Energy is the economic lifeblood of all economies. It is an essential gear for the economies of the developed world, and of ever growing importance to developing nations. It is of concern to the largest of nations as well as the smallest. And it is as great a concern of local governments as national ones.
Government action or inaction at all levels in energy policy has varied tremendously. Prior to 1930, involvement in energy issues at all levels of government was minimal in the United States because of relatively moderate demand for energy consuming technology, and an abundant and relatively cheap supply of fossil fuels. The government's approach to energy changed with the Depression and the New Deal. The United States began to subsidize energy by building hydroelectric stations (the Tennessee Valley Authority), supporting rural electrification, and subsidizing of nuclear research. Much of the developing world, as well as the Soviet Union, began subsidizing energy early in the twentieth century as a means to buy votes and strengthen political support. Because of World War II, the strategic role of energy to economic growth and national security became much more apparent. Almost all governments began to take a more active role in energy markets as world energy consumption accelerated, as spending was boosted on all aspects of the energy puzzle—exploration, production, distribution, consumption, and the energy statistics to track all of the above.
Traditionally, the developed world has paid the greatest attention to petroleum (reserves, resources, security, price), and devoted the most resources to nuclear energy research (both fission and fusion), a source that proponents in the 1950s believed would someday turn out to be "too cheap to meter." Planning, funding, and development of renewables and other energy resources has fluctuated much more wildly through the years, usually inversely to the real and perceived availability of oil. During and following an oil crisis, where there is great supply uncertainty and prices skyrocket, planning, funding and development grow, and correspondingly decrease when oil supplies are more secure and stable.
The pooling of resources to meet shared objectives have been the factor most responsible for the establishment and growth of international agencies concerned with energy issues. The three most important issues bringing about cooperation have been the need to coordinate production, the pooling of resources for research and development of energy technology, and the coordinating of activities to secure supply.
Organization of Petroleum Exporting Countries (OPEC)
The OPEC cartel was founded by Iraq, Iran, Saudia Arabia, Kuwait, and Venezuela in September 1960 as a way to coordinate petroleum production and pricing among member countries. It was not until the 1970s that the cartel tried to become an effective monopoly.
As of 2000, membership has expanded to thirteen, accounting for over 60 percent of all production. The reserves controlled by Member Countries were much higher in the 1970s, and consequently so was the cartel's monopoly power in controlling prices. But because of exploration discoveries, advances in technology (enhanced recovery of existing wells, improved offshore equipment), and the lack of cooperation from non-OPEC producers, the power of the cartel to control oil production and prices has steadily diminished. During the 1970s, an announcement of an OPEC meeting would be the major news story of the day, but by the 1990s, low oil prices and a secure supply caused the media to only superficially cover OPEC meetings. As most economists predicted, the ability of the cartel to control the price of petroleum did not last long. There will always be an incentive for member states—especially the smaller producers—to "cheat" on their quotas, and the free market will always react swiftly to higher prices by pumping up other sources of oil production and securing other energy resources.
As OPEC's share of the world oil supply market continued to fall in the 1990s, they began taking steps to better coordinate production with non-OPEC producers such as Mexico and other members of the Independent Petroleum Exporting Countries (IPEC). By exchanging information, and undertaking joint studies of issues of common interest, the hope was to stabilize prices and improve the economic outlook for all oil producers. This collaboration between OPEC and major non-OPEC producers helped raise oil prices to over $27 a barrel in 1999 from a low of less than $13 in 1998.
International Energy Agency (IEA)
In response to the Arab embargo, and the attempt of OPEC to dictate the supply and price of petroleum, the Organization for Economic Cooperation and Development (OECD) established the International Energy Agency (IEA) in November 1974. IEA membership included all of Western Europe, Canada, the United States, Australia, New Zealand, and Japan. Besides compiling useful consumption and production statistics, its mandate was for cooperation and coordination of activities to secure an oil supply in times of supply disruption. IEA's first action to insulate member countries from the effects of supply disruptions was the Emergency Sharing System (ESS). This system was to be put into effect only in cases of serious disruptions, an actual or anticipated loss of 7 percent of expected supply. The System consisted of three parts: a building up of supplies, a reduction of consumption during periods of short supply, and a complex sharing system that would attempt to distribute the loss equitably. During the 1979–1981 oil supply disruption, the system was never really tested because the loss of supplies never reached a level to trigger the ESS. Nevertheless, because of the economic hardship felt by many nations during the 1979–1981 disruption, in 1984 the Coordinated Emergency Response Measures (CERM) was adopted. The CERM were intended as a means to reach rapid agreement on oil stockpile drawdown and demand restraint during oil supply disruptions of less than 7 percent. Because of ESS and CERM, and the agreement of other OPEC Member States to boost production, the supply disruption caused by the Iraqi occupation of Kuwait, and the subsequent United Nations embargo of all oil exports from Iraq and Kuwait, did not have such a large effect.
Twenty-five years after its establishment, the focus of the IEA has changed and expanded significantly. Whereas in 1974, the IEA looked at coal and nuclear energy as the two most promising alternatives to oil, the call for more environmentally acceptable energy sources has pushed to the forefront the development of renewable energy, other nonfossil fuel resources, and the more clean and efficient use of fossil fuels. To avoid duplication of effort and better research and development results, the IEA coordinates cooperation among members to more efficiently use resources, equipment, and research personnel.
United Nations (UN)
The United Nations officially came into existence at the end of World War II on October 24, 1945 to help stabilize international relations and better secure peace. Through the years, the UN has greatly expanded its mission to include other issues such as development and protecting the environment. Because energy is such a key piece of the development puzzle, in 1947 the UN established a statistics division that began tracking energy consumption and production throughout the world in 1992.
The divisions established to take an active role in energy and development issues were the United Nations Development Program (UNDP) and the Commission on Sustainable Development in 1993. Funded by voluntary contributions from member states, with funding directed toward countries with annual per-capita GNP of $750 or less, UNDP focuses on preventing unsustainable production and consumption patterns, and ways of curbing pollution and slowing the rate of resource degradation—economic growth with environmental protection and conservation. The burden of environmental protection is far greater for poorer nations because it diverts resources away from more pressing problems such as poverty, low levels of social development, inadequate energy infrastructure, and a lack of capital for infrastructure. Despite emissions of industrial countries dropping from 1980 to 2000, many emissions, most notably toxic substances, greenhouse gases, and waste volumes are continuing to increase in the developing world.
Global warming is another energy-related problem that the UN has attempted to address through its Intergovernmental Panel of Climate Change (IPCC). The IPCC was very successful in negotiating an agreement to solve the problem of chlorofluorocarbons (January 1987 Montreal Protocol on Substances That Deplete the Ozone Layer), yet the task of getting member countries to agree on carbon emission reductions to combat the perceived threat of global warming has proven to be a much more daunting task. The science is more uncertain, there are no easy solutions (the combustion that provides the majority of the world's energy needs always entails carbon emissions), and to achieve the cuts that climate modelers feel would be necessary to fully address the problem will require a complete restructuring of current civilization. Nevertheless, based on the work of the IPCC, the United Nations Framework Convention on Climate Change adopted the Kyoto Protocol on December 11, 1997, as a first step in the process. The Kyoto Protocol calls for most of the developed nations to reduce carbon emissions by 10 percent of 1990 levels by the year 2010. Most nations ratified the treaty despite no reduction commitments from the developing nations. The poorer nations strongly objected to universal emission reductions. They countered that energy drives development, and the exploitation of cheap and abundant energy, often at the expense of the poorer nations, is how the richer nations achieved their higher standard of living. Burdensome environmental regulations of energy would severely retard development; thus, the poorer nations feel it is only equitable that the richer nations, who created the majority of carbon emissions in the last 150 years, first make the effort to curtail emissions.
The Kyoto negotiations show the tremendous friction energy issues can cause between the richest and poorest countries in the world. Addressing future energy-related conflicts—whether it be wars over oil fields or disputes over carbon emission quotas—will remain a major role of the UN.
The International Atomic Energy Agency (IAEA)
To address the technology, waste, safety and security issues concerning nuclear energy, the UN established the International Atomic Energy Agency (IAEA) in 1957, a few years after U.S. President Dwight D. Eisenhower's famous "Atoms for Peace" speech before the United Nations General Assembly.
As the political, economic, and technological realities of the world evolved, so did IAEA. The scope of products, services, and programs of the IAEA has expanded well beyond its original function as the world's central intergovernmental forum for scientific and technical nuclear cooperation, and the watchdog for civilian nuclear power programs. In the 1990s, the IAEA helped countries carry out comparative cost effective assessments of how to expand electric power generation capacity such as the potential roles of renewable energy, and the different options and costs for reducing atmospheric and greenhouse gas emissions. They also conduct research and provide outreach through the Agency's laboratories. The IAEA tries to go beyond technology transfer and energy capacity building to help provide solutions to problems of sustainable human development.
International Institute for Applied Systems Analysis
Founded in 1972 by the United States, the Soviet Union, and ten other countries, the International Institute for Applied Systems Analysis is a research organization located in Laxenburg, Austria that conducts scientific studies in many energy-related areas of global consequences such as transboundary air pollution, sustainable forest resources, climate change, and environmentally compatable energy strategies.
Established in 1946, with a subscribed capital fund of $7.67 million, the primary mission of the World Bank is to combat poverty by securing low cost funding for sustainable development. The largest shareholder is the U.S., followed by the United Kingdom, Japan, Germany, and France.
Although the World Bank provides loans for a variety of purposes, energy-related infrastructure receives over 7 percent, which primarily goes toward electric power infrastructure (hydroelectric, fossil fuel, nuclear) but also oil and natural gas exploration, production and distribution. Other energy-related areas making up a considerable share of the World Bank's loan portfolio are the transportation and agricultural sector. Loans to improve the energy and logistic efficiency of the transportation sector account for 11 percent of funding, followed by 10 percent going toward agriculture to provide assistance in expanding the amount of food energy produced.
By 1999 the World Bank loan portfolio for the energy and mining sectors had grown to $4.1 billion. Its strategy for energy development is to reform and restructure markets to attract private investment to build energy infrastructure, and expand energy access to the rural and low-income populations, and promote an environmentally responsible energy supply and use. One priority is to get more of the 2 billion plus poor people access to modern energy for cooking and lighting. Without modern energy, the world's poor rely on wood, crop residues, and other biofuels that result in environmentally damaging deforestation. Deforestation is of interest to all nations because it is not only a habitat destroyer, but also contributes to the increasing concentrations of carbon dioxide, a gas long suspected of creating global warming.
The World Bank grants financing for fossil fuel electricity generation, yet finances only facilities that have advanced emission control equipment. And although the World Bank has never financed a nuclear power plant, a zero carbon emitter, it is very active in evaluating hydropower projects, helping to establish the World Commission on Large Dams. The World Bank also looks for energy efficiency improvement opportunities by pushing for the elimination of fossil fuel subsidies (estimated at over $200 billion a year in the developing world), improving demand-side efficiency, and making the energy supply system more cost conscious.
UNITED STATES AGENCIES
The focus of U.S. energy policy is with the Department of Energy, but because energy issues touch almost every sector of the economy, the Department of Commerce, the Department of Transportation, Department of Agriculture, Department of Defense, and the Environmental Protection Agency also devote a considerable amount of resources toward energy issues.
The Department of Energy (DOE)
The Department of Energy was established on June 3, 1977, unifying offices, laboratories, and staffs from other federal agencies (see Figure 1). Besides replacing and taking on all the responsibilities of the Federal Energy Administration, the Energy Research and Development Administration, and the Atomic Energy Commission, limited functions were transferred from the Departments of Agriculture, Commerce, Housing and Urban Development, and Transportation. The newly formed agency had around 20,000 employees and a budget of $10.4 billion.
Prior to the energy crisis of 1973, the federal government took a limited role in formulating a national energy policy. Markets operated freely, long-range planning was left up to the private sector, and oversight controlled by state, local, and regional authorities. Americans felt comfortable with private industry controlling production, distribution, marketing, and pricing. But in the case of natural monopolies, such as in the interstate transportation of natural gas and electricity, it was generally acknowledged that the Federal Power Commission (established in 1920) was necessary to ensure fair prices.
The regulatory agency that the DOE established for oversight of natural monopolies was the Federal Energy Regulatory Commission (FERC). The five-member commission was set up to control the regulation and licensing of hydroelectric power facilities, the regulation of the transmission and sale of electric power, the transportation and sale of natural gas, and the operation of natural gas and oil pipelines.
After the Oil Embargo, the Economic Regulatory Administration within DOE administered oil pricing, energy import programs, the importing and exporting of natural gas, programs to curtail natural gas consumption, and to supervise the conversion of electric power production from natural gas and oil to coal. These command and control programs continued through the Carter Administration, but ended early in the Reagan Administration, a strong free market advocate.
To provide long-term energy trends to the Department, President, Congress and the public, the DOE set up a statistics division called the Energy Information Administration. The federal government had been gathering and publishing energy statistics since 1949, but under the centralized control of the Energy Information Administration, the scope of data gathering expanded and continued to expand through the 1990s to encompass related areas of interest like carbon emissions.
During the Carter Administration, funding increased to pay for the greater focus on conserving energy, greater oil production including increasing the production of oil, natural gas and synthetic fuel from coal and shale oil reserves, and speeding the development and implementation of solar power. The Carter Administration took a very activist approach to energy policy, and believed that the United States could be getting 20 percent of its energy from the sun or other renewable energy sources by the year 2000. Toward this end, the Carter Administration pushed through Congress very generous subsidies for residential and commercial solar and wind installations.
The Reagan Administration (1981–1989) came in with a completely different vision of the federal role in the energy field. Reagan wanted to abolish the DOE, but with that being politically impossible, he set about restructuring it, letting private industry and the free marketplace set energy priorities. By ending government regulations and price controls, which were detrimental to domestic oil and natural gas production, he felt a free marketplace would prevent or limit the impact of future energy crises. And although Reagan reduced and eliminated subsidies for energy conservation and energy technologies like solar—preferring private capital to demonstrate commercial viability of technology—he continued to support long-term energy research and development, such as fusion, that private industry felt too risky to undertake. Despite these cutbacks, the DOE budget grew during the Reagan era mainly because of the emphasis on defense-related spending and the Strategic Defense Initiative designed to stop incoming nuclear warhead missiles.
The Bush Administration (1989–1993) had a similar free marketplace philosophy as Reagan, but faced the daunting task of having to start directing billions toward cleaning up after forty years of neglect at the contaminated weapons complex, particularly the federal facilities at Savannah River South Carolina, Hanford Washington, and Rocky Flats Colorado. The cleanup plan was fourfold: characterize and prioritize all waste cleanups at departmental sites, confine and correct immediate problems, establish long-term cleanup plans, and mandate compliance with all applicable laws. By the end of the Bush Administration, environmental management of defense-related nuclear waste consumed nearly a third of the budget, which reflected the dauntingly difficult and expensive nature of the cleanup.
Perhaps the most noteworthy energy-related accomplishment of the Bush Administration was the handling of the Persian Gulf Crisis of 1970 and the January 15, 1991 Operation Desert Storm—a military action that many categorized as an energy war. Because Iraqi and Kuwaiti production constituted around 4.3 million barrels per day, or 9 percent of the world total, the role of the DOE during the crisis was to reassure the public and press about oil issues, improve energy coordination with other countries primarily through the IEA, and promote energy conservation and increase energy production. Rapidly rising spot market prices for crude oil as well as gasoline prices did occur, but because of these efforts, along with the short duration of the crisis, the impact on world economies was minimized.
The Clinton Administration (1993–2000) that followed was far more inclined to embrace environmental activism than Reagan or Bush, and far more likely to propose command and control solutions to energy and environmental problems. However, the Clinton Administration also realized the need to allow markets to work, to do otherwise would result in some of the disastrous consequences of intervention policies used in the 1970s.
To pay for boosted spending for conservation grants, energy research and development, and spending on defense waste management, the Administration dramatically cut defense research and development. Many energy policy decisions of the Administration were directly linked to the quality and health of the environment. And unlike the Reagan and Bush Administrations that remained skeptical of global warming, the Clinton Administration made action on the global warming threat a priority. On the first Earth Day of the Administration, Clinton promised to stabilize greenhouse gas emissions at 1990 levels by the year 2000, an extremely ambitious goal. The method proposed was the Btu tax, a 25.7 cents per million Btus tax (4 %) on all forms of energy except solar, geothermal, and wind, and an additional 34.2 cents per million Btus tax for gasoline (4 cents a gallon) and other refined petroleum products. Although projected to reduce emissions by 25 million metric tons, the proposal was rejected by Congress primarily because it was widely viewed as a tax increase to finance increased social program spending. In December 1997, the Clinton Administration signed the Kyoto Protocol calling for dramatic carbon emission reductions, but never sent it to the Senate for ratification because of certain defeat. Almost all Senators felt there should be future carbon emission targets for the developing world, and the inequity of the cuts would give an unfair competitive advantage to the developing economies of the world, such as China, that did not agree to emission reductions.
By the end of the Clinton Administration in 2000, the budget for the agency had nearly doubled, and the number of employees exceeded 170,000, a figure that includes all those employed at DOE's national laboratories, cleanup sites, and other facilities. Despite organizational reshuffling and shifts in funding, much of the DOE mission—energy security, developing new energy sources, and collecting statistics about energy production and consumption—remains the same. The 1997 Budget allocated 38 percent toward nuclear security, followed by nuclear cleanup at 36 percent, basic science 15 percent, and energy subsidies 11 percent. Many critics feel the $6 billion spent annually for nuclear cleanup of DOE facilities is extremely wasteful. Instead of trying to return these sites to pristine conditions, critic feel DOE should renegotiate the cleanup plan with the EPA, and state and local authorities so that the emphasis can be shifted toward containment and neutralization of waste.
As the DOE moves into the twenty-first century, the Department faces significant challenges in defining a mission to warrant its generous funding. As long as fossil fuel supplies remain cheap and abundant, and the public remains skeptical of global warming, there will remain a desire to cut funding.
The Environmental Protection Agency (EPA)
To consolidate the environmental protection activities of the federal government, the Environmental Protection Agency was formed on December 2, 1970 from three federal Departments, three Administrations, three Bureaus, and several other offices. The mission of EPA was to collect data on pollution, conduct research on the adverse effects of pollution, and through grants and technical assistance, develop methods for controlling it.
Much of the EPA's regulatory activity centers around the energy business, and in many ways, its actions have a greater impact on altering production and consumption patterns in the energy sector than the DOE's actions. Oil drilling, production, transportation (pipelines and tankers), and refining are all heavily regulated segments of the energy sector. Refining, in particular, is subjected to periodic EPA audits for hazardous waste by-products and airborne emissions released during the refining process. The stringency of EPA refinery regulations, and the uncertainty about future regulations, partly explains why the industry has not built any new major refineries in the United States since the mid-1970s.
Power plant and auto emissions are two other energy areas touched by EPA regulations. These are regulated through the Clean Air Act of 1970, and the amendments in 1977 and 1990 that set guidelines for acceptable emission levels. The Clean Air Act has been widely praised for improving air quality, significantly lowering emissions of sulfur dioxide, nitrous oxide, and other particulate matter. However, most economists feel that the benefits from the EPA administered safety investments (including nonenergy aspects) are far less cost effective than the safety investments of other regulatory agencies (see Table 1).
