Tuesday night’s State of the Union address offers further evidence of this administration’s rhetoric as a triumph over reality. In order to truly understand the White House’s agenda, the public first has to cut through the spin surrounding some of the president’s sound bites on energy.
“We’re telling America’s scientists and engineers that if they assemble teams of the best minds in their fields, and focus on the hardest problems in clean energy, we’ll fund the Apollo projects of our time.”
Combine the expenses involved in the Apollo program (culminated with an American walking on the moon) with those from the Manhattan Project (created the atom bomb in time to end World War II), adjust the number for inflation, and you get approximately $120 billion. Over the last three decades, the Department of Energy has already invested more than that in clean energy subsidies with surprisingly little effect.
Clean and renewable sources account for less than 8 percent of our national energy portfolio.
Unlike the government needs met by the Apollo and Manhattan projects, energy is a consumer product. The government has been successful in the past at innovating when it fulfills a government need.
On the contrary, they have failed miserably when attempting to meet the needs of consumers or, even worse, to create such needs; just look at ethanol, synfuels, and a full size car that gets 80 miles per gallon.
“I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies.”
Our oil and gas sector does not receive billions in taxpayer dollars. This is simply untrue.
All companies across the United States face a 35 percent corporate tax rate, the second highest in the world. To promote business growth and job creation, certain incentives have been written into the tax code for all companies to alleviate this burden.
Traditional fuel producers, and all other qualifying companies, benefit from incentives that enable them to invest in domestic jobs and expansion, while keeping the price of their products competitive.
Competitiveness is important, especially when facing the large international players. For this reason, “dual capacity” tax status has been written in to the tax code for U.S. multinationals.
The president would eliminate this status for oil and gas companies only, taxing them twice on foreign income and ensuring there inability to compete in the global marketplace.
“I challenge you to join me in setting a new goal: By 2035, 80 percent of America’s electricity will come from clean energy sources.”
This renewable energy mandate nationalizes a policy that has proven to be economically destructive in individual states across the nation as well as European nations. A recent study by the Institute for Energy Research shows that in the 29 states that have enacted a renewable energy standard like the one proposed by the president, energy prices are on average 40 percent higher.
Setting a goal to raise energy prices seems to be the last thing we would want to do as a nation. Federal regulators would have to make sacrifices as well.
The goal is unrealistic since today the green energy Obama likes, solar and wind, produce trivial amounts of energy in spite of very large subsidies. They are not commercially viable, and no amount of rhetoric will make them so.
The Environmental Protection Agency is making aggressive moves to regulate national emissions, even shutting down a previously approved mining operation in West Virginia this month. The Department of the Interior is still imposing a de facto moratorium on Gulf drilling permits for oil and gas despite public statements indicating otherwise.
Restraint appears an unlikely buzzword for the current administration.
If the honest communication displayed by the president in last night’s address is the gold standard by which legislators are to approach the 2011 Congress, it appears we are in for another year of the same on Capitol Hill.