Energy Policy As Unhinged As Health Care

March 25, 2010 05:28

President Obama appears to have lost touch with political and economic reality.

BERNARD L. WEINSTEIN at IBD Editorials writes:

Now into its 15th month, the administration of President Obama appears to have lost touch with political and economic reality.

A full year’s political capital was spent passing the health care overhaul act, despite the fact that poll after poll showed that up to 80% of the population was quite happy with the status quo.

The $787 billion American Recovery and Reinvestment Act of 2009 has produced neither economic recovery nor reinvestment. Indeed, the strong gross domestic product growth in the fourth quarter can be attributed almost entirely to business inventory rebuilding.


The most recent data from the U.S. Census Bureau indicate that construction spending in January — including the infrastructure outlays that were supposed to be the centerpiece of the ARRA — was more than 9% below its “pre-stimulus” level.

The Obama administration has now turned its attention to energy policy. But rather than looking at the energy sector as a vehicle for reinvigorating the American economy, the president has proposed hiking the tax burden on oil and gas companies by $45 billion.

At the same time, a new report from the Gas Technology Institute finds that drilling restrictions in Alaska and offshore are blocking access to nine years’ worth of oil and gas.

Specifically, the administration is seeking to raise $36.5 billion from fiscal 2011 to 2020 by ending certain tax credits and deductions for domestic oil and gas production. An additional $8.5 billion would be raised by eliminating the credit for taxes paid by oil and gas companies overseas.

A portion of these revenues would be used to provide additional subsidies for “renewables” such as wind, solar and biofuels. In 2011 alone, subsidies for solar energy would increase 22% and wind energy 53% under the Obama plan.

The Sierra Club, a strong advocate of the plan, claims that the tax hikes will “help correct some of the market distortions that unfairly advantage dirty energy at the expense of clean energy.” In reality, it’s the other way around: On a BTU-equivalent basis, the subsidies for renewable energy sources dwarf those received by fossil fuels.


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