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FOIA Number: 2012-0769-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Council on Environmental Quality
Series/Staff Member:
Kathleen (Katie) McGinty
Subseries:
OA/ID Number:
2893
FolderID:
Folder Title:
Natural Gas - Briefing Book
Stack:
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S
61
5
11
3
02/10/93
15:06
202 456 7739
WHITE HOUSE/OEDP
4 002/006
February 10, 1993
MEMORANDUM FOR ROBERT E. RUBIN
FROM:
ECONe - ENERGY WORKING GROUP
SUBJECT:
Additional Energy Tax Alternatives
Per the assignment to us from your principals meeting on
Sunday, February 7, we have performed further analysis on the
following additional energy tax alternatives:
1. an indexed BTU tax
2.
an indexed BTU tax with an oil supplement
3. A uniform ad valorem tax with a varied point of
application.
The indexed BTU tax simply puts the standard BTU tax on an
inflation-adjusted basis as requested. The other two
alternatives respond to the request to design a tax with effects
on fuels in the following rank order (highest to lowest): coal,
oil, natural gas.
Each of these alternatives has been evaluated at a $40
billion 1997 revenue target, allowing room for a substantial
give-back. Results for these alternatives are shown in
supplemental Tab B, which follows the tabular format of the
original decision memorandum.
1. Indexed BTU Tax with Oil Supplement
Specification: $0.45 per million BTU tax plus a $0.60 per
million BTU supplemental tax on oil ($3.50 per barrel), both
indexed for general inflation after 1997.
Meets ranking objective: equivalent to an ad valorem
(source) tax of 34.4% on coal, 25.4% on oil and 17.8% on
natural gas. Retains this rank order throughout the life of
the tax. Strikes intended targets: carbon reduction (coal)
and vehicle use (oil)
Permits a coherent story: coal, oil and gas are taxed on a
straightforward BTU basis, with an oil supplement to
particularly affect imports.
recognize security concerns. Reductions I in oil consumption
wh?
02/10/93
15:07
202 456 7739
WHITE HOUSE/OEDP
003/006
Relatively stable: indexation to general inflation will
cause some tax movement accentuating, for example, a future
oil price shock, but with less amplification than an ad
valorem tax tied to energy prices.
Avoids shifting of coal production to cheaper (minemouth)
western coal which a straightforward ad valorem (source) tax
would encourage.
Creates a regional disparity as a result of the particular
reliance of New England and Mid-Atlantic states on
relatively-highly-taxed home heating oil. This sector
accounts for less than five per cent of total oil use and
could be exempted from the supplemental tax (loses
approximately $500 million in net revenue), although this
lends complexity, opportunity for avoidance and weight to
pleas of other exemption seekers.
2. Uniform Ad Valorem Tax with Varied Application Point
Specification: 25% tax rate. Coal is taxed delivered to
utilities, oil delivered to refiners and natural gas at the
wellhead.
Less effective in meeting ranking objective: tax effect on
coal consumption is less than under alternative 1 and effect
on natural gas more. This is true in the year 2000 but
particularly true in 2010. The important lesson here is
that ad valorem taxes, because of relative price movements
over time (natural gas prices rising relative to coal and
oil; coal prices rising least in relative terms) alter the
ranking of tax effects over time away from the preferred
ranking. By 2010, coal use is estimated actually to
increase relative to the no-tax - base case, as cheaper coal
beats out competing fuels in utilities.
Accentuates price movements: future fuel price changes
amplified in U.S. markets by the rate of tax imposed.
Avoids regional shifting of coal production because of
addition of transport costs (higher for western coal) to the
tax base.
Poses a disparate regional impact for home heating oil as in
alternative 1.
Alternative Give-Back Arrangements
(Awaiting OMB/Treasury results
)
004/006
02/09/93
16:57
WHITE HOUSE/OEDP
&
004
TAB B.
