NCPA - National Center for Policy Analysis


March 9, 2009

President Obama's need to create green jobs will result in expanded subsidies to renewable energy providers as well as money for automakers to retool alternative fuel vehicles and for the construction of a national grid.  However, renewable energy already receives more dollars in subsidies per the amount of energy delivered than any other source of electricity, and they still cannot compete in the marketplace, says H. Sterling Burnett, a senior fellow with the National Center for Policy Analysis.

For example:

  • A national grid could become a danger to property rights; it will not always make sense to run power lines across public lands, even if it's the best route, which leaves only private property, thus resulting in eminent domain issues.
  • While it's unlikely that the administration will ban all new offshore exploration and production, we might see a more limited ban on new offshore production.
  • With dramatically lower oil prices and an expanded Democratic majority, the administration will likely try to place at least some areas off limits -- e.g., within 50 miles of the U.S. coast, and off the West coast and the Northeastern seaboard entirely.
  • Moreover, don't be surprised to see Congress hold a new spate of hearings into "profiteering" by big oil and renewed calls for a windfall profits tax as a way to force the industry to focus on alternative energy.

The common thread is that the cost of each will likely exceed its benefits, resulting in unintended negative environmental and economic consequences while producing insufficient and unreliable energy to meet the needs of a growing economy, says Burnett. 

Source: H. Sterling Burnett, "Will Energy Policy Continue to Be an Obstacle to Energy?" In "13 Questions That Advocates of Free Markets and Limited Government Should Be Asking," The Insider, Winter 2009.

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