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1 [1] (December 15, 2022)

handle is hein.crs/govejuw0001 and id is 1 raw text is: Congressional Research Service Inforrning the legislative debate since 1914 0 December 15, 2022 Energy Transition: Affordability, Emissions, and Security Overview The United States is undergoing a transition in the energy sector, with a shift in energy supplies and production over relatively short periods of time. Over the last 20 years, natural gas has surpassed coal as the dominant fuel for electricity generation, and the proportion of renewable energy employed has roughly doubled. During this time, the United States became a net exporter of both petroleum and natural gas. This ongoing energy transition, both in fossil fuels and renewable energy, has led to continuing energy policy discussion at all levels. U.S. energy policy has often focused on three major goals: keeping energy costs low, protecting the environment, and assuring a secure supply of energy. Sometimes, these goals have been competing, sometimes complementary. In pursuit of these goals, government programs have been developed to improve the efficiency with which energy is utilized; to mitigate the detrimental effects of energy supply and use; to promote the domestic production of an array of energy sources; and to develop new sources. Implementing federal energy programs is often controversial because varying stakeholders have different energy policy priorities. For some, having inexpensive, abundant energy to supply the U.S. economy is the key policy objective. For others, the continued use of fossil fuels, whatever their origin, in the face of their environmental impacts, may be most important. Still others view U.S. (or allied) dependence on foreign energy, particularly from adversaries, as a primary concern. Figure 1. Share of U.S. Primary Energy Consumption by Fuel Type, 2005-2020 100% 80% 9 r Renewable 6G% &~o Hydro MNuclear 40% Petroleum Natural Gas 20% Coal 0% 2Os 2010 2015 2020 Source: Energy Information Administration, Annual Energy Review, November 2022. Since 2005, U.S. primary energy consumption has held relatively steady while the economy has generally grown (except for occasional dips related to major world events- e.g., in 2009 due to the great recession, and in 2020 due to the COVID-19 pandemic). During that time, the U.S. economy has become more efficient at using energy. Natural gas and renewable energy sources (mostly wind and solar) have replaced coal in the energy mix, primarily as fuel for electricity production, while petroleum demand- mostly for transportation-has declined somewhat. (See Figure 1.) Over the same time period, greenhouse gas emissions from U.S. electric power plants have steadily decreased. Emissions from transportation have declined at a slower rate, and in 2017 transportation emissions exceeded those of electricity for the first time. (Figure 2.) Affordability In general, U.S. energy policy has sought to ensure supplies of inexpensive, abundant energy to support the U.S. economy and consumers. Policies such as establishing the Strategic Petroleum Reserve (SPR) are aimed at preventing price shocks. Policies promoting oil, natural gas, and renewable energy production on federal lands aim at increasing domestic energy supply. Historically, the United States has also promoted nuclear power through a range of policies to reduce its costs (e.g., nuclear liability insurance, incentive payments). The United States has also enacted a range of tax credits and research programs over time to promote various energy sources. Most recently, the 117th Congress enacted a suite of tax incentives, rebates, and research, development, demonstration, and deployment (RDD&D) programs aimed at reducing the cost of new energy supplies for producers and consumers. Residential, commercial, and industrial customers' exposure to high and volatile prices has been in evidence in recent years. Events include high gasoline prices in 2022, as well as weather-related spikes in electricity and natural gas prices in Texas in 2021. The extent to which policy tools can address price volatility varies, as prices are driven by a range of factors, including domestic and international energy supplies, trade policies, emissions requirements, state and local taxes, and other regulations, many of which vary by fuel type and end use. Greenhouse Gas Emissions Carbon dioxide (CO2) from combustion of fossil fuels (petroleum, natural gas, and coal) represents the single largest source of U.S. greenhouse gas (GHG) emissions (73% in 2020). Other GHGs include methane and fluorinated gases, which may also be emitted from energy systems. The transportation sector and electric power sector each represent roughly one-third of U.S. GHG emissions from fossil fuel use, and each represent roughly one-quarter of total U.S. GHG emissions. U.S. GHG emissions have been declining. Total GHG emissions dropped 12% between 2005 and 2019. The electricity sector has led emissions reductions. CO2 emissions from fossil fuel combustion, a subset of total U.S.

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