A Few Good Ideas, But Proposal Still Fall Short of the Mark

President Bush surprised audiences during the State of the Union address when he uttered the sentence, "America is addicted to oil." The first step to curing a problem, of course, is admitting you have one. After that, you have to start taking action. To start off with, the President proposed an "Advanced Energy Initiative" with a goal to "replace more than 75 percent of our oil imports from the Middle East by 2025."

So how good is this plan? Is it enough to relieve the addiction, and start reducing global warming emissions? While the proposal has some good ideas, according to the Natural Resources Defense Council (NRDC), it falls well short of the action we need to move beyond our oil dependence. The initiative also conspicuously omits sensible standards to reduce global warming pollution, which is an integral part of any responsible energy plan.

The President missed an opportunity to put his money where his mouth is with his budget for fiscal 2007. Though he bragged about increasing "clean-energy research," his budget takes money away from promising technologies to make it happen. In fact, this year's energy efficiency and renewable energy portion of the budget is almost identical to, but slightly smaller than, the last year of the previous Administration. And when inflation is factored in it amounts to a decrease of more than $130 million.

Will the President's Pledge Become Effective Policy?

The President set a goal of replacing more than 75 percent of the nation's Middle East oil by 2025. White House officials have said this translates into about a 5 million barrel per day reduction in U.S. demand by 2025. The U.S. currently consumes approximately 20 million barrels per day, and is projected to use about 30 million barrels per day by 2025.

How does that compare to savings potential? By deploying efficient technologies, implementing smart growth policies in our cities, and ramping up production of fuels known as cellulosic biofuels made from grasses, stalks,leaves, and other agricultural leftovers we can achieve oil savings of at least 3 million barrels per day within just ten years, and more than 10 million barrels per day by 2025 according to a report published by NRDC and the Institute for the Analysis of Global Security. The report, Securing America: Solving Our Oil Dependence through Innovation, is available online.

Similar targets as well as a concrete plan to accomplish these goals are included in a proposal by a bipartisan coalition in Congress. The "Fuel Choices for American Security Act," introduced in the House (H.R. 4409) and Senate (S.2025), would achieve greater oil savings faster than the President's plan. It also would protect jobs now at risk in the auto sector, and boost the market for renewable fuels made from agricultural products.

Ignoring the Technology Already Here Today

The President's plan focuses exclusively on long-term research and development projects. These efforts are important, but the bigger challenge today is to get good technologies out of the lab, onto the roads, and into our homes. High efficiency technologies on the shelf today offer the cleanest, fastest, cheapest source of oil and other energy savings in the near future. That means we need sensible new performance standards to guarantee oil savings, combined with incentives to help consumers, farmers and manufacturers truly break our oil addiction.

Cellulosic Biofuels: The Advanced Energy Initiative offers relatively modest increases in funding for research on cellulosic biofuels. The President's 2007 budget contains $150 million to help "develop" cellulosic biofuels. This is just 35 percent of the amount authorized for advanced biofuels in the Energy Policy Act passed by Congress last year. The budget for cellulosic biofuels needs to be increased to at least the amount authorized in this bill to achieve their full potential to displace oil.

To address our addiction in a timely manner, research and development of cellulosic biofuels needs to be matched with an equal push to make the fuels commercially available to consumers. Roughly half the new Energy Bill biofuels programs are focused on getting biofuels to the pump, but the President made no commitment to these programs.

With an adequate investment, cellulosic ethanol can be cost-competitive by 2012 as called for by the President. The first commercial plants are ready to start construction now. To help the industry develop, the President should act on the policies adopted in the Energy Bill. For instance the loan guarantee program for cellulosic ethanol authorized by the bill is currently stalled at the Department of Energy and the President's Office of Management and Budget. The President should put whatever funds necessary into the budget and push these agencies to make the loan guarantee available as fast as possible. Otherwise the first plants will end up in Canada or Germany, or one of the other countries that we are competing with to bring this product to market.

