Yesterday, over at Townhall.com, IWF’s Carrie Lukas took a close look at the energy bill currently being debated in the Senate. Customers are increasingly frustrated with high gasoline prices, but as Carrie points out, the energy bill might make matters even worse:
This bill (crafted behind closed doors during the Thanksgiving holiday to avoid any public scrutiny) doesn’t offer any solutions to the problems of rising gas and heating prices, and in fact will make problems worse and consumer hardships more painful. Energy prices have been on the rise due to an increase in demand. To bring prices down, the United States needs to increase supply. Yet this energy bill does nothing to increase supply, which is why the Republican opposition dubbed the legislation the “no energy” plan.
In fact, according to an analysis by CRA International, the additional taxes on the oil and natural gas industry and restrictions on drilling contained in this legislation could lead to a decline in oil production of 4% from baseline levels and 2% decline in domestic natural gas production between 2010-2020. This would mean that consumers would be competing for a smaller pool of energy and therefore would see prices rise higher.
Higher fuel costs will have serious consequences for the broader economy. Increased energy prices ripple into just about every sector and daily staple of life since consumers would be bearing the increased costs associated with transporting goods across the country, keeping the factories running, and ensuring the office lights stay on. All told, CRA estimates that the proposed legislation would create a net loss of nearly 5 million jobs, decrease the average households purchasing power by $1,700, and cost the economy nearly one trillion dollars by 2030.