By Nicolas Loris and Katie Tubb
Gas prices and the approval of President Obama’s management of the issue are heading in opposite directions. As the price at the pump continues to climb, his approval rating for handling gas prices is a meager 26 percent—the lowest of any of the polled questions. Much of what’s led to high prices, such as increased global oil demand and a weak federal dollar, is out of the President’s control; thus, it’s unfair and disingenuous to lay all blame for high gasoline prices on President Obama’s shoulders. The President does deserve criticism, however, for his nonsensical policy proposals (or in some cases, a lack of proposals) that will waste taxpayer and do very little to impact gas prices.
There are many glaring problems with President Obama’s energy pitch, but worst of all is his doublespeak on subsidies. In a speech on March 9 in Houston, Texas, President Obama said, “So what I’ve said is rather than continue a hundred years of taxpayer subsidies to an industry that’s very, very profitable, let’s double down on our investments in clean energy industry. It’s never been more promising.”
The President is manipulating language to frame the energy debate to his liking while disregarding the facts. To cover up the inherent inconsistencies in his energy and jobs agendas, President Obama refers to broadly available tax credits as “subsidies” when he’s talking about oil companies, while he refers to actual, massive subsidies to his favored industries as “investments.”
But he makes a good point and demonstrates why neither fossil fuels nor renewable energy needs subsidies: If producers have an economically viable technology, then they shouldn’t need handouts from Washington in the first place. If clean energy is as promising as the President says it is, then venture capitalists should be foaming at the mouth.
The problem is that clean energy hasn’t been that promising—even after the government invested billions in green stimulus dollars. Ask Solyndra, SunPower, Tesla, NRG Energy, Nevada Geothermal, FirstWind, Beacon Power, SpectraWatt, NextEra Energy Resources, Ener1, Energy Conversion Devices, Amonix, A123 Systems, Raser Technologies, Fisker, and Abound. These companies have either filed for bankruptcy or are in dire financial troubles—and they all received taxpayer funds.
If an energy source is not economically competitive, then the government should not artificially prop up these technologies and energy sources to create a market that wouldn’t exist without the subsidy. This wastes taxpayer dollars and sets back innovation by distorting energy investment allocations. In a free market, these resources would flow toward the most promising technologies, not to those with the most political support.
We should remove all energy subsidies, including those for oil and gas, not expand them. The Senate sent that message to the President today with the rejection of bills to subsidize natural gas vehicles and extend clean energy tax subsidies.
President Obama is correct that there is no silver-bullet solution to America’s high gas prices, but one approach we should certainly cross off the list is energy subsidies—or “investments”—by any name.