President Bush signed the Energy Independence and Security Act of 2007 into law on December 19th, thereby mandating a 40% increase in fuel economy by 2020. The act requires the Department of Transportation to set tougher fuel economy standards, starting with model year 2011, until the standards achieve a combined average fuel economy for model year 2020 of at least 35 miles per gallon (mpg).
The standards apply to the total fleet of passenger and non-passenger automobiles manufactured for sale in the United States for that model year, up to a gross vehicle weight of 10,000 pounds. Currently, passenger automobiles must achieve an average of 27.5 mpg, while “light trucks”—a category that includes pickup trucks, sport utility vehicles, and minivans—must achieve 22.5 mpg, bringing the average for cars and light trucks to about 25 mpg. The Alliance to Save Energy (ASE) estimates that the improved fuel economy standards will reduce U.S. oil consumption by 1.1 million barrels per day by 2020, saving consumers $22 billion per year. See the White House press release and fact sheet and the ASE press release.
Starting in model year 2015, the new act starts to phase out the automakers’ credit for manufacturing flex-fueled automobiles, which can run on gasoline or an alternative fuel (usually the ethanol-rich E85). The credit is phased out completely by model year 2020, placing additional pressure on automakers to improve fuel economy. To help consumers maximize their fuel economy, the act requires the U.S. Environmental Protection Agency (EPA) to create rules for a national labeling system for tires to show their impact on fuel economy. For federal fleets, the act prohibits agencies from purchasing light-duty vehicles or medium-duty passenger vehicles that do not achieve low greenhouse gas emissions, and it requires new regulations to cut the petroleum consumption of federal fleets by 20% by 2015, while boosting alternative fuel consumption by 10%. The act also calls for studies by the National Academy of Sciences on the technologies available to meet the new standards and on the possibility of increasing the fuel economy of medium- and heavy-duty trucks. In addition, the act establishes incentives and loan guarantees for advanced vehicle technologies, but those measures will depend on future appropriations of funds. See Title I of the new energy act on the Library of Congress Web site.
As noted by ASE, the new fuel economy standards will reduce greenhouse gas emissions by an amount equivalent to removing 28 million of today’s cars from the road. A separate requirement to boost renewable fuel use will also lower greenhouse gas emissions. Given these national regulations, the EPA decided on December 19th to deny a request for a Clean Air Act waiver that would have allowed California to set its own greenhouse gas emission limits for vehicles. See the EPA press release and related fact sheet.
Renewable Fuel Standards Increased and Extended by Energy Act
The Energy Independence and Security Act of 2007, signed into law on December 19th, boosts the requirements for renewable fuel use to 36 billion gallons by 2022. The act requires “advanced biofuels”—defined as fuels that cut greenhouse gas emissions by at least 50%—to provide 21 billion gallons of fuel by 2022, or about 60% of the total requirement. Such advanced biofuels could include ethanol derived from cellulosic biomass—such as wood waste, grasses, and agricultural wastes—as well as biodiesel, butanol, and other fuels. Previously, a national Renewable Fuels Standard (RFS) set by the Energy Policy Act of 2005 required 4.7 billion gallons of renewable fuels in 2007, which would have increased to 5.4 billion gallons in 2008 and to 7.5 billion gallons by 2012.
The new RFS requires 9 billion gallons of renewable fuels in 2008, increasing steadily to 15.2 billion gallons in 2012 and to 36 billion gallons in 2022. The act requires advanced biofuels to contribute 0.6 billion gallons in 2009 and steadily accelerates their contribution into the future, reaching 2 billion gallons in 2012, 5.5 billion gallons in 2015, 11 billion gallons in 2018, 15 billion gallons in 2020, and 21 billion gallons in 2022. Of that total, cellulosic biofuels must contribute at least 0.1 billion gallons in 2010, accelerating to 10 billion gallons in 2020 and 16 billion gallons in 2022. In addition, biodiesel must contribute 0.5 billion gallons in 2009, increasing to 1 billion gallons in 2012. The new act gives the U.S. Environmental Protection Agency one year to revise the RFS regulations to include the new standards. See Title II of the new energy act on the Library of Congress Web site, and for comparison, see the Renewable Fuel Association’s summary of the previous standard.
