Energy Policy: 113th Congress Issues
Carl E. Behrens
Specialist in Energy Policy
November 29, 2013
Congressional Research Service
7-5700
www.crs.gov
R42756
CRS Report for Congress
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epared for Members and Committees of Congress
Energy Policy: 113th Congress Issues
Summary
Energy policy in the United States has focused on three major goals: assuring a secure supply of
energy, keeping energy costs low, and protecting the environment. In pursuit of those goals,
government programs have been developed to improve the efficiency with which energy is
utilized, to promote the domestic production of conventional energy sources, and to develop new
energy sources, particularly renewable sources.
Implementing these programs has been controversial because of varying importance given to
different aspects of energy policy. For some, dependence on imports of foreign oil, particularly
from the Persian Gulf, is the primary concern; for others, the indiscriminate use of fossil fuels,
whatever their origin, is most important. The contribution of burning fossil fuels to global climate
change is particularly controversial. Another dichotomy is between those who see government
intervention as a positive force and those who view it as a necessary evil at best.
The 112th Congress did not take up comprehensive energy legislation, but numerous bills were
considered on specific energy issues. The most significant action was extension of energy tax
incentives, including the Production Tax Credit (PTC) for wind energy, to January 1, 2014, as part
of P.L. 112-240, The American Taxpayer Relief Act of 2012. In the 113th Congress, a number of
issues, some of which drew attention previously, have been taken up in proposed legislation. The
Energy Savings and Industrial Competitiveness Act of 2013, S. 1392 and H.R. 1616, would
promote energy efficiency in buildings and industry by encouraging adoption of uniform building
codes and authorize a grant program for state energy efficiency programs. The bill was reported
out by the Senate Energy and Natural Resources Committee on May 13, 2013.
H.R. 3, the Northern Route Approval Act, would declare that a presidential permit would not be
required for construction of the Keystone XL pipeline from Canada to the Gulf of Mexico. The
bill passed the House on May 22, 2013, by a vote of 241-175. The issue of approving the
Keystone XL pipeline is deeply involved in the question of global climate change, since
opponents argue that Canadian oil sands production contributes excessive amounts of greenhouse
gas emissions.
In November 2013 the House passed three energy related bills. H.R. 2728 would prohibit the
Bureau of Land Management from enforcing rules to regulate hydraulic fracturing in any state
that has its own regulations on the activity. H.R. 1900 would require the Federal Energy
Regulatory Commission to respond to permit applications for new natural gas pipelines within
one year. H.R. 1965 would be aimed at increasing on-shore leasing of oil and gas resources on
federal land.
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Energy Policy: 113th Congress Issues
Contents
Introduction ...................................................................................................................................... 1
Policy Goals ..................................................................................................................................... 2
Conservation and Energy Efficiency ......................................................................................... 2
Increasing Domestic Supply ...................................................................................................... 2
Production of Oil ................................................................................................................. 2
The Price of Oil and Gasoline ............................................................................................. 3
Natural Gas .......................................................................................................................... 3
Electric Power Production ................................................................................................... 4
Replacing Conventional Energy Sources .................................................................................. 4
Energy Legislation ........................................................................................................................... 5
Legislation in the 112th and 113th Congress ............................................................................... 5
Keystone XL Pipeline and Other Pipeline Legislation ........................................................ 6
Increasing Domestic Production ......................................................................................... 6
Regulation of Power Plant Emissions ................................................................................. 6
Hydraulic Fracturing ........................................................................................................... 6
Energy Efficiency ................................................................................................................ 7
Global Climate Change ....................................................................................................... 7
Contacts
Author Contact Information............................................................................................................. 7
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Energy Policy: 113th Congress Issues
Introduction
U.S. energy policy since the Arab oil embargo in the 1970s has been aimed at a long-term goal
with three major dimensions: to assure a secure supply of energy, to keep energy costs low
enough to meet the needs of a growing economy, and to protect the environment while producing
and consuming that energy. A continuing theme during this period has been that dependence on
imported oil for a large share of the U.S. energy mix, particularly in the transportation sector,
impedes that aim in all three dimensions. But the importance given to import dependence varies.
For some, import dependence is the primary concern; for others, particularly those focused on
environmental issues, it is a symptom of a general crisis that arises from indiscriminate
consumption of fossil fuels. A particularly controversial aspect of the debate is the issue of global
climate change, because burning fossil fuels produces large amounts of carbon dioxide, a
greenhouse gas.
