• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Morning Bell: Which Policy Leads to More Affordable Energy?

    Congressional Democrats returned to work yesterday after their five-week summer vacation. While House Republicans stayed in Washington to debate energy policy all summer, Congress now has only three weeks left before it adjourns for the year. Many are predicting that little will get done in September, but one issue is guaranteed to be addressed: energy. While Democrats would prefer to do nothing until next year, their failure to pass appropriations bills means Congress must pass a continuing resolution by September 30 or the government will shut down.

    Any continuing resolution that comes from Democrat leadership, however, is guaranteed to contain a continuation of the ban on energy production in the Outer Continental Shelf (OCS). Desperate to protect vulnerable members of their party from voting against new energy production at a time of high energy prices, a number of “comprises” are floating around Capitol Hill. Heritage senior policy analyst Ben Lieberman uses a simple test when grading energy policy: good energy policy leads to substantially greater supplies of affordable energy, while bad energy policy leads to less. The three most prominent policy options are examined below:

    The Gang of 10: Senate Majority Leader Harry Reid has promised a vote on the bill originally stitched together by five Republicans and five Democrats. Their plan would codify most of the current OCS ban, including all drilling within 50 miles of the coast (only 25 miles is needed to prevent offshore platforms from disturbing coastal views). Only parts of the ban in the Eastern Gulf of Mexico would be lifted, while some Atlantic states would be allowed to opt in and others would not, and the entire Pacific ban would become permanent. Under very generous assumptions, this policy would open only 22% of unavailable oil and 29% of unavailable natural gas. But even these meager new supplies come at a steep cost. The Gang of 10 plan also includes costly new government mandates (like the ones that are keeping this new 65 mpg Ford from the American marketplace) and it raises taxes on new oil and gas production.

    The Pelosi Package: House Democrats have not publicly unveiled their plan, but early reports indicate it allows even less affordable energy to come to market. Pelosi would not allow drilling within 100 miles off any coast and also does not plan to allow any of the states to share in any of the fees and royalties oil companies always pay for the right to drill. To placate her environmentalist base angered by these paltry concessions, Pelosi will punish oil and natural gas producers with $18 billion in new taxes and slap power producers with costly new alternative energy mandates.

    House GOP: The “all-of-the-above” energy plan outlined by House Republicans not only opens access to all estimated 18.17 billion barrels of oil and 77 trillion cubic feet of natural gas in the OCS, but it also includes the estimated 10.3 billion barrels of oil in the Arctic National Wildlife Refuge. The approach also attempts to improve energy conservation with tax credits for businesses and families who purchase more fuel-efficient vehicles. Barriers to the revival of the nuclear power industry are removed, and the tax credits for renewable energy (including but not limited to wind, solar and hydrogen) are part of the plan.

    The politicians in Washington are going to be making a lot of claims about who is really trying to make energy more affordable for Americans. It is important Americans know the facts about whose policies will actually accomplish that.

    Quick Hits:

    Posted in Ongoing Priorities [slideshow_deploy]

    8 Responses to Morning Bell: Which Policy Leads to More Affordable Energy?

    1. Dave Boggan, New Orl says:

      The Heritage Foundation provides a much needed service to anyone in need of a clear, focused voice for conservatisum. For those of us on the outside of politics, desparate to get political news based on common sense, your service is absolutely invaluable.

      Please keep up the good work,

      Thanks

    2. Ricky, Georgia says:

      About the severance pay of the CEOs of Mac & Mae. Who makes the decision on how much money they get? It was said the shareholders have little or no say about it. Where I work, they pay you to do your job and if you don't or can't do it they send you on your way. Without any severance pay for doing a crummy job, I might add. I would sure like a job working for those decision makers at Mac & Mae if they have any openings. They sure sound like generous people to work for.

    3. Michael J O'Bri says:

      The two most pressing domestice issues at hand today are energy and the economy, or more specifically housing and energy, hence the economy. Both impact directly on disposal income, hence consumer spending which accounts for 66% of GDP.

      First energy…

      The energy debate is useless at this point with democrats in control of both houses. Democrats will try any and all means to continually weaken this great country packaged in terms of social justice and world benevolence. Going back to the Reagan diaries [which I have read thoroughly], President Reagan noted that the lack of drilling off shore is a national security problem. He was blocked time and time again by Tip O'Niell and the democratic leadership. We have not had an energy policy since Eisenhowe while Reagan and this President have tried unsuccessfully, Clinton was busy in the Oval Office with another agenda.

