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The People Have Spoken - For Higher Energy Costs? Font Size: 
By Ben Lieberman : BIO| 14 Dec 2020
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Will the incoming Congressional majority misread their mandate from the American people? Well, on energy policy they are off to an incredibly fast start.

Needless to say, the public has responded very angrily to rising energy prices in recent years -- natural gas and electricity, but mostly gasoline. In fact, when the price at the pump hit $3.00 a gallon last summer, it was America's number one gripe. The drop in price since August made it somewhat less of an Election Day issue, but energy costs still had an impact and definitely clouded the electorate's perception of an otherwise strong economy.

Of course, the jump at the pump hurt Republicans, who controlled everything in Washington while it was occurring. But the next time gasoline rises to $3.00, it won't be so easy for congressional Democrats to point fingers since it will be happening on their watch as well. Likewise any future increase in natural gas or electric bills.

So no incoming majority would take steps to deliberately raise energy costs, right? But some Democrats are already promising as much.

First, party leaders are calling for more alternative energy mandates. This includes expanded ethanol requirements for the transportation sector, as well as renewable portfolio standards that require a certain percentage of electricity be generated by wind or solar power.

Such federal mandates are invariably bad news for consumers. Keep in mind, the only reason these alternative energy sources need to be mandated in the first place is that they are too expensive to compete otherwise. In effect, these proposed laws force the American people to switch to costlier energy options.

In fairness to Democrats, Republicans have also supported some of these provisions. For example, the Republican-led Congress and President Bush enacted the 2005 energy bill, which included the requirement that 4 billion gallons of ethanol be added to the gasoline supply in 2006, rising to 7.5 billion gallons by 2012. The measure enjoyed strong bipartisan support amongst Midwestern cornbelt legislators who represent ethanol's home base. But Democrats now seem intent on one-upmanship, perhaps in order to strengthen their position in that region before the 2008 elections. Some, like Sen. Tom Harkin (D-IA), incoming chairman of the Senate Agriculture Committee, have already advocated a massive expansion of the current ethanol requirements.

In even starker contrast with Republicans, the soon-to-be Democratic leadership has pledged to fight global warming by reducing carbon dioxide emissions. The House of Representatives opposed such measures in recent years, largely on economic grounds but also questioning the seriousness of the threat. However, incoming Speaker of the House Nancy Pelosi (D-CA) has already announced that "America must provide strong leadership to reduce emissions that are responsible for global warming." And Barbara Boxer (D-CA), who takes over as chair of the Senate Environment and Public Works Committee from global warming skeptic Jim Inhofe (R-OK), has asserted that "there ought to be a global-warming bill that looks at all the contributors to carbon dioxide emissions."

Carbon dioxide is the unavoidable byproduct of fossil fuel combustion, so capping emissions of it would require, for the first time ever, government limits on the amount of coal, oil, and natural gas that the American people are allowed to use. The bottom line -- restrictions on energy use which will drive up prices and likely do more economic harm than environmental good.

Thus, instead of looking for ways to make energy more plentiful and affordable, the new Congress would be moving in the exact opposite direction by imposing a costly new energy rationing scheme. The results may please green activists, but few others.

Proponents claim these alternative energy and global warming proposals are justified on national security and environmental protection grounds. However, the amount of oil imports ethanol can supplant is surprisingly low, the most massive expansion of wind and solar possible would provide less power than just a few new nuclear plants, and even a harsh cap on carbon dioxide emissions will have a negligible impact on the earth's temperature.

While the benefits of these measures are debatable, the fact that they will raise energy prices is not. The best proponents can do is speculate that energy cost increases can be kept under control, but even that is doubtful. Ethanol currently costs nearly 60 cents per gallon more than gasoline, hardly a boon for consumers. Thus, increasing the current mandate will only add to the pain at the pump. Similarly, wind and solar remain more expensive than the conventional energy sources that currently provide most of the nation's electricity, thus renewable portfolio standards can't help but increase electric bills.

Reducing carbon dioxide emissions would be the most expensive change of all. According to the Energy Information Administration, a previous attempt to enact such a cap on greenhouse gas emissions would have added 19 percent to gasoline prices by 2025, and 35 percent to electricity costs. And this bipartisan Senate bill, which failed to garner enough votes, was an extremely weak one that proponents conceded was merely a first step towards much more ambitious controls. In addition, the early experience with the European Union's attempts to rein in carbon emissions has shown it to be so prohibitively expensive that most member nations are violating their obligations.

Overall, the Democratic leadership isn't returning to power with an agenda to reduce energy costs, but with an agenda to increase them. If they think that's the change the public wants, they may end up even less popular on energy than the Republicans.


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