By: Lindsay Heebner

On August 30, 2012, President Obama released an Executive Order entitled “Accelerating Investment in Industrial Energy Efficiency.” The order sets forth goals that could double industrial energy efficiency.  According to the Administration, if these goals are met energy costs could be reduced by $10 billion annually and spur $40 to $80 billion in private investment.

Specifically, the order aims to increase combined heat and power technology. Rather than using two different sources to create thermal energy and general power, combined heat and power technology uses just one fuel source for both needs. This uses less energy, lowers costs, and lessens pollution. The order calls for an increase in capacity of combined heat and energy to 40 gigawatts by 2020. That would result in a 50% increase compared to current use. Several large manufacturers, hospitals, universities, and refineries already use this technology, but there is great potential for expansion. In addition, the Order asks certain agencies to convene major stakeholders to identify best practices for energy efficiency and implementation of combined heat and power technology. This measure is intended to grant flexibility in meeting the goals of the Order. Because industry stakeholders can meet with agency heads to express opinions on the best methods of implementation, they can avoid a one-size-fits-all solution and maintain flexibility.

Although energy efficiency policies usually have wide bipartisan support, energy efficiency legislation has been stymied in this election season. Increased energy efficiency could help industry combat power outages or shortages, and, according to a Department of Energy study, create one million skilled jobs. These are common goals both parties support; however, Republicans hoping to reevaluate the tax code have been hesitant to pass energy efficiency legislation, as many energy policies are implemented through tax incentives. Adding such energy efficiency legislation which would be effectuated through the tax code would hinder their efforts to reform taxes.

A few bloggers and journalists see Obama’s track record on energy programs as dismal (see article). They note that several solar panel companies have gone out of business during the President’s first term and that promised electric cars, like the Chevrolet Volt, have produced rather low sales. However, the Executive Order’s policy move may gain support because it relies on private industry to develop methods of reaching the goals. In addition, the Order has potential for industry heads to assist agencies in drafting policies with realistic, flexible methods.

Energy groups, such as the Pew Clean Energy Program, are applauding the Order as a step in the right direction for energy policy. Program Director Phyllis Cuttino believes that this type of policy makes sense for creating jobs and saving resources. She also believes that this could prompt significant industry investment. Others see the use of an executive order to achieve changes in energy policy as a means of sidestepping Congress. Using an executive order could be seen as an abuse of power, forcing action where Congress has refused to go forward. Other bloggers and journalists have even classified the move as tyrannical or dictatorial (see article).

Obama is certainly not the first President to issue executive orders, nor the first President to use them as a means of accomplishing that which Congress refuses to do. That many Presidents have used executive orders to effectively move forward with shelved policy and legislation emphasizes the complexity of our legislative and regulatory processes. However, many have expressed concern over this use of executive power and have called into question the balance of powers upon which we base our government. If the use of executive orders in this manner is upheld, the legislative and regulatory processes could also be manipulated to address the President’s use. Is this an executive abuse of power or a problem of Congressional incompetence?