Wednesday, September 30, 2009

Cap-and-Switch: Hello Sucker!

By Alan Caruba

Here’s a look at the introduction of a draft bill co-sponsored by Sen. Barbara Boxer (D-CA), co-sponsored by John Kerry (D-MA). It is the Senate alternative to the horrid “Cap-and-Trade” bill authored by Rep. Henry Waxman (D-CA) and Rep. Ed Markey (D-MA). Call it “Cap-and-Switch.”

To create clean energy jobs, achieve energy independence,
reduce global warming pollution, and transition to a
clean energy economy.

All those who believe Santa Claus, the Easter Bunny, and the Jolly Green Giant are real should stop reading now.

Let’s look at the objectives of the Senate version of a huge tax on all energy use by every American. As I will note later, the bulk of the cost will fall on low-and-middle income households.

“To create clean energy jobs.” This is pure bunk. Such jobs would be primarily in the production of solar and wind energy. Other such jobs involve biofuels such as ethanol. Combined, solar and wind represent barely one percent of all the electricity generated daily in the nation. If solar and wind were profitable, you can be sure that American entrepreneurs would have long ago become more active, but if it were not for taxpayer dollars subsidizing solar and wind, neither would likely exist.

The only thing ethanol has done has been to raise the cost of the corn from which it is made and reduce the mileage of every gallon of gasoline to which it is added.

Testifying, Sept. 30 before the House Committee on Small Business, Manning Feraci, vice president of federal affairs for the National Biodiesel Board was seeking a continuation of the industry tax incentive. He said “the industry is in the midst of an economic crisis. Plants are having difficulty accessing operating capital. Volatility in commodity markets and reduced demand for biodiesel in both domestic and global markets are making it difficult for producer to sell fuel.” Nobody wants it!

There will be few “clean energy jobs” as compared to the employment that coal, oil and natural gas industries currently provide and could expand upon if the government wasn’t trying to put them out of business.

“Achieve energy independence.” Are you stupid? Boxer, Kerry, Waxman and Markey think you are. So does the President and many members of Congress.

How does America achieve “energy independence” when it will not allow the oil in Alaska’s ANWR to be extracted? When 85% of the nation’s offshore continental shelf, home to estimated billions of barrels of oil and trillions of cubic feet of natural gas, is off-limits to any exploration and drilling? When the President wants to eliminate the current subsidies that encourage oil companies to invest billions to find new reserves? When there is a full-scale attack on America’s coal industry even though coal provides half of all the electricity we use?

Just how does America “achieve energy independence” under such circumstances? How, indeed, do we heat or cool our homes, run our businesses, or even turn on the lights if Congress is opposed to the acquisition and use of our known and estimate energy reserves? Pretty soon, for reasons that defy understanding, Americans will not even be able to purchase an incandescent light bulb in the nation where it was invented!

“Reduce global warming pollution.”
First of all, there is NO global warming. Why would Congress pass a law intended to deal with something that is a complete hoax? And what is global warming pollution? Is it the second most essential gas to all life on Earth, carbon dioxide (CO2)? If so, this law is scientifically absurd and baseless. CO2 never had anything to do with the warming that occurred after the end of the last little ice age, around 1850.

No matter what the Supreme Court and others have ruled, if CO2 is a "pollutant", than we should all be in jail because that’s what we and other mammals exhale. It also occurs when energy sources such as coal and oil are used to keep factories producing, along with hospitals, schools, airports, seaports, and the Capitol of the United States functioning.

“Transition to a clean energy economy.” Oh sure, just as soon as we cover hundreds of thousands of acres of America with solar mirrors and wind turbines, we can make that transition. We have an economy that is dependent on coal, oil and natural gas. We have abundant natural reserves. What we don’t have is a President and Congress with the intelligence to understand that China is building a new coal-fired plant every week to meet its energy needs, that India has an aggressive nuclear energy program going for its economy, and this single piece of legislation will destroy any hope that the American economy can recover and grow strong again.

According to a study of the Waxman-Markey bill by Andrew Chamberlain, it will be the shareholders, not ratepayers, that will be the primary beneficiaries of cap-and-trade’s absurd creation of a market for the purchase and sale of “carbon credits.” It will be based on how much CO2 a utility, industrial, or any other entity is producing. The credits will literally permit them to keep on “polluting” even though that means “global warming” would, in theory, just get worse. Even though there is NO global warming. Make sense to you?

Chamberlain succinctly says, “These new findings should send a clear message to the American people (that) cap-and-trade helps the powerful and hurts the rest of us. And as Congress’ corporate allies receive the bulk of the benefits Waxman-Markey has to offer, our environment, along with our struggling economy, will suffer for years to come.”

“Congress needs to get out of the business of picking winners and losers and allow the market to determine which energy and electricity sources should power our economy.”

I leave you with a short list of just some of the U.S. corporations seeking to benefit from this hideous piece of legislation. Twelve of them sent an open letter to the U.S. Senate urging swift action on the climate change bill. They are Bumble Bee Foods, Dell, DuPont, FPL Group, Google, HP, Johnson & Johnson, Johnson Diversity, Levi Strauss & Company, Nike, PG&E Corporation, and Xanterra Parks and Resorts.

Time to let your Congressman and Senators know you think this is a very bad idea.


Buzzg said...

I also find it interesting that our government, in their infinite wisdom, has approved about $10 billion in loan guarantees to Brazil so they can begin drilling for oil off their coast and in the Gulf of Mexico.

Ron H. said...

Hi Alan, I think that as usual, your post is spot on. I have only one minor disagreement which I will get to in a moment, but first I need your help.

I am poring feverishly through my pocket copy of the Constitution of the United States of America, and nowhere can I find where the Senate is authorized to do any of the following:

- create clean energy jobs
- achieve energy independence
- reduce global warming pollution - transition to a clean energy economy.

Perhaps you or one of your many other readers can pinpoint it for me.

Now, my one minor disagreement. I believe that subsidies should be discontinued for US oil companies. First of all, a subsidy is a distortion of the market that is almost guaranteed to have unintended consequences. Second, it is ridiculous to encourage exploration and at the same time put so many areas off-limits.

Oil is a fully mature industry, with fully mature companies operating in it. None are infant start-ups needing protection from foreign competitors in a new field of endeavor, which in my opinion, is the only possible justification for a temporary subsidy. The incentive for oil companies to explore is called profit.

If cutting subsidies causes gas prices to rise, then so be it. Taxpayers shouldn't have to help me pay to fill my gas tank.


Alan Caruba said...

There is nothing in the Constitution to support the globalist fantasies that environmentalists clambor for.

As for the oil companies, it is in the nation's interest to encourage exploration through subsidies because the cost is so high and the percentage of dry wells is too.

Jimmy Carter basically forced American oil companies to look in foreign countries for oil because it became too prohibitive to do so here. The situation has not changed much since then.