TONELSON: Obama ‘all-of-the-above’ plan lacking in energy

ANALYSIS/OPINION:

As gasoline prices drift higher, threatening economic growth, the White House excoriates Republicans for having no comprehensive energy plan while claiming to have an “all-of-the-above” plan of its own. But the White House plan is nothing more than a full court press to regulate carbon dioxide in direct rejection of comprehensive 2007 legislation by a Republican Congress to reduce vulnerability to international oil prices.

The 2007 legislation is the Energy Independence and Security Act (EISA) initiated by President Bush and adopted by Congress in December 2007, several months after the Supreme Court ruled carbon dioxide a “pollutant” under the Clean Air Act.

It is EISA that is responsible for most of the recent and substantial reduction in oil imports that the White House is taking credit for. The problem is that the White House is now in the process of nullifying that statute in the name of fighting global climate change. The perverse result will be increased oil dependency, higher inner-city pollution, and virtually no actual reduction of carbon dioxide emissions.

EPA desperately wants to disrupt EISAs comprehensive, reasoned statutory approach - even though doing so will produce no real reductions in carbon dioxide. The reason is simple: Once EPA has regulated fuel economy, it can claim that carbon dioxide is now a “regulated” pollutant under the Clean Air Act, and use this fact to apply limitless carbon dioxide regulations to the entire economy.

Congress disrupted this EPA strategy by recommitting the regulation of fuel economy in 2007 to the Transportation Department, where it had initially placed it in the original 1975 automobile fuel-economy legislation.

A key part of EISA is a detailed set of incentives for clean domestically produced alternative fuels like compressed natural gas, alcohols, coal-to-liquids and other competitors to gasoline and diesel, which now dominate the transportation fuels distribution system. The effect of these incentives is to allow domestic fuels to realize both their nonimportation and local pricing advantages over imported oil as well as their capacity to dramatically reduce the artificially high cost of urban pollution control.

EPA’s response was to unilaterally repeal EISA in its own carbon dioxide regulations under the Clean Air Act - which logic would say had been displaced or pre-empted by EISA. One consequence is the elimination of the alternative fuel provisions designed to level the playing field for non-polluting competing fuels with respect to light-duty vehicles, on top of the White House refusal to allow the use of compressed natural gas incentives in the fuel-economy rules it issued last year for heavy-duty trucks.

Whatever the president says about his “all-of-the above” energy plan, his agencies are consistently blocking competition to gasoline and diesel.

The other major consequence is to higher pollution-control costs, which would have been reduced by non-polluting alternatives like compressed natural gas and alcohols. Fuel-efficient cars get driven more because driving is cheaper - this is the so-called “rebound” effect that increases traditional particulate pollution. Equally important, the EPA rules require the auto companies to use gasoline technologies that will increase these same pollutants, which will cost billions to clean up after the fact.

Cleaner alternative fuels are thus important not only because they are domestically produced, but also because they do not produce deadly particulate pollution caused by increased driving and new technologies like higher compression under EPAs rules.

The irony is that for all of this costly collateral damage, the EPA auto rules will likely produce no carbon dioxide reduction beyond what EISA already directed the Transportation Department to achieve. So EPA is authorizing itself to regulate the entire U.S. economy without congressional direction or limit solely on the basis of auto carbon dioxide regulations that do not actually reduce carbon dioxide. At the same time, the agency is repealing the all-of-the-above strategy the White House claims to be promoting.

Alan Tonelson is a research fellow at the U.S. Business and Industry Council, a national business organization whose nearly 2,000 members are mainly small- and medium-sized domestic manufacturers. Author of “The Race to the Bottom,” Mr. Tonelson also is a contributor to the council’s website, www.AmericanEconomicAlert.org.

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