The 1990 amendments, which gave the Agency broad new power to revise Clean Air standards if EPA felt the results of studies warranted changes, has been particularly troublesome for the energy sector. Much of the EPA's air standard actions taken during the 1990s came under intense criticism for not being warranted by science. In particular, the EPA severely toughened new Clean Air particulate matter standards for power plant emissions in 1996, claiming it would save 15,000 lives a year, and reduce hospital admissions and respiratory illness. This was followed, in 1999, by a new lower sulfur content gasoline standard for refiners (effective in 2004) that will add 2 to 6 cents to the price of a gallon of gasoline. The EPA claims an additional 2,400 deaths will be prevented every year from this new standard. It was impossible to dispute the merits of either new standard because the EPA prevented public review of the data upon which these regulations are based (the "Pope" study) as required by the Freedom of Information Act (taxpayer-funded scientific data used to support federal regulations must be made available). Without access
|Regulatory Agency||Median Cost/Life-Year Saved|
|Federal Aviation Administration||$23,000|
|Consumer Product Safety Commission||$68,000|
|National Highway Traffic Safety Administration||$78,000|
|Occupational Safety and Health Administration||$88,000|
|Environmental Protection Agency||$7,629,000|
to the data, there can be no confirmation that the new standards will save any lives.
On the nuclear energy front, the EPA was instrumental in the late 1980s for bringing DOE nuclear facilities into compliance with the Nuclear Waste Policy Act of 1982 and 1987 (high-level radioactive wastes), the Low-Level Radioactive Waste Policy Act of 1980 and 1985, the Uranium Mill Tailings Radiation Control Act of 1978, and the Superfund statute. The most egregious sites needing cleanup are the nuclear weapons production sites located at Savannah River South Carolina, Rocky Flats Colorado, and Hanford Washington, that are all going to take decades to cleanup and cost billions of dollars. The EPA action at these DOE sites was touted as a sign that the federal government can police itself, and that the environmental laws that apply in the private sector apply equally to the public sector.
To combat the dangers of global warming by reducing carbon emissions, the Clinton Administration formed the Climate Protection Division (CPD), formerly the Atmospheric Pollution Prevention Division. This Division has been directed to find nonregulatory ways to reduce greenhouse gases through energy-efficiency improvements in all sectors of the economy. In collaboration with DOE, the EPA established the Energy Star Labeling Program as a way to develop voluntary energy-efficiency specifications for products such as office equipment, heating and cooling equipment, residential appliances, and computers. This Program allows manufacturers to prominently place an Energy Star label on qualifying products. The hope is for consumers to learn to recognize the label as the symbol for energy-efficiency, and become accustomed to buying only energy efficient products with the Energy Star label.
The Department of Commerce (DOC)
The commercial and industrial sectors account for more than fifty percent of all energy consumption in the United States. The Department of Commerce (DOC), whose mission is to improve the overall competitiveness of the commercial and industrial sector, is very concerned with reducing consumption through conservation and energy efficiency, and in improving the competitiveness of the energy businesses on the production issues.
On the energy use side, the DOC helps promote the DOE and the EPA energy efficiency programs (Energy Star) for the industrial and commercial sectors of the economy. To aid the energy businesses on the production side, the International Trade Administration and the Office of Energy, Infrastructure and Machinery assist all the energy fuel industries in improving their market competiveness and ability to participate in international trade. One of the more aggressive actions of the Department under the Clinton Administration was to sponsor trade missions to promote the export of U.S. electric power production technology.
Another major function of the DOC is the management of energy-related research through the National Institute of Standards and Technologies Laboratories in Gaithersburg, Maryland and Boulder, Colorado and the research laboratories of the National Oceanic and Atmospheric Administration.
