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President Clinton's 21st Century Approach to America's Energy Needs

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National Economic Council

President Clinton's 21st Century Approach to America's Energy Needs

September 23, 2000

Ensuring the availability of affordable and environmentally responsible energy is central to maintaining our unparalleled economic growth and prosperity. For more than seven years, the Clinton-Gore Administration has consistently pursued a forward-looking and balanced approach to meeting America's energy needs in the 21st century. This strategy supports continued development of traditional energy sources, and aggressive efforts to improve energy efficiency and promote alternative energy sources.

To ease reliance on imported oil, the Administration has invested in new technologies that have significantly enhanced recovery of domestic oil reserves. To promote clean energy alternatives, the Administration has expanded research and development of solar, wind, biomass and other renewable sources. To save energy and money, the Administration has adopted new energy-efficiency standards for appliances and forged new partnerships with industry. These include Energy Star® and the Partnership for a New Generation of Vehicles (PNGV), which is on track to producing affordable vehicles that get three times the mileage of today's models. And to demonstrate federal leadership, the President has issued Executive Orders directing federal agencies to dramatically improve the energy efficiency of their buildings and automotive fleets. To save energy and tax dollars, we have taken dramatic steps to reduce the energy use of the federal government, the larger energy user in the world, reducing energy consumption by 30 percent and saving $800 million a year.

CONGRESS HAS FAILED TO ACT TO IMPROVE AMERICA'S ENERGY SECURITY: The Republican leadership has failed to act on key elements of the President's long-term energy policy, including: tax incentives to consumers for the purchase of energy-efficient cars, homes and appliances; comprehensive electricity restructuring; and reauthorization of the Strategic Petroleum Reserve. Over the past seven years, Congress has approved only 12 percent of the increased funding proposed by the President for energy efficiency and renewable energy.

Now, the Republican leadership wants to open the Arctic National Wildlife Refuge to oil drilling – despoiling one of America's last wild places for a short-term supply of oil. Furthermore, they continue to cut programs critical to meeting our long-term energy needs. For instance:

  • The House appropriation of $650 million for Energy Conservation is $201 million less than the President's request, and $95 million below the current year's appropriations. These cuts include:
  • A $143 million cut -- complete elimination – of applied R&D at the Department of Energy (DOE) for the PNGV program, canceling over 400 R&D projects in 33 States by 15 Federal labs, 22 universities, and others;
  • A $14 million cut in the low-income home Weatherization Assistance Program, which will mean about 7,000 fewer low-income families will have their energy bills reduced; and,
  • A $2 million cut from industrial cogeneration, which funds R&D on more efficient turbines that increase energy efficiency and reliability of the electrical grid.
  • The House appropriation of $343 million for Solar and Renewable Energy is $67 million less than the President's budget request. These cuts include:
  • Cuts in biomass fuels and biopower R&D, virtually eliminating our planned increase to develop alternative transportation fuels and to make better use of biomass and waste materials for generating electricity;
  • Reductions in solar electricity R&D, designed to make solar energy cost-competitive;
  • Cuts in R&D for wind-power, which, if adequately funded, will be competitive within a few years.


  1. Tax Incentives to Encourage Greater Efficiency, Renewable Energy, and Domestic Oil Production

The Administration has proposed a balanced package of tax incentives to promote responsible development of traditional energy sources, and, for three years has proposed tax incentives to promote a wide range of alternative and renewable energy sources. The President and Vice President, once again, call on Congress to enact:

  • Tax incentives to support the domestic oil and gas industries, including the expensing of geological and geophysical testing and "delay" rental payments;
  • Tax credits to promote wind, solar, biomass, and other domestic alternative sources of energy;
  • Tax Credits For Electric, Fuel Cell, and Qualified Hybrid Vehicles ($2 billion, five-year package); and,
  • Tax Credits for Efficient Homes and Buildings.
  1. Investments in R&D to Improve Energy Efficiency, Make Renewable Energy Affordable, and Promote the Clean Use of Fossil Energy

Increased energy efficiency has significantly enhanced our energy security by reducing our demand for oil. In 1974, we consumed 15 barrels of oil for each $10,000 of GDP; today we only consume 8 barrels of oil per unit of GDP. But much more can be done. The President and Vice President have secured substantial increases to accelerate the research, development, and deployment of alternative and more efficient energy technologies. They call on Congress to build on these efforts by approving the following FY 2001 requests:

  • $1.7 billion for Federal R&D efforts to promote energy efficiency in buildings, industry, and transportation, and expanded use of renewable energy and distributed power generation systems, including:
  • $254 million to continue the Partnership for a New Generation of Vehicles (PNGV), which is on track to deliver affordable cars that get up to three times the fuel efficiency of today's cars (an increase in average fuel economy of just three miles per gallon would save almost a million barrels of oil per day);
  • $289 million, a 47 percent increase, for a bioenergy initiative that will help us develop new fuels for cars and new sources of electricity, reducing U.S. oil consumption;
  • $275 million, a 42 percent increase, for R&D investments to develop technologies to make homes and buildings more energy efficient;
  • $154 million to weatherize low-income homes, reducing energy bills and the demand for oil; and
  • An increase for Energy Star® product and building partnerships, to promote the purchase of energy-efficient products and buildings. (If all consumers purchased Energy Star® products and buildings, the Nation's energy bill could be reduced by $100 billion over the next 15 years);
  • $376 million for fossil energy R&D to enhance domestic oil exploration and promote clean use of fossil fuels, including $10 million to continue an Ultra-Clean Fuels Initiative to develop cleaner fuels in existing refineries;
  • $5 million for research to help safely extend the life of nuclear power plants; and,
  • $85 million to create a new Clean Air Partnership Fund to help States and localities reduce pollution and become more energy efficient.

III. Preparation for Energy Supply Emergencies

Notwithstanding our best efforts to promote a diverse and secure supply of energy, because of the location of the world's oil reserves, the fact remains that we import a sizeable portion of the oil we consume. In order to mitigate that risk, and to address emergencies created by unusually cold or warm weather, the Administration calls on Congress to:

  • Reauthorize the Energy Policy and Conservation Act, which governs the use of the Strategic Petroleum Reserve; and,
  • Authorizing the establishment of the Northeast/New England Home Heating Oil Reserve with an appropriate trigger for its use.
  1. Comprehensive Electricity Restructuring for Reliability and Savings

The President is disappointed that Congress has abandoned efforts to pass comprehensive electricity restructuring legislation. Comprehensive restructuring would lower electricity prices, clean the environment, encourage innovation and new services, and increase the reliability of our Nation's power supply grid. It will also enhance energy security by enabling us to operate our economy on less fuel. The President and Vice President's proposed legislation, which Congress failed to enact for over two years would:

  • Provide $20 billion in annual savings to America's families, saving typical family of four $232 per year;
  • Strengthen Reliable Service by requiring all participants in electric transactions on the grid to comply with mandatory reliability standards developed by a reliability organization; and,
  • Improve the environment, through both market mechanisms and policies that promote investments in energy efficiency, renewable energy, distributed power and combined heat and power technologies.

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