An adequate and secure supply of energy at globally competitive prices is necessary for the nation's economic growth. The NAM supports the development of markets that provide competitively priced energy resources, a minimum of government intervention, and promote an economically balanced and varied mix of energy sources consistent with prudent environmental policies.
Maintenance of a viable and globally competitive domestic energy industry is crucial to achieving U.S. energy goals. Therefore, the NAM places a high priority on the development of a national energy policy that provides a climate conducive to the increased exploration, development and more efficient utilization of all domestic energy resources and encourages development of public lands in a manner consistent with sound environmental management. Continued voluntary improvement in energy efficiency and energy conservation in all consuming segments is essential and should be constantly encouraged. Concurrently, policies that facilitate and enhance the production and use of traditional resources, as well as those that support development of market-based alternative energy sources and technologies should be continued.
Manufacturers and consumers will continue to rely upon all sources of fuel and energy for decades to come. The NAM urges policymakers to recognize the adverse effects of overly restrictive regulations and the application of policies that limit energy production and consumption.
Reducing America's domestic energy vulnerability by developing energy resources will require large capital investments by private industry. Government should not discourage this investment. The ability of the energy producing and energy consuming segments of industry to obtain adequate funding for energy-related investments must not be impaired by price controls, limitations on diversified industrial activity or forced divestiture.
National energy policies should rely on the marketplace and its proven ability to meet the nation's energy needs. The NAM is opposed to the imposition of taxes or proportionate cost levied on particular sectors of the economy. The ramifications of singling out energy or any other particular sector for new tax levies would introduce a series of distortions in the economy. Additionally, social inequities resulting from increased energy prices should not be addressed through energy rate structures or subsidies for rate structures. Ultimately, the economic costs of these distortions could outweigh the short-run revenue gains.
Therefore, the NAM opposes any federal or state government actions regarding climate change that could adversely affect the international competitiveness of the United States' marketplace economy. Any climate change policies should be based upon voluntary, cost-effective actions by the marketplace economy and should be comprehensive, involve our trading partners and take into account all greenhouse sources and sinks. The NAM believes that federal policies should pre-empt state policies.
Our knowledge of the environment is not static, and neither is our ability to protect it. Technological advances developed by the marketplace economy have greatly minimized and continue to reduce the environmental impact of domestic energy production and consumption. The NAM encourages policies that recognize these technological advances and allow for balance between economic growth and protection of our environment, including the challenges posed by climate change.
To help enable maximum efficient use of our energy resources, the NAM also supports significant investment to modernize the national utility grid and utilize smart metering, distributed storage, and other advanced technologies to improve efficiency, affordability, reliability and security.
Back to top Adopted Winter 2010 Effective until Winter 2014
Our nation's domestic oil and natural gas supply represents an important factor in our energy future. To compete in the global economy, U.S. manufacturers must be assured of an adequate supply of oil and natural gas for industrial and commercial use, such as petrochemical feed-stocks, process gas uses and transportation fuels, and for power and steam generation.
Back to top Adopted Winter 2008 Effective until Winter 2012
There are abundant oil and natural gas resources in the United States. U.S. demand for energy resources continues to increase. Restrictive government policies such as unnecessary regulation and prohibitions on exploration and production on government-owned lands and the Outer Continental Shelf (OCS) limit supply. These policies are in stark contrast to the other oil and natural gas producing regions of the world, with which U.S. producers must compete, where exploration and production are encouraged.
To slow the decline in domestic oil and gas production, the NAM supports policies that promote the leasing, exploration and development of the nation's oil and natural gas resources in an environmentally sound manner. Exploration and development of promising areas onshore, offshore and in the arctic can substantially lower our nation's energy vulnerability with minimal environmental impact.
As is currently the case for states with onshore production from federal lands, and for Gulf Coast states with production from federal waters off their coasts, all states with federal offshore leasing and production should share in related federal revenues.
