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Bipartisan Senate Bill Targets Reducing Oil Consumption, Increasing Efficiency

A bipartisan group of Senators: Jeff Bingaman (D-NM), Evan Bayh (D-IN), Norm Coleman (R-MN), Joe Lieberman (D-CT) and Lincoln Chafee (R-RI) have developed and introduced legislation aimed at reducing US dependence on fossil fuels, especially oil.

The Enhanced Energy Security Act of 2006 (S. 2747), introduced Thursday by Jeff Bingaman (D-NM) and co-sponsored by 10 other senators, is designed to spur energy conservation with a focus on reducing oil demand through greater fuel efficiency and finding ways to moderate natural gas demand by promoting renewable electricity production.

Among the most important provisions of the bill will be an emphasis on an expanded plan for economy-wide oil savings that will cut oil use, from projected levels, by 2.5 million barrels of oil per day by 2016, 7 million barrels of oil per day by 2026, and 10 million barrels of oil per day by 2031.

Other listed co-sponsors for the bill include: Maria Cantwell (D-WA), Hillary Rodham Clinton (D-NY), Susan Collins (R-ME), John Kerry (D-MA), Bill Nelson (D-FL) and Ken Salazar (D-CO).

The high gas prices we are facing today can only be addressed by a serious, long-term effort to reduce our dependence on foreign oil. Everything from our national security to our economy is impacted by our energy demands, and it will take an effort equal to that of landing a man on the moon to develop a strategy to meet those needs. The bipartisan energy plan we have introduced today represents a real step toward meeting that challenge.

—Senator Bayh

In addition to the mandated and measured decrease in oil consumption, the legislation includes a variety of measures designed to reduce the country’s almost total reliance on petroleum products in the transportation sector, including:

  • Mandating that each Federal agency achieve at least a 20% reduction in total petroleum consumption, measured from the baseline of fiscal year 1999, not later than 1 October 2009.

  • Accelerating the widespread commercialization of all types of electric drive vehicle technology into all sizes and applications of vehicles, including commercialization of plug-in hybrid electric vehicles and plug-in hybrid fuel cell vehicles, with the application of $1.8 billion in funding from fiscal years 2007 through 2012.

  • Providing up to $1 billion in incentives for the production of cellulosic ethanol from fiscal years 2007 through 2011.

  • Establish a research and development program for lightweight materials for vehicles, and funding it with $360 million from fiscal years 2007 through 2012.

  • Expanding the authority of the Secretary of Energy to provide loan guarantees and competitive grants to automakers and parts manufacturers to convert existing plants or to build new facilities for manufacturing fuel-efficient vehicles and vehicle components.

  • Establishing a trust fund to provide matching funding for building out alternative fueling stations.

  • Providing funds to states for programs to encourage motorists to retire vehicles that are inefficient, and for programs to reduce school bus idling.

The bill is similar to legislation that Sens. Bayh, Brownback, Lieberman and Coleman introduced last year. That bill—S.2025, the Vehicle Fuel Choice Act (earlier post)—provided a mix of energy policy and energy tax incentives aimed at moving our economy toward both more efficient use of oil and a more diverse future mix of transportation fuels, including biofuels. Introduced by Bayh, the bill had 20 cosponsors.

Because S.2025 mixed policy and tax provisions, it was referred in November to the Senate Finance Committee—where it still sits.

Yet, many of the provisions of S.2025 are in the jurisdiction of the Senate Energy Committee. The Enhanced Energy Security Act of 2006 takes the energy-related provisions pf S. 2025 and packages them in a bill that has been referred to the Energy Committee.

The new bill also includes a number of provisions aimed at relieving demand and price pressure on natural gas, encouraging states to strengthen their programs on demand-side management, and better educating consumers about energy efficiency measures that they can take.

In addition to this bill, Sen. Bingaman and other senators introduced, also on a bipartisan basis, legislation that will extend a variety of tax provisions contained in the energy bill enacted last year to encourage efficiency investments and the development of renewables. It also will provide new incentives to help Americans buy more fuel-efficient vehicles. The cost of these incentives will be offset by closing various tax loopholes for large oil companies.



Rafael Seidl

This strikes me as a more intelligent response to rising fuel prices than $100 rebate checks. Still, I would prefer that politicians define goals in terms of reduction targets (emissions, CO2, energy imports from specified nations etc.) and incentives for meeting those targets / penalties for failing.

