CONGRESS'S ENERGY FOLLIES
June 22, 2007
If the American people are suspicious of bold pledges from Washington about energy independence and reform, they have good reason to be. Since the first energy crisis almost 35 years ago, our nation has had a very expensive education in such matters, say J. Bennett Johnston and Don Nickles, former senators from Louisiana and Oklahoma, respectively.
Yet, the agenda presented thus far from some corners is disappointing, and will only lead to further problems. For instance:
- "Price-gouging" laws only create long waiting lines and economic chaos across all industries; the current debate completely avoids these paramount issues, instead focusing on punitive measures that will not add one new drop of gasoline or decrease fuel prices.
- Mandates for alternative energy present a least-optimal path to progress; Congress knows Americans would choose current rates of alternative energy use over "forced" alternative sources -- hence, Congress would rather force the nation's energy providers to deliver the bad news for them in the form of higher monthly utility bills.
- Rapidly accelerating renewable fuel standards like corn-based ethanol can lead to a host of problems, including transport costs, actual gains in energy efficiency, the impact on food, livestock feed and natural gas prices, and lingering environmental implications.
- Windfall profits taxes will only lead investors and shareholders to lose confidence and simply shift their money elsewhere; according to the Congressional Research Service, similar policies put in place between 1980 and 1986 reduced domestic oil production by 1.26 billion barrels and increased oil imports as much as 13 percent.
Opportunity still exists to forge a sound and stable domestic energy program that benefits consumers, industries and our economy, say Johnston and Nickles. Hopefully Congress can embrace past lessons and forge pragmatic and workable solutions while keeping this in mind.
Source: J. Bennett Johnston and Don Nickles, "Congress's Energy Follies," Wall Street Journal, June 22, 2007.
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