The Public Policy

Both Parties Promote Energy Socialism

Neither major presidential candidate advocates a free market in energy.

By 8.22.08

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While controversy and discord between the two major political parties about energy policy play out in the media, in reality they do not disagree at the level of principle.

The current energy debate is a skirmish between those who advocate energy socialism without drilling (or with some drilling if needed as a political bargaining chip) and those who advocate energy socialism with drilling. Neither major presidential candidate advocates a free market in energy.

The rallying cry for Sen. Barack Obama and the Democrats is energy efficiency, i.e. forcing or mandating incentives for people to use less, and "investment" (government subsidies) for every alternative energy source ever featured in a Sierra Club position paper (see Obama's "New Energy for America" plan).

Republican Sen. John McCain's plan might be best summed up as "me too, plus." In large part McCain embraces Obama's energy socialism and adds some new drilling and nuclear power (see McCain's "Lexington Project").

Ideologically there is no difference between the Democrat and Republican approaches. They both propose to use the powers of the federal government to move energy production and consumption in the direction that central planners deem appropriate. The overarching goals of both the McCain and Obama plans are to fight global warming and to prevent Americans from freely purchasing oil on international markets, aka energy independence. As an aside, neither candidate thinks that this latter goal is more important than preserving every inch of that frozen wasteland known as the Arctic National Wildlife Reserve (ANWR). For all of the posturing by Republicans about new exploration, opening up ANWR is not part of either John McCain's energy plan or the Gas Price Reduction Act supported by most Senate Republicans.

Clearly the Republicans have abandoned all conservative principles when it comes to this issue. The idea that freely choosing entrepreneurs and consumers, unmolested by incentives and outright coercion, have any significant role to play in determining our energy future has been completely abandoned by the GOP, and especially by its presidential standard-bearer. The Republicans and the Democrats both promote Soviet-style multiyear plans for "energy independence" with mercantilist talk about "keeping dollars in America."

Both parties advocate massive subsidies for the trendy technology of the moment, like electric and hybrid cars, biofuels, and the longstanding money pits of wind power and solar power. Energy production and consumption are to be centrally planned from Washington. The role of private consumers and producers is to goosestep to the planners' marching orders.

ONE PHRASE THAT BOTH parties refuse to utter is energy freedom. Yet this -- not energy independence and certainly not climate change -- should be the guiding principle of any party that calls itself conservative. The energy problems that we face have been caused by previous government policies. Largely we have an energy market dominated by subsidies for inefficient energy sources; coercive restrictions on oil, gas, and coal exploration, which have stifled competition and driven up energy prices; and the micromanagement of energy demand. Both parties and their presidential candidates have supported these policies.

The solution is to drop these policies, replace them with nothing, therefore instituting free markets. Abolish all subsidies and punitive taxes that either promote or punish differing energy sources. Eliminate so-called "energy efficiency programs," which amount to social engineering and lifestyle control. This would include laws regarding average fuel economy for automobiles (CAFE standards) and the kinds of light bulbs and appliances people can use. And state governments should repeal all renewable portfolio standards that restrict the use of coal, oil, natural gas, and nuclear power for electricity generation, as well as restrictions on CO2 emissions -- especially cap-and-trade programs.

The only energy policy our government should have is freedom of choice. Let consumers and producers decide what is efficient; how much we import and who we import it from; how much profit companies should earn; and, just as importantly, how large the losses are they should sustain.

In other words, we need to abandon the bipartisan energy policies that have gotten us into this mess. Unfortunately, neither party is willing to veer off of its road to energy serfdom.

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About the Author

Roy Cordato is an economist and vice-president for research at the John Locke Foundation in Raleigh, North Carolina.