Policy Evaluation: Energy Independence and Security Act of 2007

Carlos Fuentes

Professor Matt Mandel

Political Power and American Public Policy

It can be argued that “the United States has no real energy policy. Instead, individual and

corporate decisions in the market place largely determine energy use” (Kraft 2010). The debate

since the 1970’s has been whether or not the federal government should intervene with energy

policy, and if it does, whether it can do so without causing adverse effects on the economy.

However, the lack of energy policy by the government has transformed the United States into a

country of consumers that have little to no care for energy efficiency. Due to our high standard

of living, we have become a nation addicted to fossil fuels. According to the Department of

Energy (DOE), in 2007, 86.246 quadrillion British thermal units (BTU) of energy consumed in

the United States were produced from fossil fuels, while the total energy consumed for the year

was 101.527 quadrillion BTU. Of that, 39.769 Quadrillion BTUs were produced from petroleum

(Primary 2010). This statistic depicts the United States’ dependence on fossil fuels, which would

not be too bad if the United States was able to produce all of the fossil fuels it needed, but

according to the DOE, the United States imported 4.7 billion barrels of crude oil in 2007. Thus,

the United States is not only dependent of fossil fuels, but it is also dependent on imported

petroleum to produce the energy it consumes.

Due to its high use of fossil fuels for energy, the United States has become the world’s

biggest polluter of greenhouse gases. According to the Environmental Protection Agency (EPA),

“energy-related activities, primarily fossil fuel combustion, accounted for the vast majority of

U.S. CO2 emissions for the period of 1990 through 2008. In 2008, approximately 84 percent of

the energy consumed in the United States (on a Btu basis) was produced through the combustion

of fossil fuels” (U.S.). The same report estimated that the United States emitted 6,182.9 million

metric tons of greenhouse gases as a result of energy consumption.

1
 Although energy regulation has been very vague, Congress has influence national energy

use by several different legislations before the Energy Independence and Security Act of 2007.

The Energy Policy and Conservation Act of 1975 created the corporate average fuel economy

standards (CAFE), which regulate the fuel economy of automobiles sold in the United States.

The Energy Policy Act of 1992 “created new energy conservation programs aimed chiefly at

electric appliances, lighting, plumbing, and heating and cooling systems. It did nothing,

however, to curtail U.S. reliance either on imported oil or on fossil fuels in general” (Kraft 2010,

368). The Energy Policy Act of 2005 “emphasized greater production and use of oil, natural gas,

coal, and strongly boosted federal support for nuclear power” (Kraft 2010, 369). Debatably, this

has caused an increase in the United States’ dependence on fossil fuels and foreign oil.

As a result of the market place and ineffective legislation, the United States was left with

out-of-date energy policy and an energy crisis that merited urgent attention. Congress was being

pressured by government officials like the DOE, EPA, and President George W. Bush along with

many non-official actors, such as citizens, environmental groups, and the media to enact new

energy legislation that addressed dependence on fossil fuels, energy conservation and efficiency,

and greenhouse gas emissions.

The Goals:

The overall goal of the Energy Independence and Security Act of 2007 was to encourage

the United States toward greater energy independence and security. It sought to increase the

production of clean renewable fuels to 9.0 billion gallons by 2008 and 36 million by 2020, with

21 billion of the 2020 total coming from cellulosic ethanol and other advanced biofuels (Sissine

2007, 366). The Act looked to increase the efficiency of products by phasing out incandescent

2
light bulbs, and having them replaced by a number of options which include, but are not limited

to: compact fluorescent, halogen, and LED light bulbs, all of which use less energy to emit the

same levels of light as the incandescent bulbs. The Act also includes several sections on

increasing the energy efficiency of different types of buildings. Subtitle B of Title IV

encourages the development of more energy efficient commercial buildings. Section 422

establishes a goal to have all new buildings reach zero-net-energy use by 2050. Section 423 sets

a goal to have all pre-2025 buildings retrofitted to zero-net-energy use by 2050. In federal

buildings the Act sets a goal of reducing energy consumption to 30% below FY2003 levels by

2015. Lastly, Section 431 requires that by 2010, new federal buildings reduce energy supplied

by fossil fuels by 55% of 2003 levels.

