Americans are thinking more about energy. We’re facing higher prices. There’s worry about climate change, and there are questions about whether our need for foreign oil is forcing the country into wars in the Middle East. Even former oilman President Bush says we have to kick our addiction to oil, but what’s the government doing about it? Stephanie Hemphill looks at our national energy policy and its priorities:
Americans are thinking about energy more. We’re facing higher energy prices, there’s worry about climate change, and there are questions about whether our need for foreign oil is forcing the country into wars in the Middle East. Even former oilman President Bush says we have to kick our addiction to oil, but what’s the government doing about it? Stephanie Hemphill looks at our national energy policy and its priorities:
This winter, a handful of people around the country won’t have to worry about oil or gas prices. Jamie Juenemann is one of them. He lives out in the country in northern Minnesota, and he’s installed his own energy plant.
Behind the house, there’s a pole reaching above the trees. At the top, a modern windmill turns as it catches the wind. There’s also a solar hot water heater, and a geothermal heat pump, that brings underground heat into the house.
“This was the final phase in our goal to become carbon neutral; essentially producing as much energy as we’re consuming.”
Carbon neutral means not using fossil fuels that emit carbon dioxide, believed to be a greenhouse gas, and warming the planet.
Of course these systems aren’t cheap. Juenemann took out a second mortgage to pay for them. It was a big decision, but he says he’s doing what he can to make sure his young daughters will inherit a livable world.
“It’s all about choices. We have the choice to either purchase a Chevy Suburban, or we can use that same outlay, that same expense and put in some renewable energy systems.”
Eventually these systems will pay for themselves, and the Juenemann family will have free hot water, electricity, and heat.
The government helps pay for some of these systems; as much as three-quarters of the cost can be covered by tax-breaks and rebates. The trouble is one of the major federal subsidies ends next year, and others are limited to the first few buyers in a fiscal year. Businesses that sell renewable energy systems say that on-again, off-again subsidy approach by the government makes it difficult to stay in business to provide the alternative systems.
Politicians have been sending mixed messages about energy. Last year’s energy bill offered subsidies for nearly every energy source, without sending a clear message favoring one over another. Congress even offered subsidies for fossil fuels.
And that makes sense to John Felmy. He’s chief economist at the American Petroleum Institute. He says the country depends on traditional sources — including the 40% of our total energy budget that comes from oil. He says the government should subsidize exploration and research on fossil fuels.
“You have to say where can you get the biggest impact from encouraging additional supplies, and those numbers of 40% clearly dwarf what you have from the alternatives.”
He says to keep the economy strong, the government should make it easier to drill for oil and gas, and to bring energy to where it’s needed.
Another government approach to the challenge of energy is to reduce the demand. Some groups predict conservation could cut energy needs as much as thirty percent.
J. Drake Hamilton is a scientist with Fresh Energy, a non-profit organization. She says conservation is cheaper and cleaner than producing more energy.
“Every time you cut energy use, you cut pollution. Every time you increase it, you increase pollution.”
And some people regard pollution as a hidden cost of traditional fuels. They say if consumers directly paid for the environmental and health costs of burning coal and oil and gas, the prices would be a lot higher. Economists call these “external costs,” and they argue over how to set a price on them.
Environmentalists say we should start charging an extra tax on fossil fuels because they contribute to global warming. At the same time, we could reduce the income tax, so the shift would be revenue-neutral, but the idea is still likely to be politically unpopular. A higher tax on fossil fuels would mean higher prices, which would make renewable energy systems more competitive.
There’s nothing new about taxing things that are bad for us, and subsidizing things that are good. But so far, when it comes to energy, Congress hasn’t been able to agree on what to discourage, and what to encourage.
For The Environment Report, I’m Stephanie Hemphill.