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Who Said the Democrats Can’t Do Anything Right?

Posted by Chance on January 19, 2007

From ABC News

The House rolled back billions of dollars in oil industry subsidies Thursday in what supporters hailed as a new direction in energy policy toward more renewable fuels. Critics said the action would reduce domestic oil production and increase reliance on imports.
The legislation would impose a “conservation fee” on oil and gas taken from deep waters of the Gulf of Mexico; scrap nearly $6 billion worth of oil industry tax breaks enacted by Congress in recent years; and seek to recoup royalties lost to the government because of an Interior Department error in leases issued in the late 1990s.
“The oil industry doesn’t need the taxpayers’ help. … There is not an American that goes to a gas pump that doesn’t know that,” said Majority Leader Steny Hoyer, D-Md. Pump prices topped $3 per gallon last year as the oil industry earned record profits.

I don’t know enough about the leasing issue to comment on it, but I do agree with the rolling back of subsidies. However, the Democrats will probably just redirect the subsidies to renewable energy sources, as the article implies.

I am against subsidies for any source of energy. People want to make money. If there are legitimate renewable sources, they will be found.

Update. Cato has their take on the issue.

…There is no identifiable market failure that might cause private actors to significantly under-invest in domestic oil production. In practice, however, the Democrats are simply transferring subsidies from one energy sector to another with no net reduction of taxpayer funds going to corporate in-boxes. Moreover, they are sneaking in energy-tax increases under the rhetorical cover of a war on subsidies. Accordingly, there is little reason for conservatives to get particularly excited.
[…]The case for oil subsidies is laughably thin. Proponents argue that the more you subsidize oil production, the more oil you’ll get, and that, after all, is a good thing for consumers when gasoline prices are around $2.25 a gallon. Unfortunately, there’s simply not enough unexploited oil in the United States that might be exploited as a consequence of those subsidies to greatly affect world crude oil prices.
In short, eliminating — or at least, cutting back on — federal subsidies to the oil and gas business is a fine idea. But that’s not exactly what the Democrats have in mind.

The article also goes on to discuss the leasing issue, and you can follow the link if interested.


3 Responses to “Who Said the Democrats Can’t Do Anything Right?”

  1. Michael Westmoreland-White said

    What to do: As the Environmental Defense Fund has written Congress, it must NOT supplement favored renewable technologies. It could help invest in getting some things off the ground, but the most successful way for BOTH energy independence and reversing global warming is to set strong carbon emission caps and let the market find the best ways to meet them–then the best clean technologies will flourish.

    Investing in infrastructure to jump-start clean techs is one thing: subsidies for favored projects is another.

  2. Dan Trabue said

    “I am against subsidies for any source of energy.”

    Fossil fuels are going away – maybe sooner rather than later (affordable petroleum, anyway). Demand is increasing.

    I’m wondering what you think is a valid answer. I’m against Big Gov’t and wasteful spending. I’m not opposed to wise investing. And if ever there were a time for wise investing, now is that time.

    Good to see some new posts here, Chance.

  3. Chance said

    Hey Dan, sorry I haven’t been posting as often, I hope to post more, but maybe mix politics in with a few other things.

    I’m well aware of the need for new sources of energy, I just see the gov’t’s role as smaller than most people. I think if the technology is there, people will find it. I think the market is just begging for a new source of energy. No, it is not happening as fast as we like, but it will either take time, or we may have to face the facts that newer sources will be more expensive (but maybe more sustainable), so we may have to wait until oil gets a little more expensive. I see government with reference to technology as the Pointy-Haired Manger of Dilbert. Politicians don’t know what works, but engineers and scientists do.

    In other words, I see the investing and discovery up to people, not the government, just like it was with oil or coal or wood or the invention of the wheel, electricity, etc…

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