Congressional Democrats returned to work yesterday after their five-week summer vacation. While House Republicans stayed in Washington to debate energy policy all summer, Congress now has only three weeks left before it adjourns for the year. Many are predicting that little will get done in September, but one issue is guaranteed to be addressed: energy. While Democrats would prefer to do nothing until next year, their failure to pass appropriations bills means Congress must pass a continuing resolution by September 30 or the government will shut down.
Any continuing resolution that comes from Democrat leadership, however, is guaranteed to contain a continuation of the ban on energy production in the Outer Continental Shelf (OCS). Desperate to protect vulnerable members of their party from voting against new energy production at a time of high energy prices, a number of “comprises” are floating around Capitol Hill. Heritage senior policy analyst Ben Lieberman uses a simple test when grading energy policy: good energy policy leads to substantially greater supplies of affordable energy, while bad energy policy leads to less. The three most prominent policy options are examined below:
The Gang of 10: Senate Majority Leader Harry Reid has promised a vote on the bill originally stitched together by five Republicans and five Democrats. Their plan would codify most of the current OCS ban, including all drilling within 50 miles of the coast (only 25 miles is needed to prevent offshore platforms from disturbing coastal views). Only parts of the ban in the Eastern Gulf of Mexico would be lifted, while some Atlantic states would be allowed to opt in and others would not, and the entire Pacific ban would become permanent. Under very generous assumptions, this policy would open only 22% of unavailable oil and 29% of unavailable natural gas. But even these meager new supplies come at a steep cost. The Gang of 10 plan also includes costly new government mandates (like the ones that are keeping this new 65 mpg Ford from the American marketplace) and it raises taxes on new oil and gas production.
The Pelosi Package: House Democrats have not publicly unveiled their plan, but early reports indicate it allows even less affordable energy to come to market. Pelosi would not allow drilling within 100 miles off any coast and also does not plan to allow any of the states to share in any of the fees and royalties oil companies always pay for the right to drill. To placate her environmentalist base angered by these paltry concessions, Pelosi will punish oil and natural gas producers with $18 billion in new taxes and slap power producers with costly new alternative energy mandates.
House GOP: The “all-of-the-above” energy plan outlined by House Republicans not only opens access to all estimated 18.17 billion barrels of oil and 77 trillion cubic feet of natural gas in the OCS, but it also includes the estimated 10.3 billion barrels of oil in the Arctic National Wildlife Refuge. The approach also attempts to improve energy conservation with tax credits for businesses and families who purchase more fuel-efficient vehicles. Barriers to the revival of the nuclear power industry are removed, and the tax credits for renewable energy (including but not limited to wind, solar and hydrogen) are part of the plan.
The politicians in Washington are going to be making a lot of claims about who is really trying to make energy more affordable for Americans. It is important Americans know the facts about whose policies will actually accomplish that.
- By conservative estimates, the fired CEOs of Freddie Mac and Fannie Mae will receive severance packages worth $7.3 million and $6.3 million, respectively.
- The bailout of Fannie Mae and Freddie Mac threatens the financial health of several dozen of the banks that bought shares in the two companies.
- Writing in the Wall Street Journal, John McCain and Sarah Palin promise to, “make sure that [Fannie and Freddie] are permanently restructured and downsized, and no longer use taxpayer backing to serve lobbyists, management, boards and shareholders.”
- The auto industry this week begins a hectic push to get Congress to fund $25 billion, maybe even $50 billion, in promised loan guarantees.
- Russia’s foreign minister says that Russian troops will stay in Georgia’s breakaway provinces of Abkhazia and South Ossetia for a long time to come.