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green@work : Magazine : Back Issues : Sept/Oct 2001 : Happenings

A Great Debate

Squaring off on both sides
of the energy issue.

by Penny S. Bonda, FASID

Almost everyone will agree on the need for energy efficiency. Whether a Democrat or a Republican, a captain of industry or a staunch environmentalist; the benefits of forming national energy policies based on efficiencies are clear—or are they?

Now in its 12th year, the Energy Efficiency Forum sponsored by the U.S. Energy Association (USEA) and Johnson Controls, Inc., Milwaukee, WI, sought to bring together divergent views on energy efficiency, environmental impacts and economic growth within the context of the Bush administration’s redefined energy plan. With a speakers list drawing from both sides of the aisle—and the issues—numerous positions were presented and everyone found something to cheer or renounce.

The featured speaker of the event was Vice President Dick Cheney. Although not universally applauded—yes, there was a heckler—as chair of the White House National Energy Policy Development Group, no other speaker could have been more appropriate to address the standing-room-only crowd. He began by characterizing the current energy challenges as a “potential storm cloud on the nation’s economy” and frequently referenced his committee’s recently released report that contains more than 100 recommendations aimed at addressing specific areas of concern. It proposes, he said, a balanced approach in dealing with our aging power grid by increasing energy supplies from diverse sources and by promoting good stewardship of the air, water and land, using recent advances in technology that allow the production of more energy and, at the same time, promote a cleaner environment.

Contradicting his earlier assertions of a bleak energy record, the vice president noted the nation’s remarkable progress in energy efficiency, citing advances in refrigerators, fluorescent lighting and automobiles. “Since the Nixon administration, the economy has grown by 126 percent while our use of energy has grown by only 26 percent,” he reported. He also touted government programs such as Energy Star, and he complimented the federal government on efficiencies achieved throughout the 1990s in its buildings, vehicles and agencies, vowing to continue to improve on this excellent past performance.

Cheney did not shy away from addressing controversial issues such as global warming and the Kyoto Protocol when they were raised during the Q&A session. Obviously well prepared to debate the science of the case, he impressed the audience with statistics on the temperature of the planet’s surface over the last 100 years. He also reiterated the administration’s interest in promoting renewed reliance on nuclear power as a solution to reducing our dependence on fossil fuels and the problems associated with their carbon dioxide emissions.

Earlier in the program, Democratic Congressman Ed Markey of Massachusetts presented a completely different view of energy efficiency. To illustrate his opinion of the Bush administration’s energy policies, Markey used the example of the “way back machine” from “The Rocky and Bullwinkle Show,” a favorite of his as a young boy. He accused the president of trying to implement an issue agenda of 25 years ago to deal with a non-existent energy crisis. Despite the recent California electricity problems, Markey insists that the “crisis” is very localized and is the result of some bad laws, some bad weather and not a shortage of energy supplies. He feels that the solutions will be found in “working smarter, not harder.” This means improving automobile gasoline efficiency, not drilling in the National Artic Wildlife Refuge so that we can build pipelines to bring oil to California to put it into SUVs that get 14 miles to a gallon.

Markey chided the administration, often sarcastically, for many of its actions. For example, a short time ago the Clinton administration promulgated the final set of regulations pursuant to the Markey Appliance Efficiency Act of 1987, which called for a 30 percent increase in the efficiency of air conditioners. Despite the fact that the second largest producer of air conditioners in the U.S. is already meeting the proposed standard, the Bush administration decided that it would be too onerous a burden on the industry at large to impose a standard in the middle of a “national energy crisis.”

Markey questioned the moral and ethical consequences of despoiling pristine lands that should be preserved for future generations because we don’t want SUVs to average 25 miles-per-gallon or air conditioners to improve their efficiency by 30 percent. He believes that working smarter means a heavier reliance on our technological achievements, as well as the creation of tax incentives and credits to provide incentive for energy efficiency.

Although Markey’s remarks were interrupted often by laughter from a highly like-minded crowd, other speakers were well, if not as jovially, received. Senator Jeff Bingaman, a Democrat from New Mexico and the new chairman of the Senate Energy and Natural Resources Committee, started things rolling by agreeing with President Bush that this is, or certainly should be, a bipartisan issue. However, he chided the administration for its non-inclusive process in putting together its energy plan. His committee, he indicated, would work closely with its Republican members in fashioning a two-tier solution: address the short-term issues to the extent they can be through legislation—issues like the low income home energy assistance program and the state energy conservation programs—and then would go to work, in earnest, on long-term legislation.

