Energy bill misses some opportunities

Posted: Monday, August 08, 2005

The following editorial first appeared in the Anchorage Daily News:

New York Times columnist Paul Krugman speaks for many critics when he says the energy bill that recently passed in Congress is "simply an exercise in corporate welfare, full of subsidies and targeted tax breaks."

That's a little harsh. The bill makes some useful changes in dozens of areas, some of which will benefit Alaska. But the basic critique is right: The bill won't make a noticeable dent in the nation's dangerous dependence on oil, imported or otherwise. It won't bring price relief for consumers at the gasoline pump. And it won't do much to slow the greenhouse gas emissions that are accelerating global warming.

To craft an energy bill that could get enough votes to pass, Congress had to steer clear of big policy changes that might have made a real difference. There is nothing that will drive improvements in the fuel efficiency of the nation's vehicles. There is no crash program to convert vehicles to cleaner fuels that don't compromise our national security. There is no provision to open Alaska's Arctic National Wildlife Refuge to oil drilling. ANWR was left out for understandable political reasons, but that means one of the nation's best prospects for boosting domestic oil production stays off the table.

An energy bill with real bite could be very simple. Congress could slap a higher tax on gasoline and other fossil fuel use. By changing the price of energy business-as-usual, Congress could give the U.S. economy a market-based incentive to switch to energy sources that are more politically secure and don't fuel global warming.

But such a drastic step has never remotely approached the realm of political feasibility. Instead, Congress passed a complex web of regulations, tax incentives and outright subsidies.

The bill mandates a big increase in ethanol production, which might slightly offset some oil used to produce gasoline. It funds research on hydrogen fuel cells and other experimental technologies. It sets higher efficiency standards for appliances. It is loaded with tax incentives for energy-efficient houses, commercial buildings and hybrid or fuel cell vehicles.

Those and scores of other provisions may not mean a lot to the nation's bottom-line energy consumption, but they mean a lot to specific industries and lawmakers.

Alaska Sen. Lisa Murkowski is a good example. A member of the conference committee that crafted the final compromise, she used more than two pages in a press release to talk up Alaska items in the energy bill. Some of those are helpful, but none are profound.

The energy bill authorizes, but does not require, $550 million of rural energy funding over next 10 years through the Denali Commission. It promotes carbon dioxide injection to boost oil production in Cook Inlet. It funds research into natural gas hydrates, a huge potential resource locked into Alaska's permafrost. It includes incentives to produce energy from diseased timber.

That's typical of the way the energy bill works. Congress loaded it up with enough relatively inoffensive benefits for enough lawmakers to win passage.

That approach makes political sense. Unlike previous efforts, this time Congress actually passed an energy bill. But the end result is not something that will protect the nation's security and economy from long-term dependence on unstable, volatile energy supplies.

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