Wednesday, September 17, 2008

Not the Brightest Bulb, Part Deux

DBMIVFK is back with its second installment in the two-part series "Not the Brightest Bulb." We've already looked at John McCain's energy policy, and now that our pulse and respiration rates have returned to normal following the GOP convention, it's time to turn our multi-barreled snark cannon to Barack Obama's energy plan.

New Energy for America

Obama's plan focuses on five major points which it then breaks down into specific policy proposals. On the whole, Obama's plan is more cogent and more transparent than McCain's, and the Obama plan seems much more forthright in its specifics. There are still, however, significant problems with Obama's energy plan. The worst offenders are:

  • the conceit that oil speculators are exerting undue influence on the price of oil
  • the implementation of both a windfall profits tax on oil companies and the immediate distribution of that tax to taxpayers
  • an argument for opening the Strategic Petroleum Reserve
For those of you keeping track at home, that's the entirety of Obama's "short-term" fixes. It's also some of the most wrong-headed policy the campaign has unveiled to date. The oil speculators bit is easily debunked, and the windfall profits scheme can be written off as election-year pandering, but the talk about opening the Strategic Petroleum Reserve, while not unique to America's political discourse, is genuinely worrisome. The SPR is designed to act as America's oil-of-last-resort, the stash of hydrocarbons we've squirreled away for a truly rainy day. The SPR was never designed as an instrument of price control, and while the Obama campaign tries to dress up this plan as a light-for-heavy crude swap, it is fundamentally an effort to drive down prices at the pump. That's bad policy, and the Obama camp should be ashamed of looking for nails when it's not actually holding a hammer.

The good news is that once you get past Obama's short-term recommendations, his longer term plans make a lot more sense. He correctly sees climate change and energy independence as two sides of the same coin and argues forcefully for both a carbon cap-and-trade scheme and a return of the U.S. to the international bargaining table. Unfortunately, the campaign talks much more about the value of a cap-and-trade system (GWS is less than convinced of the environmental blessings cap-and-trade is said to bring) than about a new Kyoto Treaty, falling back on vague niceties about "bring[ing]...nations together." More specifics, please!

Obama then spends some time on retooling American industry, and GWS was surprised to find the "Green Vet" initiative intended to re-train returning soldiers for green-tech industries. Why the Obama camp isn't playing up this initiative is beyond GWS, because it looks like an election year winner. The most serious and best portion of Obama's plan has to do with the automotive industry: the retooling of Detroit's factories, the retraining of our workforce, and goverment-mandated fleet carbon efficiency and fuel economy standards. He offers up $4bn in guaranteed tax credits to help Detroit turn itself around, and GWS hopes that the folks at Ford and GM know a good thing when they see one (note: they don't). The plan to convert America's car fleet to all hybrid/plug-in is ambitious (perhaps overly so; the timetable is 365 days...), but well thought- out and designed with significant tax incentives (a $7,000 tax credit) for anyone who buys a carbon-friendly car or converts their existing vehicle. Sound(ish) policy with clear sticks and carrots...hooray!

Some commentators see the chants of "Drill, baby, drill!" in St. Paul as proof that Obama has been outflanked on the issue of domestic energy supplies. GWS will leave that opinion to those who think highly of drilling on the OCS...that is, to morons. Here again we find good policy that the Obama campaign has yet to trumpet: Obama's "use it or lose it" approach to drilling leases is the rare combination of election-year grist and sound free-market policy, and GWS thinks that if he emphasized this more, he'd be able to take on McCain head-on in the nascent energy security debate.

The last part of Obama's policy paper is the least sexy, the "put on a sweater" policies that the GOP has lambasted since the late 1970s. It doesn't matter that they are, in fact, good policy: that we ought to weatherize our homes, that we should inflate our tires, that we need to demand higher energy efficiency standards from the federal government. Refusing to take these suggestions seriously is an act of stupidity: they're cheap, easy, and highly cost-effective. But since no one has ever gone hungry betting on the ignorance of the American voter, it seems unlikely that Obama will again stick his neck in the guillotine that got Jimmy Carter.

On the whole, GWS likes Obama's energy proposal more than McCain's but only marginally so. The pandering about oil speculators and windfall profits taxes are (hopefully) election year bluster, but that doesn't mean that Obama can make those claims without us taking the rest of his policy less seriously. Here's to hoping we see a real energy policy debate in the coming weeks and months.

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