Like the idea of paying more for less? If a certain piece of
legislation now before Congress becomes law, we might have no
choice.
Despite having the words "consumer protection" in its title, the
latest Senate energy bill would actually boost the cost of
gasoline, electricity, food, cars and home appliances. In fact,
virtually everything touched by the Renewable Fuels, Consumer
Protection and Energy Efficiency Act of 2007 will go up in price
and down in quality.
Notwithstanding public
outcries over $3-per-gallon gas, the bill's main provision on
gasoline is to increase the amount of costly ethanol and other
renewable fuels Americans are required to use. The 2005 energy bill
mandated that agricultural-based renewable fuels, mostly ethanol
made from corn, be mixed into the gasoline supply. Ethanol usually
costs more than gasoline and dramatically lowers fuel economy, so
the mandate has hurt drivers. And the competition for corn has
driven up the prices of food items such as sweeteners and corn-fed
meat and dairy products.
Despite this costly track record, the Senate now wants to expand
the mandate fivefold to 36 billion gallons annually by 2022. The
price for fuel and food, already higher under the current mandate,
would likely skyrocket. In addition, the heavy government subsidies
for renewables, including a 51-cent per gallon tax credit, would
rise along with the mandate.
It gets worse. The bill also would require that 15 percent of
electricity be generated by politically correct but expensive means
like wind and solar. As with ethanol, the only reason these
alternatives need federal mandates in the first place is that they
are too costly to compete otherwise.
In addition, the bill sets new federal efficiency standards for
a number of home appliances such as refrigerators, clothes washers
and dishwashers. The goal is to reduce energy use by setting
arbitrary limits on how much electricity these appliances are
allowed to consume. But past appliance regulations have actually
hurt consumers.
For one thing, mandatory improvements in efficiency usually
raise the purchase price of appliances, and sometimes the increase
is more than enough to negate the energy savings. These regulations
can also hamper product performance. Far more troubling than
efficiency standards for appliances are those for cars and trucks.
In order to meet any tough new Corporate Average Fuel Economy
(CAFE) standards, cars and trucks need to be made lighter, which
also makes them less safe in collisions. According to a 2002
National Academy of Sciences study, vehicle downsizing has cost
1,300 to 2,600 lives per year. The far tougher miles-per-gallon
requirements in this bill would likely add to the death toll from
vehicle crashes.
Consider, too, what the bill doesn't do. There are no provisions
for even one drop of additional domestic oil. America remains the
only nation that has placed a significant amount of its oil
potential off- limits, both offshore and onshore. But this bill
does nothing to change that. Nor does it streamline other energy
constraints, such as the red tape that has limited refinery
expansions and contributed to the 2007 jump at the pump.
A "consumer protection" bill that's anti-consumer. An "energy"
bill that's anti-energy. Too bad the laws against false advertising
don't apply to Congress.
Ben Lieberman is
senior policy analyst in the Thomas A. Roe Institute for Economic
Policy Studies at the Heritage Foundation.