Declare Energy Independence

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Rational Bad Behavior

Unfortunately, Congress’ approach to energy policy has been to kowtow to lobbyists and campaign donors rather than craft a strategy to deal forthrightly with energy-related risks. The Energy Policy Act of 2005 was a wasted opportunity of historic proportions. At a time of rising fuel prices, Middle Eastern turmoil and growing evidence that humanity is messing with the planetary thermostat, Congress produced a bill that the Philadelphia Inquirer called a “lobbyist’s paradise and a citizens’ nightmare.” It contains $85 billion worth of subsidies for energy research, royalty concessions and tax breaks, according to Taxpayers for Common Sense, a budget watchdog group.

Useful measures in the legislation that promote conservation and resource diversification were offset by handouts that will sustain our addiction to oil. Proposals to boost fuel economy standards and increase investment in renewably generated electricity were left on the cutting room floor. An amendment to adopt caps on greenhouse gas emissions was blocked.

One of most egregious lollipops in the legislation is a $1.55 billion fund to pay for oil and gas research. Most of the fund will be administered by a private consortium, and a leading candidate is a group backed by former congressman Tom DeLay and made up of executives from Halliburton and other energy companies. Critics call it a giant slush fund for cash-rich oil companies.

Such a cockeyed distribution of energy subsidies is an example of what Jared Diamond, author of Collapse: How Societies Choose to Fail or Succeed, calls “rational bad behavior.” The recipients of such largesse are few in number, but highly motivated to keep their place at the trough. Those who pay the subsidies (the taxpayers) are large in number, but each individual only pays a little and is not motivated to spend a lot of time fighting the subsidies.

The task of quantifying energy subsidies involves both arithmetic and art. As the International Energy Agency wrote in a 2002 report on subsidies: “Estimating their size depends heavily on definitions and methodologies.” Because of the laborious work involved, detailed assessments of energy subsidies aren’t produced often.

The National Commission on Energy Policy (NCEP) — a panel of business leaders, public officials, scientists and environmental advocates — included a rough estimate of federal energy subsidies in the policy recommendations it released in 2004. The estimate showed that during 2003, federal energy subsidies totaled between $37 billion and $64 billion. While it is a rough estimate, it showed that the subsidies can take many forms.

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