‘Maximize demand, minimize supply and buy the rest from the people who hate us the most’
Thomas Friedman has a scathing critique of the current state of the U.S. energy policy and the McCain-Clinton proposed national gas tax holiday. Friedman, in summing up the policy, writes, “This is not an energy policy. This is money laundering: we borrow money from China [to pay for the national debt] and ship it to Saudi Arabia and take a little cut for ourselves as it goes through our gas tanks. What a way to build our country.”
He goes on to identify the following as major problems with our current and proposed energy policies:
Regarding Clinton’s plan to pay for the proposed gas tax holiday by taxing Big Oil, Friedman notes that if the plan is to take money from the oil companies, then that money should be put towards alternative energy innovation, instead of, as he puts it, “burning it up on the way to the beach.” As we’ve looked at previously, insisting that revenues generated by carbon taxes be re-invested in alternative energy, is a key factor in creating a policy that actually decreases carbon emissions. Otherwise, those revenues are too easily sucked up by other competing projects (like pandering to voters during the summer driving/election season).
Which leads us to Friedman’s other major critique of our energy policy—Congress’ inability to create a comprehensive, long-term plan to encourage solar and wind power generation with tax credits. These credits, which were not extended by a bickering Congress in 2007, are set to expire this December. Fortunately for Big Oil, their firmly rooted credits were successfully extended. The wind and solar industries weren’t so lucky.
Friedman, in assessing the need for tax credits for alternative energy, writes, “These credits are critical because they ensure that if oil prices slip back down again — which often happens — investments in wind and solar would still be profitable. That’s how you launch a new energy technology and help it achieve scale, so it can compete without subsidies.”
[The quote in this post’s headline is from Friedman’s piece and is attributed to energy expert Peter Schwartz of Global Business Network, in describing the U.S. energy policy today.]
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