Senate Democrats have just proposed a new energy bill: the Consumer-First Energy Act. It is meant as a response to the Republican bill introduced last week, which R’s are currently trying to pass as an amendment to the flood insurance bill.
Now, the Republican bill — the Drill, Drill, Drill Bill — would be incredibly destructive and do nothing to solve short- or long-term energy problems. That’s a given. It’s important to block it, and I understand that Senate Dems think they need a positive alternative of their own.
Obama showed last week how you can offer a serious alternative to political gimmicks and be rewarded for it. It appears his Senate colleagues didn’t learn the lesson. The bill they threw together is a lame piece of pandering, just as silly in its own way as the McCain/Clinton gas tax holiday.
I’ll get into the details below, but the main problem is not in the details, it’s in the three underlying premises:
- High gas prices are attributable to short-term market quirks and oil industry perfidy;
- it is possible for Congress to meaningfully lower the prices of gas; and
- low gas prices are a proper target for public policy.
Each of these premises is false. Oil prices are rising because production is flat and demand is rising. Production is going to stay flat, or decline. Demand is going to keep rising. Ergo, gas prices are going to keep rising. So in the unlikely event the bill is passed, it would address a problem that’s not really a problem, which couldn’t be solved if it were a problem, in a way that does not address the real causes of the problem-that’s-not-a-problem. Quite the legislative trifecta!
Look: you can’t promise Americans you’re going to lower the price of gas. It’s a lie, and they’re going to notice when prices don’t go down. It might help you tactically in the short-term, but in the long-term it’s going to come back and bite you on the ass. Gas prices are going to keep going up, and good leadership begins with honesty.
Now to the details. Here are the main proposals:
- Roll Back Tax Breaks for Oil Companies and Invest in Renewable Energy
- Force Big Oil to Pay Their Fair Share through a Windfall Profits Tax
- Halt Government Purchases of Oil for the Strategic Petroleum Reserve
- Protect Consumers from Price Gouging
- Stop Market Price Speculation
- Stand Up to OPEC
That first plank is great. It’s the same thing Senate Dems have tried thrice now, unsuccessfully. It’s unlikely it will pass this time either, though I admit to taking some satisfaction in seeing R’s going on record against renewable energy yet again. The only worry here is that Dems are holding the renewable energy tax credits — the PTC and ITC — hostage. They need to pass those, now, by any means necessary — millions, possibly billions of dollars and thousands of jobs are on the line. As long as they have other plans to get the credits passed, then this bit of theater seems fine.
But the other planks are just dumb.
- Why should Congress be in the business of telling industries how much profit they’re allowed to make? Is that a good precedent? Just eliminate the subsidies we offer oil instead. That’s a bigger pot of money anyway.
- This might briefly shave a half-percent of oil prices, a blip that would unnoticeable among the larger structural forces at play.
- Where is the evidence of price gouging? This is a silly lefty conspiracy theory and it’s risible for national Dems to be indulging it.
- It’s likely prices are slightly inflated due to futures speculation, and I’m all for better regulation of trading, but again, this is a blip.
- OPEC owns the oil. It’s under their ground. Who are we to dictate to them what they do with it? Regardless, they’re pumping as much as they can. It’s to their immense benefit right now to drive up supply, but they aren’t. Why? They can’t. It’s called peak oil, and it’s time for politicians in America to get a damn clue about it.
For decades, energy policy in this country has been predicated on the lie that cheap energy is an American birthright. It’s not. The era of cheap energy is ending. Perhaps a politician or two might try finding out what happens when you treat voters like adults and tell them the truth. It’s so crazy it just might work.