President Obama steps on the gas after switching gears in energy policy this year. As I blogged last week, the new Clean Energy Scheme, President Obama announced in his SOTU address, is poised to pick up where cap-and-trade initiatives failed.
Clean Energy Standards (CES) which mandate that certain proportions of electricity come from specified lower-emissions sources (e.g. nuclear, natural gas, renewable, etc.) have a higher likelihood of garnering enough support to pass through Congress, because they promise favorable production terms (higher profits!) and subsidies (profits financed directly by taxpayers!) to many more influential energy producers than renewable energy standards did. CES legislation allows both, Democrats and Republicans, to cater to their powerful friends in the energy sector, who have deeply vested interests in forcing their higher-cost energy on US consumers and taxpayers.
Today, President Obama is meeting with Senate Energy and Natural Resources Chairman Jeff Bingaman (D-NM) to discuss energy matters from offshore oil and gas drilling to Clean Energy Standards. Predictions based on the President’s track record tell us that instead of getting our hopes up high, we should expect to have to shell out even more dollars for energy, despite our already starved wallets.
While President Obama has his foot on the gas pedal, burning ever more taxpayer dollars on his ambitious, yet misguided, path for the country, more and more regular Americans are forced to step off the gas as oil prices continue to rise. The Heritage Foundation points out the irony in that CES legislation would increase the cost of operating an electric vehicle, and explains what a better approach to energy policy would entail, in today’s “Morning Bell:”
Allowing Americans to develop [offshore oil and gas and on-land) resources could easily produce at least 1 million new barrels of oil a day. The Heritage Foundation’s Center for Data Analysis estimates that, if the United States managed to increase its domestic oil production by 1 million barrels a day, it would create an additional 128,000 jobs and generate $7.7 billion in economic activity. …
CES is just another cap-and-trade, energy-tax-like policy, except it’s all cap and no trade. A CES would mandate that all electricity providers generate a certain percentage of energy from carbon-free sources. Just like cap and trade, this policy is fundamentally just an energy tax that would drive up everyone’s electricity prices. Ironically, this would make electric vehicles even more expensive to operate, but we’re sure the Obama Administration would offer another round of taxpayer-funded subsidies to fix that problem.
Government policies that ban economically feasible energy development while subsidizing economically unsustainable ones only raise energy costs rather than lowering them. What the U.S. economy really needs is a truly free-market energy approach, one that includes (1) real nuclear energy reform, not more loan guarantees; (2) predictable and sensible coal regulations; (3) reduced regulation on renewable energy; (4) an end to all energy subsidies; and (5) common-sense limits to environmental litigation.