Bush energy plan whacks conservation

A few years ago a little-known US Energy Department program helped produce a design technology for lightweight cars and trucks that in 2004 alone saved the nation 122 million barrels of oil, or about $9 billion.

Even without that breakthrough, the tiny Industrial Technologies Program routinely saves the United States $7 worth of energy for each dollar it spends, proponents say.

So, with energy prices spiking and President Bush pushing for more energy research, the ITP would seem a natural candidate for more funding. In fact, its budget is set to get chopped by a third from its 2005 level. It's one of more than a dozen energy-efficiency efforts that the Energy Department plans to trim or eliminate in a $115 million cost-saving move.

The push to solve the nation's energy woes are bumping up against the federal government's budget problems. To be sure, the Bush administration is anxious to fund its new Advanced Energy Initiative - long-term research into nuclear, coal, wind, solar, and hydrogen power. But to accomplish that, it is cutting lesser-known programs like ITP whose payoffs are far more near-term.

"This is the worst time to be cutting these programs," says William Prindle, deputy director of the American Council for an Energy-Efficient Economy, a Washington think tank. "At this point in time, with high energy prices and pressures, you'd think maybe we'd want to invest in a suite of energy-efficiency programs that make a dent right away."

If Congress accepts the Energy Department's proposed 2007 budget, it will cut $152 million - some 16 percent - from this year's budget for energy-efficiency programs. Adjusting for inflation, it would mean the US government would spend 30 percent less on energy efficiency next year than it did in 2002, the ACEEE says.

Such cuts reflect a shift in priorities toward programs that could offer much bigger energy breakthroughs, the Energy Department says.

"Tough choices had to be made, and we had to realign priorities," writes Christina Kielich, a DOE spokeswoman in an e-mail. "Some programs within the energy- efficiency budget have reached a point to be considered mature technologies" that require less funding.

To others, it's a penny-wise and pound-foolish move, particularly ironic for a nation hard-pressed to reduce energy bills.

"Because of high gas prices and energy prices, I just wouldn't have expected a program that helps the little guy, small business, to take this kind of hit," says Michael Muller, a Rutgers University engineering professor and national coordinator for the ITP's Industrial Assessment Centers. "They haven't said it doesn't work. They say it's because of other higher priorities."

One energy-efficiency program on the chopping block is the Heavy Vehicle Propulsion and Ancillary Subsystems. It helps improve the fuel efficiency of heavy-duty trucks, one of the nation's biggest oil consumers. That program is "zeroed out" in the 2007 budget request.

The same fate awaits the $4.5 million Building Codes Implementation Grants program. It helps states adopt more energy-efficient requirements for new buildings, the nation's largest consumer of electricity and natural gas.

The $8 million Clean Cities program has helped clean-fuel technologies, like buses that run on compressed natural gas, get to market. But it's slated for a $2.8 million cut.

Dr. Muller's Industrial Assessment Centers program annually conducts about 600 energy audits and trains a new crop of about 250 new energy-efficiency engineers. The $7 million program, which is estimated to save enough power to supply half a million homes each year, wins plaudits from the small businesses that have been able to reduce their costs.

But budget cuts slated for 2007 would trim the program by a third, slashing the number of its university-based auditing and training programs from 23 to 16. Savings: about $2.4 million.

"I hope the ITP cuts do get restored," says Larry Kavanagh, vice president of manufacturing and technology for the American Iron and Steel Institute, a Washington trade association. "It saved the auto industry a lot of weight in its cars - and the country a lot of energy."

These programs are minuscule compared with the big-ticket research programs envisioned by the White House. Mr. Bush's Hydrogen Fuel Initiative, for example, would cost $1.2 billion over five years.

Proponents of the small-scale efficiency programs point out that the ITP, with 1/20th of the budget, has already saved more oil than the hydrogen-fuel program would save, if successful, by 2025.

But others are skeptical of the value of most Department of Energy programs and especially energy-efficiency programs. They say the latter should be provided by the private sector, not government.

"When energy prices are high, you don't need to subsidize conservation efforts," says Jerry Taylor, director of natural resource studies for the Cato Institute, a Washington think tank. "These are subsidies that qualify as corporate welfare."

One of the nation's priorities is improving the security and reliability of the electric grid. One option for doing that sooner, rather than later, is the emerging technology of "distributed generation." Under that approach, the nation would build more but much smaller power plants so that small businesses and even individual homes could have them.

True, such systems would burn costly natural gas - but at twice the energy efficiency of today's grid - to produce both heat and electricity for homeowners. If such systems caught on, they could vastly reduce load demand on central power stations and slash the need to build new power plants.

But that vision of the future may be delayed, since the DOE's "distributed energy" program has been cut in half and the remainder is being heavily earmarked by federal lawmakers for specific projects that they favor. The program is slated to be terminated in 2008, observers say.

"Hurricanes, terrorism, and blackouts have given us so many reasons to emphasize distributed generation, and instead we're putting emphasis on new forms of centralized power," says John Jimison, executive director of the US Combined Heat and Power Association, a Washington advocacy group. "It's too bad it's getting cut because it was a very modest program."

There may be a glimmer of hope for energy-efficiency programs. The House Committee for Energy and Water Development subcommittee moved last week to restore some funding to ITP and hybrid technology for heavy trucks. The committee voted earlier this month to fully fund the president's $2.1 billion Advanced Energy Initiative.