Lights Out

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http://www.alternet.org/story.html?StoryID=16914

 

Lights OutAmanda Griscom, Grist Magazine

October 7, 2003Viewed on October 9, 2003

 

As of Oct. 1, the most successful program in U.S. history for improving energy

efficiency in federal buildings is toast. The demise of the Energy Savings

Performance Contracting program is no insignificant matter, seeing as how the

federal government is the single biggest energy-user in the nation. Taxpayers

spend $4 billion per year to power 500,000 federal buildings nationwide, from

science labs to military bases.

 

The ESPC program grew out of the Energy Conservation Policy Act, which was

enacted in 1992 by President Bush the First, whose intent was to allay problems

that seem to run in the family: rising post-war budget deficits and vertiginous

energy demands at a time of crisis in the Middle East. The program was slow to

take off, but President Clinton recognized its merits and issued an executive

order in 1999 exhorting all federal agencies to participate, spurring dramatic

energy cuts across the board -- and in particular at the Defense Department,

which accounts for 80 percent of the federal government's energy use.

 

Since its inception, the program has drawn a whopping $1.5 billion in

private-sector investments in efficiency measures in federal buildings. The

government itself doesn't put the money down for energy efficiency; private

companies finance and maintain the improvements. Energy consultant Jennifer

Schafer, who represents Honeywell, Johnson Controls, Sempra, and other companies

that implement efficiency measures at federal facilities, called the program

" about as win-win as you can get. "

 

Payback on the $1.5 billion in corporate investments is estimated to take about

five years, with savings on federal energy bills amounting to roughly $300

million per year. And since the efficiency measures last for about 20 years, the

long-term savings could eventually total some $6 billion, according to Mark

Hopkins, acting co-president of the Alliance to Save Energy. That's four times

the original investment -- quite enough to make any bottom-liner salivate. The

private companies split the savings with the feds, thereby saving taxpayers

money while making a profit for themselves -- not to mention cutting down on the

pollution and resource consumption associated with producing electricity.

 

" Letting this program lapse makes no sense at all. It is simply a tragedy, " said

Schafer. " There's not a soul we have talked to on the Hill or anywhere who says,

'God, that ESPC program really sucks. What a drag it is to guarantee savings for

the federal government.' Everybody says, 'Wow! What a great program.' "

 

So what happened? It's not that the Bush administration is opposed to the ESPC

program; it's just that the administration didn't fight for its survival before

its expiration date. As a pilot project, the original ESPC proposal included a

sunset date one decade out from its start -- Oct. 1, 2003. The Cheney energy

plan does include a measure that would make the program permanent, but that plan

has not passed Congress.

 

" If the White House had told Sen. [Pete] Domenici [R-N.M., chair of the Energy

Committee] to move the ESPC provision forward on its own, it would have passed

in a matter of hours, " said Hopkins. " But they're refusing to separate anything

from the rest of the energy plan. That way they can keep the pressure on to pass

the whole enchilada. " In other words, those who support controversial provisions

such as opening Alaska's Arctic National Wildlife Refuge to oil drilling don't

want to section off the more popular measures in the Bush energy plan, like the

ESPC program, because they can be used as incentives to fast-track the plan as a

whole.

 

Bush's willingness to let this unequivocally triumphant program languish for the

sake of a political gambit is particularly discouraging given that the very

circumstances that led his father to institute ESPC are again intensifying. We

may be seeing repeat crises during Bush 41 and Bush 43, but we're not seeing

repeat solutions.

 

They've Got Alaska Over a Barrel

 

Meanwhile, the current Bush administration is focused on a very different kind

of solution to America's energy independence concerns: plundering every last

oil-and-gas-filled crevice of the United States, no matter how iced-over,

far-flung, or short-lived its supply may be. Although Bush's Department of the

Interior has had trouble weaseling its way into the Arctic Refuge, it has

successfully steamrolled into less controversial but similarly remote, vast, and

ecologically sensitive areas of the country.

