Reliable and affordable energy sources are fundamental to U.S. economic growth—and the roofing industry's in particular. Unfortunately, trend lines for domestic energy production and usage show the gap widening even when efficiency increases are taken into account.
The U.S. Chamber of Commerce reports U.S. energy production has grown only 13 percent since 1973 while consumption has increased 30 percent. Also, the U.S. Department of Energy (DOE) predicts Americans will use 28 percent more energy by 2030. But the U.S. Energy Information Administration projects less than 10 percent of U.S. energy use will be supplied by renewable sources at that time.
The implications for the roofing industry are great because construction is an energy-intensive activity that requires trucks and motorized equipment. Additionally, this issue is an important factor for asphalt and most other roofing materials, which include natural resources as part of their chemical compositions.
The Energy Policy Act of 2005 that passed under Republican majorities in the previous Congress recognized this problem by incorporating tax incentives for renewable source and efficiency programs, as well as incentives to spur more oil and gas production. Republicans passed another energy bill Dec. 9, 2006, that opened up 8.3 million acres of the Outer Continental Shelf in the Gulf of Mexico to drilling.
"No-energy" energy legislation
When Democrats took control of the 110th Congress, they made energy legislation a top priority. On June 21, the Senate was the first chamber to pass a bill, H.R. 6, the Renewable Fuels, Consumer Protection, and Energy Efficiency Act of 2007. The bill's highlights include increasing the Corporate Average Fuel Economy (CAFE) standards for passenger cars and light trucks by about 40 percent to a fleet-wide average of 35 miles per gallon; new efficiency standards for household appliances and federal buildings; and promoting renewable fuel and carbon sequestration technologies.
The Senate failed to add tax language to H.R. 6 because it was stymied by the issue of raising taxes on oil and gas producers, but it did add language that subjects the Organization of Petroleum Exporting Countries (OPEC) to U.S. antitrust laws. The White House has signaled its opposition to the OPEC language and other sections of the bill.
The House's energy bill, H.R. 3221, the New Direction for Energy Independence, National Security, and Consumer Protection Act, passed Aug. 4 and also has White House opposition. The bill's highlights include requiring utilities to produce 15 percent of their power from renewable sources by 2020; new efficiency standards for appliances, lighting and buildings; and extending tax credits for energy efficiency in commercial buildings and production of renewable electricity and investments in solar energy and fuel cells.
Troubling for the roofing industry is a mandate in the bill that new residential and commercial buildings would have to realize 30 percent overall energy savings in three years' time and 50 percent by 2020. The mandate would give DOE the authority to establish national building codes that trump state and local codes, which raises jurisdictional concerns, and could increase building costs 10 to 15 percent.
The House bill's tax measures include provisions that would tap into oil and gas industry revenue to pay for energy-efficiency and alternative source programs. This has drawn a veto threat from the president, but differences between the Senate and House on issues such as CAFE standards, a renewable-energy standard for utilities and taxes call into question whether the Senate and House can agree on a bill that can make it through both chambers and be sent to the White House.
Also, Democrats have done nothing to boost domestic oil and gas production or use the U.S.'s huge supply of coal, leading some experts to refer to both bills as "no-energy" energy legislation.
Rising costs
Although tax incentives for energy-efficiency improvements to structures would benefit the roofing industry, they could be offset by a costly national building code dictated by DOE. Congress must do what it can to keep oil and gas prices as low as possible for the roofing industry, which is especially vulnerable to oil and gas price hikes.
Craig S. Brightup is NRCA's vice president of government relations.
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