Quadrennial Energy Review: A Plan to Buy Off the States

COMMENTARY Energy Economics

Quadrennial Energy Review: A Plan to Buy Off the States

Apr 22nd, 2015 5 min read
COMMENTARY BY
Katie Tubb

Policy Analyst

Katie Tubb is a policy analyst for energy and environmental issues in the Thomas A. Roe Institute for Economic Policy Studies.

The Obama Administration has revealed “the nation’s first ever Quadrennial Energy Review” (QER)—a first ever merely because the energy plans of past Administrations were titled “National Energy Plans” or “National Energy Strategies.” Although the QER promises jobs and economic growth, the review is largely a series of recommendations to buy off states to go along with the costly and unnecessary Clean Power Plan.

The Clean Power Plan

From the start, the QER was meant to incorporate the Clean Power Plan. According to the President’s 2014 memo calling for the report, “It will build on the foundation provided in my Administration’s Blueprint for a Secure Energy Future of March 30, 2011, and Climate Action Plan released on June 25, 2013.”

If finalized in June, the Clean Power Plan would radically restructure how Americans obtain their energy under the premise of reducing global warming. It essentially would retire 40 percent of base load power, which is produced by coal, and restructure electricity production based on minimizing carbon dioxide emissions rather than on affordability or reliability.

Such radical change wouldn’t happen overnight or even over several years, but it promises to be incredibly expensive while having almost no impact on global temperatures. Yet because the Environmental Protection Agency (EPA) has saddled states with the dirty work of implementing the Clean Power Plan, the EPA will avoid accountability for the costs of more expensive electricity, new power plants, and infrastructure, which will be passed on to customers.

Unsurprisingly, the Clean Power Plan has generated considerable bipartisan opposition from the U.S. Congress down through state legislatures and governors, public utility commissions, labor associations, and grassroots organizations.

QER Recommendations

Consequently, many of the QER’s recommendations focus on America’s electric grid and natural gas pipelines to accommodate the Clean Power Plan. The only problem from the Administration’s perspective is that pipelines, transmission lines, railroads, and grid improvements do not fall under federal control, but are the purview of state and local governments and the private sector. Hence, the QER recommends a bevy of federal training programs, grants, and other taxpayer-funded enticements to persuade states to buy into the Clean Power Plan. For example, the QER recommends:

  • A Department of Energy (DOE) program to “accelerate pipeline replacement and enhance maintenance programs for natural gas distribution systems,” especially for poor communities, allegedly addressing the criticism of the Clean Power Plan that costs would hit the poor the hardest.
  • Grants for states “to promote innovative solutions to enhance energy infrastructure resilience, reliability, and security.”
  • Loans for rural communities to invest in solar energy and smart grid projects.
  • Appropriations for the Diesel Emissions Reduction Act (DERA) grants, a program that has diverted funds to projects of such national importance as electrified parking spaces for a Delaware truck stop.
  • Implementing a Carbon Dioxide Investment and Sequestration Tax Credit for carbon capture and storage (CCS) technology and pipelines to coal power plants. This technology has yet to be shown as workable on a large scale, and the DOE has stepped away from several loan agreements with CCS projects in the U.S. because of time delays and significant cost overruns.
  • Most audaciously, “providing state financial assistance to promote and integrate [energy] infrastructure investment plans for electric reliability, affordability, efficiency, lower carbon generation, and environmental protection.” Funds would be contingent on the DOE being given “cooperation within the planning process of energy offices, public utility commissions, and environmental regulators” and grid owners and operators within a state.

The QER includes other recommendations that try to make two policy wrongs a right. For example, the QER directs the DOE to give technical support to groups wanting to use higher ethanol blends in their fuel supply, yet the ethanol mandate is a broken program held together by bureaucrats and biofuel lobbyists. Other recommendations are simply inappropriate, such as one to promote clean energy and infrastructure in the Caribbean. The U.S. is not responsible for another country’s energy diversity and has no business subsidizing their energy infrastructure.

Further, while the QER attempts to woo supporters with a promise to support up to 1.5 million new energy infrastructure jobs, the federal taxpayer would pay roughly $19.6 billion according to the Administration’s estimates for some of the programs. And this total does not include the cost of programs that don’t yet have estimated costs.

In fact, government spending doesn’t create jobs, but takes decisions out of the hands of American taxpayers, constituents, and customers.

Missing Recommendations

Equally problematic is what is not included. Notably missing from the QER are recommendations to address the areas in which the federal government plays a role in major infrastructure problems and is perpetuating ill-fitting policies. For example, the QER does not address the executive branch’s unnecessarily burdensome role in liquefied natural gas (LNG) and crude oil exports, a barrier that was created in response to 1970s shortages and is entirely incongruent with today’s energy boom. Nor did other important energy infrastructure issues—such as the Keystone XL Pipeline, meaningful National Environmental Policy Act (NEPA) reform, and spent nuclear fuel management—make the list.

Conclusion

The QER’s original purpose was to “improv[e] U.S. economic productivity, enhance[e] our quality of life, protect[t] our environment, and ensur[e] our Nation’s security.” Yet making the most of America’s energy supply does not require more government programs, subsidies, or central planning, which are at the core of the QER. Regrettably, the Obama Administration has yet to learn that allowing the free market to work is the best solution.

This piece originally appeared in The Daily Signal