Today, Senator Kent Conrad (D-N.D.) introduced a "comprehensive energy bill" entitled the "Fulfilling U.S. Energy Leadership Act" or "FUEL."  The bill is available for download here. 

According to his press release:

Senator Kent Conrad today introduced comprehensive energy legislation intended to lessen America's dependence on foreign oil, reduce gas prices, and strengthen the national economy.  [The FUEL Act] is a blueprint for a national energy policy that would support domestic oil and gas production, including an environmentally responsible expansion of offshore activity, while also investing in the development of renewable fuels. The bill also promotes more alternative fuels and clean sources of electricity, including clean coal, and nuclear energy.

Regardless of the other positive things the FUEL Act may contain to achieve all of these ends, the bill has almost no provisions that address building energy efficiency, and mostly they simply extend the incentives already in place until 2016.  The only provisions for building energy efficiency in the FUEL Act are Section 601 and 611-614:

Section 601--Authorizing $4.9 billion for the Rural Utilities Service to provide interest-free loans to rural electric cooperatives to provide low interest loans to qualified consumers to implement energy efficiency measures.

Section 611--Increasing to $3.00 and extending through 2016 179(d), the commercial energy efficient property tax credit;

Sections 612-614--Extending through 2016 the existing tax credits for energy-efficient homes and appliances;

According to a McKinsey report, energy efficiency is one of the most cost-effective ways to minimize the dependence of the United States on foreign oil and reduce greenhouse gas emissions. Increasing building energy efficiency in the United States by 23% by 2020 would :

• Reduce end-use energy consumption by 9.1 quadrillion BTUs, roughly 23% of projected energy demand;
• Eliminate more than $1.2 trillion in waste—well beyond the $520 billion upfront investment (not including program costs) that would be required;
• Result in the abatement of 1.1 gigatons of greenhouse-gas emissions annually—the equivalent of taking the entire US fleet of passenger vehicles and light trucks off the roads.

Despite these facts, it appears that energy efficiency is still the red-headed step-child of energy policy.  It is true, appliance standards, building codes, loan guarantees for energy efficient buildings and other solid energy efficiency proposals are not as sexy as electric vehicles or as viscerally connected to what people pay at the pump.  On the other hand, a cost-effective and achievable 23% reduction in fossil fuel usage should be at the forefront of national energy policy.  

I hope there is a larger strategy at play.  To the extent that Conrad's bill may get bogged down in politics about fossil fuels, subsidies, domestic drilling and so forth, it may be an advantage that many of the energy efficiency policy proposals contained in ESICA, the energy efficiency bill introduced last month by Senators Shaheen and Portman (described in further detail here) were not rolled into the FUEL Act.  If the FUEL Act does become the leading energy policy, I recommend incorporating the programs in ESICA to make the FUEL Act a more complete energy package.   

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On Friday, Senator Barbara Boxer released a 923-page climate change and energy bill.  A draft of the bill had been leaked to the media in late September, and I discussed it here. 

Although the overall bill has swelled from 600+ pages to 900+ pages, there is still just 1.5 pages on the National Energy Efficiency Building Code, first proposed as Section 201of the Waxman-Markey Bill.  In the Waxman-Markey Bill, the House called for: 

1. Establishing a “national energy efficiency building code” for residential and commercial buildings, sufficient to meet each of the national building code energy efficiency targets.

2. Setting energy efficiency targets for the national building code: “on the date of enactment of the American Clean Energy and Security Act of 2009, 30 percent reduction in energy use relative to a comparable building constructed in compliance with the baseline code…effective January 1, 2014, for residential buildings, and January 1, 2015, for commercial buildings, 50 percent reduction in energy use relative to the baseline code; and…January 1, 2017, for residential buildings, and January 1, 2018, for commercial buildings, and every 3 years thereafter, respectively, through January 1, 2029, and January 1, 2030, 5 percent additional reduction in energy use relative to the baseline code.”

3. If consensus based codes provides for greater reduction in energy use than is required under the ACESA, the overall percentage reduction in energy use provided by that successor code shall be the national building code energy efficiency target.

4. Requiring that states and local governments comply with or exceed the national energy efficiency building code, and providing for enforcement mechanisms for states which are out of compliance.

