Recently the Democratic Congressional Campaign Committee (DCCC) sent out a “2014 Priority Issues Survey.” In addition to the obligatory Tea Party bashing: “help the Democrats protect the progress we have made from Tea Party radicals, deliver the positive changes America needs and help Democrats win a Majority in the U.S. House of Representatives!” and the fundraising requests to “help protect House Democrats against Republican attacks”—there is a section on energy.
Section VII, asks: “Which of the following will help America achieve energy independence?” It offers five options that do little to move America toward energy independence—which isn’t even a realistic goal given the fungible nature of liquid fuels. Additionally, most of the choices given on the DCCC survey actually increase energy costs for all Americans—serving as a hidden tax—but hurt those on the lower end of the socio-economic scale the most. The proposals hurt the very people the party purports to champion.
The survey asks respondents to “check all that apply.”
Ο Raising gas mileage standards for all new cars and trucks
This choice presumes that making a law requiring something will make it happen. Sorry, not even the Democrats have that kind of power. Even the current Corporate Average Fuel Economy (CAFE) Standard of 54.5 miles per gallon (mpg) by 2025—finalized on August 28, 2012, and called “the largest mandatory fuel economy increase in history”—will be tough to hit.
The CAFE standards mean that a carmaker’s passenger vehicle fleet average must achieve 54.5 mpg. To meet that, and produce the big pick-up trucks and SUVs Americans like to drive, the manufacturers must also produce the little itty-bitty cars with mpg above 60 and the more expensive hybrids (not one of which was on the top ten best-seller list for 2013)—or have a loss leader like the Chevy Volt to help bring down the average.
Suggesting a forced raising of gas mileage standards implies that auto manufacturers are in collusion with oil companies and are intentionally producing gas guzzlers to force Americans into buying lots of gasoline.
With the price of gasoline wavering between $3.00 and $4.00 a gallon, most people are very conscious of their fuel expenditures. If it were technologically possible to build a cost-effective truck or SUV that had the size and safety Americans want and that got 50 mpg, that manufacturer would have the car-buying public beating a path to its door. Every car company would love to be the one to corner that market—but it is not easy, it probably won’t be possible, and it surely won’t be cheap.
When the new standards were introduced in November 2011, Edmunds.com did an analysis of the potential impact: 6 Ways New CAFE Standards Could Affect You. The six points include cost and safety and highlights some concerns that are not obvious at first glance.
Achieving the higher mileage will require new technologies that include, according to Edmunds, “turbochargers and new generations of multispeed automatic transmissions to battery-electric powertrains.” The National Highway Traffic Saftey Administration and the Environmental Protection Agencyhave estimated that the average new car will cost $2,000 extra by 2025 because of the proposed new fuel-efficiency standards.
Additionally, new materials will have to be used, such as the proposed new Ford F-150 made with aluminum, which is predicted to add $1,500 over steel to the cost of a new truck. Aluminum also complicates both the manufacturing and repair processes. Edmunds reports: “Insurance costs could rise, both because of the increased cost of cars and the anticipated hike in collision repair costs associated with the greater use of the plastics, lightweight alloys, and aluminum necessary for lighter, more fuel-efficient vehicles. (Plastics, lightweight alloys, and aluminum are all more difficult than steel to repair.)”
Another concern is safety. “The use of weight-saving materials will not only affect repair costs but could make newer vehicles more susceptible to damage in collisions with older, heavier vehicles, especially SUVs and pickups. Their occupants could be at a safety disadvantage.”
One of the subtle consequences of high-mileage vehicles is the probable increase in taxes. Edmunds points out that lower driving cost may increase wear-and-tear on the nation’s highway system as consumers drive more freely. “Declining gas sales mean a further decrease in already inadequate fuel-tax revenue used to pay for road and infrastructure repair and improvement. … As more untaxed alternative fuels such as compressed natural gas and electricity are used for transportation, fuel tax revenue falls even farther. All of this is likely to lead to calls for a road tax based on miles driven and not the type of fuel used.”
Instead of increasing costs by forcing a higher mpg, a free-market encourages manufacturers to produce the cars the customers want. The Wall Street Journal story on the Ford F-150s points out: “In 2004, as the auto market soared, Ford sold a record 939,511 F-series pickups. That amounted to 5.5% of the entire U.S. vehicle market. But four years later, gas prices rose above $4 a gallon, sales of pickups began tumbling.” Then, consumers wanted small cars with better mileage. I often quote an ad for Hyundai I once saw. As I recall, it said: “It’s not that complicated. If gas costs a lot of money, we’ll produce cars that use less of it.”
In response to an article in US News on the 54.5-mpg CAFE standard, a reader commented: “ALL CAFE regulations should be repealed. Let the market and fuel prices decide what vehicles are purchased. The federal government should not be forcing mileage standards down the throats of the automaker or the consumers. This is still America, right?”
Ο Develop Renewable Energy Sources
There is nothing inherently wrong with the idea renewable energy. However, the cost factor is one of the biggest problems. When I do radio interviews, people often call in and point out Germany’s renewable energy success story: “The share of renewable electricity in Germany rose from 6% to nearly 25% in only 10 years.” While that may be true, it doesn’t address the results: “Rising energy costs are becoming a problem for more and more citizens in Germany. Just from 2008 to 2011 the share of energy-poor households in the Federal Republic jumped from 13.8% to 17%.”