The rise in crude oil and gasoline prices has renewed the focus on fuel consumption in

the transportation sector. Wider concerns over greenhouse gas emissions and climate change

have contributed to the interest in reducing fossil fuel consumption. Due to these concerns, the

law has committed to rising CAFE standards to 35 miles per gallon by 2020. In order to

accomplish this, the law encourages automobile manufactures to research and develop cars that

use renewable energy sources instead of traditional gasoline. The law has also aimed to spark

advancements in research and the development of renewable energy sources in all fields by

creating programs and grants through different government agencies. These research and

developmental programs have the long-term goal of increasing the amount of energy produced

by renewable sources. For example, part of the goal is to have “renewable energy resources

from agricultural, forestry, and working lands of the nation to provide at least 25% of the

nation’s energy use by 2025” (Sissine 2007). The law also calls for better coordination of

federal, state, and private resources through partnerships.

3
 Legislation has made big strides by setting innovative goals in making all levels of the

government more energy efficient. Section 527 directs each federal agency to issue an annual

report that describes the status of initiatives to improve energy efficiency, reduce energy costs,

and reduce GHG emissions. The law also requires the DOE to compose a plan that has federal

agencies replacing all incandescent light bulbs with halogen light bulbs within five years. Title I,

subtitle C prohibits federal agencies from acquiring light duty motor vehicles or medium duty

passenger vehicles that are not low greenhouse gas emitters. In addition, federal agencies are

required to reduce 20% of annual petroleum consumption and increase the annual alternate fuel

consumption by 10%, using 2005 as a baseline. Other goals include “Section 525 which requires

federal procurement to focus on use of Energy Star and Federal Energy Management Program

(FEMP)-designated products. Section 526 prohibits federal agencies from procuring synfuel

unless its life cycle GHG emissions are less than those for conventional petroleum sources.

Section 527 directs each federal agency subject to any requirements under this title to issue an

annual report that describes the status of initiatives to improve energy efficiency, reduce energy

costs, and reduce GHG emissions” (Sissine 2007).

Program:

The Energy and Independence Act of 2007 created many new programs to ensure that all

provisions and goals of the Act are carried out and regulated. Since there are so many programs,

I have composed a brief summary of some of them and organized them by executive cabinets.

First, the Department of Education was mandated to start two projects. Section 461 creates a

grant program for Healthy High-Performance Schools that aims to encourage states, local

governments, and school systems to build green schools. In coordination with the EPA, the

Department of Education is allowed to provide grants to state agencies to provide technical

4
assistance and help with the development of state plans for school building designs. Also, the

EPA is directed to develop model voluntary guidelines for school site selection. In addition to

other environmental aspects, the grants and guidelines must have a focus on energy efficiency,

natural day lighting, and other energy-related features. Also, Title II, subtitle C establishes that a

university-based program is authorized to provide grants of up to $2 million for research and

development on renewable energy technologies. Priority is given to universities in low-income

and rural communities with proximity to trees dying of disease or insect infestation.

The law required the Department of Transportation to establish and oversee two projects.

Title I, subtitle B requires the Department of Transportation to establish a loan guarantee

program for advanced battery development, grant programs for plug-in hybrid vehicles,

incentives for purchasing heavy-duty hybrid vehicles for fleets, and credits for various electric

vehicles. Title XI, subtitle B directs DOT, in coordination with EPA, to establish and conduct a

pilot grant program to assist railroad carriers in purchasing hybrid locomotives, including hybrid

switch locomotives, in order to demonstrate the extent to which such locomotives increase fuel

economy, reduce emissions, and lower costs of operation.

