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IB10020: Energy Efficiency: Budget, Oil Conservation, and Electricity Conservation Issues (pdf)

Fred Sissine

Resources, Science, and Industry Division

July 27, 2001


Energy security, a major driver of federal energy efficiency programs in the past, came back into play as oil and gas prices rose late in the year 2000. Also, the electricity shortages in California have brought a new emphasis to the role that energy efficiency and energy conservation may play in dampening electricity demand.

Also, worldwide emphasis on environmental problems of air and water pollution and global climate change, and the related development of clean energy technologies in western Europe and Japan may remain important influences on energy efficiency policymaking. Concern about technology competitiveness may also remain a factor in debate.

In the 107th Congress, debate over energy efficiency programs appears to be taking a focus on budget, oil conservation, and electricity conservation.

DOE's FY2002 budget request for the Energy Efficiency Program proposes to cut funding to $755.8 million -- a decrease of $59.6 million, or 7%, below the FY2001 level. This includes $444.8 million for R&D programs, a cut of $180.1 million, or 29%. For grant programs, the request includes $311.0 million, an increase of $120.3 million. All of this increase is for the Weatherization Program, which would grow from $152.7 million to $273.0 million, a 79% addition.

The House recommends $940.8 million for Energy Efficiency, including $629.8 million for R&D and $311.0 million for grants. Compared to FY2001, this would be an increase of $4.9 million, or 1%, for R&D and $120.4 million, or 63%, for grants. Relative to the request, this includes an increase of $185 million for R&D and $24 million for State grants and a decrease of $24 million for Weatherization grants.

The FY2002 EPA request for Climate Protection Energy Efficiency Programs (CPP) is $145.0 million (see Table 1). This is $1.2 million, or 1%, less than the FY2001 level. Regarding specific programs, the request includes $4.6 million, or 14%, less for Industry, but $0.8 million, or 15%, more for International Capacity Building, and $3.0 million, or 10%, more for Transportation.

A recently introduced omnibus energy bill (H.R. 4, Securing America's Future Energy Act of 2001), includes many, if not most, of the recommendations from Bush Administration's National Energy Policy Development Group report. Further, it draws many of these energy efficiency and conservation provisions from H.R. 2436, H.R. 2511, and H.R. 2587, including authorizations for R&D appropriations and energy conservation grants; tax incentives for fuel cells, appliances, home improvements, energy-efficient buildings, and certain vehicles; programs for federal facilities; and increased fuel economy standards for certain light duty vehicles.

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