An aggressive biofuels program could drive production of 21 billion gallons of cellulosic ethanol (equivalent to 1.4 million barrels of oil per day) by 2025, but ethanol is not a silver bullet. Putting good ethanol into gas guzzling cars and trucks is just wasting fuel. To free us from our oil addiction, an aggressive biofuels strategy must be accompanied by stronger fuel economy performance standards in our vehicles.

Vehicle Technologies: Increasing the fuel economy performance of our vehicles is the fastest, most reliable way to achieve significant oil savings, and the only way to start breaking our oil addiction today. Increasing efficiency in heavy duty vehicles and vehicle tires, and boosting faster commuting alternatives such as rail and buses would also help achieve oil savings in the near future.

The additional $7 million the President promised to put into better batteries for hybrid cars and trucks is just a baby step. While plug-in hybrids could play a role in reducing our transportation oil demand, using our electricity grid to power vehicles could simply shift emissions of global warming pollution from tailpipes to electric power plants unless strong emission limits are in place.

Hydrogen: While the President continues his commitment to hydrogen, this should not come at the expense of excluding other promising technologies. Hydrogen fuels have long-term promise, yet we need to act now to relieve dependence on foreign oil and reduce global warming pollution. Global warming pollution and dependence on foreign oil are urgent problems that need to be addressed today not 20 years from now.

First and foremost, we need policies that mobilize the technologies we already have. That means raising fuel economy standards, accelerating hybrid vehicle production, and actively promoting the use of options such as cellulosic ethanol.

"Zero-Emission" Coal: The President's proposal to "invest more in zero-emission coal-fired plants" implicitly recognizes the need for technologies that don't emit global warming pollution. Given that recognition, NRDC believes that any government support for coal technologies should be limited to projects that capture their carbon dioxide and safely dispose of it underground in places such as existing oil and gas fields. Pumping carbon dioxide into existing oil wells instead of the atmosphere would make it possible to recover billions of barrels of additional oil from these wells.

To get these technologies developed and used, we need limits on global warming pollution, which will create a market for carbon trading. Private investment will be far more effective than government funding in getting zero-emission technology out of the lab and onto the electricity grid.

Wind and Solar Energy: The President's plan calls for increased funding of wind and solar energy technologies. The wind and solar energy programs that would receive increased funding are achieving good results and are critical to further developing these clean energy resources. The administration, however, takes away money from other federal clean energy programs to support these funding increases. And the administration should embrace market-based standards that would ensure a growing share of U.S. electricity would be supplied by clean sources.

It should also be noted that while these electricity generating technologies are essential to reducing harmful pollution, they will do little to decrease oil consumption. Only about 3 percent of oil consumed in the U.S. is used to fuel power plants.

Nuclear: The President's plan also calls for accelerating research into nuclear energy. Nuclear power has never been able to compete on its own in the marketplace and shows little sign of being able to do so now without massive taxpayer assistance. Even though nuclear power has low carbon dioxide emissions, it is, at best, decades away from being a reliable method to provide adequate energy resources and a stable climate.

Expanding nuclear power is extraordinarily expensive and has serious safety and security concerns that drain resources from clean energy solutions such as wind, solar, and energy efficiency. Expanding the nuclear fuel cycle around the globe means proliferation of weapons-usable plutonium, enriched uranium and spreading the know-how to make nuclear weapons in a time of international unrest and terrorism. And the entire nuclear fuel cycle -- from uranium mining to the disposal of lethal radioactive wastes that persist for hundreds of thousands of years -- causes severe environmental and public health risks.

Where should we go from here?

Richard Nixon went to China, and Ronald Reagan sat down with the Russians. This too could be a defining moment in President Bush's presidency, or it could be more empty rhetoric, depending on what he does next.

For starters, he should heed the call of the bipartisan House and Senate coalition sponsoring the "Fuel Choices for American Security Act." Passing this bill would be a giant leap forward for our security, our economy and our environment. President Bush and Congress also need to curb global warming -- which threatens more severe storms on our coasts, hotter heat waves in our cities, and deeper droughts on our farms -- by combining sensible emission limits with cost-saving market-based rules.