Heritage Foundation Leadership for America

WASHINGTON, MARCH 18, 2004—Even trimmed to less than half its original size, the energy legislation moving through Congress remains laden with pork, budget gimmicks, corporate welfare and misguided investments, says a new paper from The Heritage Foundation.

Senators cut the 10-year price tag on the bill from the $31.1 billion agreed to in a House-Senate conference committee to $14 billion. But large agribusinesses would continue to profit from lucrative ethanol subsidies, the coal industry still would receive $2 billion in taxpayer money, and unnecessary research—such as studying ways to convert car trips to bicycle trips and a $50 million project to study transit buses—still would go forward as usual.

“It may be less bloated than the original, but federal spending will continue to increase,” says Charli Coon, Heritage energy expert and author of the paper. Worse, Coon argues, the bill fails to take the steps necessary to improve and secure the energy America needs.

A responsible plan, Coon says, would include:

• Opening up domestic energy supplies now off-limits, such as in the Rocky Mountains and offshore.
• Ending taxpayer handouts to special-interest groups such as those that urge we enrich giant agribusiness concerns through subsidies for ethanol.
• Enhancing the nation’s electric power system by beefing up reliability standards and granting the Federal Energy Regulatory Commission “backstop” authority to issue permits for interstate electricity lines in high-use areas.

Coon says a responsible plan also would eliminate tax credits for renewable fuels—now pegged at $3 billion over 10 years—because, despite more than a quarter-century of government subsidies, these sources have yet to contribute significantly to energy security.

All renewable sources combined account for just 9 percent of our power today; by 2025, experts say they will account for just 9.1 percent. Take out hydroelectric power, as many environmental activists urge, and the percentage of our energy needs met by renewables falls to 2.2 percent today and perhaps 3.7 percent by 2025.

“Congress needs to remember that the primary purpose of a comprehensive energy plan is to provide consumers with sufficient, affordable and reliable energy,” Coon says. “We’d be better off without an energy bill than with this seriously flawed attempt.”