As oil prices reach record highs, gasoline and diesel prices make every fill-up painful, and New Hampshire continues to pay the highest electricity prices in the nation, we have to ask ourselves; why does Congress keep making energy more expensive?
This comprehensive energy plan will help lower energy prices, and bring new sources of energy to market, by rolling back decades of Congressional interference in the energy marketplace. Restrictions on domestic energy reserves, regulations that prevent new energy infrastructure, and politicians picking winners and losers among emerging technologies have all hampered economic growth, retarded progress in energy research, and harmed the environment.
Taxes and Subsidies
The current tax code provides a shifting and uncertain series of incentives for renewable energy development. Ethanol production is heavily subsidized through production tax credits, and its use is mandated. Not only does ethanol cause more harm than good to the environment, the rush to cash in on ethanol subsidies has pushed farmers to grow corn in place of other crops, driving up agricultural prices nationwide.
1) End tax credits for ethanol production and federal mandates for ethanol use.
The tax code gives businesses and homeowners tax credits for certain renewable energy sources, such as solar and wind. High efficiency biomass systems, such as wood pellet furnaces and boilers do not receive equal treatment. Geothermal and other renewable sources receive even less support. Because all of these tax credits are temporary, entrepreneurs and investors are reluctant to invest in new technologies, for fear that Congress will let the tax incentives expire. If Congress is going to provide tax incentives for renewable energy use, it should not choose which emerging technology is appropriate for businesses and homeowners.
2) Make renewable energy tax credits permanent and technology neutral.
Mature technologies such as coal and oil extraction still receive significant federal subsidy. Congress continues to support subsidies for Coal-to-Liquids development, despite the fact that such technology has been in planning stages for sixty years. Taxpayers should not be forced to pay for development of this industry any longer. Similarly, due to an error by the Clinton Interior Department, oil rigs operating in many deepwater wells in the Gulf of Mexico are allowed to extract oil in public waters without paying royalties. This mistake will cost taxpayers upwards of $10 Billion over the life of these wells. No company should be allowed to extract resources from public lands or waters without paying royalties determined on the open market. However, ending subsidies is not the same as increasing taxes.
3) End federal subsidies for fossil fuel development, rather than increasing taxes on gasoline.
Congress has placed unreasonable limits of the use of American fossil fuel reserves, such as the estimated 7.7 billion barrels of oil available in the 1002 area of the Alaska National Wildlife Refuge. Using these reserves to provide just 5% of America’s daily needs would increase supply for between 12 and 32 years. Current technology would extract these resources safely and responsibly, greatly reducing the environmental impact of extraction.
There are also an estimated 32 billion barrels of oil trapped in tar sands in deposits in eastern Utah. Canada is currently using similar deposits in Alberta, but Congress has prohibited the Department of Defense from using fuel derived from this source. Lifting these bans would allow a new source of domestic energy to complete with oil imports.
4) Repeal Congressional bans on domestic energy reserves.
Convoluted procedures, a maze of shifting regulations, and endless appeals of nuisance lawsuits discourage and often completely block efforts to build new energy infrastructure. While domestic and worldwide demand for energy is exploding, the U.S. energy infrastructure has only gotten older. No new oil refineries have come on line in nearly thirty years. No nuclear power plants have been commissioned in twenty years. And regulations and lawsuits are blocking the construction of new power lines which would allow New Hampshire’s North Country to develop wood powered electricity generation.
5) Streamline siting and environmental requirements for new oil refineries.
6) Streamline application process for nuclear power plant construction.
7) Simplify siting and appeals process for electric power lines.
Emissions from electric power plants that rely on fossil fuels threaten air quality and increase the atmospheric carbon dioxide levels. Use of a market-based cap-and-trade system would lower emissions of sulfur, nitrous oxides, carbon dioxide and mercury, while providing financial incentives to shift to cleaner forms of power production. The United States should not repeat the mistakes of the Kyoto Accord, which allocated emissions credits based on the whims of bureaucrats, but should insist that emissions credits are auctioned in the open market. 100% auctioning of emissions credits will prevent government interference in the energy marketplace, and ensure that the cost to release these substances into the atmosphere is based on the true impact of these emissions.
8) Institute a cap-and-trade system for emissions of multiple pollutants from power plants. All emissions credits should be auctioned on the open market.
Current federal support for energy research is infected by the same pork-barrel habits that have so corrupted federal spending policies in other areas. Earmarks and special interest provisions direct taxpayer support to favored projects and researchers, regardless of merit or results. Reforming federal energy research programs would boost their effectiveness and provide tremendous incentives to bring new technologies to market.
9) Promote X-Prize system for new energy breakthroughs, which provides large cash incentives for achieving concrete and replicable results.
10) Reform energy research programs through New Energy Block Grants, which would shift federal support from earmarked projects to a merit-based system administered by the states.
Clean and affordable energy is a key component is America’s future economic growth. By implementing the ten listed reforms, Congress can start to rollback the failed policies that have interfered in the development of new sources of energy, driven up gas prices, and put domestic energy reserves off limits.
The next generation of billionaires will come from the energy sector. Entrepreneurs and investors who find new ways to power the American and global economies will be richly rewarded. But first, Congress must get out of the way. The Bosse Energy Plan would increase consumer choice, reduce the price of energy in all forms, and create the regulatory framework necessary for the next century’s energy breakthroughs to benefit us all.