New Bill Will Increase Energy Prices, NCPA Says

In a press release from the National Center for Policy Analysis on Tuesday, it was announced that House leaders have filed an energy bill that they are saying will upgrade the renewable fuels infrastructure and increase energy efficiency, as well as other "green initiatives," as the press release puts it.

H. Sterling Burnett, a senior fellow with the National Center for Policy Analysis (NCPA), however, disagrees, saying it will have a negative effect on consumers, the first being higher gas prices. "Leave it to Congress to push a bill they purport will help consumers but will do the exact opposite," said Burnett. "This plan will discourage new production -- the only fix for high prices -- and will actually raise prices via new taxes."

The press release states that Congress has been encouraging domestic production (which has been on the decline) by expediting the leasing of public oil and gas wells by giving more power to the Bureau of Land Management and the Minerals Management Service. They also made changes to bureaucratic processes to make sure changes and paperwork could be filed fast.

The press release also claims that Congress allowed oil and gas companies to write off or accelerate the depreciation on capital equipment for new investments in production in the high risk, hurricane prone, Gulf of Mexico, much like renewable energy firms. They go on to say that Congress is trying to take this away.

Burnett feels strongly about the issue. "In order to fund their green priorities -- none of which will bring much energy online and therefore help consumers -- Congress plans to end the accelerated depreciation, extend the time federal agencies have to consider new leases and increase the paperwork hurdles. Each of these steps will discourage or slow development of new oil and gas projects and thus slow or even halt in some cases, delivery of new oil and gas resources to the marketplace."

He also mentions that the Clinton Administration wrote offshore leases in which companies did not have to pay royalties. This was in the 1990s, when oil prices were low. The NCPA says that congress is trying to make companies break their contract and pay royalties.

"Under this deal, unless they accede to this extortion, qualified companies will not be able to get new leases, which means there will be less competition and reduced production (or higher priced production)," said Burnett. "Only Congress could think this will help our energy situation. Worst of all, these policies will be most damaging to the poorest of the poor. They amount to a hidden tax on the most vulnerable among us."

According to their website, the NCPA is a group trying to promote private alternatives to government policies.

Sources:

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/07-31-2007/0004636397&EDATE=

http://www.ncpa.org/abo/