Back to top Adopted Winter 2008 Effective until Winter 2012
Oil accounts for a significant percentage of U.S. energy consumption, more than any other fuel. Current domestic production accounts for a significant percentage of our usage, down from two-thirds less than a generation ago. With about 17.44 mmb/d of refining capacity, some 143 U.S. refineries process crude oil into products such as gasoline, distillate and jet fuels, heating oil and chemicals for domestic use and export into world markets. U.S. refiners have responded to the call for a cleaner environment by producing cleaner fuels, such as reformulated gasoline, at competitive prices. Uninterrupted production of these products and the flexibility necessary to maintain efficiency in the transportation infrastructure necessary to deliver them are essential to domestic economic growth as well as to U.S. industry's ability to compete globally.
Back to top Adopted Winter 2008 Effective until Winter 2012
1.01c. Natural Gas Consumption
Natural gas accounts for a significant percentage of electricity, and industry relies on gas for much of its energy needs. The NAM believes that policies that encourage the cost-effective use of natural gas to meet environmental and energy security objectives should be encouraged. Recent administrations have placed considerable focus on increasing the use of clean burning natural gas. This focus has culminated in initiatives that emphasize domestic resource growth, technology transfer and increased reliance on competitive market forces. Expeditious implementation of such initiatives on both the federal and state levels should be encouraged when cost-effective, allowing their benefits to accrue to U.S. energy consumers. The NAM supports the continued removal of barriers to the use of natural gas and completion of the process of deregulation through the following principles:
- Equal Access. The benefits of equal and open access should be extended beyond the interstate pipelines to secure the benefits of competition.
- Electronic Data Standardization. The gas industry should coordinate the development of electronic data standardization to facilitate transactions, enhance reliability and facilitate the flow of real-time information.
- Streamlined Regulations. Pipeline construction lead-times to connect new markets and supplies should be expedited and rates and regulation should not discourage natural gas use.
Back to top Adopted Winter 2008 Effective until Winter 2012
Most energy forecasts project that global natural gas production will grow rapidly to meet increasing global demand for this clean-burning fuel. To deliver gas to regions with high demand like North America, major additional infrastructure is required to ensure delivery by pipeline or liquified natural gas (LNG). North America and U.S. natural gas production is expected to lag behind projected U.S. demand growth, requiring significant LNG imports. Building new LNG import terminals around the country and associated natural gas pipelines is critical to bridging the ever-increasing natural gas demand and supply gap in the United States. Construction of an LNG terminal and associated pipeline in the United States involves a rigorous permitting and approval process involving federal, state and local agencies. NAM supports the timely permitting of new LNG terminals and the expansion of existing terminals (and associated natural gas pipelines) that meet environmental and other regulatory requirements.
Back to top Adopted Winter 2008 Effective until Winter 2012
Coal is the United States' most abundant energy resource and is a vital part of our efforts to meet our energy and transportation needs. The NAM believes that increasing the production of advanced clean coal utility and industrial generation technology as well as expanding coal-to-gas and coal-to-liquid technologies in an environmentally sound manner is an appropriate and desirable national policy. It generates a significant percentage of our nation's electricity. Government actions that unreasonably increase the cost of producing and using coal are counterproductive.
Back to top Adopted Winter 2008 Effective until Winter 2012
1.02a. Regulatory Considerations
Laws and regulations governing environmental quality, especially air quality, are currently the most crucial restraint on the use of coal by industry and utilities. Environmental restrictions should be reviewed and applied in a manner that balances reasonable environmental objectives with the need to continue cost-effective coal use. To this end, the NAM supports ongoing efforts to streamline and reform the New Source Review (NSR) permitting process. The laws and regulations that ensure mine safety and govern mining and reclamation should also be monitored to ensure that they are applied reasonably and do not unnecessarily obstruct production.
Back to top Adopted Winter 2008 Effective until Winter 2012
Coal leasing programs, which have historically been stop and go, have limited the potential development of the billions of tons of coal that lie on federal lands. A long-term, stable and flexible leasing policy should be maintained to ensure the availability of federal coal reserves to contribute to our nation's energy needs. The NAM therefore supports streamlining and expediting coal leasing under the Federal Coal Leasing Amendments Act (FCLAA).
