NCPA - National Center for Policy Analysis

Regulations Should be Eased to Increase Energy

April 28, 2003

By the looks of the recently passed House energy bill, Congress has apparently gotten carried away and wants to return to Carter-era energy subsidies, according to the Wall Street Journal.

The legislation opens up a corner of the Arctic to oil drilling. But larded alongside are $19 billion in corporate tax goodies and another estimated $47 billion in spending, which add up to the biggest federal meddling in energy markets in decades.

More than two-thirds of the tax breaks will reward traditional fossil fuel companies for doing what comes naturally:

  • Some $8.6 billion will go to oil and gas companies for daring to produce oil and gas.
  • About $2 billion will go to utilities for generating electricity.
  • Around $1.5 billion will go to the nuclear industry for dealing with nuclear power.

If it seems strange to pay companies to produce what the market already demands, consider that the bill also pays companies to produce things the market doesn't.

  • The House is proposing nearly $5 billion in tax subsidies for wind power and "biomass" (power from crops).
  • President Bush gets $1.8 billion to investigate his distant dream of hydrogen power.
  • Other highlights include a grant to study the "feasibility" of burning old carpets in cement kilns, as well as an order for the Secretary of Energy to help investigate how to turn straw and chicken fat into "biopower."

In order to increase the supply of energy, the Journal recommends removing or easing the many regulatory and environmental barriers imposed on production. As the Reagan years of energy deregulation showed after the fiasco of the 1970s, companies that are free to innovate and compete in fields that make economic sense are the surest way to affordable energy.

Source: Editorial, " That '70s Show," Wall Street Journal, April 28, 2003.

For text (WSJ subscription required),,SB105149453034067800,00.html


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