Columns » Ernest Dumas

Energy (companies) bill

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Eager to change the subject from the faltering war in Iraq, for which his approval rating had sunk to 38 percent, President Bush flew to New Mexico Monday to sign the omnibus energy bill and to proclaim a bright energy future — many years from now, that is. If even that were true — a far-off independence from foreign oil — the country ought to celebrate with the president, who finally got the big help for the giant energy companies that they asked for in 2001. You remember when Enron’s Ken Lay and executives for Archer Daniels Midland Co., Exxon Mobil, ConocoPhillips and others secretly funneled their wish lists to Vice President Dick Cheney, who refused to divulge their names and requests. The courts ruled that the public was not entitled to the information. Well, this is the product of the secret machinations: $14.5 billion in tax breaks and incentives to energy companies over 10 years. Big oil and gas companies, which are drowning in cash with oil selling for $64 a barrel on the president’s big day and gas prices soaring, will get $4 billion in tax breaks and direct royalty relief to see if they can find more oil and gas if they are inclined. The prospering coal industry gets another $4 billion. Taxpayers will get to underwrite a renaissance for nuclear power, reimbursing utilities up to $2 billion if nuclear plants do not come on line on schedule, as they never have. Something was thrown in for every kind of energy company, some that are even promising, in order to co-opt enough votes for passage. The energy bill follows the pattern of almost every undertaking by Bush-Cheney, from four years of tax cuts for the wealthy and big corporations to the Halliburton war in Iraq: in the name of national security and prosperity, vast benefits for those who least need help. The list of beneficiaries goes on for 1,700 pages. The giant agribusinesses, Archer Daniels Midland and Monsanto, friends of the administration, get to nearly double their production of ethanol from corn by 2012. Corn already is the most heavily subsidized crop, $10 billion a year, and 13 percent of the nation’s vast corn production already goes to ethanol production. A Cornell University study showed that ethanol uses 29 percent more fossil-fuel energy to produce than it yields from the gas tank. What a bargain. But not even President Bush could fudge much on the truth that the bill would do nothing to halt the soaring price of energy in the short run or relieve the fright over the future. It is no quick fix, the president said. The New Mexico senators, who were instrumental in the bill’s passage, were on hand to say that the bill provides no relief in the next few years — nothing to stem the demand for oil, nothing to slow the emission of greenhouse gases that even leading Republican senators now acknowledge are heating up the earth’s surface. In fact, provisions in the bill, inserted by the Senate, to force conservation and efficiency were eliminated or reduced by two-thirds to satisfy the Republican House leaders. Sen. Jeff Bingaman, D-N.M., issued a statement at Bush’s bill signing saying that while he supported the act, “We need to build a consensus around effective steps to use less oil in our transportation sector, which is the basic cause of our increasing reliance on oil imports.” Unconsciously, Bush was ratifying that idea by choosing to sign the bill at the Sandia National Laboratories in New Mexico, built during the Gerald Ford administration in 1976 to research solar energy. The laboratory was one response in the Energy Policy and Conservation Act enacted by a Democratic Congress and Republican president after the Arab oil embargo of 1973-74, which produced a tripling of the price of a barrel of oil and an energy shortage. In those days, government was capable of responding to a crisis. The keystone of the act was the corporate average fuel efficiency (CAFE) standards for cars and light trucks. The average fuel efficiency of new cars had been declining (as it has been again in recent years), from 14.8 miles per gallon in 1967 to 12.9 mpg in 1974. The CAFE standard for cars would rise to 27.5 mpg and bring about a massive saving in oil consumption and atmospheric gases. But oil prices fell in the Reagan administration and the standards were relaxed. Republican Congresses would not raise them again either in the elder George Bush’s administration or, in the face of new global oil demand and rising prices, in the Clinton administration. Conservationists got a provision stuck into an appropriations bill in 2001 calling for a study of CAFE standards by the National Academy of Sciences, which concluded that car makers could easily achieve a 40 percent or better improvement in the fuel economy of light trucks and SUVs, the big polluters, in 10 or so years with a government mandate. That small step alone would have done more to protect the country than all the $14.1 billion in welfare for energy companies in the bill that Bush signed so ceremoniously. No big energy company wanted that and thus not a dime went into the campaign treasuries of Bush or members of Congress in the name of fuel efficiency.

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