Energy policy in the United States (2024)

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Energy policy in the United States involves federal, state, and local governmental actions related to the production, distribution, and consumption of different sources of energy, including fossil fuels such as coal, oil, and natural gas, as well as renewable energy sources such as solar, wind, nuclear, and hydroelectric power.^[1]

Energy policies are enacted and enforced at the local, state, and federal levels through legislation and regulation. Given the multiple policymakers at all levels of government in the United States, energy policy is complicated and interconnected. As a result, energy policy has several stakeholders, including citizens, elected state and federal officials, government agencies, national and state-level interest groups, corporations, and think tanks.^[1]

Several factors can affect the feasibility of energy policies, such as the availability of energy resources, geography, the cost of extracting certain forms of energy, consumer demand, potential impacts to the environment, and more.

This article focuses on energy policy goals in the United States from the 1970s to the present, federal energy policy legislation in the United States, federal agencies and their role in shaping energy policy, and an overview of state-level energy policy.

See also: Federal policy on energy, 2017-2018 and Historical energy policy in the United States

Energy policy goals

According to the Congressional Research Service, the three main goals of energy policy in the United States since the 1970s have been "to assure a secure supply of energy, to keep energy costs low enough to meet the needs of a growing economy, and to protect the environment while producing and consuming that energy." In a September 2016 report, the Congressional Research Service outlined the following policy goals guiding U.S. energy policies since the 1970s.^[2]

Conservation and energy efficiency: According to the Congressional Research Service, energy conservation and efficiency have been a policy goal since the 1970s when Arab members of the Organization of the Petroleum Exporting Countries (OPEC), an intergovernmental organization, imposed a ban on petroleum exports to the United States and cut oil production, leading to rising U.S. gasoline prices. In response to the embargo's aftermath and higher domestic gas prices, Congress passed the 1975 Energy Policy and Conservation Act, which directed the president to ban crude oil exports except for select types of oil and set average fuel efficiency standards for passenger vehicles beginning in model year 1978. As of May 2017, other energy efficiency measures implemented at the federal level included standards for home appliances, such as refrigerators, air conditioners, washing machines, and light bulbs.^[3]

Domestic supply of fossil fuels: Beginning in the 1970s with the OPEC embargo and rising gasoline prices, policymakers debated the merits of greater domestic production of fossil fuels, particularly oil and natural gas. Proponents of greater domestic production argue that increased production would result in more employment and labor income and a larger supply of energy, which would lower prices for consumers, and that oil and gas are more efficient and reliable forms of energy than renewable sources. Opponents of greater domestic production argue that oil and natural gas are finite resources and that their use produces more air and water pollution and thus should be discouraged in favor of renewable energy sources, such as wind and solar energy.^[2]

Oil and gasoline prices: Gasoline prices are affected by crude oil prices, which are in turn affected by multiple factors, including supply and demand, financial markets, international politics, environmental regulation, taxes, weather, and other factors. Oil production may increase or decrease depending on advances in technology, changes in industry regulation, policy changes, political forces, and more. Policymakers consider the role of these factors that determine gasoline prices and in general debate how best to keep gasoline prices affordable for consumers in light of other policy goals, such as conservation, environmental protection, and promotion of vehicles that use other fuels, such as ethanol.^{[4][5][6][2][7]}

Electricity generation: Policymakers debate the role of different types of energy, including coal, oil, natural gas, wind, solar, and nuclear power, in the U.S. electricity mix. In particular, policymakers debate the role of coal, which accounted for around 16 percent of total U.S. energy consumption in 2015—91 percent of which was used to generate electricity. Proponents of coal use argue that the relative abundance of coal compared to natural gas or oil produces more affordable electricity for consumers given high supplies of coal resources. These proponents cite the U.S. Energy Information Administration, which concluded in 2016 that the United States has the largest recoverable coal reserves worldwide. Opponents argue that the replacement of coal by natural gas, wind, and solar energy in electricity generation produces benefits in the form of fewer air pollutants, less disruption to surface land needed to mine coal, and fewer carbon dioxide emissions linked to potentially human-caused climate change.^[8][9][10]

Use of renewable energy: Under the Renewable Fuel Standard passed by Congress in 2005, transportation fuels must contain a minimum amount of biofuel, such as ethanol, which is fermented from corn and other crops. As of May 2017, other federal policies to promote renewable energy use included loan guarantees, tax credits, and federal grants to renewable energy sources. At the state level, 29 states as of March 2017 had an enforceable Renewable Portfolio Standard, a mandate to electric utilities to generate a minimum amount of electricity from eligible renewable energy sources, such as wind, solar, hydroelectric power, geothermal energy, and others. Proponents of policies encouraging greater renewable energy use argue that fossil fuels are a finite resource and produce more air and water pollution than renewable sources, which are naturally replenished by sunlight, wind, and other resources. Opponents of policies encouraging greater renewable energy use argue that fossil fuels are more efficient at producing energy, more affordable for consumers, and that renewable sources require state and federal subsidies to be affordable, unlike coal, oil, or natural gas.^{[11][12][13][14]}

Federal legislation

Below are descriptions of federal energy policy legislation passed from 1970 to 2016.