The department that has been given the most responsibility, thus expanding its power

greatly, is the Department of Energy. The law has an overwhelming amount of programs and

provisions that are directed towards the DOE. Since I don’t have enough room to list them all, I

will provide a quick summary of the most important ones. Title V, Subtitle E established the

Energy Efficiency and Conservation Block Grants; $2 billion are allocated to this program

annually. It is designed to reduce fossil fuel emissions, reduce the total energy use of the eligible

entities, improve energy efficiency in the transportation, and create green jobs. Section 654

directs DOE to conduct a competitive program to award cash prizes, known as the h-prize, to

5
advance research and development, demonstration, and commercial application of hydrogen

energy technologies. Prizes can be a mix of federal appropriations and funds provided by an

entity that DOE chooses to administer the program; $1 billion is authorized over a 10-year

period.

Section 655 directs the DOE to create the Bright Tomorrow lighting prizes for solid state

(LED) lighting developments that achieve targeted levels of energy efficiency and other traits,

making this program the first government-sponsored technology competition designed to spur

lighting manufacturers to develop high-quality, high-efficiency solid-state lighting products to

replace the common light bulb. Thus, adding in the law goals of replacing incandescent light

bulbs. The law requires the DOE to establish two programs that help the automobile industry

reach its goal of 35 miles per gallon by 2020. First, it is directed to help establish a convert

infrastructure to use renewable fuels, such as E85. Also, Section 651 established research and

development programs aimed at finding a way to reduce the weight of vehicles, without

compromising passenger safety. By reducing the weight of the vehicle, one can assume that the

fuel economy of the vehicle will increase.

These are just a few of the numerous programs that were initiated by the Energy

Independence and Security act of 2007. All of these programs are aimed at moving the Unites

States towards energy dependence and reducing its environmental impact. Most importantly,

these programs show that Congress is willing and able to listen to its constituents and other non-

official actors that lobbied for a comprehensive energy bill.

The Politics:

In December 19, 2007, President George W. Bush signed the Energy Independence and

Security Act of 2007 into law. With a crowded room at the DOE headquarters the President

6
ended a process that was started by his announcement of a “plan to reduce oil consumption of

gasoline by 20 percent over 10 years” during his state of the union address (Bush 2007). The Bill

itself had a long and hard battle form when it was first introduced by Representative Nick Rahall

(D-WV) on January 11, 2007, to when it was signed into law on December 19, 2007. On

January 11, 2007, the bill was “referred to the Committee on Ways and Means, and in addition to

the Committees on Natural Resources, the Budget, and Rules, for a period to be subsequently

determined by the Speaker, in each case for consideration of such provisions as fall within the

jurisdiction of the committee concerned” (H.R.6). The Bill gained praises by some key members

of these committees. “This bill makes an investment in America's energy independence through

long-term incentives for the production and use of renewable energy and energy conservation,”

said Ways and Means Chairman Charles B. Rangel (D-NY).

On January 18, 2007, the House passed the Bill with a 264-163 vote. It was then

forwarded to the Senate where it passed and the renewable fuel standard and the increase to

CAFE standards were added. On August 4, 2007, the Senate passed the Bill, and it was rerouted

to the House because of all the changes. After various modifications and debate over what

should be left out, the House passed a second H.R. 6 that included modification made by

H.R.3221 (the Senate passed bill), with a vote of 235-181. Since the House passed bill included

a repeal of about $21 billion in tax subsidies on oil and gasoline, the White House threatened to

veto it (Sissine 2007). Mainly due to the threat of President Bush’s veto, the Senate failed to

overcome a filibuster, and the Bill failed with a 59-40 vote. “The future just failed by one vote,"

said Senator Richard Durbin (D-IL) as a response to the failed vote (Thomas 2007). On

December 13, 2007, the Senate decided to take out the provision that’s repealed the tax subsidies

on oil and gasoline. That same day, the Senate passed the bill by a vote of 68-8. On December

7
18, 2007, the House approved the senate Bill, which was then signed by President Bush on

December 19, 2007.

