End of the Road for Energy Subsidies?

Last year, Heritage Action and two dozen other conservative groups delivered a four-point plan to Congress on how to end energy subsidies.   The plan expressed “concern over the massive increase in subsidies, set-asides, and special treatment for politically connected energy sources that has largely defined American energy policy in recent years.”  With $16 trillion in debt, we need to prevent any more Department of Energy boondoggles.

As conservatives, we champion the free market and call on the government to allow producers of various forms of energy to compete based market demand for their product, not based on Washington picking winners and losers.

There is nothing wrong with green energy and the development of green energy technologies.  There is a problem, however, with members of Congress, people in the administration, or bureaucrats acting like a bunch of technocrats and imposing policies on the American people that are not in their best interest just because the government has some harebrained idea that it thinks is fabulous.

You know what’s not fabulous?  Wasting $90 billion of taxpayer money on green-tinted energy projects, many of which people knew in advance were destined for failure.

Mitt Romney pointed this out during the presidential Debate last week:

Romney isn’t the only one paying attention.  Rep. Fred Upton (R-MI), Chairman of the House Committee on Energy and Commerce, understands how imprudent and wasteful government subsidies for politically preferred energy sources are, which he articulated during a debate against his opponent for the 6th district of Michigan:

“We don’t need subsidies like this, particularly when the taxpayer loses every dime in their pocket. So I am for putting all of these on the table. Let’s look at the oil and gas subsidies, let’s take them away. Let’s let them compete just like everyone else… The wind and renewable industry … they received some $90 billion in subsides. Let’s talk about taking those subsidies away.”

He is not being hypocritical.  He’s just using common sense.  All forms of energy, from solar power to coal to oil, should be allowed to compete on their viability in the free market.

Obama and his administration, on the contrary, have been hypocrites with regard to energy subsidies.  President Obama says he wants to end oil subsidies, but he “overreaches on what truly is a subsidy for oil.”  Heritage’s Nick Loris and Curtis Dubay explain:

The President attacks oil subsidies while continuing to push for subsidies for renewable fuels, electric vehicles, wind, solar, clean coal, and even natural gas. According to the Congressional Research Service, President Obama’s tax hikes on the oil and gas industry proposed in his FY 2012 budget would increase the price of oil and gas for American consumers.[1] A much better policy for taxpayers and consumers would be to define subsidies accurately and then remove all energy subsidies. Any repeal of tax breaks should be offset with a broad tax cut to avoid any net tax increase.”

To truly serve the America people, the government should stop attacking reliable, affordable sources of energy and subsidizing inefficient energy sources (like solar power that generates 0.14% of electricity) that are simply not viable in the free market.

Read More: Heritage Action’s Stance on Energy Policy

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