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Increased conservation, more drilling, are nothing but stopgap measures that will delay, but not avert, the catastrophic end of our current system. What we need is a massive effort, a serious commitment, to develop new energy technologies. John Kerry's Energy Plan: Harnessing American Technology and Innovation to Make Our Nation Safer, Stronger and More Secure
Within a Decade, America Will No Longer Have to Rely on Middle East Oil
Creates 500,000 New Jobs Over the Next Decade and Provides Assistance to Assure American Industries Will Lead the New Energy Economy
John Kerry is outlining a comprehensive energy plan that will tap America’s initiative and ingenuity to strengthen our national security, grow our economy and protect our environment.
Americans spend more than $20 billion each year on oil from the Persian Gulf -- often from nations that are unstable and hostile to our interests and our values. John Kerry believes that we must end this dangerous dependence because it leaves American security and the American economy vulnerable to the vagaries of international oil markets and to those who would use oil as an economic and political weapon. It is time to break with the past and build an American energy future.
John Kerry’s plan would increase and enhance domestic energy sources and provide incentives to help Americans use energy more cleanly and efficiently. When sixty five percent of the world’s oil reserves lie beneath the Persian Gulf states and only 3 percent lie beneath America, we cannot drill our way to independence. We can, however, develop and deploy clean energy technologies that will make America more efficient and allow us to capitalize on domestic and renewable sources of energy. Kerry’s plan will also provide major new incentives to help industry convert to more efficient energy. By meeting this challenge, we will not only strengthen American security, we will grow our economy and protect our environment. Kerry’s plan to use energy more efficiently and to use more renewable energy will reduce our oil dependence by more than 2 million barrels of oil a day – about the same amount we import from the Persian Gulf today.
(1) A NATIONAL COMMITMENT TO REDUCE DEPENDENCE ON MIDDLE EAST OIL THROUGH A NEW ENERGY SECURITY AND CONSERVATION TRUST.
Reducing our dependence on oil and building a future of clean and abundant energy are urgent national priorities. Our political system, however, does not treat them that way. Political support for research, development and deployment is supportive and so is funding through the Congressional appropriations process. John Kerry will assure that the nation is on track to reduce oil dependence by creating an Energy Security and Conservation Trust Fund capitalized by existing oil and gas royalty revenues and dedicated to accelerating the commercialization of technologies that will reduce America’s dangerous dependence on oil.
* Royalties Should Be Used to Improve Public Lands or Energy Independence. Energy companies pay the federal government royalty rents and bonuses for the right to drill for oil and gas on public land, onshore and offshore. A portion of this revenue was intended to fund critical land conservation parks and recreation resources. John Kerry believes that this commitment must be honored and that a portion of these revenues, derived from our ongoing use of public fossil energy resources, should be invested to reduce U.S. dependence on oil. Unfortunately, each year, much of this money goes into general revenue accounts, leaving critical energy projects go unfunded.
* The Trust Fund Would Protect Conservation Priorities. First, the Trust Fund would assure that existing conservation programs – such as the Land and Water Conservation Fund – are fully funded. John Kerry will make good on this long-neglected promise to the American people.
* The Trust Fund Would Guarantee the Nation is Moving Toward Energy Independence. The Trust Fund will allocate $20 billion over the next decade to reduce oil dependence and create a cleaner and more reliable energy future. These resources will help fund the manufacture of more efficient cars and trucks, the development of biofuels, the creation of a hydrogen-based energy economy and other technologies that can reduce America’s dependence on oil.
(2) REDUCE OIL DEPENDENCE BY INCREASING FUEL EFFICIENCY NOW AND NEW INCENTIVES TO MAKE SURE AMERICAN INDUSTRIES LEAD THE WAY.
