Commentary

Slick Trick

By Jerry Taylor
This article appeared in the St. Paul Pioneer Press on July 11, 2000.

Declaring it is time to free America “forever from the dominance of Big Oil and foreign oil,” Vice President Al Gore recently unveiled a 10-year, $75 billion plan that has virtually nothing at all to do with oil.

In fact, $68 billion of that will go toward the modernization of older coal-fired electricity plants and the promotion of natural gas. Although the details are sketchy, what’s clear is that the Gore energy plan is a Trojan horse loaded with corporate welfare, which is richly ironic given the vice president’s scathing indictment of Texas Gov. George W. Bush as a tool of industry.

First of all, why in the world should the taxpayer foot the bill for the cleanup of aging power plants? Those facilities are owned by private firms that should pay for their own plant maintenance and upgrades. Once upon a time, the environmental lobby adamantly opposed plans that would have the public pay companies not to pollute. Yet the Washington environmental leadership was positively ecstatic over Gore’s plan. This suggests one of two possibilities: Either the environmental lobby has undergone a radical ideological transformation before our very eyes, or there’s no principle they won’t jettison to put Gore in the White House. After all, if Bush had proposed to have the taxpayer foot the bill for the regulatory compliance costs of “polluters,” the Green lobby would be apoplectic.

That would be particularly true if the hypothetical Bush plan were written by a close former aide now employed as a lobbyist for the “polluters.” But that’s apparently what happened with Gore. Kathleen McGinty, a past chair of the White House Council on Environmental Quality and adviser to Gore on environmental issues, has acknowledged a major role in crafting the proposal. McGinty is now on the payroll of the lobbying firm Troutman Sanders, which has been retained by several of the nation’s largest coal-fired electricity companies. Two of them - American Electric Power and Southern Co. - confirmed that McGinty is employed by them as an adviser and lobbyist.

Of course, “Big Coal” isn’t the only recipient of Gore’s proposed handouts. “Big Gas” also gets a chunk of tax money in the form of public support for distributed energy sources. For the uninitiated, “distributed energy” is jargon for very small power sources such as microturbines that can be located near consumers with a minimum of transmission and distribution. Microturbines can be powered by a lot of fuels, but natural gas is easily the cheapest, most versatile and economically competitive alternative.

Now, there’s nothing wrong with distributed energy, microturbine technology or natural gas. And there’s good reason to believe such technologies are perfectly competitive today and will perhaps even dominate the market tomorrow. But that’s no reason to subsidize it. Companies such as Trigen (whose corporate headquarters served as the backdrop for Gore’s speech on energy) aren’t exactly on death’s door. Nor are corporate natural-gas giants such as Enron, which will perhaps benefit the most from a distributed energy revolution.

The few billion dollars in Gore’s plan not being spent on the coal or gas industry are earmarked for funding increases for existing programs: more tax subsidies for renewable energy, more tax cuts for purchasing solar- or wind-powered energy, more handouts to homeowners who install solar roofs, more support for mass transit ($360 billion since the mid-1960s and counting), and more research and development for alternatives to fossil fuels ($10 billion since the establishment of the Energy Department in 1978). As for “freeing us” from oil, these programs will do no more now than when President Jimmy Carter launched them in the 1970s.

Despite his public pronouncements, Gore’s plan will have no effect on OPEC’s market power or on “Big Oil’s” alleged stranglehold on the economy, for the simple reason that petroleum doesn’t compete with coal or natural gas. But then, the plan wasn’t meant to.

Instead, it was designed to accomplish every politician’s chief objective: Expand the pool of special interests that stand to gain by your victory. The fact that the vice president has pulled this off while playing the populist card with such demagogic flair demonstrates that he shouldn’t be counted out of the election yet.

Jerry Taylor is Director of Natural Resources Studies at the Cato Institute.