Senate's energy bill pushes US down wrong road

Bob Tippee

Throw away the apple from a bowl of rotten fruit, and what do you have? A bowl of rotten fruit.

The US Senate on June 21 rejected punitive taxes on the oil and gas industry but still passed a stinker of an energy bill.

Its discarded package of tax changes would have cost the industry an estimated $26 billion over 10 years (OGJ Online, June 20, 2007). There went the rotten apple.

Remaining, however, are major new favors for makers of biofuels and a measure that would make it a crime to charge "unconscionably excessive" prices for oil products in times of strained supply. Other manipulations, less directly related to oil and gas, also fester in the bill: toughened fuel-economy standards for new vehicles, new energy-efficiency standards for appliances and lighting, and spending for the development of fuels politicians like but cost-conscious energy consumers don't.

The bill pushes the US further down a dangerous road toward fuel choice by politicians. Peril already is evident in the leaping food costs that have accompanied congressionally mandated use of corn for fuel. The Senate bill would aggravate the problem.

The political thinking behind these mistakes is equally putrid.

"The time has come for us to give the same kinds of incentives to other industries—alternative energy, renewable fuels, clean-coal technologies, and so forth—that the oil and gas industry has enjoyed for decades and decades," opined Sen. Max Baucus (D-Mont.).

Yes, incentives for the production of oil and gas have come and gone over the years. But when was there anything like the simultaneous market mandates, protectionist tariffs, and whopper tax credits now creating a boom for otherwise uneconomic ethanol and biodiesel?

And where is the one no-cost move Congress can make to give US energy supply the meaningful and economic lift it needs—opening off-limits federal land to oil and gas leasing and development?

Nowhere, of course—not in a political climate misshapen by spite over the price of gasoline. That void, which no one is talking about filling, makes the Senate's bowl of rotten energy produce smell all the worse.

(Online June 22, 2007; author's e-mail:

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