As Congress begins its latest effort to choreograph energy choice, Americans should lock their cash drawers. Democrat Jeff Bingaman of New Mexico, chairman of the Senate Energy Committee, says he'll propose a clean-energy standard in a few weeks. President Obama gave the idea a sentence in his State of the Union speech.
The legislation probably won't go far in the Senate and stands no chance in the House. There the good news ends. The bad news is that some lawmakers never learn. Last year Bingaman asked the Energy Information Administration to analyze a plan for "clean energy" in power generation starting at 45% in 2015 and rising to 95% in 2050.
Bingaman's plan uses a system of credits for politically acceptable energy, such as wind and solar, and partial credits for politically less acceptable but still tolerable energy, such as natural gas and nuclear.
According to EIA, end-use energy costs would rise slowly early in the program but reach a national average 21% above reference-case levels by 2035.
That year, EIA says, emissions of carbon dioxide by the power industry would be 43% below the reference case.
In fact, the emissions cut probably would be greater. EIA has no way to account for factories not built and work not performed because of the sudden prospect of one-fifth higher energy cost a decade out. Government energy choices always produce nasty surprises.
They proceed from variable and sometimes indefensible assertions that the fuels whose use they resist—nowadays those containing carbon—create problems, that alternative energy forms do not, and that the government must respond, markets be damned.
Government energy choices also fall subject to corruption. They found rigid prescriptions in static, politically distorted, and inevitably wrong assumptions about markets, which are inherently dynamic and unpredictable. And they always cost too much. Problems do accompany the benefits of using hydrocarbon energy. Overall, however, they're not nearly as costly as those that arise when governments make energy choices consumers should make for themselves.
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