Senate Democrats have just proposed a new energy bill: the Consumer-First Energy Act. It is meant as a response to the Republican bill introduced last week, which R's are currently trying to pass as an amendment to the flood insurance bill.
Now, the Republican bill -- the Drill, Drill, Drill Bill -- would be incredibly destructive and do nothing to solve short- or long-term energy problems. That's a given. It's important to block it, and I understand that Senate Dems think they need a positive alternative of their own.
Obama showed last week how you can offer a serious alternative to political gimmicks and be rewarded for it. It appears his Senate colleagues didn't learn the lesson. The bill they threw together is a lame piece of pandering, just as silly in its own way as the McCain/Clinton gas tax holiday.
I'll get into the details below, but the main problem is not in the details, it's in the three underlying premises:
- High gas prices are attributable to short-term market quirks and oil industry perfidy;
- it is possible for Congress to meaningfully lower the prices of gas; and
- low gas prices are a proper target for public policy.
Each of these premises is false. Oil prices are rising because production is flat and demand is rising. Production is going to stay flat, or decline. Demand is going to keep rising. Ergo, gas prices are going to keep rising. So in the unlikely event the bill is passed, it would address a problem that's not really a problem, which couldn't be solved if it were a problem, in a way that does not address the real causes of the problem-that's-not-a-problem. Quite the legislative trifecta!
Look: you can't promise Americans you're going to lower the price of gas. It's a lie, and they're going to notice when prices don't go down. It might help you tactically in the short-term, but in the long-term it's going to come back and bite you on the ass. Gas prices are going to keep going up, and good leadership begins with honesty.
Now to the details. Here are the main proposals:
- Roll Back Tax Breaks for Oil Companies and Invest in Renewable Energy
- Force Big Oil to Pay Their Fair Share through a Windfall Profits Tax
- Halt Government Purchases of Oil for the Strategic Petroleum Reserve
- Protect Consumers from Price Gouging
- Stop Market Price Speculation
- Stand Up to OPEC
That first plank is great. It's the same thing Senate Dems have tried thrice now, unsuccessfully. It's unlikely it will pass this time either, though I admit to taking some satisfaction in seeing R's going on record against renewable energy yet again. The only worry here is that Dems are holding the renewable energy tax credits -- the PTC and ITC -- hostage. They need to pass those, now, by any means necessary -- millions, possibly billions of dollars and thousands of jobs are on the line. As long as they have other plans to get the credits passed, then this bit of theater seems fine.
But the other planks are just dumb.
- Why should Congress be in the business of telling industries how much profit they're allowed to make? Is that a good precedent? Just eliminate the subsidies we offer oil instead. That's a bigger pot of money anyway.
- This might briefly shave a half-percent of oil prices, a blip that would unnoticeable among the larger structural forces at play.
- Where is the evidence of price gouging? This is a silly lefty conspiracy theory and it's risible for national Dems to be indulging it.
- It's likely prices are slightly inflated due to futures speculation, and I'm all for better regulation of trading, but again, this is a blip.
- OPEC owns the oil. It's under their ground. Who are we to dictate to them what they do with it? Regardless, they're pumping as much as they can. It's to their immense benefit right now to drive up supply, but they aren't. Why? They can't. It's called peak oil, and it's time for politicians in America to get a damn clue about it.
For decades, energy policy in this country has been predicated on the lie that cheap energy is an American birthright. It's not. The era of cheap energy is ending. Perhaps a politician or two might try finding out what happens when you treat voters like adults and tell them the truth. It's so crazy it just might work.
Comments View as Flat
2wheeler Posted 7:50 am
07 May 2008
they're emotionally stuck in the 90s maybe?
The unbelievably cheap oil that befell US consumers during most of the 90s was not supposed to have happened in the peak-oil scenario, maybe some of these pols think we can magically return there by the stroke of the pen.
As great as the 90s were in some ways, I don't wanna go back there. Cheap gas is not an American birthright, that is correct.
The provisions of this policy that would invest in renewables, are the ones worth emphasizing and retaining. Problem is, I didn't see those included in the numbered steps cited above, just the asterisked title. Is that an example of more misleadingly misnamed federal legislation?
Moving toward sustainability with hopefulness, one revolution at a time.
