Energy Bill Bust

By DAVID CARGO, former Governor of New Mexico and a member of REP’s New Mexico Chapter

AN HISTORICAL DOCUMENT: This op-ed was published in the Albuquerque Journal on June 19, 2002.

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Former Governor Dave Cargo was an enthusiastic member of REP’s New Mexico Chapter from 1997 to his death in 2013.

Last July, I was part of a small group of Republicans who gathered in Washington to take a position on energy legislation. The group included some well-known and historic Republican names, including Susan Eisenhower, Larry Rockefeller, Russell Train, Theodore Roosevelt IV, and others who care deeply about this country, its future and its great natural resources.

We added the names of hundreds of newly elected officials and sent a letter to President Bush on behalf of “Republicans for a Responsible Energy Plan.”

Then we added a number of new names and took out a full-page ad in The New York Times, Roll Call and the Washington Post.

As a group called “Americans for Security,” we enlisted the help of newsman Walter Cronkite, actor Harrison Ford, former U.S. Senator Mark Hatfield of Oregon, former New Jersey Governor Thomas Kean, former U.S. Senator Charles Mathias of Maryland, former Michigan Governor Bill Milliken, former Delaware Governor Russell Peterson, former U.S. Senator Robert Stafford of Vermont, and many other former and current officeholders.

These are mainstream Republicans, and our goals certainly were not radical.

Simply stated, we wanted to:

• Protect America’s national treasures from energy development, particularly the Arctic National Wildlife Refuge – which was created by President Eisenhower and a Republican Congress. Other wild areas should also be preserved.
• Raise fuel economy standards for cars and sport utility vehicles to 40 miles per gallon over the next decade.
• Support mass transit.
• Achieve energy efficiency for homes, offices and factories through tax credits and upgraded efficiency standards.
• Encourage a boom in the production of solar, wind and hydrogen fuel cell energy sources through tax incentives paid for by redirecting fossil fuel subsidies.
• Cap carbon dioxide emissions, as promised in the presidential campaign, and responsibly utilize natural gas as a “bridge” to our energy future.

Shortly thereafter, Senate Bill 1766 and House Bill HR 4 were introduced in Congress. Then the lobbyists went to work on both bills. The Senate bill was originally 530 pages long, but amendments were added by way of 976 additional pages, consisting mostly of tax credits, tax breaks, and new spending.

In many ways, the energy bill is now the tax reduction bill. In fact the two bills contain $20.6 billion in tax incentives and tax breaks over the next six years.

The Senate bill reduces taxes and revenues by a total of more than $36.5 billion. Production incentives for the gas and oil industry total $3.5 billion in the Senate and $9 billion in the House. Conservation incentives and tax breaks for the auto industry come to $12.8 billion in the Senate and $8.6 billion in the House.

They include large credits for power windows, brakes and numerous other features already standard on most automobiles. The lobbyists did a real job on the legislation. It now includes credits for right-of-way trees, ginseng, legumes, sugar, garbage, grain, corn, wheat and most, if not all, agricultural products that could possibly be used for energy production.

The items in the fossil fuel industry grab bag are far too numerous to list since they cover page after page of legislation.

Frankly, it makes one dizzy just to read it.

It includes everything from green buses to boutique fuels to small-business work-force advocacy to ultradeep water exploration. The list is unending. It is the ultimate in “swine-ish” opulence.

All of which brings to mind the words of Woody Guthrie in his ode to Pretty Boy Floyd:

“Yes, as through this world I’ve wandered;

I’ve seen lots of funny men;

some rob you with a six-gun;

and some with a fountain pen.”

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History Lessons

Twice in the past century, rude shocks jolted America into taking on bold enterprises that strengthened our nation.

Out of Pearl Harbor came America’s entry into World War II and the Manhattan Project. The launch of Sputnik I propelled America into the space age and Project Apollo.

The attacks of September 11 were a similar shock that exposed the dangers we face securing the reliable energy we must have to support our way of life.

We must meet the challenge with an energy independence campaign that matches the ambition and scope of the Manhattan and Apollo projects. Through greater efficiency and clean energy technologies, we can improve security as well as protect the environment and stimulate investment in new industries.

America has the scientific brainpower, technical resources, and business acumen to succeed.

So far, however, President Bush and the Congress have not risen to the challenge. The president’s energy policy would perpetuate our dependence on oil, which can only mean greater dependence on foreign oil. Both the House and Senate energy bills are timid packages that don’t do enough to improve energy efficiency and commercialize advanced technologies that will deliver clean energy free of foreign control.

The bills are not all bad. Both contain modest efficiency and renewable energy incentives that will help the nation get more value for each energy dollar spent and diversify its energy portfolio. The Senate rejected Bush’s misguided proposal to allow oil drilling in the Arctic National Wildlife Refuge.

The small pluses, however, are outweighed by huge minuses:

Both houses rejected stronger auto fuel efficiency standards, easily the most effective step America can take to reduce our dangerous dependence on Middle Eastern oil.

The House bill, moreover, is an environmental disaster and a fiscal nightmare. In addition to opening the Arctic refuge and loosening standards for oil drilling on America’s public lands, the bill would splash out nearly $30 billion in corporate welfare for mature energy industries that ought to pay their own way.

The disappointment is all the more acute because of the security and environmental risks of continued heavy reliance on oil and other fossil fuels.

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Homeland Efficiencies

The most immediate concern is energy security. Today, more than half the oil used in the U.S. is imported. Foreign oil’s share of U.S. consumption is expected to reach 62 percent by 2020 as a result of rising demand and declining domestic production.

The United States cannot significantly reduce imports solely through increased domestic drilling. The geological facts are simply inescapable – the U.S. sits atop only 3 percent of world oil reserves. U.S. oil production has been declining since the early 1970s. Opening the Arctic refuge to oil drilling would reduce foreign oil’s share of U.S. demand by a mere 2 percent by 2020 — hardly worth the environmental impacts of drilling on a rare natural treasure.

The United States and other oil importing nations can expect rising dependence on the Persian Gulf petroleum oligarchies, which hold two-thirds of the world’s proven oil reserves, and on autocratic regimes in Central Asia. The reality is that the United States is playing a risky game seeking energy security from despotic states that are breeding grounds for terrorists.

Another, longer term risk is global warming. Scientists are turning up strong evidence that the climate is changing, and a large share of the blame is falling on carbon dioxide emitted by fossil fuel combustion – a large portion of it from the United States.

While much remains to be learned about this worrying phenomenon, doing nothing to reduce CO2 emissions is a perilous course. Possible impacts of global warming include more erratic, violent weather, new threats to public health from hot-weather diseases, and water supply constraints.

Energy efficiency must be the foundation of a bold energy policy to reduce security and environmental risks.

No one can mount a serious argument against efficiency. As Theodore Roosevelt declared at a 1908 White House conservation conference:

“The demand for efficiency has given us vigor, effectiveness, decision and power, and a capacity for achievement which has never been matched.”

Efficiency has superior advantages as a strategy to free up new energy supplies.

Efficiency is secure – no pipelines to bomb, no oil fields controlled by mercurial potentates.

Efficiency delivers pollution-free energy.

Efficiency helps families reduce utility bills and businesses sharpen their competitiveness.

During the past generation, energy efficiency has saved America nearly half a trillion dollars. But the environment is not a “been there, done that” game. Independent estimates show there is much, much more to be done, that the United States could cost-effectively reduce energy usage by up to one-third by 2020.

Think of the effects if we actually achieve that goal. The most important effect: By conserving, we buy time.

Greater emphasis on environmental protection and efficiency will buy time for widespread commercialization of clean, renewable technologies that also offer powerful security, environmental, and economic benefits.

Wind and solar plants would be dispersed, making life hard for terrorists. Fuel cell cars and power plants could run cleanly on hydrogen derived from energy crops grown on farms. New global investment in clean energy is expected to total $3.5 trillion over the next 20 years, a rich opportunity for the United States.

Yet the Senate and House energy bills do too little to take advantage of what efficiency and renewable energy have to offer.

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Energy Security Compromised

The biggest disappointment was the do-nothing approach on motor fuel efficiency. Congress’ refusal to strengthen Corporate Average Fuel Economy standards was a shirking of responsibility that will lead to greater dependence on foreign oil, more carbon dioxide emissions stoking up global warming, and higher costs for consumers.

Cars and light trucks consume nearly 400 million gallons of gasoline every day. Average motor vehicle fuel economy has fallen to a 20-year low. The inefficiency of popular sport utility vehicles is the leading cause of America’s growing thirst for foreign oil.

There are no technical barriers to improving fuel economy. A 2001 study by the National Academy of Sciences found that efficiency could be substantially increased at modest costs with available engine and transmission technologies. No new technologies are required.

Unfortunately, both houses of Congress failed the leadership test and fell for a hysterical barrage of misinformation from the auto industry.

The Senate rejected a 46 percent boost in efficiency standards, which would have saved 2.5 million barrels per day by 2020, equal to all of today’s imports from the Persian Gulf. Instead, the Senate settled for weak language encouraging efficiency with no mandatory targets.

The House bill is equally unsatisfactory. The House voted for light truck standards that would save 5 billion gallons of gasoline between 2004 and 2010. That impressive sounding figure equates to a paltry two weeks worth of gasoline consumption.

The House bill goes further to perpetuate excessive dependence on fossil fuels through lavish subsidies, including $6 billion for coal, the leading carbon dioxide emitter among all the fossil fuels. Three-fourths of the $33.6 billion in subsidies the House bill authorizes would go to established industries that have been on the federal dole for decades.

At a time of renewed budget deficits, such profligacy is inexcusable. A strong case can be made for junking both bills and starting all over.

Yet both have useful provisions that are worth keeping. Both authorize tax incentives for purchase of combined heat and power systems, stationary fuel cells, hybrid vehicles, energy-efficient buildings and appliances. The Senate bill requires new energy efficiency standards for a range of commercial products. Both would force federal buildings, which waste $1 billion annually through inefficient energy use, to meet tougher efficiency standards.

For renewable energy, both bills extend a wind power production tax credit and authorize new credits for biomass energy.

By adding a “renewable portfolio standard,” the Senate followed the lead of several states, including President Bush’s home state of Texas, in requiring privately owned utilities to add a rising percentage of renewable resources to their power generation facilities.

However, much stronger action is needed. Foreign oil dependence is increasing. Carbon dioxide emissions are on the rise. The economic opportunity of renewable energy is knocking — again.

A new Manhattan Project-sized effort for our energy future must be undertaken to:

• Strengthen efficiency standards for vehicles and other energy-using equipment.
• Set efficiency and carbon dioxide reduction standards for electric utilities, and strengthen the renewable energy portfolio standard.
• Use credits trading where practical to employ market forces in attaining efficiency, renewables, and carbon standards.
• Expand research and development for new energy technologies to speed their commercialization.
• Build markets and drive down prices for hybrid-electric vehicles, fuel cells, and other technologies through federal procurement.

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Sound ambitious? It should.

Winning World War II and going to the moon were ambitious too. But we did both.

The benefits of a new national Energy Independence Project, however, are worth it.

We can have a clean, healthy environment, create new jobs and wealth, and establish a critical home-based, energy policy that taps our advantage, not our weaknesses, and provides lasting security for America.

The time to start: right now.

David Cargo, an enthusiastic member of the New Mexico Chapter of REP from 1997 until his death in 2013, served as governor of New Mexico from 1967 to 1971.

Here’s a related op-ed by Governor Cargo: Energy efficiency is the best path