To the extent you’re fired up about high energy prices and want to do something about it, I suggest, to paraphrase Jim Rome, calling up and “banging the monkey(s)” at both of your Senators’ offices to strongly urge them to pass the bill referenced in today’s WSJ editorial:
Agony and Energy
October 18, 2005
“Shame! Shame!,” cried Democrats, as GOP leaders kept a floor vote open for 48 minutes to pass an energy bill this month. They had the right line but the wrong target. The real shame is that even two hurricanes and $3 gasoline can’t get some politicians to understand that the U.S. needs to increase its energy production.
The bill passed, 212-210, though under pressure from their leaders not a single Democrat voted aye. Not one. Senate Republicans seem unsure when they’ll take up the bill, if at all. If you want to know why your heating and gasoline bills will be so high this winter, look no further than those who opposed this measure.
The proposal is unusual in the refreshing sense that unlike most recent energy bills out of Washington, this one isn’t jammed with business subsidies and environmental rules. Instead, it aims at the real problem: government barriers to supply. This is why the last time the U.S. built a new oil refinery, Elvis was still impersonating himself.
The House bill eases siting and permitting restrictions, for example, by giving President Bush authority to designate certain federal lands – including shuttered military bases – as possible new refinery sites. This should bypass the usual not-in-my-backyard fights and would also diversify refining geographically (away from the hurricane-prone Gulf). The bill would also let governors request that the Department of Energy coordinate the permitting process, which is now extremely complicated and a major barrier to new investment.
Another good idea would reduce the number of “boutique fuels” to six from 17. These special gasoline blends are required in different parts of the country in the name of reducing pollution. In fact, 17 distinct fuels aren’t needed to meet anti-pollution goals, even as they raise gas prices and make it difficult to move gas around the country during shortfalls. Cities would also be able to petition for more time to meet costly new 2010 ozone standards, a smart move given that many cities are already on track to hit the targets at slightly later dates.
Like any act of Congress, the proposal has its hidden trouble. Republicans fell for phony populism and agreed to require the Federal Trade Commission to set standards for “price gouging” and then punish offenders. So companies that raise prices in order to guarantee supply in a crisis will run the risk of civil fines.
A separate bad idea is a fund to pay refiners for government inaction or for legal costs stemming from fights over their permits. You can think of this as taxpayer-funded insurance against bureaucracy and/or frivolous lawsuits. We dislike the excesses of the trial bar as much as anyone, but subsidies aren’t the answer here; tort reform is.
All told, however, the bill is a step forward. What its best provisions have in common is that they’d restore a balance between environmental protection and energy production. Americans became so used to cheap gas and electricity during the 1990s that politicians felt they could indulge the environmental lobby by imposing ever more restrictions on supply at no political or economic cost.
We now know that cost: $3 a gallon at the pump and $13 per million BTUs for natural gas to heat your home. Average household spending on gasoline is almost $2,000 a year, up 45% from just three years ago. And to give you a sense of the burden this all imposes on U.S. industry, consider that the cost of natural gas in China is less than $5 per million BTUs and in Australia less than $4. The U.S. chemical industry is building plants everywhere but America.
That no Democrat voted in favor of this bill even amid these soaring prices suggests that President Bush and his fellow Republicans have been too defensive. They’re letting themselves get pasted for supporting “industry” – as if someone else is going to refine gasoline or drill for natural gas. They need to start telling voters that a major cause of high energy prices are limits on oil and gas exploration and production.
