On March 17, The Heartland Institute hosted an intensive seminar on energy and environment issues for about 35 state elected officials. The result was a penetrating and sometimes surprising look into the nexus between energy policy and individual freedom.
No Time for Golf
We held our “Energy Summit” in Chicago in the middle of March, and to heap discomfort on top of hardship, we held it at Chicago’s O’Hare Hilton Hotel, so guests had little reason and few excuses for leaving the hotel. We did everything but stamp “don’t come if you aren’t serious about energy policy” on the invitations … and we still got 35 legislators to attend.
The legislators who attended were smart, highly motivated, and represented 20 states. Several brought their spouses, who often sat in the sessions with them. Attendance would have been even better but about two dozen legislators who had signed up had to cancel at the last minute due to ice storms on the East Coast or because their legislatures were called into session.
An Intensive Program
The 15 speakers at the Energy Summit included experts from the American Council for Capital Formation, American Enterprise Institute, Cato Institute, Institute for Energy Research, U.S. Department of Energy, and of course Heartland’s own Sandy Liddy Bourne, Jay Lehr, and James Taylor.
Other than five-minute breaks between panels, we kept the audience in their seats for eight sessions running from 7:30 in the morning to nearly 5:00 p.m. No one complained, and attendance at the end was as strong as it was at the start. The feedback I got from legislators as they filed out of the room at the end of the day was that they all thought the presentations were great, and everyone learned some valuable things.
What We Concluded
I listened to every presentation and the spirited question-and-answer sessions that followed each panel. At the end of the day I summarized the main messages and lessons learned as follows:
- If there is ever an energy crisis in America it will be of our own making, the result of bad public policies rather than market failure or the depletion of natural resources.
- We used to take safe, clean, and inexpensive motor fuels for granted, but those days are over. Now we have to fight against those who wish to restrict new supplies, impose regulations so unrealistic they cannot be met, and raise taxes on oil that are already excessive.
- Ethanol is a false hope. It’s too expensive, produces no environmental benefits, and will never meet more than a small percentage of the nation’s transportation fuel needs.
- Air quality across the U.S. is better than it has ever been and air pollution cannot be linked to any public health problems. Yet the public is easily frightened about minute and hypothetical risks. The Environmental Protection Agency is taking advantage of public ignorance by adopting new air quality standards that are so strict they will be impossible for states to comply with.
- Global warming is little more than a swindle. Dr. Patrick Michaels, one of the world’s leading climatologists, delivered a devastating critique of former vice president Al Gore’s propaganda film, “An Inconvenient Truth.”
- Attempts to reduce human greenhouse gas emissions via cap and trade, carbon taxes, and renewable fuels portfolios are all unjustified, and when adopted they will have very harmful effects on consumers.
- Nuclear power, rather than solar or wind, seems likely to emerge if ever we need a substitute for our hundreds of years’ supply of fossil fuels (coal, natural gas, and petroleum), though only if we can open the long-delayed nuclear waste disposal site at Yucca Mountain and bring down the cost of constructing new nuclear plants.
The Libertarian Zinger
There were many outstanding presentations made at the Energy Summit, but the person who did the most to bring our focus to the relationship between energy policy and freedom was Jerry Taylor, a senior fellow at the Cato Institute. Taylor debated an environmental activist on the pros and cons of ethanol, and along the way to winning the debate he told us what was really at stake in the debate over energy policy.
The pro-ethanol speaker said “we need to diversify our transportation fuel supply,” that while ethanol wouldn’t replace a very large fraction of oil used in the U.S., “at least it is something,” and “we have to make hard choices” about how to reduce our reliance on fossil fuels.
Taylor would have none of that. “Who is this ‘we’ you keep talking about?” he asked. “We” don’t have to decide anything. Alternatives to fossil fuels, if they are ever needed or desirable, will emerge “endogenous to the free market,” without government’s aid or hindrance, Taylor said.
One often-mentioned benefit from ethanol subsidies is the revenue it generates for rural communities and family farmers. Taylor was brutally direct, pointing out that farmers have higher incomes than the national average, so ethanol subsidies amount to the poor subsidizing the rich. He said farmers who don’t grow corn end up paying higher prices for land, feed for livestock, and other inputs such as fertilizer, as a result of the ethanol boom. He said farmers who rent land end up paying more in rent, while their landlords pocket the windfall.
It was a fine demonstration of libertarian analysis. Taylor attacked the naive collectivism that is at the center of so many statist programs, usually signaled by the use of “we” instead of referring to individual actors who win or lose when governments act. And the trick of pointing to sympathetic beneficiaries–in this case, farm families–must not go unchallenged, especially when the same advocates of bigger government support policies that would impose much greater burdens on farmers in the name of “stopping global warming.”
Legislators’ Role
Most of the legislators were clearly fascinated by presentations concerning the science and technology behind ethanol, nuclear energy, and global warming. Many of them had participated in legislative debates in the past where these issues came up, and they were well-informed about the pros and cons of many alternative fuels.
Here too, Taylor presented an unvarnished libertarian view, saying state legislators ought never be asked to choose one technology over another, or even to opine on what problems or solutions might lay over the horizon. He recommended that legislators respond to inquiries about nuclear energy, ethanol, and so on by asking, “Why are you asking me?” He complained that too much time during the final roundtable discussion was devoted to issues of technology and science, rather than economics.
Taylor’s comment had its intended effect. Every legislator in the room got the message: Being elected did not qualify them to be all-knowing central planners, able to choose between pebble bed nuclear reactors and the latest generation of clean coal technology. Their most important job most often is to do nothing at all–neither regulate nor subsidize–and let markets decide.
But several legislators pushed back against Taylor’s advice, and rightly so I think. Elected officials have an important role to play, not by picking winners and losers, but by rolling back regulatory barriers, subsidies, and taxes that are already on the books. Doing this is hard work, as several legislators testified, because existing laws and programs are defended by entrenched constituencies. If you go into debates knowing something about the industry that is regulated, subsidized, and taxed, your proposals to deregulate, end subsidies, and cut taxes are likely to be taken more seriously.
Let’s Do It Again
The Energy Summit was a complete success. Attendance was near our goals, the presentations were excellent, and the legislators who attended were given a big helping of our free-market perspective on energy issues. Naturally, we’re thinking about doing more of these events.
Perhaps, during the balance of 2007, we will host Energy Summits on the East and West coasts and perhaps in the Southeast, tweaking the program and teaming up with think tank allies to get elected officials from these regions to turn out. The more elected officials we can expose to extraordinary individuals such as Jay Lehr, Jerry Taylor, and Patrick Michaels, the better the prospects for freedom in energy policy become.
