Neither Energetic Nor Efficient

, Spencer Irvine, Leave a comment

The government’s energy efficiency policies don’t produce much of either energy or efficiency according to analysts who have studied the practices.

Former U.S. Congressman Cal Dooley, National Taxpayers Union Executive Vice President Pete Sepp and Let Freedom Ring!’s Alex Cortez were the key speakers of the recent Blogger’s Briefing at the Heritage Foundation. Mr. Dooley, chief executive of the American Chemical Council, noted the ramifications of the Obama administration’s current energy policies on the use of natural gas. He pointed out that natural-gas vehicles are not the problem, but the heart of the issue lies on the effects of natural gas prices and the competitiveness of the American chemical industry.

The NAT Gas bill, according to Dooley, will “pick winners and losers” and “distorts” the economic balance through government subsidies. He was concerned about the costs of natural gas vehicles, where in an Ernst & Young study, the amount per vehicle to convert from oil to natural gas will cost up to $135,000 over 5 years, not the $64,000 the government claims would be the cost. Ernst & Young is a market research firm.

Cal Dooley also noted that his organization does not object to natural gas vehicles, but oppose the subsidies that will potentially increase the price of natural gas. With an increase in prices, the American chemical industry will lose its ability to compete with other corporations and lose its current competitive edge. The recent competitive edge is due to low prices, which has led to a boost in capital investment. He pointed out that 400,000 potential jobs could be added to this rising industry. However, Dooley said, the government wants to enact bad energy policy that will continue to lose jobs and cost taxpayers more money in a bad economy.

Pete Sepp agreed with Dooley that wasteful spending of taxpayer dollars for the sake of bad energy policy is bad government policy for taxpayers. Another bad policy, according to Sepp, is the EPA’s latest study harping $2 trillion in benefits for implementing the Clean Air Act. In an NTU-sponsored study conducted by economist David Montgomery, the EPA’s measurements and conclusions leave much to imagination. Montgomery’s primary measure focused on the consumer’s willingness to pay to maintain healthy living, with questions such as “how much are you willing to pay to not have emphysema due to air pollution?” These measures, as Sepp pointed out, are hard to convert and tie to actual monetary and economic benefits. The EPA’s latest analysis on the Clean Air Act uses this interpretation to claim the act will generate $2 trillion in benefits. Future studies could follow the EPA model, potentially influencing could government cost-benefit analyses down the road. As Sepp said, it could lead to more “sun-shiny stories” and “enlarging something to a level of absurdity” in future government studies.

Alex Cortez briefly introduced the “Cut, Cap, Balance” pledge to those in attendance and strongly encouraged all to sign and join the pledge, as well as pressure their lawmakers to do so. He summarized a survey, conducted by Let Freedom Ring, regarding the public’s feel on the debt ceiling crisis. The overall consensus was that there needs to be spending control in Congress, with respondents coming from all party lines. The first step, Cortez noted, is to first have lawmakers sign the “Cut, Cap, Balance” pledge and then to push lawmakers to pass a balanced budget amendment.

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