Conservative Principles Now

Kudos to Sen. Richard Lugar (R-IN) for recognizing that current “rhetoric and legislation [which] are focused primarily at climate change” are out of step with the concerns of most Americans. A January poll by Pew Research Center found “dealing with global warming ranks at the bottom of the public’s list of priorities; just 28% consider this a top priority.” The Senator frames his new approach in this way:

I am proposing practical steps that save money and that everybody can support. Threats to our economy and security are of paramount importance. We can best face these threats by reducing our dangerous dependence on foreign oil and creating U.S. jobs in new energy and conservation efforts.

However rhetorically pleasing that may sound, Americans and policymakers should realize that such a plan would mean more power for the federal government and less choice for Americans. When viewed through that lens, the Senator’s proposal is similar to Obamacare, cap-and-trade and the EPA’s proposed global warming regulations. All three are wildly unpopular with the American people.

Let’s briefly walk through Senator Lugar’s policy outline.

First, he proposes “national building performance standards,” government incentives for retrofitting, and strengthened appliance and lighting efficiency standards. The truth is that government intervention is not needed to achieve these sorts of advancements. They happen naturally as consumers gravitate towards better products and services, which is why, as Heritage’s David Kreutzer points out, the current “trend toward greater energy efficiency is expected to continue.” Such mandates also come with perverse unintended consequences. Don’t believe me? Think about the CFL light bulbs that contain mercury and how the mandate to buy them killed manufacturing jobs in America.

Second, the Senator proposes a “clean energy standard,” enhanced loan guarantees and early retirement for some coal plants. As my colleagues Ben Lieberman and Nick Loris point out, a clean energy standard “is proposed only because renewables are too expensive to compete otherwise. In effect, Washington is forcing costlier energy options on the public. Since renewables are lavished with substantial tax breaks, a national mandate will cost Americans both as taxpayers and as ratepayers. Any incentive proposed by government should in truth be read as a handout.” Since when did expensive energy mandated by the government and subsidized by the taxpayer become a good idea?

Finally, the highest ranking Republican on the Senate Foreign Relations Committee suggests we reduce our dependence on foreign oil by increasing CAFE standards, continuing the severely flawed ethanol mandate and enhancing “domestic oil production.” The latter is a great idea, which Heritage supports vigorously, but only in the context of free markets, not energy security. Unfortunately, the other measures Lugar identifies are not helpful: 1) the partially enacted ethanol mandate has already severely distorted markets and 2) CAFE standards will force consumers to buy smaller, more expensive vehicles.

Policymakers must realize that empowering the federal government, spending more taxpayer dollars, and taking away consumer choice is not sound energy policy. Its not sound policy, period. Our nation’s energy policy needs change, but those changes should favor consumer choice and free enterprise, not government bureaucrats.

President Obama called on the federal government, the nation’s largest energy consumer, to its increase energy efficiency and to reduce its greenhouse gas emissions 28 percent by 2020. According to the White House if the targets are met they “would reduce federal energy consumption by the equivalent of 646 trillion BTUs, equal to 205 million barrels of oil, and taking 17 million cars off the road for one year, according to a statement from the White House press office. That would save $8 billion to $11 billion in energy costs through 2020.”

If the government can save $8-$11 billion of taxpayer’s money, it should be commended for such efforts. There are a few questions to ask.

1.) If the plan is going to save this much money, why isn’t the government already doing it? Maybe they are, as chair of the President’s Council on Environmental Quality points out in her examples of agency actions. For instance, “The Marine Corps Logistics Base Albany, GA has signed a 20 year contract to burn methane gas from a nearby landfill, providing 22 percent of its energy needs, enough energy to power 1,200 homes.” If the taxpayers will save $8-11 billion, that should be the headline of the story – not the cut in greenhouse gas emissions.

2.) Will the plan actually save money? Reducing energy intensity in buildings, reducing consumption of electricity and water, minimizing the generation of waste and optimizing the number of vehicles an agency’s fleet could very well reduce the federal government’s energy costs. Further, there are trade offs to energy-efficient projects, especially when mandated by the government including higher up front costs, reduced performance and unintended maintenance costs that could significantly reduce long-term savings. For instance, one attempt to use natural light for heating end up costing $5,000 per year in window-washing fees.

3.) If renewable energy is economically viable, why isn’t there more in the market? President Obama’s executive order also calls for “increasing agency use of renewable energy and implementing renewable energy generation projects on agency property.” There’s a reason renewable energy provides a very small fraction of the country’s energy needs. It is intermittent and more expensive. Increasing renewable energy production to meet a GHG reduction target would likely end up costing taxpayers money.

4.) Will it affect military preparedness? The good news is it most likely won’t. Obama’s executive order includes language that says, “The head of an agency may exempt law enforcement, protective, emergency response, or military tactical vehicle fleets of that agency from the provisions of this order.” The agency may also exempt activities and facilities that are in the interest of national security as well as submit additional requests to the president. That’s not to say the military and law enforcement is exempt from improving energy-efficiency and saving taxpayer dollars. Heritage defense analyst Mackenzie Eaglen notes that “The U.S. Air Force has set a goal to run all of its aircraft on synthetic fuel by 2011. This type of fuel costs $30–$50 less per barrel and burns cleaner without compromising performance.”

There’s one other way the federal government can reduce its energy use, reduce its carbon dioxide emissions and save taxpayers money. Make it smaller.