Someday, we'll have honesty in political speech. Maybe. But it is not this day. In a glourious demonstration of "you can have your cake and eat it, too" speech, check the first two paragraphs in this article:
WASHINGTON (MarketWatch) -- House Democrats on Thursday won passage of a wide-ranging energy bill that would require the first increase in automobile fuel-economy standards in decades. But the package faces a likely presidential veto due to provisions that repeal tax breaks for oil companies and require utilities to produce a large chunk of electric power from renewable sources.
"This legislation is not perfect ... However, when we pass this bill, we will be voting to strengthen our national security, lower energy costs, grow our economy and create new jobs, and begin to reduce global warming," said House Majority Leader Steny Hoyer, D-Md., ahead of the vote.
Consider:
-Changing Fuel Economy standards (by 2020, no less) won't reduce energy prices, or reduce Global Warming in any meaningful way (the UN says we need to make drastic changes by 2015 to prevent serious climate changes, and a standard in place by 2020 won't become mainsteam until 2030 because of the market in used cars... a market likely to grow once more expensive, efficient autos are the only new versions available).
- Raising taxes on oil companies will make gas more expensive, not "reduce energy prices."
- Requiring utilities to produce a large ammount of power (15%, I think) from renewable sources will make energy much more costly. The reason we don't use much renewable energy now is that... it's expensive. It's significantly more expensive than traditional fuels - especially without tax incentives - because it's less efficient.
-Strengthen National Security?! That statement should be laughed out of the room. When we reduce oil consumption, the losses will occur where drilling oil is expensive - like the U.S. - not where it is cheap, like the Middle East. This means lost jobs, and a larger % of our oil being foreign-based.
I don't have anything against renewable energy - I think it's a good idea. But this is a great example of costly bluster from Congress which will have negative, predictable consequences that no one in favor of the bill would dare to mention: in this case, substantively higher energy prices.
The easiest, clearest, most honest way to reduce global warming and oil consumption, while encouraging reasearch into alternative fuels is to make it (oil and/or energy) expensive. If these bills work at all, it's because they will cause that to happen.
Congress likes limits and mandates, because it requires no owning up to the damage they cause. That is cowardly, and shameful behavior.
2 comments:
Dave--great blog--thanks. I'd like to add some minor comments. Politicians are likely to exaggerate these baby steps to a new energy economy. Renewable energy is not currently significantly more expensive than fossil fuel energy--in electricity markets, the difference is in pennies per kwh. Higher fossil fuel prices or renewable mandates may be just the thing to tip the balance of investment and research to the renewable (or nuclear) side. When you consider the hidden costs of using fossil fuels (environmental damage, hidden subsidies, wars in the Middle East) renewables may already be cheaper.
On national security, most hawks disagree with you--reducing oil consumption may very slightly change the geographic distribution of production, but the real benefit to national security would be the drop in cash flowing into some of the world's most repressive states.
And you're absolutely right about the way politicians avoid talking about the necessary role of fossil fuel price rises. But your last paragraph is an overstatement. The cost of limits and mandates can be measured, and when conservatives in the Office of Management and Budget measured the costs and benefits of major environmental regulations, they found that the benefits exceeded costs by a factor of almost 20 to 1!
Thanks for your thought provoking blog!
Thanks for visiting and commenting.
I respectfully submit that most hawks are wrong. The geographic distribution changes as the price fluctuates, but a drop in the price of any commodity will crowd out the expensive sources of it, while leaving untouched (except for lower sale prices) the cheap sources of it. Since oil's a fungible commodity, this is true of it.
So we may in fact reduce the $ flowing to politically hostile states, but we increase the % of oil we get from them. This is not a reliable path to energy security, as it puts us on the same path as the 70's, when foreign governments dictated prices much more than they are able to today. Interestingly, I think it's this more globalized production that has kept the US economy from suffering from the current high oil prices the same way it did in the 70's.
On the other hand, high oil prices mean more $ to hostile states, but it also means that production from alternate sources (such as the oil sands and shale in Canada) becomes worth investing in. High energy prices also encourage, without a single push from Congress, investment in new forms of energy, like solar, pebble-bed nuclear, wind, geothermal, efficient cars, and more.
When gasoline is cheaper than milk or water, we don't have as much incentive to alter our own lifestyles to reduce our consumption of it. But it's in individuals choosing to restrict their own usage - simply because it's expensive - that MUST happen to see any significant change in consumption. Give a gas-guzzler a more efficient car, and they are likely to increase their driving, simply because it's now cheaper for them. Their overall consumption may drop some... but my bet is that it wouldn't be as much as CAFE hawks would like to think.
I perhaps engage in some hyperbole at the end of the post. But by and large, I stand by my statement. The benefits may outweigh the costs (I'd love to see a link to the OMB study you mention: it sounds interesting), but that doesn't mean we can pretend there are no costs. 1 to 20 is about a 5% ratio. 5% is a big effect in the big picture. A 5% drop in our GDP would put us in a *serious* recession right now (as we're growing around 1.5% to 4% right now).
"Little Costs" is VERY different from "No Costs." And that difference alone is one no politician would dare address.
No significant energy changes will come until energy becomes more expensive. Politicians pretending to make great headway while being unwilling to confront this truth waste their time and ours.
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