It is difficult to overestimate the sheer wrongheadedness of the energy bill Congress passed and the president signed Wednesday.
Even if it were a good idea for government to mandate what kind of energy should be used and how, this bill includes obvious missteps and mistakes that will cost taxpayers and consumers for decades to come.
First premises first: Is energy “independence” an achievable or desirable goal? And is it obvious that a group of politicians and special-interest groups with no particular expertise and no bottom line at stake know more about the most efficient and desirable forms of energy than do millions of consumers and thousands of businesses with a personal stake in making the correct calculations?
The answer to the first question is a double no. This country’s complex economy cannot operate solely on energy resources available in this country, and it is wasteful and expensive to try.
We live in a global energy economy, and that’s good. It leads to more efficient allocation of resources than in a closed economy.
Even if energy independence were desirable, however, this bill would do little to achieve it. The closest to a direct route would be eliminating government restrictions on oil exploration and nuclear development. Instead, this bill erects more restrictions and tries to compensate with a complicated system of subsidies whose impact is to distort the marketplace, increase costs and reduce efficiency.
A symbol of this bill’s obtuseness is the devotion to yesterday’s enthusiasm, ethanol and biofuels. It is becoming apparent that previous ethanol mandates are driving up food prices, draining aquifers, and increasing fertilizer runoff to the point of creating “dead zones” in rivers and in the Gulf of Mexico.
Common sense would suggest a reversal of policy or at least a moratorium. Instead this bill mandates a fivefold increase in biofuels by 2022, which is likely to cost taxpayers about $140 billion over 15 years, according to a Washington Post story.
There are places for a variety of energy sources in an advanced economy, but the way to find the most useful mix is through marketplace forces, not government mandates.