Nearly 70 percent of the oil America consumes is burned in cars, trucks, trains, planes and automobiles. America must and can develop domestic, clean energy technologies that will enhance efficiency and reduce oil use in the transportation sector. Any energy plan that lacks a strategy to make today’s transportation sector more efficient will fail to reduce our nation’s oil dependence in the coming decades and will leave the American economy more vulnerable to the global oil market. John Kerry believes we can build more efficient cars and trucks in a way that creates jobs and provides American families with the vehicles they demand. He also believes that we must produce reliable, domestic biofuels that will diversify our fuel supply and that we must start today to develop the hydrogen-based energy economy of tomorrow. John Kerry’s strategy for leadership includes both near term progress to reduce our oil dependence and a true national commitment – not just lip service – to build a hydrogen-fueled transportation future.
Setting Goals to Increase Fuel Efficiency and New Investments to Assure American Industry Leads the Way.
* Making America’s Cars More Efficient. John Kerry believes that all Americans should drive the cars, SUVs, minivans and trucks of their choice, but that these vehicles can be more efficient, safe and affordable. John Kerry believes that we need a strong and realistic fuel economy standard, coupled with tax incentives for consumers to buy the vehicles they want and incentives for manufacturers to convert factories to build the more efficient vehicles of the future. It will enhance national security, strengthen the American auto industry, and protect and create jobs.
* Saving Two Million Barrels of Oil a Day – As Much As We Currently Import From the Middle East. John Kerry supports updating CAFE standards to 36 miles per gallon by 2015. This proposal will reduce America’s dependence on oil by saving 2 million barrels of oil per day – almost as much as we currently import from the Persian Gulf. It will reduce greenhouse gas emissions, smog and ozone pollution. The National Academy of Sciences confirmed that fuel efficiency can be significantly improved through better use of technology, without limiting vehicle choice, without harming safety and without injury to the industry.
* New Incentives to Help Convert American Industries to Lead the Way in the New Energy Economy. John Kerry believes that the American auto industry should lead the world in building and selling efficient vehicles. He believes that the nation – drawing on the resources of the Energy Security and Conservation Trust – should provide assistance to American manufacturers for the conversion of existing vehicle and parts plants to build more efficient hybrid and other advanced technology vehicles. This assistance will help manufacturers accelerate the pace of conversion of their factories, make efficient vehicles available sooner, reduce oil dependence faster, and protect jobs in communities across the country.
* Helping Americans Drive More Efficient Cars. John Kerry believes that we must also provide consumers with incentives to purchase advanced technology and alternative fuel vehicles. The key to Kerry’s approach is to make the marketplace friendlier to these cleaner energy vehicles, which will include cars, SUVs, minivans, pickups, buses and trucks. Consumer tax credits will spur demand, stimulate the market, and enable manufacturers to increase production and lower costs. It is a way to help move technologies off the drawing board, into production and onto the road.
* Increasing Renewable Fuels in America’s Gasoline: 5 Billion Gallons in the Next Decade. John Kerry believes that renewable fuels, produced in America, can reduce our oil dependence. Renewable fuel produced from corn and other sources – such as agricultural, forest and food wastes – has a strong foothold in the market and great potential. John Kerry supports a national standard that will ensure that at least 5 billion gallons of renewable fuel is part of America’s energy supply by 2012. A strong renewable fuels standard will reduce our oil dependence, improve the quality of our environment, and strengthen the economy of rural America.
A Plan to Use Hydrogen Throughout the Nation By 2020
While John Kerry believes our nation needs a strategy to reduce dependence on oil today, he knows we can harness technological innovation and ingenuity to develop a hydrogen-based economy for the future. Hydrogen has great promise as a clean, domestic and reliable energy source for the future. It has the potential to power our cars at 100 miles per gallon without pollution and, with the right technology, can be produced efficiently from natural gas and coal. Eventually, John Kerry believes that we can build a truly clean and secure economy based on hydrogen -- a clean fuel that we can eventually get entirely from renewable sources from our farms, the wind, solar energy, hydropower and geothermal sources.