Like the goals of energy policy, the means of achieving them have three dimensions: reducing
consumption by increased energy efficiency; increasing domestic production of conventional
energy sources, particularly oil; and developing new sources of energy, particularly renewable
energy and renewable fuels, that can replace oil and other fossil fuels.
Pursuing the goals of energy policy has been complicated by the diversity of energy consumption
and supply in the United States. On the consumption side, there are three major sectors:
residential/commercial, industrial, and transportation. On the supply side, the primary sources
have traditionally been fossil energy: petroleum, natural gas (and “natural gas liquids” such as
propane and butane), and coal. Electricity, which is both an energy source and a consumer of
energy, has replaced some fossil fuels: about 75% of the energy consumed by the
residential/commercial sector is electricity, and industrial energy consumption is about 35%
electricity. But in the transportation sector, petroleum has remained dominant. Only in the past
few years has corn-derived ethanol become a significant transportation fuel, replacing close to
10% of gasoline consumption.
A diverse spectrum of generating sources is used to produce electricity. Coal for many years
supplied half the electricity generated nationally. In recent years its share has declined; it was
about 42% in 2011, and about 39% through August 2013. Generation by natural gas has risen in
importance, supplying about 26% through August 2013. To those who regard global climate
change as an urgent issue, this trend is important because generating electricity from coal emits
roughly twice the carbon dioxide per kilowatt-hour than generating from natural gas. Nuclear
fission supplies about 20%, hydropower less than 10%. Petroleum, an important generating fuel
in the 1970s and early 1980s, now contributes less than 1% of electricity generation. A surge of
construction of wind-powered generating capacity has brought its share of total generation to
almost 5%.
An issue that cuts across all these factors is the role of government. How much does government
policy affect energy markets? A fundamental dichotomy that lies beneath many individual policy
debates, not only in energy issues, is between those who see government intervention as a
positive force, and those who view it at best as a necessary evil to be restricted as much as
possible.
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Energy Policy: 113th Congress Issues
Policy Goals
Conservation and Energy Efficiency
Reducing energy consumption by conservation and by increased efficiency of energy use has
been a major component of policy since the first energy crisis in the 1970s. Most prominent has
been setting fuel economy standards for automobiles and trucks.1 Federal research and
development programs in energy-efficient technologies have had continued support over many
years, pursuing improvements in building technology, in industrial processes, and in vehicle
efficiency—the last including battery designs that have been used in producing hybrid vehicles.2
Development of “Smart Grid” technologies in electric power distribution systems to encourage
more efficient use of electricity has received much recent attention. Grant programs to improve
and “weatherize” existing residences have received continued funding, but like all such programs
they have become controversial in the current tight budget environment.3 Standards for home
appliances such as air conditioners, refrigerators, and washing machines are another policy
program that has had continued support, and some controversy. A requirement to raise efficiency
levels in light bulbs has been an issue for several years.
Increasing Domestic Supply
Production of Oil
With dependence on oil imports probably the most high-profile energy policy issue, the question
of domestic oil production has a long history of controversy. Much exploration and development
of new oil resources involves federal land, particularly on the outer continental shelf (OCS) and
in Alaska, and environmental concerns have led to extended moratoria on leasing for many areas.4
The Deepwater Horizon oil spill in the Gulf of Mexico in 2010 added a further dimension to the
question of OCS leasing.5 In recent years, development of Canadian oil sands resources, and of
tight oil deposits in the United States, has added further controversy over the possible
environmental effects of their production and transportation.6 The proposed Keystone XL pipeline
to bring Canadian crude to Texas refineries has been particularly controversial.7
1 For details, see CRS Report R42721, Automobile and Truck Fuel Economy (CAFE) and Greenhouse Gas Standards,
by Brent D. Yacobucci, Bill Canis, and Richard K. Lattanzio.
2 See CRS Report R42498, Energy and Water Development: FY2013 Appropriations, coordinated by Carl E. Behrens.
3 See CRS Report R42147, DOE Weatherization Program: A Review of Funding, Performance, and Cost-Effectiveness
Studies, by Fred Sissine.
4 See CRS Report R42432, U.S. Crude Oil and Natural Gas Production in Federal and Non-Federal Areas, by Marc
Humphries, and CRS Report R41132, Outer Continental Shelf Moratoria on Oil and Gas Development, by Curry L.
Hagerty.
