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Energy Priorities delivers information, ideas and commentary on smart energy -- a resource for businesses who want to be more informed energy users -- an asset to entrepreneurs and investors in the new energy sector. Topics include energy-related technologies and best practices for business, presented in non-technical language, with insights that help you take action. Published as a public service of P5 Group, Inc., Seattle USA. ISSN 1938-7326

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Energy Policy: Outlook for Compromise

Discussion of energy policy legislation is due to start in February, 2005. The Senate's version is the likely starting point for discussions. How can four years of strong disagreement give way to a balanced energy plan? Two broad approaches have become clear. Whether either approach will lead to a successful policy is yet to be seen.

In late 2004, Congress ended yet another session in stalemate over a national energy plan. There are two major schools of thought as to how a compromise could be reached in this congressional session.

Breaking up the comprehensive energy bill
The first is simply to divide up the comprehensive energy bill -- a massive 1,200-page volume -- into its component parts. Less controversial measures could be passed easily in stand-alone bills or added to other legislation.

"I've never understood why we need an energy bill that is so comprehensive," says Senator Maria Cantwell (D-WA), member of the Senate Energy and Natural Resources Committee. "It's just wrong to hold good legislation hostage for bad ideas. We need to break down the energy bill."

House and Senate leadership opposed such proposals, but Senator Dominici has said that he would consider them in the current legislative session. Regardless, this process had already begun, with the extension of renewable-energy production tax credits (PTCs) in a 2004 tax reform bill.

Following nonpartisan advice
A nonpartisan commission, formed in 2002 by the Hewlett Foundation, worked independently of Congress "to promote a balanced and comprehensive approach to the challenges that energy presents to our nation." The National Commission on Energy Policy consists of sixteen members, comprising expertise in energy, environment, technology and policy. They represent government, labor, academia, consumers and, above all, business -- ConocoPhillips, Exelon, and Ford are directly represented; several law and consulting firms also have commissioners at the table, each presumably serving interested clients. Two environmental groups are also represented.

The commission published its report at the end of 2004. Entitled "Ending the Energy Stalemate: A Bipartisan Strategy to Meet America’s Energy Challenges," the report outlines the commission's recommendations for overcoming the controversies that stalled previous attempts at passing comprehensive energy legislation.

At what cost, energy?
Few doubt that an energy policy will be passed, and that the US will continue to enjoy an abundant supply of energy -- the kind that moves our cars, as well as the kind that lights our buildings. The question on the minds of many Americans is, "At what cost?" Mounting national debt, Middle East wars, global warming, corporate abuses, and a sputtering economy all cast shadows on the outlook for a one-sided energy policy.

"While it is possible to overcome the barriers and implement energy efficiency, renewable energy, and clean fossil fuel technologies on a large scale, policies must be carefully designed and implemented," writes Howard Geller in his 2003 book, "Energy Revolution: Policies for a Sustainable Future." Geller examines energy policies from around the world and draws some interesting lessons from the successes and failures:

"Failed policy initiatives usually lack some if not many of the characteristics of successful efforts: they do not remove or overcome all of the major barriers, they are not part of an integrated market transformation strategy, they lack continuity or a high-level government commitment, they do not engage the private sector, and/or they do not develop a favorable market environment."

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