Throughout the deliberations and the votes, the Energy Independence and Security Act of

2007 had the backing of some supporters, but also faced the resistance of other opponents. The

supporters and opponents consisted of elected officials, interest groups, the media, and

government agencies. The Bill was mainly supported by democrats like Speaker of the House

Nancy Pelosi, who on December 6, 2010, when the floor was open to discussion before the vote,

said, “this vote on this legislation will be a shot heard ‘round the world for energy independence

for America. And I want to thank some of the people who made this possible” (Pelosi 2007).

She then went on to list the representatives that made things possible: John D Dingell (D-MI),

Chair of the Energy and Commerce Committee, Charles B Rangel (D-NY), Jim Oberstar (D-MI),

Henry A Waxman (D-CA), and many others that held move the legislation forward.

Interest groups that supported the Bill include POET, the largest dry mill ethanol

producer in the United States. The CEO of POET, Jeff Broin, reacted to the passing of the Bill

by saying, “our political leaders should be applauded for passing the Energy Independence and

Security Act of 2007. This bill ensures that America will continue to develop a domestic,

renewable energy source that will decrease our dependence on Middle Eastern Oil” (POET

2007). POET benefitted directly from provisions that allocated subsidies to producers of ethanol

for fuel. United Auto Workers also supported the Bill saying, “We believe that this historic

measure will provide substantial energy security and environmental benefits to our nation, while

protecting and expanding jobs for American workers” (Thomas 2007). The range of supporters

for the Bill was large and encompassed all types of organizations like the EPA, the Washington

Post, and President Bush. When signing the Bill President Bush said, “The legislation I'm about

8
to sign should say to the American people that we can find common ground on critical issues.

And there's more we can accomplish together” (Bush 2007).

The opposition also included a wide range of elected officials, interest groups, and media.

On December 5, 2007, the US Chambers of Commerce submitted a letter to the House of

Representatives titled: Letter Opposing the Energy Independence and Security Act of 2007. In

this letter, the US Chamber of Commerce suggested that “the bill fails to produce one Btu of new

energy while scaling back energy production from both fossil fuels and renewables. Chief

among the bill's flaws are an unworkable renewable fuels standard, an impossible-to-meet

renewable portfolio standard, and a punitive, overly burdensome tax title.” Jay Timmons, Senior

Vice President for policy and government relations under the National Association of

Manufacturers expressed his view by saying, “U.S. manufacturers already face a 31.7 percent

cost disadvantage when compared to our major trading partners. By increasing the cost of

energy, this bill would drive the cost disadvantage even higher, putting quality American jobs at

risk” (Thomas 2007). Oppositions also included elected officials like Ted Poe (R-TX), who

argued that the Constitution does not give the federal government the power to determine what

light bulbs people are allowed to use. Senators Claire McCaskill (R-MO), Mary Landrieu (D-

LA), also opposed the bill.

The actors on both sides played a vital role in the passing of the Energy Independence

and Security Act of 2007. This bill was a good example of how different parties tried to

influence legislation to benefit them, such as POET lobbying to get the bill passed because if it

did, they would see big profits from ethanol subsidies. They did not care that the price of food

might have risen because the price of corn would also have risen. This Bill was also an example

9
of bi-partisanship in Congress. One of the biggest advocates for the Bill was President Bush,

even though the Bill was introduced and backed largely by democratic congressmen.

The Impact:

To evaluate the impacts, the goals must be revisited. One of the biggest provisions in the

law was the increase of CAFE standards. The EPA was mandated by the Energy Independent

and Security Act of 2007 to publish a report on fuel economy. In November of 2009, the EPA

published: Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy

Trends. According to this report, the average MPG for vehicles in the United States was 20.6 in

2007. In 2009, that number rose to 21.1 MPG. The EISA had only been in effect for two years

when this report was generated. If this trend continues, the 35 MPG average will not be reached

in time. All hope is not lost. Although MPG statistics have not seen a very significant change,

we must look at the automobile market and customer buying habits to make a proper analysis of

the law’s impact. The same report demonstrates a sharp shift from trucks and SUVs to smaller

cars. The EPA also reports that the number of hybrid and alternate fuel cars have seen a big

increase.