Back to top Adopted Winter 2008 Effective until Winter 2012
Coal must be carried very long distances to markets. Recognizing the importance of transportation to coal competitiveness in utility, industrial and export markets, the NAM supports policies that will enhance capacity and efficiency for coal transportation.
Back to top Adopted Winter 2008 Effective until Winter 2012
1.02d. Carbon Capture and Storage
The NAM supports expeditious development and deployment of carbon capture and storage technology. See section 1.13 for NAM climate change principles.
Back to top Adopted Winter 2008 Effective until Winter 2012
1.03. Alternative Energy Sources
A free market energy policy is the best way of encouraging alternative energy options. Alternative energy sources include, but are not limited to, solar, sustainable biomass, wind, hydro, geothermal energy, coal to gas, coal to liquids, and coal generation with carbon capture and storage as well as transportation fuels such as ethanol, methanol, natural gas and electricity. The NAM opposes government mandates for use of alternative energy sources. Policies, which mandate the commercial use of nontraditional energy sources before they are economically competitive, are inefficient and impose unnecessary costs on our society. Government can play a positive role in support of research and development of alternative energy sources.
Back to top Adopted Spring 2009 Effective until Spring 2013
1.03a. Clean and Renewable Energy Sources
The NAM supports policies that encourage an energy mix comprised of renewable energy resources, other power options, and allows energy efficiency measures but does not support mandating specific technologies. Clean and Renewable energy resources such as wind, solar, geothermal, hydro, landfill gas and municipal solid waste and sustainable biomass and feed stock from nontraditional sources such as oil sands provide alternatives to traditional fossil fuels and together these resources account for a steadily rising share of U.S. energy supply and development. The NAM encourages Congress to review incentives and provide regulatory certainty for policies that promote the use of clean and renewable energy resources to ensure policies avoid secondary market impacts on existing users of renewable feedstocks and avoid potential adverse impacts on the sustainability of important agricultural and forest resources. In establishing federal renewable energy policies, the NAM encourages Congress to recognize regional differences in renewable energy resource availability, and to not conflict with or preempt state programs already enacted.
Back to top Adopted Spring 2009 Effective until Spring 2013
Development and utilization of non-conventional fuels and technologies will enhance energy flexibility and expand diversification of energy supplies.
Back to top Adopted Winter 2008 Effective until Winter 2012
Electricity costs and reliability are important to the competitiveness of U.S. industry. Accordingly, the NAM supports federal legislation that would facilitate wholesale and retail competition and strengthen reliability and efficiency of supply as soon as possible.
Specifically, the NAM supports proposals that are consistent with the following principles:
- Federal policy should ensure that there are no barriers to interstate commerce in electricity and should foster an open and non-discriminatory interstate electricity market.
- Federal policy should ensure that there are no barriers with respect to voluntary aggregation of customers.
- Government policies and programs should provide similar treatment to all participants in competitive markets without regard to ownership.
- The choice of generation and end-use technologies should be based on market forces. There should not be market set-asides, preferences or mandates for renewables or other specific energy sources.
- Electricity restructuring legislation should not be used as a back-door mechanism to enact environmental legislation and regulation. Environmental regulation that is not based on valid scientific and economic analyses should not influence electricity restructuring legislation.
- Determination of transition costs should be left to the states, except for costs associated with wholesale contracts, which are FERC jurisdictional.
- Operation, maintenance and improvement of the grid should be cost-effective.
- Enforceable operating standards should be developed to ensure grid reliability now and in the future.
1.06. Regulated Electric Utility Financing
Transmission and distribution rates should not constrain the ability of regulated entities to raise capital in the marketplace for the purpose of making cost-effective investments in transmission and distribution facilities.
