pageok
pageok
pageok
GOP Field Lacks Reagan's Energy:

In another NRO "energy week" article, the Cato Institute's Jerry Taylor and Peter Van Doren take aim at the GOP Presidential field's approach to energy policy.

We've been hearing a lot about Ronald Reagan from the Republican presidential field of late, but there is little trace of him in the position papers issued by the various campaigns thus far. Take energy. Whereas candidate Reagan proposed to solve the energy crisis of the 1970s by abolishing the Department of Energy, deregulating the energy sector, and letting free markets rip, candidates Giuliani, Romney, McCain, and the rest propose to solve today's energy crisis with elaborate national energy plans, lavish subsidies for favored fuels and industries, mandatory renewable-energy consumption orders, and government dictates to manufacturers regarding how energy-related goods and services are made.

PLR:
Why did the NRO let that off message piece slip through the filter? Somebody must be asleep at the switch.
9.26.2007 11:09am
RMCACE:
There are market failures in the energy market that need to be acknowledged. The world's largest energy supplier is a colluding Cartel. Certain fuels cause negative externalities which will not be accounted for in the free market system. An energy plan must address at least those two market failures.
9.26.2007 11:23am
Thales (mail) (www):
PLR: that's pretty on message, at least for the Buckley era NR. Of course, the magazine long ago abandoned his thoughtful legacy (I say this as a "liberaltarian" who always appreciates Buckley's prose and wit, even though I agree with him only a little of the time).
9.26.2007 11:34am
Randy R. (mail):
Considering the fact that the government is one of the largest consumers of energy, it is appropriate for it to decide how best to obtain it.
We had a black-out just a few years ago because our electricity grid is out of date and not functioning well: But if the free market is so good at this, then why did that happen? Obviously, we need a plan for our energy needs, as it's way too important and complicated to just let the 'free market' let go. \

That's not saying that I agree with everything they propose, but the world is a heck a lot different from 1980. And are we even sure that Reagan's prescriptions were the right ones in the first place?
9.26.2007 11:46am
bittern (mail):

There are market failures in the energy market that need to be acknowledged. The world's largest energy supplier is a colluding Cartel. Certain fuels cause negative externalities which will not be accounted for in the free market system. An energy plan must address at least those two market failures.

RMCACE,
Yes, there are specific ways that markets will fail to be the best system in energy. Do we correct specifically for the failures or do we take that as a reason to bulldoze the market and put in a government plan?

If you mean OPEC, to me that's extrinsic to the U.S. What can you do inside the U.S. that addresses that "failure"? Subsidize imports from OPEC, so that we use as much energy as if OPEC didn't exist?

Re externalities, why not get your best estimates for pollution costs into the price for fuels, and then let the market take it from there? I think Prof Adler has been consistent in implicitly supporting such.

Randy R., almost nobody pushes to unleash electricity transmission and distribution, since those are natural monopolies. The optimum level of investment in the grid is not at all obvious. The decision is pretty much within the province of regulated utilities and independent system operators, not the free market (and that's FERC, not DOE).
9.26.2007 12:22pm
Publius Endures (www):
I know it's blasphemy on the Right these days to suggest he's a Reagan conservative in any way, but I'm pretty sure Ron Paul is in favor of "abolishing the Department of Energy, deregulating the energy sector, and letting free markets rip." It gets lost in the bluster over his position on the war, but "letting free markets rip" has been Ron Paul's raison d'etre for a good 30 years now.
9.26.2007 12:36pm
RMCACE:
Bittern,

I am also taliking about geopolitical/national security eternalities. Reliance on a foreign source of energy externalizes the possible cost in the event the source of energy is no longer friendly or accessible. Domestic renewables should be subsidized for that purpose (or imports heavily taxed). This is what the Cato people are criticizing.

The market theory asumes a myriad of rational actors all trying to maximize utility/profit. In such a scenario, the market will appropriately price energy. Because the leading actor in the world engages in price collusion, such a situation will not occur in the energy market. This where policy steps to reduce our consumption of oil will help reduce reliance on OPEC. If one side of the bargaining table can collude, so can the other.

You then note "why not get your best estimates for pollution costs into the price for fuels" and then have the markets it work it out. I think essentially want a tax on the energy, with the proceeds used to offset the pollutions harmful effects. A few thoughts. First, I would like to see where Cato trusts the government to effectively administer the tax and correctly spend the revenues. Headline: Cato for Tax Increase. Yeah, right.

