Energy Bill

Congress is about to vote on a new energy bill. It has some good elements, and some poor ones. But the biggest weakness of the bill is summarized here:

The problem, as I have said before, is that we have no consistent, long-term energy policy. If we are going to get a new energy bill every other year - in which tax breaks are granted and then repealed - it makes it difficult to execute long-term projects. Imagine that two years ago you started in on a five-year project, based the project economics on the rules in place at that time, and then half way through the project the rules are changed on you. You have basically created a climate that discourages investment in the U.S., because the rules are apt to change at any time.

If anyone ever argues that the U.S. culture is socialist driven, energy is a poster child counter argument. We've known since the 1970's that energy was going to be a big problem. BIG problem. Yet government has done nothing preferring to let the marketplace decide on what's to be done. And that trend continues.

This is why I've advocated a gasoline tax to pay for an comprehensive energy program for some time. But instead, the marketplace is now imposing a "tax" in the form of supply shortages that may finally spur innovation. You know the old oil filter commercial: "pay me now or pay me later". The only question remains is just how quickly the "energy problem" grows and what the costs are of allowing the marketplace to spur innovation. We know a portion of the cost of not proactively solving the energy problem is this little embranglement we've got going in the middle east. Who knows what the ultimate costs will be.