Table B-1a: Energy Consumption in Year 2000
(percent change from Base Case)
Net Revenue Target of S42 Billion in FY 1997
Indexed
Uniform ad
Base Case
Indexed
BTU & Oil
valorem mr:
Units
1990
2000
BTU
Tax
varied
application
point
OU (all)
mmb/d
1731
18.97
-2.6%
-3.8%
-3.7%
on (imported)
mmb/d
758
10.72
-21% to -5.2%
-63%
-6.0%
Coal
mill tems
897
959
-43%
-27%
-22%
Natural Gas
tef
18.8
22.8
-3.5% a -6.7%
-24%
-2.0% to -4.5%
Electricity
twh
2830
3250
-3.4%
-25%
-2.1%
Table B-2a: Energy Consumption in Year 2010
(percent change from Base Case)
Ner Revenue Target of $42 Billion in FY 1997
Indexed
Uniform ad
Base Case
Indexed
BTU & on
valorem tar: varied
Units
1990
2000
BTU
Tax
application point
On (all)
mmb/d
1731
20.66
-29%
-43%
-5.0%
On (imported)
mmb/d
7.58
13.00
-27% to -5.0%
-53% to -6.7%
-6.0% to -7.7%
Coal
mill tons
897
1094
-3.9% to -6.1%
-12% to -4.2%
+0.4% to +35%
Natural Gas
tef
18.8
250
-3.2% to -83%
-1.9% to -43%
-4.8% to -10.6%
Electricity
twh
2830
3960
-4.6% a -63%
.32% to -4.2%
-24% to -5.1%
0
The BTU tax with an oil supplement changes the consumption impact ranking of the
pure BTU tax; the ranking is more consistent with environmental and oil security
concerns.
o
Ranges in reported natural gas impacts reflect varying expectations regarding impacts
of policies on residential conservation and fuel switching, industrial and utility
consumption, and the use of natural gas as an alternative transportation fuel.
Shifting the application point of the ad valorem tax across fuels does not change the
qualitative result of the pure at-source ad valorem tax: natural gas is most adversely
affected, and coal least adversely affected.
Because changes in domestic oil consumption are primarily reflected through changes
in import levels, domestic production falls only slightly even when consumption falls
significantly.
02/10/93
15:08
202 456 7739
WHITE HOUSE/OEDP
02/09/93
16:55
Table B-3a: Producer Prices in Year 2000
(percent change from Base Case)
Net Revenue Target of $42 Billion in FY 1997
Indexed
Uniform ad
Base Case
Indexed
BTU & Oil
valorem ar: varied
Units
1990
2000
BTU
Tax
application point
World Oil -
crude
mmb/d
20.03
22.95
-0.7%
-1.6%
-1.4%
Coal
Minemouth
short ton
21.71
26.45
-1.6%
-1.3%
-1.2%
Natural Gas -
Wellhead
met
1.71
2.58
-24%
-0.8%
-15%
Table B-4a: End-Use Prices in Year 2000
(percent change from Base Case)
Net Revenue Targer of $42 Billion in FY 1997
Indexed
Uniform ad
Base Case
Indexed
BTU & on
valorem tis: varied
Units
1990
2000
BTU
Tax
application point
Coal - Utilities
short ton
3132
3438
34.1% to 40.4%
21.0% to 255%
24.8%
Gasoline -
Retail
gallon
1.26
1.44
5.790
8.2%
3.9%
Household On
gallon
1.12
1.08
7.7%
112%
121%
Household
Natural Gas
mcf
6.10
6.90
9.1%
6.0%
9.0%
Electricity -
Residential
kWh
0.08
0.08
123%
7.1% 9 8.8%
7.0%
Price shocks that may occur in world energy markets will be amplified by and affect
the receipts from any form of ad valorem tax. Market prices and receipts will be less
sensitive to energy market shocks for either variant of the BTU tax.
0
The total impact of the indexed BTU tax with an oil supplement on petroleum product
prices in 1997 is approximately 14.5 cents per gallon, as compared to almost 10 cents
for the pure indexed BTU tax at a higher rate.
0
Residential oil use, which is unevenly distributed across regions, accounts for less than
5 percent of total oil use. The oil supplement in this sector is not a major revenue
source.
02/10/93
15:08
OZUZ 456 7739
WHITE HOUSE/OEDP
@JUUD UUD
02/09/93
16:58
--- 00116
Table B-5a: Change in CO2 Emission
(percent change from baseline)
Net Revenue Target of $42 Billion in FY 1997
1990
2000
Year
Baseline Emissions (mmtc)
1349
1497
Percentage Change From Baseline
Indexed BTU
-35%
Indexed BTU & Oil Tax
-3.1%
Uniform ad valorem tax: varied application point
-3.1%
Environmental Meeting
Roosevelt Room, White House
12:30 - 1:30 pm Sunday, February 7, 1993
Briefing information for this meeting will be provided by
Katie McGinty.
