Posted: 12/24/2007 | Author: H. Sterling Burnett
Energy Bill Is A Job Killer
Originally Published in: Republican American
Americans are demanding that Congress do something to address high gasoline, natural-gas and electricity prices. Sadly, rather than increasing supplies and reducing prices, Congress is paying off politically influential constituencies - environmentalists, Big Agriculture and select high-tech and banking firms - while actually increasing prices at the pump and raising heating and electricity bills.
The result: not even a piece of coal, but a real clinker in every American's mantelpiece stocking.
High energy prices are slowing economic growth and consumer spending. Yet according to the U.S. Energy Information Administration, the bill's regulatory and tax provisions will make it more difficult and expensive to develop new oil and gas fields. This will reduce domestic production and thus increase our reliance on imported fuels.
An independent appraisal of the Senate bill's provisions indicates the original version would have cost the economy $1 trillion and result in more than 5 million Americans losing their jobs.
Only Congress could keep a straight face pretending higher taxes and new regulations on domestic exploration, production and refining will result in more oil and gas, lower pump prices and greater energy independence.
Fortunately, facing a Republican filibuster, the Senate Democratic leadership jettisoned the regulatory and provisions passed by the House, so the bill could have been worse.
What type of energy production does Congress promote? Will it allow industry to tap the vast oil reserves under the crust of the Outer Continental Shelf and the Arctic National Wildlife Refuge.
No. Congress is pushing ethanol. Under the latest bill being considered, the mandated use of 8 billion gallons of ethanol in gasoline blends today would rise to 36 billion gallons. Is this a good idea? The U.S. Department of Agriculture estimates ethanol production requires 75 percent as much energy as ethanol provides, for a net gain in usable energy of 25 percent.
Since ethanol contains 35 percent less energy than gasoline per volume, it would take much more than 36 billion gallons of production to displace 20 percent of current gasoline demand, let alone the 20 percent of the one third-increase in gasoline use estimated to occur over the next 20 years. We are far more likely to be able to drill, rather than grow, our way to greater energy independence.
In another attempt to reduce our reliance on foreign oil, Congress is mandating an increase of the Corporate Average Fuel Economy Standard from 27.5 mpg for cars and 22.2 mpg for light trucks to 35 mpg for both.
History shows increasing CAFE standards will not decrease our reliance on imported oil. Improved fuel economy makes driving cheaper. When driving becomes cheaper, people drive more. Accordingly, the share of imported oil has risen from 35 percent of the oil consumed in the U. S. to nearly 60 percent.
The only result of increased CAFE standards will be reduced consumer choice as automakers end production of less fuel-efficient, but more family-friendly, safe and comfortable sedans, SUVs and minivans.
This is why even Toyota, the company touted as having the line of cars with the highest fuel economy, fought raising CAFE standards to this level. Besides, people already may choose fuel-efficient cars if they want them. More than 60 models sold today get more than 30 mpg, and more than 30 exceed 40. Yet none is a best-seller because most people choose vehicles based on factors other than fuel economy.
Congress should unleash the power of the market to provide more abundant, reliable, relatively inexpensive energy to the public. Instead, it seems intent on paying off Big Green.
Vital U.S. industries, motorists, highly skilled workers and those on fixed incomes ultimately will pay an exorbitantly high price for such legislative ineptitude.