NCPA - National Center for Policy Analysis


October 4, 2004

Sen. John Kerry's federal energy independence program makes little economic sense, says the National Review.

Kerry advocates that the United States make do solely with domestic sources of energy. This would require either extreme cuts in consumption or major increases in domestic production, or both. Last year, America consumed 20.3 million barrels of oil a day (mbd) but only produced 5.6 mbd. Moreover, it's highly unlikely Kerry's energy program would even slow down America's increasing reliance on foreign oil, says the Review.

There are four key elements to Kerry's energy plan:

  • One is to throw $5 billion into the production of hydrogen-powered fuel cells: Unfortunately, hydrogen will require just as much or more fossil fuel to produce as it displaces, which explains why virtually all environmental organizations dismiss the hydrogen fad as an expensive distraction.
  • A second is a mandate for more ethanol consumption: Both Kerry and President Bush support requiring the production of 5 billion gallons of ethanol a year by 2012 despite serious questions about whether ethanol, too, might not consume more than it produces.
  • Another element is to increase the subsidies directly paid to producers and consumers of unconventional energy: But when Arizona tried a similar plan some years ago, it almost bankrupted the state.
  • Fourth, Kerry seeks to tighten automobile fuel-efficiency standards, by an unknown amount: The downside is that increased efficiency encourages more travel, which means increased congestion and a net increase in air pollution, according to Andrew Kleit at Pennsylvania State University.

In sum, Kerry's plan makes absolutely no sense economically, but makes perfect sense as politics. Important industry swing states will certainly cheer much of it. But there's nothing new here: just the same old slick handouts dressed up as high-minded policy, says National Review.

Source: Jerry Taylor and Peter Van Doren, "The Energy Mirage." National Review, September 13, 2004.


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