Saturday, October 11, 2008

Skelly on Energy

http://i244.photobucket.com/albums/gg36/RobertWBoyd/SkellyPlan.jpg?t=1223752598

One of the biggest issues facing the next Congress and the new Administration will be what to do about energy. Fortunately for us in Texas district 7, the candidates offer clear choices.

Michael Skelly, running as a Democrat, has outlined his approach here. He has three goals: 1) to reduce energy costs, 2) reduce dependence on foreign oil, and 3) reduce carbon emissions. None is trivial, and the first and third will fight each other all the way. But nor is any a fantasy, like some of the other plans being tossed out.

Achieving these goals has four basic approaches.

  • Increase efficiency. There are lots of efficiency measures that can be adapted, both long term (like improved CAFE and Energy Star requirements) and short term (see this paper by the EIA). This affects all three of his goals--by controlling demand on oil, it brings oil prices down. It also reduces our gross imports and reduces our CO2 footprint.
  • Renewable Energy. Not a surprising focus from a man who built Horizon Energy, the third largest wind energy company in the U.S. As long as cars are primarily run on gasoline, renewable energy won't have a huge effect on oil imports. But as electric cars like the Volt become common (or CNG cars, as suggested by the Pickens Plan), new sources of electricity will be needed, and many of them will need to be renewable.
  • Access to Hydrocarbons. Skelly recognizes that we will be needing oil and gas for a long long time. He isn't a hippy idealist who imagines solar power will replace oil and gas (and coal, for the matter) in 20 years. But the importation of oil hurts us economically as we continually run up huge trade deficits, and destabilizes the world by pumping U.S. dollars into the hands of various dictators, kleptocrats, thugs, and fanatics. Skelly therefore supports opening previously off-limits areas of the U.S. to oil and gas exploration. It won't end imports, but it will reduce them--as well as providing good jobs to American workers.
  • Carbon Policy. Skelly supports a cap-and-trade system rather than a tax or simple regulatory limits. With a cap-and-trade system, the market decides what is the best allocation of resources. This permits (and even encourages) innovation in energy production while limiting CO2 output.
It all seems pretty sound. Gimmicks he opposes are the gas tax holiday (no reputable economist favored that pander), a windfall profits tax (beloved of many Democrats, unfortunately, and also implemented in Alaska by Sarah Palin, as hard as that is to believe), suing OPEC (good luck with collecting), and releasing oil from the strategic petroleum reserve. He also opposes the disingenuous claims of the "drill here, drill now" crowd, recognizing that expanding drilling will neither cause prices to immediately drop nor replace all imported oil.

This shows, I think, what an independent thinker Skelly is on energy--not beholden to the party line at all. That is a great contrast to John Culberson, the incumbent.

Back in 2001, he said, "President Bush’s energy policy focuses on increasing our energy supplies, and promoting conservation which will strengthen our economy, lower consumer prices, and protect our environment. I believe President Bush’s energy policy will ultimately solve our nation’s energy shortages and bring down the spiraling costs of gasoline, electricity, and natural gas." Ho ho, good one, John. Oh, and he thinks that giving tax cuts to oil companies is a good idea. Because I guess they are hurting for cash for capital investments right now. I work for an energy company, and this is nutty. If oil and gas companies needed a tax cut to "rebuild the oil infrastructure ASAP," as Culberson suggests, they wouldn't have spent the last few years repurchasing stock from investors. Look, I understand why Culberson is doing this--many oil companies are located in this Congressional district. All companies like tax breaks. He's servicing his constituents.

But we need someone who does more than constituent service. We need someone with vision, something Culberson, a consumate footsoldier (not too bright but follows orders well), will never have. We need Skelly.

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