Red, Green and Blue: The Energy Bill
Jimmy: When we chose the recently-passed Senate Energy Bill for our Red, Green and Blue discussion this week, I really didn’t expect it to be such a great illustration of what not to do to secure our energy future. Since this is the same crew who left our last shot at reasonable immigration reform this decade to die on the vine, I guess I shouldn’t be surprised.
This bill is all about government and the main word is ‘control’. It bumps the CAFÉ standards up, controlling the type of car we will be able to buy in the future… it imposes greater control on domestic oil/refinery capacity… it imposes ethanol production mandates (thank you ADM and the farm lobby)… and generally says to America "We and our lobbyists know what is best for you."
Alternative energy research is up and that’s a good thing but the overall effect will be an energy bill that is not responsive to any of the expected advancements due to imposed inflexibility.
Sadly, the whole thing could be simply scrapped and replaced with an energy and geo-political tax on oil to cover alternative fuel development and to cover the tab for sending our soldiers across the globe every decade or so to protect world oil interests. Such a tax indexes the cost at the pump to the real cost of fuel, and, at the same time, gives us the resource and incentive to invest in winning alternatives. No bloated government programs and no cash-cow lobby paybacks for big agriculture. Suddenly, it just makes more sense for the consumer to vote with his/her dollars in a way that advances US energy independence without the peak and valley market effects of regulatory nonsense.
So the Energy bill is our topic today. We invite your thoughts in the comments below.
Tags: Alternative Fuels, Climate Change, Congress, Conservation, Geothermal, legislation, Political News, politics, Red, Green and Blue, Renewable Power, Taxes, us
July 3rd, 2007 at 4:33 pm
Jimmy, I’ll have to agree with you that this bill is hardly what we need to secure our energy future. Of course, I think every piece of legislation that comes out of DC generally is guilty of the same reasoning: “We and our lobbyists know what is best for you.” Good argument for serious reform regarding the influence of lobbyists, political contributions, campaign financing, etc.
However … (you knew there’d be a “however,” didn’t you? : ) )
I see a few more bright spots in this bill than you do: I’m all for stricter CAFE standards (the rest of the developed world and even China seems to handle such requirements just fine), and I’m really glad to see reauthorization of the Weatherization Assistance Program, though we could certainly invest more than $750 million to help the disadvantaged better insulate and weatherize their homes.
Nor do I see anything particularly onerous about setting higher efficiency standards for government buildings or appliances: greater efficiency benefits everyone, both in terms of their energy bills and their impact on fossil fuel consumption and global warming.
Likewise, the new provisions on oil price-gouging, along with the increased power of the feds to investigate oil industry market manipulation, don’t bother me. I don’t know how effective these provisions will actually end up being, but I can’t see how any efforts to discourage price-gouging and market manipulation could be a bad thing.
Regarding the ethanol mandates and the influence of ADM and the farm lobby, I’m with you all the way Jimmy. The corn people all have dollar signs in their eyes when it comes to ethanol, which I don’t see as a truly desirable alternative to fossil fuels (considering it takes so much fossil fuel to grow, transport and process corn for ethanol).
Ultimately, though, I’ll agree with you here, Jimmy: outside of the higher CAFE standards, which I’d keep regardless, I’d be happy to trade most of this bill for an energy tax that would fund alternative fuel and transportation research. Of course, I support the same approach for reducing carbon dioxide emissions — a carbon tax — but I seem to recall you didn’t like that one, Jimmy. Why is an energy tax OK, but a carbon tax not?
July 3rd, 2007 at 5:25 pm
Oil tax is a win/win/win. Oil is 40% of our trade deficit which we would like to see reduced, the oil market geo-politically underwrites regimes that are hostile to our interests, and the tax would discourage consumption, encourage conservation and encourage alternatives for an environmental benefit. No CAFE necessary.
A carbon tax would be a blanket tax that would get coal too and I eventually see us solving sequestration/mitigation of CO2 in centralized operations like power plants in the near future and I wouldn’t want a fuel of such bountiful supply in this country to have its hands tied by soon-to-be obsolete concerns of bureaucrats and politicians.
I think, too, that the effect of CO2 over the past 30 years is a bit exaggerated by the climate models. We’ve done such a good job at particulate reduction I think this has been the major reason for the recent spikes that have everyone so worried. For this reason carbon, in general, doesn’t bother me as much as it does most people… not that we shouldn’t continue to improve in the ways we can.
July 3rd, 2007 at 7:35 pm
Actually, the fact that the climate was cooler when particulate pollution was high shows that the climate models scientists like Hansen are using are very good at reflecting reality. (see here: http://gristmill.grist.org/story/2006/11/4/14560/6189). Less particulate pollution now only means that the actual effects of global warming over many years is becoming increasingly clear.
But back to the energy bill: I agree an oil tax would be an effective way to encourage increased energy independence, but don't you think that would also end up being regressive for low-income fuel consumers? Requiring increased efficiency now — whether it's for buildings or for appliances — carries immediate benefits for everyone.
Besides, considering how skeptical you are of government's ability to do things right, how could you ensure the feds would spend those oil tax revenues properly and effectively?
July 3rd, 2007 at 9:21 pm
I think an oil tax would be the best and least intrusive shot we’ve got Shirley. Certainly an improvement over what the lobby jockeys came up with.