Back to top Adopted Winter 2008 Effective until Winter 2012
1.07. Cogeneration, Distributed Generation and Combined Heat and Power Systems
The NAM supports cogeneration and distributed generation and combined heat and power systems, and believes industries should have full freedom to install and operate such systems. To facilitate the development of such systems and maintain reliability and efficiency of electricity supply, the NAM supports the following principles:
- The PURPA mandatory purchase obligation should be eliminated only in markets opened to retail competition. Existing PURPA contracts must be honored.
- The rights of co-generators under PURPA to interconnect should be retained. Non-discriminatory interconnection standards should be developed.
- States and utilities should not discourage the development of cogeneration and distributed generation and combined heat and power systems.
- For markets not yet opened to retail competition, utilities should provide backup, standby and maintenance power at just and reasonable rates.
1.08. Demand-Side Management (DSM) Programs
The NAM believes that the implementation of cost-effective DSM programs can help ensure a reliable and adequate electricity supply at least-cost. The NAM also believes that electric utilities must not be precluded from meeting future electricity needs with cost-effective supply-side technologies. Therefore, DSM programs should be evaluated by state public utility commissions as part of least-cost planning or integrated resource planning. Utility investment in DSM should reduce costs to all electric customers. The ability to profit by increasing sales or decreasing costs is the only appropriate incentive in our economic system that ensures the efficient utilization of resources.
Back to top Adopted Winter 2008 Effective until Winter 2012
The development and operation of hydropower in the United States has proven to be an environmentally compatible energy generation resource. Because it is a renewable resource that cannot easily be replaced, it does not deplete the nation's other fuel resources and contributes to the nation's energy self-sufficiency. Hydro contributes a small percentage of the nation's energy supply and a significant percentage of the renewable energy supply. It is energy efficient with energy conversion efficiency in the range of 85-95 percent. The NAM supports the continued use and development of hydropower resources.
The NAM supports the streamlining of the regulatory process for hydroelectric power development through the elimination of redundant or contradictory regulatory steps and avoiding the imposition of conflicting clauses in other legislative initiatives such as those related to clean air, clean water and endangered species.
With regard to hydro projects owned and operated by the federal government itself, efforts to offset their impact on fish and wildlife (including Endangered Species Act initiatives) must be carefully balanced with the preservation of the economic, recreational and public safety goals that justified their construction in the first place as well as the attendant large investment by taxpayers and ratepayers.
Back to top Adopted Winter 2008 Effective until Winter 2012
1.10. Electric and Magnetic Fields
NAM members strive to provide products and services in a safe and reliable manner. Where concern is expressed about the health and safety of the general public, customers and employees, the NAM supports and encourages scientific research into the various aspects of electric and magnetic fields (EMF). The NAM encourages funding (both government and non-government) for research into possible health effects, exposure assessment and field management activities. The NAM also encourages the wide dissemination of research results and open, responsible discussion of those results.
Back to top Adopted Winter 2008 Effective until Winter 2012
The NAM supports the continued development and operation of nuclear energy consistent with the protection of public health and safety. Nuclear power is a safe and vital source of cost-effective baseload electricity that does not emit criteria pollutants or greenhouse gases into the atmosphere. It is the largest source of non-emitting power generation in the United States and the second largest source of electricity, supplying approximately 20 percent of the nation's power.
In supporting the continued use and development of nuclear energy in the United States, the NAM supports the construction and operation of facilities covering all parts of the fuel cycle and nuclear energy generation, including power plants, fuel enrichment facilities, fuel fabrication plants, low- and high-level waste handling and disposal operations and other related facilities critical to supporting and expanding the nuclear energy industry.
The NAM supports policies that allow the federal government to fulfill its legal obligation to remove used fuel from commercial nuclear power plants and manage its long term disposal. The NAM supports the research, development and demonstration of technologies to close the fuel cycle while a permanent disposal facility, which is needed even if the fuel cycle is successfully closed, is developed. The NAM encourages the development of interim storage facilities for consolidating used fuel until recycling or permanent disposal facilities or both are available.
