Heritage Foundation Leadership for America

What Happened in 2002

Recognizing the essential role that energy plays in the U.S. economy, President George W. Bush has called for a balanced, responsible, and comprehensive national energy policy. The President's proposal seeks to ensure that consumers and businesses will have access to reliable and affordable supplies of energy in the future. The House and Senate passed separate versions of a comprehensive energy plan. The House version included many of the energy-enhancing measures advocated by the President. In contrast, the Senate yielded to extremist demands and chose to suppress domestic energy production and increase the cost of energy for consumers. The conference committee appointed to reconcile the two versions of this plan failed to craft an acceptable compromise, leaving this critical task to the 108th Congress.

What to Do in 2003

The availability of energy at reasonable prices is key to economic growth and national security. A primary goal of Congress should be to enact a long-term energy plan that balances supply and demand; ensures affordable, reliable, and sufficient supplies of energy for the future; and provides responsible stewardship of the nation's resources. At a minimum, such a plan should:

• Increase domestic supplies of energy. U.S. law prohibits exploration in the eastern Gulf of Mexico and on the outer continental shelves and severely restricts access to resources in the Rocky Mountains. Overly restrictive leases and difficulties in acquiring permits to drill wells on government land also limit natural gas production. Such statutory and regulatory controls make the United States more vulnerable to disruptions in supply at a time when its energy needs demand greater development of domestic resources. Untapped domestic energy resources should be explored and developed in order to lessen the nation's dependence on imports and vulnerability to disruptions in supply.
• Promote fuel diversity. Federal policy should not favor one fuel source over another. Coal, natural gas, nuclear power, oil, and renewable energy sources should all be included in the mix of fuel resources. The market--not government regulations--should determine the winners and losers. The United States should expand trade relations with energy-rich countries such as Canada and Russia as well as Latin American producers and West African producers.
• Modernize the nation's energy infrastructure. A dependable system to deliver this energy to industry and consumers is vital. Existing transmission constraints limit the flow of power and cause consumers to pay higher prices for electricity, and insufficient domestic pipeline capacity has caused peak-load problems in moving oil and petroleum products from one region of the country to another. Improvement and expansion of the nation's electricity grid and pipeline systems are needed to increase reliability, lower costs and prices, and meet increased demand. Sound deregulation--as opposed to re-regulation--of the electricity sector is long overdue and necessary to accomplish this goal.
• Reject domestic Kyoto-style regulations. Some Members of Congress are calling for curbs on energy production through drastic reductions in the use of fossil fuels. So-called multi-pollutant proposals are simply domestic forms of the Kyoto Protocol on climate change that would undermine the nation's economic and energy security. Congress should soundly reject any such proposals for several reasons.

First, contrary to the alarmist rhetoric of the Protocol's proponents, the nation's air quality is good. The Environmental Protection Agency's recently released report, Latest Findings on National Air Quality, reveals that since 1970, aggregate emissions of six principal pollutants, tracked nationally, have been cut 25 percent; gross domestic output has increased 161 percent; energy consumption has increased 42 percent; and vehicle miles traveled have increased 149 percent. As these data show, economic growth fosters improved--not deteriorating--air quality. Further, because of the large number and the magnitude of air pollution programs in existence today (or scheduled for implementation), air emissions will continue to fall over the next decade.

Second, calls to make drastic reductions in carbon dioxide--a clear, odorless gas and a fundamental nutrient of the planetary food chain--would cause a major change in the electricity-generation fuel mix that would adversely affect the nation's energy supply and economic strength. Carbon dioxide (CO2) does not pose a threat to human health or the environment and is not subject to regulation under the Clean Air Act. It is also a byproduct of carbon-based fuels, such as coal, which are used to generate over half of the nation's electricity supply. Indeed, a rapid switch from coal to natural gas for electricity generation could cause disruptions in supply and raise the cost of energy for consumers.

Third, there are no economical technologies to sequester carbon dioxide emissions from generating plants. The only way to reduce these emissions is to reduce overall energy use or dramatically reduce the amount of domestic coal used to generate electricity. The latter measure could force the premature closure of many coal-fired steam-generating plants in states such as West Virginia, Illinois, Ohio, and Pennsylvania--affecting employment, the economy, and energy supply significantly.

Fourth, stringent emission reductions in pollutants such as sulfur dioxide (SOx), nitrogen oxide (NOx), and mercury would force power plants to install expensive emissions control technologies over a short period of time, causing existing facilities to be taken off line while new equipment is put in place. This would severely affect the availability, cost, and reliability of electric power and compromise the capacity of the electric power grid to meet consumers' needs.

Drastic cuts in emissions would cause substantial harm to the U.S. economy. Air quality continues to improve, even without such cuts. These two facts provide a sound rationale on which Members of Congress should base their opposition to measures (whether in a comprehensive energy plan or separate legislation) that have the real goal of suppressing energy production under the guise of "clean air."

Charli E. Coon, J.D., is Senior Policy Analyst for Energy and the Environment in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

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