Energy Bill --- Bad --- AT: Solves Oil Dependence

Energy Bill --- Bad --- AT: Solves Oil Dependence

If legislation is going to help America wean itself off foreign oil while significantly reducing CO2 emissions, then the American Power Act probably represents one of the most likely scenarios. Unfortunately, even if the bill makes it to the President’s desk, America will still be very dependent upon foreign oil for decades to come. If analysis of the bill proves correct, America could reduce spending on foreign oil by $51 billion per year by 2030. Of course, we’d still be spending almost $100 billion per year on foreign oil nonetheless. Even worse, history indicates that Congress will leave many loopholes in the final package, while watering down the bill, if it can even pass such legislation in an extremely cantankerous, bipartisan Congress ramping up for midyear elections amidst declining support for CO2-capping legislation. Over the last few decades, many significant problems have spawned from US dependence upon foreign oil – with ever-increasing severity and danger. Based upon this history, is not the worst probably yet to come? Ultimately, if this issue cannot bring the people together, can any?

Energy Bill --- Bad --- Economy

The Energy Bill is Terrible for the economy—There’s a laundry list of reasons

Heritage 7-14 (“Circumventing Cap and Trade With Another Bad Energy Bill,” http://blog.heritage.org/?p=38667)

In the midst of a crisis in the Gulf, some Senators are making a final push to pass energy and climate legislation this year. Senators John Kerry (D–MA) and Joe Lieberman (I–CT) areintroducing a scaled-back version of their original cap-and-trade billbut still want to maintain a carbon cap. Senate Majority Leader Harry Reid (D–NV) wants to bring an energy bill up for debate the week of July 26 that addresses the oil spill response and a greenhouse gas reduction plan for utilities only. A draft leaked from Senator Jeff Bingaman (D–NM) would go after utilities and aim to “cut emissions from the electric utility industry by 17 percent in 2020 and 43 percent by 2030.” When asked if the bill would contain a cap-and-trade program, Senator Reid responded, “I don’t use that. Those words are not in my vocabulary. We’re going to work on pollution.” But this is not about pollution. Carbon dioxide is a naturally occurring component of the air and is also the ubiquitous and unavoidable result of fossil fuel production and other naturally occurring events. Any bill drafted by Congress that aims to reduce carbon dioxide and other greenhouse gas emissions translates into rising energy prices for energy consumers, lost jobs, and a slower economy. Even calls for significant increased renewable energy generation are being met with strong resistance. If electricity created by wind and other renewables were cost competitive, a federal law to force consumption would not be necessary. Though the source of wind and solar energy is free, power delivered from these sources is very expensive. Why? The flow of wind is erratic and uncertain, which means that the power generated from wind is as well. Further, location choices for fossil and nuclear-fueled power plants have much greater latitude than those for wind turbines, which like hydropower plants, must be located where the natural resource is best suited—not necessarily close to where the power is used. This feature adds additional transmission costs to wind energy. Just yesterday, 11 northeastern governors sent a letter to Senator Reid warning of the exorbitantly high costs associated with building new transmission lines, which was pegged at $160 billion when analyzing the American Clean Energy Security Act passed out of the Senate Energy and Natural Resources Committee last June. The governors warned, In its current form, this legislation would harm regional efforts to promote local renewable energy generation, require our ratepayers to bear an unfair economic burden, unnecessarily usurp states’ current authority on resource planning and transmission line certification and siting, and hamper efforts to create clean energy jobs in our states. Ian A. Bowles, Massachusetts Secretary of Energy and Environmental Affairs, said, more forwardly, “This is a radical Soviet-style approach to transmission planning. If the market needs those resources, the market will create a way to get those resources.” Whatever Reid has planned for the week of July 26, you can be sure it won’t be good for consumers.

