Every day we walk into a room and turn on the lights. Do you ever think how the power for the lights is provided? In America, it is easy to take for granted the reliable sources of power. However, America’s power plants have been undergoing a revolution over the past fifteen years.
In June 2005, oil prices set new highs of $60 per barrel and oil prices were forecast to go substantially higher. On August 8, 2005, President George W. Bush signed the bipartisan, Energy Policy Act of 2005. The new energy law was developed over concerns over energy security, environmental quality and economic growth.
The Energy Policy Act provided $14.5 billion in tax incentives to encourage domestic energy production and efficiency. The tax incentives were provided for energy efficiency and conservation, renewable energy, oil and gas, coal and nuclear power.
The act resulted in technology breakthroughs in the oil & gas and renewable energy sectors. In the oil & gas sector, hydraulic fracturing (“fracking”) reversed America’s declining domestic oil & gas production. In the renewable energy sector, new technology improved the operating efficiency and output capacity for wind turbines and solar panels.
The Energy Policy Act of 2005 was the beginning of an energy revolution in the United States. In August 2005, electricity in the United States was generated from coal (50.7%), nuclear energy (19.9%), natural gas & oil (19.0%) and renewable energy (10.4%).
Utilities began to abandon expensive coal and nuclear power, as technology drove down the cost of renewable energy and natural gas. In April 2019, electricity in the United States was generated from natural gas & oil (47.77%), renewable energy (21.56%), coal (21.55%) and nuclear energy (8.95%). More importantly, greenhouse gases in the United Stated decreased 12.5% from 2005 to 2019.
The Energy Policy Act of 2005 marked the beginning of America’s energy revolution. Today, the cheapest forms of power in the United States without any tax incentives are onshore wind, solar energy and hydropower. The cost for electricity from coal-fired power plants is more than double the cost.
In May 2019, the Federal Energy Regulatory Agency (FERC) issued a three-year energy forecast for the United States. The FERC forecast that renewable energy capacity would grow by more than 10% by 2022. Coal-fired power will continue to decline, while there will be a modest increase in the use of natural gas for power. America’s energy revolution began in 2005 and is forecast to continue into the foreseeable future.
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