More Efficiency Standards, and Transportation Finance

Photo by Andrew Curtis. Some rights reserved.

Earlier this week, the Obama administration announced its fuel efficiency standards for cars in an effort to curb U.S. dependency on oil and reduce greenhouse gas emissions. In a related measure, on Thursday President Obama issued an executive order to spur energy efficiency upgrades at manufacturing facilities across the country. Energy efficiency policy, put on the back burner for years, has hardly moved forward despite support from members of both political parties. Some of that support comes from DOE studies indicating that doubling the nation’s industrial efficiency could create 1 million skilled jobs and bring in $234 million of investment.

The directive aims to boost combined heat and power capacity to 40 gigawatts by 2020, an increase of 50 percent compared with today. Agencies will craft best practices and help states encourage combined heat and power implementation. The administration said that reaching the goals outlined in the order would reduce energy costs by $10 billion annually in addition to attracting $40 to $80 billion in private investment.

Combining heat and power facilities to produce both simultaneously on-site is more efficient than having separate facilities. By burning less fuel, the combined heat and power technology reduces greenhouse gas emissions and lowers energy costs. By having a fuel source on-site, manufacturing facilities are protected from electricity outages.

Also in the news are the fiscal policy repercussions of the new vehicle mileage standards announced earlier, because the requirements will make less fuel tax money available for road construction and maintenance. The highway trust fund, which pays for a large portion of road projects, will take a $71 billion hit due to the requirements. Already included in the current transportation bill, set to expire in 2014, are tax loopholes and fee increases to cover a $10 billion shortfall in gas tax revenue. Expect to hear more about financing transportation projects as the gas tax brings in less revenue in the future.

 

 

 

 

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