Cap and Trade – Bad - Economy

Cap and Trade Is Bad For The Economy—It Kills Jobs, Raises Taxes, and Lowers Incomes

Laffer et al 7-16 (Arthur Laffer: Chairman of Laffer Associates, Wayne Winegarden: Senior VP Laffer Associates, Colin Hanna: President of Let Freedom Ring “Gulf Oil Spill ‘Crisis’ May Revive Growth-Killing Cap-and-Trade Bill,” http://www.investors.com/NewsAndAnalysis/Article.aspx?id=540628&p=2)

As White House Chief of Staff Rahm Emanuel expressed in the midst of the financial crisis, this administration follows the rule "Never allow a crisis to go to waste." And following President Obama's Oval Office address, it is apparent that many in Washington are doing their best not to let the oil spill crisis in the Gulf "go to waste." Prior to the Gulf disaster, the American Power Act (the Senate version of cap-and- trade) seemed all but dead. This is as it should be. But with the Senate back from the July 4 recess, either the American Power Act will be explicitly taken up or another clean energy bill will be proffered to which the key provisions of the American Power Act will be attached. The problem is that there is no real link between cap-and-trade regulations and the crisis in the Gulf. As President Obama himself admitted in a speech at Andrews Air Force Base in March of this year: "The bottom line is this: Given our energy needs, in order to sustain economic growth, produce jobs, and keep our businesses competitive, we're going to need to harness traditional sources of fuel even as we ramp up production of new sources of renewable, homegrown energy (emphasis added)." Therefore, even if cap-and-trade legislation were passed, we will still need to drill for oil and natural gas. Furthermore, cap- and-trade regulations do not fix the problems that led to the Gulf crisis in the first place, so we will still need to fix these problems. All that would change if cap-and-trade legislation were passed is that President Obama and Congress would have chosen the worst possible time to impose job-killing legislation on the economy. The U.S. economy has been growing thus far in 2010, but not at the robust pace one would expect at this phase of an economic recovery, and the joblessness rate remains unacceptably high. Additionally, the looming tax boundary and other policy mistakes the administration has already made have set the economy up for a major economic downturn in 2011. Piling cap-and-trade regulations on top of all of this will only make a terrible economic situation even worse. There have been many economic studies that have assessed the economic damage created by cap-and-trade regulations, including an analysis performed by two of the authors. Depending on how the regulations are implemented, most studies find cap-and-trade regulations will cause a significant reduction in our rate of economic growth. Relying on the results from a 2007 Energy Information Administration (EIA) study, the present value in the reduction in our economic growth from implementing cap-and- trade regulations would be between -1.6% and -3.2% depending upon how the bill is implemented. The adverse economic impacts will not be felt equally across industries. Some industries — such as manufacturing, farming and transportation — will suffer more than others. The economic harm created by cap-and-trade regulations will be felt across the country, however, and will be manifested in many different ways. First, the wealth of individuals across the country will fall. The value of the stock market closely tracks changes in the economy. Therefore cap-and-trade regulations will have a significant and negative impact on the stock market. Reductions in economic growth of the magnitudes estimated by the EIA imply that growth in the S&P 500 will be -3.1% to -6.1% less than otherwise. For perspective, based on the current values of the S&P 500, 3.1% to 6.1% represents between $340 billion and $670 billion in market wealth, or between $1,100 and $2,200 in lost wealth per person in the U.S. as a result of cap-and-trade regulations. State pension funds will suffer too. States currently do not have enough assets to meet their current pension obligations, health obligations and other retirement obligations. Consequently, state funds will be significantly strained in the coming years. Current estimates place this deficit at around $1 trillion — though it is likely even higher. By reducing the financial wealth of the nation, cap-and-trade regulations will only make the unfunded state liabilities worse, not better. Based on data from a 2010 Wilshire report on the condition of state pension funds, we estimate that these investments would be worth $17.1 billion to $34.1 billion less if the American Power Act were implemented than otherwise. As a result, the funding level of the pension, health and other state obligations will fall from their current 79.0% to between 77.4% and 78.2%. That gap will need to be closed sooner or later by raising taxes or reducing pension benefits. Either solution will be wrenching to many Americans. Energy taxes, such as gasoline taxes, are generally viewed to be regressive because the dollar value of the tax imposes a larger proportionate burden on poorer individuals than on wealthier individuals. The same holds true for cap-and-trade regulations. When energy prices increase, the increases will impose a higher "tax" on lower income people. As a consequence, it is likely that the costs of the cap-and-trade regulations will be felt most acutely by those least able to afford these costs. The costs of reducing carbon emissions are not trivial. If implemented, cap-and- trade regulations would add significant costs to production and have a devastatingly negative impact on the long-term growth of many segments of the U.S. economy. The negative impacts would be felt across the country and impact people through higher costs, reduced job prospects, lower incomes, lower wealth and a reduced standard of living. Linking cap-and-trade regulations to the current environmental crisis in the Gulf does not change this fundamental reality.

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