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Misguided Energy Bill Falls Short – Won’t Lower Gas Prices, Could Increase Dependence on Foreign Oil

Ryan Supports Renewable Fuel Requirement, Opposes Flawed Overall Legislation

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December 06, 2007 | Kate Matus ((202) 226-7326) | comments

WASHINGTON – First District Congressman Paul Ryan today voted against a flawed energy bill (H.R. 6) that fails to increase the supply of many proven energy resources that exist in abundance in the U.S., raises taxes on American companies by more than $20 billion, and relies on a big-bureaucracy approach to energy policy that creates many opportunities for waste and abuse – and would likely increase costs for consumers. The bill, which was cobbled together behind closed doors rather than through the usual conference process for resolving differences between the House and Senate, passed the House by a vote of 235-181 and faces an uncertain future in the Senate. The text of this mammoth legislation, which exceeds 1000 pages, was only released yesterday – offering little time for thorough examination of its contents.

Among its key provisions, this legislation would boost the mandatory fleetwide Corporate Average Fuel Economy (CAFE) standard for new cars and light trucks to 35 miles per gallon by 2020, while permitting separate standards for cars and light trucks. America’s auto manufacturers have accepted this compromise deal that – while not ideal – factored in U.S. auto makers’ concerns with earlier CAFE proposals.

Although he does not approve of the overall legislation, Ryan supports some components of the bill – most notably the provision that requires electric suppliers, other than rural electric cooperatives and governmental entities, to provide 15 percent of their electricity using renewable energy resources by the year 2020. This policy builds on Wisconsin’s leadership in this area. (The state already has its own requirement in place to prompt greater reliance on renewables to generate electricity – requiring 10 percent of electricity to come from renewable energy resources by 2011.) Ryan voted for this policy in August when the House considered a different version of energy legislation.

“I’m pleased that, at the very least, this bill averts a CAFE crisis, by taking into account what GM, Chrysler and other American auto makers say they need to stay competitive. I would have preferred to see a clearer move toward separate fuel economy standards based on vehicle class – not a standard that applies to a manufacturer’s whole fleet of vehicles – but this is better than earlier versions that would have been disastrous for our home auto industry. Unfortunately, the overall bill still falls far short of a workable, comprehensive energy plan,” Ryan said. 

“As we’ve seen gas prices soar in recent weeks, it’s clearer than ever that we need to end our addiction to foreign oil imports. This bill won’t do that – and will actually make matters worse by raising taxes on U.S. oil and gas producers and tilting the competitive advantage to overseas producers. We need to develop renewable energy sources and improve energy conservation, while at the same time pursuing clean, conventional domestic fuel sources that will help lower energy costs. These approaches to energy security should complement one another – not work against each other,” Ryan said. “I was also disappointed to see this bill misuse taxpayer dollars to fund questionable ‘green pork’ tax credit bonds and other measures that open the door to waste and abuse.”

Among its misguided policies, H.R. 6 would:

  • Waste tax dollars on “green pork” – creating a new slush fund for governors and local officials in the form of billions in tax credit bonds, with only the loosest restrictions on how that money can be spent and no assurances that bond projects will reduce energy consumption or greenhouse gas emissions. For example, such bonds could be used to help complete an “indoor rainforest” project in Iowa, which is stalled for lack of local money, or to purchase hybrid snowmobiles for ski resorts in Aspen.

  • Create “forestry conservation tax credit bonds” that, upon closer examination, appear to be a specific tax earmark. According to the U.S. Fish and Wildlife Service, this $500 million provision applies to only one parcel of land in Montana that is owned by a large private timber company.

  • Repeals the domestic manufacturing deduction for five American companies that explore, extract and refine oil and natural gas – forcing these companies to pay more taxes than other American manufacturers. Raising taxes on domestic oil and gas production reduces incentives to produce here in the U.S. and could lead to increased oil imports, and higher oil and gas prices.

  • Create dozens of new, often duplicative government programs.

  • Authorize funds for clean and energy efficient technologies in other countries.

In addition, the bill lacks language expediting the oil refinery permitting process so that more fuel could be brought to market faster.

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