Weekly Clean Energy Roundup:January 11, 2006

News and Events

New Energy Efficiency Tax Credits Take Effect

Weapons Plant to Save $2 Million Per Year Through Energy Efficiency

Hybrids, Flex-Fuels, and Subcompacts Debut at Auto Shows

Northeastern States Sign Pact to Limit Greenhouse Gases

Interior Department Seeks Comments on Offshore Energy Projects

EPA Publishes Regulations to Implement Renewable Fuel Standard

Energy Connections

EIA: U.S. Greenhouse Gas Emissions Increased 2 Percent in 2004

News and Events

New Energy Efficiency Tax Credits Take Effect

New energy efficiency tax credits went into effect on January 1st, making it easier for U.S. families and businesses to reduce energy costs at home, at work, and on the road. As part of the Energy Policy Act of 2005, the new tax credits will allow consumers to reduce their 2006 tax bills on a dollar-for-dollar basis up to the amount allowed under the law. For example, consumers who purchase the most fuel-efficient vehicles could reduce their tax liability by up to $3,400, while those who install energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment in the home can receive up to $500 off of their federal tax bill.

Specific tax benefits for the home include $50 for purchasing an advanced main air circulating fan; $150 for installing a highly efficient furnace or boiler; $200 for installing energy efficient windows; $300 for purchasing a highly efficient central air conditioner, heat pump, or water heater; and 30 percent of the purchase cost, up to $2000, for solar power and solar water heating equipment (this does not apply to equipment used to heat swimming pools or hot tubs).

Businesses may be eligible for credits such as a 30 percent tax credit for the installation of qualifying solar equipment on buildings. Companies that build highly energy efficient homes or manufacture energy-efficient appliances can also earn tax credits. See the DOE press release and for more details, see the Energy Tax Incentives Web site from the Tax Incentives Assistance Project.

Weapons Plant to Save $2 Million Per Year Through Energy Efficiency

DOE announced last week that it has signed a contract to significantly improve energy efficiency at its Pantex Plant near Amarillo, Texas, resulting in an estimated savings of more than $2 million per year. This contract will also help the nuclear weapons plant cut its annual energy use by two percent as required by the energy legislation signed by President George W. Bush in August 2005. The Pantex Plant covers 25 square miles and serves as the only nuclear weapons assembly and disassembly facility in the United States. See the Pantex Plant Web site.

Energy-saving measures will include: installing new energy-efficient lighting systems and control systems to reduce waste in heating and air-conditioning systems, repairing leaks in steam systems, installing energy-efficient cooling systems, and renovating dehumidifiers needed for industrial operations. These energy conservation measures will cost about $19.5 million over 19 years, but will save the Pantex Plant an estimated $38 million in that same time frame. See the DOE press release.

NORESCO, an energy services company, will oversee the improvements through an energy savings performance contract (ESPC). Under ESPCs, companies invest in energy-saving improvements and are repaid with a portion of the energy cost savings over the life of the contract, after which the federal agency continues to reap the cost savings. Since authorized in 1992, ESPCs have been implemented by 18 different federal agencies and departments, saving 14.4 trillion Btu annually. These projects will save the government $5.0 billion in energy costs, of which $3.5 billion will be used to pay off project investment, leaving a net savings of $1.5 billion. The Energy Policy Act of 2005 extends the authority for all Federal agencies to use ESPCs until September 30th, 2016. See the Federal Energy Management Program Web site.