Germany has been faced with a potential exodus of industry as a result of its high energy costs. For example, in February, BASF, the world’s biggest chemical maker by sales, announced that for the first time, it “will make the most of its capital investments outside Europe.” According to the Financial Times, Kurt Bock, BASF chief executive, explained: “In Europe we have the most expensive energy and we are not prepared to exploit the energy resources we have, such as shale gas.”
Throughout America people are beginning to feel the escalating costs of the forced renewable energy utility companies are required to add as a result of Renewable Portfolio Standards that more than half of the states passed nearly a decade ago.
But the cost is not where I take issue with the DCCC’s inclusion of “Developing renewable energy sources” in its survey. The survey question is about achieving “energy independence.”
In preparation for writing this column, I posted this question on my Facebook page: If the goal is “energy independence,” what issues should be a priority in America? The first answer posted was: “Smart grid and fast ramp natural gas turbines.” Another offered: “High efficiency appliances and lights. I am a LED FAN!” Yet, another: “Solar, tidal, water.” Bzzzzzzt, all wrong answers.
All of the above suggestions are about electricity. The U.S. is already electricity independent. We have enough coal and uranium under our soil to provide for our electrical needs for the next several centuries. Add to that America’s newfound abundance of natural gas and we are set indefinitely. By the time we might run out of fuel for electricity, new technologies will have been developed based on something totally different, and, I believe, something that no one is even thinking about today.
Developing more “solar, tidal, water,” or wind energy won’t “help America achieve energy independence.” Nor will a smart grid or natural gas turbines. High efficiency appliances or LED light bulbs won’t either.
Ο Encouraging consumer and industrial conservation
Consumers are already feeling the pinch of higher energy costs—both electricity and liquid fuels. When possible, people are restricting driving by taking a stay-cation rather than a traditional vacation. Many people who can afford the option are switching to more energy-efficient light bulbs.
As the BASF story above makes clear, most industry is energy intensive. In the story about the Ford F-150’s use of aluminum, the WSJ says that the new manufacturing process requires “powerful and electricity-hungry vacuums.” Industry cannot stay in business without profit. Therefore, in interest of preservation, energy conservation is virtually an instinct.
The cost of energy drives conservation.
Including this question in the survey is a red herring that would lead the respondent to think conservation is a big issue.
Ο Investing in energy efficient technology
When the word “investing” is used in reference to a government document or program, it always means spending taxpayer dollars. In a time of ongoing economic stress, we don’t need to borrow more money to spend it on something of questionable impact on energy independence.
Remember, much of the “efficiency” numbers bandied about refer to electricity, which has nothing to do with energy independence. Energy.gov states: “Every year, much of the energy the U.S. consumes is wasted through transmission, heat loss, and inefficient technology…Energy efficiency is one of the easiest and most cost effective ways to … improve the competitiveness of our businesses and reduce energy costs for consumers. The Department of Energy is working with universities, businesses, and the National Labs to develop new, energy-efficient technologies while boosting the efficiency of current technologies on the market.” Among the “solutions” presented on the page are “developing a more efficient air conditioner” and “a new smart sensor developed by NREL researchers that could help commercial buildings save on lighting and ventilation costs.” Nothing is offered that will actually impact energy independence.
Ο Increasing offshore drilling and oil exploration in wilderness areas
Respondents are discouraged from selecting the one item on the list that could actually lead to “energy independence” by the inclusion of the words “offshore” and “wilderness areas”—as if those are the only places drilling could take place.
Yes, we should increase exploration and drilling—and, while there are risks, it can be, and has been, done safely in offshore and wilderness areas. But there are vast resources available on federal lands that are either locked up or are under a de facto ban due to the slow-walking of drilling permits.
Instead of phrasing the choice “Increasing offshore drilling and oil exploration in wilderness areas,” if the goal is energy independence, the option should have read: “Release America’s vast energy resources by expediting permitting on federal lands.”
While the options on the DCCC survey, even if a respondent checked them all, will do little to “help America achieve energy independence,” the survey didn’t include any choices that could really make a difference in America’s reliance on oil from hostile sources.
Some selections that would indicate a true desire to see America freed from OPEC’s grip should include:
Ο Approving the Keystone pipeline;
Ο Revising the Endangered Species Act so that it isn’t used to block American energy development;
Ο Encouraging the use of compressed natural gas as a transportation fuel in passenger vehicles and commercial trucks;
Ο Expediting permitting for exploration and drilling on federal lands;
Ο Opening up the Arctic National Wildlife Refuge; and
Ο Cutting red tape and duplicative regulations to encourage development.
The fact that not one of these options that would truly make a difference was included in the DCCC survey belies the ideology of the Democratic Party. Its goals do not include energy independence. Instead, it wants to continue the crony corruption that has become the hallmark of the Obama Administration as evidenced by Secretary of Energy Ernest Moniz’s April 2 announcement that: “[T]he department would probably throw open the door for new applications for renewable energy project loan guarantees during the second quarter of this year.”
Like the Ukraine, until there is a change at the top, the U.S. will likely remain dependent on the whims of countries who want to use energy as a weapon of control. The goal should be energy freedom.