Nuclear energy helps stabilize the price of electricity while maintaining a diversity of domestic fuel sources. As the demand for electricity in the U.S. continues to grow, the NAM supports the construction of additional nuclear power plants that have been approved by the Nuclear Regulatory Commission to maintain a diverse portfolio of generating resources.
Back to top Adopted Winter 2008 Effective until Winter 2012
1.12. Industrial Energy Efficiency
Manufacturers continue to lead the economy in the area of energy efficiency and waste minimization. Intense competition both at home and abroad is driving manufacturers to make continuous improvements in productivity and waste reduction while boosting the quality and performance of their products. These competitive pressures will not abate. Instead, they will ensure that manufacturers rationally weigh all opportunities to increase their productivity, and implement those investments that give them the greatest competitive edge in the marketplace.
Back to top Adopted Winter 2008 Effective until Winter 2012
1.12a. The Federal Role in Improving Industrial Energy Efficiency
The most significant federal actions to increase industrial energy efficiency in the long run are those that will create a positive climate for capital investment in new plants and equipment.
There is a clear and important federal role to be played in the research, development and demonstration of new high-risk energy efficiency and waste minimization technologies, and in joint ventures with energy intensive industries, particularly where private sector incentives are inadequate.
The NAM believes that previous overly prescriptive federal energy policies have failed in large part because cost-effective industrial energy efficiency improvement cannot be mandated. Industrial energy management is a complex moving target that includes process innovation, long-term quality planning, energy assessments of building and equipment purchases, employee awareness and waste minimization and recovery.
The NAM opposes the imposition of mandatory data collection programs unless there is a clear justification of the need for the data and complete protection of proprietary data. Mandatory data collection programs impose a significant burden on manufacturers by diverting personnel and other resources to non-productive information gathering tasks. Moreover, there is no evidence that mandatory data collection programs improve industrial energy efficiency.
The NAM also opposes the imposition of mandatory industrial energy efficiency targets. Federal energy efficiency targets would have no meaning to most companies because manufacturing energy consumption varies dramatically from plant to plant. Product demand, weather, fuel price swings and capital investments such as pollution control influence manufacturing energy consumption.
Back to top Adopted Winter 2008 Effective until Winter 2012
1.12b. Cooperative Initiatives
The NAM believes cooperative government-industry initiatives are far more fruitful and a far better use of scarce resources than federally mandated programs that burden energy managers with additional data collection requirements and other administrative costs. Cooperative initiatives should assist manufacturers in establishing effective energy management programs and identifying cost-saving investments that meet a company's internal thresholds. Such initiatives should be completely voluntary and should not compel companies to make any investments or expenditures that would otherwise not be made in their own best interest.
Back to top Adopted Winter 2008 Effective until Winter 2012
1.12c. Energy Efficiency Principles
Manufacturers perform 50 percent of the research and development in the United States and are the leaders in developing and deploying innovative solutions across the manufacturing economy. No segment of American society has as much to gain from efficiency and waste reduction measures as the manufacturing sector and the consumers they serve. Manufacturers support a comprehensive energy strategy that embraces all forms of domestic energy production while expanding the conservation and efficiency efforts we already practice.
Manufacturers use one-third of our nation’s energy and are directly affected by the cost of energy in making products as well as by the cost of maintaining office operations. It is widely acknowledged that process and building system energy efficiency and conservation offers immediate and cost-effective opportunities to cut these costs. The NAM recognizes that cost-effective energy efficiency and conservation measures are key to reducing energy cost inputs, stretching available energy supplies and reducing green house gas emissions. Manufacturers have taken the lead in making energy efficiency a priority. In fact improvements in energy efficiency in the manufacturing sector have helped the country to be 46 percent more efficient in energy use per unit of GDP, and reduced energy intensity of the U.S. economy by 1.9 percent. Manufacturers are committed to producing more energy efficient consumer products that help reduce the U.S. demand for energy and reduce greenhouse gas emissions almost entirely without government mandates.
