Given the misguided energy bills under consideration in our nation’s capital, Congress should actually embrace the label “Do Nothing” as a badge of honor and statesmanship if current energy legislation fails.
Proponents describe them as “energy” bills, but these legislative proposals would neither produce more energy nor make it more affordable. In fact, this collage of ill-conceived provisions is based more on political expediency than any economic reality.
Legislation needs to be based on workable solutions to meet the energy needs of our citizens today and to provide a roadmap that will be economically viable tomorrow.
It is an ominous sign when the likelihood of convening a conference committee (the mechanism by which the House and Senate reconcile the differences between the versions of a bill) is so grim that the congressional leadership has to revert to closed-door, one-party sessions to hammer out a bill that might possibly pass. If this is not an effort to evade public scrutiny, why would Congress bypass normal, transparent democratic processes?
Keeping the alarming provisions of the bills intact undoubtedly would wreak further havoc on the nation’s energy challenges and impact the national economy and the pocketbooks of Georgia consumers in the process.
What is at stake?
First, the Senate energy bill contains so-called “price gouging” provisions and the House passed a “stand alone” price gouging bill. These seemingly noble proposals would in effect impose 1970s-era price controls, raising gas prices for consumers and limiting the availability of fuel for American families and businesses. Apparently, many in Congress did not learn the lesson of that failed economic experiment. Congress should instead consider facilitating an increase in domestic refining capacity, not punishing energy providers through additional taxes and regulations.
Second, the legislation would impose government mandates requiring massive expansion of renewable fuels such as corn-based ethanol. In addition to increasing costs for livestock feed, the climbing prices for corn already adversely impact consumers through higher food prices for meat, dairy products and other daily staples.
Now that speculators have sped up production in anticipation of the new mandates and federal subsidies, a glut of ethanol is stuck in the Midwest — stuck because it must be shipped and stored separately from other fuels. Requiring consumers to use enormous amounts of subsidized ethanol at the present time is not practically, fiscally or environmentally sensible.
Third, a certain percentage of renewable energy sources in delivering electricity to all consumers and businesses would be mandatory for utilities.
Renewable energy holds great promise and will clearly be part of our nation’s future energy portfolio, but forcing adoption and uses of alternative energy comes with great economic risk, namely in the form of higher utility bills for customers.
Until these important segments of the industry mature, consumers have affordable and convenient access to reliable energy sources that should not be disrupted. As such, it is unfair to impose penalties on consumers because promising technologies have yet to be embraced and afforded in the marketplace. In fact, while Georgia’s utilities offer a “green” option, just 4,000 of Georgia Power’s 2.25 million customers have opted to pay the premium.
Georgia EMC, the trade association for the state’s 42 electric membership cooperatives, is first and largest in terms of renewable energy generation in the state. Georgia EMC says it remains committed to maintaining its leadership role but, adds spokesman Bill Verner, “Consumer willingness to pay a premium for renewable energy has been far less than initial market research indicated.”
These are just a few of many of the unfortunate provisions being discussed; what is not in legislation is even more even more concerning. Not only are there no proposals to increase U.S. energy production and capacity, some in Congress would remove existing incentives and increase regulatory obstacles to increase needed supply — the key factor guiding today’s energy prices.
Additionally, the lip service being paid to benefits of renewable energy apparently overlooks much mention of bringing additional nuclear power facilities online. Nuclear, as opposed to solar, wind and other fickle resources, is the only proven and safe source of renewable energy that can generate the enormous amounts of electricity needed in our communities.
Policies that would facilitate a market system that increases capacity, production and supply are the key to sound energy policy. Sadly, today’s current political formula is noble goals + special interests + unintended economic consequences = ineffective legislation. And it simply doesn’t add up to a sound, sustainable solution for the nation’s consumers, and by extension, the nation.
Dodd is vice president of the Georgia Public Policy Foundation, an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Thorning, who earned her Ph.D in Economics at the University of Georgia, is senior vice president and chief economist of the American Council for Capital Formation.