      Housing

      Democrats are also largely responsible for Freddie and Fannie failures for hindering robust oversight and promoting special interest mortgages [mortgages you cannot pay back]. The american people need to become better educated about our congress and who cares for who. It is not the Democrats for sure.

      We need representatives that understand how to manage a nation, robust energy policies, financial accountability, all the good things. This group does not.

    4. george dubendris,rum says:

      I live in New England where it gets preety chilly during the winter.

      Suggesting we turn our heat down and throw on a sweater is a very callous remark.

      It's proof how Obama and his subjects truly are out of touch.How unamerican.

      Some of our fellow New Englanders don't have heat to turn down or a sweater to throw on.

      It seems our representatives are out of touch also.

      But in thinking about it I guess that getting angry is a waste of time for liberalism is truly a mental disease.

    5. DON ABERNATHY, ALBE says:

      Harry Reid and Nancy Pelosi are the two most un- American people I know. This Country deserves what it is about to get if they allow these two to continue to run roughshod over the voting public.

      They should be fired from office, and sent to live in Russia, or Cuba, or even in China if this is what they want for America.

      I don't worry for me, but for my grandchildren.

    6. Thomas Gray, South C says:

      The US energy supplys are locked up by the environmentalist,,,,,It's magic,,,,,wrong, It's insanity.

      My children in maine can't pay the oil bill from last year what do these people think about my vote???

      solor and wind does not work in maine in the winter.

      guess how I'm going to vote…………………………

      Maine, which received $38 million last year from the federal government, would need $70 million just to deliver the same benefit in light of rising fuel prices, said Jo-Ann Choate, the manager of energy and housing services for the Maine State Housing Authority.

      "This is a real crisis for the Northeast," she said.

      Choate said many residents are carrying a past-due balance from last winter's bills. snip,,,,

      Lets see if I've got this straight:

      One set of tidy fees are dropped into deep trouser pockets when a mortgage is originated.

      Mortgages are more often than not sold on to third parties, that also more often than not consolidate multiple mortgages into securities called Collateralized Debt Obligations (CDO's).

      Nobody really looked at the components of CDO's to differentiate the good from the toxic waste (sub prime and high risk mortgages) – making the job of ratings agencies more or less impossible. Rather than admit to talking out their butts, the ratings agencies and the investment banks, carried on and sold the toxic waste as if it were top shelf material.

      When the people that were supposed to make the mortgage payments started to default resulting in foreclosure – the mortgage holders repossess the properties and also turn to Freddie Mac and Fannie Mae to collect on some kind of insurance that guarantees repayment on some part of the mortgage.

      It turns out that Freddie Mac and Fannie Mae are insolvent and did not adequately re-insure to cover themselves.

      So now the USA taxpayer, in addition to paying their own mortgages, is having a [future trillion dollar] debt foisted on them to ensure that big-finance can own millions of homes and at no cost to themselves – (sarcasm) its magic!

      Tom.

    7. Dan, Springfield, IL says:

      For the life of me I can’t understand why we haven’t instituted a Manhattan Project on Energy with two broad charges:

      1. Evaluate present known alternatives and determine what steps we might take in the short term to utilize their highest gain. This step might cover all sorts of energy related matters from the efficency of the gasoline motor, solor, wind, insullation, rail service, geo-thermal, modification of the present gasoline engine,oil additives or enhancements, energy storage long life battery usage – etc., etc., etc.

      2. The second part of this Manhattan Project on Energy would be the more crucial aspect of the program. This would take the findings from part number 1 or something completely different that would be a true breakthrough into a self sufficent energy source(s). An example might be radiation free nuclear nanosized battery construction and usage. This part of the project would be our shot to the moon.

      But the only alternatives I’ve seen from any political party has been to throw money and subsidize solar panels etc., which we’ve already attempted or grants to mom and dad operations who are doing not much more than what we’ve already done. It just doesn’t seem that we’re serious about this yet and only through a centralized well funded Manhattan Project on Energy are we actually going to even have a chance of making the correct short term and long final term solution towards energy independence.

    8. Pingback: Morning Bell: Hold Pelosi to Her Promise | The Foundry: Conservative Policy News.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×