Attendees: (Tentative List)
George Frampton, Wilderness Society
Jay Hair, National Wildlife Federation
Fred Krupp, Environmental Defense Fund
Jane Perkins, Friends of the Earth
Mike McCloskey, Sierra Club
Peter Berle, National Audobon Society
Kathryn Fuller, World Wildlife Fund
John Sawhill, Nature Conservancy
Rodger Schlickheisen, Defenders of Wildlife
Jonathan Lash, World Resources Institute
MEMORANDUM FOR THE VICE PRESIDENT
FROM: KATIE
RE:
MEETING WITH ENVIRONMENTAL GROUPS
DATE: 2-6-93
List of enviros who will attend:
George Frampton -- Wilderness Society
Peter Berle -- Audubon Society
Jane Perkins -- Friends of the Earth
Jay Hair -- National Wildlife Federation
Kathryn Fuller -- World Wildlife Fund
John Sawhill -- The Nature Conservancy
John Adams -- Natural Resources Defense Council
Ben Chavis -- United Church of Christ
Fred Krupp -- Environmental Defense Fund
Carl Pope -- Sierra Club
Some themes to strike with them:
o This office will be involved in all major policy making.
The office will fully participate in the deliberations of all of
the major councils -- domestic; economic; national security.
o The office will enable us to ensure that the environment
is not a separate or secondary consideration, but a central piece
of all of our decision-making.
o We're not going to banish this office to a place outside
the White House complex either. It will be right next door --
centrally located so that it can be maximally involved.
O The office will also enable us to be forward-thinking.
Rather than just waiting for crises to arise, this office will be
able to coordinate the work of the councils -- to call for a
thorough review by the agencies of our policy on various issues;
to challenge them to think creatively about new policy
directions; and to provide a forum for non-governmental groups
and citizens groups to come together to help us chart a new and
innovative course on the environment.
O The NGOs had provided me with ideas on how to organize
environmental policy in the White House -- you should give them
credit for what we have created here. They had emphasized to me
(1) that there should be an Assistant to the President for
environmental policy; (2) many said that that person should also
be the head of CEQ -- what we have done here is essentially that,
but we have replaced CEQ with something new and improved; (3) all
emphasized that the assistant should be an integral part of all
policy council deliberations.
o
Why eliminate CEQ in favor of this new body? We really
wanted a fresh start; we wanted a new office that would be
understood from the outset to be an integral part of all policy
making. We also wanted this office to be able to focus on
policy. So much of CEQs resources have been drained by things
like producing the environmental quality report that -- frankly -
- your organizations can do a much better and more credible job
of putting together.
o What about CEQs role in the NEPA process -- reviewing
environmental impact statements? Until we can make this change
through statute, CEQ will be maintained to fulfill that
responsibility. I do believe, however, that it is important to
have an objective review of the Agencies' compliance with NEPA,
and we will work with Congress to devise an appropriate
mechanism. We would welcome your ideas on this.
Other issues they will likely raise:
o Energy tax. They, of course, will try to find out if one
really is in the works and if so, what the approach and magnitude
will be. Another concern that they have is that the tax will be
small (or will be a wholesale ad valorem) that will not really
have any environmental benefit, but it will be sold as an
environmental initiative.
While not giving them any clue as to where we are in these
discussions, you should emphasize to them that (1) if the tax is
small, you don't expect them to hail it as an answer to our
environmental problems (indeed -- we will need their continued
pressure if we are going to be able to get the tax to a
meaningful level) ; (2) but, they should be willing to support it
as a step in the right direction; (3) they should be mindful that
their comments on the tax will have ramifications for our ability
to bring the Europeans and Japanese around too. In particular --
if they completely denounce the tax and refuse to recognize any
environmental benefits from it -- they will undermine our ability
to hold the EC to the commitment they have made on energy taxes.
o Climate. We have a meeting of the Intergovernmental
Negotiating Committee in March. Will the United States call for
a protocol at that time?
I have been handling this by re-affirming our campaign
commitment to stabilizing emissions. I have left open the exact
way in which we are going to get there and specifically, whether
we would push for a protocol. It may be better, for example, for
us to simply say that, as we revise the draft action plan that
Bush Admin started (and that now is in Fed Reg for public
comment), we will ensure that the plan will achieve
stabilization. Rather than wasting time negotiating a protocol,
we can then achieve stabilization by simply saying that we expect
Europeans and others to fulfill the commitments they have already
made and pushing them to do SO. We can then move beyond the
protocol on stabilization and focus our efforts on things like
getting a monitoring system up and running; energizing prompt
start and capacity building initiatives with developing
countries, etc.
