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Wednesday, March 04, 2009

Obama’s Energy Agenda

No matter how you come at it – from an environmental or energy cost/supply point of view – President Obama’s energy agenda just doesn’t add up.

That was made crystal clear in an excellent piece in the March 2 D.C. Examiner by Iain Murray, who is the Director of Projects and Analysis and Senior Fellow in Energy, Science and Technology at the Competitive Enterprise Institute.

Consider the following key points from Murray:

• “One of wind power’s biggest shortcomings is the simple fact that the wind does not blow all the time, especially on hot days when electricity is needed for air conditioning. The wind industry unspoken secret is that to make up for this inbuilt shortfall, it needs backup power generation facilities, which use fossil fuels, mostly natural gas. So the supposed benefit of wind – carbon-free electricity – is an illusion. Solar has the same problem, as the sun doesn’t shine all day.”

• “Now what about the cap-and-trade scheme? According to the Congressional Budget Office, the President’s budget includes revenues from the auctioning of carbon permits by 2012, probably reaching $300 billion by 2020. Of this, only $15 billion would be invested in alternative energy in the form of spending and tax incentives. The rest would be rebated back to consumers who have been forced to pay more for energy as a result of the program. In other words, the government will put us all on energy welfare. And as rebate schemes involve overhead costs such as employing bureaucrats to administer the schemes, the rebates will never cover the full amount of our increased costs.”

Read the entire piece, as Murray makes additional points that must be kept in mind as we wade further into the energy policy debate.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council

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