In late February and early March, ConservAmerica came out in support of the first comprehensive energy legislation in more than 12 years, the American Energy Innovation Act (AEIA), introduced by Senators Lisa Murkowski (R-AK) and Joe Manchin (D-WV). The bill was a package of more than 50 individual energy bills all of which had already gone through the committee process with strong bipartisan support.
The measures included in the AEIA package will help modernize America’s energy policies after a remarkable decade of innovation. It contains measures supportive of energy efficiency, renewable energy, energy storage, carbon capture, advanced nuclear, mineral security, cyber and grid security and modernization, and workforce development.
The package was the first legislation the full Senate took up after impeachment and passage on the floor looked promising at first, but two issues tripped it up. The first was an argument over adding language on building codes in the efficiency standards portion of the package that has been around for over a decade. Sens. Rob Portman (R-Ohio) and Jeanne Shaheen (D-N.H.) have long championed the building code provision and were insistent they be included. The National Association of Home Builders opposes the language, arguing they would increase housing costs.
The second point of contention members had with AEIA was an amendment to phase out the use of hydrofluorocarbons (HFCs) over a 15-year period. Senate Environment and Public Works (EPW) Committee Chairman John Barrasso (R-Wyo.) opposed the inclusion of the amendment in the energy bill, pointing out that it was EPW’s jurisdiction and that they were working on a separate proposal.
Those two issues became sticking points in negotiations and stopped AEIA from obtaining the 60 votes needed to overcome a filibuster. And then the country was hit with the coronavirus pandemic and all work in the Senate turned to addressing the worsening health and economic crisis. It seemed likely the AEIA would be shelved indefinitely.
Now, as policymakers consider a fourth and possibly a fifth package to address the economic fallout of weeks of government stay-at-home orders, some are giving AEIA a second look as one way to get Americans back to work while making improvements along the entire energy supply chain.
One area where AEIA could make a difference is renewable energy. Like the rest of the economy, this sector is struggling with shutdowns and a tightening credit market. Planned projects and investments have been delayed or canceled, supply chains have been disrupted, and there have been industry-wide layoffs.
The energy consultancy Wood Mackenzie recently offered a sobering view of the pandemic’s impact on renewable energy industries. Its estimate of 2020 solar installations has been revised down by 18 percent from pre-coronavirus levels, from 129.5 GW to 106.4 GW. It also projects a 4.9 GW decline in 2020 wind additions and a 20 percent drop in energy storage installations compared to its 2020 base case. And it suggests that electric vehicle sales could drop as much as 43 percent this year.
While there’s resistance in Congress to providing stimulus funds to wind and solar companies, what’s important to understand is that renewable energy is no longer “alternative energy,” it is part of the mainstream energy Americans use every day to power their homes and businesses. It is also where much of the job growth is happening. The oil and natural gas sector still employs many more people than renewable energy nationwide, but renewable energy is creating jobs at 12 times the rate of the rest of the economy.
This was echoed by former U.S. Energy Secretary Ernest Moniz in a recent op-ed published in The Hill.
“The chorus is growing louder: in addition to halting the increases in coronavirus cases, we need an energy stimulus package focused on rebuilding the economy. Job creation and infrastructure development will be key,” Moniz said. “While the energy and auto sectors make up 5.4 percent of the American workforce, they created 10.7 percent of all new jobs since 2015. Translation: 915,000 new jobs, over 40 percent of them in energy efficiency alone.”
AEIA could be a silver lining to this terrible public health emergency. We hope that Congress will reconsider the AEIA as part of its relief efforts. In the meantime, we will continue to take a closer look at individual components of the bill, as we had begun doing back in early March. Stay tuned.