O Biodiversity. Here I have been re-iterating our concerns
with the intellectual property provisions and the finance
provisions, but expressing our strong desire to find some way to
fix those provisions and sign the treaty. Note that some
countries that signed the treaty are now having trouble at home
getting it ratified because of concerns raised by their own
biotech companies on the ipr provisions. Note also, however,
that WWF has an effort underway with Genentech and some other
biotech companies here to forge an alliance in favor of signing
the treaty. You should inquire about the status of those
efforts.
O Commission on Sustainable Development. Negotiations
underway in New York to negotiate rules of procedure for the CSD.
One of main issues has been NGO access to the proceedings. I
worked extensively with our negotiators on this and in the end
they carried a strong message that we were supportive of ngo
access and involvement. That issue has been resolved in the talks
and the ngos are happy with the result. I also had our
negotiator deliver a short statement that signalled a change in
attitude on these issues by the new administration. Remaining
sticking point in this round of talks is the status of the EC and
the ability of the EC to participate in these talks essentially
as a member state. We are for a much more limited role for the
EC. We are joined in that position by Japan and Group of 77.
al- These are drops is is that I have done N.
will cereen finalige for package the cg pattry together
WHITE HOUSE OFFICE ON ENVIRONMENTAL POLICY
the press X.
Q: How is this office different from CEQ?
A: Unlike CEQ, this Office will be involved in all major policy
decisions. The Office will participate fully in the
deliberations of all of the policy councils and it will
coordinate the work of the councils and agencies on environmental
policy. Environment won't be a separate and secondary
consideration as it has been with CEQ, but it will be a critical
dimension of all policy.
handled? Q: What about the statutory functions of CEQ? How will they be
A: While we are working with the Congress to make this change,
CEQ certainly will be maintained to fulfill its responsibilities.
We would like to move quickly to make this change, however,
because this new office will be a streamlined -- and much more
effective and efficient -- means of coordinating environmental
possible. policy, and we would like to get it up and running as quickly as
As part of the change -- and in order for the new office to
be able to focus on policy development and coordination -- we
will transfer some of CEQs functions back to the Agencies. CEQ,
for example is charged with producing an annual report on
environmental quality. But the technical expertise for producing
that report lies in the Agencies, and it really does not make
sense to have a separate office duplicating the work that the
agencies already do in fulfilling their own statutory mandates.
With regard to CEQs responsibilities under NEPA to review
environmental impact statements, again, much of this work is
already done by the various agencies. It is important to have an
objective review of those impact analyses, however, and we will
be working with the Congress to devise a system that allows that
to happen while avoiding unnecessary duplication of effort.
Q: What will the role of the Vice President be with regard to
this new office?
A: As you know, the Vice President has a long-standing interest
and considerable expertise in these issues and he and I will both
priortize our efforts in this area. This new office will enable
us better to achieve our goal of integrating environmental
considerations into the broad range of issues that we are facing.
Q: What does this new focus on the environment mean for
business? Can they expect new regulatory burdens?
A: What we are trying to accomplish here is an integration of
environmental policy into our other policy concerns. The
previous Administration tried to tell us that there must be a
trade-off between a strong economy and protection of the
environment. We said in the campaign that we don't believe that
that is true. Far from being a way to pit the environment
against business, this new office will enable us to demonstrate
that a strong economy and sound environmental protection go hand
in hand.
2.5.93
THE WHITE HOUSE
WASHINGTON
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2
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3
THE WHITE HOUSE
WASHINGTON
Information you asked me for this
Post-It™ brand tax transminal memo 7671
# of pages
2
February 5, 1993
Confidential Memorandum
DETERMINED TO BE AN ADMINISTRATIVE
MARKING INITIALS: MAY DATE: 3/13/2017
Re: Possible Quid Pro Quos for Natural Gas Industry Support for a Ad Valorem Sales or BTU Tax
Imposed at the Producer Level
I am assuming that you and your colleagues on the economic side of the house are focussing in on an ad
valorem sales tax or BTU tax imposed at the producer level with an exemption for solar, wind and
possibly closed-loop biomass. You have asked how we could bait the book a little for the gas folks.
