Transcript Section 1: Historical Arc of energy Policy and Development

History Section 1: Historical Arc of
Energy Policy and Development
Primary energy: energy extracted from natural
sources, not converted into usable energy yet
Ex: wind, coal, oil
Secondary energy: energy from transformation of
primary energy
Ex: electricity
Both used to measure energy consumption
Quad of energy: 1015 btu, used for reference
Question
Name one example of a primary
source and one example of a
secondary source
Edison’s light bulb
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Created incandescent light bulb
Alternative to common kerosene lighting
Affordable, long-lasting, does not catch on fire
Provided need for electricity on a wide scale
Direct vs Alternating current
• By late 1880’s, most power plants used direct current
• Direct current inefficient, only transmit about a mile until
power lost as heat
• Alternating current introduced by George Westinghouse(
inspired by Nicolas Tesla)
• Began a “war of the currents”
• Edison began publicity campaign against alternating current
• Alternating current just too good, so today, alternate current
used
• However, researchers still looking at diff uses of direct current
today
Question
Who supported the alternating
current? The direct current?
Access to electricity today
• International Energy Agency(IEA) defines
energy poverty as lack of access to modern
energy services
• 1.5 billion people lack any access to any
electricity
• 95 percent of these people live in Asia or subSaharan Africa( refer to fig 2 page 8)
Oil!
• Cooked, pressurized remains of organic matter over
millions of years
• Used so much by everyone
• Major role in geopolitical power: 1990 Kuwait
invasion, Gulf War, many Middle Eastern conflicts
• Everyone (especially US) dependent on oil for
everything
• Hard to find alternatives for it, but not impossible
History of Oil
First oil well drilled in 1859 in Pennsylvania by George Bissell
Started an oil boom overnight
John Rockefeller, founder of Standard Oil, becomes one of
richest men in history
Demand for oil grew with Ford cars
However, oil resources finite
Amount of oil drilled peaks in 1970, the declines irreversably
( see fig 3, p10)
OPEC and 1973 Oil Crisis
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OPEC: Organization of the Petroleum Exporting Countries
Rivaled the Seven sisters: private oil companies
October 6, 1973, Egypt and Syria start 1973 Arab-Israeli War
US backs Israel against Egypt and Syria
In response, OPEC declares Embargo on oil against US
Results of Embargo:
– Creation of IEA 1974
– US began building Strategic Petroleum Reserve to protect
from future supply disruption
– Begins awareness of our increasing dependency on foreign
oil
Question
What was the cause of the 1973 Oil
Embargo and Crisis?
Question
Name one consequence of the 1973 Oil Crisis
1979 Oil Crisis
• Iran was 2nd biggest producer of oil in world in
1979
• Disrupted by Iranian revolution
• Less supply, higher prices
Consequences:
- President Carter only 1 term
- Resignation of 5 members of cabinet
- More gas lines
Energy Policy
• Policy: principles that guide decisions and
provide a pathway toward achieving desired
outcomes
• Many policy efforts in energy since Industrial
Revolution, but approach changed with 1970’s
oil crises
Energy Policies prior to 1970’s
• 4 energy developments between WWII and 70’s:
– Coal repurposed for electricity
– Natural gas industry destabilized
– Oil industry shifted from nearly unlimited to shortage
– Nuclear energy came online nationwide
Natural Gas Act 1938
- Empowered Federal Power commission to regulate rates
for pipelines
- Had to keep gas prices at the wellhead
- Has to set price controls and set prices
Energy policy under Nixon
• 1969-74
• When first entered office, implemented price
controls against inflation
• Had to adjust with 1973 oil crisis
• Announced Project Independence
– Supposed to wean US off of foreign energy
sources by end of 70’s
– Couldn’t see it through b/c of Watergate scandal
and resignation
Question
What was the intent of Project
Independence?
Energy Policy under Ford
• Continued Project Independence, but stepped down from
totally efficiency to “reasonable self-sufficiency”
• First president to emphasize relationship between energy,
economy, and national security
• Energy Policy and Conservation Act 1975
– Codified Ford’s Strategic Petroleum reserve
– Increase energy production and supply and reduce
demand
– Extend price controls on oil
– First time that US energy policy encourage conservation
and renewable energy
Question
Name one thing the EPCA act did
Energy Policy under Carter
• Created department of energy
• Gave a Speech about energy crisis vs War
– Led to passing of National Energy Act 1978
National Energy Act
- Addressed larger role for coal
- Return to conservation principles
- Create electricity market
- Decontrol of oil prices
Energy Policy under Carter Part 2
• 5 major legislative efforts under NEA
– National Energy Conservation Policy Act(NECPA)
– Powerplant and Industrial Fuel Use Act
– Natural Gas Policy Act
– Public Utility Regulatory Policies Act (PURPA)
– Energy Tax act of 1978
NECP: direct departm. of energy to set “minimum energy performance
standards” for buildings, vehicles, equipment
PURPA: created markets for power produced by small power plants and
exempt them from most regulation, gave power to non-utility power
producers, and created conditions for competitive markets in the electric
industry
Question
Name one thing Carter did during his legislation
in regard to energy
Energy Policy under Reagan
• Totally different approach from Carter
• Decontrol fuel prices, increase access to
domestic oil supplies
• Promote alternative energies, esp.
nuclear
• Policies unsuccessful in attempt to
deregulate energy industry
EPAct of 1992
• Similar to earlier acts: lessen dependence on imported oil,
encourage renewable energy
• But deregulated electric power
– Before, companies that owned or controlled 10%+ of a public
utility had to listen to PUHCA and simplify their ooperations to a
single state
– Crated new category of power generators who could generate
and sell electricity at wholesale w/o being regulated by PUHCA
Results:
- non-regulated energy producers could enter wholesale market
and sell power at market prices
- End of monopolies for electricity generation
Energy Policy Act of 2005
• Under George W. Bush
• Calls for increase in amount of biofuels mixed with
gas
• Subsidies for wind and alternative energy producers
• Authorizes 50 mil for biomass research and
development
• Repealed PUHCA entirely
• Amended PURPA by repealing that utilities in
competitive markets buy Qualifying Facility power
Question
What previous policy did the Energy Policy
Act of 2005 repeal?
Energy Independence and Security Act of 2007
• Increased CAFE( Corporate Average Fuel
Economy) standards for passenger vehicles
• 35 mpg minimum( varied)
• Forced taxpayers to fund +production of
biofuels and incl. new standards to promote
energy efficiency in residential and
commercial appliance equipment
Question
Describe CAFE in your own terms
Energy Policy Today
• No consistent or well-defined goals
• Some say not big problem, has already lasted
decades w/o real policy
• But energy resources finite
• Need to watch out for global warming and
geopolitical security