Promoting Freedom and Green Energy Together?

by Steve Palmer, Pennsylvania Tenth Amendment Center

Last week, President Obama addressed the nation on the BP oil spill in the gulf of Mexico.  In addition to the immediate problem, the president also discussed long term energy policy, saying,

“For decades, we have known the days of cheap and easily accessible oil were numbered.  For decades, we’ve talked and talked about the need to end America’s century-long addiction to fossil fuels.  And for decades, we have failed to act with the sense of urgency that this challenge requires.  Time and again, the path forward has been blocked — not only by oil industry lobbyists, but also by a lack of political courage and candor.”

There is some truth in those statements, but there is also plenty to disagree with.  I am old enough to remember a time when my parents were only allowed to buy gas for their cars on certain days of the week — A time with gas lines so long that people ran out of gas while waiting in line to get to the pump.  During those years, we were assured that the end of oil was just around the corner.  Having lived through those experiences, I don’t need to be convinced that running out of oil would be unimaginably painful.

Here is one place where I disagree with that excerpt, though.  The truth is that the federal government has not “failed to act”, as President Obama says.  The reality is that the federal government, captured by the fossil fuel industry, has acted aggressively on behalf of the fossil fuel industry.  Subsidy policies are designed to encourage fossil fuel production and consumption, not to discourage it.  Blogger and science policy expert, Dr. Roger Pielke, Jr., provides this chart.

At the same time Uncle Sam is demanding more money from us in order to create subsidies to, “break our addiction to fossil fuels”, he is spending more than twice as much more for fossil fuel subsidies than for ”traditional renewables”, carbon capture and corn ethanol combined.  We don’t need to increase taxes and subsidize alternative energy.  All we need to do is stop subsidizing fossil fuels.  Imagine the boost that the alternative energy industry would get from being able to compete on a level playing field against “big oil”!  Yes, our fuel costs might go up, but the increase would be more than offset by the corresponding decrease in taxes or national debt (remember, any time the federal government taxes us to subsidize something, it skims a little for itself.)

We have already talked about the so-called “interstate commerce clause“; Article 1, Section 8, clause 3 of the United States Constitution.  Judge Andrew Napalitano, in various writings informs us that in the meaning of language at the time, the congressional power to regulate interstate commerce meant to “make regular”.  Tipping the balance in favor of the fossil fuel industry is exactly the opposite of making commerce regular.  It makes commerce irregular, favoring states with fossil fuel reserves and limiting states with favorable conditions for alternative sources of energy.  The commerce clause was intended to prevent tariffs and trade policies that basically amounted to economic warfare between the states.  When we consider that some states have abundant fossil fuels and others don’t, these federal subsidy policies create the exact problem that the commerce clause was intended to prevent (as with agriculture subsidies, a topic for a different day).

So we just stop the subsidies, right?  Unfortunately, it’s not quite that easy.  As noted above, we are up against the problem of capture.

“Capture Theory” refers the fact that most citizens are too busy with survival and life to worry about every permit and hearing taking place before a government agency. A vested interest, however – such as BP before the MMS, or a pharmaceutical company before the Food & Drug Administration – has evry reason in the world to know exactly what is on the agency’s agenda, and who is making the decision on their application, and what the secretary’s name is and how the agency decision-makers like their steak cooked. Because the potential benefits of favorable treatment are so lucrative, it makes sense for corporations to hire lobbyists who wine and dine the agency officials. In the end, (to quote myself), “A vested interest will always capture the agency designed to regulate it, and then use that agency for its own advantage.“

The cost of these subsidies to any individual is small enough to be unnoticed, but the total amount of subsidies is big enough to incentivize the beneficiary.  With the system we have today, the special interest is destined to win the legislative contest.  There simply isn’t sufficient return on investment for a large number of individuals to dedicate the time it would take to eliminate any particular subsidy.

To repeat,

“A vested interest will always capture the agency designed to regulate it, then use that agency for its own advantage”.

What if we turn it around?  Instead of talking about fossil fuel subsidies or tobacco subsidies or agriculture subsidies or any of a hundred other Tenth Amendment violations, we stay focused on the Tenth Amendment.  The cost to an individual of any particular Tenth Amendment violation is small.  However, the combined cost of all Tenth Amendment violations is enormous!  We the People are a vested interest.  We can take advantage of capture theory just like any other special interest.  Our interest is not in any of those particular issues, but in enforcement of the Tenth Amendment — across the board — without exception.  If we reframe the problems this way, suddenly the incentives change.  I don’t know if a study has been done, but I have to believe that if the combined cost to the individual of all Tenth Amendment violations were known and communicated, it would be big enough to motivate a large number of people and organizations to action.

Thomas DiLorenzo said,

“The purpose of government is for those who run it to plunder those who do not.”

Federal subsidies for fossil fuels and other types of energy confirm this principle.   Our founders would not have been surprised by DiLorenzo’s observation.  To guard against federal plunder, they gave us the Tenth Amendment.  It is time that we dust it off and make regular use of it.

Steve Palmer is the State Chapter Coordinator for the Pennsylvania Tenth Amendment Center.

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