Here are some suggestions for bait:
Within the tax itself:
Make the rate of tax slightly lower for natural gas on the grounds that it is a clean domestic fuel. AGA
would prefer reflecting the environmental advantages of natural gas through a carbon tax or surcharge,
but this may not politically possible at this time. Such an incentive for clean fuels within the tax itself
would be the strongest form of bait.
Outside of the tax - RD&D:
The natural gas industry has proposed, and the environmental comm nity has endorsed, $250 million of
federal money for joint RD&D on gas end-use technologies such as gas cooling, fuel cells and natural
gas vehicles in addition to what is already in the FY 1993 budget. The details are in the Sustainable
Energy Blueprint budget submitted to the transition by the environmental community. It may be
politically necessary to couple such supplemental funding with additional RD&D funding for efficiency
and renewables per the Blueprint.
Outside of the tax - federal government initiatives:
A simultaneous announcement that the federal government was converting a substantial portion of its
vehicle fleet to natural gas would be pleasing to the industry. This is something the Administration
should do anyway, but an early commitment could be worth a lot to AGA and its members. Another
step that the gas industry would love is to direct federal power marketing authorities to promote natural
gas utilization as an alternative to increased electricity supply.
Outside of the tax - Exploration and Producing Incentives:
If it were felt necessary to give something to the independent gas producers, it might be possible to craft
a limited tax incentive directed at exploration for new gas from deep, high pressure formations. Such
an incentive would make the Bob Hefners of this world extremely happy, but would mean little to the
rest of the industry. My advice would be to leave it out of the package and consider it later on its own
merits.
I have attached a broader and more general AGA wish list that may stimulate further thinking. We are
also trying to get a number of Business Council members to sign a joint letter. I will keep you posted.
Let me know how I can be of further help.
P.S. You better increase low-income weatherization to keep the consumer folks on board.
We propose that the Clinton Administration take the following steps to support natural gas
in order to reach its energy-policy objectives.
Promote Policies that Result In Displacement of imported OII
Convert Federal Buildings to Natural Gas
Convert Federal Fleets to Natural Gas
Encourage Private-Sector Use of Natural Gas
Reprioritize Federal Support for Research, Development, Demonstration and
Commercialization of Energy Technologies
Provide Additional Funding for Gas-Related RD&D and Commercialization
Assist in Commercialization of Natural Gas Technologies
Support Commercialization of New Gas Cooling Technologies
Champion the Natural Gas Vehicle Market
Accelerate Implementation of the Energy Policy Act of 1992
Property Implement the Clean Air Act of 1990
Promote the Most Efficient Use of Energy
Consider Source-Efficiency, not Site-Efficiency
Advocate Full-Cycle Appliance Efficiency Standards
Promote Integrated Resource Planning
Better Utilize Federal Power Marketing Authorities
Promote Clean-Burning Fuels for Electricity Generation
Help Natural Gas Contribute to Meeting Other Environmental Goals
Ensure Effectiveness of NOx Emission Standards
Encourage Phaseout of CFCs
Support Voluntary Programs that Address Climate Change
Support the Low-Income Home Efficiency Assistance Program (LIHEAP)
Support Responsible Initiatives to increase Natural Gas Supply
Encourage World-Wide Commercialization of Natural Gas Technologies
Refocus DOE Priorities
Create an Assistant Secretary for Natural Gas
Evaluate EIA Energy Model
Make FERC Appointments that Balance Interests
This document -2- is from the
Am.Gas. Assin.
622
0646
P03
The question remains, then, can a Btu tax be combined with other policy options
to help natural gas? Here are some of the natural gas initiatives mentioned in Putting
People First:
General goal of increasing natural gas use;
Speed certification of gas pipelines to expand markets;
Convert the federal fleet to natural gas;
Increase R&D into new gas applications.
These natural gas initiatives were further discussed in the environment, energy,
and natural resource options document, under the following headings:
Create an industrial policy for the development of globally competitive
alternative fuel vehicles
Executive order to convert federal fleet to alternative fuels
Speed development and certification of natural gas pipelines
Encourage use of natural gas throughout the economy:
FERC actions to promote gas as utility fuel;
Create Assistant Secretariat at DOE for natural gas;
Amend federal procurement to base decisions on life cycle
energy costs;
Eliminate federal purchase of CFC-using cooling units in
favor of natural gas chillers; and
Convert federal buildings from fuel oil to natural gas.
