Energy Should Be Job One for the New Congress

Commentary by H. Sterling Burnett

Source: Energy Tribune 

Most people argue that getting the economy back on track should be the new Congress's first order of business. Yet no one seems to agree on how to do so. I suggest that the 112th Congress look at energy policy as job one to secure the economy for now and the future.

Our economy was built on and our lifestyles depend upon relatively inexpensive, abundant, reliable sources of energy. Looking just at the fossil fuels oil and natural gas, they are critical for transportation and, increasingly for electricity, but they also serve as feedstock for plastics, pharmaceuticals, fertilizers, lubricants and construction materials.

With this in mind, here are a couple of steps Congress could take to improve the reliability and reduce the costs of energy.

First, Congress should halt the EPA's climate regulations in their tracks.

Majority leader Reid reneged last year on his commitment to his Democratic colleague Jay Rockefeller to allow a vote on his bill to delay the EPA greenhouse gas regulations for two years. Now the EPA is moving forward with rules that will raise energy prices (even more than the Obama administration's drilling ban already has) and put people out of work as we struggle to come out of the lingering economic malaise.

The vast bulk of independent research indicates that allowing the EPA to move forward with the agency's climate rules would make energy more expensive. Facing rising energy costs, some businesses will cut jobs, meaning people will lose their health insurance and fall into poverty. Poverty and the lack of access to good nutrition, medical care and the basics of life all of which require energy to produce or transport, results in thousands of cases of premature death each year.

Congress and Congress alone is given the Constitutional authority to regulate interstate commerce and unless and until Congress decides to take action, the EPA should not be allowed to go forward with its power grab.

A frontal assault on the rules - for instance, a law prohibiting the EPA from regulating greenhouse gases - seems likely to fail since President Obama has indicated he would veto such a bill. And why not, he is using the threat of regulations to force Congress to enact his version of greenhouse gas legislation. It's extortion par excellence.

Instead, Congress should develop a bill that prohibits the EPA from expending any resources or funds, enacting or enforcing greenhouse gas regulations unless and until Congress itself writes a law specifically addressing greenhouse gasses. Then, it should attach this bill as a rider to every must pass piece of legislation it takes up. It is doubtful that the President would veto an increase in the debt limit, for example, or funding bills for various agencies, just because it contained language halting the EPA regulations.

Second, Congress should end its love affair with so-called green energy and the misplaced belief in the myth of green jobs. This presents us with some difficulty as the lame Congress has already acted to make our energy situation worse. Republicans seem to have learned little from the elections. Rather than holding out for a clean bill continuing the Bush era tax cuts - something they would have gotten with the new Congress, instead they allowed the Democrats to load the bill down with green pork. In a time the public is clamoring for fiscal restraint and federal downsizing, Congress continued a variety of grants, subsidies and mandates for wind, solar, ethanol and other less reliable, more expensive energy sources. Research shows that these subsidies kill more jobs than they create. For instance, a 2009 study from Madrid's King Juan Carlos University found that for every green job the government "creates," 2.2 jobs are lost in competing industries as factories lay off workers to cover the higher energy costs of the green technology or move their plants overseas. In addition, only 10 percent of those green jobs were permanent with the average green job adding nearly $750,000 in costs to consumers' bills.

In Denmark, about 28,400 people were employed in the wind industry, but only about 1 in 10 were new jobs - the remaining 90 percent were simply positions shifted from one industry to another. Worse, Danish gross domestic product was about $270 million less than it would have been if the wind industry work force were employed in other sectors.

The 112 Congress should look at these subsidies anew and treat all energy sources equally by ending subsidies for them all. There is never a good time for bad policy like the EPA greenhouse gas regulations or the recently resurrected subsidies for green jobs, but there are better and worse times and this is among the worst for this type of pandering to the big green lobby.