Energy Policy Recommendations To the President and 110th CongressThese recommendations are the product of a bipartisan Commission of 21 members of diverse expertise and affiliations, addressing many complex and contentious topics. It is inevitable that arriving at a consensus document in these circumstances entailed innumerable compromises. Accordingly, it should not be assumed that every member is entirely satisfied with every formulation in this document, or even that all of us would agree with any given recommendation if it were taken in isolation. Rather,we have reached consensus on these recommendations as a package,which taken as a whole offers a balanced and comprehensive approach to the economic, national security, and environmental challenges that the energy issue presents our nation.National Commission on Energy PolicyNCEP_7faf6e14-00b6-11e1-9411-36757a64ea2aJohn P. HoldrenCo-Chair, Teresa and John Heinz Professor of Environmental Policy, Harvard University; Director of the Woods Hole Research CenterWilliam K. ReillyCo-Chair, Senior Advisor,TPG, Inc.JohnW. RoweCo-Chair, Chairman and CEO, Exelon Corporation_7faf70c6-00b6-11e1-9411-36757a64ea2a_7faf721a-00b6-11e1-9411-36757a64ea2aOil Security_7faf72c4-00b6-11e1-9411-36757a64ea2a1Vehicle Fuel EconomyEstablish a national average new-vehicle fuel-economy improvement target of four percent per year,while retaining the full discretionary authority of the National Highway Traffic Safety Administration (NHTSA) to modify the presumptive target up or down if safety, technology, or economic considerations warrant._7faf7364-00b6-11e1-9411-36757a64ea2a1.1National Highway Traffic Safety Administration (NHTSA)CAFE ProgramEncourage and empower NHTSA to implement reforms aimed at making the existing corporate average fuel economy (CAFE) program more cost-effective, market-oriented, and responsive to the jobs and competitiveness concerns of the automobile industry._7faf7418-00b6-11e1-9411-36757a64ea2a1.2IncentivesProvide targeted consumer and manufacturer incentives to promote the domestic development, production, and deployment of advanced automotive technologies such as hybrids, plug-in hybrids, and advanced diesel vehicles._7faf74c2-00b6-11e1-9411-36757a64ea2a1.3Heavy Truck Fuel Economy and Light-Duty Vehicle TiresPursue cost-effective opportunities to further reduce transportation energy use by improving heavy-truck fuel economy and by adopting efficiency standards for light-duty vehicle replacement tires._7faf7580-00b6-11e1-9411-36757a64ea2a1.4Climate Change_7faf7648-00b6-11e1-9411-36757a64ea2a2LegislationAdopt legislation this Congress to implement a mandatory,market-based program to limit economy-wide U.S. greenhouse gas emissions._7faf7710-00b6-11e1-9411-36757a64ea2a2.1CongressClimate ProposalStrengthen key parameters of the original NCEP climate proposal_7faf77d8-00b6-11e1-9411-36757a64ea2a2.2TargetsDefining program targets to aim for stabilizing emissions at current (2006) levels by 2020 and reducing emissions 15 percent below current levels by 2030_7faf78aa-00b6-11e1-9411-36757a64ea2a2.2.1Safety Valve PriceRaising the starting price of the safety valve to $10 per ton of carbon-dioxide equivalent emissions_7faf797c-00b6-11e1-9411-36757a64ea2a2.2.2Escalation RateIncreasing the rate of escalation in the safety-valve price to 5 percent per year in real (rather than nominal) terms_7faf7a6c-00b6-11e1-9411-36757a64ea2a2.2.3Other IssuesAddress other program design issues_7faf7b52-00b6-11e1-9411-36757a64ea2a2.3Emission AllowancesAllocating emission allowances in a manner that effectively directs substantial resources to aid in the transition to a low-carbon economy and that fairly compensates major affected industries for short-term economic dislocations incurred as a result of the policy, while also avoiding the potential for significant windfall gains_7faf7c42-00b6-11e1-9411-36757a64ea2a2.3.1Point of RegulationPlacing the compliance obligation (point of regulation) at or near primary energy suppliers_7faf7d32-00b6-11e1-9411-36757a64ea2a2.3.2OffsetsIncluding a well-designed offsets provision._7faf7e36-00b6-11e1-9411-36757a64ea2a2.3.3Trading Partner IncentivesCreate stronger incentives for comparable action on the part of key trading partners by providing technical and financial resources for the transfer of low-carbon technology, by signaling that the United States will work with other countries to forcefully address trade and competitiveness concerns in the event other major emitting nations fail to take action within a reasonable timeframe, and by linking future U.S. emission-reduction commitments to progress in the international arena._7faf7f30-00b6-11e1-9411-36757a64ea2a2.4Energy Efficiency_7faf803e-00b6-11e1-9411-36757a64ea2a3Tax IncentivesEnhance and extend tax incentives for efficiency investments introduced under the Energy Policy Act of 2005 (EPAct05)._7faf814c-00b6-11e1-9411-36757a64ea2a3.1Efficiency StandardsEnsure that the Department of Energy (DOE) follows through on its recent commitment to issue efficiency standards for 22 categories of appliances and equipment that capture all cost-effective and technically feasible energy savings._7faf8264-00b6-11e1-9411-36757a64ea2a3.2Department of Energy (DOE)Natural GasContinue to focus on assuring future supply adequacy by following through on EPAct05 commitments with respect to the Alaska pipeline, LNG infrastructure,market transparency, and permitting and leasing. _7faf8386-00b6-11e1-9411-36757a64ea2a4The Commission reiterates its call for a comprehensive inventory of on- and off-shore resources to inform future policy decisions and urges Congress to address concerns about the adequacy of related provisions in EPAct05 (both in terms of the relatively short timeframe specified for completing the inventory and in terms of constraints on the use of federal resources to conduct inventory-related activities in certain areas)._7faf84b2-00b6-11e1-9411-36757a64ea2aAdvanced Coal_7faf85e8-00b6-11e1-9411-36757a64ea2a5Carbon Capture and StorageDirect greater resources toward accelerating the commercialization of carbon capture and storage (CCS) by providing substantial deployment incentives._7faf871e-00b6-11e1-9411-36757a64ea2a5.1Specifically, the Commission believes CCS projects should be eligible for bonus allowances under a greenhouse gas trading program that are at least equal in value to incentives provided under the renewable energy production tax credit.Public Funding or SubsidiesCondition eligibility for public funding or subsidies on the actual inclusion of CCS with any new integrated gasification combined cycle (IGCC) and other advanced coal projects going forward. _7faf8886-00b6-11e1-9411-36757a64ea2a5.2CCS must be included from the outset in any taxpayer supported efforts to develop coal-to-liquids technology.Carbon Capture OptionsExplore carbon capture options for non-IGCC plants._7faf89da-00b6-11e1-9411-36757a64ea2a5.3Regulatory ProtocolsEnsure that the U.S. Environmental Protection Agency (EPA) completes a rigorous, formal public process to formulate effective regulatory protocols governing long-term carbon storage as soon as possible (recognizing that midcourse corrections will likely be needed as experience is gained)._7faf8b24-00b6-11e1-9411-36757a64ea2a5.4U.S. Environmental Protection Agency (EPA)New Coal PlantsEnsure that new coal plants built without CCS are not “grandfathered” (i.e., awarded free allowances) in any future regulatory program to limit greenhouse gas emissions._7faf8cd2-00b6-11e1-9411-36757a64ea2a5.5Nuclear EnergyTake action to address the current impasse on nuclear waste disposal,while reaffirming the ultimate objective of siting and developing one or more secure geologic disposal facilities, by amending the Nuclear Waste Policy Act (NWPA) to:_7faf8e4e-00b6-11e1-9411-36757a64ea2a6Human Engineering and Scientific CapabilitiesAlign its