Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
Jack Gerard is spot on in pointing out that Dodd-Frank's Section 1504, requiring lengthy disclosures of payments by U.S. energy firms to foreign governments, will put the U.S. at a competitive disadvantage and harm the energy market. ("The Dodd-Frank Threat to U.S. Energy," op-ed, Aug. 17)
Unfortunately, this isn't the only provision of Dodd-Frank the SEC voted Wednesday to implement that threatens U.S. energy through the clumsy shoehorning of foreign policy into domestic financial regulation. Section 1502 also threatens the energy supply by forcing U.S. companies into an expensive process of tracing their products for "conflict minerals."
This provision will require firms to disclose the use of metals such as tin and tungsten from war-torn regions of the Congo. But since these minerals are reused several times, there is great incentive for suppliers to avoid the Congo altogether so as to not run afoul of the law.
Tin and tungsten are used in many electrical applications, so Dodd-Frank's effective creation of backdoor tariffs on these minerals could lead to energy price spikes and even shortages. Many advocates of the Congo also point out that Section 1502 harms innocent citizens more than the warlords.
This is yet another reason to repeal and replace Dodd-Frank.