NCPA - National Center for Policy Analysis

A Decent Energy Bill?

May 22, 2002

During the next 20 years, U.S. oil consumption could grow by one-third, and electricity demand could grow by more than 45 percent. The administration has proposed a balanced energy plan: of 105 recommendations, 42 encourage conservation and promote environmental protection; 35 deal with diversifying the U.S. energy supply and modernizing infrastructure.

The House of Representatives and the Senate have passed different measures, which are now awaiting action by a conference committee.

Both bills forgo increasing fuel efficiency standards, which would not decrease U.S. dependence on foreign oil and might force drivers into smaller, more hazardous vehicles. And Senators restrained pork-barrel spending better than their counterparts in the House.

However, the House's bill is far closer to the president's plan. The problem with the Senate bill isn't so much the amount of money it would spend but the types of programs it proposes.

  • Although renewable energy makes up less than 2 percent of America's resources (despite billions of dollars of subsidies), the Senate mandated that renewables constitute at least 10 percent of the U.S. energy portfolio by 2020 -- which would make energy much more expensive.
  • In addition, the Senate bill mandates tripling the use of ethanol in motor fuels, which would not help the environment, but would significantly raise gasoline prices.
  • The House bill rejects ethanol provisions and does not mandate a set percentage of renewable energy.

Recognizing the need for domestic fossil fuel development, the House bill includes $2 billion in tax credits for clean coal technologies. It also opens up additional public land for energy production, including the Arctic National Wildlife Refuge, which contains 6 billion to 16 billion barrels of oil.

If Senate conferees hold firm on spending, and House conferees hold firm on priorities, we could end up with a decent energy bill.

Source: Sterling Burnett (NCPA), "Energy Bill Could Be Good," Dallas Morning News, May 19, 2002.


Browse more articles on Environment Issues