A federal energy policy: Can it happen here? Part II

A second problem confronting policymakers is the unequal distribution of energy resources across this vast country of ours. A handful of coal-producing states—West Virginia and Wyoming come to mind—are net fossil energy exporters, and will view with hostility any policy proposal that will place limits on energy extraction within their borders. Their power is magnified by the markets they serve, which include large swaths of the Midwest and South.

On the other side of the coin are the West Coast states, Florida and New England, which are populous regions that have no domestic coal interests to protect. Nor does the automotive industry have a big presence in these states. Not having to appease Big Coal or Big Auto enables state governments in these regions to plot a more aggressive course toward achieving emissions reductions and fuel diversity goals, as is being done in California and Florida.

One would expect members of Congress to promote the principal energy industries in their region. This predisposes them to enter into strategic alliances with other members representing different energy interests, usually of the “I’ll watch your back if you’ll watch mine” variety. Though these alliances are necessary for lubricating the deal-cutting and building support for the entire package, often it comes at the expense of public policy objectives.

Indeed, Congress is institutionally incapable to pass a comprehensive energy bill that attempts to diversify the nation’s energy resource base and scale back its carbon footprint unless it contains elements that work in the opposite direction (e.g., gasifying coal and expanding offshore drilling).

Further complicating matters is the very nature of the U.S. Senate itself, a body organized to magnify the power of individual states to block “national interest” initiatives from changing the status quo. Each state is equally represented in the Senate, no matter how populous. And Senate tradition grants committee chairmen enormous deference to bottle up or water down legislation that might impose unwanted changes on the states they represent.

Another Senate tradition, the right of unlimited debate, is enforced by a rule that expressly allows a minority of senators to thwart the will of the majority. To shut off debate on a measure, especially one in which powerful economic forces and regional interests are pitted against each other, bill proponents have to line up not 51, but 60 votes. Under the rule, debate continues even if 59 senators vote in favor of ending it and only one votes against the motion.

The energy bill, passed by the Senate in June, came tantalizingly close to incorporating a 10-year tax package that would have raised $29 billion, mostly from oil and gas companies, and redirected it toward renewable energy development. The tax package was designed to be self-supporting; that is, it would not have trigged additional borrowing to underwrite the pro-renewable energy incentives.

Would such a tax package raise prices at the pump? A little. But remember, too, that $29 billion equates to about nine months’ profit for Exxon Mobil alone. And, from a social equity perspective, it’s always better to base energy subsidies and incentives on a real-time transfer of wealth than to saddle future taxpayers with even greater levels of indebtedness.

Nonetheless, the oil and gas companies objected to the closing of their favored tax loopholes, and they called upon their senatorial friends in the Oil Patch states to kill off this measure. To accomplish this, these senators made common cause with their counterparts from the Southeast and Rocky Mountain states, where Big Coal is very strong.

Though this minority bloc was outvoted 57-36, they managed to prevent the tax package from being attached to the larger energy package. In any other legislative venue, losing a vote by a margin of 21 would be considered a stinging defeat, but on the floor of the U.S. Senate, it counts as a win.

In his most recent installment of Lyndon Johnson’s biography, author Robert Caro points out that there have been only a few periods in the nation’s history where the Senate lowered the floodgates and allowed legislation reflecting the popular will to come washing through its portals. Those rare instances resulted from significant political realignments that put one party with an activist agenda firmly in power.

The closest the United States came to a coherent national energy policy was during the mid- to late 1970s. During that period, there was a prevailing sense of anxiety about the nation’s energy security, and both the legislative and the executive branches responded to the national mood with decisive actions. In a five-year period, Congress passed laws creating automobile fuel efficiency standards, prohibiting new gas-fired power plants, and requiring utilities to purchase electricity generated by independent entities. By the debased standards of current governance, those were amazingly productive years.

However, once the price of oil dropped in the 1980s, the urgency of the previous decade evaporated, and successive administrations began dismantling the policy initiatives adopted in the Ford and Carter years. When the Reagan administration lowered fuel efficiency standards in 1986, Chrysler Corporation chairman Lee Iacocca said: “We are about to put up a tombstone, ‘Here lies America’s energy policy.’”

It would take nothing short of a sea change to overcome Congressional inertia and recover the ground lost in the last 25 years or so. But though the prospects for a truly coherent national energy policy are improving, and the need has never been greater, both the citizenry and the current Congress are far too complacent to entertain changes that might involve belt-tightening and discipline. Given the current political dynamic, it would be unrealistic to expect this Congress, with its narrow majorities, to be the one that jump-starts the federal government into meaningful action.

Yes, we will see some progress on the energy front this year and next, but they will represent the sum of state government initiatives undertaken to counter the policy vacuum that persists at the federal level.

RENEW Wisconsin is a nonprofit organization that acts as a catalyst to advance a sustainable energy future through public policy and private sector initiatives. Michael Vickerman’s commentaries also posted on RENEW’s web site: http://www.renewwisconsin.org, RENEW’s blog: http://www.zmetro.com/community/us/wi/madison/renew and Madison Peak Oil Group’s blog: http://www.madisonpeakoil-blog.blogspot.com.

from the Aug. 22-28, 2007, issue

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