2.02 Energy Policy

A. Problems

The nation needs to ensure that we maintain an integrated, consistent and equitable energy policy. The federal energy policy shall demonstrate foresight and long-range planning that will result in efficient production and end-use of energy. We must seek an energy path which minimizes adverse impacts on the natural environment and on the health of our citizens. Local governments, which can play a major role in improving the efficiency of energy use, should be given encouragement and assistance to do so.

B. Goals

The nation shall develop an integrated, consistent, and equitable energy policy with both a short-term and long-term perspective. This policy should recognize, based on historical experience, that the world energy market is not free and not subject to customary competitive pressure which could yield consumer benefits. Our national policy must ensure the vitality of a domestic energy industry in order to avoid endangering our national economy.

The four major goals of the national energy policy are to: a. ensure that all energy resources are developed without bias in a manner which protects public health, safety and the environment; b. produce and use existing energy resources as efficiently and effectively as possible; c. reduce our dependency on energy resources that are depleting; increase the use of clean, renewable forms of energy; and continue development of conventional energy resources in an environmentally sound manner; and

d. educate the public on the efficient and equitable use of all forms and sources of energy. C. General Energy Policies

1. Federal Policy Approach

The implementation of a national energy policy into specific energy programs should be guided by the following principles: a. equity: energy issues shall be addressed in a manner that is fair to all regions, sectors and income groups;

b. impact on jobs: energy resources should be developed with a concern for the impact on jobs;

c. impact on the environment: existing energy resources should satisfy federal, state and local environmental standards. Decisions about the development of new energy resources should respect a careful balancing of economic and environmental factors;

d. local involvement: where there are overriding national or state energy concerns, federal and state governments have a legitimate role in planning and decision-making. Local governments should be included in those processes;

e. coordination: energy is not an end in itself but must be viewed in relationship to other public values. All levels of government should develop planning and decision-making processes which relate energy to employment, environment, conservation, and other public priorities;

f. conservation: energy programs should promote conservation and efficient use of existing resources; and

7. domestic production: the federal government should encourage domestic energy production in order to decrease our dependence on foreign energy sources.

Federally supported energy research should benefit all regions and should thoroughly explore the interrelationships of energy, capital, labor, and materials, as well as the technological and environmental issues of energy systems. At the same time, efforts should be made to encourage private industry to fund research on and support commercialization of energy solutions.

The federal government should devote more of its research and development funds to renewable energy sources including, but not limited to, the conversion of agricultural, forestry and urban wastes to methanol and other liquid and gaseous fuels and the use of wind power, photovoltaic, solar thermal, geothermal power, tidal power, hydrogen and other renewable sources of power whenever feasible.

3. Energy Tax Policy

Federal energy taxes should be allocated to develop new and existing energy resources, shift to renewable energy sources, promote energy conservation, assist energy efficient transportation, and maintain a strong domestic energy industry.

The federal government should promote, through direct expenditures and tax policy, those investments which increase end-use efficiency.

4. Promoting a Local Government Role

The federal government should continue to develop a program of financial and technical assistance to local governments and regional planning bodies for energy planning. The government should also provide assistance to cities to coordinate and implement conservation and energy programs in a manner consistent with the national energy policy.

When federal funding is made available to states to promote energy programs, incentives should be provided to encourage state and local coordination regarding effective disposition of those funds, and where appropriate, allow local governments to apply directly to the federal government for funding.

D. Energy Conservation and Renewable Energy Resources

1. Federal Energy Programs

The federal government should continue to support and provide leadership in conservation and fuel assistance programs. Local governments should participate in the design and implementation of these programs.

2. Community Energy Assistance

The federal government should provide community energy assistance to cities which have developed a local strategy in addressing energy conservation and renewable resources programs. The key components of the strategy should be energy efficiency and equity, local administration of funds, assessment of local needs, and encouragement of public/private partnership in the development of local energy programs.

Additionally, a technical assistance program should be created to provide training and information services in support of local energy conservation of programs.

3. Renewable Energy Resources

The federal government should support the development of projects which encourage the efficient production of energy. The federal government should provide incentives for efforts such as cogeneration, solar energy, waste-to-energy, and district heating and cooling projects. Federal support should promote the development, use, and commercialization of such resources through support for research and development and assistance to local communities for demonstration projects of potential new approaches.

4. Utility Regulation to Promote Conservation

Federal and state utility regulatory agencies should encourage electric utilities to promote the economic and efficient use of electric energy. For example, such support could included daily off-peak rates to customers willing to pay metering costs or lower rates to customers willing to have their service interrupted at times of highest peak demand. Utility regulatory agencies should prohibit utilities from discriminating against customers using solar and other alternative sources of energy.

5. Energy Conservation in Transportation

NLC supports an aggressive national program, including the private sector, to establish a national distribution system for alternative fuels and financial incentives for acquisition of alternative fueled vehicles. The introduction of alternatively fueled vehicles should take into consideration the cost and availability of alternative fueled vehicles and the cost of establishing refueling facilities for these vehicles.

NLC opposes a federally mandated phase-in of a fixed number of alternative fueled vehicles for fleets.

The federal government should continue to seek a general increase in the energy efficiency of motor vehicles on our highways. In the interest of energy conservation, the federal government should raise Corporate Average Fuel Economy (CAFE) standards to the maximum extent feasible, taking into consideration public safety and the need for U.S. jobs in the automobile industry. Foreign automobile manufacturers should be held to at least the same standards as domestic auto manufacturers. The CAFÉ standards should be applied to all general driving and passenger vehicles.