One alternative tax formulation that would favor natural gas over coal and
petroleum, and could have substantial environmental benefits would be a graduated
wholesale level ad valorem tax on coal, oil, and natural gas. For example, instead of a
12% ad valorem tax on all fossil fuels, a tax could be structured as 8% on natural gas,
12% on crude oil, and 16% on coal. This would actually hit coal less hard (relatively
speaking) than either a carbon or Btu tax, but would still have an environmental
rationale. I don't know how the politics would shake out on this -- whether the
perceptions of ganging up on coal would dominate the discussion even though such a
2
formula would actually be gentler on coal than an equivalent carbon or Btu tax. We can
discuss the idea further if you want.
I understand that the gas industry is arguing for a retail ad valorem tax as
preferable to a Btu tax. Natural gas competes effectively in three markets: (1)
residential markets where gas competes against electricity in appliances such as ranges,
water heaters, and dryers and where gas competes against fuel oil for heat (2) industrial
markets where it competes against electricity and petroleum and (3) electricity
generation where it competes against coal. In the first two markets, a retail ad valorem
tax would increase electricity and fuel oil prices more than delivered gas prices, so the
gas industry would prefer the ad valorem tax to either a Btu or maybe even a carbon tax.
In terms of competing against coal in utility fuel markets, the gas industry would be
better served by a Btu or carbon tax compared to an ad valorem tax at either the
wholesale or retail level; however, fuel price is only one consideration among many in
utility fuel choices, and the gas people probably think that they can compete well without
the high tax on coal in these markets. Thus, it makes sense from their standpoint to
argue for the retail ad valorem tax.
The environmental benefits from a retail ad valorem tax are not as great as a
carbon or even a Btu tax. In particular, it would have very little impact on utility fuel
choices. However, a retail ad valorem tax does not appear to produce any
counterproductive incentives, as in the case where a wholesale ad valorem tax on fuels
could favor coal in utility fuel markets.
As for regressivity, EPA analysis suggests that about 10% of the revenues would
have to be given back in order to even the burden on lower income families. If greater
relief is needed (i.e. middle class burdens reduced) then perhaps as much as 25% of the
revenues would have to be dedicated toward reductions in income taxes or expansion of
earned income tax credits. However, it bears mentioning that other assistance
programs -- such as state and local energy assistance programs that help lower income
families conserve energy -- could be expanded (as part of a jobs stimulus package) that
would directly help cushion the blow for poorer families. While these programs probably
can't reach everybody, they will help reduce the tax burden for some people and help
reduce overall energy use (increasing environmental benefits).
3
FUTTENG PEOPLE FIRST
Energy
Increase Energy Efficiency and Conservation
gas pipelines to get natural gas to market, with special
emphasis on areas not currently adequately served by
Increase corporate average fuel economy standards
natural gas.
from the current 27.5 miles per gallon to 40 miles per
Convert the enormous federal vehicle fleet to natural
gallon by the year 2000, and 45 miles per gallon by 2015.
gas.
Develop and implement revenue-neutral market in-
Use federal research and development dollars to de-
MJ
centives that reward conservation and penalize polluters
relop new natural gas applications.
and energy-wasters.
Adopt transportation strategies and highway spend-
Expand the Use of Renewable Energy Sources
ing programs that encourage car-pooling, high-efficiency
highway technology, and mass transit by including conser-
Create a civilian advanced research agency that will
vation incentives in the federal matching fund program.
support civilian research and development of renewable
Promote changes in utility regulation to make energy
technologies and renewable fuel programs.
efficiency profitable for both utilities and customers.
Reorient the mission of hundreds of national labora-
Strengthen federal programs to encourage energy-
tories, moving from defense R&D to more work on com-
efficient housing; encourage state and local governments
mercial renewable energy projects.
to adopt building codes that encourage conservation by
Change the tax code to create greater incentives for
calling for thicker walls and windows, new compact fluo-
renewable energy use.
rescent bulbs, more efficient insulation, and new low-cost
Give incentives to utilities to adopt least-cost plan-
housing construction that could cut domestic energy con-
ning, which factors environmental, social, and economic
sumption by 25 percent using measures that would pay
costs into fuel-use decisions. Least-cost planning is cur-
for themselves in five to seven years.
rently employed by utility companies in seventeen states.
