The Direction of U.S. Energy Policy

  • Jamie Juenemann invested in equipment to produce energy at his home in northern Minnesota. He says the government should offer more consistent incentives for renewable energy. (Photo by Stephanie Hemphill)

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:

Transcript

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.

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Reining in Diesel Exhaust

  • The EPA is planning to regulate smoke from diesel engines in farm and construction equipment. Photo courtesy of NESCAUM.

You see them every time you pass a construction site: big machines belching thick diesel smoke. The smoke isn’t just annoying. It causes major health and environmental problems. Now, after years of dealing with other issues, the EPA is taking on this major source of uncontrolled pollution: emissions from farm and construction equipment. The Great Lakes Radio Consortium’s Julie Halpert looks at the challenges the EPA faces in this far-reaching regulatory effort:

Transcript

You see them every time you pass a construction site. Big machines belching thick diesel smoke. The smoke isn’t just annoying. It causes major health and environmental problems. Now, after years of dealing with other issues, the EPA is taking on this major source of uncontrolled pollution: emissions from farm and construction equipment. The Great Lakes Radio Consortium’s Julie Halpert looks at the challenges EPA faces in this far-reaching regulatory effort.


Emissions from diesel engines create problems for both the environment and people’s health. Diesels release nitrogen oxides, which are a factor in acid rain and smog. They also spew very fine particulates that can lodge deep in the lung when inhaled. And that causes respiratory problems.


Controlling these emissions is no easy task. That’s because most diesel engines still burn fuel containing high amounts of sulfur. The sulfur clogs up existing pollution control devices. And that makes it a lot tougher to come up with ways to reduce emissions. But Christopher Grundler, deputy director of the EPA’s Office of Transportation and Air Quality in Ann Arbor, Michigan, says its an important challenge.


“In the year 2007 we estimate that off road or non-road emissions will make up over 40% of the air pollution from mobile sources or transportation sources, so it’s a big deal.”


In tackling air pollution, EPA’s first job was to clean up gasoline car emissions. Now its moving onto diesels. The agency’s first challenge came when they issued a rule for highway trucks last year. That plan drops sulfur content in diesel fuel from 500 parts per million to 15 parts per million. It also reduces overall diesel emissions by 90% by the year 2007. The EPA now wants to use this rule as a model for farm and construction equipment as well. But the agency is likely to face opposition from refiners, who are fighting the on road rule. Jim Williams is with the American Petroleum Institute.


“We feel that the ability of the refining industry to make sufficient volumes of 15 ppm in the timeframe that EPA wants us to is highly questionable, whether we can do that. We’ve done some studies that show there will be supply shortfalls with the 15-ppm limit.”


Williams is pushing to phase in the requirement over a longer period. He says that would give refiners more time to produce the necessary quantities of low sulfur fuel. Until then, refiners also want to continue providing high sulfur fuel.


But Engine Manufacturers don’t like that idea. They’ve agreed to support tough standards only if the switchover to low sulfur fuel happens quickly. Jed Mandel runs the Engine Manufacturers Association. He’s worried that if cheaper, low sulfur fuel remains abundant; users could continue relying on the dirtier fuel.


“If there are dual fuels available — if there’s cleaner fuel on the marketplace for some time, as well as higher sulfur dirtier fuel, and there’s a price differential in that fuel, there will be a disincentive for users to buy the cleanest engines.”


Mandel says that could cause a delay in purchasing these engines for several years.


Like Mandel, Jason Grumet, executive director of the Northeast States for Coordinated Air Use Management, also wants tight standards. Northeast states, plagued with acid rain and smog caused largely by these diesels, are pushing the EPA to develop the tightest standards possible to meet clean air goals and also to better protect equipment operators.


“The particles from diesel emissions can lodge very deep within the human lung and we know that these particles are carcinogens, so for folks who work with construction equipment every day or on construction sites, for people who farm or plow fields for several hours a day, we think that the emissions of diesel pollutants cause a very substantial and real threat to their health.”


(sound of tractor)


Herb Smith isn’t worried about his health. Smith hops off his tractor and stands on the land that his family has farmed in Ida Township, Michigan since 1865. Despite years of inhaling diesel fumes, Smith said he’s in perfect physical condition. Though he supports regulations to control diesel emissions, he’s worried that the EPA will place undue hardship on farmers.


“I am concerned about fuel costs because our margin in farming is very slim and anything we add to fuel costs, we have to absorb it.”


Smith fears that some of the smaller farmers may not be able to bear higher fuel and engine costs and could go out of business.


Despite the many different viewpoints on the issue, EPA’s Grundler is confident that his agency can develop a rule that will bring tremendous public health benefits at a reasonable cost.


“We’ve shown we can do it for cars and SUVs. We’ve shown it can be done for heavy duty on highway engines. I’m absolutely certain it can be done for these sorts of engines as well.”


The agency expects to issue a technical report outlining emission control options by the end of the year. A proposal is due by the middle of next year. For The Great Lakes Radio Consortium, I’m Julie Halpert.