Hybrids, Flex-Fuels, and Subcompacts Debut at Auto Shows

Toyota Motor Sales and General Motors Corporation (GM) are displaying the latest in hybrid-electric vehicles slated for production at the North American International Auto Show (NAIAS) in Detroit. On Monday, Toyota unveiled its 2007 Camry Hybrid, which combines a 45-horsepower motor and a 147-horsepower, 4-cylinder, Atkinson-cycle engine. Equipped with a continuously variable transmission, the Camry Hybrid achieves an estimated 43 miles per gallon (mpg) in the city and 37 mpg on the highway. On Sunday, GM debuted two upcoming hybrid sport utility vehicles: the 2007 Saturn VUE Green Line and the 2008 Chevrolet Tahoe Two-mode Hybrid. The Saturn VUE Green Line is expected to achieve 27 mpg in the city and 32 mpg on the highway, a 20 percent improvement over the Saturn VUE. When it goes on sale this summer, the Saturn VUE Green Line will sell for less than $23,000, including a markup of less than $2,000 for the hybrid system. The Tahoe Hybrid is optimized to perform efficiently in two modes: in city driving and on the highway. The vehicle will operate on electric power only when it can, which will help it to achieve an estimated 25 percent gain in fuel economy over the base Tahoe. The Tahoe Two-mode Hybrid will go on sale next year along with the GMC Yukon Two-mode Hybrid, and a Cadillac Escalade hybrid is planned for the future. See the Toyota press releases and the GM press release and Webcast.

As always, this year’s NAIAS also features many intriguing concept vehicles. Ford Motor Company is displaying the Reflex Hybrid Coupe, a sporty car that achieves 65 mpg with a hybrid-electric diesel engine. Solar cells in the headlights and taillights help recharge the lithium-ion battery, while a roof-mounted solar panel powers fans to keep the interior cool. Ford also brought the F-250 Super Chief concept, a flex-fuel pickup that runs on gasoline, ethanol, or hydrogen. Mitsubishi Motors Corporation is displaying the Concept-CT MIEV hybrid, a sport hatchback that combines a lithium-ion battery with in-wheel motors, while Toyota’s F3R concept is a hybrid minivan with modern styling. The NAIAS opens to the public on January 14th. See the Ford press releases on the Reflex Hybrid Coupe and Super Chief; the press releases from Mitsubishi and Toyota; and the NAIAS Web site.

Fuel-efficient subcompacts are also coming on strong, as Honda unveiled the 2007 Honda Fit at the NAIAS. The five-door subcompact achieves 33 mpg in the city and 38 mpg on the highway with its four-cylinder engine. Toyota is also introducing its Yaris subcompact to the U.S. market for the 2007 model year. Already popular in Europe, the Yaris sedan and hatchback models achieve 34 mpg in the city and 40 mpg on the highway. The Yaris debuted last week at the Los Angeles Auto Show, which also features an innovative three-wheel concept vehicle from Volkswagen. The company says its GX3, a two-seat crossover between a motorcycle and a sports car, can achieve 46 mpg in the city. Honda also introduced its 2006 Civic GX, which runs on compressed natural gas, at the Los Angeles Auto Show. The show is open to the public through January 15th. See the Los Angeles Auto Show Web site and the press releases about the Honda Fit, Toyota Yaris, Volkswagen GX3 (PDF 93 KB), and Honda Civic GX. A photo of the Volkswagen GX3 is also available.

Northeastern States Sign Pact to Limit Greenhouse Gases

Seven northeastern states announced an agreement in December to implement the Regional Greenhouse Gas Initiative (RGGI), which will regulate carbon dioxide emissions from fossil-fueled power plants in those states. The governors of Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, and Vermont signed a Memorandum of Understanding (MOU) that sets a cap on each state’s carbon dioxide emissions from 2009 through 2014, after which the emissions will decline 10 percent by 2019. The RGGI will allow trading of emissions credits to help achieve the caps, and will allow credits for projects that capture and burn landfill methane; that encourage end-use energy efficiency for natural gas, propane, and heating oil; and for other projects.

Under the RGGI, the participating states hope to become “world leaders in the creation, development, and deployment of carbon emission control technologies, renewable energy supplies, energy-efficient technologies, and demand-side management practices,” according to the MOU. To implement the RGGI, the states anticipate the release of a draft Model Rule for public comment by March. The RGGI is expected to take effect on January 1st, 2009. See the RGGI Web site and the press releases from New York Governor George Pataki and Delaware Governor Ruth Ann Minner.