Regressive, well sure; but since the income tax is so ridiculously progressive maybe it would balance out just a bit. It sure would be nice for everyone to be complaining about the cost of the federal government instead of just the minority of high wager earners who are feeling the pinch now. When a minority of voters pay the majority of taxes you get a system out of control… like what we have now. With a consumption or energy tax, maybe when people start screaming ‘DO SOMETHING!’ about Al Gore’s or Michael Moore’s latest hysteria flick there will some balance about the concern for what it will cost.
And besides… it would be nice to get some of these people off the road. $4.50 a gallon sounds great to me if it clears the roads off some. I mean if more people were forced to take public transportation my Hummer wouldn’t waste so much fuel in stop and go traffic. It’s a win/win
The spike to $3.50 when Katrina hit didn’t even put a dent in it though so I wonder how much it would really take to affect our usage.
July 3rd, 2007 at 9:49 pm
As for particulates, much of the gain over the past 30 years where the trendlines are becoming progressively steeper is due to steep particulate reduction rather than increased CO2.
The heat gain due to this is unsustainable because we’ve reached a point of diminishing returns in removing particulates.
July 3rd, 2007 at 11:04 pm
Ridiculously progressive income tax? According to these figures (based on info from Wikipedia and IRS), the tax rate for top brackets these last three years has been the lowest since 1991, and the third lowest since 1979:
Year Income brackets Rate range
1979 15 brackets 14%-70%
1982 12 brackets 12%-50%
1987 5 brackets 11%-38.5%
1988 3 brackets 15%-33%
1991 3 brackets 15%-31%
1993 5 brackets 15%-39.6%
2001 5 brackets 15%-39.1%
2002 6 brackets 10%-38.6%
2003-2006 6 brackets 10%-35%
If, on the other hand, you're saying that anything other than across-the-board flat taxation is "progressive," I suppose that would qualify. But I'll go Biblical here:
"For everyone to whom much is given, of him shall much be required." (Luke 12:48)
July 4th, 2007 at 12:04 pm
Check this site out, has United States Interactive Carbon Footprint Map, illustrating Greenest States. This site has all sorts of stats on individual State energy consumptions, demographics and State energy offices.
http://www.eredux.com/states/
July 5th, 2007 at 1:18 pm
Hey Shirley… I think we’ve hit upon our core difference!
If you check the stats you will find that the top 10% of earners pay over 50% of the federal taxes in this country. The top 50% of earners pay over 90% of the taxes (even before calculating EIC and other rebates which make the stats even worse).
When the majority of taxes are paid by a minority of voters there’s no popular political check on spending and government grows out of control. In our country today more than 1/2 of the people have no substantial vested interest in the cost of government and that’s the way the elected government and the bureaucracy wants it. They are no longer politically accountable for their spending.
You can go biblical all you want but please get the context right. The bible speaks of individual charity. We are compelled to follow the laws of the country and pay our taxes but to dump truck-loads of resource into an inefficient, often corrupt and politically motivated bureaucracy hinders our ability to be directly charitable.
Since God could abolish all poverty and suffering with a blink of His eye it only follows that it is the voluntary act of charity that is meaningful… take the man who was blind and poverty stricken all of his life only to be an example to the disciples of the ability of Jesus to heal. In your scenario there is no charity involved at all. The resource is taken at gunpoint to do the will of the politicians and bureaucrats whether we agree with it or not.
I do love your chart though. It illustrates very well what a great man Ronaldus Maximus was.
July 5th, 2007 at 7:16 pm
Jimmy, I'm all for individual charity, but that alone isn't nearly enough to handle the needs of a large society like ours. Government has a role to play, and the only way in which it can obtain the revenues to fulfill that role is via taxation.
Yes, the top earners pay the most dollars in taxes … because they EARN the most dollars (and still keep the most dollars). And I don't see people like Warren Buffett or Bill Gates being LESS charitable just because they have to pay more dollars in taxes than poor people do. (In fact, I recall several left-leaning millionaires complaining after W's last round of tax cuts that they DIDN'T need to have their taxes cut.)
If you want to make legislators more accountable to the citizenry for their actions and spending, let's talk campaign finance reform (public funding of elections) and get rid of the lobbyists' influence: K Street has done far more to corrupt Washington than a progressive tax system has.
July 5th, 2007 at 7:39 pm
The point you are missing is that its not republicans vs. democrats but unchecked bureaucracy against the rest of us.
Whether a handfull of billionaires think they pay enough taxes is meaningless. The problem is that over half the population has no skin in the game and when you consider ovelapping groups of the un-taxed, the on-the-dole, and bureaucratically-employed… then suddenly you’ve polarized society into host and parasite roles.
If everyone feels the pain of a tax increase to fund various causes then you can get an accurate political concensus. When only a minority feels the pinch then you have the capacity of populist politics where people buy favor with the earnings of others.
I have no problem with charity as I am very charitable myself. I do have a problem with the idea that government can or should be altruistic because it has neither the capacity to control such power nor the resource to do it with; sans stealing it from those who go to the trouble to earn it in the first place. You can’t be generous with the earnings of others… that’s faux generosity at best and stealing at worst.
I’d go for a flat % of income tax across the board with a small standard deduction to cover necessities. This serves your requirement that, “For everyone to whom much is given, of him shall much be required”, and also assures you don’t have politicians out there buying votes with money they didn’t earn. This keeps government in check and assures that what is spent is spent properly under the scrutiny of all voters.