Trump on Energy: Promising Free Market Directions

By Robert Bradley Jr. -- March 31, 2016

“8). Do you support a carbon tax? Do you support the Obama administration’s use of the social cost of carbon in rulemakings?

A. No and No.

 9). Do you think federal agencies have abused the cost-benefit process to suit their political agenda? Would your administration end the process of underestimating costs and inflating benefits of agency regulations?

A. Yes and Yes.”

President candidate Donald Trump responded to ten questions submitted by the free-market energy advocacy group, American Energy Alliance (the advocacy arm of the Institute for Energy Research, of which I am founder and CEO). Overall, there is great promise of market-oriented reform, reinforcing Trump’s earlier statements about reigning in the US Environmental Protection Agency (EPA).

Trump is weak on ethanol mandates and pretty good on most other issues. A particularly weak sentence is: “Until this nation sets its sights on total energy independence, we must support all energy sources.” The terms ‘energy independence’ and ‘energy security’ were nebulous, statist terms in the old days. Today, they are looking for relevance. Moreover, “we must support all energy sources”–‘we’ being ‘the government must support all energy sources’–is a recipe for the good subsidizing the bad.

Regarding public lands, he offers a “first step” of “establishing a shared governance structure with the states” from which “finding ways to gain revenue that would benefit both the federal and state governments.” Think privatization as in federal budget deficit reduction and enlarging the private sector. And think of advancing civil society where private conservation groups could bid on and take title to public lands.

The questions and answers follow. For proponents of a fuel-neutral, pro-consumer, pro-taxpayer energy and climate policy, there is more to like than dislike below.

1). Do you support ending all energy subsidies, including cleaning up the tax code to treat all types of energy the same?

A. This is an issue for Congress and the people they represent. Subsidies distort markets and should be used only when national security is at stake. Eventually, all subsidies should end so that the demand for energy will set prices, allow consumers access to the best values and encourage all facets of the energy industry to do all they can to keep their particular source competitive.

2). Do you support the use of open and transparent science? Should federal agencies be required to publicly disclose all the data they use to justify their regulations?

A. Absolutely. Over regulation presents one of the greatest barriers to entry into markets and one of the greatest costs to businesses that are trying to stay competitive. Large companies have the wherewithal to mitigate these burdens but smaller companies do not. Further, given the tax code and the regulatory burden that is currently in place, it is a wonder we have any businesses left in the United States.

3). Should Congress repeal the Renewable Fuel Standard?

A. Not at this time. Until this nation sets its sights on total energy independence, we must support all energy sources. If we can truly achieve energy independence, then there would be no need for subsidies or any other form of mandate or market interference.

4). The federal government is the largest landowner in the United States. Should the federal government continue to acquire land, or should they begin selling certain lands back to states and private entities?

A.The federal government does have stewardship of millions of acres of land. Rather than selling the land to states and private enterprises, the first step should be establishing a shared governance structure with the states. This first step would allow for maintaining the aesthetics of the land while finding ways to gain revenue that would benefit both the federal and state governments.

5). Should federal lands be managed more like private and state lands, or should the government continue to restrict natural resource production on federal lands?

A. See answer above.

6). Does the Obama administration’s definition of waters of the United States go too far and, if so, how should the responsibility for the protection of waters be divided between the states and the federal government?

A. Yes, the administration has gone too far. Clean water is the responsibility of all citizens and governments. Again, shared governance of waterways seems a logical way to go.

7). In 2015, the Obama administration finalized their regulation of carbon dioxide emissions for power plants under the Clean Air Act. Does this regulation exceed the federal government’s regulatory authority? Does it make sense to impose a regulation that, according to EPA, produces a temperature savings of 0.01°C [1] in exchange for billions of dollars of economic costs?

A. Again, the Obama administration committed an overreach that punishes rather than helps Americans. Under my administration, all EPA rules will be reviewed. Any regulation that imposes undue costs on business enterprises will be eliminated.

8). Do you support a carbon tax? Do you support the Obama administration’s use of the social cost of carbon in rulemakings?

A. No and No.

 9). Do you think federal agencies have abused the cost-benefit process to suit their political agenda? Would your administration end the process of underestimating costs and inflating benefits of agency regulations?

A. Yes and Yes.

10). Will your administration review the Obama administration’s finding that carbon dioxide endangers public health and welfare, also known as the “endangerment finding”?

A. Yes. See answers above.

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[1] Patrick J. Michaels & Paul C. Knappenberger, “Spin Cycle: EPA’s Clean Power Plan,” Aug. 5, 2015.