A research and development program should be aggressively pursued centering on energy efficiency improvements of urban transportation systems, including: a. improved technological solutions for vehicle efficiency and fuels, including hydrogen, electric power and methane;

b. greater understanding of energy savings through improvement of management systems, along with institutional limitations and regulatory restraints which are barriers to unifying system management and operation;

c. clarification of linkages between transportation facilities, development patterns and energy demands; and

d. incentives for research and development by individuals or small scientific or engineering agencies working on new energy resources and invention for automotive or other vehicular power. As more and more energy technologies are researched and developed, such as alternative fuels, efficiency plans and demand management studies, there should be a national program specifically for putting this developed energy technology into practice. E. Conventional Energy Sources

1. Synthetic Fuels

Until the gains from energy conservation and renewable resources are fully realized, certain fossil fuels such as coal, unconventional gas, and coal/shale derived fuels will have to be utilized in the interim.

The federal government should assist in the selective development of these fuels. Choices concerning their development should be guided by the following criteria (not in priority order): impact on ambient air quality, including CO₂ impact on water quality; impact on land and land use; impact on noise levels; impact on the existing transportation network; cost-effectiveness of developing each fuel; impact on various socioeconomic groups; the ease with which the fuel can be refined into more than one product; the net energy produced; impact on the existing infrastructure; the rapidity with which imported oil can be displaced; and the ease in which the fuel facility can be used by renewable forms of energy.

2. Natural Gas

The nation and its cities must have sufficient supplies of natural gas. As a positive effort to meet our natural gas needs, the federal government should promote the development of this significant resource. Natural gas should be allowed to make its optimum contribution in solving the nation's pressing energy and environmental problems.

The Federal Energy Regulatory Commission (FERC) should continue to review all purchased gas costs to ensure they are just and reasonable, to make public all requests for rate increases, and to shift the burden of proof to the pipeline requesting a rate increase to show that the increase is just and reasonable. FERC should continue to encourage the opening of services from the pipelines to ensure an open market between producers, local distribution companies and users.

3. Nuclear Power

The federal government should improve existing licensing and regulatory procedures for new nuclear power plants. NLC supports a "one-step" licensing process for the construction and operation of nuclear power plants, provided that at each stage of the process, including siting, design and licensing hearings be held in the vicinity of the site.

Final sitting approval of energy producing facilities should remain a local and state power, subject to appropriate federal environmental laws and regulations. Once sites are designated and licensed, a program of assistance should be made available to local communities located nearby. Funds should be available for emergency preparedness, technical assistance, and emergency preparedness information.

Federal agencies involved in nuclear licensing should undertake a comprehensive and effective program of disseminating information to local elected officials.

4. Hydroelectric Power

The pricing of hydroelectric power generated at federal projects should be the lowest possible consistent with sound business principles, while ensuring that all costs to the federal government are fully recovered including cost of federal capital.

The federal government should encourage and support the development of environmentally sensitive hydroelectric power. The federal government should continue to own and operate the federal power marketing agencies and should not sell, transfer, exchange or otherwise dispose of them.

5. Petroleum

As part of our nation's overall energy policy and national security, the federal government should institute measures to promote the availability, conservation and efficiency of the domestic petroleum industry including equitable tax policies and incentives.

The federal government should support cooperative ventures with industry and universities that can lower the costs of U.S. oil exploration and production. Specifically, cooperative research efforts to enhance oil recovery should be expanded to increase domestic productivity.

The federal government should not reinstate price controls on domestically produced crude oil.

In order to be prepared in the event of a future oil embargo or supply disruption, the federal government should increase the rate at which petroleum is stockpiled in the Strategic Petroleum Reserve and should authorize and appropriate sufficient federal funds for this purpose. In the event of an oil embargo or supply disruption, there should be no action by the federal government which causes the depletion of the Strategic Petroleum Reserve simply to mitigate oil prices.

6. Coal

Coal is the most abundant fossil fuel in the United States. Clean coal technology should be pursued to ensure that our nation's communities have a clean, efficient and effective source of electricity and/or fuel for the future.

The requirements for development and retention of federal leases should be streamlined, balanced and evaluated to allow for effective and efficient development of this resource. The current federal policy of double taxes should be eliminated (tax on tax). Coal taxes should not exceed taxes on other energy sources. The transportation of coal, including slurry, should be considered and steps outlined to alleviate captive shipper inequities. Improving the transportation of coal will enhance both the domestic and export markets and contribute to energy security. NLC should encourage clean coal research grants by federal and state governments as well as the private sector to promote economical and environmentally sound use of this abundant resource.

F. Energy Emergencies

We may, because of an oil embargo or massive power outage, need to drastically and quickly reduce energy consumption. The repercussions would be acutely felt at the local level.

In order to respond to such a reduction, the federal government should help the nation's cities and citizens cope with higher energy prices and dramatic fluctuations in consumption.

In the event that allocation controls are used during an energy emergency, the federal government should take the following actions: a. develop a national program to inform local elected officials of the procedures for managing energy sources under the emergency conditions;

b. require the inclusion of local governments in the development and implementation of the state emergency program;

c. give priority to essential public health and public safety services and take action, in conjunction with state governments, to expedite the delivery of energy to local governments in the event of a shortfall;

d. adjust emergency allocation regulations so that they do not discriminate against cities that have already cut energy consumption and ensure that suppliers adhere to the allocation regulations in calculating allotments to municipalities;

e. designate a single office of emergency energy preparedness which would coordinate energy activities of federal, state, and local governments and provide technical and financial assistance to local governments for the preparation of energy contingency plans;

f. not preempt state and local price and allocation controls;

g. ensure that utilities and regulatory agencies inform and consult with local government officials at the earliest possible stage of any energy emergency; and

h. give the President standby emergency powers to respond to a clearly identified emergency with measures, including rationing, to cut energy consumption.

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