Fact: All forms of energy are subsidized. Oil. Gas. Coal. Nuclear. Renewables. No type of energy stands alone in the market, free of tax breaks, research grants or other forms of government help. Fact: Subsidies are ultimately funded by the taxes we pay.
Few except pure libertarians would do away with all government intervention in the energy marketplace. But the salient question is, given the increasing problems connected with conventional energy, which subsidies make sense and which don't?
The question must be asked because our current energy habits will not sustain the environment, our national security or our economic health. The United States must establish a long-term strategy to shift to cleaner, more diverse, more secure sources of energy used more efficiently. Subsidies can be a major tool in this effort, and those that move us closer to that goal deserve support. Those that don't should be terminated.
Beyond environmental impacts, there are good reasons to rewrite our nation's energy script. America uses too much oil too inefficiently. Imported oil fills the gap between rising demand and declining domestic production. In 2004, imports accounted for 58 percent of consumption. By 2030, imports will reach 62 percent, government projections forecast.
Oil dependence leads to serious security risks. Many oil-exporting countries, such as Iran and Saudi Arabia, are run by unpredictable regimes. Violence and civil unrest in such countries can roil an increasingly tight global oil market, adding a "fear premium" to prices and exposing the economy to disruptions that could send fuel prices upward. Furthermore, high U.S. demand keeps oil prices high.
At some point, crude oil production will peak and begin an inexorable decline. No one knows for sure when "peak oil" will be reached, but some experts say it is just around the corner. Long lead times will be necessary to introduce replacement fuels, according to a 2005 study published by the National Energy Technology Laboratory. Better to start sooner on alternatives rather than later, or risk serious harm to the economy, the study said.
The clinching argument for a new energy strategy is global warming. Few reputable scientists disagree that the climate trend bears human fingerprints. Without U.S. leadership and action, there is little chance of halting the buildup of heat-trapping greenhouse gases in the Earth's atmosphere. The risks of harmful consequences - coastal flooding, increasingly violent weather, spreading of pests and disease, water and food shortages - will rise to dangerous levels. As science academies from the United States and 10 other nations said in a joint statement last year, prompt action is necessary to prevent dangerous, human-caused interference with global climate systems.
Unfortunately, Congress' approach to energy policy has been to kowtow to lobbyists and campaign donors rather than craft a strategy to deal forthrightly with energy-related risks. The Energy Policy Act of 2005 was a wasted opportunity of historic proportions. At a time of rising fuel prices, Middle Eastern turmoil and growing evidence that humanity is messing with the planetary thermostat, Congress produced a bill that the Philadelphia Inquirer called a "lobbyist's paradise and a citizens' nightmare." It contains $85 billion worth of subsidies for conventional energy research, royalty concessions and tax breaks, according to Taxpayers for Common Sense, a budget watchdog group.
Useful measures in the legislation that promote conservation and resource diversification were offset by handouts that will sustain our addiction to oil. Proposals to boost fuel economy standards and increase investment in renewably generated electricity were left on the cutting room floor. An amendment to adopt caps on greenhouse gas emissions was blocked.
One of most egregious lollipops in the legislation is a $1.55 billion fund to pay for oil and gas research. Most of the fund will be administered by a private consortium, and a leading candidate is a group backed by former congressman Tom DeLay and made up of executives from Halliburton and other energy companies. Critics call it a giant slush fund for cash-rich oil companies.
Such a cockeyed distribution of energy subsidies is an example of what Jared Diamond, author of Collapse: How Societies Choose to Fail or Succeed, calls "rational bad behavior." The recipients of such largesse are few in number, but highly motivated to keep their place at the trough. Those who pay the subsidies (the taxpayers) are large in number, but each individual only pays a little and is not motivated to spend a lot of time fighting the subsidies.
Redirecting subsidies is an essential component of a strategy that deals with the energy problems on our nation's doorstep. The necessary elements to do so are clear and well within America's entrepreneurial and technological capability. They include improving energy efficiency across the board, mandating lower carbon emissions, and replacing oil and other fossil fuels with solar, wind, homegrown biofuels and other clean energy sources that are not under the control of dodgy foreign regimes.
Time is short to change our energy course from the risky path that we are traveling to a new path of lower costs, less danger and wise stewardship of the only atmosphere that we have. Congress can be prodded to act in the country's best interests only if citizens make their views clear and demand that lawmakers enact a rational energy strategy equal to the difficulties ahead. It will take a mix of good ideas and strong will to move forward. Ideas are available in abundance. But only we, the people, can supply the necessary will.
Jim DiPeso is the policy director of Republicans for Environmental Protection ( REP America ), a grass-roots organization that seeks to restore the Republican conservation tradition (www.repamerica.org).
Excerpted from Mother Earth News magazine, the original guide to living wisely. Read the full story at motherearthnews.com or call 800-234-3368 to subscribe. Copyright 2005 by Ogden Publications, Inc.
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