The National Institute of Standards and Technology (NIST), formerly the National Bureau of Standards (NBS), was established by Congress in 1901. Its mission is to assist industry in the development of technology needed to improve product quality, to modernize manufacturing processes, to ensureproduct reliability, and to facilitate rapid commercialization of products based on new scientific discoveries. For example, it provides measurements that support the nations' standards for lighting and electric power usage. In 1988, NIST added three major new programs to its measurement andstandards laboratories: The Advanced Technology Program (ATP) which in partnership with industry accelerates innovative, enabling technologies with strong potential to deliver large payoff for the nation; the Manufacturing Extension Partnership (MEP), a network of local centers offering technical and business assistance to smaller manufacturers; and the Malcomb Baldridge National Quality Award that recognizes business performance excellence. Programs the ATP is funding in the energy arena include the development of rapid thermal processing to produce low-cost solar cells with Solarex (a business unit of Amoco/Enron Solar), and ultrathin silicon ribbon for high-efficiency solar cells with Evergreen Solar, Inc.
The Office of Oceanic and Atmospheric Research (OAR) is the division of NOAA that conducts and directs oceanic and atmospheric research. Since carbon dioxide is a greenhouse gas and fossil fuels are the leading generator of carbon dioxide, the work of the twelve Environmental Research Laboratories and eleven Joint Institutes of OAR to describe, monitor, and assess climate trends are of great interest to all parties interested in the affect of energy use on climate change.
The Department of the Interior
The Department of the Interior is the home of the Bureau of Land Management, the Minerals Management Service, the Office of Surface Mining Reclamation and Enforcement, and the U.S Geological Survey (USGS).
The Bureau of Land Management is responsible for the leasing of land for coal, oil, and natural gas exploration and production, and the Minerals Management Service does likewise for offshore leasing. Both divisions rely on resource evaluation information provided by the USGS in negotiating leases. The main responsibilities are the inspection and enforcement of leases, and the collection of royalty payments and other revenues due the Federal Government from the leasing and extraction of energy resources. Besides providing the statistics for the other Department of the Interior divisions, the USGS compiles databases and geologic maps of energy reserves and resources.
The mining industry has taken great steps in limiting environmental problems in developing energy resources, yet much of the mining industry prior to the 1980s abandoned sites leaving huge environmental problems. The Office of Surface Mining Reclamation and Enforcement was established to formulate policy and working plans for the Abandoned Mine Land reclamation programs. This was necessary because the Department cannot sue many of the offending mining companies for cleanup costs because most no longer exist.
The Department of Agriculture (USDA)
Energy issues are a major, yet indirect, focus of the Department of Agriculture (USDA). Energy is involved in every step of agriculture: it takes energy to produce the inputs of nitrogen, phosphate, seeds and pest/weed control, energy to run the machinery to plant, maintain, harvest and process crops, and energy to transport crops by truck, train, barge and container ships. And the even the end result, food itself, is essentially energy. Food is as essential to humans as gasoline is to the automobile.
The USDA has an inherent conflict of interest: promote eating more dairy products and meats to relieve agriculture surpluses, while promote good eating with the ubiquitous USDA Food Pyramid. Out of a budget of over $65 billion in 2000, about two-thirds of the USDA budget goes toward nutritional programs and social programs for the poor, such as food stamps, to ensure that all Americans can afford an ample supply of food energy. For the middle and upper class of society, food prices are artificially low because of the subsidies to producers. An overabundance of food, that is more affordable to more of the population than ever before, has turned the United States into an equal opportunity obesity society. Over 20 percent of the population is obese (over 50 percent overweight), and obesity can be found in large percentages at all income levels. This is unlike most of the world where obesity is far less prevalent and mostly found among the affluent.
Another function of the USDA is the promotion of biofuels like ethanol as an important market for the nation's farm products. Ethanol is an alcohol fuel produced from corn and is blended with gasoline to enhance octane and reduce automobile emissions of pollutants. From 1980 through 2000, ethanol producers have received a subsidy of nearly $10 billion. To prop up the price of corn and help the ethanol industry, in 1986 the USDA Office of Energy started to give away free corn for all ethanol producers, which was extended to even the very largest and most profitable ethanol producers like Archer Daniels Midland Corporation. These huge subsidies are very controversial. Proponents claim ethanol as a fuel provides an additional market for corn farmers, and also claim the fuel is better for the environment and helps reduce imports of foreign oil. Critics counter that the energy content of ethanol is one-third that of gasoline. Moreover, the DOE and Congressional Research Service found it was not better for the environment, and would retail at a price much higher than gasoline if not for the heavy subsidies. And because it takes considerable energy to convert corn to ethanol, there can be a net loss in energy in producing ethanol (a gallon of ethanol contains around 76,000 British Thermal Units (Btus) of energy and estimates of the energy to produce that gallon range from around 60,000 to 90,000 Btus).