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Sean Casten Posted 7:58 am
07 May 2008
Couple comments
Totally agree with your premise, but a few comments on details:
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Jon Rynn Posted 11:43 am
07 May 2008
They'd kill the messenger
Dave --
You've generally been quite the political realist -- has anyone canvassed Congress about their attitudes about why gas is getting more expensive? It seems like everyday I hear another weird reason, today Rep. Fazio, one of the best representatives, was mostly blaming speculation (he claimed that 30 to 50 dollars of the per barrel price was from speculation -- considering the track record of economists on the supply of oil, I'd be very suspicious.)
Or another question for Congresspeople: Do they think that they'd be defeated in the next election if they told their constituents that the price of gas is going up forever because of peak oil? Because if that's the case -- and it very well may be-- this is going to be a bumpy ride.
On top of all this, they might be defeated if they didn't keep saying that gas should go down.
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bigTom Posted 12:07 pm
07 May 2008
David has it figured out.
It would be too risky at this point in the election cycle to try to deflate myths now. It might be reasonable to offer people ways to use less gas, you just gotta be careful in how you package it. Demand destruction is the only way to get the price down. Given the robust demand from the developing world, even that is unlikely to do enough. But signals that we intend to party on regardless, such as the tax-holiday, simply send the oil markets the message that we will keep consuming as the price goes higher. Nothing like the subtlety of trying to convince the seller, that you don't want his goods anyway. But, thats way too subtle an argument for 10 second sound bite.
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amazingdrx Posted 3:11 pm
07 May 2008
OPEC
OPEC is a monopoly.
Monoplies don't have any right to manipulate markets.
How to relieve short term shortage and pain? Withdraw from Iraq. That will either bring peace, in which case production will rise and speculation will lose it's main impetus.
Or it will set traditional enemies against each other directly. As war rages, saudis and iranians will need more munitions, to get those munitions they will sell more oil.
Withdrawing from Afghanistan (if they haven't got bin laden yet, they aren't going to) would allow a pipeline for oil from the stans to be built by the saudis, more oil. The reason 911 was allowed by Bandar bush was because the Texans threatened to start a war if the taliban wouldn't allow UNOCAL to build a pipeline without the warlords getting a percentage of the profits.
There is plenty of oil in russia. in fact huge new deposits all around the globe are announced every year.
Peak oil is a myth created by oil analysts in the employ of oil companies, oPEC, and hedge funds. We are far from peak oil. but if the myth is spread, it increases the profit and power of military industrial oil empire.
The bush brats barred drilling off Florida. Why? To create an oil "crisis". They aren't environmentalists.
The real problem is peak GHG. Now how to solve GHG climate disaster? 26% of US GHG is due to transportation. Are high oil prices going to cut that figure? Sure, but only a few percent.
http://amazngdrx.blogharbor.com/blog
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Sean Casten Posted 11:02 pm
07 May 2008
Hot off the press
From E&E this morning:
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amazingdrx Posted 12:39 am
08 May 2008
"Strategery"
As the shaved chimp says it.
The plan was to kill the economy just enough so that the investment capital to energize the replacement for fossil and nuclear power would be in short supply. At least until this whole GHG climate craze blew over.
High oil and other energy prices do that, taking the wind out of the sails of those pushing renewable/conservation energy revolution as well.
Sure it reduces economic growth, but it puts oil companies at the top of the bottomline heap. This was the tune coming out of the organ grinder's organ all these last 8 years.
It's been successfull. The military industrial oil empire now rules. Maybe Barack can change that? McCain surely won't bother to even try. All his campaign staffers are lobbyists.
Think about it. A simple step of going to a 40 mpg car from a 20 mpg SUV cuts your gas bill in half. That is underway right now, that shift in consumer choices.
Can semi tractors be built that get twice the mileage too? Peterbuilt has a hybrid semi coming off the line right now. And how about driving slower, especially accelerating more slowly?
Meanwhile people who are nimble enough to curtail their driving in favor of biking or mass transit are pulling ahead financially. Likewise people who just stop buying crap. Coffee and fast food, salad shooters, third and fourth cars for the kids, and so forth.
I see this as a shifting economy. Right now consumption is coming down, that takes people's jobs away. If government incentivizes the shift to a new energy economy new jobs are created to replace those lost. That wrecks the Cheney plan.
Wreck it Barack, wreck it good!
http://amazngdrx.blogharbor.com/blog
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