Bush energy plan whacks conservation

Dr. Muller's Industrial Assessment Centers program annually conducts about 600 energy audits and trains a new crop of about 250 new energy-efficiency engineers. The $7 million program, which is estimated to save enough power to supply half a million homes each year, wins plaudits from the small businesses that have been able to reduce their costs.

But budget cuts slated for 2007 would trim the program by a third, slashing the number of its university-based auditing and training programs from 23 to 16. Savings: about $2.4 million.

"I hope the ITP cuts do get restored," says Larry Kavanagh, vice president of manufacturing and technology for the American Iron and Steel Institute, a Washington trade association. "It saved the auto industry a lot of weight in its cars - and the country a lot of energy."

These programs are minuscule compared with the big-ticket research programs envisioned by the White House. Mr. Bush's Hydrogen Fuel Initiative, for example, would cost $1.2 billion over five years.

Proponents of the small-scale efficiency programs point out that the ITP, with 1/20th of the budget, has already saved more oil than the hydrogen-fuel program would save, if successful, by 2025.

But others are skeptical of the value of most Department of Energy programs and especially energy-efficiency programs. They say the latter should be provided by the private sector, not government.

"When energy prices are high, you don't need to subsidize conservation efforts," says Jerry Taylor, director of natural resource studies for the Cato Institute, a Washington think tank. "These are subsidies that qualify as corporate welfare."

One of the nation's priorities is improving the security and reliability of the electric grid. One option for doing that sooner, rather than later, is the emerging technology of "distributed generation." Under that approach, the nation would build more but much smaller power plants so that small businesses and even individual homes could have them.

True, such systems would burn costly natural gas - but at twice the energy efficiency of today's grid - to produce both heat and electricity for homeowners. If such systems caught on, they could vastly reduce load demand on central power stations and slash the need to build new power plants.

But that vision of the future may be delayed, since the DOE's "distributed energy" program has been cut in half and the remainder is being heavily earmarked by federal lawmakers for specific projects that they favor. The program is slated to be terminated in 2008, observers say.

"Hurricanes, terrorism, and blackouts have given us so many reasons to emphasize distributed generation, and instead we're putting emphasis on new forms of centralized power," says John Jimison, executive director of the US Combined Heat and Power Association, a Washington advocacy group. "It's too bad it's getting cut because it was a very modest program."

There may be a glimmer of hope for energy-efficiency programs. The House Committee for Energy and Water Development subcommittee moved last week to restore some funding to ITP and hybrid technology for heavy trucks. The committee voted earlier this month to fully fund the president's $2.1 billion Advanced Energy Initiative.

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