Energy Policy and Conservation Act (1975): The act directed the president to ban crude oil exports except for select types of oil. The act also authorized the following:^[15]

• Creation of the Strategic Petroleum Reserve, a federally managed emergency supply of petroleum in underground caverns along the Gulf of Mexico
• Corporate average fuel economy standards for passenger vehicles beginning in model year 1978
• Federal authority for the U.S. Department of Transportation to establish fuel economy standards for light- and heavy-duty trucks and other vehicles
• A schedule to end federal oil price controls

Natural Gas Policy Act (1978): The act authorized the Federal Energy Regulatory Commission (FERC) to regulate intrastate and interstate natural gas production and transmission. In addition, the act set price ceilings for the first sale of gas from gas wells (the ceilings were later repealed).^[16]

Alternative Motor Fuels Act (1988): The act established incentives for automobile manufacturers in the form of fuel economy credits for the production of motor vehicles that use alternative fuels, such as ethanol and natural gas.^[17]

Energy Policy Act (1992): The act required the Federal Energy Regulatory Commission to allow wholesale electricity suppliers to access the national electricity transmission system on a case-by-case basis. The act also required federal and state fleets to acquire vehicles that operate on alternative fuels, such as ethanol, natural gas, hydrogen, electricity, biodiesel, and more.^[18]

Energy Policy Act (2005): The act authorized the following:^[19]

• Energy-related tax incentives totaling roughly $14.5 billion from 2005 to 2016, including $1.3 billion in tax incentives for energy efficiency and conservation, approximately $4.5 billion in incentives for renewable energy, $2.6 billion in incentives for oil and gas production and transmission, almost $3.0 billion for coal production, and around $3.0 billion in incentives for electricity generation and transmission
• The Renewable Fuel Standard, a program mandating that transportation fuels contain a minimum amount of biofuel, such as ethanol
• Increased oil and natural gas production, more electric transmission lines, and more gas pipelines on federally owned land

Energy Independence and Security Act (2007): The act authorized the following:^[19][20]

• Average fuel economy standard of 35 miles per gallon for all passenger vehicles and light trucks by the 2020 model year
• Energy efficiency standards for appliances, including external power supplies, residential clothes washers, dishwashers, dehumidifiers, refrigerators, freezers, and electric motors.
• Increasing the federal Renewable Fuel Standard to require transportation fuel to contain 36 billion gallons of biofuels like ethanol by the year 2022

American Recovery Reinvestment Act (2009): In the aftermath of the 2008 financial crisis, Congress passed the American Recovery and Reinvestment Act (also known as the stimulus bill) in 2009. The bill authorized $35.2 billion in federal funding to the U.S. Department of Energy for the following policy measures:^[21][22][23]

• Operational and energy measures to integrate renewable energy sources into the electric grid
• Energy efficiency incentives for building owners
• Support for the management and disposal of nuclear waste

Federal agencies

Below are descriptions of federal agencies involved in energy policy (in alphabetical order).

• The U.S. Department of Energy (DOE) was established in 1977. The department's stated mission is to "ensure America’s security and prosperity by addressing its energy, environmental and nuclear challenges through transformative science and technology solutions." As of May 2017, the department contained 27 offices, 21 national laboratories, four power marketing administrations, and 10 field sites. The department oversees the U.S. nuclear weapons program, the U.S. Navy nuclear energy program, and federal energy research.^[24][25][26]

• The U.S. Department of the Interior (DOI) was established in 1849. The department contains agencies such as the U.S. Bureau of Land Management, the U.S. Fish and Wildlife Service, and the U.S. National Park Service, which oversee federal land. The U.S. Bureau of Land Management has primary responsibility over permitting and regulating energy production on federal land, such as coal, oil, natural gas, solar, and wind production.^[27][28]

• The U.S. Energy Information Administration (EIA) is responsible for collecting, analyzing, and distributing "impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment." It was established in 1977.^[29][30]

