Labor Day Report: Energy Costs Siphon Workers’ Paychecks

By August 29, 2006Energy

Our annual Labor Day Report provides a clear picture of the damage being done to an otherwise strong economy by soaring energy costs, which are hurting manufacturing workers at the pump and in their paychecks.

In our ninth annual report, our chief economist explains that while manufacturing production has increased at its fastest pace in six years and jobs on the factory floor have expanded, the lack of true energy reforms has tempered the positive news.

Over the past year energy prices have risen 23 percent due to increased global demand, limited domestic supplies, natural disasters and global instability. As a result, real wages have fallen by 0.5 percent over the past year when they should have gone up by 1.2 percent.

This fact illustrates the need for energy reforms now. The time has come to build a national energy policy to address these costs by increasing domestic production and supply. Our nation was galvanized around the Manhattan Project, we put a man on the moon, and 50 years ago, we created the Interstate Highway System. If we marshal that same national spirit of cooperation, unity and focus, we can ensure energy security.

While there is no “silver bullet” solution, there is a clear path to get energy policy moving in the right direction. In fact, the Energy Policy Act of 2005 — the first comprehensive energy strategy in many years — was a first step.

There is now a need to be even bolder. In just a few short days, Congress will be back at work after its August recess. Waiting for them are two pieces of legislation to open the Outer Continental Shelf (OCS) to energy development — one approved in the House and one in the Senate — that need to be reconciled and sent to the President’s desk in September.

We call on Congress and the Administration to build a plentiful, flexible, diverse and affordable energy supply through these actions:

  • Open the OCS for deep-water exploration.
  • Open section 1002 Area of the Arctic National Wildlife Refuge (ANWR) to environmentally regulated exploration and production.
  • Establish a new “Royalties Conservation Fund” and earmark royalties from new, clean oil and gas exploration in ANWR.
  • Provide for the expansion of nuclear energy by establishing a national repository for nuclear waste, and by further streamlining regulations to build new plants.
  • The United States should also consider technologies, in collaboration with international partners with highly developed fuel cycles and a record of close cooperation, to develop reprocessing and fuel treatment technologies that are cleaner, more efficient, less waste-intensive, and more proliferation-resistant.
  • Enact “multi-pollutant” legislation to establish a flexible, market-based program to significantly reduce and cap emissions of sulfur dioxide, nitrogen oxides, and mercury from electric power generators.
  • Review and provide recommendations on establishing Corporate Average Fuel Economy (CAFE) standards with due consideration of the National Academies of Sciences study released in July 2001.
  • Expand the Department of Energy’s Energy Star program beyond office buildings to include schools, retail buildings, health care facilities, and homes.
  • Support a permanent extension of the existing R&D tax credit.
  • President Bush should direct agencies to explore regulatory approaches that will encourage advancements in emerging energy technology.
  • Establish a grant program over five years to fund the development of coal-to-liquid fuel plants.
  • Expand the development and use of renewable fuels.
  • By tackling this energy agenda, policymakers can play a positive role in allowing the economy to grow at its full potential.