Policy Recommendations
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Natural Gas Efficiency Measures that Should be Included in a Federal Energy Bill To Achieve the Energy Efficiency Savings Called for in the Western Resource Advocates Report on Using Natural Gas More Efficiently: Saving Money and Protecting our Western Way of Life
May 2005
Adapted from A Choice of Two Paths: Energy Savings from Pending Federal Energy Legislation, American Council for an Energy-Efficient Economy, April 2005
Using Natural Gas More Efficiently shows that by investing in energy efficiency, we can reduce demand for natural gas, save American consumers money, reduce pollution, and give federal land managers the breathing room they need in order to make more careful and more thoughtful decisions about energy development that threatens wild lands and our ranching heritage. State government and public utility commissions will be at the forefront of making many of the decisions that are needed to use natural gas more efficiently. However, a number of steps could also be taken by the United States Congress to promote natural gas efficiency. The list of needed actions outlined below was developed by the American Council for an Energy-Efficient Economy. Their report is available at: http://www.aceee.org/pubs/e051full.pdf.
- Energy Efficiency Resources Standard: An energy efficiency resources standard (EERS) is a mechanism to encourage more efficient use of electricity and natural gas. It consists of electric and gas end-use savings requirements for retail utilities. It allows utilities to meet the requirements directly or through a market-based energy savings credit trading system.
ACEEE recommends EERS savings requirements for both natural gas and electricity starting at 0.25% of sales annually ramping up over several years to 0.75% of sales annually. Under the ACEEE proposal, electricity and natural gas use would be reduced by 6.75% after 10 years (including the savings from current utility energy efficiency programs). - Federal Renewable Energy Standard: A renewable energy standard requiring that 20% of the nation’s electricity come from renewable energy by 2020 should be part of any federal energy bill. A renewable energy standard will reduce natural gas consumption because renewable energy developed under the standard will avoid the need for electricity generation from gas-fired power plants.
- New Federal Appliance and Equipment Efficiency Standards: These standards would require additional products and equipment to meet minimum efficiency levels. They would expand efficiency standards adopted by Congress in 1987, 1988, and 1992.
Natural gas savings would result from standards that applied to products that use natural gas directly as well as to products that use electricity, because natural gas is a major electricity generating fuel.
The product standards that would achieve the largest direct natural gas savings are:
- Residential furnaces
- Pre-rinse spray valves
- Ceiling fans
- Torchiere lighting fixtures
- Commercial packaged air conditioners
- Tax Incentives: Tax incentives can be used to spur the sales and adoption of innovative energy saving technologies and products. The Federal energy bill should include tax incentives for the following energy saving products and practices:
- Highly efficient new homes and commercial buildings
- Combined heat and power systems
- Fuel cell and microturbine cogeneration systems
- High-efficiency appliances, furnaces and air conditioners
- Weatherization of existing homes
- Advanced meters for managing energy use
- Building Energy Codes: Building codes can substantially reduce energy demand in new buildings.
- The Congress should make the International Energy Conservation Code mandatory for states (or for municipalities in the case of states that adopt building codes at the local level), for both residential and commercial buildings.
- Grants should be provided to states and municipalities for building code training and enforcement activities.
- Encourage Combined Heating, Cooling and Power: Combined heating, cooling and power (CHP) systems produce both electricity and useful heat (or cooling) energy from a single, integrated system. Typically these systems use natural gas but there are opportunities to use waste fuels as well. By jointly producing electricity and heating or cooling, CHP systems are much more efficient than separate systems. Policies that would encourage CHP include:
- Uniform standards for interconnecting CHP systems to the utility grid
- Utility tariff reform to remove barriers to CHP systems
- Revolving loan fund for CHP
- Energy Efficiency Public Education Campaign: Increased public awareness of the availability of energy efficiency products and practices can spur household and private sector investments energy efficiency. As part of a Federal energy bill Congress should direct DOE to conduct a substantial national public awareness effort regarding energy efficiency opportunities. National energy efficiency groups recommend that $100 million be authorized for such an effort annually.