It is for this reason that the NAM supports:
• A national commitment to further reduce the energy intensity of the U.S. economy;
• Developing and adopting voluntary, cost-effective energy efficiency improvements across the manufacturing economy;
• Strengthening and focusing public-private partnerships, research and development efforts, and energy user education on energy efficiency;
• Promoting development of a 21st century workforce ready to assume the challenges of America’s future energy needs;
• Removing obstacles in existing statues and regulations to increase efficiency in both energy production and use;
• Promoting market, regulatory, and institutional reforms that increase the nation’s opportunity to utilize energy efficiency as a resource;
• Optimizing the utilization of existing fuel sources to increase further efficiencies and conservation in both energy production and use;
• Investing in new technologies and cost-effective alternative sources of energy;
• Deploying cost-effective distributed generation, combined heat and power technologies, and waste heat recovery systems;
• Developing cost-effective, intelligent energy systems to lower energy user costs, including: smartgrid, smartmeter, smart process manufacturing, and energy audit systems, techniques and best practices;
• Improving energy efficiency for existing commercial, industrial and residential buildings and strengthening standards for new buildings;
• Providing tax credits and other incentives to increase energy efficiency in manufacturing facilities and processes; and
• Improving energy efficiency in the transportation sector and developing new technologies and products to lower transportation costs for energy users.
Back to top Adopted Spring 2010 Effective until Spring 2014
The NAM understands the fundamental importance of protecting the environment. Our member companies are committed to greater environmental sustainability, including energy efficiency and conservation and reducing greenhouse gas emissions associated with global climate change. We know we cannot solve the climate change issue alone. The U.S. Congress must engage in a thorough and transparent deliberative process for establishing federal climate change policies to reduce greenhouse gas emissions, while maintaining a competitive level playing field for U.S. companies in the global marketplace. These Principles can help us achieve that goal.
Successful U.S. greenhouse gas emission reduction policies will:
- Support economic growth and do no harm to U.S. economy;
- Preempt all state climate change/global warming laws;
- Be equitable and economy-wide in scope and include all sectors;
- Recognize the different competitive environments and abilities of sectors;
- Avoid creating “compulsory†manufacturers, who would bear the burden for emissions and actions they do not control;
- Employ the most cost-effective implementation mechanisms;
- Promote advanced, energy efficient and zero-and-low-GHG emission and sequestration technologies as part of a long-term strategy;
- Harmonize any compliance deadlines, consistent with the development and commercial deployment of necessary technologies;
- Address all significant greenhouse gases, sources and sinks;
- Provide a reasonable level of flexibility for implementation, compliance and deadlines to aid in transitioning;
- Include a safety valve or other equally effective and responsive cost-containment mechanism;
- Address the legal, technical, regulatory, liability, infrastructure framework and other challenges for capture, transport and storage of carbon dioxide;
- Encourage the development, funding and deployment of energy-efficient, zero- and low-carbon emission and sequestration technologies;
- Expand the production and use of reliable, affordable and diverse domestic energy supplies;
- Provide for free standing legislation independent of the Clean Air Act's administrative, procedural and other provisions;
- Harmonize with other mandatory climate change policies to avoid duplicative and conflicting requirements;
- Promote global participation and encourage comparable global emission reduction action by all U.S. trading partners in a reasonable timeframe;
- Must recognize that fossil fuels are sometimes used for feedstock purposes and should be treated accordingly;
- Should not exacerbate high US natural gas prices, which are a major reason for 3 million lost manufacturing jobs in recent years;
- Encourage the use of voluntary emission reduction initiatives and ensure that companies will not be disadvantaged later for current voluntary actions;
- Give consideration to industries exposed to foreign competition if a U.S. climate change policy creates competitive disadvantages;
- Avoid multiple and extreme penalties that adversely impact economic sectors;
- Ensure transparency and open communication of policy, costs, benefits and uncertainties; and
- Accompany climate policy with policies that expand the production and use of reliable affordable and environmentally sound domestic energy supplies.
Adopted Fall 2009 Effective until Fall 2013