Senate Democrats

Democratic Budget Resolution Makes Urgently Needed Investments in Clean Energy

Next week, the Senate will begin debate on the Fiscal Year 2010 Budget Resolution, a fiscally responsible budget plan that addresses the fiscal and economic crises inherited from the Bush Administration and lays the foundation for long-term economic security.  The Budget Resolution makes significant investments to promote clean energy and reduce our dependence on oil, reform our health care system, and make excellence in education a reality. 

This Fact Sheet provides a summary of the energy -and climate- related provisions in the Budget Resolution, and highlights the need for urgent action to address our nation’s energy and environmental challenges.

Reducing Our Dependence on Oil

The Budget Resolution includes an energy reserve fund to accommodate legislation to reduce our nation’s dependence on oil, produce green jobs, promote renewable energy development, improve electricity transmission, create a clean energy investment fund, and encouraging conservation and efficiency.  The reserve fund could also be used for legislation to: enact energy provisions; extend the permissible term of power purchase agreements used by federal agencies to acquire renewable energy; expand the economic recovery package’s investments in transmission infrastructure and smart grid technology; and create a Clean Energy Investment Fund, which could help the transition to a low-carbon economy by using financing such as direct loans and loan guarantees to invest in clean energy technologies.

The following information highlights the need for these investments:

·         Oil Dependence.  In 2008, the nation imported approximately 2.37 million barrels of oil and petroleum products per day or approximately 73.5 million barrels of oil and petroleum products per month from countries in the Persian Gulf, which accounts for about 18 percent of the nation’s total oil and petroleum product imports. 

The United States also imported approximately 5.7 million barrels of oil and petroleum products per day in 2008 or approximately 177 million barrels of oil and petroleum products per month from countries that belong to the Organization of the Petroleum Exporting Countries (OPEC), which accounts for about 44 percent of the nation’s total oil and petroleum product imports.[1]&[2]

·         Oil dollars sent overseas.  In 2001, the United States sent approximately $101 billion to foreign countries to pay for its addiction to oil.  At the end of 2008, the cost of America’s addiction to oil had increased to $439 billion.[3]  The total amount of American dollars sent overseas for our nation’s oil addiction equals about 18 percent of the combined estimated 2008 Gross Domestic Products (total combined GDP of $2.47 trillion) of the all countries that belong to OPEC or, if expressed differently, would represent the world’S.25th largest Gross Domestic Product.[4]

·         Oil company profits. Since 2001, the profits of the major oil companies skyrocketed to record levels while crude oil prices were similarly increasing.  In 2001, the major oil companies combined profits totaled $38.7 billion and had increased to approximately $125 billion in 2007.  The cumulative profits of the major oil companies from 2001 to 2008 totaled $666 billion.[5]

·         Oil prices. The price for a barrel of oil increased 370 percent during the previous administration from $31 in January 2001 to highs of $145 in July 2008.[6]

·         Gas prices.  The price of gasoline increased as much as 180 percent from $1.46 in per gallon of regular gasoline in January 2001 to an all-time high of $4.11 in July 2008.  Before the financial crisis and the subsequent reduction in oil and gasoline prices, the average household with children was spending about $4,143 on transportation fuel costs in 2008, an increase of 118 percent or $2,240 over 2001 costs.[7]&[8]

·         Electricity prices. The residential price for electricity increased from 8.58 cents per kilowatt hour in 2001 to $10.65 cents per kilowatt hour in 2007.  This increase in residential electricity prices resulted in the average residential electricity bill increasing from $81 per month to $100 per month.[9]

·         Natural gas prices. The residential price for natural gas increased from $9.63 per thousand cubic feet in 2001 to $13.70 per thousand cubic feet in 2008.  The increases in residential natural gas prices resulted in winter natural gas expenditures increasing from $465 during the winter of 2001 and 2002 to the anticipated cost of $866 during the winter of 2008 and 2009.[10]

·         Heating oil prices.  The price for heating oil increased from $1.16 per gallon in the winter of 2001 and 2002 to $3.31 per gallon in the winter of 2007 and 2008.  The increases in heating oil prices resulted in winter heating oil expenditures increasing from $627 during the winter of 2001 and 2002 to $1,953 during the winter of 2007 and 2008.[11]

Reducing Greenhouse Gas Emissions and Addressing Climate Change

The Budget Resolution includes a reserve fund to accommodate legislation to invest in clean energy technology initiatives, decrease greenhouse gas emissions, and help families, workers, communities, and businesses make the transition to a clean energy economy.  The Budget Resolution includes no specific assumptions regarding the details of such a proposal.  The details of the proposal will be left to the committees of jurisdiction and the legislative process. 

