Feds face steep challenges meeting new pollution targets

Financial restrictions and security requirements create impediments for federal managers trying to cut greenhouse gas emissions as required by the Obama administration, agency officials told Sen. Tom Carper, D-Del., during a hearing on Wednesday.

President Obama has charged federal agencies with leading the effort to move the nation to a clean-energy economy -- one that minimizes petroleum use in favor of renewable sources. In October 2009, he signed executive order 13514, which established targets for reducing greenhouse gas emissions. By 2015 agencies must cut recycling and waste 50 percent; by 2020 they must reduce vehicle fleet petroleum use 30 percent and improve water efficiency 26 percent; and by 2030 all new federal facilities must produce at least as much energy as they consume.

Under the order, agencies submitted pollution reduction targets to the White House in early January, using 2008 energy consumption data as a baseline. On Friday, the White House announced that the aggregate target will require the federal government by 2020 to cut heat-trapping emissions by 28 percent. Achieving that goal will save taxpayers between $8 billion and $11 billion in energy costs, and represents the equivalent of taking 17 million cars off the road for a single year, according to the announcement.

The executive order builds on energy reduction targets previously established in the 2005 Energy Policy Act and the 2007 Energy Independence and Security Act.

The new standards will cut energy consumption, reduce heat-trapping pollutants in the atmosphere and save money, said Nancy Sutley, who chairs the White House Council on Environmental Quality.

As the single-largest energy consumer in the country, the federal government owns nearly 500,000 buildings, operates more than 600,000 vehicles, and spends more than $500 billion annually on goods and services, giving it considerable economic clout, Sutley told Carper, chairman of the Senate Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security.

But meeting the goals won't be easy, officials said during Wednesday's hearing. Dorothy Robyn, deputy undersecretary of Defense for installations and environment, said security is "a running theme" in the push back she gets from department managers who not only have to meet energy reduction targets, but also are responsible for securing both data and facilities. With Defense owning more than 300,000 buildings in the government's inventory, that's a critical issue.

"We buy Energy Star appliances, and then we disable the [conservation] features for security reasons," Robyn said. Likewise, high-tech meters designed to measure and regulate energy and water for optimum use can create vulnerabilities in information technology systems, she said.

Those issues must be addressed before Defense can meet conservation targets in some areas, Robyn said.

Financing necessary investments to reap long-term energy savings is another challenge, said Richard Kidd, who runs the Federal Energy Management Program at the Energy Department. Defense has been able to finance renewable energy projects on military property by entering into 20-year power purchase agreements, under which private developers build and operate solar, wind or other renewable power-generation projects in exchange for the department's commitment to buy the power produced. But civilian agencies are prohibited from entering into such agreements for periods longer than 10 years. Because it typically takes more than one decade for a company to realize a return on an investment in renewable energy, civilian agencies essentially are locked out of reaping such benefits.

The annual appropriations process also makes it difficult for agencies to fund capital improvements that could take years to show a return in energy savings, Kidd said. As a result, agencies often finance upgrades through energy-savings performance contracts, where a private company assumes the upfront capital investment in exchange for a share of the long-term savings.

While the contracts can be appropriate, they aren't always a good deal for taxpayers in the long run, the Government Accountability Office has found.

Kidd urged Carper to give civilian agencies the same authority Defense has to enter into 20-year power purchase agreements, and to create more financial flexibilities for agencies seeking to make capital improvements that will reap long-term energy savings.

The good news is federal leaders are committed to meeting energy conservation targets. Carper cited a recent survey conducted by the Government Business Council, the research arm of Government Executive Media Group, which found that managers rank the importance of green government initiatives as high as key priorities like financial management and physical and IT security.

But the survey also showed that more than half of respondents said green initiatives needed more accountability along with clear performance measures.

Agencies must submit detailed "strategic sustainability performance plans" to the Council on Environmental Quality and the Office of Management and Budget in June. Plans are to describe specific actions agency officials will take to meet greenhouse gas reduction targets. OMB will measure and report progress using a score card process.