What will the new Energy Bill Really Cost?

Would you like to know the truth about climate change consensus, prevention and price tags? Read on! Paul Driessen, a member of CARE’s Energy Counsel, share’s his insights here. Agree? Disagree? Give us your thoughts!

The Sarbanes-Oxley corporate ethics law and 2006 elections supposedly inaugurated a new congressional commitment to ethics, transparency, accountability and consumer protection. Something has been lost in translation.

The “energy” bill now wending its way through the legislative labyrinth dedicates $6 billion to goodies like more energy-efficient snowmobiles for ski resorts, outlaws “price gouging” at the gas pump, and sets new mileage standards that will likely make cars and light trucks less safe and cost more lives (Check out CARE's July Newsletter for more information on this item). It also provides subsidies and mandates for politically correct “alternative” energy projects that probably wouldn’t survive without such aid.

But the bill doesn’t increase the nation’s energy supply by one drop of gasoline or one watt of electricity, says Congressman Jim McCrery (R-LA). It lifts no bans on oil and gas drilling, and does nothing to ease regulatory impediments to pipelines, transmission lines, refineries, or coal and nuclear generating plants. The only power it generates is expanded bureaucratic power over energy and economic decisions.

Its ethanol mandates will result in more land converted from wildlife habitat to corn fields, and in greater use of water, fertilizer, pesticides, and tractor and truck fuel. Corn prices will continue to rise, along with the cost of meat, candy, soft drinks and other products that use corn for feed or corn syrup as a sweetener. The biofuel itself will cost more, but provide noticeably less mileage per tank.

Even more problematic, is the rush to “do something” about global warming. Assorted climate change bills propose to slash US carbon dioxide emissions by varying amounts, under different timetables, to prevent speculative disasters conjured up by computer models that do not reflect complex atmospheric processes and cannot predict temperature or rainfall one year in the future, much less 40 or 90.

The worst of the lot (the Sanders-Boxer bills) would compel the United States to cut CO2 emissions to 15% below 2006 levels by 2020, and 83% below 2006 levels by 2050. That’s far more than even the Kyoto Protocol contemplates.

Such mandates might help special interests – which are lining up to proclaim “consensus” on climate change and claim a share of any taxpayer-funded entitlements. But they would severely impact US energy production, transportation, agriculture, manufacturing, employment and families.

An MIT analysis concludes that Sanders-Boxer would cost the US up to $403 billion in foregone Gross Domestic Product, corresponding to a loss of some 4.5 million jobs and an impact of $5370 per family of four. The Sanders-Boxer, Feinstein and Waxman bills would result in carbon offset allowances priced at $210 per ton of CO2, adding a truly price-gouging $95 to the cost of a barrel of oil, $2 to a gallon of gasoline, $143 to a ton of coal, and 50% to the price of electricity, by 2020.

Domestic production of goods and services would plummet, and families with low incomes or living in regions with high heating or air-conditioning needs would be disproportionately affected, as they would have to spend a growing portion of their incomes on energy, food and consumer products.

MIT’s evaluation presumes developing countries would match our emission cutbacks. It’s more likely that they would prefer to reap the benefits of more energy at lower prices, to fuel economies, create jobs and improve living standards that lag far behind those of wealthy Western countries. That means the impacts on US workers and consumers could be much worse than MIT anticipates.

The US Energy Information Administration calculated that Kyoto mandates (CO2 emission reductions to 5% below 1990 levels) could cost up to 2.5 million jobs and reduce our GDP by up to $525 billion annually – equivalent to a tax of $7,000 on every family of four.

Wharton’s Business School of Economics determined that Kyoto would cost 2.3% of America’s GDP. With a $12 trillion GDP in 2006, that translates into $275 billion a year or $3700 per family.

Management Information Services concluded that Kyoto could eliminate 1.3 million black and Hispanic jobs, force nearly 100,000 minority businesses to close, and cause average minority family incomes to plunge by more than $2,000 a year. States with large minority populations would lose $10-40 billion a year in economic output, and over $2 billion annually in tax revenues.

At these prices, Congress should be 100% certain about alleged climate change cataclysms, before enacting any such laws. But the case for immediate drastic action is getting progressively weaker, and none of these measures would bring any detectable environmental benefits.

In fact, Congress is telling American families it is prepared to impose enormous costs to achieve minuscule reductions in global CO2 emissions and avert speculative impacts 90 years from now – on the assumption that carbon dioxide causes climate change, and any change will be disastrous.

The Kyoto Protocol, if adhered to by every signatory nation, would prevent a mere 0.2 degrees F of warming by 2050. To stabilize atmospheric CO2 and prevent theoretical climate catastrophe, we would need 30 such treaties, each one more restrictive and expensive than the last. The various congressional bills would accomplish far less than that.

Moreover, increasing numbers of scientists doubt that carbon dioxide is the culprit. New studies suggest that there has been no rise in average global atmospheric temperatures since 1998, despite a 4% increase in CO2. Ice core and other data indicate that, over the past 650,000 years, temperatures usually rose first and CO2 levels increased several centuries later.

Timothy Patterson, Henrik Svensmark and other climate scientists have found growing evidence that our sun is the dominant cause of climate change. As its energy output varies, so does the solar wind that determines how many galactic cosmic rays reach the Earth.

More solar energy warms Earth directly and generates stronger solar winds, deflecting cosmic rays, reducing cloud cover and warming us still more. Less solar energy results in reduced solar wind, more cosmic rays and thus more clouds – further cooling the planet.

Solar scientists now predict that, by 2020, the sun will begin its weakest cycle in two centuries. That could bring on global cooling that would harm agriculture in northern latitudes, raise heating bills, and make the clamor about manmade global warming look like so much wasted hot air.

Will Rogers once said, every time Congress makes a joke it’s a law, and every time it makes a law it’s a joke. The energy and climate bills are perfect examples.

Congress often exempts itself from ethics, accountability and price-gouging laws. The citizens are rarely so fortunate.



Paul Driessen, Senior Policy Advisor for the Committee For A Constructive Tomorrow and Center for the Defense of Free Enterprise, and author of Eco-Imperialism: Green power ∙ Black death.