By Freedom Newspapers
August is one of our favorite months. Congress is on annual recess. Washington’s sausage-making machinery is idle. No new laws are being cranked out. The republic is temporarily safe from congressional meddling.
The problem with August is that September follows. Sooner or later, Congress will reconvene, and take up the legislation left unfinished when members slunk out of town. And that has us worried, given that an energy bill and a farm bill could be the first orders of business. Both are disasters in the making. But today, let’s take a closer look at the energy package.
There are a number of disparities between the House and Senate bills, setting the stage for tense negotiations between conferees trying to work out a compromise.
The House version, for instance, includes a national renewable energy mandate, requiring that utilities get 15 percent of their power from “renewables” by 2020. Many states already have stumbled down this command-and-control path, whose costs and unanticipated consequences will become apparent only years down the road, when the requirements really begin to bite.
A federal standard is as wrong-headed as the state standards (even more so, arguably, because it’s redundant) and marks a troubling new expansion of government power into a realm where it doesn’t belong.
Many utilities are moving toward renewables anyway, responding to market forces, consumer demand and the high prices of traditional carbon-based fuels. That’s the most logical, efficient and fair way to proceed.
One-size-fits-all federal mandates are misguided because one size doesn’t fit all, when it comes to energy companies as well as individuals. And each utility should determine its optimal mix of energy technologies, responding to markets, circumstances and ratepayer preferences. But politicians are an impatient lot, who tend to mistrust markets, so they feel they need to intervene even when they don’t.
“The legislation proves that energy production, job creation and environmental protection can be achieved all at once, which is why a new coalition of labor and environmental groups have come together to endorse our bill,” crowed House Speaker Nancy Pelosi.
But it proves no such thing.
It shows you can pass a pie-in-the-sky energy bill in the House, given the present mania for “renewables.” It will be years before we know whether these energy production, job creation and environmental promises pan out — and what they will cost ratepayers. Washingtonians really do live in a dream world.
The House bill also includes a huge new tax increase the Senate bill lacks. That, along with the renewable mandates, will be a sticking point with senators.
“This (renewable) scheme continues to have significant opposition in the Senate and would be a major obstacle to final passage of this bill,” New Mexico Sen. Pete Domenici has said. He’s the ranking Republican on the Senate Energy Committee. “The Senate has passed much more reasonable legislation, while rejecting similar tax measures that would have resulted in higher prices.”
The House bill lacks any increase in federal fuel economy standards, while the Senate version would boost the mandates from 27.5 mpg to 35 mpg by 2020. House leaders have talked about slipping in a Senate-like mandate during the conference committee, but that’s likely to spur a fight, especially with House Energy and Commerce Committee Chairman John Dingell from Michigan.
The Senate bill includes more “biofuel” production quotas, including one aimed at boosting cellulosic ethanol. We already see the market-distorting, inflationary effects of Washington’s obsession with corn-based ethanol at work. The jury is still out on whether mass production and distribution of cellulosic ethanol is feasible and affordable. But the panacea-pushers in Congress keep serving up the Kool-Aid.
The White House is making the now customary, but still less-than-credible veto threats. “The bills will actually lead to less domestic oil and gas production and increased dependence on imported oil,” Energy Secretary Samuel Bodman said. “Because they fail to deliver American consumers or businesses more energy security, but rather would lead to higher energy costs and higher taxes, the president’s senior advisors would recommend that he veto these bills.”
We hope President Bush does so. Both bills are so bad the country is better off without them.
We encourage Congress to extend August recess into September … and why not into October? Members work hard and could obviously use more time off.
So, please, don’t hurry back to Washington on our account.