September 21, 2016

September 21, 2016 | Commentary on

A Workable Blueprint For Energy Freedom

“Keep it in the ground." That mantra of the Greens encapsulates the restrictive energy policies imposed by the Obama administration.

But there's a better approach: one that relies on the ingenuity of free enterprise to produce abundant, reliable and affordable energy for all. That approach, rather than the restrictive, bureaucratically directed model favored by the left, will lead to significant savings for consumers, serious economic growth and lower government spending.

But there's a catch. The free-market approach outlined in the Heritage Foundation's "Blueprint for Reform: A Comprehensive Policy Agenda for a New Administration in 2017" would require both presidential and congressional leadership to rein in the size and scope of the federal government.

The blueprint calls for eliminating frivolous federal spending on energy projects that should be driven solely by private sector investment.  This means no more handouts for wind or solar or nuclear -- or carbon-based fuels, for that matter.

There's no need to risk spending any more taxpayer dollars on half-billion dollar boondoggles like failed solar manufacturer Solyndra. Truly promising cutting-edge energy technologies will have no problem attracting private investors.  There's no need to sweeten the pot by giving mega-corporations and wealthy financiers government-backed loans or preferential tax treatment.

Subsidies not only line the pockets of the wealthy, they wind up stunting the development of emerging technologies.  When the government plays favorites, both public and private dollars flow toward that project, starving other potentially groundbreaking ideas of the backing they need.

Moreover, when the government starts doling out tax dollars, the receiving companies have less of an incentive to innovative and more of an incentive to secure another handout. Companies quickly become dependent on federal funding and become bound to pursue the favored path, whether it's a mandate to use biofuels or a special tax break to produce wind power.

While the administration has propped up its pet energy technologies, it has worked assiduously to hobble their rivals. It has restricted access to natural energy resources, regulated power plants out of operation and blocked energy infrastructure projects -- while producing little, if any, environmental benefit.

Regulatory red tape has crippled many segments of the U.S. energy sector. Extended environmental review periods, permitting time-frames and legal challenges complicate the construction of everything from a liquefied natural gas export facility to a solar farm.  Furthermore, the administration is making good on its promise to bankrupt coal. Its stringent regulations are decimating coal towns and forcing existing, clean-running power plants to close early -- driving up energy costs for households and businesses.

The next administration needs to reverse these worrisome trends. Congressional and administrative reform should focus on shrinking the size and scope of federal intervention in the energy marketplace.

This should begin by asking fundamental questions such as: Does America really need a Department of Energy? After only a few decades of existence, the DOE has far exceeded its original mission to manage the nation's nuclear warheads and related infrastructure.

The government should not control the decisions of individuals and businesses with energy-use mandates. Nor should the government gamble billions of dollars trying to find the next best source of energy or technology.

The Department of the Interior and the Environmental Protection Agency deserve a hard look too. Increasingly they are imposing energy-production and land-use restrictions that run roughshod over state, local, and private interests.

Significantly reducing the scope of these two agencies is not a green light for unregulated businesses to pollute without consequence. Rather, it is a call for smarter, localized regulations that relies on state government and the courts. State and local governments are closer to most environmental issues than Washington and can more effectively meet the needs of its citizens. And private property owners have the proper incentives to care for their own land and use it as best they see fit.

The single brightest spot in the Obama-era economy has been growth in the oil and natural gas sector and the subsequent reduction in fuel prices.  Yet this improvement came about despite the administration's policies -- not because of them. Virtually all the downward pressure on prices has been due to fracking -- a free enterprise success story. It's time to see what can happen when Washington stops playing favorites in the energy arena and gives the reins over to free enterprise.

About the Author

Nicolas Loris Herbert and Joyce Morgan Fellow in Energy and Environmental Policy
Thomas A. Roe Institute for Economic Policy Studies

This first appeared in Investor's Business Daily Politics.