• The Federal Energy Regulatory Commission (FERC) is responsible for regulating the interstate transmission and wholesale sales of electricity and overseeing hydroelectric dams and utility mergers. In addition, the agency oversees the siting, permitting, and construction of interstate natural gas pipelines.^[16][31]

State energy policy

Click here for Ballotpedia's coverage of energy policy in the 50 states

Energy policy at the state level includes legislation, regulation of energy extraction, taxes, incentives for energy production or use, energy efficiency standards, and more. Below are descriptions of energy policies adopted by state governments:

Oil and natural gas regulation: States with oil and/or natural gas production adopt regulations to ensure environmental protection and worker safety. State-level regulations cover the drilling of all wells used for oil or gas exploration, the spacing of wells, permitting requirements for oil and gas operators, injection wells used to enhance oil and gas recovery or to dispose of wastewater, protection of groundwater and underground sources of drinking water, the cementing and plugging of wells, the underground storage of natural gas, the prevention of well blowout and leaks, well restoration, reporting requirements, and more. These regulations are generally issued and enforced by state-level energy departments or commissions.^[32]

Renewable energy: As of May 2017, states implemented funding and financial incentive programs to subsidize or otherwise increase investment in renewable energy resources such as wind, solar, and hydroelectric power. These programs include renewable portfolio standards, grants, rebate programs, tax incentives, loans, performance-based incentives, and more. The aim of the policies generally involves reducing the cost of renewable energy production for consumers, reducing regulatory compliance costs, reducing investment risks involving renewable energy, and/or increasing the adoption of renewable energy sources by individuals and businesses.^[33]

Energy efficiency: State-level energy efficiency standards can include voluntary or mandatory energy efficiency standards for new residential and commercial buildings built on or after a particular date. These standards generally include efficiency standards for heating, ventilating, air conditioning, water heating, and lighting in residential and/or commercial buildings.^[34]

Utilities: States and localities generally have a role in regulating utilities, which are firms that own and/or operate facilities to generate, transmit, and/or distribute electricity, gas, and/or water to the public. For example, state and local regulators can oversee electricity transmission and distribution charges. Utilities are defined differently in each state and in federal legislation. Two general types of utilities are private and public utilities. Private utilities, commonly known as investor-owned utilities, provide stocks to investors and sell bonds. These utilities are regulated by state regulatory agencies. State agencies are also responsible for setting retail rates charged by investor-owned utilities, overseeing utility infrastructure, and ensuring that investor-owned utilities respond to customer service demands. Public utilities include government or municipally owned utilities regulated by local or municipal governments.^[35][36]

Fuel taxes: Revenue collected by federal, state, and local governments from fuel taxes is usually used to fund transportation infrastructure such as roads and bridges. Some states may charge an excise tax based on how much gas or diesel is purchased. Some states may charge retail tax based on the average price of gas over a certain period. Additionally, some states may charge an environmental tax to be used for environmental projects.^[37][38]

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See also

• 

  Energy use in the United States

• 

  Fracking in the United States

• 

  Environmental policy in the United States

External links

• U.S. Department of Energy
• U.S. Environmental Protection Agency
• U.S. Energy Information Administration
• Official House Natural Resources Committee Page
• Official House Energy and Commerce Committee Page
• Official Senate Energy Committee Page

Footnotes

v•e Energy Policy
Background	Energy policy in the United States • Fracking in the United States • Energy use in the United States • Electricity prices in the United States • Historic state electricity prices • Historic state natural gas prices • State energy production rankings • Environmental Policy • State environmental policy pages • Environmental policy in the United States • Energy and Environmental News
Terms	Abandoned mine drainage • Biofuels • Biomass • BTEX • Clean Air Act • Clean Water Act • Coal • Coalbed methane • Compressed natural gas • Crude oil • Directional drilling • Directional well • Electrical grid • Energy siting • Ethanol • Flare • Flowback • Frac sand • Frack fluid • Fracking • Geosteering • Geothermal energy • Horizontal drilling • Hydrocarbons • Hydroelectric energy • Liquid Petroleum Gases • Megawatt • Megawatt hour • Methane • Mineral rights • Natural gas • Natural gas liquids • Natural gas storage • Naturally Occurring Radioactive Materials • Nuclear power • Oil shale • Petrochemicals • Petroleum • Petroleum systems • Produced water • Proppants • Public Trust Doctrine • Renewable energy resources • Renewable Portfolio Standards • Seismicity • Shale gas • Shale play • Slick water frac • Slurry • Solar energy • Traditional energy resources • Vertical drilling • Volatile organic compounds • Wellbore • Wind energy
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