requirements with human engineering and scientific capabilities, while adequately protecting public health and safety and the environment._7faf8fc0-00b6-11e1-9411-36757a64ea2a6.1Interim StorageRequire DOE to site and operate consolidated national or regional interim storage options._7faf9128-00b6-11e1-9411-36757a64ea2a6.2Technological AlternativesUndertake R&D to explore technological alternatives to the direct geologic disposal of waste froma once-through cycle that meet commercial requirements and nonproliferation objectives, reduce the challenge of waste disposal, ensure adequate protection of public health and safety, and extend fuel supply._7faf92a4-00b6-11e1-9411-36757a64ea2a6.3Waste ConfidenceCodify that interim storage and federal responsibility for disposal of nuclear waste is sufficient to satisfy the Nuclear Regulatory Commission’s Nuclear Regulatory Commission waste confidence requirement._7faf942a-00b6-11e1-9411-36757a64ea2a6.4Nuclear Regulatory CommissionDecommissioned SitesRequire the Secretary of Energy to take possession of and/or remove fuel from reactor sites that have been, or are in the process of being fully decommissioned._7faf95b0-00b6-11e1-9411-36757a64ea2a6.5Secretary of EnergyRenewable Energy_7faf974a-00b6-11e1-9411-36757a64ea2a7Investment CertaintyContinue to provide investment certainty by extending the eligibility period for federal production tax credits in five-year, rather than two- or one-year, increments._7faf98e4-00b6-11e1-9411-36757a64ea2a7.1Renewable Portfolio StandardAdopt a federal renewable portfolio standard (RPS) that increases the share of electricity generated by renewable resources nationwide to at least 15 percent by 2020._7faf9a88-00b6-11e1-9411-36757a64ea2a7.2Biofuels_7faf9c40-00b6-11e1-9411-36757a64ea2a8Ethanol SubsidiesRe-evaluate ethanol subsidies and tariffs in light of current fuel mandates and rationalize existing policies to direct a greater share of public resources to more promising options, such as cellulosic ethanol; biobutanol and clean, high-quality diesel fuel from organic wastes._7fafafe6-00b6-11e1-9411-36757a64ea2a8.1Deployment HurdlesAddress other hurdles to biofuels deployment, including hurdles related to the deployment of critical supporting infrastructures (including gathering systems, distribution systems, and refueling facilities) and compatible vehicle technologies._7fafb1ee-00b6-11e1-9411-36757a64ea2a8.2Sustainable Fuel PoliciesTake steps to ensure that policies aimed at reducing U.S. oil dependence do not promote environmentally unsustainable fuel alternatives. _7fafb450-00b6-11e1-9411-36757a64ea2a8.3The Commission believes that California’s recently introduced low-carbon fuel standard suggests a useful direction for future policy and deserves consideration at the national level.Energy Technology Innovation_7fafb630-00b6-11e1-9411-36757a64ea2a9Federal ExpendituresDouble annual direct federal expenditures on energy-technology research, development, and demonstration, corrected for inflation, with increases emphasizing public-private partnerships, international cooperation, and energy-technologies that offer high potential leverage against multiple challenges. _7fafb81a-00b6-11e1-9411-36757a64ea2a9.1Substantially increasing public investment in energy technology innovation is critical to the achievement of oil security and climate change objectives and can be funded using revenues generated by the proposed greenhouse- gas trading program.Cooperative International EffortsTriple federal funding specifically for cooperative international efforts in energy research, development, and deployment (where this proposed increase is within the overall expansion of federal expenditures recommended above)._7fafb9e6-00b6-11e1-9411-36757a64ea2a9.22007-04-302011-10-27http://bipartisanpolicy.org/sites/default/files/Energy%20Policy%20Recommendations%20to%20the%20President%20and%20the%20110th%20Congress.pdfOwenAmburOwen.Ambur@verizon.net