The original Boxer-Kerry draft backed off of the Waxman-Markey structure entirely, simply mandating that the Department of Energy or "other agency head or heads as may be designated by the President shall promulgate regulations establishing building code energy efficiency targets...beginnning not later than January 1, 2014... "

The exact same language is mirrored in the current version of the Senate Bill at Section 163 (starting at page 200 of the current bill).  No structure, no mandatory energy efficiency targets, no requirments that states adopt energy efficiency codes by a certain date.  

This is a fascinating development because of the vast energy savings possible through regulation of new buildings and retrofits of old buildings.  According to a study by McKinsey on energy efficiency,

by 2020, the United States could reduce annual energy consumption by 23 percent from a business-as-usual projection by deploying an array of...efficiency measures, saving 9.1 quadrillion BTUs of end use energy...

The majority of the 900 page bill is dedicated to defining and establishing a cap-and-trade program.  While a worthy goal, I think that the Boxer bill misses the opportunity to grasp low-hanging fruit in energy savings through energy efficient building requirements.

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Yesterday, a draft of the Boxer-Kerry senate version of the Waxman-Markey climate change bill was leaked to the media. I have previously posted about the proposed National Energy Efficiency Code in the Waxman-Markey bill and in the first proposed senate bill ACELA. 

Both of those proposed Energy Efficiency Codes had specific energy efficiency targets, timelines, adoption and implementation plans, and enforcement, though they differed somewhat in the specifics. Not so the Boxer-Kerry Bill.  What had been pages of turgid regulatory prose in the prior two bills has been condensed to a mere page and a half--Section 174, starting on page 113 of the draft bill for those of you following at home. 

The most interesting part is that all specifics have disappeared.  No mandated energy efficiency savings, no specifics for implementation timeline, no enforcement, nothing.  Just a mandate that the Department of Energy or "other agency head or heads as may be designated by the President" 

shall promulgate regulations establishing building code energy efficiency targets...beginnning not later than January 1, 2014... 

There is also a section requiring the suitable administrator to "promulgate regulations establishing national energy efficiency building codes."  The entire specifics of the regulations are as follows:

Such regulations shall be sufficient to meet the national building code energy efficiency targets...in the most cost-effective manner, and may include provisions for State adoption of the national building code standards and certification of State programs.

Many have argued that the Waxman-Markey and ACELA bills went too far--making the energy efficiency requirements too high, and requiring to fast an implementation timeline.  I would argue that the Boxer-Kerry draft does not go far enough--it simply does not provide the stick required to urge rapid development and adoption of a national energy efficiency code.  It also leaves a lot of room for further politicking at the administrative agency level.  What do you think?

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On July 17, 2009, the Senate Energy and Natural Resources Committee approved the American Clean Energy Leadership Act (ACELA),  Senate Bill 1462 . This is a "bipartisan" markup of the House American Clean Energy and Security Act of 2009, also know as the Waxman-Markey Bill. [A summary of the green building provisions of Waxman-Markey from Green Building Law Blog and Green Building Law Update is available here and the Pew Charitable Trusts' resources on all things Waxman-Markey is here. For a primer on getting bills passed in Congress, School House Rock does an excellent job here.]

Among the most significant provisions for green building interests is the National Energy Efficiency Building Codes, Section 241 (it starts at page 228 of the bill).

•  30% improvement in energy efficiency by 2010 and 50% by 2016 for the National Model Energy Efficiency Codes;
• Within 2 years after the passage of ACELA, States must certify whether they have reviewed and updated the building code of the State regarding energy efficiency;
• To certify, States must show that the code provisions of the State at least meet or exceed 2009 IECC for residential buildings and Ashrae 90.1-2007 for commercial buildings (or acheive equivalent or greater energy savings.). 
• Within two years after the Secretary of Energy establishes a modified national energy efficiency code, State must certify that that the code provisions of the State meet the revised code. 
• Within 3 years of certification with the national energy efficiency code, States must certify that they have acheived compliance with the State building energy code or model code or "made significant progress" toward achieving the goal.
• A State is considered to have made "significant progress" if it has developed and is imlementing a plan for achieving compliance within 8 years.
• The Secretary may reduce the energy targets for renovated buildings to "the highest achievable level." 

 To acheive these goals, ACELA appropriates $100,000,000 for fiscal years 2009-2013 for training, enforcement and implementation.

A brief comparison with Section 201 of the Waxman-Markey bill (from the Pew's excellent summary) shows that ACELA's version is a lot softer on the states.

