The previous Congress passed a massive energy bill, the Energy Policy Act of 2005 (EPACT, P.L. 109-58 ), but subsequent developments worked to keep crude oil and gasoline prices high and interest in legislative solutions active. Successive hurricanes, Katrina and Rita, in late August and late September 2005, brought about the shutdown of more than 5 million barrels per day of refining capacity in Texas and Louisiana and initially shut down the 25% of U.S. crude oil production and 20% of U.S. natural gas production that comes from the Outer Continental Shelf in the Gulf of Mexico. World and domestic demand for oil has remained strong, taking up most of the world's spare production capacity. The phaseout of the gasoline additive methyl tertiary butyl ether (MTBE) and a renewable fuels mandate in EPACT have placed additional pressure on gasoline price and deliverability in the United States. Whenever the United States has experienced a period marked by sharp increases in the price for energy and concern about the adequacy of essential supplies, there is widespread concern that the nation has no energy policy. However, not only does the nation have an energy policy, it has adopted several distinct policy approaches over the years. However, it is apparent from a review of the years since the time of the Arab oil embargo and first oil price shock in 1973 until 2004 that it is more accurate to see this 30-year period as one of general price and supply stability that was periodically broken by short episodes of supply disruption and price volatility. It wasn't so much that energy policy failed to be responsive to earlier crises; rather, during lengthy periods of stability and declining prices for conventional fuels, it proved difficult to sustain certain policy courses that might help shield the nation from future episodes of instability. Traditionally, the energy debate has been the most vigorous over the balance to be struck between increasing supply and encouraging conservation. However, energy policy turns on the additional axis of short- and long-term policies. For example, one of the major issues in energy policy is the price for fuels. Tax policy plays a role in many of these areas. 94-163 ) established new car corporate average fuel economy (CAFE) standards, beginning with model year 1978.
Energy policy continues to be a major legislative issue, despite passage of the Energy Policy Act of 2005 (EPACT, P.L. 109-58). Shortly after EPACT's enactment, Hurricanes Katrina and Rita temporarily shut down production of oil and gas and refining capacity in Texas and Louisiana. World and domestic demand for oil remained strong, and other factors have placed pressure on gasoline prices and deliverability in the United States.
In the face of these developments, and because the prospect that this episode of elevated prices is likely to be a long one, interest in energy policy remains high in the 110th Congress. When the United States experiences a period marked by sharp increases in the price for energy and concern about the adequacy of essential supplies, there is widespread concern that the nation has no energy policy. The nation has, in fact, adopted several distinct policy approaches over the years, and many of the debates have been about determining the appropriate extent of the federal government's role in energy.
There were episodes from 1973-2003 when oil prices spiked, but these were generally for comparatively brief periods; overall, the period was one of general price and supply stability. It isn't so much that energy policy failed to be adequately responsive to past crises; rather, during lengthy periods of stability and declining prices for conventional fuels, it has proven difficult to sustain certain policy courses that might help shield the nation from occasional episodes of instability. Because prices are now expected by some analysts to remain high, the prospect for certain longer-range energy policies may now be more favorable. Traditionally, the energy debate has been most vigorous over the balance to be struck between increasing supply and encouraging conservation. However, when markets are unstable, debate turns on another axis as well, that of short-term versus long-term policies.
Energy policy issues of continuing interest include Corporate Average Fuel Economy Standards (CAFE) for passenger vehicles; improving U.S. energy infrastructure, including pipelines and refineries; seeking effective means to promote energy conservation using currently available technologies; and developing new technologies and alternative fuels.