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Lugar’s “Practical Energy Plan” Means More Government, Less Consumer Choice

Posted By Dan Holler On March 9, 2010 @ 5:27 pm In Energy | Comments Disabled


Kudos to Sen. Richard Lugar (R-IN) for recognizing that current “rhetoric and legislation [which] are focused primarily at climate change” are out of step with the concerns of most Americans. A January poll by Pew Research Center [1] found “dealing with global warming ranks at the bottom of the public’s list of priorities; just 28% consider this a top priority.” The Senator frames his new approach [2] in this way:

I am proposing practical steps that save money and that everybody can support. Threats to our economy and security are of paramount importance. We can best face these threats by reducing our dangerous dependence on foreign oil and creating U.S. jobs in new energy and conservation efforts.

However rhetorically pleasing that may sound, Americans and policymakers should realize that such a plan would mean more power for the federal government and less choice for Americans. When viewed through that lens, the Senator’s proposal is similar to Obamacare, cap-and-trade and the EPA’s proposed global warming regulations. All three are wildly unpopular with the American people.

Let’s briefly walk through Senator Lugar’s policy outline.

First, he proposes “national building performance standards,” government incentives for retrofitting, and strengthened appliance and lighting efficiency standards. The truth is that government intervention is not needed to achieve these sorts of advancements. They happen naturally as consumers gravitate towards better products and services, which is why, as Heritage’s David Kreutzer points out [3], the current “trend toward greater energy efficiency is expected to continue.” Such mandates also come with perverse unintended consequences. Don’t believe me? Think about the CFL light bulbs that contain mercury [4] and how the mandate to buy them killed manufacturing jobs [5] in America.

Second, the Senator proposes a “clean energy standard,” enhanced loan guarantees [6] and early retirement for some coal plants. As my colleagues Ben Lieberman and Nick Loris point out [7], a clean energy standard “is proposed only because renewables are too expensive to compete otherwise. In effect, Washington is forcing costlier energy options on the public. Since renewables are lavished with substantial tax breaks, a national mandate will cost Americans both as taxpayers and as ratepayers. Any incentive proposed by government should in truth be read as a handout.” Since when did expensive energy mandated by the government and subsidized by the taxpayer become a good idea?

Finally, the highest ranking Republican on the Senate Foreign Relations Committee suggests we reduce our dependence on foreign oil by increasing CAFE standards, continuing the severely flawed ethanol mandate and enhancing “domestic oil production.” The latter is a great idea, which Heritage supports vigorously, but only in the context of free markets, not energy security. Unfortunately, the other measures Lugar identifies are not helpful: 1) the partially enacted ethanol mandate has already severely distorted markets [8] and 2) CAFE standards [9] will force consumers to buy smaller, more expensive vehicles.

Policymakers must realize that empowering the federal government, spending more taxpayer dollars, and taking away consumer choice is not sound energy policy. Its not sound policy, period. Our nation’s energy policy needs change, but those changes should favor consumer choice and free enterprise, not government bureaucrats.

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URL to article: http://blog.heritage.org/2010/03/09/lugar%e2%80%99s-%e2%80%9cpractical-energy-plan%e2%80%9d-means-more-government-less-consumer-choice/

URLs in this post:

[1] Pew Research Center: http://people-press.org/report/584/policy-priorities-2010

[2] approach: http://www.lugar.senate.gov/energy/

[3] points out: http://www.heritage.org/Research/Economy/bg2365.cfm

[4] contain mercury: http://www.heritage.org/Press/Commentary/ed031908b.cfm

[5] the mandate to buy them killed manufacturing jobs: http://www.washingtonexaminer.com/opinion/columns/How-GE_s-green-lobbying-is-killing-U_S_-factory-jobs-8162035-55422792.html

[6] enhanced loan guarantees: http://www.heritage.org/Research/EnergyandEnvironment/wm2277.cfm

[7] point out: http://www.heritage.org/Research/EnergyandEnvironment/wm2378.cfm

[8] ethanol mandate has already severely distorted markets: http://www.heritage.org/Research/tradeandeconomicfreedom/bg2151.cfm

[9] CAFE standards: http://www.heritage.org/Research/EnergyandEnvironment/wm1729.cfm

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