Energy Bill Passes — Uggh

By June 22, 2007Energy

The Senate last night passed H.R. 6, the Clean Energy Act, by a vote of 65-27. The preceding cloture vote was closer, 63-32.

There’s nothing much to like in the bill, even though the worst parts did not survive. Thank goodness opponents killed the majority’s proposal to raise taxes on essential energy producers — oil and natural gas — by $32 billion to subsidize politically preferred, but much more limited, renewable fuels production.

Complain about energy prices and then increase taxes? Makes no sense, at all. But stand guard. Bloomberg reports, “A pending House bill that includes a tax package and possibly a renewable standard could form the basis of a new round of negotiations on both issues later this year.” (New York Times wrap-up here. AP story here.)

That renewable standard that was blocked — the “renewable fuels portfolio” — is a federal mandate to force electric utilities to produce at least 15 percent of their power from renewable fuels by the year 2020. It’s true that some localities around the country are passing similar requirements, but they tend to be places where the wind blows or the sun shines. Note to federal lawmakers: Some places are darker than others. Some places aren’t that windy.

A renewable fuels portfolio would have artificially limited supply and forced the purchase of more expensive sources of electricity. And what would happen when consumers protested their high heating or air conditioning bills? We can hear the cries: Increase LIHEAP funding! A politically perpetuating cycle, increasing government’s involvement in the economy and raising the cost of living.

We’re still looking at the CAFE standards compromise.

But was there anything in the bill to increase domestic energy supplies, to really improve America’s energy security? After the failure of Sen. Warner’s amendment to allow natural gas exploration off the coast of Virginia, the answer is no. As NAM President John Engler commented in this radio actuality:

I just think that we’ve got a group of people who aren’t being honest about what the real problem is in this country. I don’t think that anyone who looks at the data can be concluding other than the fact that in the near term, in the next few years, oil and gas and nuclear power are going to generate most of the electricity in America. And if that’s true — and I passionately believe that’s true — then you better figure out how you’re going to have abundant resources.

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