Pat Dollard | Young Americans

Democrats’ Energy Plan Does Not Boost US Supply of Oil

Senate Democrats have rolled out their solution to the high cost of gasoline on Wednesday, but Republicans say it won’t work.

The Consumer First Energy Act of 2008 “addresses the root causes of high gas prices, holds big oil accountable and puts consumers first,” Senate Democrats said.

The bill would roll back tax breaks for oil companies and use the money to invest in renewable energy. It also would “force” Big Oil to pay its “fair share” through a 25 percent windfall profits tax; it would temporarily halt government oil purchases for the Strategic Petroleum Reserve; protect consumers from price gouging; stop market price speculation; and “stand up to OPEC.”

On the latter point, Senate Democrats want the U.S. attorney general to file charges against any country or company that colludes to set the price of oil, natural gas, or any other petroleum product.

“Enacting this provision will make it clear to nations that participate in the oil cartel that engaging in conduct designed to fix the price of oil is illegal under U.S. law. As such, nations concerned with maintaining good diplomatic relations with the U.S. will likely be reluctant to blatantly act in a way that is counter to U.S. law,” Senate Democrats said.

Sen. Jeff Bingaman (D-N.M.), chairman of the Senate Energy and Natural Resources Committee, said the Democrat bill “would help provide some relief in the near term.” His news release said nothing about the long term, however.

Won’t work, Republicans Say

Senate Republican Leader Mitch McConnell of Kentucky said the Democrats’ plan will raise taxes on American energy but do nothing to lower prices at the pump.

More than two years after Democrats promised to reveal their “commonsense” energy plan,’ they finally unveiled it — “minus the commonsense,” McConnell said.

McConnell said the Democrats’ response to record-high gas prices is predictable: “More taxes, more bureaucracy and continued dependence on OPEC. None of these proposals will lower the price at the pump; all will increase the strain on the family budget.”

Sen. Pete Domenici of New Mexico, the ranking Republican on the Senate Energy and Natural Resources Committee, agreed that the Democrats’ plan will do nothing to lower gas prices.

“Americans don’t need more taxes and more investigations — they need more oil and lower prices. Yet nothing in the Democrats plan will produce a single drop of oil,” he said.

A week ago, Domenici introduced legislation — the “American Energy Production Act” (S.2958) — that would boost oil supply by expanding production offshore and in Alaska.

Domenici said tapping the estimated 24 billion barrels of oil would be enough to keep America running for five years with no foreign imports. His bill also would boost fuel production from oil shale coal-to-liquids technology.

“All of this is untapped energy already owned by the American people,” Domenici said. “I hope the Senate will vote on my legislation and go on the record to support production.”

McConnell has introduced Domenici’s bill as an amendment on the Senate floor for immediate consideration.

Domenici noted that the centerpiece of the Democrats’ energy plan is a 25 percent windfall profits tax on American oil companies. The last time such a tax was imposed, in 1980, it reduced domestic oil production, he noted.

“America has already tried a windfall profits tax — and it hurt consumers by making us more dependent on foreign oil. Not only will this proposal not decrease gas prices, it may actually raise them. This is the exact wrong answer to a vitally important problem.

“Instead of looking for ways to make it harder to produce domestically, we should be doing all we can to encourage American production and stop the cycle of dependence on foreign oil,” said Domenici.

‘Drill and veto’

House Speaker Nancy Pelosi on Wednesday said President Bush’s response to skyrocketing energy prices is “drill and veto.”

She and other Democrats held a news conference Wednesday afternoon to tout the House Democrats’ soon-to-be-revealed energy plan (dubbed “a new direction for energy independence”).

“Two weeks ago, I sent the President a letter urging him to sign legislation that would help American families with the rising price of gasoline,” Pelosi said.

“This week, we heard back from the Administration. Instead of forward-looking solutions to address these challenges, the President offers two ways of dealing with the energy crisis — drill and veto.”

Pelosi called oil drilling a “failed energy policy of yesterday,” and she said the president — by threatening to veto Democrats’ energy plan — “is forbidding us to move our nation to a 21st century energy policy.”

Pelosi said House Democrats — before the Memorial Day break — will bring to the floor a “comprehensive energy tax package that promotes research and development and promotes efficiency.”

Republicans insist that higher taxes are the wrong way to go.

Like the Senate bill, the House bill also would suspend additions to the Strategic Petroleum Reserve and “hold OPEC accountable for price-fixing.”

(CNSNews)