Increase energy efficiency in every federal agency and
set standards to ensure that federal grants, contracts, and
A.Safe, Environmentally Sound Energy Policy
projects support America's national conservation goals.
Oppose increased reliance on nuclear power. There
Increase Natural Gas Use
is good reason to believe that we can meet future energy
needs-with conservation and the use of alternative
Implement policies to expand markets for natural gas
fuels-without having to face the staggering costs, delays
in every sector-homes, businesses, industry, electrical
and uncertainties of nuclear waste disposal.
generation, and transportation.
Oppose federal excise gas tax increases. Instead of a
Speed development and certification of new natural
backbreaking federal gas tax, we should try conservation,
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91
Environment
PUTTING PEOPLE FIRST
sue federal agencies that ignore environmental laws and
wilderness area and stop the crusade for new offshore
regulations designed to preserve our environment-so
drilling.
government bureaucrats are made accountable for proper
and effective environmental law enforcement.
Use Market Forces to Encourage Environmental
Support efforts to mandate public reporting on toxic
Protection
chemicals used and produced by companies, and require
those companies to develop plans for reducing their toxic
Place greater emphasis on preventing and reducing
chemical use.
pollution before it happens, so we won't have to spend so
Crack down on environmental crime by holding
much on cleaning it up after the fact. We can do that
companies and polluters responsible for their behavior.
without big bureaucracies and public spending-by har-
Corporations that deliberately violate environmental laws
nessing market forces, integrating environmental incen-
will pay the price-and polluters will be sent to jail where
tives into daily production decisions of big firms, and
appropriate.
making polluters pay.
Harness market forces to reward consumers and busi-
Preserve America's Natural Beauty and Key
nesses that conserve and to penalize polluters and ineffi-
Resources
cient energy users.
Create revenue-neutral tax incentives to encourage
Preserve our ancient forests for their scientific and
the use of alternative fuels like natural gas and renewable
ecological importance.
energy sources like hydroelectricity, solar power, and wind
Make the "no net loss" wetlands pledge a reality;
power.
base wetlands policy on science instead of politics by
working with the National Academy of Sciences and
Exert American Leadership for a Healthier World
other members of the scientific community to devise ap-
propriate policies. Our wetlands act as a natural filter for
Provide real international leadership to protect the
much of the water America drinks and make up one of
world's delicate environmental balance.
our most important and fragile natural habitats.
Limit U.S. carbon dioxide emissions to 1990 levels
Rededicate the agencies that manage our national
by the year 2000 and accelerate the phase-out of sub-
parks and wilderness lands to a true conservation ethic;
stances that deplete the ozone layer.
expand our efforts to acquire new parklands and recrea-
Call on major banks and multinational institutions
tional sites with funds already available under the federal
to negotiate debt-for-nature swaps with all developing
Land and Water Conservation Fund.
nations that allow Third World countries to reduce their
Designate the Arctic National Wildlife Refuge as a
crippling debt burdens by setting aside precious lands.
96
97
ENVIRONMENT, ENERGY AND NATURAL RESOURCES
ISSUE: Environmental Technology
PROPOSAL: Create An Industrial Policy for the Development of
Globally Competitive AFVs by the Year 2000
Putting People First: "Instead of coddling special interests whose fortunes
depend on America's addiction to foreign oil, our national energy polloy will
promote natural security, energy diversity, economic prosperity, and
environmental protection." (p. 89)
"It's time to make the right energy choices convert the enormous federal
vehicle fleet to natural gas". (p. 89)
A number of barriers stand between a successful, market-driven
clean vehicles industry and the present state of the auto
industry. This proposal recommends the development of a national
industrial policy that will insure that American industry is not
left behind in the global race to develop the personal
transportation technologies of the future.
Option 1: Create an Interagency Task Force Charged with
Developing a National Plan for Commercialising Alternative-Fuel
Vehicles (AFVs)
Due to the strategic importance of AFV technologies, and the care
with which market forces and government policies must be
combined, an Interagency Coordinating Council (FCCSET) be
established and charged with reporting back to the President,
within one year, as to the proper size and scope of a national
AFV development plan. No legislation is required, and there are
no significant near-term revenue requirements.