Proponents describe them as “energy” bills, but these legislative proposals would neither produce more energy nor make it more affordable. In fact, this collage of ill-conceived provisions is based more on political expediency than any economic reality.
Legislation needs to be based on workable solutions to meet the energy needs of our citizens today and to provide a roadmap that will be economically viable tomorrow.
It is an ominous sign when the likelihood of convening a conference committee (the mechanism by which the House and Senate reconcile the differences between the versions of a bill) is so grim that the congressional leadership has to revert to closed-door, one-party sessions to hammer out a bill that might possibly pass. If this is not an effort to evade public scrutiny, why would Congress bypass normal, transparent democratic processes?
Keeping the alarming provisions of the bills intact undoubtedly would wreak further havoc on the nation’s energy challenges and impact the national economy and the pocketbooks of Georgia consumers in the process.
What is at stake?
First, the Senate energy bill contains so-called “price gouging” provisions and the House passed a “stand alone” price gouging bill. These seemingly noble proposals would in effect impose 1970s-era price controls, raising gas prices for consumers and limiting the availability of fuel for American families and businesses. Apparently, many in Congress did not learn the lesson of that failed economic experiment. Congress should instead consider facilitating an increase in domestic refining capacity, not punishing energy providers through additional taxes and regulations.
Second, the legislation would impose government mandates requiring massive expansion of renewable fuels such as corn-based ethanol. In addition to increasing costs for livestock feed, the climbing prices for corn already adversely impact consumers through higher food prices for meat, dairy products and other daily staples.
Now that speculators have sped up production in anticipation of the new mandates and federal subsidies, a glut of ethanol is stuck in the Midwest — stuck because it must be shipped and stored separately from other fuels. Requiring consumers to use enormous amounts of subsidized ethanol at the present time is not practically, fiscally or environmentally sensible.
Third, a certain percentage of renewable energy sources in delivering electricity to all consumers and businesses would be mandatory for utilities.
Renewable energy holds great promise and will clearly be part of our nation’s future energy portfolio, but forcing adoption and uses of alternative energy comes with great economic risk, namely in the form of higher utility bills for customers.
Until these important segments of the industry mature, consumers have affordable and convenient access to reliable energy sources that should not be disrupted. As such, it is unfair to impose penalties on consumers because promising technologies have yet to be embraced and afforded in the marketplace. In fact, while Georgia’s utilities offer a “green” option, just 4,000 of Georgia Power’s 2.25 million customers have opted to pay the premium.
Georgia EMC, the trade association for the state’s 42 electric membership cooperatives, is first and largest in terms of renewable energy generation in the state. Georgia EMC says it remains committed to maintaining its leadership role but, adds spokesman Bill Verner, “Consumer willingness to pay a premium for renewable energy has been far less than initial market research indicated.”
These are just a few of many of the unfortunate provisions being discussed; what is not in legislation is even more even more concerning. Not only are there no proposals to increase U.S. energy production and capacity, some in Congress would remove existing incentives and increase regulatory obstacles to increase needed supply — the key factor guiding today’s energy prices.
Additionally, the lip service being paid to benefits of renewable energy apparently overlooks much mention of bringing additional nuclear power facilities online. Nuclear, as opposed to solar, wind and other fickle resources, is the only proven and safe source of renewable energy that can generate the enormous amounts of electricity needed in our communities.
Policies that would facilitate a market system that increases capacity, production and supply are the key to sound energy policy. Sadly, today’s current political formula is noble goals + special interests + unintended economic consequences = ineffective legislation. And it simply doesn’t add up to a sound, sustainable solution for the nation’s consumers, and by extension, the nation.
Dodd is vice president of the Georgia Public Policy Foundation, an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Thorning, who earned her Ph.D in Economics at the University of Georgia, is senior vice president and chief economist of the American Council for Capital Formation.