America’s energy policy is shifting billions of dollars overseas each year, but the benefactors aren’t foreign oil regimes; the new energy pirates are the world’s “green” subsidy regimes.
For decades, America has been trying to reduce the outflow of cash to unstable foreign regimes that goes hand-in-hand with our reliance on their valuable oil reserves. In 1977, President Carter even established a new cabinet level agency – the Department of Energy – tasked with “solving” the energy crisis once and for all. They’re still working on it.
Meanwhile, the rest of the world seems to have come to a rather obvious conclusion: if the world’s largest economy is going to throw hundreds of billions of dollars into revolutionizing its energy supply, while simultaneously ignoring their own domestic resources, there’s probably a buck to be made. Actually, about 1.7 billion bucks so far, according to a new report from the Investigative Reporting Workshop at American University and ABC News.
The study examined DOE’s own figures on recipients of energy grants, made possible by the stimulus program passed by Congress. The figures show that the grants have gone to overseas companies by a margin of nearly 4-1. And that’s just the government portion of these projects that’s going overseas. Billions more in private funding has gone to the foreign companies who are using government subsidies to out-compete America’s domestic suppliers.
It seems that political graft is the only natural resource Washington seems to care about.
The most perverse part of this government induced wealth transfer though is who the government intends to leave with the bill – namely, America’s domestic energy producers. Just weeks ago, the President’s 2011 budget proposal announced more than 40 billion dollars in new taxes on domestic production of oil and natural gas. That’s 40 billion reasons for entrepreneurs, investors, and America’s energy companies to think twice before making the significant long term investments required to tap the domestic resources right under our feet. And all to pay for wind farms produced overseas.
If you’re shocked that the government would be so easily fooled by foreign interests into handing over the keys to our energy future – don’t be. In fact, bowing to the interests of others seems to be the mainstay of America’s current energy policy. A study by the respected carbon market publication Point Carbon that I wrote about just months ago demonstrated that linking US and EU cap and trade systems could slash EU carbon prices by as much as 50% while increasing U.S. prices by upwards of 30%. Should that energy fiasco ever move forward, American consumers would face more than $100 billion dollars in new costs.
As our domestic economy rebounds and world leaders regroup on global priorities for the new decade, energy is sure to remain at the top of the priority list. America needs to lead that discussion by example. Shifting our cash flow from one foreign reliance to another just doesn’t make sense.
Instead, Congress should support American energy resources, with tax policies that support worldwide energy exploration and investment by the private sector and an approach to climate policy that doesn’t fatten the wallets of the politically connected at the expense of American taxpayers.
America’s energy future is in the hands of our leaders. But I have to ask – with leadership like this, who needs enemies?
Andrew Langer serves as president of the Institute for Liberty, a DC-based non-profit organization dedicated to defending America’s small businesses.