FOR IMMEDIATE RELEASE
August 27, 2008
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Brian Kennedy (202) 434-8200
‘Gang of Ten’ Plan Attracts Flies
Despite fatal flaws, support for ‘New Era’ plan grows as election looms
WASHINGTON, D.C. – Thomas Pyle, president of the Institute for Energy Research (IER), issued the following statement today in response to the recent expansion of support for an energy proposal crafted by the self-described “Gang of Ten” U.S. Senators:
“If the burning of tax dollars were a viable source of energy for America, the gang’s plan would be worthy of consideration. But make no mistake – this is not an energy plan, it’s a blueprint for new federal taxes and spending sprees. For the sake of consumers and our economy, we had hoped that support for this proposal would go in the other direction. With winter around the corner and more than 100 million American households facing record-setting home-heating costs, the growth in support for this plan is disappointing.”
“A common sense energy plan would yield the taxpayer an abundance of new domestic energy supplies and billions in revenue to the federal treasury. It would lift the arbitrary restrictions that have kept billions of barrels of American oil and trillions of cubic feet of natural gas off-limits during times of dire need. Unfortunately, the gang’s plan promises to do no such thing. In exchange for a hint new production in the future, this plan spends roughly $85 billion on taxpayer-funded pork projects and handouts to the auto industry and – worst of all – puts the ban on offshore drilling into permanent law for the first time ever.”
Click here for a complete section-by-section analysis of the ‘New Era’ energy plan’s fatal flaws. Two notable shortcomings are as follows:
Auto Industry Handouts: Almost No Bang for Big Taxpayer Bucks
The “Apollo” component of the gang’s plan calls for spending $20 billion: $7.5 billion to fund research and development of alternative fuel vehicles, $7.5 billion for the auto industry to help it “re-tool” and “re-equip” to manufacture alternative fuel vehicles (if and when it’s possible), and $5 billion in the form of $7500 tax credits for purchasers of non-petroleum vehicles.
The “Gang” claims that its plan will convert 85% of the vehicles in the country to “non-petroleum fuels” in 20 years. However, the $7500 tax credit would only help with the purchase of 666,667 vehicles when and if they become available. With 250 million registered vehicles in the U.S., this plan may help replace 1/375th of the vehicles on the road today (if the technology becomes available).
Offshore Energy Bans Continued, Permanently
Potential energy production under the “Gang’s” energy plan is severely limited, especially by three provisions:
- Only four coastal states would be granted the ability “opt out” of energy bans in the future, should the governors and legislatures in those states take decisive action to do so.
- The plan imposes an arbitrary 50-mile buffer zone around the coasts that would exclude potential resource deposits, such as the Gulf of Mexico’s Destin Dome, which is some 25 miles offshore.
- The plan appears to place the offshore energy bans into permanent law for the first time ever. For the last 27 years, the offshore energy ban has been subject to annual renewal by the Congress. This is the wrong direction, especially as the Congressional ban is set to expire in less than two months, on October 1, 2008, which will open the entire 1.76 billion acre outer continental shelf (OCS) to energy production.
Click here for a complete IER analysis of the ‘New Era’ energy plan.
The Institute for Energy Research (IER) is a not-for-profit public foundation that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets. Founded in 1989, IER is funded entirely by tax deductible contributions from individuals, foundations and corporations. No financial support is sought or accepted from government (taxpayers).
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