Energy Policies of IEA Countries: United States 2007

Energy Policy Review

About this report

The United States is the largest economy and energy user in the world. Significant developments have taken place in its energy policy since the last IEA review in 2002. Most important is the Energy Policy Act 2005 – a comprehensive energy legislation which has set new directions, including opening the way for a nuclear renaissance. Two closely connected challenges shape all debates on the nation’s energy policy path: how to increase security by reducing the dependence on imported supplies; and how to address growing emissions of greenhouse gases. The United States national strategy is to find solutions largely through technology. It is a world leader in R&D and is driving development of carbon capture and storage and second-generation biofuels. But thus far, no federal government policy is in place to establish as a target an absolute reduction of CO2 emissions. The resulting uncertainty risks holding back investments into new technologies and may delay projects that are urgently required. The transport sector will be a key to a sustainable success. In the short to medium term, reduced fuel demand through higher vehicle efficiency will increase security and reduce CO2 emissions. Yet the policy for the revision of CAFE (the corporate average fuel economy) standards will leave consumers with vehicles that fall short of the technological possibilities.