If climate change legislation brings new revenues into the Treasury, the Budget Resolution would support the President’s proposal to invest $15 billion per year in a variety of clean energy technology initiatives.  These initiatives would accelerate the widespread deployment of energy efficient technologies, increase our reliance on clean and renewable energy sources, and move America forward on the path to energy security.

The following information highlights the need for these investments:

·         Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report.  The IPCC Fourth Assessment Report reviewed all available scientific data through 2005 to examine the issue of climate change.  The report found that "Global atmospheric concentrations of carbon dioxide, methane and nitrous oxide have increased markedly as a result of human activities since 1750 and now far exceed pre-industrial values determined from ice cores spanning many thousands of years.  The atmospheric concentrations of carbon dioxide and methane in 2005 exceed by far the natural range over the last 650,000 years.  Global increases in carbon dioxide concentrations are due primarily to fossil fuel use, with land-use change providing another significant but smaller contribution."[12]

·         Global warming emissions.  When the previous Administration came into office, the Energy Information Administration reports that the United States emitted 6,958 million metric tons of carbon dioxide equivalents.  The most recent data from the Energy Information Administration shows that in 2007 those emissions increased by 224 million metric tons (approximately five percent) to 7,282 million metric tons of carbon dioxide equivalents.  From 1990 to 2007, U.S. emissions increased by 16.7 percent.[13] 

·         Atmospheric carbon dioxide.  Since 2001, the amount of atmospheric carbon dioxide levels have risen from 371 to 386 parts per million.[14]  The most recent data from the Mauna Loa Observatory in Hawaii indicates that over the last 50 years the annual mean growth rate of atmospheric carbon dioxide levels have been increasing by approximately 1.42 parts per million per year.  Recently, atmospheric levels of greenhouse gases were measured at 392 parts per million at an Arctic research station near Norway.[15]

·         Temperature increases.  The IPCC Fourth Assessment Report found that "warming of the climate system is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice and rising global average sea level," and that "eleven of the last twelve years (1995-2006) rank among the twelve warmest years in the instrumental record of global surface temperature (since 1850)."  Additionally, the IPCC study projects warming to increase by 0.2�C per decade for the next two decades.[16]

·         International climate change negotiations.  The prior Administration worked continually to impede international and G-8 efforts to reduce greenhouse gas emissions by opposing any binding global warming emission reduction agreements.  The persistent opposition to a binding global warming emission reduction agreement diminished our nation’s reputation in the world but also reduced the amount of time the world has to reduce its greenhouse gas emissions.[17]

·         Arctic and global sea ice. In August 2008, the Arctic Ocean’s sea ice melted to its second lowest level since satellite observations began[18] and since 1979 global sea ice area has decreased by 1.34 million square kilometers or an area about the size of Texas, California, and Oklahoma combined.[19]  Sea ice in the Arctic in "the summer of 2007 saw exceptionally low ice cover at the September minimum, with an area of 3.77 million square km or 38 percent below the long term average. From 1996 to 2007 the summer area minimum decreased at an annual rate of 10.7 percent per decade, compared to 3 percent per decade for 1979 to 1996."[20]

·         Coastal flooding. In March 2009, the Pacific Institute issued a report, which was commissioned by the State of California, to study what California will need to do to deal with floods, erosion and other effects expected from rising sea levels.  The study found that California will need to spend at least $14 billion to safeguard its coastal areas by the end of the century and spend $1.4 billion every year thereafter in maintenance costs because of sea level rise and coastal flooding.[21]