Despite hydrogen’s great potential, we must recognize that we cannot convert to hydrogen overnight. Today, a car fueled by hydrogen costs as much as $500,000 and there are only scattered efforts to develop the infrastructure necessary to make this a reality. So while the Bush Administration calls for every child born today to drive a hydrogen car, it does nothing to improve the quality of the air that child will breathe growing up or make sure that the child grows up in an America less threatened by our dangerous dependence on oil. The Bush Administration’s vision on hydrogen is akin to setting a goal to cure cancer decades from now and doing nothing to treat the millions who will get cancer in the meantime. That is why we need to improve vehicle fuel efficiency in the near term, while we work to develop the hydrogen-based energy economy of tomorrow. John Kerry’s plan includes:
* Uniting Scientists and Researchers to Develop a New Energy Economy by 2020. Today, there are scattered efforts around the country to develop the infrastructure to supply, and systems to utilize, hydrogen as a fuel. Reaching our goal requires additional research, but we also need a new coordinated effort to harness the potential of America’s scientists and researchers in the public and private sectors. The Hydrogen Institute would provide $10 billion to fund research efforts to help solve critical problems, such as infrastructure needs and configuration. It will help address fundamental questions such as whether hydrogen be piped to the filling stations of the future or will it be produced on the spot, or in vehicle on-board systems? The Institute would also support efforts to develop the codes and standards that will ensure the safety of a major hydrogen infrastructure.
* Putting 100,000 Hydrogen-Powered Vehicles on the Road by 2010 and 2.5 Million by 2020. John Kerry will challenge the new Hydrogen Institute to develop a roadmap to get 100,000 hydrogen-powered vehicles on the road by 2010 and 2.5 million by 2020. He will start by making sure the federal government does its part by committing to getting 20,000 hydrogen-powered vehicles into the federal government fleet by 2010. Kerry will also bring state and local governments to the table to encourage innovation that moves America closer to a hydrogen-based energy economy. For example, Michigan has a program that provides tax credits for companies that come to the state to invest in these technologies.
(3) PRODUCING CLEAN ENERGY AND CREATING JOBS WITH RENEWABLE ENERGY. Just as renewable fuels can help reduce oil dependence, they can create electricity and enhance our electricity markets. Renewable energy will diversify our electricity supply, ease price shocks and help protect our environment. And together these abundant renewable energy sources can build the backbone of a long-term hydrogen economy.
* Assuring 20 Percent of Electricity Comes From Renewable Sources by 2020. John Kerry believes that America needs a national market for electricity produced from renewable energy, such as wind, solar, biomass, geothermal and hydrogen. John Kerry supports a national goal of producing 20 percent of our electricity from renewable sources by 2020. States have shown that we can significantly increase renewable energy sources. Texas is on track to reach its renewable target by 2004 instead of the proposed year of 2009 and California derives 13 percent of its electricity from renewable energy. The tremendous disparity in state renewable energy programs, however, illustrates the need for a national renewable electricity standard. This standard will encourage the market to respond by finding the most efficient and effective way of meeting that goal through a credit trading system.
Transitioning to Renewable Energy Creates Jobs While Strengthening National Security.
Economists and government experts predict that policies to bolster energy efficiency and renewable energy will create hundreds of thousands of good American jobs throughout the construction, manufacturing, agriculture, and transportation sectors. John Kerry believes that it is time we invest in American workers, American innovation and American energy independence.
* Making Energy a Cash Crop. Clean energy, including biofuels like ethanol and biodiesel, and wind power are cash crops that can create jobs and provide new income streams for farmers, ranchers, rural small businesses and rural communities. Economists estimate that the John Kerry-supported renewable fuels standard will create 214,000 American jobs.
* Helping Small Farmers Who Want to Produce Renewable Energy. John Kerry supports making the Small Ethanol Producer Credit more workable for farmers by applying the 10-cents per gallon production tax credit to small farmer-owned cooperatives. Local co-ops across Iowa and the Midwest are building ethanol plans, cultivating switch grass, and turning soybeans into diesel fuel and industrial lubricants. Cooperatives are one of the keys to the future of rural America and John Kerry believes government has a role to play in keeping them viable.
* Using More Fuels From Crops and Waste. Ethanol production accounts for over $3 billion a year in economic activity and new forms of ethanol from waste biomass (cellulosic ethanol) promises a bright new source of income for America’s farmers and foresters. John Kerry will also use the Energy Security and Conservation Trust to accelerate the research needed to fulfill the great promise of new forms of ethanol from biomass, such as crop and forest waste, that will reduce our oil dependence and provide an entirely new cash crop for America’s farmers and foresters. He will also support bonds and other means to help create biomass factories and refineries.
