Energy: Two Paths

By June 13, 2005Energy

EnergizeEcon.jpg In the classic Frank Capra film, “It’s a Wonderful Life“, Clarence the Angel shows George Bailey what life would be like had he never been born. Along the way, two clear paths emerge, with dreadful consequences aplenty.

By the time you read this, a very important Capitol Hill press conference will be under way (or concluded), releasing an energy study done by us and the American Council on Capital Formation (ACCF). Let’s cut to the quick: the study shows, among other findings, that some 2 million jobs could be lost if the Senate doesn’t pass the pending energy bill.

In Capra style, the study proposes two paths. The first, called, “Promoting Energy Supplies” (PES), echoes the provisions of the energy bill. Following this course would encourage domestic production of natural gas offshore and on shore, encourage the development of liquid natural gas (LNG) terminals and new nuclear capacity. It would also mandate a reduction in mercury emissions, but would do it in a common sense way.

The other path, termed, “Restricting Energy Supplies” (RES), would impede development of natural gas, raise barriers to new exploration, discourage expansion of nuclear capacity and enact both phases of the McCain-Lieberman bill, among other actions.

What the study concludes is that the PES approach would result in average GDP growth of 3.1%, growth in manufacturing output at about the same level, and with concomitant growth in business investment, industrial production, disposable income and employment.

Under the anti-growth RES approach, the picture is reversed, with the price of natural gas rising 57% for manufacturers(on top of a near doubling in the price thus far), a 26% increase in natural gas prices for homeowners, and resulting drops in GDP, industrial production, disposable income and job creation.

After seeing this data, like George Bailey peering into life without his great and positive influence, the choice would seem obvious. This press conference kicks off a week of energy-related events focusing on the need to pass this bill. Follow this link to tools you can use to help get this pro-jobs, pro-growth bill done. Seems like a no-brainer, but like so many things in Washington these days, it’s just not that easy. Here’s a link to the Executive Summary, and here’s the link to the full study.

Where’s Clarence the Angel when you need him…..?