Alliance to Save Energy Supports S. 2747, Promotes Innovative ‘Feebate’ Concept to Reduce U.S. Oil Dependence | Alliance to Save Energy

Alliance to Save Energy Supports S. 2747, Promotes Innovative ‘Feebate’ Concept to Reduce U.S. Oil Dependence

Release Date: Thursday, June 22, 2006

Washington, D.C., June 22, 2006 – In testimony before the Senate Energy and Natural Resources Committee today, Alliance to Save Energy President Kateri Callahan supported the Enhanced Energy Security Act of 2006 (S. 2747) while urging the committee to ensure that the bill’s laudable targets for national oil savings are met by including additional energy-efficiency measures. Sen. Jeff Bingaman (D-N.M.), an Alliance vice chair and former chair, is the bill’s lead sponsor.

Callahan said Congress should consider extension of the energy-efficiency tax incentives included in the Energy Policy Act of 2005 (EPAct) as well as additional appliance standards and a federal energy efficiency resource standard to reduce our nation’s energy use. She also advocated the Alliance’s innovative “feebate” concept as a way to increase vehicle fuel economy and reduce the nation’s addiction to oil in the transportation sector.

Callahan noted that “the need for energy efficiency and the potential contribution of new energy-efficiency policies have never been greater,” despite EPAct’s enactment last summer. Indeed, she said, the new law may not yield any oil savings at all, “as the small savings from the hybrid-electric vehicle tax incentive and other provisions could be canceled out by increased gasoline use due to extension of the CAFE loophole for dual-fueled vehicles.”

To address EPAct’s oil-savings gap, Callahan touted the Alliance’s innovative “feebate” idea as a way to lower oil and gasoline consumption. This revenue-neutral, market-driven program would encourage automobile manufacturers to use more fuel-efficient technologies in their vehicles and encourage consumers to purchase more efficient vehicles.

“The idea is simple,” Callahan explained. “Provide an incentive (rebate) to make and buy fuel-efficient vehicles, and charge a premium (fee) on gas guzzlers to discourage that choice and pay for the incentives.” She noted that one study finds that a feebate slightly different from the one she described would save 1.2 million barrels a day of oil by 2020.