5 See CRS Report R41684, Enacted and Proposed Oil Spill Legislation in the 112th Congress, by Jonathan L. Ramseur.
6 See CRS Report R41760, Hydraulic Fracturing and Safe Drinking Water Act Regulatory Issues, by Mary Tiemann
and Adam Vann.
7 See CRS Report R41668, Keystone XL Pipeline Project: Key Issues, by Paul W. Parfomak et al., and CRS Report
R42611, Oil Sands and the Keystone XL Pipeline: Background and Selected Environmental Issues, coordinated by
Jonathan L. Ramseur.
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In addition, for some, increasing production of oil is in principle to be avoided, since it merely
postpones the replacement of fossil fuels by renewable energy and makes the transition more
difficult. Others are particularly opposed to development of oil sands, on the grounds that it
produces more greenhouse gases than conventional oil production.8
The Price of Oil and Gasoline
Since 2004, oil and gasoline markets have been highly volatile. Throughout this period some have
argued that prices were being driven not by the cost of producing the resources but by speculation
and unregulated manipulation of the markets. The Dodd-Frank Wall Street Reform Act of 2010
(P.L. 111-203) aimed to address these concerns, but its application and enforcement remain
controversial.9 The issue is complicated because oil prices are largely determined in a world
market beyond the reach of domestic regulation.
An additional issue involving oil and gasoline prices is the role of the Strategic Petroleum
Reserve (SPR), which was set up after the Arab oil embargoes to fill temporary interruptions in
the supply of oil. In principle releases from the SPR are limited to cases in which a physical lack
of supply exists, but some have argued that it can be used to dampen surges in world oil prices
even when current supply is adequate to meet demand. The June 2011 release of 30 million
barrels from the SPR in response to the Libyan civil war has been deemed by some critics as such
an attempt to influence the market when U.S. supplies were adequate.10
Natural Gas
Unlike the world oil market, in which events abroad quickly affect prices locally, the natural gas
market is largely domestic. Except for about 5% net imports from Canada by pipeline, 2012 gas
consumption, 25.5 trillion cubic feet, was almost entirely produced in the United States.
Production since 2010 has increased sharply, largely as a result of development of tight shale
formations. As with tight oil production, shale gas development has brought environmental
concerns about the effects on ground water of hydraulic fracturing. The need for gathering
infrastructure and pipeline construction from new fields is also an issue.
With gas production up and demand not growing as quickly, the likelihood of increasing exports
of liquefied natural gas (LNG) has increased. LNG requires complex and expensive processing
and loading facilities that have been controversial in locations where they have been proposed.
There is also the prospect of controversy over the question of exporting energy resources such as
natural gas, and its effect on prices and supply.11
8 See CRS Report R42537, Canadian Oil Sands: Life-Cycle Assessments of Greenhouse Gas Emissions, by Richard K.
Lattanzio.
9 See CRS Report R41398, The Dodd-Frank Wall Street Reform and Consumer Protection Act: Title VII, Derivatives,
by Rena S. Miller and Kathleen Ann Ruane.
10 See CRS Report R42460, The Strategic Petroleum Reserve: Authorization, Operation, and Drawdown Policy, by
Anthony Andrews and Robert Pirog.
11 See CRS Report R42074, U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes, by Michael Ratner et
al.
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Electric Power Production
The electric power sector since the mid-1980s has been essentially independent of the major
energy policy issue of dependence on imported oil, since oil-generated electricity is a very small
part of the generation mix. Nevertheless, electricity’s central role in America’s energy mix makes
it subject to numerous controversies.
A major consideration is the role of the coal industry. More than 1 billion tons of coal are
consumed in the United States each year, about 93% of it burned to produce electricity. Initiatives
by the Environmental Protection Agency (EPA) that would impose tighter emissions restrictions
on coal-fired power plants are particularly controversial. Limits on cross-state emissions of sulfur
dioxide and nitrogen oxides, emissions of mercury and other hazardous pollutants, and regulation
of greenhouse gas emissions, among other proposed regulations, have been characterized by
critics as a regulatory “train wreck” that would impose excessive costs and lead to plant
retirements that could threaten the adequacy of electricity capacity (i.e., reliability of supply)
across the country, although some in the electric power industry consider those concerns
overstated.12
Nuclear power is also a continuing issue. Although subject to continuing opposition over
questions of safety, disposal of radioactive waste, and possible proliferation of nuclear weapons,
nuclear fission has gained support because it does not emit greenhouse gases. However, cost
considerations in the face of increasing natural gas production, and safety concerns enhanced by
the tsunami-caused accident at Japan’s Fukushima nuclear plant in March 2011, have put further
expansion of nuclear power in question.13
Replacing Conventional Energy Sources
The third path toward reaching the goals of energy policy is to develop alternative sources of
energy to replace fossil fuels. As noted, reducing the need for imported oil has been a major
feature of energy policy, and congressional mandates have led to increased consumption of
ethanol. However, essentially all fuel ethanol currently is produced from corn, potentially putting
pressure on food production and food prices. The technology for producing ethanol from non-
food sources (including cellulosic biomass) faces serious technological barriers. Another
transportation alternative, long considered but only slowly adopted, has been natural gas-powered
vehicles. Recent increases in natural gas production, noted above, have made this option appear
more attractive, although developing a supply infrastructure and overcoming technological and
cost difficulties continue to present barriers to widespread adoption.
