Washington, D.C., May 5, 2009—Today, President Obama will
meet with House Energy & Commerce Committee members in hopes of persuading
Democrats from resource-producing states to support the cap-and-tax bill
sponsored by Committee Chairman Henry Waxman (D-CA) and Subcommittee Chair Ed
The White House has floated the idea of a “grand bargain”
whereby the Administration would promise a short-term increase in domestic oil
production in return for the support of Democrats from oil and gas producing
states for a cap-and-trade system of greenhouse gas regulation.
“If the ‘grand bargain’ is as described, Democrats from
resource-producing states should spurn it,” said Competitive Enterprise
Institute Senior Fellow Marlo
Lewis . “Oil production projects can take a decade or more to complete, so
between now and 2012 little if any oil from previously prohibited areas
such as the California
coast could be produced. Moreover, a key objective of cap-and-tax is to
discourage oil production by making oil, gasoline, diesel fuel, and
heating oil more costly to consumers. By the time any new oil fields
could be developed, the cap-and-tax program would erode their
profitability. This is a swindle, not a bargain.”
As CEI has pointed out in the past, the immediate effect of
a cap and trade system will be to dramatically increase energy prices,
resulting in a damaging cascade throughout the consumer economy. Restricting
access to the nation’s most efficient and reliable forms of energy – the exact
goal of a cap and trade system – amounts to a stealth tax on all Americans.
Given that the nation is facing a recession into the indefinite future, such a
system amounts to a massive de-stimulus to economic growth and prosperity.
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