The Environmental and Energy Study Institute (EESI) appreciates the opportunity to comment on DOE’s EERE programs. The Administration has an enormous opportunity to develop the right kind of energy policy that is based on moving the country from dependency on foreign and domestic petroleum and nuclear and coal resources to aggressive development and deployment of energy efficiency technologies and practices and the production of domestic renewable energy resources. The Administration’s National Energy Policy, developed by the Cheney Task Force, includes only a few of the provisions we recommended, such as combined heat and power and expanding the Energy Star program, but instead it largely focuses on fossil and nuclear supply issues - not a forward-looking energy policy that will serve the nation or our planet well in this new century. Furthermore, the slashing of the efficiency and renewables RD&D in the Administration’s proposed budget is short-sighted, ignores the major environmental issues confronting our world, and abandons enormous opportunities to truly invest in America’s future.

According to a New York Times/CBS News poll on June 21st, only 33 percent of Americans approve of how President Bush is handling the nation's energy problems. Nearly two-thirds of Americans, including a plurality of Republicans, say that Mr. Bush and Mr. Cheney are too beholden to oil companies, and that they are more likely to formulate policies that favor the industry. According to a Washington Post-ABC News poll on June 5th, 90 percent of those polled said they supported increased energy conservation by consumers, more conservation by business and the development of more solar and wind power. An overwhelming 89 percent of respondents said they would require vehicle manufacturers to improve the fuel efficiency of their products. Increased research and development (R&D) of energy efficiency and renewable energy is a requirement if we are to get serious about addressing this country’s energy, environmental and economic needs. In fact, historically, U.S. energy policy has been anything but balanced as it has been dominated by strong government support of fossil and nuclear energy despite these having been mature and highly profitable industries for decades. DOE should also support strong energy efficiency and renewable energy standards, tax credits, and federal funds for state and local efficiency and renewable energy programs - which have proven their worth by helping transform markets for technologies that DOE and the national labs, in partnership with the private sector, often have helped developed. State programs are critical partners with federal research because they tend to be the sites for demonstration projects and deployment.

Their programs provide alternatives to polluting energy sources and are vital for the commercialization of renewable energy and energy efficient technologies. Clean energy technologies provide multiple benefits, such as improving air and water quality, economic development, decreasing dependence on foreign petroleum, improving public health and reducing greenhouse gas emissions. These are enormous public benefits which are not reflected in the market place. These technologies also provide an international multi-billion dollar market in developing countries for the United States and increase our competitiveness in the global market. Submitted in a Congressional hearing and supported by the U.S. General Accounting Office, a recent DOE report documenting twenty of its most successful energy efficiency projects found that the nation saved 5.5 quadrillion BTUs of energy over the past two decades, worth about $30 billion in avoided energy costs. The cost to taxpayers for those activities was $712 million during the 1990s, less than three percent of the savings. In fact, the energy bill savings from these 20 projects alone is over three times the amount of money appropriated by the Congress for all DOE energy efficiency and renewable energy programs during the 1990s, demonstrating a very good return on investment for taxpayers. These savings continue to increase every year. Overall, DOE’s energy efficiency programs returned more than $100 billion to the economy for the relatively small investment of $13.0 billion through 2000. The U.S. spent over $600 billion on energy last year, with U.S. oil imports climbing to approximately $120 billion, nearly $440 of imported oil for every American. These are dollars that could be invested domestically if we were implementing much more aggressive fuel economy programs and ensuring that alternative fuels (especially biofuels) were actually being used to meet fleet requirements. These amounts would have been even higher if not for past investments in energy efficiency research and development (R&D) and deployment programs and continued progress is critical for sustaining and increasing these benefits. EESI recommends restoring and increasing funds to DOE’s energy efficiency programs.

The Federal Energy Management Program (FEMP) continues to make progress saving energy and taxpayers' money by investing in federal buildings. The bill to heat and cool federally owned and occupied buildings is about $4 billion annually. Improvements in federal facilities undertaken through FEMP saved the federal government over $11 billion between 1985 and 1995 - for a $1.8 billion investment and much more needs to be done. The Administration’s budget request cut FEMP by 48 percent which we regard as a serious error. EESI recommends full funding of the program. The federal government should be a leader in use of renewable energy and efficiency technologies - not only would this save money, but it would also help transform markets. It is truly the right thing to do. Just as the Texas Governor’s Mansion saved $6,600 in one year by opting for a "green" energy package through Austin Energy, the federal government should be leading here. Therefore, we urge the federal government (led by DOE) to adopt its own Renewable Portfolio Standard, as well as support one in national energy legislation. EESI also urges the adoption of a federal government Renewable Fuels Standard and one in national energy legislation as well.

The cost of renewable energy technologies has declined dramatically over the past twenty years. Solar and wind prices have dropped over 80 percent and geothermal has declined by over 50 percent. Further research and development will continue to lower the costs and expand the use of renewable energy around the United States.

