March 13 2013
Ryan's Budget Offers Smart Energy Solutions
Paul Ryan’s plan to slow the rate of growth in federal spending is getting most of the media’s attention from the release of his budget. Yet Ryan’s budget plan also offers smart energy policy recommendations that would eliminate billions in harmful federal spending and could spur a flood of tax revenue.
For instance, Ryan would eliminate industry subsidies. The Congressional Budget Office estimates that the federal government spends $24 billion on energy subsidies, with “green energy” getting the lion’s share of that money ($16 billion) compared to $2.5 billion for fossil fuels. Given that wind and solar industries produce much less energy than fossil fuels, taxpayers get a particularly bad deal from these subsidies. In fact, taxpayers pay 100 times more per-unit of energy created for wind and solar energy than for conventional energy. These handouts -- and all handouts to energy industries -- are unnecessary, distort the market, and ought to be eliminated.
While these subsidies must be eliminated to spur real competition within the energy industry, that’s not the only policy that should be changed. Ryan explains that approving the Keystone pipeline would increase our supply of affordable gas and contribute $5.2 billion in tax revenue. The federal government is also sitting on federal lands that could be leased for oil and gas production. As explained in the Ryan budget:
While U.S oil production is at its highest levels in two decades, 100 percent of this increase is due to production on non-federal lands. Meanwhile, the federal government owns nearly one-third of the land in the country. That is an area roughly four times the area of the state of Texas. Substantial volumes of oil and gas are known to lie under these government lands.
Opening federal lands for oil and gas leasing could contribute $14.4 trillion in increased economic activity, and thus be a way to increase tax revenue without raising taxes.
Ryan’s approach to energy policy would do more than help solve our fiscal crisis; it would free up energy markets to compete and produce affordable, reliable energy. That's a boost American families, manufacturers, and job creators could use right now.