Senator Robert Menendez of New Jersey has a great idea to lower the price of gasoline and ease tax payers’ pain at the pump: Raise taxes on American oil companies.  Unfortunately, the Menendez bill is not just a terrible solution; it’s a calculated political move by Democrats hoping to put Republicans on the record as being “for” oil companies.  As Forum expert Gordon Gray explains, this bill’s best possible destination is a Constitutional rejection.  Still, senators of all stripes lined up to debate one of the most fundamental partisan dividing lines in D.C., and President Obama is set to lend his support to the proposal this morning from the Rose Garden.

 

Conservative plans for lowering fuel prices run the gamut, with solutions like putting emerging EPA regulations on pause until our economy recovers, temporarily repealing the Jones Act to reduce costs for oil shipments, cutting existing energy subsidies across the board to support an aggressive energy technology and efficiency research program, and, of course, speeding the pace of permitting to send a strong market signal that the US is serious about energy access.  Regrettably, Majority Leader Harry Reid prohibited any amendments to the legislation, solidifying its role as political ploy meant to demonize the oil industry.

 

Earlier this week, the White House announced pending EPA regulations for greenhouse gas emissions from new power plants, adding a layer of urgency to the Senate’s debate.  The regulations will effectively prevent the construction of any new coal facilities that don’t include uneconomical carbon capture and storage technology, and promote natural gas – with historically volatile prices – as the primary source of new fossil generation.  It perhaps best illustrates what conservatives are asking: In what ways are democrats not looking for opportunities to increase the costs of doing business for their least favorite fossil fuels?

 

So while it’s well understood that the US government can exert only minimal price pressure on the global oil market, current gasoline prices are turning energy costs into a hot button political issue and a critical policy debate.  Though this nation is blessed with abundant natural resources, the costs of those resources on the market will play a major role in our economic recovery.  So while natural gas prices are mercifully low today thanks to hydraulic fracturing, and coal prices remain affordable, pending government regulations are sending a signal to the market that these fuels should (and will) increase in price.

 

Conservatives are looking for solutions to ensure a rapid economic recovery, and they’re entirely correct that affordable energy prices are an important piece to that puzzle.  As embodied in the Menendez bill, the left is looking for hollow political messaging to win election year points.  This legislation is fundamentally flawed, looking to erect a punitive tax code for a major American industry and increase the costs of producing gasoline in a vain attempt to make it cheaper.  Rather than portraying the GOP as “in the pocket” of big oil companies, this bill paints democrats as wildly out of touch with America’s best interests and completely disinterested in finding solutions to pressing American problems.