Also in March 2009, a study using ten state-of-the-art climate models, which have also been used by the IPCC, studied the impact of sea level rise on the northeastern U.S. coast.  The study found that northeastern coast of the United States will see the world’s biggest sea level rise due to global warming.  The chief scientist for the report stated that the sea level changes would leave the northeastern U.S. coast as vulnerable to storms as residents of Louisiana.[22]

·         Oceans. Oceans are critical to the regulation of the Earth’s weather and climate and they are vital to the world’s food supply.  Climate change is raising sea levels, warming water temperatures, and altering ocean currents.  Rising ocean temperatures may alter the distribution, growth, and abundance of species, including marine fish, birds, and mammals.  Ocean warming and rising sea levels are likely to alter coastal weather and increase the intensity of severe storms and coastal flooding.  The absorption of atmospheric carbon dioxide by the oceans is acidifying seawater, which threatens the ecological, nutritional, and economic benefits provided by healthy oceans.  Coral reefs are among the oldest and most diverse ecosystems on the planet; providing critical habitat for fish and other organisms.  Ocean acidification may erode existing corals and prevent new coral growth. 

·         Water and drought. The impacts of global warming are continuing to impact water supplies as studies have shown that climate change trends support the conclusion that by 2040 most of the snowpack in the Sierra Nevada Mountains and the Rockies will melt each year by April 1.  This would lead to serious shifts in river flows that could prompt flooding along those rivers, periods of acute drought during the summer due to the increased likelihood of evaporation, and the depletion of underground water aquifers.[23]  This is important because these conditions can help to cause or make droughts much more acute and which can then have significant economic impacts.  For instance, the ongoing drought in California has cost its farmers more than $300 million in 2008 and economic losses may accelerate to 10 times that this year as 95,000 people lose their jobs.[24]

·         Heat waves.  The number of people suffering death and disease from heat waves is expected to rise due to climate change.  Recent studies have projected an overall increase of about 70 percent in the annual number of heat wave days for the Midwestern portion of the United States by the late 21st century.  Specifically, heat wave frequency would increase by about 24 percent for Chicago (from 1.7 to 2.1 heat waves per year); 50 percent for Cincinnati (from 1.4 to 2.1 heat waves per year); and 36 percent for St. Louis (from 1.4 to 1.9 heat waves per year).[25]

·         Ozone.  The New England Journal of Medicine recently published a study that found that chronic exposure to ozone, formed when sunlight oxidizes with pollutants like carbon dioxide, increases the chances of death due to respiratory diseases.  The report detailed that ozone pollution likely translates into about 240,000 deaths per year in the United States.[26] 

Enhancing Energy Efficiency, Promoting Renewable Energy, and Creating Green Jobs

The Budget Resolution provides increases for the Energy Efficiency and Renewable Energy program, which will enable investments in important priorities such as wind, solar, geothermal, biomass and biorefinery research and development, hydrogen, vehicle/building technologies and the weatherization assistance program.  The budget supports increased funding for the Energy Efficiency and Conservation Block Grant Program and the development of low carbon coal technologies such as carbon capture and sequestration.  The budget also supports continued funding increases for the Department of Energy’s loan guarantee program.

The following information highlights the need for these investments:

·         Office of Energy Efficiency and Renewable Energy funding.  Former President Bush’s first budget request proposed spending $1.03 billion for the Department of Energy (DOE) office of Energy Efficiency and Renewable Energy.  In his last budget request, President Bush proposed spending $1.26 billion for DOE’s office of Energy Efficiency and Renewable Energy.  This represents a cumulative increase of only $230 million, despite the fact this office has responsibilities for the broad market adoption of clean energy technology and the commercialization of renewable energy and energy efficiency technologies.