Based upon what EESI has learned through the Congressional briefings we have held on geothermal energy, we believe the DOE geothermal energy research program has been seriously underfunded for years. DOE’s own Strategic Plan calls for a near-term annual budget level of $50-60 million, but funding has ranged around $20 million. By comparison, Japan is spending $150 million on geothermal energy research and development. Critical technical needs include the development of advanced drilling, exploration and reservoir sensing, energy conversion and metals recovery, and enhanced reclaimed water injection. According to the geothermal industry, DOE’s efforts have supported important advances, including development of the "advanced direct contact condenser," which increases plant efficiency, expands power production and reduces environmental abatement requirements; improved drilling cement, which extends the life of geothermal walls, reducing operating costs and improving power reliability; and development of the rolling float meter, which reduces costs and improves drilling success rates. Existing plants could provide 20-30 percent more power if there was significant short-term investment in technology improvements and operational changes. In addition, a thousand megawatts or more of additional capacity lies in or immediately near existing facilities. EESI recommends an extension of the production tax credit to new facilities and incremental capacity additions at existing power plants, a strong DOE research and development program, and priority processing by federal land management agencies of leases and permits for new geothermal development and expansions at existing facilities (consistent with the substantive requirements of the law). Geothermal is a vastly underutilized resource, as are all other non-hydro renewable resources. There are important geothermal resources in the West, the very area which has experienced the most serious energy supply problems. However, up-to-date geothermal resource mapping has not been done since the 1960-1970s. This must be changed. Furthermore, there are many places which could utilize geothermal energy for direct use, but without really understanding and being aware of the resource, people are not likely to tap it.

Solar energy is an abundant, clean, reliable, and renewable energy source that can help address our nation's energy crisis, and it can do this pollution-free. Government research has led to dramatic improvements in solar technologies in recent years. For example, the Solar Energy Industries Association reports that the cost of solar electricity has dropped by more than 40 percent in just the last five years, thanks in large part to government and industry research programs. EESI recommends that DOE restore, and increase, research, development, and deployment programs for solar energy, including photovoltaics, concentrating solar power, and solar buildings.

We applaud work on "zero emission buildings" and believe it is a key role DOE can play in fostering the integration of renewable technologies with high efficiency building design, materials and equipment. Buildings consume about one third of our energy - we can dramatically change this in new construction. This results in improved products all around.

Bioenergy technologies use renewable biomass resources to produce an array of energy related products including liquid, solid, and gaseous fuels; electricity; heat; chemicals; and other materials. Bioenergy ranks second (to hydropower) in renewable U.S. primary energy production and accounts for three percent of the primary energy production in the United States. Bioenergy technologies must be part of a national energy plan because it will decrease foreign dependence on petroleum, increase energy supplies, provide products previously derived from petroleum, improve the environment, and provide rural economic development. We strongly support the DOE/USDA’s goal of tripling bioenergy and biobased products by 2010.

Continued work should be supported by DOE and USDA in this area as there are opportunities not only to tap waste streams (which are themselves often environmental problems), but to improve conversion technologies and utilize a broad variety of feedstocks. In fact, we should be working to develop low-input feedstocks to capture both economic and environmental benefits. We urge that DOE work with small and mid-sized companies as biomass is a distributed resource, and small-scale facilities using locally available biomass can provide significant local economic development returns to communities.

EESI strongly supports the Regional Biomass Program as an important vehicle through which to partner with states and localities in catalyzing the further sustainable development and utilization of biomass. The resource can take many forms and varies by region. Helping to provide resources for "biomass inventories" is well worth the small investment entailed. EESI strongly recommends that resources be provided for Renewable Resource Assessment. This needs to be done on a state/regional basis by resource (biomass, solar, wind, geothermal) with the information made available in an understandable, usable way. Experience tells us (as does industry) that if people don’t know the value or size of the resource available to them, then it is not going to be developed or viewed as being legitimate. Renewable sources are reserves just as much as are oil, coal, and gas and should be counted as such. This is not a huge ticket item, but it can have enormous impact. EESI views increased deployment of clean energy technologies in public facilities, particularly schools, as essential to transforming the market. There continues to be a tremendous need for new school construction and school renovation across the country. Not only are school districts huge energy consumers, but they have had to deal with crushing energy bills in California and around the United States. In some schools this year, it literally became a question of teacher lay offs versus paying utility bills. According to DOE, easily 25 percent of energy consumption in schools is wasted and could be turned into dollar savings to help address the energy crisis and provide resources for "real" education for improved facilities, teacher salaries, equipment, etc. The savings on an annual basis is an enormous hidden resource for school districts and legislatures across the country that are concerned about energy costs and the need to improve education and how to pay for it. Again, why should we simply waste energy when we can do far better and have a better quality of life at the same time? DOE should continue its Energy Smart Schools program, as well as provide resources for "energy smart" design to state and local governments and school districts, and consider cleaner, safer school buses that are powered by alternative fuels as opposed to diesel buses that expose school children to potentially harmful levels of diesel exhaust.

Energy efficiency and renewable energy technologies do not have a level playing field because of large subsidies for mature, conventional energy sources, such as coal, gas and nuclear. Cutting funding for DOE's energy efficiency and renewable energy programs will increase consumers' energy bills, hurt U.S. economic growth, increase the likelihood of power shortages, put upward pressure on energy prices, increase oil imports, and increase air pollution. Cuts in DOE's clean energy programs will harm public-private partnerships that have been built up over many years and harm R&D and deployment "infrastructure" that exists at the national labs, state energy offices, and elsewhere. If we forego federal research and development in energy technologies, it will not be replaced in kind by the private sector, and it will be extremely difficult to regain the knowledge and experience built by DOE programs.

The public power sector serves millions of customers across America. However, it can not utilize conventional "production tax credits" so we urge expansion of the Renewable Energy Production Incentive (REPI).

Among other points we want to emphasize are that federal programs should utilize and further develop state and local governments as partners. They are living laboratories, can leverage resources and help ensure broader outreach to the public, small businesses and other key constituencies - all of this helps optimize DOE’s investment and ensures that technical assistance and technology development gets to those who can use it. State and local governments can also provide an important feedback loop. This is why we also support Rebuild America as an important gateway and outreach tool.

We are blessed with an abundance of renewable resources and efficiency opportunities - they are the basis of the clean, sustainable future we should be creating. EESI was founded in 1984 and established as an independent, non-partisan policy development and educational organization by a group of Members of Congress.