Searching for the Keys to the Energy Puzzle

Amy Harder
National Journal

At panel discussions, keynote addresses, and conversations across Washington, it's a ubiquitous idea: We need a national energy plan!

I have been asked many times whether I think the country needs such a plan (or strategy or blueprint; choose your favorite relevant noun). It's a convenient, catchall, feel-good phrase that generally means: Washington, get your act together on energy and climate policy.

With the Senate debating its first energy bill in six years, hype around a "national energy plan" is running high. It shouldn't be. This energy-efficiency bill, which has just one—one!—mandatory provision, is a tiny sliver of any sort of national energy strategy.

"It's not comprehensive energy reform by any stretch," said former Sen. Byron Dorgan, D-N.D., of the efficiency bill. "But given the limitations of what might or might not be possible in the Congress, it's worth doing."

The whole concept of a national energy plan is a bit misplaced. And when people ask me whether I think we need a national energy plan, I answer in two ways.

First, I answer with another question: How do you define a national energy plan? I can't answer a question whose premise lacks a definition. In this case, the definition depends on who you ask.

To virtually all Republicans and many Democrats representing energy-intensive states and districts, the crux of a national energy plan means expanding oil and natural-gas drilling offshore and on public lands, relaxing regulations, and minimizing the federal role as much as possible.

To many Democrats and others concerned about climate change, a national energy plan might be better called a national climate and energy plan. That could take the shape of a cap-and-trade system that caps the amount of greenhouse-gas emissions companies can emit. Congress tried but failed to pass such a proposal during President Obama's first four years in the White House. Or it could mean a carbon tax, which has gained traction among think tanks in recent months. Or it could mean regulations, which Obama has vowed to use to tackle global warming with Congress stalled.

As long as most Republicans and Democrats define a national energy plan in these widely different terms, finding agreement on just one plan will require significant compromise on both sides.

The second thing I say in response to a question about whether the country needs a national energy plan is that we already have one. You just may not like it very much. This plan is made up of a patchwork of policies put in place largely by the pair of energy bills that then-President Bush signed into law in 2005 and 2007 at a time when Washington was trying to become more energy independent. These policies include the renewable-fuel standard, which has come under intense bipartisan scrutiny in the last year, and stronger fuel-economy standards, which Obama in turn made even more ambitious. A host of tax incentives, both temporary (like the wind production tax credit) and permanent (several oil and natural gas tax deductions) also shape our nation's energy plan.

"Anybody who says we don't have a plan—yes of course we have a plan," said Chris Miller, who until earlier this year was the top energy and environment aide to Senate Majority Leader Harry Reid, D-Nev. "This is our plan until something new passes Congress and is signed by the president."

That's easier said than done, especially given how much has changed in the past six years. The government warned in 2007 that the nation was running out of natural gas. Today, some people argue we have a surfeit of it. In 2005, we imported 60 percent of our oil; today, it's down to 40 percent. The term "fracking" was associated with Star Trek, not oil and natural gas. Global greenhouse-gas emissions are at a record high, even though U.S. emissions are down in the last six years. Layered on top of this sea change in energy are politics much more averse to anything that expands government involvement or deals with climate change.

The better question to ask is whether we need a new national energy plan, in light of the new energy—and climate—landscape. While it may not seem like it, Washington is debating all of this a lot: The House Energy and Commerce Committee is crafting legislation to reform the renewable-fuel standard. The Environmental Protection Agency is crafting rules controlling carbon emissions from power plants. If or when Washington tackles comprehensive tax reform, the energy industry will have much at stake.

"I think we have various energy policies, all of which address a different part of the puzzle that we're working through," said former Senate Energy and Natural Resources Chairman Jeff Bingaman, D-N.M. "The idea that we're going to have a 25-word solution to our energy problem is not realistic."

The 30-page energy-efficiency bill the Senate is debating—or trying to debate, if Republicans allow it—is a very small piece of this puzzle. But if you can't (yet) agree on the big pieces, you should start with the small ones.