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Attachment I Minority Opinion of Ellen Berman, Committee Member The committeeâs primary recommendation (Recommendation 1) is that: DOE/EERE should consider moving over time to use of the full- fuel-cycle measure of energy consumption for assessment of national and environmental impacts, especially levels of greenhouse gas emissions, and to providing more comprehensive information to the public through labels and other means including an enhanced website. DOE/EERE efforts should address the data collection and analysis needed to accurately estimate full-fuel-cycle energy consumption as well as to assess and improve consumer understanding and use of information on full-fuel-cycle energy consumption. As an advocate for energy policy in the best interest of the nationâs consumers, I believe that consumers may unintentionally be adversely affected by the primary conclusion and related recommendations. In order to ensure that consumers are best served by the Appliance Efficiency Program, I present this dissent. My dissent addresses three key issues which could impact the usefulness of the program for consumers: 1. The problem with the appropriateness and validity of a full-fuel-cycle energy measure. The Committeeâs recommendation that DOE/EERE transition to a full-fuel-cycle energy measure is intended to provide a more complete picture of the energy consumed by an appliance. The full-fuel-cycle measurement would expand the energy calculations beyond the direct consumption of energy by the consumerâs appliance and would include those upstream costs incurred from the point of extraction of the fuel to the point the energy made from that fuel enters the home. As laudable as this intent is meant to be, this approach would not benefit consumers. Developing a full-fuel-cycle cost methodology is fraught with complexity and controversy. A simple conversion factor from site energy to full fuel cycle is not adequate. There are myriad criteria for determining full-fuel-cycle analysis and reaching agreement on a satisfactory procedure would likely be beyond DOE/EEREâs time and resources at a time when such resources are already strained. Some reputable economic models include not just costs of fuels but benefits as well, while others include societal costs and benefits, such as health impacts, environmental impacts, global warming, accidents, energy security, employment impacts, and depletion of non-renewable resources. In addition, both supply and demand of fuels should be considered. The impact of new technologies for carbon sequestration and clean coal, new generation of nuclear power, greater use of renewables, gas technologies should be factored into the model. Given the complexity of a proper full-fuel-cycle-cost model, the ability of the public to respond meaningfully in the rulemaking process would be limited and the Appliance Efficiency Program would not benefit. The current measurements best serve the goals of the Program. 2. The problem with using full-fuel-cycle in setting a standard when a choice of fuels can be used. Assuming an appropriate full-fuel-cycle methodology could be determined, using this measure when a choice of fuels can be used could have unintended consequences and harm consumers. As explained in this report, âthe appliance standards program is not meant to identify or establish favored energy sources or technologies for building appliances. That is a matter of government policy and/or the free market.â Notwithstanding this caveat, direct comparisons among fuels will inevitably favor one fuel over another in terms of the measures 39
used in the analysisâ¯one fuel will be more environmentally sound, one will be more affordable, another might be more reliable or secure, yet another might be more available, and another might be determined to be safer. These preferences are beyond the intention of the Program and are a matter of national energy policy. Of particular significance is the fact that the consumer has no control over upstream costs of producing energy or the physical characteristics of fuels. They cannot control the transmission and distribution losses incurred in bringing electricity to the home. They cannot control the energy required to bring LNG into the country or pressurize it into the pipeline system. They cannot account for the cost of oil drilling or storing nuclear waste. They can only control the amount of energy used within their homeâ¯site energy. Factoring in the upstream costs would create a disservice to consumers and could thwart the intent of the Program. Were consumers to switch fuels based on incomplete analysis, costs of conversion could be very great and energy savings might not occur at all. In addition, supplies of the preferred fuel could become constrained, prices could soar, and industries could relocate abroad in order to stay competitive. The nation saw such an example of unintended consequencesâ¯ constrained supply, sharply increased prices, chemical industries moving abroadâ¯when natural gas, a clean-burning fuel, was popularly used in turbines to generate electricity. DOE/EERE should continue using site measurements to set appliance efficiency standards. 3. The problem with using the label as a vehicle for societal goals as measured by full-fuel-cycle energy analysis. Informing the public of environmental consequences of energy use is an important goal. The government has an obligation to conduct such educational campaigns. As worthy as this goal is, the appliance labeling program is not the appropriate vehicle. Over the past 30 years, energy efficiency standards have helped consumers in very important ways which can be negatively impacted by the recommendations. Adding information on environmental impacts would confuse the decision process. The existing site-based labels provide clear and understandable cost and consumption information that is relevant to consumersâ purchases. Consumers can easily compare the annual operating costs of different appliances while they compare the purchase prices of the appliances. The cost and energy consumption information on the label equips the consumer to make an informed economic decisionâ¯a decision which is fully within the consumerâs control. Importantly, a unit of energy saved by the purchase of an efficient applianceâ¯regardless of the fuel usedâ¯means one less unit of energy that we need to produce from domestic sources or import from unstable foreign countries. That helps the environment through reduced air emissions and has important national security implications. In 2006, the Consumer Energy Council of America convened leading energy experts to examine the costs and benefits of each fuel used for stationary energy needs. The consensus forum examined the characteristics of each fuel through the prism of national consumer priorities, including cost, environmental impacts, availability, national security, public health, safety, and other factors. The report of the forum, Fueling the Future: Better Ways to Use Americaâs Fuel Options, determined that over the next 20 years we need to use every fuel in the nationâs portfolioâ¯but we need national policy and new technology to improve the characteristics of each fuel. The Appliance Efficiency Program is not the proper vehicle for setting national fuels policyâ¯and fuels policy would be the unintended consequence. Site based standards are uncomplicated, non-political, provide valuable cost and consumption information for consumers, result in significant national energy and environmental savings, and best serve the goals of the Program. 40