* Supplying More Electricity with Wind. Wind power was the fastest growing source of electricity generation worldwide over the last decade. Because so much of it may be found in the nation’s heartland, wind power has the added potential to reinvigorate the nation’s farming communities, providing steady income through lease or royalty payments to farmers and to other landowners. Wind power has the added benefit of producing no harmful pollutants or greenhouse gases.
* Good Jobs Manufacturing Clean Energy. Investing in energy efficiency and renewable energy will create hundreds of thousands of quality jobs. Clean energy technology will be designed, developed and built here in America and exported to the world. Investment in more efficient transportation, such as commuter and intercity rail, will create jobs in manufacturing, construction and operations. The development of wind, geothermal, hydrogen, solar power and other renewable energy will create jobs in manufacturing and building. Biomass development will create jobs in construction, refining and distribution. And investment in energy efficient buildings will create jobs in retrofitting existing building stock. The Tellus Institute predicts that federal policies – including many in the Kerry plan – to bolster clean energy will create more than 700,000 jobs by 2010 and 1.3 million jobs by 2020.
Encouraging Technologies and Innovation to Bring a New Energy Future. Whether it is developing renewable fuels or a more efficient way of using electricity, many clean energy projects don’t get built because sponsors don’t have the ability to raise capital, even with projects that demonstrate attractive financial returns and strong credit and security structures. John Kerry believes that we should improve access to financing for clean energy products.
* Encouraging Investment and Exploration in Clean Renewable Energy Project. John Kerry believes we should extend the Production Tax Credit for renewable sources of energy such as wind and biomass. Kerry will also broaden the Production Tax Credit so that a greater range of financial investors in renewable energy projects and wholesale purchasers of renewable energy can make use of the credit. This will help attract the capital necessary to get these projects built.
* Encouraging More Investments in New Technologies and Innovations That Bring a Cleaner Future. Already several large institutional investors have begun exploring major investments in this area and private equity funds are being raised to meet the growing demand. At the same time, the federal government needs to do its part to encourage this investment. Beyond the Production Tax Credit, John Kerry will provide federal regulatory and policy support to stimulate investments in renewable energy, with mechanisms such as loan guarantees for appropriate projects, and federal electricity rules that improve the way intermittent sources like solar and wind are valued by utilities through dispatch mechanisms, net metering, and interconnection standards. He’ll also make sure that clean air regulations take proper account of the environmental benefits of renewable energy, and again, he’ll help level the playing field for renewable energy by adopting a federal renewable portfolio standard.
(4) MAKING OUR HOMES, OFFICES, AND CITIES MORE ENERGY EFFICIENT. John Kerry believes that a unit of energy saved is as important as a unit of energy produced. For example, the American economy is twice as efficient today as it was some 30 years ago. In part, that’s because we accomplish more with less through efficient technologies. But studies by the Department of Energy and other agencies show that we can save significantly more energy through advances in energy efficient technologies – heating, lighting and manufacturing – that only need to be implemented. John Kerry believes that the government should promote the efficient use of energy in the places that we work and live.
The Federal Government Will Lead the Way By Cutting It’s Energy Bill
* Cutting the Government’s Energy Bill 20 percent by 2020. John Kerry believes that the U.S. government – probably the single largest user of energy in the world – should lead by example. In 1999, the Federal Government spent $7.9 billion on energy. Kerry will require that federal agencies submit annual plans to achieve this goal and will develop incentives for agencies and managers to comply. Federal managers across many agencies have already proven they know how to cut energy bills and save precious taxpayer dollars in our government’s 500,000 buildings. When fully implemented, this plan will save at least $1.6 billion and it will save an estimated $8 billion over the next ten years.
