New energy bill doesn't do enough

THE FIRST ENERGY bill in a decade will soon hit the president's desk. How disappointing that it doesn't address New England's real energy needs. While it has been called the ''most comprehensive energy bill in the last 30 to 40 years," it still misses the mark for us.

Most important, the bill sidesteps the biggest energy issue of all: climate change. Most greenhouse gases come from burning fossil fuels in power plants and motor vehicles. Yet, despite heroic efforts by key senators culminating in Senate endorsement of a mandatory cap on carbon emissions, the final bill dropped the ball.

This omission is followed by the failure to address oil security.

Everyone now knows about high oil prices from increasingly tight supplies, as China and India roar into the market, and instability continues in the Middle East and other oil-producing regions. Even so, Congress did not raise fuel economy standards, which could reduce US oil consumption by up to 15 percent, or 5 million barrels per day, by 2025.

Given the near-total reliance of our transportation system on oil -- and our nation's vulnerability to the geopolitics of oil -- this continued impasse on fuel economy puts us all at unnecessary risk.

So, for all of its comprehensiveness, the new energy bill is disappointing. New England, in particular, will be left with difficult energy problems.

For example, we will soon need to add critical energy infrastructure. Electricity use hit two new record levels in the past two weeks, after growing 23 percent in five years. Even faster growth has occurred in the region's demand for natural gas, with local gas companies selling 27 percent more gas to consumers last year than five years ago. The region could need to add new gas-delivery capacity and supplies as soon as 2007 to meet traditional winter demands for heat and electricity generation.

The energy bill will not solve these issues. And active battles over federal and state roles in siting on-shore LNG facilities and setting payments for power-plant capacity reveal limits to our tolerance for Washington-based solving solutions to our energy infrastructure needs in any event. In light of this, what should we be doing as a region to assure that we have the clean, reliable, and affordable energy supply and infrastructure we need?

First, the Northeast states should adopt a region-wide program to control greenhouse gas emissions from power plants, as committed to by the Northeast governors two years ago. After much work, the states are on the verge of deciding how to do it, as a cohesive region. They need support to take the final step, and show Washington that it's possible to reduce carbon emissions without damaging our economy.

Second, we must mine our local energy supplies. That means, among other things, approving the Cape Wind project. It's the only new power plant on the drawing boards in New England, and it uses a local energy supply (wind) with zero carbon emissions and zero fuel costs. Also, we must tap economic ''energy efficiency" opportunities through efficient building codes, appliance efficiency standards, and improvements in heating, cooling, and production processes.

Third, we need to attract new investment in power generation and transmission to meet new demand beyond what can be met by Cape Wind and efficiency programs.

For the past decade, investors built power plants in New England on spec, with many taking a financial bath. While electricity consumers have been insulated from the costs of this past decade's over-supply, attracting interest in new capacity investment in the region will require new capacity market rules (proposed by the region's grid operator), or the existence of longer-term utility power contracts endorsed by local regulators.

Fourth, we need to consider carefully the tradeoffs presented by our insatiable demand for energy in the context of local infrastructure siting proposals. This might mean a wind farm here, or a new gas pipeline or power line over there, or a new LNG facility off shore -- or all of the above. While no one wants an energy facility located nearby, there is no silver ''energy" bullet that will meet all our needs in a way that completely avoids negative consequences or inconveniences for some.

Indeed, we all benefit daily from infrastructure projects -- roads, cell towers, gas pipelines, or oil refineries -- that are located elsewhere, distributing benefits broadly, but having an impact locally. Our region needs to think about fair ways to accept the public and private burdens of infrastructure development.

It is clear that we won't get everything we need in the new energy bill, but there's much we can do here in New England to help ourselves.

Susan Tierney is an energy consultant at Analysis Group in Boston and a member of the National Commission on Energy Policy.