The Issue: Energy

Energy is essential to the daily lives of all Americans. Life as we know it cannot be sustainable without the use of energy. Farmers depend on energy to grow and ship their crops, and all Americans rely on it to heat or cool our homes to adapt to changing seasons. It is not an exaggeration to say that more people are alive—with higher standards of living—due to the use of fossil fuels.

Ensuring that energy is affordable and reliable is vital to our quality of life and economic development. This vitality is why government interference in the energy market should face a high degree of scrutiny. Many government interventions into this market have the side-effect of restricting production or limiting use. In other words, government involvement can make energy more expensive for Americans.

Government restrictions on energy are “regressive”— the poor are affected much more by these policies than the wealthy. For instance, an increase of $100 on the energy bill of the poor may severely curtail their standard of living. At the same time, the rich may not even notice their payment has changed. The goal of our country’s energy policy should be to help increase the quality of living for our most vulnerable citizens—not to force them to choose between keeping the heat on or their next meal.

Current government policy makes energy more expensive for ordinary Americans in many ways. Behind the scenes, the Environmental Protection Agency (EPA) heavily regulates how Americans use energy through restrictions on power plants. Furthermore, the EPA, armed with the Supreme Court ruling in Massachusetts v. EPA, has essentially been given a blank check to regulate all greenhouse gasses as “air pollution,” even though Congress nor the American people never explicitly gave it this power.

One policy that threatens American families’ access to affordable and reliable energy is the EPA’s so-called “Clean Power Plan.” In reality, it’s a costly regulation that drives up the price of electricity. This regulation effectively kills the ability for any new coal power plant to be built. It will also shut down hundreds of existing plants because of limits placed on carbon dioxide emissions. Since coal is one of the most abundant and affordable energy sources, the regressive nature of this legislation is obvious—those who can barely afford energy will be forced to pay more or lower their standard of living by cutting out other essentials. One study found electricity bills across the country will rise on average by 11%. It was also found that people in some states could see their bills rise by 40%! The average household already pays $1,367 each year for electricity.

Not only does bad government policy force Americans to pay more for energy, but millions of taxpayer dollars are wasted by failing companies. Often times, favoritism instead of merit determines who receives government funding. Solyndra, the green energy firm that went bankrupt after receiving over $500 million in government loans, is just one example where favoritism likely played a role.

The Issue Personalized

For over 15 years, Ashley* and her husband worked as a coal miner and maintained rock-solid job security. In 2008, President Obama infamously said that his plan would “bankrupt” those wanting to build coal power plants. This battle caused Ashley’s family to lose their income, their jobs, and their opportunity to provide for their family. Countless other families in coal-producing states have suffered the same fate. The entire livelihood of families was taken away from them by senseless government regulation, even though they are willing and able to work. These regulations have destroyed jobs and increased energy prices that American families just cannot afford. All Ashley and her family want is the government to get out of the way and allow her and her husband to provide for their family.

The Solution

Quick Facts from the Institute for Energy Research:

  • The U.S. has the largest combined reserves of coal, oil, and natural gas of any country on earth
  • The U.S. is the 3rd largest oil producer in the world
  • Increasing nuclear power will not reduce oil imports
  • Petroleum produces less than 1% of electricity
  • The United States leads the world in natural gas production

Many of the above facts are misunderstood or misapplied to policy in the U.S. The United States is an energy rich country—and our energy policy should reflect this basic fact.

U.S. energy policy should not be attempting to pick winners and losers in the energy industry. When the government tries to subsidize one company, they are squandering scarce resources that can be available to all other businesses. Bureaucrats, spending taxpayer money, have no incentive to make wise investment decisions.  These actions are true in every industry across America, from food to clothing to energy.

The United States should pursue an energy policy that allows its consumers to decide for themselves which resources to use for energy—while meeting baseline pollution requirements. Whether customers prefer coal, nuclear, wind, or solar the choice should be made in the energy market, not by the government. Competition and consumer choice will dictate the most efficient uses of energy. These choices should reflect consumers’ preferences, not those of politicians and bureaucrats. When the EPA over-regulates and creates burdensome requirements, the loser is the American consumer.

* Pseudonym

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