We believe smaller government is better government. Stifling regulations and government overreach are constraining free market growth.
Within the energy sector in particular, excessive government interventions have made it impossible for true competition among America’s power sources. The Obama Administration’s energy mandates only add to the bureaucracy, from the Clean Power Plan’s arbitrary rules to the effective ban on new coal power plants. The administration justifies its constraints with its climate agenda, that it knows better than elected officials what’s best for America’s energy future. The reality is these unilateral actions unnecessarily grow the size of government and may not yield environmental benefits.
Government can play a more limited and constructive role by addressing issues the private sector cannot solve on its own: breaking down monopolistic barriers, making investments in public infrastructure, correcting market failures, and driving basic scientific research.
…our basic role is to provide a sound and stable economic and policy environment that will enable our citizens, businesses, and governmental units at all levels to make rational decisions on energy use and production
– President Reagan, July 1981
The world’s energy demands are on the rise and are expected to double by 2100. As the world climbs out of poverty and economies power up, the world will demand cheaper, cleaner, and more reliable forms of energy. As a nation blessed with vast energy resources and dynamic entrepreneurs, America can rise to the challenge. We can provide the energy sources of today and develop the technologies of tomorrow.
America’s military muscle and robust economy carry our voice of reason to the farthest reaches of the world, as the world was reminded many times over during the 20th century. In the 21st century, American energy development will be critical to preserving our legacy.
Exports strengthen our economy and help combat the influence of rival countries. America is already the global hub for energy innovation and trade. Other countries are eager to challenge and usurp our leadership role. Energy is one of their biggest influences and is already a bargaining chip in international politics. Middle Eastern countries manipulate global oil prices, Russia wields control over Europe’s natural gas supply, and China is becoming the focal point for new nuclear energy development. The outsized influence of energy will only grow and America must be the country paving the way.
“Government will serve as the partner of private enterprise, not as its master. This approach will allow our Nation to reap the benefits of the greatest single energy resource we possess — the entrepreneurial spirit of free men and women.”
– President George H.W. Bush, October 1992
After a two decade hiatus, America has reclaimed its position as the world’s top producer of oil and natural gas. Our remarkable turnaround was not by blind luck. Rather, it was the result of decades of dedicated scientific research, often initiated by the government.
As early as the 1970s, scientists in our national laboratories began laying the foundation for today’s shale oil and gas revolution. They developed drilling technologies, such as new drill bits and imaging techniques, which were later refined by the private sector.
America should not stand idle amidst our current abundance of energy resources. Instead, we should maximize our existing resources and accelerate research in next generation energy technologies. Today’s low prices at the pump should not dampen efforts to diversify our energy supplies. The shale revolution demonstrated that basic research can take many decades to pay off.
“…think about a legacy here at home, about making investments today that will make future citizens of our great country less dependent on foreign sources of energy.”
– President George W. Bush, February 2003
Energy is the lifeblood of our economy. Without reliable and low-cost power plants, America would not be the economic force it is today. Any effort to minimize air and carbon pollution must not jeopardize our competitiveness in the global economy — but this does mean inaction is the only option. Developing cleaner technologies can reduce our dependence on foreign oil, stimulate the economy, and improve public health.
Heavy-handed government mandates, such as EPA’s Clean Power Plan or its effective ban on new coal power plants, are not the only ways of addressing carbon pollution. We should constructively work with industry, rather than against it, toward cleaner technologies. America should not have to choose between our economy and environment.
Both industry and environmental groups agree power plant pollution can cause respiratory problems. The most recent smog standards set off a firestorm between industry and environmental groups — not on whether they were needed — but on the most appropriate level. A similar, nuanced debate also exists on carbon pollution and climate change. Our brightest scientific organizations, including NASA and MIT, agree the risks of climate change are real. Corporations, including the largest oil companies, are also onboard. Like ExxonMobil, we agree “the risk of climate change is clear and the risk warrants action”.
We recognize these views are not universally shared by everyone. Yet, we believe we don’t need to agree on climate to agree on the benefits of conservative clean energy. Developing clean energy will create more jobs, reduce our dependence on foreign energy, and improve our health. We can have a clean environment and a strong economy. To say otherwise is a false choice.
“What is a conservative after all but one who conserves, one who is committed to protecting . . . our rivers and mountains, our plains and meadows and forests. This is our patrimony. This is what we leave to our children. And our great moral responsibility is to leave it to them either as we found it or better than we found it.”
– President Reagan, June 1984
We believe in the power of free markets. As any introductory economics class will teach, unconstrained markets generate better outcomes.
The electricity sector is heavily regulated because of natural monopolies and the vital importance of power to the economy. Government intervention, however, must be kept to a minimum because it can have large, unintended repercussions. In parts of the United States, electricity can be sold at negative prices because of excessive subsidies for wind power.
Wind power is not the only technology to receive preferential treatment. Every technology receives a different suite of incentives. A morass of technology-specific government policies have made it impossible for true competition among America’s power sources. The tired exercise of ramping support up and down for mature technologies is not conducive to economic or scientific progress. Too often these policies unnecessarily cost the American taxpayer and crowd out private investment. With over $17 trillion of debt, the government must decrease unnecessary spending and leverage every dollar ultimately spent.
We can reform this process by reducing regulations that constrain market-driven growth of affordable, reliable, and clean energy sources.
“Our primary objective is simply for our citizens to have enough energy, and it is up to them to decide how much energy that is, and in what form and manner it will reach them. When the free market is permitted to work the way it should, millions of individual choices and judgments will produce the proper balance of supply and demand our economy needs.”
– President Reagan, July 1981
We believe rigorous cost-benefit analysis produces policy that grows the economy. This principle is especially relevant in today’s era of fiscal austerity: the government is approach $20 trillion in federal debt and more than 5% of all spending is used on paying down its interest.
With a limited pool of federal dollars, cost-benefit analyses should inform policymaking decisions to the maximum extent. Economic analysis, not ideology, produces effective and fiscally responsible policy. It’s not enough to act on a decision because the expected benefits are greater than the costs. Leaders must consider who will reap the benefits, who will bear the costs, and the tradeoffs between competing policy proposals.
Clean energy policy must be results-driven, rather than ideology-driven. America should focus on the lowest-hanging fruit. In the most simple case, why are expensive wind farms being built in the ocean when cheaper hydropower is readily available? Hydropower from our Canadian neighbors is about a quarter the price of electricity from offshore wind turbines in New England — and just as renewable.
“Regulatory action shall not be undertaken unless the potential benefits to society from the regulation outweigh the potential costs to society.”
– Ronald Reagan’s Executive Order 12291, February 1981