Washington, D.C., May 14, 2008—As prices for oil and gas rise to record levels, members of Congress have responded with an energy bill that, while ostensibly intended to provide relief to consumers, would increase regulation, decrease flexibility and do nothing to increase affordable energy supplies, according to a new study by the Competitive Enterprise Institute.
In the new OnPoint analysis “The Consumer-Last Energy Bill: A Critical Look at the Consumer-First Energy Act of 2008,” authors Iain Murray and Eli Lehrer dissect the latest energy legislation being sponsored Harry Reid (D-NV), Ted Kennedy (D-MA) and Barbara Boxer (D-CA), among others.
“The current energy crisis needs to be addressed by increasing the supply of energy worldwide. Instead, the proposed bill relies on punishment of energy suppliers who are themselves constrained by legislation in what they can do to increase supply,” write CEI Senior Fellows Iain Murray and Eli Lehrer. “At a time when the nation is facing massively increased energy costs and income and credit availability are being squeezed, American citizens deserve better from their representatives in Congress.”
“The Consumer-Last Energy Bill” refutes the case for a windfall profits tax on oil companies, comparing the industry’s recent past with the more-profitable performance of the health care and retail sectors. The study also reminds policymakers of the highly distributed ownership of major energy companies and the impact a discriminatory tax would have on the financial well-being of the average investor.
Murray and Lehrer also refute charges of price gouging and damaging market speculation by oil companies in times of tight supplies. Charges of gouging have, upon investigation, repeatedly failed to hold up, most recently in the aftermath of Hurricanes Katrina and Rita. Moreover, proposals to curb “speculation” would only make prices more volatile and drive investment capital out of the U.S. without easing prices for consumers.
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