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Top Ten Democrat Energy Bill Failures
June 28, 2007

Contact:
Marc Morano 202-224-5762
Matt Dempsey 202-224-9797
 
Top Ten Democrat Energy Bill Failures

The Democrats recently passed Senate Energy Bill will increase the price of gasoline, do nothing for supply and production, and impose new mandates on energy providers which will increase the cost of electricity for all consumers.  The Democrats claim to want to reduce prices at the pump, claim to support energy independence and help lower income Americans, but this bill fails to meet any of those goals. In particular, low and fixed income Americans will be hit hardest with higher gas and electricity costs for at least the next decade. The bill fails to secure an American energy supply that is stable, diverse, and affordable. 

Top Ten Failures

#1 – Democrat Energy Bill will raise gas prices. The Democrat passed energy bill does nothing to address prices at the pump. In fact, the only amendment that would have helped lower prices, the Gas Petroleum Refinery Improvement & Community Empowerment Act of 2007 or Gas Price Act was voted down. One estimate of the bill’s legacy, with its so-called “price gouging” provisions and new mandates on energy providers -- has the price of fuel at the pump more than doubling by 2016.

#2 - Democrat Energy Bill will raise food prices.  The Energy Bill expanded the corn based ethanol mandate to 36 billion gallons by 2022. Current Ethanol production is using up to 20% of the Nation's corn crop. Ethanol production is already increasing food prices on milk, pizza, chocolate, poultry, ice cream, cereals, beef and tortillas. The current demand for corn is pushing food prices up 4% this year alone. Milk alone could hit $4.50 a gallon this summer. America’s farmers and industry banned together and signed a letter opposing all new mandates on corn based ethanol.

#3 – Democrat Energy Bill lacks energy. At a time when American families are paying near record prices for motor fuels and natural gas, the majority party failed to increase any supplies of abundant domestic resources like gas, coal or nuclear. Democrats have instead told energy starved Americans to go on a diet. There are no provisions for increased domestic oil production. Democrats voted against an amendment that sought to improve the permitting process for the construction of coal-to-liquids production facilities. Coal-to-liquids was praised by Montana’s Democratic Governor Schweitzer. “’Synfuels’ have remarkable properties: they are high-performing substances that run in existing engines without any technical modifications, and they burn much more cleanly than conventional fuels,” Governor Schweitzer said. In addition, while claiming to support renewable fuels, Democrats voted down another amendment to help spur cellulosic ethanol.

#4 - Democrat Energy Bill means U.S. job flight overseas. A May 31, 2007 article in the Monterey County Herald details how no new refineries have been built in the U.S. in the past three decades and only one is currently in the works. The article explains that "oil companies are scaling back planned investments in new, expanded or modernized U.S. refineries rather than increasing them," while at the same time there is a boom underway overseas where it is "generally cheaper and easier to build refineries." The article explains that these developments mean "Americans increasingly will be filling their tanks with imported gasoline."

#5 – Democrat Energy Bill’s “price gouging” provisions will promote gas shortages.  The provisions include subjective phrasing, vague and undefined terms. In a complex market such as fuels and commodities, regulatory certainty is required. Subjective phrases such as “unconscionably excessive” along with the imposition of heavy fines and prison terms up to five years serve to discourage fuel suppliers.  The Democratic attempt to “protect” consumers will have the opposite result.  A June 27, 2007 op-ed in the Detroit News summed up the energy bill’s shortcomings: “Price controls and taxing our way to energy security backfired in the 1970s, draining billions of dollars from domestic oil and natural gas development, and they won't work now.” “price gouging” provisions may have a worse effect than outright price controls.

#6 – Democrat Energy Bill’s $3 million Capitol Power Plant carbon capture demonstration project fails to achieve stated sequestration goals. Although many technologies are touted for possible use at the plant, none of those technologies actually would qualify under two year the bill. In addition, there is little purpose to carbon capture and storage if the stored carbon is released back into the atmosphere.

#7 - Democrat Energy Bill harms U.S. workers. A June 27, 2007 op-ed in the Detroit News explained: “For Congress to increase taxes on our own investor-owned oil companies and raise royalty rates to pay for a big increase in renewable fuels doesn't make economic sense. It will be potentially harmful to working people, since most of the tax money would come from eliminating the manufacturing tax deduction, which Congress authorized in 2004 and was designed to boost the number of U.S. jobs, including those in the oil and gas industry.”

#8 – Democrat Energy Bill adversely impacts home appliances. The cost of the energy bill's mandates for appliances would outweigh the electricity saved.  Consumer Reports found that current federal efficiency standards have resulted in clothes washing machines which "left our stain-soaked swatches nearly as dirty as they were before washing." The magazine recommended "for best results, you'll have to spend $900 or more” to get a machine that cleans adequately. Improving energy efficiency is a laudable goal, but it must protect and enhance consumer choice.

#9 – Democrat Energy Bill will decrease automotive safety and hinder consumer choice. The Energy Bill mandates Higher Corporate Average Fuel Economy (CAFE) standards for cars and trucks will rise to 35 miles per gallon by 2020. But the current (27.5 mpg) fuel economy standard has already being blamed for causing thousands of deaths due to vehicle downsizing. In addition, the higher mandates can add thousands to the cost of a new car. Politicians in Washington have decided that consumer choice is not sufficient and federal law must now dictate smaller vehicles on the American public.  A spokesman for the Alliance of Automobile Manufacturers' said of the energy bill: "It's almost like the bill is designed to be anti-manufacturing and [anti]-jobs, rather than energy independence.” ( Link – Subscription required)

#10 - Democrat Energy Bill turns back the clock on the Clean Air Act and the EPA.  Despite claims to be the pro-environment party, the Democrats’ energy bill cuts the Clean Air Act and the Environmental Protection Agency out of regulating fuels and places it under the discretion of the President.  The fuels program would no longer be subjected to environmental safeguards. Fourteen environmental groups opposed the very same bill when it came out of the energy committee. Observers would expect them to maintain their opposition.

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June 2007 Press Releases

Majority Office
410 Dirksen Senate Office Bldg.Washington, DC 20510-6175
phone: 202-224-8832
Minority Office
456 Dirksen Senate Office Bldg.Washington, DC 20510-6175
phone: 202-224-6176