In the energy sector, capital investment usually have to amortize over 20 years or more. Ergo, the best and cheapest incentive may be to eliminate uncertainty wrt future government regulation and taxation, to the extent that is legally possible. For example, Germany has guaranteed low taxes on natural gas fuel through 2020, to diversify energy sources away from oil. Afaik, it may come from any source, incl. biogas if it meets the technical standards. Carmakers are free to burn it in ICEs, reform it into H2, convert it to methanol/DME or anything else.

Politicians and bureaucrats should not be explicitly favoring any one specific technology over any other, as that stifles innovation. An egregious example is California's ZEV law, which prescribes an certain minimum percentage of sales has to be EV or hydrogen FCEV, even if you sell range-centric HEVs as well. The specifics of the law are diverting R&D funding away from alternatives, e.g. recuperation-centric hybrids, engine downsizing, membrane absorption chillers, HCCI combustion, particulate filter retrofits etc.


I agree. Don't specify technology; specify goals. Reward behavior that gets you to those goals. Discourage behavior that gets you away from those goals. We have the absurd situation where we are subsiding sub 30 mpg hybrids and giving nothing to those who choose 40 mpg non hybrids.

gerald earl

This is based on the bipartisan s.2025 bill I have been promoting in a few previous posts.This is probably the best chance at a bill that can pass and that will actually begin a weening from oil.I think the technolgy and the mindset on this website would be able take this foothold and vault us further and faster than the reduction goals called for in the legislation.
The environmentalists and the security hawks are finding common interest in a cleaner domestic fuel supply.We may at times arrive at the same point for different reasons and motivations.Intellectual discourse and an inclination toward mutual understanding could lead to a much broader impact upon the political landscape as well as the corporate boardrooms.
I would encourage gcc poarticipants to email or call your reps and register your support for this legislation.I believe you will find that your voice is heard.It is an election year after all.


I'm having trouble seeing how this does much to achieve the goal. Why not just put a $1 per gallon tax on gasoline from imported fossil fuels (and the equivalent for other imported fossil fuels), use the tax proceeds to build renewable energy for government facilities and for enery research, and let the market work out the technology for transportation and other energy uses.

anti gravity

titanic, deckchairs ect


After last year's energy bill, and the direct effect it's had on our gas prices, I have no faith in our politicians.


So you're saying penalize the consumers. Might I remind you that most had no choice in the matter of the car that they purchased! We cannot all buy new efficient cars to alleviate the burden of more taxes! Make the car manufacturers responsible for releasing more efficient vehicles. Again, we only buy cars that are available, not fictious ones.

Joseph Willemssen

This will never happen, but if they really wanted to change the equation quickly they'd slap a huge emergency tax on gasoline - something like $7. *THAT* would curb demand immediately, which would drive down wholesale prices. Then they could ratchet the tax back until the wholesale price dropped about a buck, then they could leave a one dollar tax in its place to fund alternative fuels, efficiency incentives, transportation alternatives, etc.

Incrementalism won't do much in terms of shifting demand, especially in the short-term.

Joseph Willemssen

Might I remind you that most had no choice in the matter of the car that they purchased!

NO choice? People have always had a range of choices available to them, and by-and-large they bought what they bought with the fuel prices at the time in mind - not potential future fuel price upturns.

Prius for me

When free markets don't work, go with the trickle up theory:
penalize consumers (higher gas $) and when they react (as only a select few are now) then the manufacturers might follow..

Joe Rocker

Gutless politicians. They need to raise the price of gas 50 cents right now and then raise it one penny per month after that. Eventually gasoline will be too expensive and we will have our own domestic energy instead of buying from Middle East dictators.

Tripp Bisop

Yeah, all of the $40K+ Yukons, H2s, and F350 supercab commuter cars out there are a clear indication that the average joe just doesn't have a choice in the matter.

gerald earl

I think the carrots offered would work better than the tax clubbing.Look at the screaming about prices now.
Europeans pay five to more than six dollars per gallon.I heard that their cafe is five mpg higher than ours.
I dont see those kind of results flying in our more geographically spread out society.I think we need a system designed to fit our societal model as opposed to following theirs.
The two different systems would produce different solutions to problems.A cross pollination of a sort could then be exchanged resulting in ,I think, a greater creative energy.

Joseph Willemssen

I heard that their cafe is five mpg higher than ours.
I dont see those kind of results flying in our more geographically spread out society.

That doesn't make sense to me. If we're more spread out, somehow "requiring" more vehicle-miles per person, then we should be the ones with the higher mileage vehicles. And since we must drive more highway miles, and that generally is a more efficient means of travel, then again that would mean we would have higher mileage vehicles.

gerald earl

seven dollars a gallon would destroy the economy eliminating the capital needed to fund alternatives.Incremental withdrawal from oil addiction is what is practically achievable.Cold turkey would be a violent and perhaps fatal treatment.