* Challenging Municipalities, Corporations, Universities, Small Businesses and Hospitals to Establish the Same 20% Energy Efficiency Goal. A Kerry Administration will establish a task force comprised of representatives from public and private institutions, which are large energy users, to increase energy efficiency. The task force will determine how best to increase efficiency by purchasing and installing more efficient heating and cooling systems, industrial equipment, appliances, and indoor and outdoor lighting, as well as promoting more efficient building, landscaping and transportation designs. Officials in the city of Portland, Oregon estimated that by implementing energy efficiency programs in their public buildings, they were able to save $1.1 million on energy costs annually, for a total savings of $9.46 million since 1991.
Making America’s Communities More Energy Efficient.
* Tax Credits for Energy-Efficient Buildings and Homes. To help families reduce their utility bills, John Kerry will provide consumers with a credit to purchase equipment that meet energy-efficiency standards for heating and cooling in their new homes, and to retrofit existing homes. Kerry will encourage builders to build energy efficient homes with a 20 percent tax credit for the purchase of energy efficient building equipment, including electric heat pumps, hot water heaters, and natural gas heat pumps. This step would also significantly help ease natural gas prices.
* Supporting Smarter Growth and Better Transportation Choices. John Kerry supports directing more of our transportation resources to support smart-growth strategies and more transportation choices. He also encourages Fannie Mae to promote location efficient mortgages that reward building and buying near public transit. This will not only reduce urban sprawl but will reduce our oil dependence.
(5) A NEW NORTH AMERICAN ENERGY PARTNERSHIP TO EXPAND THE SUPPLY OF NATURAL GAS. Natural gas, the cleanest form of fossil fuel, has historically been in abundant supply at a reasonable cost. However, many fear that supply shortages may cause persistently high prices over the next several years. High prices for this fuel hurt lower and middle class families since heat and power are essential services. American families will bear the cost of increased prices for electricity and heating and for goods produced using natural gas. Natural gas, for example, is used in producing fertilizer and other products and as a fuel for industrial processes and producing electricity. These higher costs will hinder economic recovery. John Kerry believes it is imperative that we begin to address not only the supply and demand sides of the equation, but the short-term and long-term challenges for natural gas as well.
Assuring a Fair Marketplace
* Providing Effective Market Monitoring and Enforcement. While much of the expected pressure on the natural gas market is due to supply shortages, there have been abuses in the market for natural gas – such as alleged manipulation of capacity in the western markets, inaccurate filing of trade data – that ultimately have an adverse effect on the prices consumers pay. John Kerry will make sure that any abuses are dealt with effectively and prevented from reoccurring. This will require the Federal Energy Regulatory Commission to be more diligent and aggressive in pursuing anti-competitiveness practices.
Pursuing Opportunities to Tap Natural Gas in Environmentally Safe Ways
* North American Energy Initiative. John Kerry believes that the United States should reach out and develop a long-term partnership with our immediate neighbors and friends Canada and Mexico to develop and expand North America's robust energy supplies. By looking beyond our borders, as well as to our nation's huge stranded gas supplies on the North Slope of Alaska, we have the potential to secure long-term energy supplies that help meet our demand for energy. For example, Canada has huge stranded natural gas capacity that has no way to reach major markets, and Mexico likewise lacks an adequate energy infrastructure to allow it to tie into major North American energy markets. Presidential leadership must be interjected into this equation, and John Kerry would make this a priority issue with our North American neighbors.
* Developing Alaska Natural Gas Pipeline. There are 35 trillion cubic feet of known natural gas reserves on the North Slope of Alaska that have no way to get to markets in the lower 48 states. John Kerry believes that we must build the Alaska pipeline to expand natural gas as a resource and provide important jobs for American workers. As President, John Kerry would bring together the States, Native Americans, producers, pipeline companies, Canada and other interested parties to make this a domestic priority, including providing appropriate regulatory streamlining to get this project built.
* Encouraging Development in the Gulf of Mexico. John Kerry supports developing natural gas sources in the Gulf of Mexico on areas already open for drilling. He supports temporary incentives that encourage development in this area.
