Tuesday, August 09, 2005

More of the same with the energy bill

Yesterday, President Bush signed into law his energy bill, a bill which will, he says, “strengthen our economy, and it will improve our environment, and it's going to make this country more secure.”

According to the New York Times , “In addition to encouraging more domestic oil and gas production, it provides money for research into technology to help burn coal with less pollution and creates federal risk insurance for companies that build a new generation of nuclear power plants.

It extends or creates tax incentives for alternative energy sources like wind, creates incentives for the use of more ethanol and finances research into the use of hydrogen to power automobiles. The bill contains incentives for oil companies to expand refineries to reduce periodic tightness in supplies of gasoline, and tax credits for conservation and energy efficiency.”

But does the bill do what Bush says it will do? The answer, I believe, is mostly no.

Democrats were wise to sign on to the bill, which actually does move us in the right direction and include a lot of beneficial provisions, such as encouraging wind and solar energy for electricity. However, as David B. Sandalow , Director of Environment and Energy Project says, the energy bill is more accurately “a grab bag of special interest favors, many of which lavish taxpayer dollars on allies of the congressional leadership… The bill showers tax breaks on domestic oil and gas producers already benefiting from record high prices. It exempts many of these producers from rules intended to protect the quality of our drinking water. It authorizes preliminary steps to explore for oil in sensitive marine areas. Perhaps worst of all, it squanders the opportunity to put forward serious legislation that would actually address our pressing energy problems.”

In other words, it does very little to actually “strengthen our economy,” since it is yet another example of wealthy corporations receiving tax breaks for doing something they would likely do anyway or are already doing. At the same time, it continues the trend in government to simply add more and more pork to every bill that comes out of Congress, regardless of its relationship to actually conserving energy. Economically, in short, I don’t see this doing very much at all.

What about improving our environment? As I say above, the bill does have many provisions that are worthwhile and in the area of environmentalism, something is better than nothing. In that sense, it is likely that the energy bill will improve the environment, but it does so like riding a bike can get you from New York to LA. The bike will get you there, but slowly, indirectly, and at an extremely high price.

How about making the country more secure? This to me is the weakest argument. The bill does NOTHING directly to truly wean our way off Middle Eastern oil, and thus we remain hostages to our own dependence. What a waste of an opportunity. As the Washington Post pointed out, “independent energy analysts cautioned that with crude oil prices hitting new highs, consumers should not expect the new law to push down gas prices or reduce U.S. reliance on Middle East oil soon, if ever.”

From the Brookings Institute: “The National Academy of Sciences said in 2001 that a roughly one-third increase in the miles–per-gallon (MPG) of new cars, pickup trucks and SUVs could be achieved using current technology, and without sacrifice of safety or comfort. If all new cars, pickup trucks and SUVs had roughly one-third higher fuel economy, it would take less than 10 years' worth of new-vehicle sales to displace petroleum consumption equal to the amount the United States currently imports from Persian Gulf dictatorships.”

Of course, I can hardly blame President Bush, or even Republicans for this kind of tax giveaway. The Democrats were in power for a long time and during that time, when it came to energy, they did much the same thing Republicans do: lots of talk about conservation and energy independence, and lots of special pork projects going home to Congressmen with no real solution. Like Healthcare and the national debt, why actually fix the problem when you can get elected just as quickly by merely talking about it?


montana urban legend said...

Good piece. This sums up the problematic constraints of relying on U.S. government action to improve the state of the environment about as well as anything written. As long as we can't do much about that politically, however, in the meantime, some of the more important consumer movements in this area are worth pointing out, including: 1) Improving consumer choice in power sources from their electricity company which now more frequently advertise the growing incorporation of renewables in the mix, 2) The organic/natural food movement, which should decrease our artificially heavy reliance on nitrogenous fertilizers that are creating dead zones in our lakes, streams and, most notably, the Mississippi delta, and 3) Repealing restrictions that prevent residents from "rolling back the meter" in reward for their own energy production or conservation efforts. A decentralized grid with decentralized production of (renewable) energy and the well-conserved usage patterns that would accompany it, implicitly encouraged at every available household, would be an incredibly innovative approach, and a libertarian-conservationist's dream! (if such a combination could exist, an interesting, if not unconventional political fusion, but completely feasible for such a scenario). There are interesting stories of schools on the plains who have been able to increase their budget for supplies etc after having installed their own windmills.

Cram said...


Well put and I agree 100%

I am comforted by the rise and popularity of hybrid cars as well. Unfortunately, there has not been a mass movement to truly look into alternative energy sources, even after the shock of 9/11. Drilling in the arctic is a short-term fix that does nothing to solve the real problem, which is simply that Americans use too much oil. As China and India continue to expand their economies and their citizens increasingly enjoy the same benefits of automotives that Americans have been taking for granted, the environmental damage will be catastrophic, and international stability will be even more heavily tied into undemocratic despots in the Middle East.

Like many national problems, solutions are available but they will require the courage of policy makers and American voters to implement. Thus far, that courage does not appear to have manifested itself.

montana urban legend said...

They will require either courage or a crisis, and the latter is more likely. Catastrophes just lead to finger-pointing ;-)

Sure, ANWAR is likely only a temporary fix, and I don't like the costs involved. I heard, however, they're looking to increase utilization of liquid natural gas, which as a fossil fuel, I still find primitive, but at least you get more BTUs per carbon polluted than oil, I hear.

Wind is the best bet. It's unfortunate that a vanity-based sense of NIMBYism gets in the way of this in crucial areas such as offshore of Boston or Long Island. If we can get to the kind of hydrogen economy that Germany envisions, that would be really cool. A car whose only by-product is water was demonstrated by the mayor of Chicago recently in one of his city's vehicles; this scenario neatly dovetails with what's possible with an energy economy fueled by renewables, with a conversion to hydrogen as the exchange medium (the way paper bills replaced barter systems), and even, depending on activity, fuel source.