Once again, the administration of President Barack Obama proposes to defund oil and gas in an energy program stout with ambition and lean in practicability. Coming as part of a fiscal 2014 budget proposal that envisions a deficit of $744 billion, the energy measures, largely recycled from past budgets, should make Americans ask, "Can we afford this?"
The numbers aren't promising. The administration wants to spend $7.9 billion in 2014 on uneconomic energy while raising taxes oil and gas by more than $4 billion. That alone looks negative by $4 billion or so—in the cozy mists of federal budgeting. The real-world effects are worse. Drilling for oil and gas is one of the few activities in the US economy that's strong and creating jobs. Yet the administration would siphon enough money away from it to cut drilling, according to the Independent Petroleum Association of America, by 25%.
The strategy
There's no need to ask why. A budget document entitled Analytical Perspectives provides the answer.
"The administration is committed to enabling a future where the United States leads the world in research, development, demonstration, and deployment of clean-energy technologies to reduce dependence on oil and other energy imports, reduce potential impacts on the environment, and respond to the threat of climate change while creating high-paying clean-energy jobs and new businesses," the document says on pp. 369-370. "The budget reflects the administration's energy strategy, which includes: basic and applied research to address some of the fundamental unknowns to advancing clean-energy technologies, such as understanding and developing new approaches to energy storage; research and development to create and dramatically improve clean-energy products like solar panels, batteries, and electric vehicles, wind turbines, and modular nuclear reactors; and appropriate assistance to American entrepreneurs and businesses to commercialize the technologies that lead the world in new clean-energy technologies."
That torrent of high-mindedness offers something to everybody except taxpayers who buy energy. And it certainly aims high: world leadership, no less. Actually, leading the world in clean energy shouldn't be difficult now that the European countries once claiming the status are reining in the feed-in tariffs and other program essentials they've found to be unaffordable.
Why must the US lead the world in an enterprise from which other countries fast are withdrawing? Why does any country think it must push energy forms into the market for no reason other than that they don't involve the oxidation of carbon? What's wrong with spending judiciously on energy research and letting markets determine which new energy forms enter commerce—and when?
The administration's windy energy strategy, like its European predecessors, is grandiose and doomed. As long as economically superior energy remains available in needed amounts, the government can't overcome form advantages underlying that superiority no matter how much money it spends on alternatives. It shouldn't try. Its spending should aim at knowledge about usable energy of the future, not commercialization of it. Spending by the government on energy for anything beyond basic, fuel-neutral research represents investment in political bluster.
When folly ends
Energy folly is nothing new in the US, of course. It always ends when costly programs exhaust budgets with meager result and the electorate realizes how much money its government has invested in vain hope. This time, however, the government proposes to spew money at every alternative energy form in sight while loading cost onto oil and gas with higher taxes on producers at a time of fresh abundance. If it thinks this will hasten the replacement of fossil energy with preferred alternatives, it again should study Europe. Hydrocarbon fuels have been heavily taxed there for many years—at the point of consumption rather than production—and still dominate energy markets. Alternatives have made inroads, but at costs fast proving to be unendurable.
Obama refuses to learn from history or current events across the Atlantic. Congress must keep his heady ambition for energy from sapping the American economy.