Assuring Natural Gas Can Be Delivered – Safely and Reliably
* Enhancing Infrastructure to Help Supply Natural Gas More Effectively. We need a domestic pipeline infrastructure that is capable of delivering natural gas where it is needed, when it is needed, in a safe and reliable manner. For example, the lack of pipeline infrastructure may be impeding development of natural gas on public and private lands on the eastern front of the Rocky Mountains, which are believed to hold very significant reserves of natural gas. Over 60 percent of the natural gas reserves in this region are available for lease under standard lease terms, according to a recent government report. John Kerry’s plan would ensure that we develop needed pipeline infrastructure and supplies in appropriate areas in an environmentally sound and safe manner.
* Improving Liquefied Natural Gas (LNG) Transportation Systems. There are ways in which we can improve our ability to import natural gas from reliable foreign sources. The current infrastructure for importing natural gas from overseas is limited as the natural gas must be liquefied at super cold temperatures for shipping overseas and returned to gas form before it can be put in the domestic pipeline system. There are currently only four terminals in the U.S. where liquefied natural gas is delivered and these facilities often raise challenging local issues. John Kerry would support new technologies under development to address some of the local concerns about this transportation system, including development of ship-based regasification systems that would allow the LNG to be regasified offshore and moved to shore by connecting to underwater pipelines.
* Increase the Efficiency of Natural Gas Use. Advanced technologies, commercially available today, can dramatically increase the efficiency of natural gas use for power generation and end use applications, including heating and cooling. For example, combined heat and power systems which provide both electric and thermal energy to commercial and industrial users can achieve efficiencies greater than 70%, compared with power plants that operate often at half that level. And gas-fired appliances available today can substantially cut homeowners natural gas bills which may hit record levels this winter.
(6) MAKING COAL PART OF THE 21ST CENTURY ENERGY SOLUTION
For too long there has been a deadlock between those who support using coal and those who support improving the environment. George Bush tells coal producing regions to fight environmental protections because they will hurt the industry. Others believe there is no future for coal. The reality, however, is that coal is an abundant domestic fuel that is used to produce more than one-half of our electric power. John Kerry believes that coal should be part of the solution to our energy and environmental challenges and that we need to forge a new way to harness technology to develop and deploy clean electric power from coal. At the same time, John Kerry believes that we need clear benchmarks and a flexible framework by which to measure the emissions performance of existing and new uses of coal.
* Making Coal Part of the Clean Energy Solution and Strengthen the Economy in States and Regions Engaged in Coal Production and Use. John Kerry believes that we need leadership to lower the four leading power plant emissions – nitrogen oxide, sulfur dioxide, mercury, and carbon dioxide. He also is committed to helping the coal industry and the communities that support it be part of America’s energy future. He wants to make the coal industry part of the effort in developing and implementing new cleaner coal technology. John Kerry believes we must invest $10 billion over the next decade – a five-fold increase – to help transition from the current generation of older and dirtier coal plants to cleaner and more advanced coal-fired power plants Kerry believes we must also invest in new research that can make sure clean coal is a major contributor in meeting future energy needs, including playing an important part in the production of hydrogen. This approach will be good for the environment and public health and will assure coal workers and their families are an important part of the next generation of energy technology for our nation.
(7) REDIRECTING UNWARRANTED SUBSIDIES TO INVEST IN THE ENERGY TECHNOLOGIES OF THE FUTURE. John Kerry’s plan does not necessarily spend more than the Republican energy bill, he just has different priorities. While John Kerry wants to invest in renewable energy that can reduce our dependence on foreign oil, the Republican bills advocate big subsidies for large, well-financed energy companies. The House Republican energy bill authorizes billions in new spending and tax cuts for the industry. The Senate bill also has subsidies for the industry. John Kerry believes we need an energy policy that puts federal resources into creating the technologies that will create energy security, create jobs and protect the environment. At the same time, John Kerry believes that the nation can save money through targeted policies to improve the management of energy and public resources. For example, we can modernize the sale of mineral rights on public land by ending the sale of public land rights at $5 per acre and save $519 million over five years. John Kerry’s plan to cut electricity in the Federal government would save $8 billion over the next ten years. And John Kerry would close a loophole that allows small-business owners to deduct $100,000 for luxury sport-utility vehicles through a law meant to benefit farmers and others from being penalized by the luxury tax when they purchase pickup trucks and tractors.
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