End all energy subsidies? Why not?
The cover of today’s Viewpoints section ledes with a piece by a self-confessed environmentalist who makes the audacious suggestion that the federal government end all subsidies for all forms of energy — oil, gas, coal, solar, wind, nuke, ethanol, geothermal, wood chips, garbage methane, cattle flatulence, you name it.
In a piece that first appeared in The Washington Post Friday, Jeffrey Leonard makes the argument that in the end renewables would be able to compete adequately.
“Major changes in the picture of domestic energy supply make it possible to sweep away decades of accumulated subsidies without seriously threatening the affordability of energy,” Leonard writes. “In the mid-1900s, the dominant fuels and sources of energy in America — for all sectors of the economy — were petroleum and coal. The rationale for subsidizing these fuels was simple: They were the backbone of the economy, and adequate supplies needed to be assured. But this rationale no longer applies.”
Leonard says the game changer is the huge natural gas production since new well fracturing techniques have been discovered. “The U.S. energy market, if left to its own devices, without distortions or subsidies, will provide plentiful and affordable energy while gradually evolving away from oil and coal as the primary fuel sources.”
He estimates the cost of energy subsidies at $20 billion a year.
According to a Reuters report, oil and gas subsidies have been proposed for cuts that would save $39 billion over the next decade.
The story said, “For decades, tax breaks and federal incentives have been a boon to the U.S. fossil fuels industry. Numbers compiled by the Environmental Law Institute reveal that those figures totaled $72 billion between 2002 and 2008 — about $10 billion annually.”
A Dow Jones report says the anti-subsidy movement may have an ally in the House’s new Energy Committee Chairman Fred Upton, a Michigan Republican. The story said of his stance on renewable energy subsidies, “Upton believes Congress should cut financial incentives for the renewable energy sector. In a Dec. 3 article he wrote for ‘The Daily Caller,’ Upton said Congress should reduce these incentives because they have become a ‘crutch’ for renewable-energy companies and fail to promote a competitive marketplace. Upton's opposition to renewable-energy incentives coincided with Congress's recent decision to grant one-year extensions of ‘1603’ grants for renewable-energy projects and tax credits for companies that blend ethanol with gasoline.”
Besides, where in the Constitution does it grant the federal government the power to subsidize anything with our tax money? In the General Welfare Clause?
James Madison said of the General Welfare Clause in a 1792 letter:
“Having not yet succeeded in hitting on an opportunity, I send you a part of it in a newspaper, which broaches a new Constitutional doctrine of vast consequence, and demanding the serious attention of the public. I consider it myself as subverting the fundamental and characteristic principle of the Government; as contrary to the true and fair, as well as the received construction, and as bidding defiance to the sense in which the Constitution is known to have been proposed, advocated, and adopted. If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one, subject to particular exceptions. It is to be remarked that the phrase out of which this doctrine is elaborated is copied from the old Articles of Confederation, where it was always understood as nothing more than a general caption to the specified powers."
Here is a John Stossel take on energy subsidies:
