[Editor Note: Tomorrow’s post,”A Free Market Energy Vision,” explains the philosophy behind the Institute for Energy Research/American Energy Alliance.]
The New York Times is upset with “Big Oil,” including the advocacy group American Energy Alliance (AEA). This is evident in their Saturday opinion-page editorial, Big Oil’s Bogus Campaign, subtitled “Industry spends heavily to preserve tax breaks and blame Mr. Obama for rising gas prices.”
What is the philosophy behind AEA, what are the Times’s complaints, and what is a free-market response?
American Energy Alliance
The American Energy Alliance is the C4 (advocacy) arm of the C3 (educational) Institute for Energy Research. I am founder and CEO of IER.
AEA’s “About” section on its website reads as follows:
Founded in May, 2008, The American Energy Alliance (“AEA”) is a not-for-profit organization that engages in grassroots public policy advocacy and debate concerning energy and environmental policies.
AEA believes that freely-functioning energy markets provide the most efficient and effective solutions to today’s global energy and environmental challenges and, as such, are critical to the well-being of individuals and society. AEA believes that government policies should be predictable, simple and technology neutral.
AEA’s mission statement is as follows:
The American Energy Alliance (AEA) is the independent grassroots affiliate of the Institute for Energy Research (IER). AEA’s mission is to enlist and empower energy consumers to encourage policymakers to support free market policies. These policies lead to abundant, affordable, and reliable energy for all Americans.
In fulfilling its mission, AEA will enlist the support of Americans in every state and conduct targeted, non-partisan national and local energy education campaigns. Outcomes will create a climate that encourages the advancement of free market energy policies.
Free markets will provide the United States with affordable, plentiful, and reliable energy. Energy consumers, not bureaucrats, should decide the mix between various sources of energy. The tax code should not be used to pick energy winners and losers. Lastly, markets not mandates result in lower energy prices and more abundant energy for all Americans.
AEA will also help fulfill the mission of the Institute for Energy Research, which is to establish itself as the premier source of accurate, substantive and timely energy information for policymakers, the media and the public. By communicating IER’s decades of scholarly research to AEA grassroots activists, AEA will empower citizens with the facts.
Political Capitalism, Duh
The Times opinionists express angst at an industry whose “profits are being continuously recycled to win the support of pliable legislators.” Well, welcome to the world of political capitalism, whereby activist government shapes profits in addition to underlying market consumer demand.
Some advice. If the Times wants to get the industry to stop spending money on politics, then get the politics out of energy as much as possible.
Advocate a flat tax or tax reform that eliminates tax preferences for all energies, not just oil and gas. End the Production Tax Credit and accelerated depreciation for wind and solar power. Eliminate the ethanol requirement. Let’s truly level the energy playing field and see what consumers choose and which energy sources fail.
The editorial then takes on a new ad campaign of the American Energy Alliance (my comments are interspersed):
“Money has always talked in Congress. Now industry allies are aiming at voters. The American Energy Alliance, a Washington-based group that does not disclose its financial sources, on Thursday began an ad campaign in eight states with competitive Congressional races.”
Comment: “Industry allies …”? Free market groups such as AEA often find themselves fighting “the industry.” Ken Lay of Enron … James Rogers of Duke Energy … T. Boone Pickens and Aubrey McClendon of Big Gas … Jeff Immelt of GE …. We need a new free-market ethic Principled Entrepreneurship™ rather than get-what-you-can from Washington, DC (and state capitals).
“Voters … will hear a 30-second spot peddling the industry’s misleading arguments against the Obama administration’s energy policies — including the fiction that those policies have led to higher gas prices: ‘Since Obama became president,’ it says in part, ‘gas prices have nearly doubled. Obama opposed exploring for energy in Alaska. He gave millions of dollars to Solyndra, which then went bankrupt. And he blocked the Keystone pipeline, so we will all pay more at the pump.’
Four sentences, four misrepresentations. Gas prices, tied to the world market, would have gone up no matter who was president. Mr. Obama has not ruled out further leasing in Alaskan waters. Solyndra, a solar panel maker, is the only big failure in a broader program aimed at encouraging nascent energy technologies. The Keystone XL oil pipeline has nothing to do with gas prices now and, even if built, would have only a marginal effect.”
Comment: The premise of the AEA advertisement is that Obama doesn’t like oil, and the recent Administration actions are purely political to get to a second term when the president can get back to his underlying anti-oil philosophy. (Remember Al Gore?)
A challenge: Can the Times find a seasoned quotation from Obama, Biden, Browner, Holdren, Jackson, Salazar, or anyone else associated with the White House that is pro-oil supply for a better future for consumers and/or society?
The neo-Malthusian philosophy, premised on fossil-fuel unsustainability, permeates the entire Obama Administration. They want higher fossil fuels prices, whether for gasoline and diesel in transportation or coal- and gas-fired electricity, to increase conservation and to hasten the transition to “green” energies.
The AEA ad calls out Secretary Chu for wanting U.S. pump prices to be at the level of Europe’s. And remember what Obama’s science advisor John Holdren once said: “More energy for its own sake (or for profit’s sake) can no longer serve as the goal of national energy policy, and it is apparent that much tighter control over the energy industry by government is the minimum prescription for steering away from this outmoded view.” [1]
The Obama Administration, in short, is changing its colors on oil because they find themselves in an election pickle, but a pro-supply policy is a philosophy and continuing effort from Day One. There was no Day One for Obama.
“The message war has really just begun. The oil industry has the money, but Mr. Obama has a formidable megaphone. He must continue to use it.”
Comment: The far bigger money is Big Environmentalism that spends a multiple of that spent by free-market groups such as the American Energy Alliance.
IER would like to ‘work itself out of a job’ by depoliticizing energy so that lobbying monies can be retained by individuals, foundations, and corporations for nonpolitical purposes, thank you. With the help of the New York Times, we can do so and get the saved money to other uses.
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[1] Paul Ehrlich, Anne Ehrlich, and John Holdren, Ecoscience: Population, Resources, and Environment (San Francisco: W. H. Freeman and Company, 1977), p. 860.
Well said. The Times is a mouthpiece for dispensing liberal ideas. There is no balance in their reporting and this posting takes the Times to task. I believe we can all safely conclude that they do not understand fundamental economics. Obviously there is no one in the Management of the newspaper that knows enough to make their editorial writers toe the line–the sad state of the NYTimes stock offers some additional support to my statement. Master Resource and IER are probably the two best sites for solid analysis of energy issues. I use Master Resource and IER very frequently for references in prep of my blog.
[…] This repost from five years ago remains as relevant today as then. Part II tomorrow, also a repost from April 2012, explains the philosophy behind the Institute for Energy Research/American Energy […]