 After enactment, buildings built to a code meeting the national building code energy efficiency target will have a 30 percent reduction in energy use relative to the baseline code. By 2014 (residential) and 2015 (commercial), buildings built to a code meeting the national target will have a 50 percent reduction; an additional 5 percent reduction will be required every three years thereafter, until 2029 and 2030 for residential and commercial buildings, respectively. The baseline codes are the 2006 IECC (residential) and ASHRAE Standard 90.1-2004 (commercial) codes. National targets may be modified to reflect the Secretary of Energy’s determination of the maximum reduction of energy use that is cost-effective on a life-cycle basis or if successor building codes provide greater reductions.

Within one year of the establishment of a national building code, each state is required to certify that it has either adopted the national code or updated its own building codes to meet or exceed the national target, or certify that local governments representing at least 80 percent of the State’s urban population have either adopted the national code or modified their own codes to meet the target. In states and local governments that do not provide certification, the national building code will apply.

States and/or local governments will be required to demonstrate compliance within two years of adoption of a new code; compliance is achieved if at least 90 percent of new and substantially renovated building space in the preceding year meets the code. For the first seven years after enactment, states may instead demonstrate that they have been making “significant progress” toward compliance by developing a plan for enforcement, taking steps to implement that plan, maintaining funding for enforcement, and demonstrating at least 50 percent of new and renovated buildings meet the code.

In short, ACELA's requirements are lower, and the states have longer to comply.  However, the ACELA does not do what I would have liked to have seen--a true cooperative Federalism model in which the Federal government sets the energy efficiency targets, and allows the states to create codes to meet them, much like the State Implementation Plans in the Clean Air Act. 

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This week, I posted an online conversation with James Bedell and Chris Hill about the stimulus package.

On Friday, we sat down and had a lively debate on KCast, a podcast brought to you by Konstructr, the social network for the building industry brought to you by one of the brightest lights in the online work, Vik Duggal.

You can access the podcast here.

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Thanks so much to James Bedell for his thoughtful response to my Senate stimulus package  piece.  You make the point:

Perhaps we should take the president at his word. That the primary purpose of this bill is to get people to work, to stimulate demand in the economy and break the downward trend. Not fulfill the agenda of the liberal left in one massive bill passed within 3 weeks of taking office.

My difficulty is that once you have passed a $1 trillion (there, I said it, everybody ok?) stimulus package, there will be little capital--fiscal or political--left over to apply to other projects.  Obama will have essentially spent all of his favors passing the stimulus package, and not be able to get solid legislation through on energy efficiency, green building codes, etc.

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Yesterday, I posted a piece on the Senate stimulus package, arguing that it failed to provide the green basis for a thriving future economy. 

James Bedell, one of my Twitter buddies (he is @jamesbedell, and you should be following him if you are a tweeter) wrote this thoughtful response on Konstructr. 

Read the rest of James' post on Konstructr

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The Senate is proposing to give the United States a bandaid, when a transplant is required.

I was disappointed when the House’s version of the Stimulus Package was released with only $95 billion allocated to green initiatives out of $550 billion in expenditures (and another $275 billion in tax cuts), but the Senate version is far worse. By my reading, only $67.2 billion of the $885 billion Senate stimulus plan is now allocated for green initiatives:

Instead of a down payment on our future, the Senate bill sprinkles most of the stimulus money throughout the existing economy, with $13.9 billion in Pell Higher Education grants, $13 billion "to help close the achievement gap and enable disadvantaged students to reach their potential," $5.8 billion to "fight preventable diseases and conditions." Some money is clearly not green at all—like $27 billion in highway funding.

There are also major bucks for residential real estate proposed. According to CNN, Senate Budget Committee Chairman Kent Conrad, D-N.D., said he would propose an expansion of a temporary $7,500 first-time home buyer credit so that it applies to all purchases of primary residences, and some Republican senators have called for an increase in the credit to $15,000. Senate Republicans are likely to introduce a provision that would encourage lenders to offer a 30-year fixed rate mortgage at 4%.

The problem with the stimulus package and the proposed amendments is not the amount of the allocations, or even the worthiness of some of the programs, like higher education and healthcare. Rather, it is the fundamental perspective on the American economy that it represents.

Read the rest of this article at Greenerbuildings.com

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