Title II of the energy act also prohibits petroleum companies from restricting the sale of alternative fuels under new franchise agreements, a provision that could allow gas station owners to install more pumps for E85, a blend of 85% ethanol and 15% gasoline. The act also requires labeling diesel fuel pumps with their biodiesel content. For federal fleets, the act requires at least one renewable fuel pump at each fueling center, with few exceptions. The act also calls for a host of studies on biofuel infrastructure and delivery issues, and creates grant programs and research programs for biofuels that will depend on future appropriations.
Energy Act Creates New Energy Efficiency Standards
The Energy Independence and Security Act of 2007, signed into law on December 19th, phases out the use of inefficient incandescent lights and imposes improved energy efficiency standards on a wide variety of products. According to the American Council for an Energy-Efficient Economy (ACEEE), the new standards for light bulbs require them to use about 20%-30% less energy by 2014, while requiring DOE to set standards for light bulbs to cut their energy use at least 35% by 2020. The ACEEE notes that the initial targets could be met with compact fluorescent lamps and advanced incandescent lamps that combine halogen capsules with infrared-reflective coatings, while the 2020 standards will encourage the use of LEDs (light-emitting diodes) and other advanced lighting technologies. The Alliance to Save Energy (ASE) calls the act “the most significant energy-efficiency legislation in three decades” and notes that the lighting standards alone will cut electric bills by $13 billion per year, eliminating the need for 60 mid-sized power plants.
According to ACEEE, the energy act sets new minimum efficiency standards for external power supplies, dishwashers, dehumidifiers, residential boilers, electric motors, and walk-in coolers and freezers. It directs DOE to conduct new rulemakings on residential refrigerators and clothes washers, and allows DOE to expedite rulemakings in cases where a broad consensus exists (a measure requested by DOE last year). It also allows DOE to establish a regional standard for heating products and two regional standards for cooling products, in addition to the national standard. Such regional standards will allow DOE to account for significant climate differences throughout the United States. The act also calls for DOE to create a national media campaign to promote the benefits of increased energy efficiency.
For federal buildings, the energy act sets a goal to cut their energy use by 30% by 2015, and requires new and renovated federal buildings to significantly reduce their reliance on energy from fossil fuels. Compared with existing federal buildings, federal buildings built or renovated in 2010 must cut their fossil-fuel dependency by 55%, and by 2030, new or renovated federal buildings must eliminate their use of fossil fuel energy. It also permanently authorizes the use of Energy Saving Performance Contracts, updates the authorization for DOE’s Industrial Technologies Program, authorizes a Commercial Building Initiative, and contains new provisions to promote combined heat and power, recycled energy, and district energy systems. See the ASE and ACEEE press releases, the energy act summary from ACEEE, and Titles III, IV, V, and VIII of the new energy act on the Library of Congress Web site.
New Energy Act Calls for Increased Renewable Energy Research
The Energy Independence and Security Act of 2007, signed into law on December 19th, calls for accelerated research and development (R&D) and deployment of renewable energy technologies, although all the provisions are subject to congressional appropriations of funds. For solar energy, the act calls for new R&D programs for solar thermal energy storage, daylighting, and solar-powered air conditioning, as well as grant programs for solar industry workforce training and advanced photovoltaic demonstration projects. For geothermal energy, the act calls for a wide range of R&D programs, an expansion of the “GeoPowering the West” program to make it “GeoPowering America,” and the creation of a new Center for Geothermal Technology Transfer. The act also establishes a new R&D program for marine and hydrokinetic energy, which includes wave, tidal, current, and thermal technologies that draw on the energy of the ocean or free-flowing rivers. The act includes a measure to establish one or more demonstration centers for marine and hydrokinetic technologies. See Title VI of the new energy act on the Library of Congress Web site, as well as the press release from the Geothermal Energy Association (PDF 85 KB).
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