The other big goal of the EISA was to produce a goal of billion gallons of renewable fuel

by 2020. According the EIA’s Alternate to Traditional Transportation Fuels publication in April

of 2010, the total alternate and replacement fuels used in transportation increased 27% from

2007 to 2008. According the U. S. Energy Consumption by Energy Source publication by EIA

in August of 2010, the amount of renewable energy consumed increased 9% from 2007 to 2008.

These statistics clearly show that the United States is increasing its production and consumption

of renewable fuels.

10
 In conclusion, The Energy Independence and Security Act of 2007 has had many impacts

so far. Its subsidies of ethanol marked up prices for corn, which in turn raised the price of food

in the United States (Zhou 2010). The amount of crude oil imports has decreased in 2008 and

2009; the daily average for 2010 is lower so far than it was in 2007 (U.S). The light bulb

provision has “shut down factories that produce incandescent light bulbs, thus lying off workers”

(Milloy 2010). Without a doubt, some of the influences have been good and some have not.

However, I believe the long term impacts we have yet to see, will be overwhelmingly positive.

Even the short term positive impacts outweigh the negative ones, in my opinion. The good

aspect of our government is that if we do see negative outcomes from this legislation, we can

attempt to pass new legislation to correct it or improve it, just like we did to moderate corn prices

after they spiked in early 2008.

11
 Works Cited

Bush, George W. President Bush Signs H.R. 6, the Energy Independence and Security Act of

2007. U.S. Department of Energy, Washington DC. 19 Dec. 2007

"H.R.6: Energy Independence and Security Act of 2007." OpenCongress.org. Sunlight

Foundation. <http://www.opencongress.org/bill/110-h6/actions?page=8>.

Milloy, By Steven. "A Lightbulb Tea Party? " FOXNews.com. 20 Dec. 2007. Web. 11 Oct. 2010.

<http://www.foxnews.com/story/0,2933,317708,00.html>

Pelosi, Nancy. "Vote for the Energy Independence and Security Act." House of Representatives,

Washington DC. 6 Dec. 2007.

POET. "CEO Says Bill Will Decrease Oil Imports and Accelerate Cellulosic

Development." Poetenergy.com. POET, 18 Dec. 2007. Web.

<http://www.renewableenergyworld.com/rea/partner/poet-

7042/news/article/2007/12/poet-applauds-passage-of-the-energy-independence-and-

security-act-of-2007-50914>.

"Primary Energy Consumption by Source." Annual Energy Review 2009. U.S. Energy

Information Administration, 19 Aug. 2010.

<http://www.eia.doe.gov/aer/pdf/pages/sec1_9.pdf>.

Rahm, Dianne. Climate Change Policy in the United States: The Science, the Politics and the

Prospects for Change. Jefferson, N.C.: Mcfarland & Company, 2009.

12
Sissine, Fred. "Energy Independence And Security Act of 2007: A Summary of Major

Provisions." Global Energy Security. Ed. Rodger H. Attenberg. New York: Nova

Science, 2009. 365-86.

Thomas, Richard. "Energy Bill Takes a Roller Coaster Ride." Business North [Duluth, MN] 12

Dec. 2007

U.S. Environmental Protection Agency. "INVENTORY OF U.S. GREENHOUSE GAS

EMISSIONS AND SINKS." epa.gov. Environmental Protection angency, 15 Apr. 2010.

Web. <www.epa.gov/climatechange/emissions/downloads10/US-GHG-Inventory-

2010_Report.pdf>.

Zhou, By Moming. "U.S. Denies Bid to Ease Ethanol Policy, Pushing up Corn

Prices." MarketWatch. 7 Aug. 2008. Web. 11 Oct. 2010.

<http://www.marketwatch.com/story/us-denies-bid-to-ease-ethanol-policy-pushing-up-

corn-prices?siteid=rss&rss=1>.

13