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A carbon tax is an alternative to an energy tax. Varying a carbon tax so that it penalizes dirty coal the most, fuel oil less, and clean natural gas the least would make sense. A carbon tax would eliminate the tax on nuclear power, wind power, PV power, and solar thermal energy, giving them an annual-operating-energy-savings advantage over fossil fuels. The first costs of nuclear power, wind power, PV power, and solar thermal energy, however, would increase, based on the amount of fossil energy used during manufacturing, while life-cycle paybacks would remain the same.

CONCLUSION
For the size of its population, the United States consumes an inordinate amount of energy. Developing countries such as China and India have increasing energy demands just as existing world supplies are peaking. Energy shortages are causing the world’s energy-consuming countries pain, while the world’s oil-producing countries are benefitting greatly.

The U.S. government has yet to provide a feasible national energy policy or reliable short-, mid-, or long-term energy solutions, while 35 years of free-market policies and technologies have largely failed, as U.S. oil imports have increased from 10 percent in 1970 to 70 percent today.

For 35 years, the world’s focus primarily has been on increasing conventional-oil and natural-gas supplies, but they are declining. Unconventional oil does not look promising. Unconventional natural-gas shale, on the other hand, could be a pleasant surprise, but the quantities, development times, water requirements, and costs are unproven. Research into clean-coal technology is proceeding, but will take time, as will research into nuclear. Hydrogen still is questionable and has the longest way to go to becoming reality. Alternative energy sources have limited capability.

The United States’ first priority should be reducing the federal trade deficit. A massive energy-conservation program that retrofits industry and the built environment and reduces energy consumption by half in 10 years is needed. If left to the free market, a massive energy-conservation program will not be enacted until energy prices have at least quadrupled, and by then, the trade deficit will have weakened America. An energy-conservation program can be implemented fairly quickly, with revenue-neutral energy taxes, targeted tax credits, laws, and government mandates. Additionally, it is the least expensive energy solution.

Energy taxes are the most effective tool in making the United States a more energy-efficient society. Europe’s energy taxes are double the United States’, which is why Europe’s energy consumption per capita is half of the United States’ with an equivalent gross national product and standard of living. The combination of energy taxes and tax credits can be revenue-neutral.

The United States needs to invest its limited capital resources carefully, based on sound business analysis. Both PV and thermal solar energy are material- and capital-intensive and may never be cost-effective.

A national energy policy must clearly identify a direction for all possible energy solutions over the short, mid, and long terms to avoid duplication and waste. For example, an effective energy-conservation program would reduce electricity demand, which would delay the need for PV solar energy, wind power, and nuclear power. Reduced electricity demand occurred during the late 1970s and early 1980s, resulting in excess electricity-generation capacity and no need for new plants for approximately eight years. Similarly, energy conservation can reduce the immediate need for Alaskan and off-shore oil. The DOE recently increased its research-and-development spending after having failed to adequately do so since the 1970s. The United States must invest heavily in research and development, focusing its capital resources where they will do the most good and produce results quickly.

With its national energy policy, the United States should look to:

1) Reduce the federal trade deficit, which can be accomplished only with a massive energy-conservation program.

2) Buy time to determine which mid- and long-term solutions are best, which would best be accomplished with a massive energy-conservation program.

3) Invest heavily and wisely in short-, mid-, and long-term research and development.

4) Implement optimum mid- and long-term solutions at a later date.

The devil is in the details. The United States needs a national energy policy based on solid engineering and business decisions. It is important that top scientists and engineers be tapped to perform short-, mid-, and long-term research and development. In the short term, a number of legislative and financial incentives would be needed for a massive energy-conservation program to be enacted.

REFERENCES

1) IEA says fading oil production threatens supply. (2008, November 13). The Wall Street Journal.

2) Pickens plan. (2008). Retrieved from http://www.pickensplan.com/theplan/

3) EIA. (2008). Annual energy outlook 2008 (Table A1). Washington, DC: Energy Information Administration. Retrieved from http://www.eia.doe.gov/oiaf/aeo/pdf/appendixes.pdf

4) Crabtree, G.W., & Lewis, N.S. (2007, March). Solar energy conversion. Physics Today. Retrieved from http://ptonline.aip.org/journals/doc/PHTOAD-ft/vol_60/iss_3/37_1.shtml

5) DOE. (2008). Annual report on U.S. wind power installation, cost, and performance trends: 2007. Washington, DC: U.S. Department of Energy. Retrieved from http://www.windpoweringamerica.gov/pdfs/2007_annual_wind_market_report.pdf

6) DOE. (n.d.). The Smart Grid: An introduction. Washington, DC: U.S. Department of Energy. Retrieved from http://www.oe.energy.gov/DocumentsandMedia/DOE_SG_Book_Single_Pages(1).pdf

7) DOE. (2007). Transforming electricity delivery. Washington, DC: U.S. Department of Energy. Retrieved from http://www.oe.energy.gov/DocumentsandMedia/RD_Strategic_Plan_Final07.pdf

8) Jones, E.A. (2008, August 3). How Texas struck it rich beneath suburbia. The Wall Street Journal. Retrieved from http://www.elizabethamesjones.com/index.php?pageid=news&newsid=4

9) Casselman, B. (2008, August 11). Natural-gas firms seek outlet for growing supplies. The Wall Street Journal.

10) Nuclear power in the USA. (2009). London: World Nuclear Association. Retrieved from http://www.world-nuclear.org/info/inf41.html

11) Wald, M.L. (2008, October 23). Nuclear power may be in early stages of a revival. The New York Times. Retrieved from http://www.nytimes.com/2008/10/24/business/24nuke.html?_r=1

12) Plugging in to uranium’s glowing future. (2008, December 20). The Wall Street Journal.

The principal of Guntermann Engineering, a provider of mechanical- and electrical-engineering consulting services, with special expertise in energy-conservation analysis and construction support, Alfred E. Guntermann, PE, has 40 years of construction-industry experience. He has received a number of local, regional, and national engineering awards; written nearly two dozen articles published nationally; and served on numerous boards and committees. He is an American Society of Heating, Refrigerating and Air-Conditioning Engineers Fellow and a member of HPAC Engineering’s Editorial Advisory Board.

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