IER Reviews 'Gang of 10' Energy Proposal -- Better Off Doing Nothing
The Institute for Energy Research (IER) released today an analysis of the "New Era energy plan" proposed by U.S. Senators calling themselves the “Gang of Ten”. Publicly-available details on the plan are limited to press releases and brief summaries, which form the basis of IER’s analysis. The Institute’s resident economist, Robert Murphy, issued the following statement:
“Faced with the prospect of having the ban on offshore energy production expire at the end of September if Congress does nothing, this headline-hungry gang decided it had to do something before leaving town for the August vacation,” Murphy said. ““The New Era plan is the same as the era we find ourselves stuck in today – flush in subsidies, tax credits, and various other government handouts, but short on the energy supplies our economy and our consumers need to prosper. American families would be better served if the Gang and the entire Congress simply stopped trying to help, stepped aside, and let the offshore ban expire.”
The Gang of Ten calls for additional offshore production in areas currently under moratoria, but proposes a process that fails to guarantee/deliver any new supplies whatsoever. New production on federal offshore lands is to the discretion of several state legislatures.
Production potential is severely limited. Only four coastal states would be granted the ability “opt out” of energy bans. Arbitrary 50-mile buffer zones would exclude potential resource deposits, such as the Gulf of Mexico’s Destin Dome, which is some 25 miles offshore.
The plan ignores the urgent national need to repeal the offshore energy exploration and production bans that have contributed to the very problem their plan purports to solve. It may even give the ban the force of permanent law for the first time ever. This is an especially short-sighted, as the Congressional ban is set to expire in less than two months, on October 1, 2008, which will open the entire 1.76 billion acre outer continental shelf (OCS) to energy production.
Spending $85 billion on tax credits, subsidies, and various other federal handouts in lieu of increasing domestic oil and gas production is the kind of failed approach to energy policy that helped deliver the crisis we find ourselves in today. Government continues to be the source of the problem; government-centered ‘solutions’ will only compound our problems.
Dedicating additional, inordinate sums to biofuel programs is especially unwise, as they represent up to 75 percent of the recent spike in food prices, according to the World Bank. They are not as “renewable” as their proponents claim, and may not even provide any environmental benefits whatsoever.
Clearly, we still have a lot of ground to cover before a real solution will even be considered. I remain convinced that "All of the Above" is still the best policy on the table...
The Institute for Energy Research (IER) released today an analysis of the "New Era energy plan" proposed by U.S. Senators calling themselves the “Gang of Ten”. Publicly-available details on the plan are limited to press releases and brief summaries, which form the basis of IER’s analysis. The Institute’s resident economist, Robert Murphy, issued the following statement:
