Later this month, the Environmental Protection Agency will rule on Texas Governor Rick Perry’s request for a one-year, 50 percent waiver from the federal ethanol mandates that are driving up feed costs for the state’s livestock and poultry producers. Granting the request would be a welcome break from three decades of unrealistic and counterproductive energy policies that have harmed every consumer and every sector of the economy.
The federal government’s costly energy missteps are plentiful – relying on foreign countries and an oil cartel for petroleum, refusing to tap our nation’s abundant natural resources, and burdening businesses and industries with billions of dollars in environmental-law compliance costs top the list. But the ethanol example is instructive.
Last December’s federal energy law requires annual increases in domestically produced ethanol. Within months, the folly of the ethanol mandate was clear: Corn prices have tripled over 2006 levels – contributing to global food-price shocks and food riots – while two scientific studies revealed corn-ethanol production increases carbon emissions rather than reducing them.
The ethanol mandate shows the potential harm when government makes decisions instead of markets and technology. Grocery bills and animal-feed prices are up, thanks to a fuel that has not lessened our foreign oil dependence, requires an inordinate amount of water for its production, and is less efficient than gasoline.
Unrealistic energy policy is not limited to Washington, D.C. Numerous states clamor for “green” status – picking energy-supply winners and losers and rushing to judgment in the ongoing and unsettled debate on greenhouse-gas emissions. Environmental groups have virtual veto authority over cleaner coal-fired power plants, nuclear facilities, and oil refineries, which can meet an exponentially larger portion of energy and electric demand than the heavily subsidized renewable energies.
Last October, Kansas’ environmental regulator denied air-quality permits for two 700-megawatt coal-fired electric generation plants over concerns about carbon-dioxide emissions. More recently, a state judge in Georgia ruled a proposed 1200-MW coal plant cannot move forward unless its CO2 emissions are limited. Environmental groups plan to use the Georgia ruling to block about 30 proposed coal plants currently subject to litigation.
In Texas, legislative mandates to increase the amount of renewable-energy consumption and the requirement of building transmission lines from West Texas wind farms to Central and East Texas load centers will cost Texas electric ratepayers at least $5 billion.
Cities also impose “green” costs on consumers and taxpayers. The Austin Climate Protection Plan is an overly burdensome attempt to “make Austin the leading city in the nation in the fight against climate change.” Never mind the fact that the Plan cites a non-existent climate-change “consensus,” is based on the findings of the thoroughly discredited United Nations Intergovernmental Panel on Climate Change, and seeks to achieve renewable-energy and climate-neutrality goals through the use of technologies not currently viable on a commercial scale.
The Energy Information Administration reports that, as of January 2008, the collective year-to-date contribution of coal, natural gas, and nuclear power to our nation’s total electricity generation was 89.6 percent. In 2030, non-hydropower renewables, including wind and solar, will contribute just 2.83 percent to the United States’ total energy production. Consumers deserve energy realism, not fanciful plans to replace fossil fuels with renewables.
When misguided environmental theory dictates energy policy, the result is high prices, unreliability, and inadequate supply. It is time to reverse course. As our energy needs grow, we must tap our domestic resources in smart and efficient ways. No longer should we send hundreds of billions of dollars to rogue regimes, burn our food for inferior fuel, and mandate insufficient renewables, while blocking the building of power plants that will give us clean, affordable energy.
The prospects for more substantial energy and environmental regulations, mandates, and taxes arguably pose the greatest threat to our economy and the well-being of our citizens. We need affordable, reliable energy, but we will never get it without a realistic energy policy.
Unless and until judges and policymakers begin making common-sense decisions, based on the efficacy of supply and demand and with the long-term health of the economy in mind, our nation, our states, and our communities will continue down a path of actions that do little to help the environment yet do much harm to those living in it.
Drew Thornley is a natural resources policy analyst at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.