For many participants in the energy debate, replacing fossil fuels has been a goal not limited to
the transportation sector, however. Electricity production by renewable energy sources—wind
power, concentrating solar power, photovoltaic cells, geothermal energy, biomass—is the goal of
many initiatives: research and development programs, tax benefits, loan guarantees, and
mandates.
12 See CRS Report R41914, EPA’s Regulation of Coal-Fired Power: Is a “Train Wreck” Coming?, by James E.
McCarthy and Claudia Copeland.
13 See CRS Report RL33558, Nuclear Energy Policy, by Mark Holt.
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The main stimulus for these programs is environmental, including concern about global climate
change, but the prospect of developing new industrial production from expansion of renewable
energy sources has been a significant, if controversial, theme. Even nuclear power, long a target
of environmental concerns, has been considered a viable alternative to fossil energy for electricity
generation, although once again the influx of newly developed natural gas resources has raised
serious questions about the cost competitiveness of new nuclear power generators.
Energy Legislation
Energy policy historically has been legislated mostly in large, complex bills that deal with a wide
variety of issues, with debate spanning several sessions. The Energy Policy Act of 2005 (EPAct
2005; P.L. 109-58) was the most recent comprehensive general legislation, with provisions and
authorizations in almost all areas of energy policy. EPAct 2005 also set up in DOE the program of
energy project loan guarantees which has become a source of controversy and debate following
the bankruptcy of the Solyndra solar system manufacturing facility in 2011.14
The Energy Independence and Security Act of 2007 (EISA, P.L. 110-140) set new target fuel
economy standards for cars and light trucks of 35 miles per gallon by 2020, and increased the
renewable fuels standard (RFS) to start at 9.0 billion gallons in 2008 and rise to 36 billion gallons
by 2022. EISA also included new efficiency standards for appliances and for light bulbs, the latter
being particularly controversial in the 112th Congress.
In the 111th Congress the American Recovery and Reinvestment Act (the “Stimulus” Act, ARRA,
P.L. 111-5) had major energy policy provisions, including expansion of the loan guarantee
program and large increases in funding for renewable energy programs. The Office of Energy
Efficiency and Renewable Energy programs, in addition to the $2 billion appropriated in the
FY2009 regular appropriations bill, received $17 billion in ARRA, of which $11.5 billion was for
grants to states for energy, efficiency, and weatherization programs. The Office of Electricity
Delivery and Energy Reliability, which had historically been funded at about $150 million per
year, received $4.5 billion in ARRA, directed at establishing “Smart Grid” technology for the
electric power industry.
Legislation in the 112th and 113th Congress
The 112th Congress did not deal with major energy legislation, but numerous energy policy
questions were taken up in proposed legislation. The major action was passage of the “fiscal cliff”
act: P.L. 112-240, The American Taxpayer Relief Act of 2012, signed into law January 2, 2013. It
was primarily concerned with averting scheduled income tax rate increases and spending
reductions required by the Budget Control Act (P.L. 112-25), but it included temporary extension
of certain energy tax provisions. Specifically, the Production Tax Credit (PTC) for wind was
extended through January 1, 2014. For all PTC-eligible technologies, the placed-in-service
deadline was replaced with a construction start date. Other expired energy tax incentives,
14 See CRS Report R42152, Loan Guarantees for Clean Energy Technologies: Goals, Concerns, and Policy Options,
by Phillip Brown.
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including several incentives for biofuels and alternative fuels, as well as incentives for certain
types of energy-efficient property, were also extended.15
In the 113th Congress, the following issues have attracted legislative attention.
