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Philip Gailey

The good, bad and ugly of energy plans

After the silly business about Paris Hilton and the ugly business about which candidate is playing the race card, it was a refreshing change to see Barack Obama and John McCain turn their attention to energy policy last week. This issue is foremost on the minds of voters and the source of many of their economic woes. With the public finally paying attention, it's too bad Obama and McCain had to pollute the debate with their pandering, misrepresentations and cheap shots.

Both presumptive presidential nominees have offered some good ideas for moving the country toward energy sanity — and a few dumb ones. Obama and McCain agree on a cap-and-trade system for greenhouse gas admissions and on the need for more investment in renewable energy sources. Obama proposes to spend $150-billion over 10 years to develop alternatives to oil, far more than McCain would invest. Both want to make our cars, buildings and appliances more energy efficient. McCain would like to see 45 new nuclear power plants built by 2030. Obama says we must address nuclear security and waste before expanding nuclear power.

They even agree that keeping our tires properly inflated could save energy. When Obama first mentioned tire inflation, the McCain campaign tried to hoot it down, even handing out to reporters tire gauges labeled "Obama's Energy Plan.'' Apparently, no one bothered to inform McCain, who said he thought it was a good idea.

So far, so good.

Now let's consider some of their dumb ideas. McCain is still calling for a federal gasoline tax holiday, an idea he and Hillary Clinton embraced in the primaries. To his credit, Obama called it what it was — a gimmick to "get them through the election.''

Unfortunately, the political courage and intellectual honesty Obama showed in opposing a gas tax holiday has been missing in the debate over offshore drilling. In his biggest flip-flop yet, McCain is demanding that Congress come back from vacation and lift the moratorium on offshore drilling. It wasn't so long ago that McCain stood shoulder to shoulder with opponents of lifting the ban.

"We have to drill here and we have to drill now and we have to drill immediately,'' McCain told an Ohio audience last week.

With polls showing McCain scoring political points on the issue, Obama decided to modify his own opposition to offshore drilling. As he often does on controversial issues, Obama tried to split the difference. He said he would support limited offshore drilling as part of a comprehensive energy package. That certainly beats McCain's drilling frenzy, but limited drilling won't be of much comfort to Floridians when the first oil slick comes ashore.

While he was at it, Obama also decided to reverse his opposition to tapping the nation's strategic oil reserve intended to protect against disruptions in the oil supply or other national emergencies. McCain said it was a bad idea, as Obama did as recently as a month ago when he said we should save the reserve for a "genuine emergency.'' If Obama had done his homework, he would have known that when other presidents have tapped the reserve, as President Bush did after Katrina, the move had little or no impact on pump prices.

I don't begrudge either candidate a little pandering, but Obama's call for a windfall profits tax on oil companies, while wildly popular, may be a pander he might come to regret. As always, "Big Oil'' is a convenient villain. It's true that the major oil companies have been bringing in record profits. But did anyone mention that they also are paying record amounts in corporate taxes on those profits?

Obama no doubt means well. He wants a surtax on net oil company profits to pay for a $1,000 "energy rebate'' to every American family ($500 for individuals) at a cost of $65-billion over the next five years. It's sounds like a political winner until you consider the potential for unintended consequences. What happens if this extra tax causes oil companies to pull back on exploration and production, resulting in higher gasoline prices? If oil prices plunge and industry profits follow, how would Obama pay for his energy rebates? And what would he tell oil company shareholders and public pension plans if their dividends are lowered as a result of the surtax?

Meanwhile, Obama and McCain keep slamming each other with cheap shots.

McCain accused Obama of wanting to raise electricity rates, which is patently false. Obama says McCain wants to give Big Oil "another $4-billion in tax breaks.'' That is based on McCain's proposal to lower the corporate tax rate for all American businesses.

Obama accused McCain of "taking a page of the (Dick) Cheney playbook'' in crafting his energy policy.

McCain says, wait just a darn minute. It was Obama who voted for a 2005 energy bill Cheney helped shape that included billions in subsidies for oil and gas production. McCain said he voted against the legislation because it gave the oil industry too many tax breaks. Obama said he voted for the bill because it included investments in renewable energy.

Obama is taking a well-deserved one-week vacation in Hawaii. Maybe McCain should consider taking some time off himself. Voters could use the break.

Philip Gailey's e-mail address is gailey@sptimes.com.

The good, bad and ugly of energy plans 08/09/08 [Last modified: Wednesday, August 13, 2008 1:26pm]

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