A national energy security summit hosted by Securing America’s Future Energy Foundation (SAFE) and its sister organization the Electrification Coalition is set to take place in Washington, D.C. on Wednesday, and will focus on how the United States' rapidly changing energy and transportation markets present an opportunity to end foreign dependence on oil.
It’s true. Thanks to new drilling technologies, U.S. oil and gas production is booming while demand is rapidly declining. In July, U.S. oil output hit its highest level in 20 years, and in less than five years, America may no longer need to import oil from any source but Canada, according to a recent Citigroup report. This is a dramatic turnaround from just a few years ago. At this rate and as projected, the U.S. could become the world’s largest oil producer next year, meaning positive geopolitical leverage and significant economic growth.
Unfortunately the boom in energy production will not be the focus of SAFE’s OPEC anniversary summit, and here’s the ironic part: the summit is a group of prominent political, business and military leaders joining together in D.C. to request government subsidies in the midst of a government shutdown; and the argument is that the government should spend more money promoting technology for electric vehicles (EV) and weaning the country off of oil.
SAFE tries to disguise subsidies as “tax benefits,” “programs,” and “research and development initiatives,” but what they really want is more money for the Fortune 50 companies they lobby for. And that’s what Wednesday’s Subsidy Summit will be all about.
Millions of taxpayer dollars have already been spent on tax breaks for people who have chosen to buy an EV, while the Congressional Budget Office (CBO) says that even with these tax benefits, EVs are not cost effective. In fact, the CBO says tax breaks may have to increase by as much as four times in order to bring costs down to comparable non-electric vehicles.
At current levels, promoting the manufacturing and purchasing of electric vehicles through federal subsidies is expected to cost taxpayers at least $7.5 billion through 2019 with little or no benefit to total gas consumption or emissions. Furthermore, considering the U.S. is actually approaching net energy exportation, making the argument that oil consumption is weakening U.S. national security because we import so much of it would be a very audacious claim. Subsidizing this unreliable industry is not the path to weaning the U.S. off of foreign oil dependence.
So why would SAFE, an organization that presents itself as a “nonpartisan organization” concerned with energy security, be in favor? The organization lobbies on behalf of Fortune 50 companies and members of the Electrification Coalition who want more government handouts. FedEx, for example, is in the process of converting its fleet to electric; General Motors manufactures electric vehicles; and General Electric provides the charging stations. Unsurprisingly, SAFE’s main lobbying effort in the last Congress was on S. 948, "Promoting Electric Vehicles Act of 2011," which would provide $2 billion in government grants to put 400,000 electric vehicles on the road. The bill would also set aside $25 million to electrify the federal fleet, and include an additional $235 million for the research and development of electric vehicle batteries and infrastructure.
SAFE has also played a crucial role in increasing Corporate Average Fuel Economy (CAFÉ) standards, a cap and trade system that forces companies like Ford to pay electric vehicle makers like Tesla. Essentially blue-collar buyers of Ford trucks are subsidizing $60,000 Tesla cars for wealthy buyers. Additionally, the organization lobbied for the NATGAS Act, legislation that basically throws taxpayer money in the form of subsidies to the natural gas industry and its billionaire investors like George Soros and T. Boone Pickens, who will also be participating in the summit.
The point being, it’s ironic that SAFE condemns the market for oil for not being a free market, when its main lobbying efforts are geared toward government policies that would subsidize specific industries and disrupt the energy market. Hosting a Subsidy Summit in the midst of a government shutdown isn’t useful or practical. In a time of uncertainty, we should focus on ending foreign dependence on oil by taking advantage of the U.S.’s energy boom, not wasting taxpayers’ money on a deficient industry.