Interior Department Seeks Comments on Offshore Energy Projects

The U.S. Department of Interior’s Mineral Management Service (MMS) is currently seeking comments on how it should regulate energy development other than oil and gas on the outer continental shelf (OCS). The Energy Policy Act of 2005 authorized MMS to grant leases, easements, or rights-of-way on the OCS for the development and support of energy from sources other than oil and gas and to allow for alternate uses of existing facilities on the OCS. MMS anticipates that the majority of the applications received for non-oil and gas development projects will be for renewable energy projects, specifically for offshore wind plants, solar installations, and ocean energy projects such as wave, ocean current, or ocean thermal energy systems. The Act also directed MMS to develop a comprehensive program and regulations to implement its new authority by mid-2006.

As the first step in the development of this regulatory program, MMS issued an Advanced Notice of Proposed Rulemaking on December 30th, seeking comments on a variety of issues relating to its new authority. Comments are due by February 28th. On January 3rd, MMS also published several maps showing the extent of its offshore jurisdiction for each state. See the MMS press release, its Renewable Energy and Alternative Uses Web site, and its Federal OCS Administrative Boundaries Web page.

EPA Publishes Regulations to Implement Renewable Fuel Standard

The U.S. Environmental Protection Agency (EPA) published new regulations for ethanol use in our nation’s fuel supply in late December. The Energy Policy Act of 2005 gave EPA the authority to establish a new Renewable Fuels Standard Program, which will double the use of fuels produced from U.S. crops by 2012. The regulation explains how industry will comply with the provision requiring that the gasoline blends sold or dispensed to U.S. motorists this year contain, on average, 2.78 percent renewable fuel (such as ethanol), an amount equal to about 4 billion gallons. And for this year, at least, the approach is simple: do nothing, because the EPA expects the industry to meet the standard without any additional regulations. In fact, the ethanol industry produced and sold more than 4 billion gallons last year, and expects to produce more this year. See the press releases on meeting the standard and the new EPA regulations from the Renewable Fuels Association.

In the future, the EPA envisions requiring registration, recordkeeping, and reporting requirements; enforcement provisions; a credit trading program; and various fuel tracking mechanisms to implement the program. For this year, though, the EPA published its simpler regulations in the Federal Register on December 30th. Comments are due by January 30th, and if no adverse comments are received, the regulations will take effect on February 28th. See the EPA press release, the EPA’s new Renewable Fuels Standard Web page, and the EPA’s Notice of Proposed Rulemaking and accompanying Direct Final Rulemaking, as published in the Federal Register.

Energy Connections

EIA: U.S. Greenhouse Gas Emissions Increased 2 Percent in 2004

The latest report on greenhouse gas emissions from DOE’s Energy Information Administration (EIA) shows a 2.0 percent increase in 2004. Since 1990, U.S. greenhouse gas emissions have increased by 15.8 percent, for an average annual increase of 1.1 percent. The EIA attributes the large growth in 2004 to a surging U.S. economy, which in turn resulted in more energy use. The economy grew 4.4 percent in 2004?the fastest since 1999?and in turn the carbon dioxide generated from energy use increased by 1.7 percent. But since the greenhouse emissions grew slower than the economy, the U.S. greenhouse gas intensity?the amount of greenhouse gas emissions per unit of economic output?decreased by 2.1 percent in 2004.

The other significant contributor to greenhouse gas emissions was hydrofluorocarbons (HFCs), a class of refrigerants. HFC emissions increased by 12 percent in 2004 and have increased 246 percent since 1990. The growth in HFCs is largely due to their use in place of ozone-depleting compounds such as chlorofluorocarbons (CFCs). See the EIA report (PDF 637 KB).

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