Another biofuel of importance is wood. The Forest Service, which is part of USDA, administers national forest lands for the sale of wood for wood fuel. Besides determining the quantity of wood fuel to bring to market by collecting and analyzing statistics on woody biomass supply and use, the Forest Service sponsors forest biomass energy-related research in conjunction with federal and state agencies, as well as universities.
The Department of Transportation (DOT)
Because every means of transportation requires energy for propulsion, how energy is used in transportation is something that is carefully tracked by the Office of Transportation Policy Development within the Department of Transportation (DOT). The transportation sector felt the greatest impact from the oil supply disruptions in the 1970s because it was, and continues to be, the sector most dependent on oil. It is also the sector with the least flexibility to switch fuels. (see also Consumption)
National Aeronautic and Space Administration (NASA)
The National Aeronautic and Space Administration is involved in every aspect of atmospheric and space science. Because of the special energy requirements of spacecraft and satellites, NASA has been the proving grounds for many emerging energy technologies such as fuel cells and photovoltaics. In the area of transportation, the Jet Propulsion Laboratory in Pasadena California is a leading center for bettering jet and rocket engines and developing new technologies such as ion propulsion. NASA is also responsible for building, launching, and collecting the data from satellites trying to detect global warming.
The Department of Defense (DOD)
The DOD consumes more energy than most nations of the world, and four times more energy than all the other federal agencies combined. The DOD took an interest in energy long before there was an energy crisis. Energy in the form of petroleum is what fuels military technology, and almost every military strategy involves, directly or indirectly, energy. The DOD is not only interested in the logistics of petroleum planning (through the Defense Fuel Supply Center), but also in developing an array of nontraditional energy technologies, everything from better nuclear propulsion for ships and submarines to solar photovoltaic applications and battery technologies to power mobile communication technologies.
The Nuclear Regulatory Commission (NRC) is an independent federal agency that licenses and decommissions commercial nuclear power plants and other nuclear facilities. NRC inspections and investigations are designed to assure compliance with the Agency's regulations, most notably the construction and operation of facilities, the management of high-level and low-level nuclear wastes, radiation control in mining, and the packaging of radioactive wastes for transportation.
STATE AND LOCAL AGENCIES
Almost every state in the nation has an energy policy and planning agency charged with ensuring a reliable and affordable energy supply. Duties of these agencies include forecasting future energy needs, siting and licensing power plants, promoting energy efficiency, and planning for energy emergencies. Instead of leaving all energy decisions entirely up to the free market, many states actively promote changes in production and consumption. Faced with some of the worst air quality problems, the California Energy Commission is one of the most active state agencies in implementing demand side management and market transformation strategies.
In an effort to coordinate policy, exchange information, and to convey to the federal government the specific energy priorities and concerns of the states, the state agencies formed the National Association of State Energy Officials (NASEO) in 1986. To better ensure that appropriate policy was being implemented, NASEO set up the Association of Energy Research and Technology Transfer Institute to track the successes and failures of different programs.
Because the federal government has taken a more hands-off approach toward energy since the 1970s, this trend of state and local governments becoming more active in making energy and environmental decisions about electricity production and transportation issues is likely to continue, especially for the more populace areas of the country like California and the Northeast.
See also: Agriculture; Air Pollution; Biofuels; Climatic Effects; Culture and Energy Usage; Demand-Side Management; Emission Control, Power Plant; Emission Control, Vehicle; Geography and Energy Use; Government and the Energy Marketplace; Market Transformation; Military Energy Use, Historical Aspects of; National Energy Laboratories; Nuclear Waste; Propulsion; Spacecraft Energy Systems.
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