The Energy Policy Act of 2005 contains a multitude of different energy provisions from extending daylight savings time to providing tax credits for conservation measures like installing insulation at home or driving a hybrid vehicle. The bill would provide subsidies to encourage the development of alternative fuels including wind energy, biomass, and geothermal power and more than $28 billion in tax breaks would go to the coal, nuclear, oil, gas, and electricity industries. The bill also weakens environmental and public safety protections like the Clean Water Act and the Public Utility Holding Company Act, which protected consumers from fraud and abuse by utility companies. Finally, the bill preempts states’ authority over the location of natural gas, transmission lines, and coastal oil and gas exploration within their borders.
The Middle-Class Position:
The Middle Class Opposes. The most startling thing about this legislation is what it does not do. In the first place, the 1,700-page multi-billion dollar bill fails to help middle-class consumers squeezed by high gas and fuel costs. The rollback in public safety protections also puts middle-class families at risk, for example by exempting oil and gas companies from the provisions of the Safe Drinking Water Act when these companies inject carcinogenic chemicals into the ground. At the same time, the deregulation of public utilities exposes the middle class to a different kind of risk: stemming from increased consolidation of utilities that could raise electric rates and manipulate energy markets. What the bill does do is provide massive taxpayer subsidies – to the tune of $85.1 billion dollars – for some of the world’s most profitable corporations, so that, among other things, they can drill on public land while paying the public less, ultimately leaving middle-class families to pick up a bigger share of the cost of public services. Finally, although the legislation comes at a time of overwhelming scientific evidence about the dangers of global warming and increased concern about the nation’s dependence on foreign oil, it does very little to address either problem, neglecting to even increase fuel efficiency standards for cars.
From the Experts:
“With oil at more than $50 a barrel, by the way, energy companies do not need taxpayers'-funded incentives to explore for oil and gas.” –President George W. Bush (April 20, 2005)
“Congress chose to largely follow the path of a 19th century fossil-fueled past instead of crafting an energy bill for the 21st century that would lead us to a clean energy future. The Union of Concerned Scientists opposed the bill because it fails to reduce our dependence on oil, fails to address global warming, fails to reduce home heating and gasoline prices, fails to significantly increase the deployment of renewable energy and actually increases the threat of nuclear terrorism.” –Union of Concerned Scientists (November 17, 2005)
“After the energy measure passed, energy lobbyists from all over Washington celebrated over filet mignon and wine at their favorite D.C. steakhouses. Alas, this bill gives hard-working American taxpayers nothing to celebrate: It won't lower prices at the pump [and] won't reduce our dependence on foreign oil… Instead of crafting an innovative energy blueprint for the next generation, lawmakers chose to reward their campaign contributors with huge government handouts at the taxpayer's expense… The nation deserves an energy policy that is not powered by pork. We can do better than this package of government giveaways to mega-rich energy companies.” –Jill Lancelot, President, Taxpayers for Common Sense (August 24, 2005)
Beyond this Bill:
The nation still needs an energy plan to deal with environmental challenges, promote energy independence, and relieve the squeeze on middle-class and aspiring middle-class consumers. Congress should begin drafting a new policy with these aims in mind. Legislators concerned about fiscal responsibility and interested in prioritizing the needs of their middle-class constituents rather than corporate special interests should oppose appropriating most of the pork barrel giveaways authorized in this bill and should reinstate taxes on the highly profitable oil, gas, coal, and nuclear industries.
Total cost of tax breaks and subsidies in this bill: $85.1 billion
Earnings of oil giant ExxonMobil in the first quarter of 2005: $7.86 billion
Value of subsidies to oil and gas companies like ExxonMobil contained in this bill: $6 billion
Approximate proportion of Americans who considered high gas prices “a hardship” in April 2005, according to Gallup: 6 in 10
Retail cost of one gallon of gasoline on August 8, 2005, the day President Bush signed this bill: $2.60
Estimated amount middle-class households spent on gasoline in 2005, not including taxes: $1,778
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