Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays Bank.
In case you haven’t heard, Congress recently approved an 822 page energy bill (known as the Energy Independence and Security Act) that President Bush is expected to sign into law. This bill is expected to reduce energy usage by 7% and carbon dioxide emissions by 9% in 2030. Excuse me? It’s going to take 23 years to achieve a less than 10% improvement in energy use and carbon emissions? I haven’t read the bill, but I’m assuming that this is on a per capita basis, so with continued population growth, there will likely be a net increase in energy usage over that timeframe (feel free to correct me if I’m wrong).
With that said, let’s take a look at some of the changes that are in store. Again, I haven’t read the bill myself, so these bits are captured from various media reports that I’ve run across.
More efficient light bulbs. Under the terms of this bill, all light bulbs have to use 25-30% less energy by 2012 to 2014. This measure is being phased in, starting with 100W incandescent bulbs in 2012, ending with 40W bulbs in 2014. And by 2020, all bulbs have to be 70% more efficient. The funny thing is, compact fluorescent bulbs that use 25% as much energy (i.e., that use 75% less energy) as compared to their incandescent brethren are already available. If you’re looking for a soundbite in support of this move, consider the following comment from Lynn Clement of Focus on Energy:
“If every American household replaces light bulbs in their five most frequently used fixtures with Energy Star compact fluorescent bulbs, we could save more than $8 billion in annual energy costs and prevent greenhouse gasses equal to the emissions of more than 10 million cars.”
Obviously, there are improvement that can be made in this area and, in the long run, it would be great if affordable, high-quality LED lighting eventually replaced CF bulbs. But in the mean time, there’s no reason for consumers to wait 13 years to make this one a reality. And it’s become increasingly cheap to do so. The claims that CF bulbs cost $8-$10 apiece are utter B.S.
More fuel-efficient cars. The bill requires a 40% increase in fuel efficiency by 2020 for a fleet-wide average of 35 MPG. I’m not a carmaker, but it doesn’t seem like this should be too hard to achieve, especially given the available timeline. In terms of real impact, this change is predicted to save the nation 1.1 million barrels of oil per day, which is about half of what we currently import from the Persian Gulf. On the downside (for the government) will be reduced federal excise taxes on gasoline.
Ethanol as a motor fuel. The bill calls for a 5-6 fold increase in the use of ethanol as a motor fuel by 2022. This one worries me — if it’s going to become reality, I certainly hope we can move beyond turning food into fuel, and switch over to cellulosic biomass in a hurry. The other side of the issue is that many drivers are reporting mileage decreases commensurate with the amount of ethanol blended into their fuel (e.g., a 15% decrease in mileage when driving with gas containing 15% ethanol). This seems odd to me, as there’s a good bit of energy packed into ethanol. While I’d expect some drop off with ethanol, I wouldn’t expect it to effectively behave as an inert ingredient.
More efficient water use. The bill also requires new dishwashers to use 28% less water, and for clothes washers to use 40% less water (note that many front loading washing machines already do this). This will not only help with energy usage (less hot water = less water to heat) but will also help to conserve water, which is becoming an increasingly scarce resource in many parts of the country).
Labelling. There are also a number of labeling requirements designed to make consumers more aware of how much energy various items use. This sounds good in principle, and it certainly can’t hurt, but I’m skeptical as to how much it will help in the long run.
Closing thoughts… While I’m not crazy about the idea of government intervention into free market processes, I also don’t really trust the markets (or individuals in general) to come up with a solution for our current energy problems that truly serves the common good. As Garrett Hardin pointed out, the tragedy of the commons (i.e., the exploitation of finite natural resources for personal gain) is a social problem that cannot be solved by technical means alone. In that light, perhaps the proper question here is not whether this legislation goes too far, but rather if it goes far (and fast) enough.
As always, please feel free to share your thoughts in the comments section, below.
- How to Become a Millionaire
- How to Get Out of Debt
- The Best Dollars I've Ever Spent
- How Our Estate Plan is Structured
- How We Paid Our Mortgage In Less than 10 Years
- Money Making Ideas
- How to Manage Your Asset Allocation with Multiple Accounts
- Consumption Smoothing - Save While the Saving's Good
- How to Save on Groceries
- How Much Life Insurance Do You Need?
- Eleven Great Books About Money
- Dave Ramsey is Bad at Math (693)
- Dish Network Customer Service SUCKS (536)
- $8,000 Homebuyer Tax Credit (429)
- Pay Off Mortgage Early or Invest? (424)
- How to Claim the First-Time Homebuyer Tax Credit (352)
- Termite Control: Sentricon vs. Termidor (329)
- How Much Should You Pay a Babysitter? (286)
- Ethanol Blended Gas = Lower Mileage? (272)
- Reduced Credit Limits? Share Your Experience (256)
- $15,000 Homebuyer Tax Credit (242)
- Buying Furniture off the Back of a Truck (235)
- Will Mac OS X Lion Kill Quicken 2007? (191)