As published in the July 1, 2011 Toledo Business Journal
Rob Portman,
US Senator
Energy conservation improves infrastructure
Toledo Business Journal recently interviewed US Senator, Rob Portman. He shared the following thoughts:
Toledo Business Journal: Can you explain the purpose of The Energy Savings and Industrial Competitiveness Act of 2011 (ESIC) that you and Senator Shaheen are co-sponsoring?
Rob Portman: The purpose is to kick-start more energy efficiency, the most effective way to reduce energy costs and clean-up the environment. Despite an intense focus on the development and deployment of advanced energy technologies, energy efficiency remains – and likely will remain for the foreseeable future – the cheapest and fastest approach to improving our nation’s energy infrastructure and our economy’s energy independence.
US commercial and residential buildings combined consume 40% of all energy used, the industrial sector consumes more energy than any other sector of our economy, and the Federal government is the largest single energy consumer in the country. All three offer opportunities for energy savings at relatively low cost.
The deployment of energy efficiency technologies is therefore critical to meeting the energy and environmental objectives of the US, as well as driving economic growth across all regions of the country.
This bill will incentivize and leverage public-private investments in energy efficiency technologies in the residential, commercial and industrial sectors, as well as the Federal government. Modest and targeted investments today can help advance energy efficiency technologies, create jobs, and better position ourselves for the energy challenges of tomorrow.
TBJ: Can you discuss expectations for increasing private investment in energy conservation and support from the Department of Energy (DOE) Loan Guarantee program?
RP: This bill will leverage private investment for smart energy efficiency that will make the economy more competitive and create jobs. Specifically, ESIC expands the DOE Loan Guarantee Program to include commercial, industrial and MUSH (municipal, university, schools, and hospitals) building efficiency upgrades. This unlocks one of the key barriers to making efficiency upgrades to existing buildings by making access to capital easier through the DOE loan guarantee program.
A 2009 McKinsey & Company study found that an investment of $73 billion by private entities in making existing commercial buildings more energy efficient would provide present-value savings of $104 billion and save $11 billion annually by 2020.
TBJ: Can you discuss revolving loan programs that will be made available to manufacturers through this legislation?
RP: This will provide needed upfront capital to help manufacturers make investments that will result in big savings over time.
The US industrial sector consumes more energy than any other sector and offers immense opportunity to improve efficiencies. By installing more efficient equipment and adopting efficient processes in areas like power factor and load management, manufacturers can achieve significant energy savings, allowing them to reduce costs on consumers and create jobs.
The Manufacturing Revolving Loan fund would work with states and lenders to establish revolving loan programs for manufacturers to invest in more efficient processes and equipment that will allow them to be more productive and less energy dependent. The bill authorizes the DOE to competitively award grants to community lenders, private financial institutions, and state partnerships to establish the loan funds.
The bill also establishes industry-led partnerships through the existing Industrial Partnership Program (IPP) to develop industry-specific roadmaps to identify technologies and practices necessary to reduce energy intensity.
TBJ: Can you explain requirements for standards on outdoor lighting, residential HVAC systems, and residential appliances?
RP: Appliances or plug-in products are a leading source of energy consumption, accounting for 15 to 20% of energy consumed by homes and commercial buildings. Thus, improving the energy efficiency of appliances is an effective way to reduce demand and help solve our energy challenges. The language is identical to legislation introduced by Energy Committee chairman Bingaman (D-NM) and ranking member Murkowski (R-Alaska), that implements several agreements negotiated between industry, consumers, and Congress.
TBJ: Can you explain the legislation’s impact on model building codes?
RP: The bill strengthens voluntary national model building codes for new homes and commercial buildings by working with independent code-setting organizations to set efficiency targets. The DOE would be required to incorporate economic and cost consideration from the perspectives of building owners and tenants as the codes are developed. DOE would also be required to subject codes to a small business impact review analysis and make transparent the methodology and data to determine whether, and by how much, a subsequent code iteration improves energy efficiency compared to its predecessor. Adoption and enforcement is reserved for the states, but the DOE is empowered to offer technical assistance.
TBJ: What requirements does this legislation impose on the Federal government for energy conservation?
RP: The government is the largest single energy consumer in the country, accounting for 1.5% of all energy used in fiscal 2008. Federal agencies spent $25 billion in 2008 on energy, including $7 billion to operate federal buildings.
It requires Federal agencies to adopt computer power-saving techniques. The Veterans Affairs Department recently mandated that employees turn off computers at the end of the work day, and acquired new computers that use less energy and software that automates when a computer is turned on and off. Combined, the VA plans to save around $32 million over the next 5 years. Additionally, it requires agencies to share best practices for implementing advanced metering technology to remotely monitor and better manage energy usage of government buildings. It also amends Federal renewable energy purchasing requirements contained in EPAct 2005 to include “thermal” energy, providing parity for solar and biomass thermal efficiency technologies with other renewable energy technologies.
TBJ: Are there any other issues that you wish to address?
RP: Recently I authored the Senate Republican Jobs Plan, a blueprint for creating private sector growth and strengthening the economy. It includes a strong, pro-growth energy component, which supports the following measures:
- Lift the Outer Continental Shelf Prohibitions. We need to increase access to US oil and natural gas reserves on the Outer Continental Shelf (OCS). This will create jobs, drive investment, and reduce our nation’s dependence on foreign sources of oil. A February 2006 report released by the Department of the Interior estimated OCS reserves to be 8.5 billion barrels of oil and 29 trillion cubic feet of natural gas.
- Increase Federal Loan Guarantee Authority for Nuclear Power. Furthering the nuclear renaissance would significantly enhance the energy portfolio and energy security of the US by providing reliable base-load electricity, reducing greenhouse gas emissions, and strengthening our manufacturing bases with good quality jobs.
- Require Greater Access to Federal Lands for Exploration of Resources. The US has a natural abundance of energy resources including coal, natural gas, solar, wind, oil, biomass, and water resources. Expansion of access to Federal lands for the development of these resources would take advantage of these resources while diminishing our reliance on foreign fuel sources of fuel.