·         Weatherization. The previous Administration’s Fiscal Year 2009 budget request eliminated all funding for the Department of Energy’s Weatherization Assistance Program.  The attempt to eliminate its funding was troubling because it enables low-income families the ability to reduce their energy bills by making their homes more energy efficient.  The funding for weatherization assistance is important because weatherizing homes saves an average low-income family $413 in reduced first-year energy costs and for every $1 invested in weatherization returns $2.72 in energy and non-energy related benefits.[27]

·         Economic impact. In 2007, the renewable energy and energy efficiency industries in the United States generates $1.05 trillion in sales and created over nine million jobs.  In 2006, renewable energy and energy efficiency industries generated 8.5 million new jobs, nearly $970 billion in revenue.[28]&[29]

·         Wind. Last year, wind-turbine manufacturing added 13,000 jobs for a total of 85,000 wind workers[30] while 85,000 people are employed in the wind industry today, up from 50,000 a year ago.[31]  The Department of Energy’s "20 Percent Wind Energy by 2030" report estimates that if investments are continued to be made and challenges like transmission are met the wind energy industries in the U.S. have the potential to support roughly 500,000 jobs in the U.S., with an annual average of more than 150,000 workers directly employed by the wind industry.[32]

·         Solar. The Apollo Alliance and the Urban Habitat Institute have reported that photovoltaic (PV) panels generate 22.4 jobs per megawatt while solar thermal energy produces 5.9 jobs per megawatt.[33]

·         Geothermal. In September 2008, the United States Geological Survey released its geothermal resource assessment for the United States.  The results of their assessment found that the United States possesses 9,000 megawatts of conventional and identified geothermal energy resources and 30,000 megawatts of conventional and unidentified geothermal energy.[34]  The Apollo Alliance and the Urban Habitat Institute also reported that geothermal energy generates 10.5 total jobs per megawatt of geothermal energy.



[1] Energy Information Administration, Petroleum Trade Overview,  February 2009, S.Ec3_7.pdf">http://www.eia.doe.gov/emeu/mer/pdf/pages/S.Ec3_7.pdf

[2] Energy Information Administration, U.S. Imports by Country of Origin, March 2009, http://tonto.eia.doe.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_m.htm

[3] U.S. Census Bureau Federal Trade Division, Monthly Trade Highlights, Exhibit 17, http://www.census.gov/foreign-trade/Press-Release/current_press_release/exh17.pdf

and U.S. Census Bureau Federal Trade Division, Monthly Trade Highlights, http://www.census.gov/foreign-trade/Press-Release/2001pr/Final_Revisions_2001/exh16.pdf

[4] Central Intelligence Agency, CIA World Fact Book, Gross Domestic Product (Official Exchange Rate), https://www.cia.gov/library/publications/the-world-factbook/fields/2195.html

[5] Based upon annual figures based off most recently available annual or quarterly report from ExxonMobil, ChevronTexaco, BP, Shell, and ConocoPhillips.

[6] Energy Information Administration, Cushing, OK WTI Spot Price FOB, http://tonto.eia.doe.gov/dnav/pet/hist/rwtcD.htm

[7] Calculations based on data available from Energy Information Administration, Household Vehicle Energy Use: Latest Data and Trends; Short Term Energy Outlook (November 2007), available here, Household Vehicles Energy Use: Data Tables, Table A2 (released November 2005),
available here.

[8] AAA, Fuel Gauge Report, http://www.fuelgaugereport.com/

[9] Energy Information Administration, U.S. Average Monthly Bill by Sector, Census Division, and State,  January 2009, http://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.html

[10] Energy Information Administration, Short-Term Energy Outlook, March 2009 and January 2008, http://www.eia.doe.gov/emeu/steo/pub/mar09.pdf and http://www.eia.doe.gov/pub/forecasting/steo/oldsteos/jan08.pdf

[11] Energy Information Administration, Short-Term Energy Outlook, March 2009 and January 2008, http://www.eia.doe.gov/emeu/steo/pub/mar09.pdf and http://www.eia.doe.gov/pub/forecasting/steo/oldsteos/jan08.pdf

[12] Intergovernmental Panel on Climate Change Fourth Assessment Report, Climate Change 2007: Synthesis Report, http://www.ipcc.ch/ipccreports/ar4-syr.htm

[13] Energy Information Administration, Emissions of Greenhouses Gases Report, December 2008, http://www.eia.doe.gov/oiaf/1605/ggrpt/

[14] National Oceanic and Atmospheric Administration, Mauna Loa Carbon Dioxide Annual Mean Data, ftp://ftp.cmdl.noaa.gov/ccg/co2/trends/co2_annmean_mlo.txt

[15] Reuters, CO2 hits new peaks, no sign global crisis causing dip, February 12, 2009, http://www.reuters.com/article/environmentNews/idUSTRE51B44Z20090212

[16] IPCC, 2007: Summary for Policymakers. In: Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt, M.Tignor and H.L. Miller (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.