 

On Sept. 24, amid the hubbub of Mike Leavitt's confirmation hearings, few

journalists and policy makers stopped to notice that the DOI's Minerals

Management Service put 9.4 million acres in Alaska's Beaufort Sea on the

chopping block at unusually low royalty rates. The area in question is not far

from the Arctic Refuge, off the northern shore of Alaska -- land of polar bears,

bowhead whales, and Inupiat Eskimos who still practice maritime hunts. Within

the first few days of the fire sale, energy companies, including ConocoPhillips

and EnCana (a major Canadian oil and gas company), had already snatched up

75,000 acres of prime offshore drilling plots. Estimates of commercially

recoverable oil in the Beaufort Sea range from 4 billion to 12 billion barrels

(compared to an estimated 3.2 billion in the Arctic Refuge), but the area

features some of the world's most hostile conditions for exploration, making it

pricey to drill.

 

There are, of course, likely environmental side effects: Last spring, a report

by the National Academy of Sciences warned that seismic exploration and offshore

drilling in the area would threaten endangered bowhead whales as well as the

livelihoods of traditional Inupiat hunters. Needless to say, that report was

overlooked.

 

Although the Beaufort sale troubles many Alaskan wildlife experts, they say it's

merely one of many concerns in the region, some of them potentially far more

serious. " This is just a small piece of a larger picture in which the federal

government is essentially giving the resources of Alaska away for free, " said

Eleanor Huffines, Alaska regional director for the Wilderness Society.

 

Huffines says she is realistic about the need to expand drilling, and the

Wilderness Society has identified areas in Prudhoe Bay and western Alaska where

it is not opposing increased development. " What concerns me is that no matter

how reasonable we try to be in balancing commercial and environmental concerns,

[the Bush administration's] plans show no balance at all -- no regard for the

seven areas scientists have identified as biological hotspots, no respect for

wildlife habitat, native traditions, water quality, or any non-commercial

values. "

 

Dirty Dealing on Clean Air?

 

No agency within the Bush administration has a reputation for dismissing

" non-commercial values " more doggedly than the Office of Management and Budget.

Last week, however, the agency and its director of Information and Regulatory

Affairs, John Graham, enjoyed a sudden flow of accolades in the media for doing

just the opposite, after releasing a study concluding that clean-air regulations

have health benefits five to seven times greater than the costs they impose on

industry and consumers.

 

The big news reported in major newspapers was that over the last decade,

industry, states, and municipalities spent an estimated $23 billion to $26

billion on technologies to comply with clean-air standards, while society reaped

gains of $120 billion to $193 billion during the same period (that is, money

saved by reductions in emergency-room visits, premature deaths, and lost

workdays as a result of improved air quality).

 

" The report provides the most comprehensive federal study ever of the cost and

benefits of regulatory decision-making, " wrote Eric Pianin in the Washington

Post on Sept. 27. " It has pleasantly surprised some environmentalists who

doubted the Bush administration would champion the benefits of government

regulations. "

 

Strangely enough, however, it was industry representatives -- not

environmentalists -- who tended to see the report as a pleasant surprise.

" Despite the relentless complaining about the OMB we've heard from

environmentalists, [this report] is proof that Graham and the White House

conduct balanced and unbiased analysis, " said Scott Segal, an electricity

industry lobbyist clearly still giddy from the newly weakened New Source Review

rules he fought for, and unconcerned that Graham's findings would pose any

practical threat to industry. After all, it's one thing to admit that

command-and-control regulations have yielded a great payoff for society; it's

another to actually support more of those protections or vigorously enforce the

ones already on the books.

 

Indeed, more than a few environmentalists were less than happy about the

findings: " Reporters picked up on a subplot of Graham's [243-page] report, but

entirely missed the dominant theme, " said Gary Bass, executive director of OMB

Watch. " The bulk of the report is far more troubling; it's about changing the

rulemaking process to favor industry. " Bass says the report encourages loopholes

that may further skew the results of mandatory cost-benefit analyses, the most

egregious of which allows agencies to discount the lives of elderly people and

those afflicted with diseases in evaluations of public-health regulations.

 

Wesley Warren, an economist at the Natural Resources Defense Council who worked

at the OMB during the Clinton administration, sees a clear correlation between

the loopholes and the findings on the benefits of federal air-quality

regulations: " The [evaluation] of the air-pollution rules have been in the works

for several years. John Graham has seen this high-benefit conclusion coming and

that's one of the main reasons why he's spent the last year trying to rig the

game with loopholes -- so he could start ratcheting down benefit estimates in

the future. "

 

Amanda Griscom is a columnist for Grist. Her articles on energy, technology, and

the environment have appeared in publications ranging from Rolling Stone to the

New York Times Magazine.

 

 

 

 

 

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