“Today, the libertarian Cato Institute releases its “Policy Handbook for the 104th Congress,” a 39-essay proposal to dismantle the federal government…. The essay on energy was written by Cato camp follower Robert L. Bradley Jr. of Houston … president of his own energy think tank – well, OK, it’s small, more like a think bucket – called the Institute for Energy Research.”
How the energy debate has shifted in the last quarter-century–with the middle moving Left and the free market, classical liberal Right falling off the table. Today, the Green Party has been neutered by the Progressive (or Regressive, as Alex Epstein puts it) Left dictating the debate.
I was reminded of this upon encountering an old ‘Perspectives’ column from John H. Jennrich, the founder and editor of Natural Gas Week. The article, “Libertarian Seeks Burial of ‘Dead Hand’ DOE.” was published on February 6, 1995. (I do not believe articles from this publication and time are available online.)
This was a different time than today. Energy policy analytics was not what it was in the 1970s or today because there was no direct energy crisis. The global warming issue had taken over, so a lot of science-versus-science was happening at the Cato Institute (Pat Michaels) and elsewhere. But Cato had an energy program, which gave me voice at a time when I would have otherwise had little.
The 900-word article is reprinted below verbatim, followed by my final comment.
Today is federal budget day in the nation’s capital, a day when President Clinton (actually, his beancounters) statistically define his plan for downsizing the federal establishment.
It comes at a time when firebrand Newt Gingrich, a Republican representative from Georgia and speaker of the House, has been hammering Democrats, liberals and the White House for failure to cut drastically federal bureaucracies and programs.
But these guys ain’t seen nothin’ yet.
Today, the libertarian Cato Institute releases its “Policy Handbook for the 104th Congress,” a 39-essay proposal to dismantle the federal government.
The essay on energy was written by Cato camp follower Robert L. Bradley Jr. of Houston, an analyst with a major gas transmission company but, more importantly in this context, president of his own energy think tank – well, OK, it’s small, more like a think bucket – called the Institute for Energy Research. Bradley is a prolific writer and editor, and while he himself is a mild-mannered gentleman, his writing can be brutally direct.
For example, in his book, The Mirage of Oil Protection, published in 1989 by the Cato Institute, Bradley calls the Strategic Petroleum Reserve “a sacred cow among interventionist-minded economists.” He says the average acquisition and storage cost is $30/bbl, far above the market. And he slams the expensive SPR as “a foreign-aid program for Mexico with a secretive long-term contract that included $1 billion up-front money.”
That was in 1989. Funny how the topics of Mexico, oil, foreign aid and large U.S. expenditures have all rolled around again.
In his paper, to be released formally today, Bradley opens with a clarion call for the free market: “Energy, like other goods and services in the economy, should be left to consumers and entrepreneurs in the market, not ‘planned’ by governmental bodies. In fact, the long history of U.S. oil, gas and electricity regulation, taxation and subsidization makes abundantly clear that shortages and energy crises are engendered by government intervention, not market failure.”
He notes that natural gas and oil today are “cheap and plentiful,” but that “[r]egulated electricity rates . . . are widely recognized as too high.” He cites moves, especially within states, to deregulate electricity sales, and he says that “energy consumers have profited handsomely from the deregulatory undertakings of the 1980s.” Still, he says, “much more can and should be done to move energy from the dead hand of government planners into the invisible hand of the marketplace.”
In a nutshell, Bradley says that Congress should:
As I suggested, Bradley is not timid.
At a time when the DOE and its advisers are considering last week’s recommendations by the Galvin Commission on what to do with DOE’s 10 national laboratories (see story, p. 7), Bradley suggests privatizing the labs as well as other energy assets such as the “poorly managed” power-marketing agencies (he highlights the Bonneville Power Administration) and the oil and oil-shale reserves. Of the labs, Bradley says, they are “blatant subsidies to an energy industry that can ‘free ride’ on taxpayer-funded research and development that most other industries rightly pay for themselves.”
Bradley says the “first place to begin the dismantling of energy intervention” is at DOE, whose problem is “not its administrative structure but the very fact of its existence.” He calls it dangerous because “it offers ‘one-stop’ central planning.” Instead, he would return DOE’s nuclear activities to an independent noncabinet agency, transfer its environmental activities to the Environmental Protection Agency and abolish all subsidies for energy conservation and technology.
Says Bradley, “Market prices, not taxpayer or ratepayer dollars, should determine the optimal level of energy usage.”
He says that “Political favoritism toward renewable energy sources is misplaced, particularly since renewable energies each have their own, seldom acknowledged environmental problems, such as bird deaths from wind generation of electricity, heavy industrial waste from the manufacture of solar equipment, energy inputs that exceed energy outputs from biomass sources, and damaged river habitats from hydropower.”
Bradley says “Subsidies to traditional energy technologies and industries are perhaps even more egregious and should be eliminated as well.” The clean coal program, for example, has cost taxpayers billions of dollars and is beginning to rival the notorious Carter-era synfuels program for economic waste and technological futility.
Advanced nuclear fusion research likewise promises to cost billions more with highly uncertain technological benefits in the foreseeable future.” In short, he says, if these and similar programs have commercial promise, coal and nuclear industries” should invest their own money in research and development and leave the taxpayer alone.”
He says that “federal subsidies and market distortions to increase energy conservation are misguided and counterproductive” Why? “Conservation for its own sake is not necessarily efficient . . . [I]ncreasing the use of one input, such as energy, while decreasing the use of another, such as labor, may lead to greater efficiencies and cost savings and should not be reflexively criticized as ‘wasteful.’” He concludes that “conservation subsidies to gas and electric consumers are uneconomic and save less energy than claimed.”
And this is just the beginning of the budget debates.
Final Comment
This is where the energy debate was–and needs to be again in the current dark hour. Major federal laws need to be repealed. And the U.S. Department of Energy and the Federal Energy Regulatory Commission, among other agencies, need to be abolished.
Keep the vision. Let’s go!