[17] New York Times, Climate Plan Looks Beyond Bush’s Tenure, December 16, 2007, http://www.nytimes.com/2007/12/16/world/16climate.html?pagewanted=1&sq=bali%20and%20climate&st=cse&scp=3

[18] Associated Press, Northeast U.S. to suffer most from future sea rise, March 15, 2009,

http://www.usatoday.com/weather/climate/globalwarming/2009-03-15-sea-level-rise-northeast_N.htm

[19] Discover Magazine, "George Will Liberates From the Burden of Fact-Checking," February 16, 2009, http://blogs.discovermagazine.com/loom/2009/02/16/george-will-liberated-from-the-burden-of-fact-checking/

[20] Field, Christopher, Carnegie Institution for Science and Co-Chair Working Group II of the IPCC, Before the Senate Environment and Public Works Committee, February 25, 2008, http://epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=07bc4243-a48e-4481-8a5f-daf01b1f5eba

[21] Los Angeles Times, "California Panel Urges Immediate Action to Protect Against Rising Sea Levels," March 12, 2009, http://www.latimes.com/news/science/environment/la-me-global-warming-searise12-2009mar12,0,2405277.story

[22] Associated Press, Northeast U.S. to Suffer Most from Future Sea Rise, March 15, 2009, http://www.usatoday.com/weather/climate/globalwarming/2009-03-15-sea-level-rise-northeast_N.htm and Science Daily, "Sea Level Rise Due to Global Warming Poses Threat to New York City," March 16, 2009, http://www.sciencedaily.com/releases/2009/03/090315155112.htm

[23] Science, "Human-Induced Changes in the Hydrology of the Western United States," February 22, 2008.

[24] Reuters, "Climate Change Accelerates Water Hunt in U.S. West," March 10, 2009, http://www.reuters.com/article/environmentNews/idUSTRE52900820090310?sp=true

[25] Testimony of Kristie L. Ebi to the U.S. Senate Committee on Health, Education, Labor, and Pensions.  April 10, 2008, http://help.senate.gov/Hearings/2008_04_10/Ebi.pdf

[26] USA Today, "Ozone pollution amplifies risk of fatal respiratory illnesses," March 16, 2009, http://www.usatoday.com/news/health/2009-03-11-ozone-illness_N.htm

[27] Weatherization Assistance Program Technical Assistance Center, Weatherization Assistance Program Overview, September 26, 2008, http://www.waptac.org/sp.asp?id=1437

[28] American Solar Energy Society, "Defining, Estimating, and Forecasting the Renewable Energy and Energy Efficiency Industries in the U.S. and in Colorado," December 2008, http://www.ases.org/images/stories/ASES/pdfs/CO_Jobs_Final_Report_December2008.pdf

[29] American Solar Energy Society, "Renewable Energy and Energy Efficiency: Economic Drivers for the 21st Century," 2007,

[30] ABC News, " Wind Farms Revitalizing Midwest Manufacturing Towns," February 7, 2009, http://abcnews.go.com/US/Story?id=6823005&page=1

[31] American Wind Energy Association, "Wind Energy Grows by Record 8,3000 MW in 2008, January 27, 2009, http://www.awea.org/newsroom/releases/wind_energy_growth2008_27Jan09.html

[32] Department of Energy, "20 percent Wind Energy by 2030," May 2008, http://www.20percentwind.org/20percent_Wind_Flyer.pdf

[33] Apollo Alliance and Urban Habitat, "Community Jobs in the Green Economy," 2007, http://www.urbanhabitat.org/files/Community-Jobs-in-the-Green-Economy-web.pdf

[34] United States Geological Survey, "Substantial Power Generation from Domestic Geothermal Resources," September 29, 2008, http://www.usgs.gov/newsroom/article.asp?ID=2027&from=rss_home

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