Bingaman concedes that there are a large number of complex issues requiring attention, and he is anxious to hear the administration’s plans in more detail than were presented in the report. At the top of his list is how to improve fuel efficiency in vehicles, a highly-charged political matter, but one the senator believes is crucial given the extent of our dependence on foreign oil and the roughly 60 percent of it that goes into vehicle transportation. Part of the solution, he believes, is increasing federal funding support for new technologies rather than cutting back, as proposed by the administration. He thinks Congress should deal with energy-related tax incentives even though the recent large tax cut has committed the funding elsewhere.

To conclude, Bingaman strongly advised that our nation’s energy plan and any legislation must be put together with an eye toward global climate change. He ended on a hopeful note by professing that he believes that the “stars are correctly aligned” for Congress and the administration to actually do something significant this year.

Representing the automobile industry was Dennis Minano, General Motors’ (GM) vice president of energy and environment and chief environmental officer. He acknowledged both the importance of the White House National Energy Plan to GM and its support, noting that it takes “a comprehensive and balanced approach to the demand for and supply of energy; one that makes sense.” The report, he said, presents a number of fundamental premises with which GM concurs: a belief in environmental stewardship; an integrated approach to environmental, economic and energy issues; support for the idea that technology will ultimately solve many of the problems we face; and the importance of partnerships between private industry and the government.

Minano was critical of the government’s fuel economy legislation since 1975, emphasizing that the U.S.’s reliance on imported oil has grown even though the fuel economy of cars and trucks has more than doubled. In his opinion, it is clear that mandates like CAFE (Corporate Average Fuel Economy) have not solved the petroleum conservation problems.

GM has outlined a list of other solutions, beginning with the belief that they can eventually build commercially viable fuel cell vehicles powered by hydrogen. There are major challenges that need to be overcome and, until then, some interim solutions include hybrid vehicles, modern diesel engines, continuously variable transmissions, displacement on demand technology and mass transit. GM has already begun producing hybrid buses and will soon begin introducing hybrid pick-up trucks and SUVs. GM is obviously relying heavily on innovative technology and, as Minano says, is applying it across the board—to manufacturing, land use, energy development, emissions, fuels, power trains, vehicle design, conservation and infrastructure.

In closing, Minano reiterated an oft-repeated theme—the importance of cooperation and collaboration between industry and government. “We must all,” he said, “stretch to achieve the best rather than impose limits on the possibilities.”

The remaining speakers addressed similar themes. Curt Hébert, Jr., chairman of the Federal Energy Regulatory Commission and enjoying support from both the Clinton and Bush administrations, was temperate in his remarks, admitting to the complexity of the issues and using poll results to support his views and the actions of his agency. His price mitigation plan, he explained, is based on market solutions and market mechanisms; and it is working, at least thus far, to control the cost of energy.

Andrew Natsios, administrator for the U.S. Agency for International Development (USAID), approached the issues from a different perspective. The world economy, he said, is trying to deal with twin trends going on simultaneously. One is globalization, which is tying the whole international economy together. At the same time, there is a huge increase in the number of failed states and collapsed governments. Economic growth is the key to stabilizing these fragile nations; yet such growth is impossible without energy—to light homes and classrooms, pump water, make bread, listen to radios, learn on computers, refrigerate medicines and, of course, enable transportation.

The USAID is therefore putting programs into place to provide developing countries access to world-class commercial technology and management practices, while at the same time helping U.S. industry become more competitive in the international marketplace.

Llewellyn King, publisher of Energy Daily, moderated a panel representing many divergent views that were most clearly expressed in response to the question, “What did you like and dislike in the vice president’s energy plan?”

Branko Terzic, the director of Public Utilities Services for Deloitte & Touche, approved of the proposals for more drilling, using technology to achieve better efficiencies and mitigating environmental concerns. David Nemtzow, with the Alliance to Save Energy, liked the focus of national attention on tax credits for hybrid cars as well as expansion of the Energy Star program. He criticized the plan, though, for its failure to reverse two key mistakes of this administration—the budget cuts and the air-conditioning rollback, as well as its insufficient attention to fuel economy. Mark Whitenton, vice president for resources, environment and regulation with the National Association of Manufacturers, agreed with Nemtzow on many issues, but overall liked the plan a great deal.

These individuals, as well as many of the speakers, openly discussed the government’s CAFE standards, debating whether they have served the public well or have imposed undue hardships on industry. As was the case with almost all the issues raised at this forum, there was strong, yet respectful disagreement, making it very clear that open discussions such as this one need to be available.

USEA and Johnson Controls, Inc. are to be commended for their willingness to continue to present this annual bipartisan event. One can only wonder what the next year holds for this complex and crucial debate.

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