Keystone XL Pipeline and Other Pipeline Legislation
In the ongoing debate over approval of the proposed Keystone XL pipeline to bring Canadian oil
sands crude oil to the Gulf of Mexico, H.R. 3, the Northern Route Approval Act, would declare
that a presidential permit would not be required for its construction.16 The bill passed the House
on May 22, 2013, by a vote of 241-175.
In response to the wide spread of new production of natural gas and a consequent pressure to
expand the means of transporting it to market, the House passed legislation (H.R. 1900) on
November 21, 2013, to require the Federal Energy Regulatory Administration (FERC) to respond
to new gas pipeline permit applications within one year.17
Increasing Domestic Production
A bill to increase on-shore leasing of oil and gas resources on federal land (H.R. 1965), including
the National Petroleum Reserve in Alaska, and shale oil deposits in Colorado, passed the House
on November 21, 2013.
Regulation of Power Plant Emissions
As noted above, EPA’s moves to regulate emissions from coal-fired power plants have been
controversial, and several bills in the 112th Congress passed the House without being taken up in
the Senate. No similar legislation has yet been introduced in the 113th Congress.
Hydraulic Fracturing
The issue of regulation and safety of hydraulic fracturing led to differing legislative proposals.
Under provisions of EPAct 2005, EPA does not have regulatory jurisdiction over certain aspects
of hydraulic fracturing. In the 112th Congress, one proposed legislative solution, the Fracturing
Responsibility and Awareness of Chemicals Act (FRAC Act, H.R. 1084 and S. 587), would have
given EPA such jurisdiction under the Safe Drinking Water Act. Another bill would have
15 For a list of energy-related provisions that were extended as part of P.L. 112-240, see CRS Report R42894, An
Overview of the Tax Provisions in the American Taxpayer Relief Act of 2012, by Margot L. Crandall-Hollick. Energy
tax issues continue to be important in the 113th Congress. For more information, see CRS Report R43206, Energy Tax
Policy: Issues in the 113th Congress, by Molly F. Sherlock; CRS Report R43124, Tax Provisions Expiring in 2013
(“Tax Extenders”), by Molly F. Sherlock, and CRS Report R42374, Oil and Natural Gas Industry Tax Issues in the
FY2014 Budget Proposal, by Robert Pirog.
16 For more information, see CRS Report R41668, Keystone XL Pipeline Project: Key Issues, by Paul W. Parfomak et
al.
17 For more information, see CRS Report R43138, Interstate Natural Gas Pipelines: Process and Timing of FERC
Permit Application Review, by Paul W. Parfomak.
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maintained jurisdiction within the states. Neither legislative proposal was reported out of
committee. In the 113th Congress, the FRAC Act was reintroduced as H.R. 1921.
Another aspect of the hydraulic fracturing issue is the proposal by the Bureau of Land
Management (BLM) to regulate fracking on federal lands.18 On November 20, 2013, the House
passed H.R. 2728, which would prohibit the Department of the Interior from enforcing rules
related to hydraulic fracturing in “any state that has regulations, guidance or permit requirements
for that activity.”
Energy Efficiency
The Energy Savings and Industrial Competitiveness Act of 2013, S. 1392 and H.R. 1616, would
promote energy efficiency in buildings and industry by encouraging adoption of uniform building
codes and authorize a grant program for state energy efficiency programs. The bill was reported
out by the Senate Energy and Natural Resources Committee on May 13, 2013.19
Global Climate Change
On June 25, 2013, President Obama announced a national plan to reduce emissions of carbon
dioxide and other greenhouse gases, as well as to encourage adaptation to expected climate
change. A major feature of the President’s Climate Action Plan was a directive to the
Environmental Protection Agency to issue rules to curtail carbon dioxide emissions from new and
existing power plants. The House Energy and Commerce Subcommittee on Energy and Power
has scheduled a hearing on President Obama’s Climate Action Plan on September 18, 2013.20
Author Contact Information
Carl E. Behrens
Specialist in Energy Policy
cbehrens@crs.loc.gov, 7-8303
18 See CRS Report R43148, An Overview of Unconventional Oil and Natural Gas: Resources and Federal Actions, by
Michael Ratner and Mary Tiemann.
19 For details, see CRS Report R43259, S. 1392, Shaheen-Portman Bill: Energy Savings and Industrial Competitiveness
Act of 2013, by Fred Sissine.
20 See CRS Report R43120, President Obama’s Climate Action Plan, coordinated by Jane A. Leggett.
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