Feigns, planes and automobiles

OPINION:

How many senators does it take to change a light bulb?

Sixty-five.

That’s the number of U.S. senators who passed a bill last June to reduce American dependency on foreign oil by tightening the standards to measure fuel and energy efficiency and by requiring more production of ethanol. The bill — which began its life as H.R. 6 in the House — will soon go to a conference committee where members of both houses of Congress will iron out their differences.

The American automobile industry is one target of the bill. Automakers are currently governed by the 1989corporate average fuel economy (CAFE) standards, which require an automaker’s entire fleet of cars to have a gas mileage of 27.5 mpg, and its fleet of SUVs and small trucks 22.2 mpg. H.R. 6 would increase the CAFE fleet-wide average for all vehicles to 35 mpg by 2020 — a 40 percent hike. This would give Detroit an incentive to build smaller and lighter cars, which are less safe, and will lead carmakers to spend their time and money complying with government rules instead of making better automobiles. The logic of Washington regulators is such that improved auto efficiencywill only be achieved by lowering highway speeds and banning more powerful engines. If the bureaucrats had their way, we’d all get to work by maneuvering our Mini Coopers around 16-wheelers on the interstate.

And if we work in a federal government building our cubicles will be lit by Energy Star fluorescent lighting. That’s what the bill requires by October 1, 2013. Of course not everyone likes to see — or be seen — by fluorescent light, but if the cost savings are as great as members of Congress believe, savvy consumers wouldn’t need Congress to mandate use of fluorescent bulbs.

Unfortunately, public discussions of energy policy are increasingly captive to charged emotions and dark suspicions. The Senate bill makes “price gouging” a crime punishable by fines ranging up to $5 million and five years in jail — while vaguely defining the offense as charging an “unconscionably excessive” price. Is $3 a gallon gas unconscionably excessive for you? Not if you can afford a $400 haircut. For the rest of America, you’re in luck if you can persuade someone in the Federal Trade Commission to agree with you.

The bill also calls for a greater than fourfold increase in production of “renewable” fuels from the current 7.5 billion gallons to 36 billion gallons by the year 2022. Moreover, Congress in its wisdom further decided that only 15 billion gallons of that fuel may come from corn. The other 21 billion gallons must come from advanced biofuels for which there is not yet a commercial market. But never fear. Congress will promote more research by giving grants and guaranteeing loans to whichever of its friends seek to develop this new snake oil.

The Senate bill is somewhat less pernicious than the House version, in that it omits a requirement that 15 percent of the power that utility companies sell must come from renewable energy sources, a requirement known as “renewable portfolio standard.” The House version of the bill would force companies that currently produce electricity from “non-renewable” energy sources — oil, gas and coal — to either produce renewable energy or else buy compensatory energy “credits” from those who do. If the final energy bill includes renewable portfolio standards, expect the cost of energy to skyrocket — especially if nuclear power and hydroelectric power are not counted as renewable fuels (and they won’t be, if the environmentalists have their way).

The House version of the bill aimed to repeal the “suspension of royalties” which was granted to oil companies in the Energy Policy Act of 2005. This would place royalties paid to the federal government directly into a “Strategic Energy Efficiency and Renewables Reserve” account to “offset the cost” of renewable energy research. These royalties will impose increased costs of anywhere between $28 billion and $32 billion over 10 years. Using oil companies, who are providing a market-demanded energy resource, to fund non-viable alternatives through tax revenues is ludicrous. Ethanol requires more energy to produce and produces less energy per gallon than gasoline. Why should a more expensive method of production be subsidized on the back of an industry which should stand on its own merit?

Requiring a company to use or produce new kinds of energy that are more expensive than what’s currently available is in effect a tax on the American people. Make no mistake. The cost of complying with this brave new energy policy will be transferred to consumers. The House and Senate should keep that in mind when they meet to iron out their differences. And so should President Bush.

James Dellinger is the executive director of Green Watch at the Capital Research Center, a Washington, D.C.-based think tank.