Second, it assumes that the pollution can be "undone" through spending money. We do not yet have an effective method for removing greenhouse gases from the atmosphere. Our best plan right now is to basically replant a lot of trees. Not the most efefctive method. If you have a method to remove greenhouse gases from the atmosphere, please let me know and I will split this prize with you.
9.26.2007 12:51pm
ScottVA:
Publius:

It took me seeing firsthand many conservative pundits, bloggers, etc going after Ron Paul with extreme animosity to realize that perhaps the Republican party really has changed--and not just at the top/elected levels, but top to bottom. I've been really shocked by how some alleged "conservatives" attack him, and for more than his war position.

not quite sure where that leaves me--at the moment a republican, though of the "anti-democrat" wing of the party, I suppose..
9.26.2007 12:55pm
bittern (mail):
RMCACE,
The Cato article argues against your position on the "reliance on foreign energy" problem. I don't see where you've debunked them. Why should I care whether you buy your gasoline from a domestic or foreign seller? Whether or not OPEC is actually effective, though, I'm all for learning more about a buyer's cartel. I'm happy to junk the free market for something better at any time.

I'm starting to think, following thoughts of MA GOP governors, that "user fee" is a better term than "tax." Besides, a "tax" goes to the government, by definition, and most of the damage to the environment is not accruing to the government. So "user fee" is a better term. And, yes, where there is damage to natural resources, a user fee is designed to incorporate the damage into a price. But no, the user fee doesn't "undo" damage, the fee just discourages damage to the extent the damage ought to be discouraged. Your big national energy plan is going to do something better?
9.26.2007 1:26pm
Publius Endures (www):
ScottVA:
I don't want to read to much into it, but it's surprising that Cato of all places would be the ones to implicitly lump Paul in with Huckabee, et al on energy policy. Since it's Cato, maybe it was just a momentary brainfart.
Either way, something has changed in the Republican party these last 7 years. When I worked on the Hill briefly in the 90's, Ron Paul was regarded by many Republicans as almost a folk hero who they wished they could emulate without paying at the ballot box. There was even loose talk amongst some staffers wondering why the LP didn't just fold into the Republican Party. Things have changed so much now, though, that people like Bob Barr and Dick Armey (both poster children for 1990s social conservatism) have joined the libertarian movement, and are now regarded by the Right as whacky leftists. The number of disaffected Republicans who were considered the "establishment" 7 years ago is staggering: Barr, Armey, Christine Whitman, Colin Powell, William Buckley, Bruce Fein, Richard Viguerie, the Chafee family, Bob Smith, Paul O'Neill, Chuck Hagel, Sen. Webb, and dozens more.
9.26.2007 1:42pm
Jason F:
Whereas candidate Reagan proposed to solve the energy crisis of the 1970s by abolishing the Department of Energy, deregulating the energy sector, and letting free markets rip, President Reagan did no such thing.
9.26.2007 1:43pm
A. Zarkov (mail):
President Regan did deregulate at least part of the energy sector. Before 1980 we had a system of "entitlements." In an effort to prevent cheaper "old oil" from being more profitable than more expensive "new oil," DOE put in a complex system of entitlements where you in effect had to purchase a license to sell oil in order to equalize profits. Reagan did eliminate this whole system and the shortages went away. Now arguing cause and effect is always hard, but it least made life simplifier for everyone. Reagan went wrong in not pushing hard for new reactor construction despite Three-Mile Island accident. That would have given us 28 years of lead-time to get a large source of pollution free, non-carbon-emitting energy in place. Now we have a very brittle energy system. One bad storm that takes refining capacity down will disrupt the gasoline supplies. Better hope for no big hurricanes this year or you will find yourself waiting in line at the gas pump.
9.26.2007 2:06pm
J. F. Thomas (mail):
Reagan went wrong in not pushing hard for new reactor construction despite Three-Mile Island accident.

It amuses me to no end to hear libertarians blather on about free markets in energy and eliminating the Department of Energy and in the very next breath extolling the virtues and wonders of nuclear power.
9.26.2007 2:45pm
mariner (mail):
Reaganism is dead, if it ever really lived.

Today's Republicans favor big government and expansion of its power, albeit in directions different from Democrats.

Anyone who actually believes in smaller government and would work toward that end is anathema to them. Ron Paul's isolationist foreign policy views give everyone else a convenient stick to beat him with (and they do so with gusto, to divert attention from their own shortcomings).
9.26.2007 3:28pm
David M. Nieporent (www):
Randy R:
Considering the fact that the government is one of the largest consumers of energy, it is appropriate for it to decide how best to obtain it.
The government may be one of the largest individual consumers of energy, but even our ridiculously bloated government is a tiny consumer of energy as a proportion of the whole. Moreover, there's little logical connection between the premise and conclusion of that sentence anyway.
We had a black-out just a few years ago because our electricity grid is out of date and not functioning well: But if the free market is so good at this, then why did that happen? Obviously, we need a plan for our energy needs, as it's way too important and complicated to just let the 'free market' let go.
Good thinking: government did a terrible job managing a highly-regulated industry, so obviously this proves the free market doesn't work!

