OPEC market power without a serious drawback is government support for energy research and development that could lead to an increase in the price elasticity of world oil supply and demand.’’ As energy and fuel are global commodities, security, independence, and sustainability need to be enacted world-wide. Where it may be difficult to convince a foreign country to drop its subsidization regime or enact a regulatory mandate, over time cost-lowering technology will spread across the planet, however, the globalization of technology does risk temporarily foundering on protectionist measures.

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New technology can increase supplies and lower consumption, however, when they fail such new methods present greater uncertainty and can dramatically undercut economic, environmental, and social sustainability. This downside was witnessed in April, 2010 when the cutting edge Deepwater Horizon drill rig exploded, killing eleven workers (USA Today, 2010) and ultimately spilling an estimated 4.9 million barrels of oil into the Gulf of Mexico (Hoch, 2010). The Macondo Well being drilled was 5000 feet below sea level and the novel engineering and equipment that allowed BP to reach that depth lacked a sufficient back up safety system when crisis struck. Over three months a new well cap system had to be designed, fabricated, and put in place before the flow of oil could be staunched. This delay exacerbated the spill’s impact on the Gulf’s economy and environment while testing the social fabric of the communities dependent on the now polluted resource base (National Commission on the B.P. Deepwater Horizon spill and offshore Drilling.. 2011, Chapter 6). Much as deep and ultra-deep offshore drilling technology raises environmental risks while promising to unlock previously economically unrecoverable fossil fuel resources, the combination of hydraulic fracturing and horizontal drilling has dramatically increased America’s natural gas production and reserves through tapping shale formations while causing concern over its environmental impact. Fears center around the potential for ‘‘fracking’’ to pollute ground water (Osborna et al., 2011), release methane into the atmosphere (Howarth et al., 2011), and induce micro-seismic events. While proper well design and construction mitigate many of the risks associated with fracking, the volume of water demanded by the process and the subsequent treatment of that water concerns some researchers (Zoback et al., 2010; Cathles et al., 2012). Longer-term it seems that the extent of fracking production will be determined by the returns the technology brings on investment, which will be partially determined by how it is regulated. Even ostensibly ‘‘green’’ renewable technology development like biofuels has been criticized for compromising global food production (Tilman et al., 2009). Beyond simply securing greater fuel supplies or efficiencies the broader impacts of technological development need to be considered when formulating policy. Nevertheless, government programs to foster technological development tend to be fraught with problems linked to special interests and pet projects, often nurturing narrow political goals instead of addressing underlying energy issues. Stagliano (2001, p. 52) writes: ‘‘The link between federal R&D investments and the performance of the energy sector isytenuous at besty.Republican administrations increase DOE’s fossil fuel and nuclear budgets and, with some notable exceptions, reduce those for conservation and renewable energy. Democratic administrations reverse the order.’’ Moreover, there is a related inertia and lack of imagination in congressional energy policy. ‘‘Congress typically encourages the adoption of established technologies that aren’t economically viable without special incentives’’ (Griffin, 2009, p. 13). Thus programs like corn-based ethanol and coal-to-liquids technological development that enjoy political backing from agricultural and coal mining lobbies. Such groups leverage ‘‘energy security,’’ ‘‘energy independence,’’ and ‘‘energy sustainability’’ to rationalize continued support while more promising research ideas that are less well positioned politically are left unfunded. Despite their seemingly ingrained nature, US lobbies and interest groups are continually evolving. In addition to environmentally minded non-profit groups, myriad business interests recognize opportunities to gain from shifting energy policy priorities away from fossil fuels. Though still dwarfed by fossil fuel lobbying efforts, 1998–2009 saw alternative energy lobbying expenditures in the US increase from $2.4 million to $30 million

(LaRussa, 2010). With the US economy stagnating, energy technology represents a potential growth engine. While the Deepwater Horizon accident prompted calls to further regulate energy exploration, after temporarily dipping, US public opinion toward offshore energy exploration remained strongly favorable (Broder, 2011). Moreover, energy – both in the fossil fuel extraction industry and in high tech – is an employment issue, with government programs like ARPA-E promoting ‘‘out-of-the-box’’ basic research (ARPA-E, 2012). The energy lobbying space is occupied by both small clean tech start-ups and multi-billion dollar global corporations like Exxon innovating and monitoring developments in the energy field so as not to be left behind (Howell, 2009; Wells, 2012). While large oil and gas players are not leaving their traditional, lucrative niche, they are nevertheless seeking the public relations and financial rewards of diversifying into what is perceived as a more benevolent side of energy.

5. Conclusion The 2012 election cycle has clearly demonstrated that energy policy is a critical issue for the United States. The smooth operation of America’s economy depends on the predictable supply affordable of fuel. Moreover, the country’s relationship with energy must be geared to exist for the indefinite future. However, as these generally accepted truths are applied to specific policy programs and championed by interest-biased politicians, loose terminology is manipulated and the holistic impact of legislative acts subordinated to the wishes of the most convincing parties involved in negotiations. Energy security, independence, and sustainability cannot be cleanly bound. While maximizing oil production or nuclear power generation may arguably make financial sense, such actions can undercut aggregate human well-being through pollution or industrial accidents. Market focused actors speak with loud, clear, and coordinated voices, but often focus on direct economic impacts to the exclusion of a policy’s blurry, indirect effects on broader public welfare. Timney, 2004, p. 107) notes: ‘‘The market cannot care about social equity or environmental costs so long as it must focus on the profit imperative. Any requirement to internalize these costs will reduce profits.’’ Constructing an energy policy that reflects the total costs and benefits of energy production and consumption demands an overhaul of the legislative process to account for public goods and impacts over a time scale that is orders of magnitude longer than US electoral cycles. While a sea change in policy creation is unlikely in the foreseeable future, impeded by the very forces it would disempower, there is nonetheless scope for improving the energy policymaking process—starting with recognizing the immediate problems society faces that are related to energy use. This paper argues that the combination of complex technological development, convoluted financing arrangements, and massive scale alongside well organized interest groups makes energy policy creation in the US especially prone to being manipulated with the details of debate becoming confused and participation being limited to specialists. Moreover, the imprecise language surrounding energy – including terms like security, independence, and sustainability – provides a vehicle for particular groups to leverage policy outcomes. The domestic electoral appeal of US energy self-sufficiency or ‘‘Superpowerhood’’ should be tempered by a realistic assessment of the range of potential energy outcomes the country faces. This paper helps to illuminate present and past energy legislation while offering insight into how future energy policy discussions can be made more participatory and solutions geared toward broader, more diffuse interests. This analysis also serves as a basis for future research into

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the politicization of terms like ‘‘green’’, ‘‘liberal’’, and ‘‘conservative’’ within political dialogue both in the US and elsewhere. Ultimately, energy policy will benefit from greater public participation in and understanding of policymaking debates which will allow broader interests to impact the process. Unpacking interestdriven and emotion-laden terms like energy security, energy independence, and energy sustainability represents a first step toward forming and enacting better, more inclusive energy policy.

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