ENERGY POLICY

1. ENERGY POLICY MAY 12, 2006 JOHN BUSH

2. CAN WE ANSWER THESE QUESTIONS? • What is an energy policy? • Does the US have an energy policy? • Does California have an energy policy? • Who makes Energy Policy?

3. WHO ARE THE ACTORS IN ENERGY POLICY? • In theory the elected government establishes the policy and private enterprise implements it • Voters generally select from a slate of candidates endorsed by private enterprise • Voters are strongly influenced by local and “pocketbook” issues • The clearest lead indicator of energy policy may be the way that private enterprise is placing its investments

4. COMPONENTS OF ENERGY POLICY • A vision—what is to be accomplished? • A strategy—how is it to be accomplished? • Qualitative and quantitative goals • Timing of meeting the goals • Tactics—what is to be done? • Technical • Economic • Political • Social • Implementation—how will it be done? • Legislative framework • Budgets in appropriate time frames • Administrative rules • Management structure • Measurement—how will success or failure be measured? • Development of appropriate measures • Financial measures • Periodic reports

5. EXISTING ELEMENTS OF CALIFORNIA ENERGY POLICY • Greenhouse Emission Reduction • Executive Order S-3-05—June 1, 2005 • 2010 reduce to 2000 level • 2020 reduce to 1990 level • 2050 reduce to 80% below 1990 level • California Code of Regulations Title 13 Section 1961.1 August 4, 2005 • Passenger cars 36% reduction by 2016 • Light duty trucks 24% reduction by 2016 • Renewable Energy Increase • California Renewables Portfolio Standard program—Public Utilities Code Section 399.11 (2005) • Electricity target of 20% generation from renewables

6. CALIFORNIA ENERGY LEGISLATION2005 • AB 1229 Global Warming Label on cars: revises the smog sticker- Passed 10/6/05 • SB 1 Million Solar Roofs: Killed in Assembly • SB 107 Goal of 20% renewable energy for electricity production by 2010 instead of current 2017: Killed in Assembly* • SB 1223: Internet sale of hybrid vehicles* • SB 757: Goal for statewide reduction of petroleum demand by requiring purchase of “cost-effective” alternative fuels* *likely to be reintroduced in 2006

7. IS THE ASSEMBLY THE PROBLEM? • Initiatives: California’s option to by-pass the Assembly • The Clean Alternative Energy Act • Energy Independence Fund: fee paid by producer for “privilege” --up to 6% of gross value of oil (exempts strippers) • Allocated to • Service debt incurred by other provisions • Reduce gasoline and diesel 57.5% • Research and innovation acceleration 26.75% • Commercialization acceleration 9.75% • Vocational training 2.5% • Administration and “public education” 3.5%

8. EXAMPLES OF TACTICS • Diesel and Gasoline Reduction: 10 billion gallons in 10 years • Loans and buydowns • Production incentives • Incentives to build refueling stations • Incentives to install infrastructure • Research grants to private enterprises • Research and Innovation Acceleration: grants to California Universities • Renewable energy technologies • Energy efficiency technologies • Commercialization Acceleration: loans and grants for start-up costs • Vocational Training: grants to Community Colleges • Administration and Public Education • Propagandize the people • Monitor the Assessment • Administer the Authority

9. IS THIS GOOD POLICY?

10. US ENERGY POLICY • Is California a proper model for the nation? • 1 Concern for transportation • 2 Concern for Greenhouse Gas emissions • 3 Concern for electricity supply (little coal) • The National policy current priorities: • 1 Security of oil supply • 2 Concern for nuclear proliferation • 3 Concern for economy • 4 Concern for transportation

11. PRESIDENT’S NATIONAL ENERGY POLICY: 2005 Energy Policy Act 2005 left issues unaddressed • Opening the Arctic National Wildlife Refuge to oil and gas exploration • Expediting investments in refineries • Streamlining the New Source Review process • Increasing production from the Outer Continental Shelf • Accelerating building of the Alaska Natural Gas Pipeline • Enacting Clear skies legislation to encourage investment in cleaner coal technologies

12. ADVANCED ENERGY INITIATIVE • Vision: “the principal energy challenges we face” • “Promoting energy conservation” • “Repairing and modernizing our energy infrastructure” • “Increasing our energy supplies in ways that protect and improve the environment” • Goals • “Keep America Competitive” • “For the sake of our economic and national security” • Ensure “reliable, affordable, clean supplies of energy” • Strategies • “Changing the way we fuel our vehicles” • “Changing the way we power our homes and businesses”

13. ADVANCED ENERGY INITIATIVEFUELING VEHICLES • Existing technologies • Increase CAFÉ Standards • Tax incentives for hybrids and clean diesels • Clean diesel regulations • Renewable ethanol and biodiesel • Tax credit for alternative fuel facilities • Advanced batteries for plug-in hybrids • Ethanol from cellulose • Hydrogen fuel-cell vehicles by 2020

14. ADVANCED ENERGY INITIATIVE POWERING HOMES AND BUSINESSES • Existing technologies • Make it easier to find and produce natural gas domestically • Expedite permitting of LNG terminals • Establish energy efficiency standards for large appliances • Foster investment in “newer, cleaner coal technologies” • “Encourage investments in safe and reliable nuclear power” • Provide tax incentives for electricity production from renewables • Clean coal technology research • Global Nuclear Energy Partnership • Reduce cost of photovoltaic technologies

15. IS THIS GOOD POLICY?