Yes. Absolutely. Penalize consumers for buying and retaining cars which burn more fuel than necessary and create incentives for buying more efficient cars. Remember that there's a huge reservoir of used cars and SUVs out there. Even if manufactures were to stop shipping gas-hogs today, the older cars would still continue to guzzle.

The only way to reduce fuel consumption is to increase the cost to consumers. We have to either accept that or accept ongoing short supply, dependence on foreign sources, and environmental destruction.

I think a $1/gal tax on gasoline is a step in the right direction. Add windfall profits taxes on the oil industry, increased tariffs on imported oil, tax rebates for operating fuel efficient cars, and increase research funding for alternatives such as electric cars. Then we might have a chance of staving off disaster.

I doubt we'll do it though. So, basically, I'm saying we're screwed.

Joseph Willemssen

seven dollars a gallon would destroy the economy eliminating the capital needed to fund alternatives.

I said it would be an emergency tax to change demand over a short period of time. They could certainly rebate back the proceeds of the temporary tax to offset the effect on the economy.

Cold turkey would be a violent and perhaps fatal treatment.

We'll never know what would happen since it never will be tried. But gasoline demand doesn't respond to small price changes. It's like boiling a frog.

gerald earl

What I meant to say Joseph is that the American public would never accept paying another three dollars per gallon to achieve a 5mpg increase.
Whether they should accept it is another question.With the current hand wringing over three dollars a gallon I suspect their would be a public lynching of anyone who imposed six dollars.
Understanding the general public psyche and political landscape has to govern the ideal towards the doable.This legislation is by no means ideal but it is a light year ahead of anything seriously proposed and agreed to by both parties to date.If you dont strike while they are agreeing it could be a long time before anything is done.


I see way too many Big Government suggestions here. Ultimately you can't wait for *them* to take action, nor can you use it to effect social change. Forget them. Take action yourselves. If you have money to invest, buy stock in alternative energy companies that need capital for their projects.

gerald earl

As for old gas guzzlers I have been toying with an idea.Perhaps wealthy environmentalists{hollywood types who preach green and live in a 40,000 sq. ft. house mebbe} could contribute to a fund that would then be used to purchase older vehicles at a premium from people that cant afford to replace them.The owners would then be more able to buy a newer more efficient model.George soros,bill gates etc.,if each of us write a letter it might inspire one gazillionare to take it up.

gerald earl

Find me one politician who would propose your emergency tax.Again ideal as opposed to doable.

gerald earl

Cervus;if this bill passed investment capital will stampede towards alternative energy.It would be a force multiplier far beyond our gcc investment club.

gerald earl

Acase in point,the energy blog,goldman sachs invests thirty million in Iogens cellulosic ethanol plant.Another round of financing will be required for the full commercial scale up.The 2005 energy bill actually opened the door to the financing of much of what we read about here.
Investors want to know the direction the feds are headed before they invest.This follow up legislation I guaruntee would accelerate the pace of investment in alternative energy.That is the goal isnt it?

Joseph Willemssen

Find me one politician who would propose your emergency tax.Again ideal as opposed to doable.

Gerald, read what I first said. "This will never happen, but if they really wanted to change the equation quickly they'd slap a huge emergency tax on gasoline."

It will never happen. I understand political realities.

I was just pointing out what the solution would be if we had a system which actually worked to produce the best outcomes. People whine about things, but then they penalize people who do what's necessary. Happened to Carter and it happened to the congressional Democrats in 1994.

Joseph Willemssen

I see way too many Big Government suggestions here. Ultimately you can't wait for *them* to take action, nor can you use it to effect social change.

First of all, individual and entrepremeurial action are not mutually exclusive from policy initiatives. This is a democracy and ultimately we should be able to decide what to do with the powers and resources we give to those who represent us in government.

The theoretical option I posited is not something I support, because as I acknowledged and is obvious, it won't happen. But it was to highlight what it would take to change behavior in a short period of time, which is supposedly what everyone wants, right?

Also, to think that government can't affect social change - that's pure cynicism and ignores things like Roe v Wade, Brown v Board, the '93 Budget, or Bush's budgets. All of these things profoundly shifted the dynamics in this society.

Government is 1/5 of this economy, and to just brush it off as hopeless is not productive, IMO. And this is coming from someone who ALWAYS looks first to what he can change either through his own action or through enterprise.

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