Nicolas Loris of Heritage Foundation reacts to Obama’s proposed budget

Sen. Toomey responds to State of the Union address 2012

Leader Cantor On CNN Responding To President Obama’s State of the Union Address

Here is an excellent piece from the Heritage Foundation with a reaction to the president’s proposed budget:

Obama’s Energy Budget: The Antithesis of a Market-Driven Energy Economy – Nicolas Loris

If only entrepreneurs had President Obama’s vision of what technologies are going to be successful and profitable in the future. Sadly, the President’s vision seems to suggest that America’s innovators lack the ingenuity and expertise to meet our country’s needs, leaving the taxpayer to pick up the dropped ball. In a nutshell, that’s President Obama’s fiscal year 2013 Department of Energy (DOE) budget. It completely rejects the notion of a market-based energy industry and wastes taxpayer dollars at a time when we desperately need to curtail out-of-control spending. Whether it’s renewable energy, energy efficiency, nuclear, or fossil fuels, the President’s blueprint is all wrong. Not the Government’s Role to Make Energy Technologies Cost Competitive Each year, the President’s budget has moved further away from basic research and more into commercializing politically preferred technologies.

For instance, the 2013 budget proposes to spend $310 million on the SunShot Initiative, a program to make solar energy cost-competitive without subsidies by 2020. The oxymoronic part of this proposal is that the program itself is a $310 million subsidy. And it’s a perfect example of the President’s attempt to hand over America’s energy economy to the DOE. This is an attempt that’s been tried and failed. And it’s not just solar getting a handout—there’s money for wind, geothermal, biofuels, advanced vehicles, energy efficiency, nuclear energy, and even natural gas. Government has no business trying to make private-sector projects cost-competitive. It’s neither appropriate nor necessary. There’s a robust demand for energy domestically and globally that is met with a wide variety of energy sources. According to analysis by HSBC Holdings PLC, the global market for low-carbon energy and energy efficiency will reach $2.2 trillion in the next decade. That’s all the incentive solar needs. If a technology or a company cannot capture part of that market, it doesn’t deserve to be in business, and it certainly needs no help from the taxpayer. Consumers and Businesses Know How to Save Money Energy efficiency spending programs and legislation have largely enjoyed bipartisan support because the practices of being resourceful and saving money are inherently desired. But it’s because they’re inherently good things that we don’t need government mandates, rebate programs, or spending initiatives to make businesses and homeowners more energy efficient. The President’s overview highlights that “the Budget provides DOE with $290 million to expand R&D on innovative manufacturing processes and advanced industrial materials that will enable U.S. companies to cut the costs of manufacturing by using less energy, while improving product quality and accelerating product development.”

Businesses do not need taxpayer dollars to improve efficiency and cut costs; they make those investments all the time with their own money. Nestle’s newest water bottle uses 60 percent less plastic than the one they first introduced in mid-1990s. Businesses make these investments every day to be more competitive and pass the savings onto consumers to capture a larger market share. Energy efficiency programs take an overly simplistic view of how our economy works and fail to take into account the tradeoffs energy consumers and businesses consider when making decisions. Subsidize One Fossil Fuel, Punish Another? In his State of Union speech, President Obama claimed that our country’s natural gas boom came largely as a result of public funding. While nothing could be further from the truth, the President wants to unnecessarily dump money into an already-booming industry. The budget proposal includes $421 million in fossil energy research and development, including $12 million “aimed at advancing technology and methods to safely and responsibly develop America’s natural gas resources.” Much of the $421 million is subsidies for the fossil fuel industry for research and spending that can be done by the private sector. Most of this funding focuses on technologies that will reduce carbon dioxide emissions. The program includes a clean coal power initiative, research on fuels and power systems to reduce fossil power plant emissions, innovations for existing plants, integrated gasification combined cycle, advanced turbines, carbon sequestration, and natural gas technologies. All of these programs need to go. The Administration proposed a phase-out of fossil fuel subsidies, significantly cutting funding for the Office of Fossil Energy. But the Administration is doing so less because it is good economic policy (which it is) and more to promote an environmental policy of Administration-preferred clean energy sources. When the Administration does talk about eliminating fossil fuel subsidies, they’re not actually removing subsidies but imposing targeted tax hikes on the oil industry by removing broadly available tax deductions. The President’s anti-subsidy rhetoric is on track, but actually defining what’s a subsidy is a different story.

Unsurprisingly, President Obama’s budget proposal for energy is largely a carbon copy of last year’s, with an even stronger government push for renewable energy and energy efficiency programs. It hands DOE unprecedented control over America’s energy economy, which has successfully been driven by the private sector. The DOE budget proposal doesn’t need a scalpel taken to it; it needs a hatchet.

 __________________

I believe in the free market and basically if an industry is successful then it will grow and if it is not then it will disappear. It is no place for the federal government to try and re-arrange everything.

Post a comment or leave a trackback: Trackback URL.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: