Today’s energy costs are impacting American hotels and their guest’s ability to travel.  Congress needs to enact policies that produce more new energy resources and encourage conservation of our existing energy supplies.

SUMMARY

Energy has become the biggest issue in America.  And for good reason:  besides today’s high petroleum costs, we will need more energy sources over the next 20 years if we are to sustain our nation’s economic growth.

The U.S. hospitality industry spends almost $4 billion each year on energy to power everything from guest room lights to golf course maintenance equipment.  We depend on affordable energy to maintain a superlative standard of comfort for our guests and employees. 

The industry is also a leader in environmentally-friendly energy policies. Its members have taken proactive steps to reduce energy consumption and developing green programs and policies.  The industry is implementing sustainable solutions which meets consumer business demands and improves the health of our planet. 

The U.S. hotel and lodging industry does not exist in a vacuum.  Our business successes are linked to the overall health of the American economy.   The high costs of petroleum fuels are affecting our business from a number of directions.  Besides direct purchases of goods and services by hotels, the industry is dependent on business travel budgets and the ability of Americans to take affordable vacations.  Both of these categories are influenced by the overall health of the national economy.  And when Americans can’t afford to travel because they are spending a record-breaking amount of money for energy this year, that decision will affect our members.

For hotel operators, the increased cost of fuel adds to an ever-increasing cost of running a business. Increased costs and reduced visitation are forcing business operators to make difficult decisions such as reducing or delaying hiring staff.

For many years, Congress has been engaged in debate over our national energy policy.  2005 saw the enactment of the last major energy bill, the Energy Policy Act.  Since then, we have seen a meteoric rise in gasoline prices, an increase in electricity costs, and continued worries over where our nation will find its future energy supplies.

Congress must put aside partisan bickering and quickly find solutions to our immediate energy problems.  And when Congress undertakes new legislative activity, it needs to begin a serious debate about where our nation will derive its energy supplies over the next 20 and 30 years.

Many state and local goverments are adopting EPA's ENERGY STAR tools to seek reductions in energy use in commercial buildings like hotels.  This EnergyStar.gov document provides a quick summary of state and local legislation that use ENERGY STAR programs to track energy use, energy costs, and energy perfomance targets in new and existing structures. 

In the 110th Congress, Congress did not introduce another major stand-alone energy bill.  Both parties ntroduced legislation that attempting to address certain immediate energy issues, such as offshore drilling or repealing tax incentives used by the oil industry.  Other legislation addressesdnuclear energy, streamlining the refinery approval process, or reining in oil speculation through regulatory changes in the futures markets.

Both the Democrats and Republicans have good ideas for reducing energy costs and we need to look at all of them.  Energy conservation goes hand-in-hand with increased oil and natural gas exploration.  The need to reform energy futures markets does not mean we cannot also give incentives to companies to develop alternative sources of energy.  It is our belief that AH&LA’s pragmatism towards finding solutions for this critical issue transcends partisan politics and broadcasts to the American public that there is common ground on this important national issue.

In July 2008, AH&LA released the association’s first-ever statement on energy policy.  Actions Congress and the Administration must consider to alleviate energy costs include:

• Increase domestic oil and natural gas production that will reduce our reliance on foreign sources of energy;
• Encourage oil and natural gas exploration in new areas and where drilling licenses have already been granted;
• Provide greater positive incentives through the tax code for development of alternative sources of energy;
• Provide incentives for businesses that implement greater energy conservation programs, policies, or tools; and
• Penalize unscrupulous price gouging and energy speculation.

Congress needs to act immediately to pass legislation that will keep energy prices within fair market values.

More than 360 bills on energy efficiency and renewable energy were introduced in the 110th Congress. About one-third of these bills were focused on renewable fuels and about one-third would provide a tax incentive for investment, energy production, fuel use, or fuel reduction.  Most never made it out of committee.

H.R. 6 has been the only major piece of omnibus energy legislation passed into law in the 110th Congress, signed by President Bush in December 2007.  It offered the first new auto fuel efficiency standards in 32 years, increased building efficiency standards, and opened a commitment to increased bio-fuels use. The omnibus “Farm Bill” signed into law in May 2008 (H.R. 2419) extended, expanded, and added to several energy efficiency and renewable energy provisions of the Farm Security Act of 2002.

CURRENT STATUS 

In the 111th Congress (2009-10), legislation to specifically address energy development has not been introduced.  Instead, the Democratic leadership has turned its attention to climate change legislation, addressing the demand side of the energy equation, instead of the supply.

A major climate change bill, the American Clean Energy and Security Act (H.R. 2454) narrowly passed the House 219-212 on June 28, 2009.  The vote marks the first time either chamber has passed a bill to cap the emissions of greenhouse gases. The bill would limit emissions at 17 percent below current levels in 2020, 42 percent in 2030 and 83 percent in 2050.

The bill, also known as the Waxman-Markey clean energy bill, also would allow companies such as electric utilities, refineries and factories to buy and sell pollution allowances and get credit for funding special projects to reduce emissions on farms and in forests. The legislation would require utililities to produce 15 percent of the nation’s electricity from renewable sources by 2020, with another 5 percent energy savings from efficiency.

The bill also mandates that new office and commerical buildings--including hotels--must be 30% more efficient by 2012.

The bill passed was the product of months of negotiations with members in both industrial and rural districts. It faces even tougher odds in the Senate, where similar disputes among moderate Democrats are expected and where some Republican support will probably be needed.  Senate Majority Leader Harry Reid (D-NV), and Senate Environment and Public Works Chairwoman Barbara Boxer (D-CA), are already working with moderate Democrats to craft a compromise. 

However, the current legislative outlook for H.R. 2454 in the Senate is not favorable.  Heavy opposition from businesses is causing enough Senators to publicly oppose the bill, and the Senate's tight schedule, the continuing delays in other major legislation, and the 2010 elections are causing this bill's progress to severely slow down.

CALL TO ACTION

Our nation’s legislature has to start somewhere to address these costs this year.  But Congress must also open up more areas to oil and natural gas exploration and it must continue to give incentives for businesses and homes to save and conserve energy.  There are short-term actions Congress needs to take before it adjourns this year and it must be bold in its accomplishments.

With respect to H.R. 2454, AH&LA and others in the business community are watching the bill's progress and will weigh in with their position on the bill when it comes up for debate in the Senate in 2010.  AH&LA did not publish an opinion on the House bill.

AH&LA would like any climate change or energy efficiency legislation to include:

• Tax credits and incentives for energy efficiency
• No building code mandates
• Support of voluntary Federal efficiency programs (such as EPA’s Energy Star, fair green travel purchasing)

As an AH&LA member, we strongly hope that you will join our grassroots efforts to maximize our effect on Congress.  Click on the hotelLOBBY icon to your left, which will take you to our grassroots action Website.  We have drafted an email or letter that you can send to your Senators and Representative urging them to take action on energy issues this year.

When you join hotelLOBBY, you become a vital part of our efforts on Capitol Hill.  And with a small portion of your time, you can help influence the debate in Congress on this issue and many others that affect our industry.

For more information, contact Kevin Maher, AH&LA Senior Vice President of Governmental Affairs, at (202) 289-3147 or kmaher@ahla.com.

(Updated December 2009)