107
ENVIRONMENT, EMERGY, AND MATURAL RESOURCES
ISSUE: REGULATORY INITIATIVES
PROPOSAL: ISSUE EXECUTIVE ORDER FOR CONVERSION or THE FEDERAL
VEHICLE FLEET TO MATURAL GAS AND ELECTRIC VEHICLES
Under this initiative, an Executive Order would be issued
accelerating the conversion of a substantial portion of the federal
vehicle fleet to natural gas ("NGV") and electric ("EV") vehicles
on a schedule that accelerates minimum fleet purchases mandated
under the Comprehensive National Energy Policy Act of 1992. This
would be done by (a) setting requirements for minimum percentages
of new purchases or acquisitions of NGV/EV light and medium duty
vehicles for FY 93-97; and (b) Establishing minimum percentage
requirements for particular segments of the federal fleet that must
be NGV/EV's at the end of each Fiscal Year from FY94 through FY97.
(These requirements may be met either through new acquisitions or
by converting existing vehicles.) The E.O. would target all
accelerated AFV purchases primarily towards American cities with
severe air quality problems.
Federal outlays required under option 1 are approximately $35
million in FY93 and $45 million in FY94. Under option 2, funding
requirements are $35 million in FY93 and $90 million in FY94.
option 1: Accelerate purchases of new AFVs in place of new
conventional vehicles by one year from the mandates contained in
the Energy Policy Act of 1992.
Option 2: Double the pace of federal AFV acquisitions by
implementing, via E.O., a program to convert existing federal
vehicles at the same rate as new AFVs are acquired (as in option
1). Because conversions require additional planning, the E.O.
would require the Secretary of Energy to have in place a conversion
plan for implementation beginning in FY94.
115
ENVIRONMENT, ENERGY, AND NATURAL RESOURCES
ISSUE: REGULATORY INITIATIVES
PROPOSAL: SPEED DEVELOPMENT AND CERTIFICATION or NEW MATURAL
GAS PIPELINES
Putting People First proposes that the new Administration "speed development and
certification of new natural gas pipelines to get natural gas to market, with special
emphasis on areas not currently adequately served by natural gas" (p. 90-91).
New natural gas pipeline development and certification has become
a bottleneck to increased natural gas usage in some regions. The
rules of the game could be revised to benefit gas producers,
consumers, and the environment.
Option: The FERC could initiate a rulemaking on natural gas
pipeline certification early in the new Administration.
120
ENVIROMMENT, ENERGY AND NATURAL RESOURCES
ISSUE: REGULATORY INIATIVES
PROPOSAL: ENCOURAGE USE OF MATURAL GAS THROUGHOUT THE
AMERICAN NOONOMY
Putting People First - "Implement policies to expand markets for natural gas in every
sector - homes, businesses, Industry, electrical generation, and transportation." (p.90)
This proposal contains five options that encourage increased
natural gas use in many sectors of the U.S. economy via actions by
DOE, the FERC, and other government agencies. These initiatives
are not exclusive and generally involve little or no cost to the
federal government. Several options have numerous design
alternatives.
Option 1:
FERC Actions That Help Increase the Use of Natural
Gas by Electric Generators. The FERC could hold
proceedings that help insure that electric
generators obtain reliable, sufficient, low-cost
gas supplies for future generating units.
Option 2:
Create an Assistant Secretary for Natural Gas and
oil at DOB. The present designation of Assistant
Secretaries at DOE does not adequately recognize
the importance of natural gas to the U.S. economy,
as well as many other changes in DOE's national
mission.
Option 3: Amend Federal Procedures so that Life Cycle Energy Costs
Are Used to set Efficiency Standards. Present laws and
federal procedures do not account for the fact that
natural gas is supplied to end users much more
efficiently than is electricity. A change in the
procedures for federal buildings would improve federal
energy efficiency and serve as a model for state utility
commissions.
Option 4: Eliminate Future Federal Purchases of Cooling Units That
Use CFCs. Electric air conditioning units use CFCs,
whereas gas cooling units do not. An executive order
that forbade the purchase of cooling equipment containing
CFCs would therefore increase natural gas use and
demonstrate the Administration's commitment to
environmental protection.
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option 5: Convert All Federal Buildings That Use Fuel oil to
Natural Gas. Due to an unwillingness to examine
conversion options, some federal facilities are heated
with oil rather than cheaper, cleaner natural gas. An
executive order to find and convert these buildings in a
cost-effective manner could correct this situation.
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