Shorter JFThomas: "Pointless content-free snark."
9.26.2007 5:46pm
DeezRightWingNutz:
Even if the blackout was entirely a result of free markets, the optimal number of blackouts, like airplane crashes, is likely non-zero. What if it costs $50 billion to ensure that a major blackout doesn't occur during the next decade? I'd rather read by candlelight for a while.
9.26.2007 6:27pm
J. F. Thomas (mail):
"Pointless content-free snark."

Hardly, there is not an energy source that is more dependent on government involvement and interference than nuclear power (hell, the government invented it).
9.26.2007 7:43pm
Duncan Frissell (mail):
I love the way that our rulers try and design cars, toilets, health care systems, and energy delivery systems as if they were any good at designing things. It's hard enough for people with training and experience to come up with designs that work -- much less bureau-rats sans such training and experience.

Just because energy production has been highly regulated does not mean that such regulation is desirable. See telecoms dereg.

Energy is pretty easy to produce. If we were allowed to produce it we could produce plenty. I bet that a deregulated energy market would produce more at a lower cost than a regulated one (as with the markets for food and computers). Note that we eat better (or could eat better with better taste in food) than the commies or the Europeans.

NRG applied for two reactor licenses yesterday. First since TMI. Nuclear power was invented by academics some from public and some from private universities.
9.26.2007 10:00pm
Kazinski:
I don't think that those favoring government regulation of energy get it. It isn't just a philosophical argument that people should be allowed to make their own decions, etc. It is a practical argument, government is just guaranteed to take most problems and make them worse. The current rage is subsidies for alternative energy. Now it looks like biodiesel causes WAY more harm to the environment than petroleum diesel, and at a higher cost:


The results show that biodiesel derived from rapeseed grown on dedicated farmland emits nearly the same amount of greenhouse gas emissions (defined as CO2 equivalents) per km driven as does conventional diesel.

However, if the land used to grow rapeseed was instead used to grow trees, petroleum diesel would emit only a third of the CO2 equivalent emissions as biodiesel.

Petroleum diesel emits 85% of its greenhouse gases at the final stage, when burnt in the engine. By contrast, two-thirds of the emissions produced by rapeseed derived biodiesel (RME) occur during farming of the crop, when cropland emits nitrous oxide (N2O), otherwise known as laughing gas, that is 200-300x as potent a greenhouse gas as CO2.


The same problem occurs producing corn oil biodiesel, corn and rapeseed are the two main crops used in Europe and the US to produce biodiesel. Are governments going to stop subsidizing biodiesel now? Of course not, its pork, pork never dies.
9.27.2007 4:04am
Mary Katherine Day-Petrano (mail):
Oh, I don't think this is about Republicans lack the energy of Reagan. That's a faux. What is really going on is everyone knows the global warming destruction to our planet has been and continues to be caused by the Republicans unbridled capitalism without checks and balances and shameless wealth shifting to the rich run amok (see President's thugery at the UN Climate Change summit, refusing to cap carbon emissions).

Simply put, that is NOT the agenda Americans want or intend to vote for in the future. The Republicans of the past are a failed vision of doom to America and the entire planet.

For each inch of sea level rise and each forced migratory American footprint, millions of votes shift away and will continue to shift away from these Republicans who are wreaking such global warming damage.

Even the smallest carbon emission reduction measure -- making it mandatory that each and every federal, state, and local government court and agency require electronic format Internet access to do all their business with the public to eliminate unnecessary vehicle trips and pulp and paper mill emissions (getting rid of hard paper copy forms, letters, and filing) has not been enforced by the Bush Administration.

His legacy will be truly felt by all our children and grandchildren who live like slowly baked Turkeys in a global warming world with increasing temperatures and rising sea levels who will hate everything this Presidential Administration has stood for and who will no dooubt abolish the Republican party.

If Republicans cared at all, they would take immediate measures to cut the carbon emissions rates -- see above, there is at least one way to make an immediate change: Big Oil vs. Paper and Pulp Mills -- it is high time to cut carbon emissions by eliminating luxury hard paper copy-based governmental and business operations and unnecessary vehicle trips by making Internet electronic transactions and communications mandatory.

We are at a turning point no different than the realization that Big Tobacco kills people and our children and we can no longer afford it.
9.27.2007 11:45am
Jam:
This reminds me why I quit my subscription to NR and why I do not read NRO. Hey, NRO, have you heard of Ron Paul?

The problem with conservative respectables, like the NR gang, is that they know that Ron Paul means it.
9.27.2007 4:12pm