T he House of Representatives voted last week to impose $16 billion in new taxes on the oil industry and give away billions of dollars in tax breaks for so-called “renewable” energy schemes.
The proposals will only drive energy costs higher, while limiting availability and giving foreign oil producers more sway in the U.S. domestic market.
“We are turning to the future,” said House Speaker Nancy Pelosi. If the future is more expensive energy and government subsidies of unproven, uneconomical alternatives, it’s a frightening forecast.
If it had not been for Democrats’ in-fighting, we also would have been saddled with onerous new automobile “fuel efficiency” standards.
The House is expected to add that requirement on automakers when it reconvenes. The Senate in June approved a 40-percent increase in auto mileage to 35 mpg by 2020.
The House’s rush to tax and subsidize suffer from the same flaw as the Senate’s demand that manufacturers make cars the public prefers not to buy. There are numerous economy car options already available to consumers, who obviously still love gas-guzzling SUVs and other less-than-economical vehicles. The fuel efficiency mandate not only would reduce the typical car’s size, making it less safe, but the National Highway Traffic Safety Administration estimates, but it would add $3,000 to $5,000 to the price of an American vehicle.
Democrats contend the public buys too much gasoline, which they say contributes to global warming caused by man’s activities, a condition that may exist (or not), may have detrimental effects (or not), may get worse (or better), and which has occurred throughout the planet’s history. Fossil fuels remain the most economical way to power everything from electric lights to sports cars. Alternatives don’t work as well, and cost much more.
But the Democrat-controlled Congress apparently isn’t concerned about your costs or convenience, or the rights of those who make and sell what you prefer to buy. Instead, they want government to force changes. That means penalizing fossil fuel providers, like oil and coal industries, and rewarding — with your tax money — alternatives that can’t be made and sold profitably, like solar, wind and synthetic fuel blends. But people aren’t about to turn their backs on the cheapest, plentiful sources of fuel, which means we will grow increasingly reliant on foreign oil sources.
This is bad economics and bad energy policy. These bills are arrogant attempts by government to dictate to the market, and interfere with consumers’ choices. There is and will be escalating pressure for more alternative fuels to be developed by industry because world demand is rising so quickly. That, in the end, will move our nation closer to energy independence, not this government intervention.
Worst of all, they demand more tax money to bring about their ideological ends. Energy taxes, according to economist F.A. Hayek, amount to “a pretense of knowledge” that government can improve on market results.
When the government tries to influence markets with rewards and punishment through the tax system, it arbitrarily undermines the true basis for decisions, supply and demand. That wrongly establishes ideological motives as the market’s driving force. We might ask those who want to “cool” the planet or to change the price of fuel when they will know that the planet is cool enough and the price is right.